Guidelines for Annual Reassessment

Overview

Benefits of Annual Reassessment
Each year, State Law requires assessors to sign an oath that the assessments in their municipality represent a uniform percentage of market value. The best way to ensure that assessments are consistently fair and equitable is keep assessments up-to-date annually. To encourage compliance with State law, New York State provides State Aid of up to $5 per eligible parcel to municipalities that keep assessments at 100% of market value each year. For special assessing units, uniformity must be maintained within each class. Aside from State Aid, the benefits of maintaining consistent market value assessments include:

• Assessment Equity for Taxpayers - The longer it has been since a municipality has updated assessments, the more likely it is that some taxpayers are paying more or less than their fair share of taxes. Up-to-date assessments eliminate unfair assessments and the "sticker shock" that taxpayers experience when assessments are adjusted after years of neglect.
• Local Control over the Equalization Rate - By maintaining assessments at market value each year, municipalities can consistently receive an equalization rate of 100. This eliminates shifts in school and county tax apportionment due to fluctuating equalization rates.
• Improved Bond Ratings - In addition to State Aid, many municipalities are receiving improved bond ratings as a result of efforts to keep assessments current. These municipalities are saving tens of thousand of dollars each year (and, in some cases, much more than that).
• Fewer Court Challenges to Assessments - By keeping assessments up-to-date, municipalities are likely to have fewer tax certiorari cases.
• Increased State Land Assessments - Because State land assessments are frozen at the year of the last municipal-wide reassessment conducted after 1990, annual assessments allow municipalities to make changes in market value that could not otherwise be captured.

The information contained in this booklet provides guidelines for planning the process of maintaining equitable assessments and can help local officials understand the scope of tasks involved in this process.

Statutory Requirements
New York State Real Property Tax Law (RPTL) actually requires annual assessment of all properties:

• RPTL Section 301 – "All real property…assessed as of a March first taxable status date, shall be valued as of the preceding first day of July"
• RPTL Section 305 – "All real property in each assessing unit shall be assessed at a uniform percentage of [market] value…"
• RPTL Section 502 - "The assessment roll shall set forth the uniform percentage applicable to the assessing unit…pursuant to [RPTL Section 305], and shall provide for the entry with respect to each separately assessed parcel…the total assessed valuation, and the full value of each parcel."

Properties need not be assessed at 100 percent of value provided they are assessed at the same uniform percentage throughout the assessing unit (throughout each class in New York City and Nassau County).

To encourage compliance with State Law, Section 1573 of the RPTL provides an incentive payment of up to $5 per parcel (also known as "State Aid") for cities and towns assessing at a level of assessment of 100 percent. In New York State’s two "special assessing units", Nassau County and New York City, assessments within a property class must be confirmed as reflecting the assessor’s stated level of assessment in order to receive State aid. In order for property to be assessed consistently at a uniform percent of current market value, a “reassessment” must be conducted each year.

Terms and Definitions
According to statute, a reassessment is "a systematic review of the assessments of all locally assessed properties, valued as of the valuation date of the assessment roll containing those assessments to attain compliance with the (statutory) standard of assessment" (Real Property Tax Law – Section 102). It is synonymous with the terms "revaluation" and "update".

• Systematic review, or "systematic analysis" is a methodical, thorough and regular review/examination of a municipality's assessments. In order to maintain equity on annual basis, the following steps would be taken by the assessing unit:
  • Gather and maintain current inventory, valuation and market information
  • Group the data appropriately for analysis
  • Use accepted analytical techniques to:
    • Determine the relationship between assessments and current market values
    • Revise assessments as necessary based on the market analysis
  • Validate the results

• Re-inspection means, at a minimum, observing each parcel from the public right-of-way to ascertain that the physical characteristics necessary for reappraisal are complete and accurate (re-inspection most likely will not require a full re-collection or re-measurement; re-collection may be necessary only if existing property inventory data is incorrect or the property has changed since the last visit).
• Reappraisal means developing and reviewing an independent estimate of market value for each parcel by the appropriate use of one or more of the three accepted approaches to value (cost, market and income).
• Trending refers to the application of an arithmetic factor to the assessments of a group of properties to reflect increasing or decreasing property values over a period of time. Usually expressed as a percentage, a 5% trend would indicate that property values have increased 5%.

IAAO Standards
ORPS’ program of annual aid for maintaining equity is guided by the standards for assessment administration published by the International Association of Assessing Officers (IAAO). The two specific statements of the IAAO below are applicable to the annual assessment of property.

