A.R.S. tit. 42 ch. 13 — Arizona Revised Statutes Title 42 Chapter 13 — Valuation Of Locally Assessed Property

42-13002. Relationship between department and county assessors A. The department shall: 1. Exercise general supervision over county assessors in administering the property tax laws to ensure that all property is uniformly valued for property tax purposes. 2. Prescribe forms to be used by county assessors for: (a) Listing and valuing property for tax purposes. (b) Reporting changes in valuations. (c) Such other purposes as the department may require under this title. 3. Assist county assessors: (a) In maintaining uniform maps and records. (b) In placing on the rolls the valuations determined under this chapter. (c) To ensure a uniform valuation of all property throughout the state for property tax purposes, including providing the services of department personnel to the assessors. The department may charge to the county the costs of department personnel provided to that county. B. The department may: 1. Require the reclassification of property, if necessary. 2. Require information from the county assessor's office and the county treasurer's office to verify compliance with the procedures prescribed by section 42-12052. 3. Audit the valuation of new construction as determined by each county as prescribed by section 42-17051. C. The director and county assessors shall meet at the state capitol, or at a place designated by the director, at least twice each year to consider matters relating to property taxation. The traveling expenses of assessors in attending these meetings shall be paid by the respective counties. 42-13003. Report on property that has not been appraised A. On or before November 15 of each year each county assessor shall report to the department each parcel of property that has not been appraised during the preceding three years. The assessor shall include a statement of the reasons for the failure to appraise each such parcel. B. The department may direct the assessor to adjust the valuation of any such parcel to reflect its full cash value. 42-13004. Data processing equipment and systems A. County assessors shall use data processing systems that are prescribed by the department, but a county assessor who has a data processing system that is compatible with the system prescribed by the department may continue to use that system if it is coordinated with the system prescribed by the department. B. A county may contract with a private supplier or with another political subdivision for equipment or services that are necessary to meet the requirements of the department if the data processing system is compatible and coordinated with the system prescribed by the department. C. If a county does not own, lease or contract for data processing equipment or services that are necessary to meet the department's requirements, the department may contract with the county to furnish the equipment or services to the county. D. On application by the board of supervisors, the department shall authorize a county to prepare its own tax rolls and assessment abstracts if the data processing system used by the county in preparing the rolls and abstracts is compatible and coordinated with the system prescribed by the department. E. The office of the county assessor is responsible for paying the cost of its data processing system and permanent records that are prescribed by the department. F. Monies collected by the department pursuant to subsections C and E of this section shall be deposited in the state general fund. 42-13005. Sales-ratio studies A. The department shall perform and issue the results of sales-ratio studies using sales or appraisal data according to statistical principles that apply to the studies. B. If the studies disclose discrepancies with county assessors' full cash values, the department may request the assessor or assessors to conduct field appraisals in the county, area, class or classification of discrepancy, using the standard appraisal methods and techniques adopted by the department. Adjustments to property valuations may be based on the results of the assessors' field appraisals. C. The department shall not issue equalization orders under article 6 of this chapter affecting commercial or industrial property based exclusively on the results of sales-ratio studies. 42-13006. Qualifications of appraisers and assessing personnel; certification program A. A person may not perform the duties or exercise the authority of an assessor or appraiser of property in or on behalf of a county unless the person holds an assessor's or appraiser's certificate, respectively, that is issued or recognized by the department. This subsection does not apply to an elected official or to clerical and secretarial personnel. B. The department shall provide for examining applicants for assessor's and appraiser's certificates. A certificate may not be issued to a person who has not demonstrated to the department's satisfaction that the person is competent to perform the work of an assessor or appraiser, as the case may be. C. The department shall conduct or sponsor in-service and preentry training programs on the technical, legal and administrative aspects of the assessment process. For this purpose, the department may cooperate with educational institutions, regional, state or national assessors' organizations and other organizations that are interested in improving assessment practices. D. The department shall provide for a graduated certification program that encompasses provisional certification, basic certification, intermediate certification and advanced certification. Each certification level shall encompass gradually increasing professional standards and qualifications. E. At the request of any of the following the department shall prepare and submit a report on the achievements and problems of the education, training and certification activities under this section: 1. The education, training and certification advisory committee established by section 42-13007. 2. The president of the senate. 3. The speaker of the house of representatives. 4. The chairman of the senate finance committee or its successor. 5. The chairman of the house of representatives ways and means committee or its successor. 42-13007. Education, training and certification advisory committee A. The education, training and certification advisory committee is established consisting of the following members: 1. A member of the state board of equalization who is appointed by the chairman of the state board. 2. Three county assessors or deputy county assessors who are appointed by the director. 3. A training coordinator in the property valuation and equalization division of the department who is appointed by the director. B. The members who are appointed pursuant to subsection A, paragraphs 1 and 2 shall be appointed to one year terms. The training coordinator who serves pursuant to subsection A, paragraph 3 serves at the pleasure of the director, shall serve as secretary to the committee and shall keep written minutes of all committee meetings. The members of the committee shall choose a chairman from among the members. The committee shall meet at least semiannually at a time and place set by the chairman. Additional meetings shall be held on the call of the chairman or at the request of two or more members. C. The committee shall evaluate: 1. The guidelines proposed by the department for placing persons who apply for admission to the assessor certification program into the proper professional level of certification. 