Does my Kansas county appraiser have to follow the state's valuation guides, and can they depart from them?

Plain-English summary

Kansas does not leave each of its 105 counties to invent its own valuation methods. The Division of Property Valuation publishes guides, and this directive states the rule that binds counties to them: "The county appraiser shall follow the policies, procedures and guidelines set forth in the Division of Property Valuation's specifications, manuals, guides, schedules, memoranda, regulations, directives and other instructions, as promulgated by the Director."

For certain property types the obligation is stated even more firmly: where "the director of property valuation has developed and adopted methodologies to value specific types of property, the county appraiser is required to follow such methodologies." The directive lists five such guides:

1. Personal Property Guide
2. Oil and Gas Appraisal Guide
3. Grain Elevator Appraisal Guide
4. Commercial Feedlot Appraisal Guide
5. Affordable Housing Appraisal Guide

Which edition applies? "Some guides are revised annually and may set forth the valuation year (tax year) to which they apply. If a guide is not revised annually, then the county appraiser shall utilize the most current version of the guide which precedes the valuation date."

When can an appraiser depart from the guide? Only in a narrow lane. For "personal property required to be valued at fair market value," the appraiser "may deviate from the values shown in such guides on an individual piece of personal property for just cause shown and in a manner consistent with achieving fair market value." Note the three limits packed into that sentence: personal property only, one individual piece at a time, and only toward fair market value.

Guides do not outrank the statute. This is the most consequential passage for a taxpayer. The directive instructs that appraisers "shall interpret appraisal and valuation guides in a manner consistent with statutes," and then quotes the governing case law: "To be valid, rules or regulations of an administrative agency must be within the agency's statutory authority. Rules or regulations that go beyond that authority, violate the statute, or are inconsistent with the agency's statutory powers are void. Further, administrative rules and regulations must be appropriate, reasonable, and consistent with the law."

The software is a tool, not the appraiser. The directive is careful about the Orion mass appraisal system. It "is a tool for mass appraisal intended to facilitate performance of the three generally accepted appraisal methodologies of the sales comparison approach, the cost approach, and the income approach when data to perform each approach is readily available." The judgment stays human: "it is the responsibility of the county appraiser or appraiser's designee to consider all applicable valuation methodologies and any other appropriate factors and then to select the best indication of fair market value based on appraisal judgment." The directive closes by saying the appraiser "is expected to follow professionally recognized methods and techniques in order to maintain a high level of public trust in the appraisal practice."

What this means for you

Owners of property covered by one of the five guides

If you own oil and gas interests, a grain elevator, a commercial feedlot, affordable housing, or business personal property, the state guide is not advisory to your county — the appraiser is required to follow the adopted methodology. That cuts both ways: it is a constraint you can hold the county to, and a methodology you generally cannot ask them to abandon.

Ask which edition was applied. For guides not revised annually, the correct one is "the most current version of the guide which precedes the valuation date" — not the one in circulation when the notice was mailed.

Business personal property owners

The deviation provision is yours specifically. If a guide value does not reflect what a particular item is actually worth — unusual wear, obsolescence, a machine that is not what the schedule assumes — you can ask the appraiser to deviate for "just cause shown." Frame it item by item, since the authority runs to "an individual piece of personal property," and frame it as reaching fair market value rather than as a request for leniency.

Anyone appealing a value

Remember the hierarchy: statute over guide. If the outcome in your case comes from a guide provision that conflicts with what K.S.A. 79-503a or another statute requires, the directive itself supplies the answer — guides must be read consistently with statutes, and "rules or regulations that go beyond that authority, violate the statute, or are inconsistent with the agency's statutory powers are void."

Also useful: an answer that rests entirely on what the Orion system produced is not, by itself, complete. Under this directive the appraiser must consider all applicable methodologies and other appropriate factors and then exercise appraisal judgment to select the best indication of fair market value.

County appraisers and appraisal staff

Two compliance points. The obligation extends past the named guides to the Division's "specifications, manuals, guides, schedules, memoranda, regulations, directives and other instructions." And the deviation authority does not extend to real property — for real property the directive offers no equivalent guide-deviation provision, only the duty to interpret guides consistently with statute.

Common questions

Q: Does my county have to use the state's guides?
A: Yes. The appraiser "shall follow" the Division's guides and instructions, and must follow adopted methodologies for specific property types.

Q: Which guides have mandatory methodologies?
A: The directive lists the Personal Property Guide, Oil and Gas Appraisal Guide, Grain Elevator Appraisal Guide, Commercial Feedlot Appraisal Guide, and Affordable Housing Appraisal Guide.

Q: Which year's guide applies to my valuation?
A: If the guide is revised annually it may state the valuation year it applies to. If it is not revised annually, the appraiser uses "the most current version of the guide which precedes the valuation date."

Q: Can the appraiser use a different value than the guide shows?
A: For personal property, yes — on "an individual piece of personal property for just cause shown and in a manner consistent with achieving fair market value."

Q: What if the guide seems to contradict the statute?
A: The statute governs. Guides must be interpreted "in a manner consistent with statutes," and rules that go beyond the agency's statutory authority or are inconsistent with it are void.

Q: Can the county just point at the computer system?
A: Not under this directive. Orion is described as a tool; the appraiser or designee must consider all applicable methodologies and appropriate factors and select the best indication of fair market value using appraisal judgment.