The Principle of Annual Reassessment
Current market value implies annual assessment of all properties. This does not necessarily mean that every property must be appraised each year. In annual assessment, the assessing officer should consciously re-evaluate the factors that affect value, express the interactions of those factors mathematically, and use mass appraisal techniques to estimate property values. Thus, it is necessary to observe and evaluate, but not always to change, the assessment of each property each year to achieve current market value. It is recommended that assessing officers consider establishing regular reappraisal cycles or at least quality (vertical and horizontal equity) thresholds that trigger reappraisal. (Standard on Property Tax Policy [Paragraph 4.2.2.], approved August 1997).

Frequency of Reappraisals
Properties should be revalued annually. Annual assessment does not necessarily mean, however, that each valuation must be reviewed or re-computed individually. Instead trending factors based on criteria such as property type, location, size, and age can be developed and applied to groups of properties. These factors should be derived from assessment-ratio studies or other market analyses.

The analysis of assessment-ratio studies data can suggest groups or strata of properties in need of physical review. In general, trending factors can be highly effective in maintaining equity when appraisals are uniform within strata. Physical reviews and individual reappraisals are required to correct lack of uniformity within strata.

While assessment trending can be effective for short periods, properties should be physically reviewed and individually appraised at least every six years. This can be accomplished in at least three ways: (1) reappraising all properties at periodic intervals (e.g. every four to six years); (2) reappraising properties on a cyclical basis (e.g., one-fourth or one-sixth each year); and (3) reappraising on a priority basis as indicated by assessment-ratio studies or other considerations, while ensuring that all properties are physically reviewed at least every sixth year. (Standard on Mass Appraisal of Real Property [Paragraph4.5], approved March 1984.)

Simply stated, the IAAO supports annual assessment of all property at market value. This annual valuation can be achieved by analyzing the assessments of all properties with respect to the current market, and revising assessments of individual properties or groups as necessary, either by individual reappraisals, "trending" the assessments of groups of properties, or some combination of both, while at the same time ensuring that all properties are reappraised and re-inspected at least once every six years.

ORPS' Programs Recognizing Reassessment Activity
The following ORPS' programs recognize reassessment activity:

• Use of aggregate valuation data in full value measurement pursuant to the procedures for establishing State equalization rates;
• Provision of State aid pursuant to RPTL Section 1573;
• Equalization of State land and special franchise values by the prevailing municipal uniform percentage of value, as provided in RPTL Sections 542(1)(b) and 606(3);
• Tax apportionment by assessed value in counties and school districts certified pursuant to RPTL Sections 845 and 1315;
• Certification of assessing units as “approved assessing units” pursuant to RPTL Article 19;
• Provision of State advisory appraisals of public utility and other highly complex taxable real property pursuant to RPTL Section 1544.

For an assessing unit to participate in each of these programs, ORPS must analyze and understand the local reassessment activity. This analysis does not require active participation or support by the Agency in the reassessment project. While the analysis may indeed take the form of monitoring reassessment activity as our staff members assist in the course of a project, it may also take the form of our staff reviewing the municipal processes and procedures at specific intervals during the project. It is our intent that by working collaboratively, we can ensure a common understanding of ORPS’ standards and expectations and provide the opportunity to avert potential problems and eliminate misunderstandings before they occur. This process is commonly referred to as Pre-Decisional Collaboration (PDC).

State Aid Requirements

Section 1573 of the RPTL allows for a payment of up to $5 per parcel annually. In order to be eligible to receive this aid, an assessing unit must:

