Section 35.01.03.405 - ASSESSMENT OF OPERATING PROPERTYSection 63-405, Idaho Code
01.The Unit Method. The unit method of valuation is preferred for valuing a railroad or public utility when the individual assets function collectively, are operated under one ownership and one management, are interdependent, and the property would be expected to trade in the marketplace as a unit. Under the unit method, the value of the tangible and intangible property is equal to the value of the going concern. The market value of the unit is referred to as the system value. For interstate property, allocation factors are used to determine what part of the system value is in Idaho.02.Identify the Unit. The unit includes all property used or useful to the operation of the system, property owned, used or leased by the business and the leased fee and leasehold interests. All title and interest in unit property is assessed to the owner, lessee or operating company.03.Appraisal Approaches. The three (3) approaches to value may be considered for all property.04.Appraisal Procedures. Market value is determined through procedures, methods, and techniques accepted by nationally recognized appraisal and valuation organizations. For operating property, the direct capitalization techniques or derivatives thereof will not be used in estimating value.05.The Cost Approach. The appraiser may consider replacement, reproduction, original or historical cost.a. Contributions in aid of construction are valued at zero in the cost approach.b. Construction work in progress may be considered in the cost approach.c. Obsolescence. The appraiser will attempt to measure obsolescence, if any exists. If obsolescence is found to exist, it may be considered in the cost approach.06.The Income Approach. The income approach is based on the premise that value can be represented by the present worth of future benefits derived from the ownership, use or operation of the unit. The appraiser will consider yield capitalization in processing the income approach.07.The Market Approach. In the market approach, the appraiser will consider the sales comparison approach or the stock and debt approach.08.Reconciliation. Reconciliation, also called correlation, is an opinion regarding the weight that should be placed on each approach. The appropriate weight to be given each indicator is based on the appraiser's opinion of the inherent strengths and weaknesses of each approach and the data utilized. The appraisal report will disclose the weight given to the indicators.09.Allocation. Use readily available data from existing records to calculate the factors that are multiplied by the correlated system value to allocate that value to Idaho.10.Situs Property Apportionment. For situs property, as described in Subsection 404.04 of these rules, apportionment is based on physical location, meaning the market value will not be apportioned based on mileage but only to the tax code area(s) within which said property is situs or physically located.11.Valuation of Rate-Regulated Electric Utility Property. The methods set forth in this Rule will apply to the valuation of operating property of rate-regulated electric utility companies except to the extent any provision is inconsistent with the valuation criteria set forth in Section 63-205B, Idaho Code, in which case, the criteria in Section 63-205B, Idaho Code. will control.12.Cross Reference. See Sections 63-404 and 63-602L, Idaho Code, and Rules 404 and 615 of these rules.Idaho Admin. Code r. 35.01.03.405