2. The guidelines proposed by the department pertaining to appraisal reports, experience, education or training submitted for credit in the assessor certification program. 3. The curriculum proposed by the department for the assessor certification program. 4. The procedures proposed by the department for grading demonstration appraisal reports, including any graders who are designated for the reports. 5. The form and content of examinations that are given for credit in the assessor certification program. 42-13051. Duties of county assessor A. Not later than December 15 of each year the county assessor shall identify by diligent inquiry and examination all real property in the county that is subject to taxation and that is not otherwise valued by the department as provided by law. B. The assessor shall: 1. Determine the names of all persons who own, claim, possess or control the property, including properties subject to the government property lease excise tax pursuant to chapter 6, article 5 of this title. 2. Determine the full cash value of all such property as of January 1 of the next year by using the manuals furnished and procedures prescribed by the department. 3. List the property with the determined valuation for use on the tax roll and report to the department of education the determined valuations of properties that are subject to the government property lease excise tax pursuant to chapter 6, article 5 of this title. C. In identifying property pursuant to this section, the assessor shall use aerial photography, applicable department of revenue records, building permits and other documentary sources and technology. 42-13052. Continuing valuation of class two, three and four property In the case of property that is classified as class two, three or four pursuant to section 42-12002, 42-12003 or 42-12004, the assessor may use the same valuation for up to three consecutive tax years if: 1. The assessor files a specific plan for the valuations with the department. 2. The plan is implemented uniformly throughout the county. 42-13053. Exception list; review of valuation A. If the county assessor initially determines the valuation of property under this article by using a computerized data processing or valuation program, and if the valuation found by that method constitutes a change in the valuation methodology and the resulting change in valuation in any year is more than fifteen per cent above or below the valuation found for the same parcel of property in the preceding year, the assessor shall place the parcel on an exception list. The assessor shall review the valuation to determine if the change in valuation reflects the current status and conditions affecting each property on the exception list before mailing the notice of valuation. B. This section does not apply in the case of parcel splits or consolidations, construction or destruction of improvements, changes in use or classification of the property, or other occurrences that would account for the change in valuation. 42-13054. Taxable value of personal property; depreciated values of personal property in class one, class two (P) and class six A. The taxable value of personal property that is valued by the county assessor is the result of acquisition cost less any appropriate depreciation as prescribed by tables adopted by the department. The taxable value shall not exceed the market value. B. Except as provided in subsection C of this section and notwithstanding any other statute, the assessor shall adjust the depreciation schedules prescribed by the department as follows to determine the valuation of personal property: 1. For personal property that is initially classified during tax year 1994 through tax year 2007 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42-12001 and personal property that is initially classified during tax year 1995 through tax year 2007 as class two (P) pursuant to section 42-12002: (a) For the first tax year of assessment, the assessor shall use thirty-five percent of the scheduled depreciated value. (b) For the second tax year of assessment, the assessor shall use fifty-one percent of the scheduled depreciated value. (c) For the third tax year of assessment, the assessor shall use sixty-seven percent of the scheduled depreciated value. (d) For the fourth tax year of assessment, the assessor shall use eighty-three percent of the scheduled depreciated value. (e) For the fifth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines. 2. For personal property that is initially classified during tax year 2008 through tax year 2011 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42-12001 and personal property that is initially classified during tax year 2008 through tax year 2011 as class two (P) pursuant to section 42-12002: (a) For the first tax year of assessment, the assessor shall use thirty percent of the scheduled depreciated value. (b) For the second tax year of assessment, the assessor shall use forty-six percent of the scheduled depreciated value. (c) For the third tax year of assessment, the assessor shall use sixty-two percent of the scheduled depreciated value. (d) For the fourth tax year of assessment, the assessor shall use seventy-eight percent of the scheduled depreciated value. (e) For the fifth tax year of assessment, the assessor shall use ninety-four percent of the scheduled depreciated value. (f) For the sixth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines. 3. For personal property that is initially classified during tax year 2012 through tax year 2021 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42-12001, personal property that is initially classified during tax year 2012 through tax year 2021 as class two (P) pursuant to section 42-12002 and personal property that is acquired during tax year 2017 through tax year 2021 and initially classified during tax year 2018 through tax year 2021 as class six pursuant to section 42-12006, paragraph 2 or 3: (a) For the first tax year of assessment, the assessor shall use twenty-five percent of the scheduled depreciated value. (b) For the second tax year of assessment, the assessor shall use forty-one percent of the scheduled depreciated value. (c) For the third tax year of assessment, the assessor shall use fifty-seven percent of the scheduled depreciated value. (d) For the fourth tax year of assessment, the assessor shall use seventy-three percent of the scheduled depreciated value. (e) For the fifth tax year of assessment, the assessor shall use eighty-nine percent of the scheduled depreciated value. (f) For the sixth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines. 4. For personal property that is initially classified during or after tax year 2022 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42-12001 personal property that is initially classified during or after tax year 2022 as class two (P) pursuant to section 42-12002 and personal property that is acquired during or after tax year 2022 and initially classified during or after tax year 2022 as class six pursuant to section 42-12006, paragraph 2 or 3, the assessor shall use a valuation factor of two and one-half percent. C. The additional depreciation prescribed in subsection B of this section: 1. Does not apply to any property valued by the department. 