To:Property Appraisers
From:James McAdams
Date:March 8, 2007
Advisory Letter:PTA-PA07-05
2007 ASSESSMENT ROLL SUBMISSION & EVALUATION
COMPLETE SUBMISSION STANDARDS—NAL AND NAP FILES
ASSESSMENT ROLLS MAY BE REQUIRED TO BE RESUBMITED IF THE PRELIMINARY ROLL DOES NOT COMPLY WITH THE FOLLOWING STANDARDS AND INCLUDE THE FOLLOWING DOCUMENTATION.
UNIFORM STANDARDS AND MINIMUM REQUIREMENTS: The uniform standards and minimum data requirements for the preliminary assessment roll submission are described in Rule Chapter 12D-8, Florida Administrative Code, and Form DR-590, “Name-Address-Legal File Record Layout,” (NAL) effective January 2001. If the submitted assessment roll does not comply with the format and content described below, it will be considered an incomplete submission and a resubmission of the roll may be required and/or a post audit notification of defectsmay be issued pursuant to section 195.097, Florida Statutes.
The following items and documentation must be included in the assessment roll submission:
Standard Name--Address--Legal File (NAL Tape, CD or FTP)
Standard Name--Address--Property File (NAP Tape, CD or FTP)
Form DR-489Preliminary Tax Roll Certification r. 3/84
Form DR-489ACPreliminary Recapitulation of Ad Valorem Assessment
Rolls--County, r. 01/07, Pages 1 and 2
Form DR-489AMPreliminary Recapitulation of Ad Valorem Assessment
Rolls--Municipality, r. 01/07, Pages 1 and 2
Form DR-489PCValue and Number of Parcels on Real Property Assessment Roll by Category, Pages 1 and 2 r. 5/85
Form DR-489EBAssessment Roll Exemption Breakdown, r. 01/04, Pages 1 and 2
Form DR-493Summary of Adjustments to Tax Roll r. 6/92
The Department’stax roll analysis will include the following:
DATA FIELD ANALYSIS: The Department will conduct an analysis of the data fields to determine if the data submitted on the roll complies with the complete submission standards in Rule Chapter 12D-8, F.A.C., and Form DR-590. Among the criteria contained in this rule and form is a proper reporting of market areas, just values, assessed values and land values for the various classes of property; accurate reporting of all sales transactions; and proper reporting of social security numbers for those parcels receiving a homestead exemption in 2007.
If there are unusual circumstances related to the compilation of a roll, such as new computer conversions, the Department will perform a trial run on the format and readability upon written request from the Property Appraiser.
SOCIAL SECURITY NUMBERS: Section 196.011, F.S., requires that the Property Appraisers’ records contain social security numbers (SSNs) for each homestead exempt parcel on the assessment roll and that such information be included on all assessment rolls submitted to the Department of Revenue.
The fields for submitting the SSNs on the record layout are “field 43” for the applicant and “field 45” for the co-applicant. The threshold for compliance with regard to submitting SSNs is 90 percent. Rolls will be tested to determine if they comply with this standard. Any assessment roll that does not comply with this standard will be returned as an incomplete submission.
ALLOWANCE FOR THE 1ST AND 8TH FACTORS: For any adjustments made under section 193.011(1) and (8), F.S., which exceeds 15 percent, complete, clear, and accurate supporting documentation, must be submitted with the preliminary assessment roll. This documentation must describe in detail the study on which such adjustment for each use code group is based and must include a detailed narrative description of all procedures used in deriving the total percentage adjustment for each use code group. The documentation also must list each sale used in the study and must include individual data for each of these sales. The study must clearly demonstrate the market prevalence, statistical representativeness, and appropriateness of any adjustment in excess of 15 percent. The study must be based on actual transactional data and all data and analysis must be verifiable and must justify the adjustment derived and reported. A statement such as “…up to 15%…” will not be considered adequate documentation. The amount of the adjustment must be specified on Form DR-493. Please note that a signed and current DR-493 must be submitted each year even if there is no change.