• Annually maintain assessments at 100 percent of market value
• Annually conduct a systematic analysis of all locally assessed properties
• Annually revise assessments where necessary to maintain the stated uniform percentage of value
• Implement a program to physically inspect and re-appraise each property at least once every six years
• Comply with applicable statutes and rules
• Quality and maintenance of valuation data.
• Parcels on the data file have complete and accurate inventories as of taxable status date.
• Pertinent sales data on the data file is complete and accurate.
• Presentation of public information and data.
• An indication that informal meetings with taxpayers are held in the year of the reassessment between the date the assessment disclosure notices are sent and the tentative roll is published, if required by paragraph 8 of Section 511, RPTL.
• Administration of exemptions
• Parcels on the assessment roll filed pursuant to Article 15-C of the RPTL have valid property tax exemption codes.
• An acceptable level of assessment uniformity is maintained.
• Compliance with statutes and rules.
• The reassessment satisfies the following criteria:
• The reassessment was conducted in compliance with the Full Value Measurement "Local Reassessment Project Review and Analysis" as provided for in 9 NYCRR 186-2.15.
• The reassessment was conducted in compliance with the "Guidelines for Annual Reassessment" established according to section 1573(2) of the RPTL, the municipality's plan for re-inspection, reappraisal and annually maintaining has been approved in accordance with those guidelines, and the municipality has demonstrated compliance for the roll upon which the application has been filed.
• The final assessment roll meets the requirements of 9 NYCRR 190.
• The assessor's report meets the requirements of 9 NYCRR 193 and is reconciled.
• Data files required pursuant to Article 15-C of the RPTL and 9 NYCRR 190 are filed in accordance with Section 1590 of the RPTL.
• Sales corrections required pursuant to 9 NYCRR 191 are received in an ORPS approved computerized format. Transactions are received on a timely basis.
• Applicant is not subject to an adjudicatory proceeding commenced by the State Board relative to the assessment roll for which State assistance is sought.
• The assessor or the board of assessors has filed a signed statement verifying that the following actions were taken in accordance with the statute.
• Notice of assessment inventory was published pursuant to section 501 of the RPTL.
• Notice of tentative assessment roll was published pursuant to section 506 of the RPTL.
• Where applicable, assessment change notices were sent pursuant to section 510 of the RPTL.
• An assessment disclosure notice was mailed to all property owners and required meetings have been held, if required by paragraph 8 of Section 511, RPTL.
• Notice of final assessment roll was published pursuant to section 516 of the RPTL.
• Renewal forms for the senior citizens' exemptions were sent pursuant to section 467 of the RPTL.
• Notices of denial for the STAR exemptions were sent pursuant to section 425 of the RPTL.
• The uniform percentage appears on the tentative assessment roll or in instances where a tentative assessment roll is not printed, a sign that contains the uniform percentage is posted in a conspicuous location.

Aid Application Requirements

An application must be filed no later than 90 days after the date of the final assessment roll for which aid is being sought. Municipalities wishing to apply for Annual Aid must also submit a plan for "re-inspection, reappraisal and annually maintaining assessments at full value". The plan (hereafter referred to as the "Six-Year Plan") must be submitted to ORPS as follows:



• If an applicant has not conducted a re-inspection and reappraisal of all parcels on the assessment roll for which Annual Aid is first being sought, the plan must be submitted at least 120 days prior to tentative roll date (January 1 for municipalities using the standard assessment calendar)
• • If an applicant has conducted a re-inspection and reappraisal of all parcels on the assessment roll for which Annual Aid is first being sought, the plan may be submitted up to 90 days after the final roll date (October 1 for municipalities using the standard assessment calendar)



Initial Six-Year Plans

A sample plan template is available from this document and is also available on the ORPS' website. It is described in more detail later in this document. The plan will detail the approach that the municipality will take to maintain a program of systematic analysis to ensure equitable assessments at 100% of market value. The plan should also include an explanation of how the assessing unit will comply with the requirement to re-inspect and reappraise each parcel at least once every six years, inclusive of the resources and timeframes that make the plan viable. This plan, which can be developed in collaboration with the County RPTS office, other municipalities, a vendor or ORPS, will be reviewed by ORPS when initially submitted. It need only be submitted once every six years unless the assessing unit makes modifications to the plan. When modifications to the plan occur, the municipality is required to file a copy of all revisions with ORPS no later than the filing of the application for State Aid each year. ORPS will then integrate this plan into a regular review process over the six-year period.

Reappraisal Requirements for "New" Six-Year Plans

In most instances, a new plan will be filed in the first year after the completion of the initial six-year commitment. However, there may be instances where this new plan is filed in a year other than the first year after the completion of the initial six-year commitment. For example, a municipality may decide to drop out of the program, or wait one or more years to re-enter the program after the completion of the first six-year cycle. Anytime a municipality drops out of the program a new plan must be put in place. A municipality is also deemed to drop out of the program when it:

• Does not perform a systematic analysis
• Does not implement the necessary assessment changes
• Claims a Level of Assessment other than 100
• Does not file for aid

ORPS has adopted a policy regarding the reappraisal/re-inspection requirement when a municipality submits a "new" six-year plan for any reason:

Whenever a municipality is required to file a new plan for participation in the annual aid program, the plan should ensure that the six-year re-inspection and reappraisal requirement is met. This means that for each assessment roll filed within the timeframe of the plan, all parcels should be re-inspected and reappraised at least one time within the preceding six years of that assessment roll. At no time within the timeframe of the plan should there be parcels entered on any of the assessment rolls that have not met the six-year re-inspection and reappraisal requirement.