2. Shall not reduce the valuation below the minimum value prescribed by the department for property in use. 42-13055. Reducing minimum value for property in use A. Beginning in valuation year 2000, the department shall reduce the minimum value prescribed for class one, paragraphs 8, 9, 10 and 13 and class two (P) valued by the assessor by 2.5 per cent good each year. B. This section does not require the department to reduce the minimum value for any property in use below 2.5 per cent good. 42-13056. Taxable value of solar energy devices classified as personal property; depreciated value; definition A. When characterized as personal property, subject to any applicable constitutional exemption from taxation, the property specified in section 42-11054, subsection C, paragraph 3 shall be valued annually, at its taxable original cost, minus any appropriate depreciation as prescribed by tables adopted by the department. Each taxpayer that owns the property specified in section 42-11054, subsection C, paragraph 3 shall annually report to the assessor in each county where the property is located the taxable original cost of the property. B. As the annual scheduled depreciated value for this section, the county assessor shall use the depreciation table prescribed by the department for personal property with a ten-year life, based on the date each device or system was placed into service. C. Notwithstanding any other law, the county assessor shall adjust the depreciation schedules prescribed by the department as follows: 1. For the first tax year of assessment, the assessor shall use three percent of the scheduled depreciated value. 2. For the second tax year of assessment, the assessor shall use three percent of the scheduled depreciated value. 3. For the third tax year of assessment, the assessor shall use three percent of the scheduled depreciated value. 4. For the fourth tax year of assessment, the assessor shall use four percent of the scheduled depreciated value. 5. For the fifth tax year of assessment, the assessor shall use five percent of the scheduled depreciated value. 6. For the sixth tax year of assessment, the assessor shall use six percent of the scheduled depreciated value. 7. For the seventh tax year of assessment, the assessor shall use eight percent of the scheduled depreciated value. 8. For the eighth tax year of assessment, the assessor shall use eleven percent of the scheduled depreciated value. 9. For the ninth tax year of assessment, the assessor shall use twenty-four percent of the scheduled depreciated value. 10. For the tenth tax year of assessment, the assessor shall use one hundred percent of the scheduled depreciated value. D. For the purposes of this section, "taxable original cost" means the original cost minus the value of any investment tax credits, production tax credits or cash grants in lieu of investment tax credits applicable to the taxable renewable energy equipment. 42-13101. Valuation of agricultural land A. Land that is used for agricultural purposes shall be valued using only the income approach to value without any allowance for urban or market influences. B. The income of agricultural property shall be determined using the capitalized average annual net cash rental of the property. For purposes of this subsection the average annual net cash rental of the property: 1. Is the average of the annual net cash rental, excluding real estate and sales taxes, determined through an analysis of typical arm's length rental agreements collected for a five year period before the year for which the valuation is being determined for comparable agricultural land used for agricultural purposes and located in the vicinity, if practicable, of the property being valued. 2. Shall be capitalized at a rate 1.5 percentage points higher than the average long-term annual effective interest rate for all new farm credit services loans for the five year period before the year for which the valuation is being determined. 42-13102. Statement of agricultural lease A. Each lease of agricultural land or agreement to rent agricultural land for a period of more than ninety days shall be abstracted in a written statement in a form approved by the department containing at least the following information: 1. The name and address of the lessor and lessee. 2. The complete legal description of the property. 3. The situs address, if any, of the property. 4. The cash or cash equivalent of the lease payments. 5. The conditions of the lease, including the relationship, if any, of the parties. 6. The lessor expenses associated with the property excluding land cost, interest on land cost, income tax depreciation and capital improvements. B. The county assessor shall not use the information listed pursuant to chapter 15, article 2 of this title to supplement the information obtained pursuant to this section. C. The owner or lessor or an agent of the owner or lessor shall file the statement with the county assessor for use by the assessor for the valuation process under section 42-13101. If the ownership or the lessor or lessee of the property changes or if there is a change in the lease as abstracted pursuant to subsection A of this section, a new statement shall be filed with the assessor within three months after the change or before January 31, whichever is later. D. The assessor shall transmit a copy of the statement to the department. 42-13151. Definition of golf course In this article, unless the context otherwise requires, "golf course" means substantially undeveloped land, including amenities such as landscaping, irrigation systems, paths and golf greens and tees, that may be used for golfing or golfing practice by the public or by members and guests of a private club. Golf course does not include: 1. Commercial golf practice ranges that are operated exclusive of golf courses that are valued under this article. 2. Clubhouses, pro shops, restaurants and similar buildings that are associated with the golf course, which are generally used by the public or by members and guests who are entitled to use the golf course. 42-13152. Computing valuation of golf courses A. In recognition of the importance of the open space and economic benefits of golf courses, county assessors shall value all golf courses uniformly based on guidelines prescribed by the department. B. Subject to section 42-13154, values shall be made on the assumption that no other property use is possible. C. Land shall be valued at five hundred dollars per acre. D. The improvement value of the golf course is established by the department's 1988 per hole cost, as prescribed in subsection E of this section for the grade of the golf course as described in the department's assessment practices manual for golf course assessment effective January 1, 1986. The per hole cost shall be multiplied by the number of holes included. The value shall be adjusted to reflect the application of economic obsolescence, which shall be uniformly determined as follows: 1. Determine the number of actual rounds of golf played during the most recent twelve months ending on July 31. 