SALE INFORMATION: Specific information on the two most recent transfers of ownership for each parcel must be reported on the tax roll, including specific information on transfers of property with minimum documentary stamp tax on the deeds (i.e., $100 sales). All sale prices submitted on the roll may be compared to the Department’s Form DR-219 “Return for Transfers of Interest in Real Property” database and reviewed for any discrepancies. If the Department’s review indicates sale prices are not in agreement with the documentary stamp tax paid on the deed, or prices are omitted from the assessment roll, the roll may be returned for correction and resubmission.
LIMITATION ON HOMESTEAD EXEMPT PARCELS: For the 2007 assessment roll, the limitation on the assessed value of homestead exempt parcels is 2.5 percent (equal to the increase in the Consumer Price Index for calendar year 2006). Parcels receiving a homestead exemption which are transferred in 2006, whether or not the transfer is a sale qualified by the Property Appraiser, must have the assessment cap removed unless the transfer is not considered a change of ownership under s. 193.155(3), Florida Statutes. In accordance with this section, the assessed value should equal just value for all transferred parcels where the transfer is considered a change in ownership. Any county reporting a transfer as a qualified sale on the DR-590 where the assessed value is less than the just value must provide a written explanation for each property describing the reason assessed value is less than just value prior to approval of the Preliminary Assessment Roll. Under no circumstances should the assessed value of a parcel exceed its just value.
LOCAL OPTION EXEMPTIONS
- Additional $25,000 Exemption for Seniors – If the county or any municipality in the county has adopted the senior citizen exemption, the designated alpha exemption code "A" (Senior Homestead Exemption, see section 196.075, Florida Statutes) should be placed in “field 46” and the value of the county exemption should be placed in “field 47.”
- Reduction in Assessment for Living Quarters of Parents/Grandparents (Applies to All Mileage) – If the county has adopted the provision that allows for a reduction in assessments for the living quarters of parents and/or grandparents, the designated alpha exemption code “F” should be placed in “field 46” and the value of reduction should be placed in “field 47.”
EXEMPTION CODES:Personal exemption codes are single digit alpha or numeric codes entered in field 46 (Personal Exemption Flags) of the NAL record layout. A list of the current codes can be found in rule 12D-8.011(1) (o), F.A.C. In a letter (see Attachment 1) mailed to all Property Appraisers on May 10, 2006, the Department requested that the then unused numeric code “9” be used to indicate one of two specific circumstances involving homestead property: either 1) a parcel that is part of a group of contiguous parcels receiving a single homestead exemption; or 2) a single homestead parcel receiving two or more homestead exemptions. By reporting such properties as code a “9” exemption, the Department can effectively filter these types of exemption and minimize the need to contact the Property Appraiser’s office for clarification. PLEASE NOTE: If a parcel qualifies to receive a code “9” pursuant to this section and also has either a local option exemption as described in the section above or is one which would normally be given one of the homestead combination codes “Q” or “Y”, please enter the correct local option or combination code.
VETERANS DISCOUNT: In November 2006, the voters approved a constitutional amendment providing a discount on homestead property taxes for certain disabled veterans. The discount is a percentage equal to the percentage of their permanent service connected disability. In its bulletin PTA-06-19, issued on December 18, 2006 (see Attachment 2), the Department, as a matter of aid and assistance, recommended that Property Appraisers apply the discount for qualified applicants by reducing taxable value prior to certifying the tax roll to the tax collector. A procedure for doing so is included in the Bulletin.
For those Property Appraisers applying the discount as recommended by the Department, the relevant roll information should be reported to the Department in the following manner:
Recap Forms: To allow reporting of the discount amount on the recap forms, an additional line will be added to the DR-489AC and AM and the DR-403AC and AM. The relevant informationshould be entered on the lines provided.All counties must use the new recap forms, whether or not they have veterans discount amounts to report.
12D-8 Record Layout: For purposes of reporting the discounted value amounts on the 12D-8 record layout (DR-590), the Department is requesting that Property Appraisers use the code and value field currently reserved for the renewable energy exemption. Section 196.175, F.S., provides that the renewable energy exemption was applicable only to equipment installed between January 1, 1980 and December 31, 1990 and only for a period of no more than 10 years. The 12D-8 record layout code and value field for reporting this exemption should currently be unused. The code letter “R” should be entered in field 46 for the veterans’ permanent disability discount. The value subtracted as a result of the veterans’ permanent disability discount should be entered in field 51.