Q: Which valuation approaches are supposed to be considered?
A: The sales comparison approach, the cost approach, and the income approach, "when data to perform each approach is readily available."

Q: Is this directive still in force?
A: It superseded Directive #17-048, was approved March 24, 2019, and applies to the 2020 valuation year and subsequent years. Check the Division's current directive list before relying on it.

Citations and references

Authority for the directive: K.S.A. 79-505.

Duty to follow the Director's guides:

• K.S.A. 79-1456 generally; K.S.A. 79-1456(a) (cited in the directive as "K.S.A. 2018 Supp. 79-1456(a)") for required methodologies
• K.S.A. 79-1456(b), cited in the directive in its K.S.A. 2018 Supp. form, for the personal property deviation for just cause

Valuation standard: K.S.A. 79-503a (cited as "K.S.A. 2018 Supp. 79-503a"); Uniform Standards of Professional Appraisal Practice (USPAP).

Cases cited in the directive:

• In re Appeal of the Director of Property Valuation, 14 Kan.App.2d 348, 791 P.2d 1338 (1989), rev. denied 246 Kan. 767 (1990)
• In re Tax Appeal of City of Wichita, 277 Kan. 487, 495, 86 P.3d 513 (2004)
• Wagner v. State of Kansas, et al., 46 Kan.App.2d 858, 862, 265 P.3d 577 (2011), rev. denied 294 Kan. 948 (2012)

Guides named in the directive: Personal Property Guide; Oil and Gas Appraisal Guide; Grain Elevator Appraisal Guide; Commercial Feedlot Appraisal Guide; Affordable Housing Appraisal Guide.

Directive superseded by this one: #17-048.

Source

• Landing page: Kansas Property Tax Directives
• Original PDF: PVD Directive 19-048

Original ruling text

Division of Property Valuation
300 SW 29th Street Phone: 785-296-2365
PO Box 3506 Fax: 785-296-2320
Topeka KS 66601-3506 www.ksrevenue.gov
Mark Burghart, Acting Secretary Laura Kelly, Governor

                                  DIRECTIVE #19-048

TO: County Appraisers

SUBJECT: Procedures and Guidelines for Valuing Property
(This Directive Supersedes Directive #17-048)

This directive is adopted pursuant to the provisions of K.S.A. 79-505, and shall take effect and be
in force from and after the Director’s approval date for the 2020 valuation year and all subsequent
valuation years.

The county appraiser shall follow the policies, procedures and guidelines set forth in the Division
of Property Valuation’s specifications, manuals, guides, schedules, memoranda, regulations,
directives and other instructions, as promulgated by the Director. See K.S.A. 79-1456; In re
Appeal of the Director of Property Valuation, 14 Kan.App.2d 348, 791 P.2d 1338 (1989), rev.
denied 246 Kan. 767 (1990).

If the director of property valuation has developed and adopted methodologies to value specific
types of property, the county appraiser is required to follow such methodologies. K.S.A. 2018
Supp. 79-1456(a). The following guides set forth methodologies to value specific types of
property:

         1) Personal Property Guide
         2) Oil and Gas Appraisal Guide
         3) Grain Elevator Appraisal Guide
         4) Commercial Feedlot Appraisal Guide
         5) Affordable Housing Appraisal Guide

Some guides are revised annually and may set forth the valuation year (tax year) to which they
apply. If a guide is not revised annually, then the county appraiser shall utilize the most current
version of the guide which precedes the valuation date. The division of property valuation will
notify county appraisers of proposed changes in guides and of the adoption of new or revised
guides.

In valuing personal property required to be valued at fair market value, the county appraiser may
deviate from the values shown in such guides on an individual piece of personal property for just
cause shown and in a manner consistent with achieving fair market value. K.S.A. 2018 Supp. 79-
1456(b).

Page 2

In valuing real and personal property, the county appraiser shall interpret appraisal and valuation
guides in a manner consistent with statutes. “To be valid, rules or regulations of an administrative
agency must be within the agency's statutory authority. Rules or regulations that go beyond that
authority, violate the statute, or are inconsistent with the agency's statutory powers are void.
Further, administrative rules and regulations must be appropriate, reasonable, and consistent with
the law.” In re Tax Appeal of City of Wichita, 277 Kan. 487, 495, 86 P.3d 513 (2004); Wagner v.
State of Kansas, et al., 46 Kan.App.2d 858, 862, 265 P.3d 577 (2011), rev. denied 294 Kan. 948
(2012).

The Orion computer assisted mass appraisal system is a tool for mass appraisal intended to
facilitate performance of the three generally accepted appraisal methodologies of the sales
comparison approach, the cost approach, and the income approach when data to perform each
approach is readily available. When using the Orion computer assisted mass appraisal system for
property required to be valued at fair market value, it is the responsibility of the county appraiser
or appraiser’s designee to consider all applicable valuation methodologies and any other
appropriate factors and then to select the best indication of fair market value based on appraisal
judgment. See K.S.A. 2018 Supp. 79-503a; Uniform Standards of Professional Appraisal Practice
(USPAP). The county appraiser is expected to follow professionally recognized methods and
techniques in order to maintain a high level of public trust in the appraisal practice.

Approved: March 24, 2019

                                                  David N. Harper
                                                  Director of Property Valuation