2. Multiply the rounds played during the peak month by twelve to determine the number of rounds of play the course would have had under optimum conditions. 3. Divide the actual number of rounds played during the year by the optimum rounds played. 4. The quotient is the relationship between the actual rounds played and projected play under optimum conditions or the per cent good after the economic obsolescence has been deducted. 5. Apply the obsolescence by multiplying the total per hole cost by the per cent good. 6. The obsolescence factors developed by applying the procedures prescribed by paragraphs 1 through 5 shall be applied to the data submitted to the county assessor annually by golf course owners or managers on a form prescribed by the department. The assessor shall mail the form to the last known mailing address of each golf course owner or manager on or before August 1 of each year. The form shall reflect the number of rounds played by month for the most recent twelve months ending on July 31. The form shall be returned to the county assessor not later than September 30 to receive the economic obsolescence adjustment. 7. Add the replacement cost new less the depreciation for the structures and additional items to determine the full cash value of the facility improvements. 8. To determine the full cash value of the golf course, add the per acre value as reflected in this section, the valuation of the golf course improvements, adjusted for obsolescence pursuant to paragraphs 1 through 6, and the valuation of the structures and additional items pursuant to paragraph 7. E. For tax year 1995, the 1988 per hole improvement cost described in subsection D of this section shall be used to value golf courses. In each subsequent tax year the per hole improvement costs shall be adjusted using the change in the GDP price deflator as defined in section 41-563. For purposes of this subsection, the per hole improvement cost values include landscaping, bridges, lakes, lake liners, practice ranges, irrigation systems, paths, golf greens and tees. 42-13154. Covenant not to convert golf course to another use; notice; violation; penalty; definition A. As a condition for valuation under this article, the owner of a golf course shall record a deed restriction with the county recorder and file a copy of the restriction with the county assessor, requiring and restricting the property to use as a golf course for at least ten years. The deed restriction must be refiled as necessary, including when the property is split or combined, to ensure that the deed restriction always applies for at least ten years. B. The valuation of a golf course under this article constitutes a covenant between the county assessor and the owner of the golf course that the use of the property as a golf course will remain unchanged for the duration of the deed restriction in order to receive valuation as a golf course and to avoid the penalty prescribed in subsection E of this section for converting the property to a different use. C. The county assessor shall maintain a record of the value of the property determined under this article and the value of the property if it had not been determined under this article. The county assessor shall maintain the record for at least ten years for use in computing the penalty under subsection E if the property is converted to a different use in violation of the covenant. D. If any part of the property is converted to a different use in violation of the covenant, the owner of the golf course must submit notification to the county assessor in person, electronically or by certified mail within thirty days after the property is converted to a different use. E. On receipt of the owner of the golf course's notice pursuant to subsection D of this section or the county assessor discovering that any part of the property has been converted to a different use, the county assessor shall add to the tax levied against the property on the next tax roll a penalty equal to the difference between the total amount of property taxes that would have been levied on the property for the preceding ten years or the period of time the property was valued under this article, whichever period is shorter, if the property had not been valued under this article and the property taxes that were actually paid for the same period. The penalty due under this subsection shall be paid before completion of the next property tax roll and is enforceable and subject to the same penalties and interest as if the penalty were a tax levied against the property. F. If the county assessor accepts electronic filings or notices, the county assessor shall provide an electronic acknowledgment of receipt. G. For the purposes of this section, "converted to a different use" means the terms of this article have been violated or the deed restriction has been removed, has expired without the refiling of a replacement restriction or has been violated. 42-13201. Definition of shopping center In this article, unless the context otherwise requires, "shopping center" means an area that is comprised of three or more commercial establishments, the purpose of which is primarily retail sales, that has a combined gross leasable area of at least twenty-seven thousand square feet, that is owned or managed as a unit with at least one of the establishments having a gross leasable area of at least ten thousand square feet and that is either owner-occupied or subject to a lease that has a term of at least fifteen years. 42-13202. Exclusive method and procedure for valuing shopping centers; confidentiality A. A shopping center that is subject to valuation for purposes of property tax shall be valued pursuant to this article. This article establishes the exclusive valuation methods and procedure for determining the valuation of a shopping center. B. All information that a taxpayer submits pursuant to this article is confidential pursuant to chapter 2, article 1 of this title. 42-13203. Replacement cost less depreciation method of valuing shopping centers; election to use income method on appeal A. Except as provided by section 42-13204, the county assessor shall determine the valuation of a shopping center by using the replacement cost less depreciation method. B. This method shall use base rates in existence on January 1, 1982 subject to any changes that are necessary to reflect changes in costs of construction. The base rates shall be based on average costs that relate to this state as reported in professional cost manuals and publications that are approved by the department. C. The depreciation schedule used under the replacement cost less depreciation method, including any adjustment for obsolescence, shall be the schedule in existence on January 1, 1982 and used by the county assessor. D. On review or appeal of a valuation determined under this section, the owner of a shopping center may elect to have the valuation of the shopping center determined by the income method commonly known as the straight line building residual method if the owner submits all reasonably necessary income and expense information. The reviewing body shall use the information submitted by the owner and may also use any other information customarily analyzed under this method. The capitalization rate used for purposes of this subsection shall be comprised of: 1. For the 1983 tax year a discount rate of 10.5 per cent, adjusted each year thereafter according to the percentage change in the weighted average cost of monies derived from interest paid on savings accounts, federal home loan bank advances and other borrowed money as reported by the federal home loan bank of San Francisco for this state for the most recent twelve month period ending June 30. The discount rate shall not be less than ten per cent. 2. A recapture rate based on a thirty-five year economic life. 3. The effective tax rate for the property for the most recent tax year. E. The department shall: 1. Determine the average differences in valuations for similar size and age shopping centers that result from the two valuation methods prescribed by this section and section 42-13204 and from which the department shall develop a schedule of obsolescence factors that can be added to the depreciation schedule used in the replacement cost less depreciation method. County assessors shall incorporate the obsolescence factors into the depreciation schedule. 