Margie Cusack Research Manager International Association of assessing officers 314 W. 10th Street Kansas City, Missouri 64105 www.iaao.org

Practical Application of IAAO Standards For Land Administration and Property Tax Systems Margie Cusack cusack@iaao.org

Why IAAO Standards are important for property valuation? IAAO Standards have been developed to: Guide assessment officials in the creation, implementation and advancement of efficient land and property tax administration systems

What is a standard? A model accepted as correct by custom, consent, or authority A criterion for measuring acceptability, quality, or accuracy

What is a standard? An agreed way of doing something The distilled wisdom of an organization’s subject matter experts

Standard-setting Organization A body that sets, describes, or documents uniform operating, technological, or other norms for participants in a particular field or industry.

Technical Standards Subcommittee Alan Dornfest, AAS, Chair Property Tax Policy Bureau Chief Idaho State Tax Commission Carol Neihardt Vision Government Solutions Eudora, Kansas Bill Marchand Chief Deputy Assessor Norfolk, Virginia Joshua Myers Josh Myers Valuation Solutions Chesapeake, Virginia Wayne Forde Director of Shared Services Barbados Revenue Authority Chris Bennett Director of Publications, IAAO Staff Liaison, Chicago, Illinois August Dettbarn Appraiser Manager Douglas County, Kansas

Principles-based vs Rules-based Norms expressed as guidelines Principles-based Standards How to- Implementation is left up to you Prescribes implementation in detail Rules-based Standards Specific quality criteria or thresholds

Principles-based vs Rules-based Principles-based Standards Qualitative What is required, has exceptions Rules-based Standards Quantitative How to achieve an objective, no exceptions

Valuation Principles-based Example “Sales data should be collected, verified, and adjusted as necessary for model calibration and ratio study purposes.” Section 2 of Standard on Verification and Adjustment of Sales

Valuation Rules-based Example 9.1 Level of Appraisal While the theoretically desired level of appraisal is 1.00, an acceptable level between 0.90 and 1.10 is considered acceptable for any class of property *IAAO Standard on Ratio Studies

Principles-based vs Rules-based Younger standard setting organizations are typically principles-based More mature standard-setting bodies will use a mixture of principles and rules

A IAAO Disclaimer IAAO assessment standards represent a consensus in the assessing profession and have been adopted by the Executive Board of the International Association of Assessing Officers (IAAO). The objective of the IAAO standards is to provide a systematic means for assessing officers to improve and standardize the operation of their offices. IAAO standards are advisory in nature and the use of, or compliance with, such standards is voluntary. If any portion of these standards is found to be in conflict with national, state, or provincial laws, such laws shall govern. Requirements found in the Uniform Standards of Professional Appraisal Practice (USPAP) also have precedence over technical standards.

Nature of IAAO Standards Professional consensus & best practices Use is voluntary Do not have the force of law Cross both technical and policy lines Hybrid – on spectrum between principles-based and rules-based

Why Should We Use Standards in Valuing? Provide authoritative support Facilitate strategic planning Promote excellence in assessment administration Promote public trust to facilitate success

Nature of IAAO Standards The foundation of modern mass appraisal practice fair, uniform and equitable valuation Mass appraisal and new technologies can be successfully implemented overtime – not all or nothing

IAAO Keys to the Industry Attempt to cover everything on which assessing officers need guidance Establish and maintain valuation information related to property tax How to Value and Review Value Tax policy, Management, Accountability Fundamental principles- FAIR, UNIFORM and EQUITABLE

A little bit of History Began standard-setting in 1937 with the publication of principles Started calling them “standards” in the 1956 published report

IAAO History Minimum Assessment Standards document published in 1963 Principles-based Qualitative

IAAO History Preeminent Standards - First Adopted Assessment-Ratio Studies – 1980 Mass Appraisal of Real Property – 1984 Property Tax Policy – 1997 Automated Valuation Models - 2003

Response to Emerging Trends IAAO tackles emerging issues Standard on the Valuation of Property Affected By Environmental Contamination 1992 Automated Valuation Model Standard – 2003 Sales Verification and Adjustment - 2010

Standards Concentrating on Land and Property Tax System Development Where do I start to build a system and then add additional data layers? Digital Cadastral Maps and Parcel Identifiers Manual Cadastral Maps and Parcel Identifiers

Digital Cadastral Maps and Parcel Identifiers Starts from basic concepts to full system development Covers all sorts of new imagery and desktop measurement tools Improved ‘how to’ for the creation of effective land administration and parcel mapping systems

Parcel Information Mapping Application

How do I improve Valuation development? Standards of: Automated Valuation Models Mass Appraisal of Real Property Valuation of Personal Property Verification and Adjustment of Sales Valuation of Property Affected by Environmental Contamination

Standard on Mass Appraisal of Real Property Section 1. Scope Section 2. Introduction Section 3. Collecting and Maintaining Property Data Section 4. Valuation Section 5. Model Testing, Quality Assurance, and Value Defense Section 6. Managerial Considerations

Standard on Automated Valuation Models Entire industry resource including references to other international standards What are AVM’s? A numerical model simulating an event or events What for? Used globally by large entities to determine value through a value estimate model

Advisory areas included in AVM Standard Documentation of Model Performance Quality Control of Data Used Integration/Reference to USPAP Product Limitations and Useful Life Internationalization of the Standard

Valuation Evaluation and Review- how is it going? Standards on: Ratio Studies- ruled based review of assessment fairness, uniformity and equity. Assessment Appeal –best practices in operational procedures and due process. Oversight Agency Responsibilities –what should this unit be doing to improve valuation and assisting valuers. Professional Development –IAAO can help!

Standard on Assessment Appeal Section 3. Appeal System for Locally Assessed Property Court System State or Provincial Property Tax Tribunal Local or Region Appeal Board Informal review by local assessor

Valuation Administration Toolkit Standards on: Public Relations-create effective public communication Property Tax Policy- enhance fair and equitable considerations Professional Development-train your staff! Contracting for Assessment Services-optimize external resources

Professional Development Standard IAAO-we will teach you! Professional Development Standard Professional Training and Designations Certified Assessment Evaluator (CAE) Residential Evaluation Specialist (RES) Mass Appraisal Specialist (MAS) Assessment Administration Specialist (AAS) Personal Property Specialist (PPS) Cadastral Mapping Specialist (CMS) http://www.iaao.org/wcm/Education/IAAO_Designations/

Where to Start? http://www.iaao.org/wcm/Resources/Publications_access/Technical_Standards/

http://www.iaao.org/wcm/Resources/Publications_access/Technical_Standards/

What is the Body of Knowledge? BOK, a description of the expertise required to effectively work within the assessment profession. The BOK describes the key areas of knowledge in which an assessment professional can establish skills.

Upcoming IAAO Body Of Knowledge 1. Working with the Legal Framework 2. Collecting and Maintaining Property Data 3. Developing and Managing Cadastral Data 4. Appraising Property  5. Leading and Managing the Assessment Office 6. Managing Complaints and Appeals 7. Managing Public Relations and Communications 8. Oversight and Compliance Review

IAAO - Valuing the World http://www.iaao.org/wcm/Resources/Research_Library/

Timeline for Retirement When do you plan to retire or leave the assessment industry? Less than 2 years 8% In 2-4 years 15% In 5-9 years 25% 48% of the respondents are planning on retiring within the next 9 years!

International Association of Assessing Officers 2016 Assessment Industry Compensation Survey Success! Qualifications & Opportunity Benefits www.iaao.org Base Salary

Questions or suggestions to: Margie Cusack cusack@iaao.org