Amended Plans

Please note that this policy refers to plans filed subsequent to the initial plan filed when a municipality first enters the program. When a new plan is required, the municipality is making a commitment to the program for a new six-year period. An amended program is one that requires changes, but is not being set up for a new six-year period commitment. An amendment to an existing plan, as opposed to filing a new plan, may be required when a municipality attempts to implement its existing plan, but does not accomplish the tasks successfully or produces a roll that ORPS determines is not assessed uniformly at 100 percent. It is the responsibility of ORPS’ staff to decide on a case-by-case basis whether a new plan, or amendments to an existing plan, is required.

The Importance of Six-Year Plans

The Six-Year Plan serves several different purposes:

• It is a local government record
• The development of a comprehensive plan helps ensure that resources have been considered, and that there is a commitment on the part of local officials to maintain equity at 100% of value on an annual basis
• The methods and timetable contained within the plan provide a "roadmap" for the locality to follow, and a reference for ORPS to use in monitoring the projects and verifying the results
• A comprehensive plan, including revisions each year as appropriate, is vital to successful public relations and general acceptance of the process

TThe Six-Year Plan is a local government record. It is subject to the same disclosure provisions in the State’s Freedom of Information Law (Public Officers Law, Article 6) as any other local government record. Local governments may not dispose of records except as authorized by the Commissioner of Education. The Commissioner, through the Local Government Records Bureau of the State Archives and Records Administration (SARA), issues schedules setting forth minimum retention periods, thereby authorizing disposal of records once they have been retained for the required period of time. For further information, please visit the SARA website at: http://www.archives.nysed.gov/a/nysaservices/ns_mgr.shtml

The Six-Year Plan can help alleviate taxpayer fears and improve their understanding of the process. This must start with the understanding, support and commitment of the municipal chief executive officer and the members of the Town Board/City Council. While only the municipal chief executive officer signs the plan, it is strongly recommended that a copy be provided to all Town Board/City Council members. The act of drafting a plan may raise questions about the resources required to complete this work annually. These questions are generally resolved through discussions with and actions taken by the municipal chief executive officer and the Town Board/City Council members.

Once a plan has been drafted, it is strongly recommended that it be discussed at a public meeting prior to the onset of the project, for several reasons:

• This helps to raise public awareness of the assessment process
• It also helps to demonstrate that the municipality values the importance of providing equitable assessments to its property owners
• It also offers a much-needed show of public support to the work of the assessor(s) whose efforts are often unrecognized except when property owners become dissatisfied
• This begins the process of acclimating property owners to appropriate value changes annually

The value of this public awareness and municipal support cannot be overstated. Although the law requires that assessors maintain assessments at a uniform percentage of value as of the annual valuation date, many property owners are accustomed to assessments remaining stable except in cases of new construction or remodeling, or when a periodic municipal-wide reassessment is conducted. In fact, the adjustment of assessments based on changes in market value varying by location or other factors may be viewed with suspicion or claims of "spot assessing". If feasible, the municipality should consider taping this presentation and having it broadcast repeatedly on public access television for maximum exposure.

ORPS looks to use the results of reassessments in its equalization program by verifying that the stated Level of Assessment has been achieved for each Major Type of property. The annual plan is a reference for the ORPS' Customer Relationship Manager (CRM) in performing this verification. By knowing the assessor(s)' general intentions for each of the six years for physical inspections and reappraisals, the CRM can proactively advise or assist the assessor(s) in completing the analysis or work required. Additionally, this better enables the CRM to ensure that all requirements are met for the payment of state aid.

While the annual plan is intended to serve as a roadmap for a six-year cycle, it is important to acknowledge that no one can accurately predict the movement of the market for all property types six years in advance. For this reason, it is vital that the plan be revised, as appropriate, each year. All revisions should ideally occur when the diagnostic portion of systematic analysis has been completed (for municipalities using the standard assessment calendar, this would typically be the end of the year preceding implementation). Revisions to the plan should be shared with the ORPS' CRM and with the municipal chief executive officer and the members of the Town Board/City Council as soon as possible. It is strongly recommended that the revisions be discussed at a public meeting to maintain awareness of the program and to build credibility for the changes that will occur to the roll. Revisions must be submitted to ORPS no later than with each year's application for State Aid. It is strongly recommended, however, that revisions be provided to ORPS' CRM as part of the pre-decisional collaboration (PDC) process as soon as the municipality has completed its diagnostic analysis (for municipalities on the standard assessment calendar this typically would be by the end of the calendar year preceding the filing of the tentative roll). By maintaining timely awareness of the assessor(s)' actions for the various elements in the plan, the assessor(s) will help make partners of elected officials and property owners alike.

It is important to remember that, since the plan is a local government record, the public can monitor compliance with the plan. Local officials as well as ORPS' personnel may be questioned on compliance. In addition, compliance with the plan will be one factor in the review of the project for State financial assistance.



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