2. Develop obsolescence factors prescribed by paragraph 1 of this subsection based on statistical research in order to, on average, equalize the valuations that result from the two valuation methods prescribed in this section and section 42-13204. The department may use data from state sources, nationally recognized publications and journals and other related research. 42-13204. Election to use income method of valuation initially In lieu of valuation under section 42-13203, the owner of a shopping center may elect to have the valuation of the shopping center determined by the income method commonly known as the straight line building residual method if the owner submits all reasonably necessary income and expense information for the owner's three most recent fiscal years to the county assessor before September 1 of the year immediately preceding the year for which the property will be valued. 42-13205. Valuation method applied on appeal On appeal of a valuation determined by the income method pursuant to section 42-13204 or an appeal in which the owner has elected the income method pursuant to section 42-13203, subsection D, the valuation of a shopping center shall be determined by whichever one of the following valuation methods most closely approximates fair market value: 1. The income method commonly known as the straight line building residual method pursuant to section 42-13203, subsection D. If the reviewing body finds that other information that is customarily analyzed under the income method must be used to properly apply the income method to the property, it may use the other information to supplement information provided by the owner if: (a) The credible and accurate information provided by the owner remains the primary basis for the valuation under the income method. (b) The supplementary information is credible, is derived from properties or circumstances that are substantially comparable to the property and is valid under the income method. (c) The reviewing body specifies in its written order what other information was considered, the manner in which it was applied and the change in the valuation under the income method, if any, resulting from the use of the supplementary information. 2. The replacement cost less depreciation method pursuant to section 42-13203. 3. The market comparison method, if a sale of the subject property occurred within two years before the date of valuation and no material change to the property, its lease terms, tenants or occupancy rates or any other material fact has occurred since the sale. If the market comparison method is applicable, the reviewing body may consider information on sales of other properties that occurred within two years before the date of valuation and that are determined to be comparable to the subject property by clear and convincing evidence. 42-13206. Valuation of dedicated parking or common areas For the purposes of this article any part of the land of a shopping center that is limited by a zoning requirement or contractual covenant to parking or common area use shall be valued on the assumption that no other use is possible. 42-13251. Equalization of valuations by department A. The department may adopt a schedule of examining and comparing the valuations of property in the several counties every year. B. The review shall be according to and consistent with the valuation directives, rules and guidelines adopted by the department. C. Each county assessor shall provide complete copies of data files and proposed assessments to the department on or before December 15 of the year preceding the valuation year. If the data is not complete or is in a format that is not readable by the department, the department may use the latest available data for the purposes of complying with this article. 42-13252. Scope of equalization A. If the department finds that inequalities exist between or within counties or between or within classes or classifications, the department may equalize them so that all property that is subject to taxation is listed on the rolls at its full cash value. B. The department shall not issue an equalization order or directive except as provided by this article. C. The department may equalize valuations of property: 1. Between or within counties. 2. Between any designated areas authorized under the guidelines established by the department. 3. Between or within the statutory classes of property established by chapter 12, article 1 of this title or the standard use classifications of property established by the department including between or within counties or between any designated area authorized under the guidelines established by the department. D. The equalization may be based on a deviation from the standard median or on a deviation from the coefficient of dispersion, as prescribed by law. 42-13253. Notice of equalization order On determining that an equalization order is necessary, the department shall: 1. Notify the assessor of any county that is affected by the order. 2. At the same time, notify by certified mail or by e-mail the governor, the president of the senate and the speaker of the house of representatives including the reasons that necessitated the order. 42-13254. Date of issue; effective date A. The department shall issue an equalization order no later than January 15 of the valuation year. B. The equalization order is for the valuation year in which the order is issued. C. The assessor shall not issue a notice for property affected by the equalization order pursuant to section 42-15101 until the assessor has complied with the equalization order issued pursuant to this article and the compliance is confirmed by the department, unless the assessor has filed an appeal with the court pursuant to section 42-16212. On a showing of good cause, the department may extend the date for issuing the notice of valuation under section 42-15101 for not more than fifteen days. 42-13255. Appeal The county assessor who receives an equalization order may appeal the order to the state board of equalization pursuant to section 42-16159 on or before February 15 of the valuation year. 42-13256. Adjustments of equalized property values by assessor On reviewing the effect of an equalization order on individual property valuations, the county assessor may adjust the level of valuation of a property if the equalization order would result in the property being valued at a level greater than full cash value. 