Section 50 IAC 27-4-5 - Ratio study statistics and standardsAuthority: IC 6-1.1-4-4.5; IC 6-1.1-31-1; IC 6-1.1-31-12
Affected: IC 6-1.1-14-12; IC 6-1.1-33.5-6
Sec. 5.
(a) Except for agricultural land, ratio study statistics shall be calculated based on the methods and procedures contained in the IAAO Standard on Ratio Studies (April 2013), as incorporated by reference in 50 IAC 27-1-4.(b) The level of assessment, as determined by the median ratio, must fall between 0.90 and 1.10 for any class of property. However, the department may use necessary measures of reliability to determine ratio study compliance. (c) The coefficient of dispersion (COD) standard for improved residential property is 15.0 or less. All other real property has a COD standard of 20.0 or less.(d) The price-related differential (PRD) must be between 0.98 and 1.03. However, in accordance with the Standard on Ratio Studies, as incorporated by reference in 50 IAC 27-1-4, if there are fewer than twenty (20) sales in a particular township or class of property, the Spearman Rank test will be relied upon to determine if vertical equity has been met for that stratum. This will resolve the well-known sensitivity of the PRD to outliers in small samples. (e) The overall assessment level shall be equal to one hundred percent (100%) of market value-in-use. However, ensuring uniformity in assessment levels among strata is also important. Therefore, the assessment level of each township and major property class (improved residential, unimproved residential, improved commercial, unimproved commercial, improved industrial, and unimproved industrial), must be within five percent (5%) of the overall assessment level of the county.(f) The data used for ratio studies shall include the sales ratio data exported from the property tax management system under 50 IAC 26-3-6. If the county assessor or township assessor (if any) modifies any of the data exported from the property tax management system for the ratio study classification, an explanation of the modifications shall be provided to the department.Department of Local Government Finance; 50 IAC 27-4-5; filed Apr 8, 2010, 1:45 p.m.: 20100505-IR-050090502FRAFiled 11/2/2020, 9:34 a.m.: 20201202-IR-050190636FRA