AGRICULTURAL SCHEDULES: A tabular summary of per acre land valuations used in preparing the assessment roll for each class of agricultural property (i.e., agricultural schedules) must be submitted with the assessment roll. See Rule 12D-8.002(4), F.A.C., or call George Wheeler at 850-922-7981 (email: )with questions regarding the content of the tabular summary.
CENTRALLY ASSESSED PROPERTY: The Department will compare centrally assessed property values (railroads and private car lines) from Form DR-489AC for agreement with the just values on the assessment roll. Please call Wyatt Peters at 850-922-7943(email: ) with any questions regarding central assessments.
HURRICANE NOTATION NOT REQUESTED: For the submittal of tax rolls in 2005 and 2006, the Department had requested that a notation be made on all parcels where just value decreased due to substantial damage from a hurricane. This notation is no longer being requested for the 2007 tax roll.
ELECTRONIC SUBMISSION OF ASSESSMENT ROLLS
The Department has established a procedure for the electronic submission of tax rolls and is encouraging all counties to submit their tax rolls through the new File Transfer Protocol (FTP) website. Attachment 3 is a copy of the May26, 2006 memorandum from Kevin Gorham outlining the procedures and requirements for submitting tax rolls through this site. As stated in this memorandum, the contact person with the Department for questions or assistance is James Diaz at 850-488-3335(email:). As always, the real property roll must be submitted in DR-590 format and the tangible personal property roll must be submitted in DR-592 format.
The Department will still accept tax rolls in formats allowed in previous years. These include IBM 3480 cartridge, CD-ROM, and Iomega Zip. Real and tangible personal data files may be included in the same submittal.
It is requested that no matter which delivery system is employed by the county, the naming convention outlined in the memorandum referenced above be used. This is especially critical for those counties that use the File Transfer Protocol.
PROCEDURAL AUDIT
The Department will resume the performance of procedural audits in 2007. These audits will vary in scope but include a review of office practices, data integrity, and conformance to the requirements of law. A portion of this effort will involve parcel inspections and will be outsourced using appraisal contractors. The remainder of the work and overall coordination will be performed by the Department’s Education and Assistance staff. The process for determining the counties subject to procedural audits will consider such factors as those counties subject to in-depth review, those counties with statutory strata subject to sale ratio studies, and other factors that indicate the appropriateness of a procedural audit.
2007 ASSESSMENT ROLL EVALUATION AND APPROVAL STANDARDS
Each assessment roll will be processed in the order that it is received. For the purpose of issuing any review notices, the Department will consider all rolls received before July 1st as having been received on July 1st. Assessment rolls must meet the content requirements identified in Rule 12D-8, Florida Administrative Code, the format requirements specified in Form DR-590 and other requirements contained in the “Complete Submissions Standards—NAL and NAP Files,” outlined above.
Approval of a non-in-depth assessment roll will be based on the aggregate level of assessment for all studied strata, while approval of in-depth assessment rolls will be based on the level of assessment for each individual stratum studied, in addition to the aggregate level of assessment for all studied strata.
The following evaluation and approval standards will be used for 2007 assessment rolls. These are standards the Department will use to approve, approve with noted defects, or disapprove the assessment rolls.
SALES QUALIFICATION STUDY: The Department will conduct a study of sales qualification decisions as required by section 195.0995(2), Florida Statutes. If this study shows that more than 10 percent of sales qualification decisions do not meet the applicable criteria, the Department is required to issue a post audit notification of defects and follow the procedures set forth in s. 195.097, Florida Statutes.
On April 12, 2006, a memorandum (see Attachment 4) outlining the Department’s sales qualification study procedures for certain types of sales was sent to all Property Appraisers. Key points in this memorandum are:
- Sales representing arms-length sale prices should not be disqualified. The Department will not consider any changes in market conditions (increase or decrease in prices) between the date of sale and the date of appraisal as a reason for disqualification.