42-13257. Report to property tax oversight commission In conjunction with the valuation examinations under this article, the department shall report to the property tax oversight commission established by section 42-17002 on the accuracy of valuations reported in prior years pursuant to section 42-17052. 42-13301. Limited property value A. The limited property value of property for property taxation purposes is the limited property value of the property in the preceding valuation year plus five per cent of that value. B. The current limited property value of a parcel of property shall not exceed its current full cash value. C. The limited property value of a parcel of property shall be determined and shown on notices and tax rolls as the total limited property value of the property. Separate determinations shall not be made for the limited property value of land and for the improvements on the land in reference to property parcels. 42-13302. Determining limited value in cases of modifications, omissions and changes A. In the following circumstances the limited property value shall be established at a level or percentage of full cash value that is comparable to that of other properties of the same or a similar use or classification: 1. Property that was erroneously totally or partially omitted from the property tax rolls in the preceding tax year, except as a result of this section. 2. Property for which a change in physical, objectively verifiable use has occurred on the property since the preceding tax year. For the purposes of this paragraph and section 42-16002: (a) A change in the occupant or classification of a single-family residence is not a change in use, in and of itself. (b) A change in the classification of a guest ranch as defined in section 42-13551 is not a change in use, in and of itself. 3. Property that has been modified by construction, destruction or demolition since the preceding valuation year such that the total value of the modification is equal to or greater than fifteen percent of the full cash value. 4. Property that has been split, subdivided or consolidated from January 1 through September 30 of the valuation year, except for cases that result from an action initiated by a governmental entity. 5. Property that previously qualified for property valuation protection under article IX, section 18, subsection (7), Constitution of Arizona, if title to the property is conveyed to a person that does not qualify for property valuation protection or the current owner of the property no longer qualifies or did not reapply for property valuation protection. 6. Property that previously qualified for a statutory valuation and no longer qualifies, unless otherwise provided in law. For the purposes of this paragraph, "statutory valuation" means a specific formula for the calculation of full cash value prescribed in chapter 12, 13, 15 or 19 of this title. B. In the case of property that is split, subdivided or consolidated after September 30 through December 31 of the valuation year, except for cases that result from an action initiated by a governmental entity, the total limited property value of the new parcel or parcels is the same as the total limited property value of the original parcel or parcels. For the following valuation year, the limited property value shall be established at a level or percentage of full cash value that is comparable to that of other properties of the same or a similar use or classification. The new parcel or parcels shall retain the same value-adding characteristics that applied to the original parcel before being split or consolidated, except as provided in subsection A, paragraph 3 of this section. C. In the case of property that was split, subdivided or consolidated from January 1 through September 30 of the valuation year as a result of an action initiated by a governmental entity, the limited value is the lower of either: 1. The level or percentage of full cash value that is comparable to that of other properties of the same or similar use or classification. 2. The total limited value for the original parcel or parcels as determined under section 42-13301, and in the following valuation year, the limited property value shall be established pursuant to section 42-13301. D. In the case of property that was split, subdivided or consolidated after September 30 through December 31 of the valuation year as a result of an action initiated by a governmental entity, the total limited value for the resulting parcel or parcels is the same as the total limited value for the original parcel or parcels as determined under section 42-13301, and in the following valuation year, the limited property value shall be established as the lower of either: 1. The level or percentage of full cash value that is comparable to that of other properties of the same or similar use or classification. 2. The limited property value established pursuant to section 42-13301. 42-13304. Exemptions from limitation The limitations prescribed by this article do not apply to: 1. Personal property, other than mobile homes. The full cash value of personal property, other than mobile homes, shall be used for all purposes in lieu of limited property value. 2. Property included in property class one under section 42-12001, paragraphs 1 through 7, 11 and 14. The full cash value of that property shall be used for all purposes in lieu of limited property value. 42-13351. Method and procedures for valuing property of manufacturers, assemblers or fabricators; confidentiality A. Real or personal property that is subject to valuation for property tax purposes and that is used by any manufacturer, assembler or fabricator of tangible personal property, except property that is included in class one, paragraphs 1 through 9 and paragraphs 11 through 14 and classes two, three, four, five, six, seven, eight or nine, shall be valued pursuant to this article. B. All information that a taxpayer submits pursuant to this article is confidential pursuant to chapter 2, article 1 of this title. 42-13352. Determining valuation of property of manufacturers, assemblers or fabricators A. The county assessor shall determine the valuation of both real and personal property valued under this article. B. For purposes of determining the valuation of property valued under this article, the county assessor shall use standard appraisal methods and techniques as provided in section 42-11001, paragraph 6 and section 42-11054, except as otherwise provided in this article. C. The taxable value of personal property is the result of acquisition costs less any appropriate depreciation as prescribed by the department. The taxable value shall not exceed the market value. 42-13353. Depreciated values of personal property of manufacturers, assemblers and fabricators A. Except as provided in subsection D and notwithstanding any other statute, the department shall adjust depreciation schedules for use by the assessors to determine the valuation of personal property valued under this article that was or is initially assessed during tax year 1994 through tax year 2007 as follows: 1. For the first tax year of assessment, the assessor shall use thirty-five per cent of the scheduled depreciated value. 2. For the second tax year of assessment, the assessor shall use fifty-one per cent of the scheduled depreciated value. 3. For the third tax year of assessment, the assessor shall use sixty-seven per cent of the scheduled depreciated value. 4. For the fourth tax year of assessment, the assessor shall use eighty-three per cent of the scheduled depreciated value. 5. For the fifth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed by the department's guidelines. B. Except as provided in subsection D and notwithstanding any other law, the department shall adjust depreciation schedules for use by the assessors to determine the valuation of personal property valued under this article that was or is initially assessed during tax year 2008 through tax year 2011 as follows: 1. For the first tax year of assessment, the assessor shall use thirty per cent of the scheduled depreciated value. 2. For the second tax year of assessment, the assessor shall use forty-six per cent of the scheduled depreciated value. 3. For the third tax year of assessment, the assessor shall use sixty-two per cent of the scheduled depreciated value. 4. For the fourth tax year of assessment, the assessor shall use seventy-eight per cent of the scheduled depreciated value. 5. For the fifth tax year of assessment, the assessor shall use ninety-four per cent of the scheduled depreciated value. 6. For the sixth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines. C. Except as provided in subsection D and notwithstanding any other law, the department shall adjust depreciation schedules for use by the assessors to determine the valuation of personal property valued under this article that was or is initially assessed during or after tax year 2012 as follows: 1. For the first tax year of assessment, the assessor shall use twenty-five per cent of the scheduled depreciated value. 2. For the second tax year of assessment, the assessor shall use forty-one per cent of the scheduled depreciated value. 3. For the third tax year of assessment, the assessor shall use fifty-seven per cent of the scheduled depreciated value. 4. For the fourth tax year of assessment, the assessor shall use seventy-three per cent of the scheduled depreciated value. 5. For the fifth tax year of assessment, the assessor shall use eighty-nine per cent of the scheduled depreciated value. 6. For the sixth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines. D. The additional depreciation prescribed in this section shall not reduce the valuation below the minimum value prescribed by the department for property in use. 42-13354. Assessing personal property construction work in progress; definition A. The county assessor shall not value or assess personal property construction work in progress until the construction work has progressed to a sufficient degree for the personal property to be useful for the purposes for which it is being constructed. B. For the purposes of this section, "personal property construction work in progress" means the amount spent and entered on the taxpayer’s accounting records as of December 31 of the preceding calendar year as construction work in progress. 42-13355. Assessing clean rooms as personal property; definition A. Clean rooms that are used for manufacturing, processing, fabrication or research and development of semiconductor products shall be valued and assessed as tangible personal property. B. For the purposes of this section: 1. "Clean room" means all property that comprises or creates an environment where humidity, temperature, particulate matter and contamination are precisely controlled within specified parameters, without regard to whether the property is actually contained within that environment or whether any of the property is affixed to or incorporated into real property. 2. Clean rooms include the integrated systems, fixtures, piping, movable partitions, lighting and all property that is necessary or adapted to reduce contamination or to control airflow, temperature, humidity, chemical purity, or other environmental conditions or manufacturing tolerances, as well as the productions machinery and equipment operating in conjunction with the clean room environment. 3. Clean rooms do not include the building or a permanent, nonremovable component of the building that houses the clean room environment. 42-13401. Exclusive method of identifying and valuing common areas This article establishes the exclusive method for identifying and valuing common areas. 42-13402. Identifying common areas; definition A. The county assessor shall identify common areas for valuation under this article. B. In general, common areas consist of improved or unimproved real property that is intended for the use of owners and residents of a residential subdivision or development and invited guests of the owners or residents and include common beautification areas and common areas used as an airport. Areas that do not qualify as common areas shall be valued using standard appraisal techniques. The following are not considered to be common areas: 1. Common elements of a condominium, as defined in section 33-1202. 2. A golf course, as defined in section 42-13151 and valued pursuant to article 4 of this chapter. C. Property must meet all of the following requirements to be considered a common area: 1. The property must be owned by a nonprofit homeowners' association, community association or corporation. 2. The association or corporation must be organized and operated to provide for the maintenance and management of the common area property. 3. All residential property owners in the development must be required to be and must actually be members of the association or corporation, or must be obligated to pay mandatory assessments to maintain and manage the common areas. 4. All members of the association or residential property owners in the development, their immediate families and, if provided by rules of the association or corporation, guests must have a right to use and enjoy the common areas. This right must be appurtenant to and pass with title to each lot and parcel. The association or corporation may assess fees for particular uses of individual common areas. 5. The common areas must be deeded to the association or corporation. D. For purposes of this section "airport" means runways and taxiways that are used primarily by residents of the residential subdivision but that may be designated as a reliever airport by the federal aviation administration and that receives no public funding. 42-13403. Computing valuation A. Subject to section 42-13404, values for common areas shall be made on the assumption that no other property use is possible. B. Land, buildings and improvements used for common areas shall be valued at five hundred dollars per parcel. The county assessor may divide the assessment amount per parcel to depict an assessment for land and an assessment for buildings and improvements provided that the total assessment for the parcel does not exceed five hundred dollars. 