- If a county believes that a sale should be disqualified because of substantial changes in market conditions during an abnormally long period between the contract date and the deed date, the county must provide credible, verifiable, and documented evidence that justifies the disqualification decision.
- Documentation required for sales qualified or disqualified as a result of examining the deed and comparing it to the disqualification criteria in Rule 12D-8.011(1) (m) 3, F.A.C., includes only the deed and the required qualification code.
- Documentation required for sales qualified when the deed matches one or more disqualification criteria in Rule 12D-8.011(1)(m)3., F.A.C., or for sales disqualified when the deed does not match such disqualification criteria, must include credible, verifiable, and documented evidence that justifies the qualification or disqualification decision.
In addition, in some cases the Department has previously accepted a determination by a county that a sale was an “outlier” as a reason for changing its preliminary qualification decision. The Department will no longer accept such reasoning for changing its preliminary sale qualification decision.
LEVEL OF ASSESSMENT: If a county is the subject of an in-depth study, a level of assessment of 90 percent or greater must be met for each stratum studied and for the overall assessment roll. If a county is the subject of a non-in-depth study, the 90 percent level of assessment threshold will be required for the overall assessment roll.
Any in-depth county with a stratum level of assessment of less than 90 percent which is not due to material mistakes of fact will be issued a review notice and a new submission will be required. See section 193.1142, Florida Statutes. If the Property Appraiser fails to make the necessary corrections on the re-submission, the assessment roll will be disapproved and the procedure for an interim assessment roll outlined in section 193.1145, Florida Statutes, will begin. In-depth counties with an individual stratum level of assessment of less than 90 percent which is due to material mistakes of fact will be issued a post audit notification of defects. Failure to adequately respond to the notice of defect will result in the issuance of an administrative order detailing the necessary corrective actions. Provided that the roll approval requirements for level of assessment and sample representativeness are met, the statistical and analytical review of individual sub-classes such as age groups, size groups, market areas, or use codes will not be used as roll approval criteria.
The standard for approval of a non-in-depth assessment roll will be based on the aggregate level of assessment for all strata. Any non-in-depth county with an overall level of assessment of less than 90 percent will be issued a review notice and a new submission will be required. As with the in-depth study rolls, if the Property Appraiser fails to make the necessary corrections on the re-submission, the assessment roll will be disapproved and the procedure for an interim assessment roll outlined in section 193.1145, Florida Statutes, will begin.
COEFFICIENT OF DISPERSION (COD) AND PRICE-RELATED DIFFERENTIAL (PRD): The established uniformity standards for the COD and PRD for the 2007 tax rolls are as follows:
- Strata 01, 02, 04, 05, and 06 Price-related Differential.98 PRD 1.03
- Stratum 03 Price Related Differential.90 PRD 1.10
- Stratum 01 Coefficient of DispersionCOD 15.0
- Strata 02, 04, 05 and 06 Coefficient of DispersionCOD 20.0
- Stratum 03 Coefficient of DispersionCOD 25.0
Please note that the stratum 6 price-related differential (PRD) standard has changed for 2007. In previous years, the stratum 6 range for this standard was .95 to 1.05. This change was recommended by the Auditor General in his report dated October 2006.
In applying such standards, the Department will rely on a determination of whether systemic problems underlie the calculated statistics. Calculated stratum PRDs or CODs outside the established parameters will be used as indicators in determining the existence of systemic problems that may warrant the issuance of a post audit notification of defects. Other such indicators include, but are not limited to, systemic problems identified in mapping, data collection and management, stratification and data analysis, valuation planning, land valuation, improved property valuation, and quality assurance. Provided that both the calculated stratum PRD and COD are within the established parameters listed above, the statistical and analytical review of individual sub-classes such as age groups, size groups, market areas, or use codes will not be used as the sole basis for the issuance of a post audit notification of defects. Even if a calculated stratum PRD or COD is outside the established parameters listed above, such individual sub-class review will not be used as the sole basis for the issuance of a defect letter. If a post audit notification defects is issued, a response from the Property Appraiser’s office is required within 15 days and a conference will be held, if requested. If an administrative order is subsequently issued, it will be issued with specificity concerning corrective actions to be taken.