42-13404. Deed restriction on common area use A. As a condition for valuation under this article, the subdivider of a residential subdivision, on approval of the subdivision by the state real estate department pursuant to title 32, chapter 20, article 4, or the community or homeowners' association that owns the common area shall record a deed restriction with the county recorder and file a copy of the restriction with the county assessor restricting the property to use as a common area. B. If the property is converted to a different use in violation of the restrictions, the assessor shall change the classification and revalue the property according to standard appraisal methods and techniques. C. The county assessor may consolidate parcel combinations within the same taxing district if requested by the community or homeowners' association. A community or homeowners' association may provide a one-time list of common area tracts by parcel number to the assessor, in a form prescribed by the department of revenue. D. The county assessor shall automatically consolidate parcel combinations within the same taxing district. If after further review by the assessor the parcel does not meet the requirements of a common area as described in section 42-13402, the assessor may revoke the statutory valuation made pursuant to section 42-13403 and shall value the parcel according to standard appraisal techniques. The revocation does not waive a community or homeowners' association's right to request the common area valuation. 42-13451. Definitions In this article, unless the context otherwise requires: 1. "Accommodation" means any apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room or other private or commercial structure containing toilet facilities that is designed and available for use and occupancy as a residence by one or more individuals and that is included in the offering of a timeshare plan. 2. "Association" means any organized body consisting of the purchasers of interests in a timeshare plan. 3. "Developer" means either of the following: (a) Any person, corporation, partnership, limited liability company, trust or other entity, other than a sales agent, that creates a timeshare plan or is in the business of selling timeshare interests or employs sales agents to sell timeshare interests. (b) Any person or entity that succeeds to the interest of the developer by sale, lease, assignment, mortgage or other transfer if the person offers at least twelve timeshare interests in a particular timeshare plan and the person is in the business of selling timeshare interests or employs sales agents to sell timeshare interests. 4. "Managing entity" means the association or other person that undertakes the duties, responsibilities and obligations of the management of a timeshare plan. 5. "Promotion" means a plan or device, including one involving the possibility of a prospective purchaser receiving a vacation, discount vacation, gift or prize, used by a developer or the developer's employee, or on the developer's behalf by an agent or the agent's employee, an independent contractor or the independent contractor's employee in connection with the offering and sale of timeshare interests in a timeshare plan. 6. "Timeshare interest" includes either a timeshare estate or a timeshare use. 7. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. 8. "Transient occupant" means any person who occupies an accommodation in a timeshare property and provides rental income to the developer or association to occupy the accommodation. Transient occupant does not include any person who uses an accommodation as a promotion, timeshare interest or exchange program. 42-13452. Computing valuation A. Except as provided by subsection B, the county assessor shall determine the valuation of timeshare property based on the original gross sales price of the timeshare interests of the timeshare property to a buyer. If there are insufficient original sales, the county assessor may use the sales of comparable timeshare interests. When using the original gross sales price of the timeshare interests, the county assessor shall deduct a reasonable amount representing nonrealty components of the original gross sales price. The deductions may include extraordinary initial marketing costs, business going concern value, excess sales commission costs, unusual financing, transactions that are not at arms length, atypical developer risks, extended marketing time, the value of any personal property and other nonrealty components, including vacation conveniences and services, club memberships, exchange programs and unusual closing costs. The amount of the deductions shall be presumed to be sixty-five per cent of the original gross sales price of the timeshare interest, except that the presumption is rebuttable by the county assessor or the managing entity. B. If the value of the timeshare interests can be appropriately determined by using resale prices of the timeshare interests for the timeshare property, the county assessor shall determine the value of the timeshare property based on the resale prices of the timeshare interests. If there are insufficient resale prices, the county assessor may use resale prices of comparable timeshare interests. When using the resale price, the county assessor shall deduct from the resale price the nonrealty components, including: 1. Atypical costs associated with the resale, including marketing costs, holding costs, commissions and financing costs. 2. The value of any personal property and rights associated with the timeshare interest being resold. C. If the county assessor rebuts the presumption in subsection A, the county assessor, on or before mailing the notice of valuation, shall notify the managing entity of the reason for the disapproval and establish the methodology the county assessor will use in determining the value of the timeshare property. 42-13453. Timeshare use form A. On or before September 30 of each year, each managing entity shall file with the county assessor a timeshare use form, prescribed by the department, for each timeshare property. The form shall contain: 1. The name and mailing address of the managing entity. 2. The total number of accommodations included within the managing entity's timeshare property and the total number of available nights for all accommodations. 3. The total number of nights for all accommodations that were used by a transient occupant during the reporting year. 4. The estimated original gross sales price of any timeshare interest if an affidavit of legal value is not required pursuant to section 11-1133. The estimated original gross sales price shall be determined by equating the actual sales price for a timeshare interest to an estimated sales price for the timeshare interest on a weekly use basis. B. The county assessor shall mail the timeshare use form to the last known mailing address of the managing entity on or before August 1 of each year. C. If the managing entity does not file the timeshare use form, the managing entity retains its right to appeal the classification pursuant to chapter 16 of this title. D. If the transient occupant use of the timeshare property was less than ten per cent of all available nights for all accommodations during the reporting period, the county assessor shall treat the timeshare property as if no transient occupant use occurred on the property. 42-13454. Managing entity as agent of owner A. Except as provided in subsection B, for the purpose of ad valorem taxation the managing entity identified on the timeshare use form is considered to be the taxpayer as agent of the person who owns the timeshare pr