Shown verbatim: the complete text as captured from the official PDF posted by the Arkansas General Assembly, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 SENATE BILL 573
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5 By: Senators J. Petty, Caldwell
6 By: Representative Jean
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8 For An Act To Be Entitled
9 AN ACT TO AMEND THE METHOD OF VALUATION UNDER
10 ARKANSAS CONSTITUTION, ARTICLE 16, � 5, BY DEFINING
11 THE TERMS USED IN THE ESTABLISHED METHODS OF
12 VALUATION FOR PURPOSES OF PROPERTY TAX; TO CLARIFY
13 AND DEFINE A STANDARD OF VALUATION FOR PROPERTY TAX;
14 AND FOR OTHER PURPOSES.
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17 Subtitle
18 TO AMEND THE METHOD OF VALUATION UNDER
19 ARKANSAS CONSTITUTION, ARTICLE 16, � 5,
20 BY DEFINING THE TERMS USED IN THE
21 ESTABLISHED METHODS OF VALUATION FOR
22 PURPOSES OF PROPERTY TAX.
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24 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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26 SECTION 1. DO NOT CODIFY. Legislative intent.
27 The General Assembly intends for this act to be remedial and to clarify
28 the law.
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30 SECTION 2. Arkansas Code Title 26, Chapter 23, Subchapter 1, is
31 amended to add an additional chapter to read as follows:
32 26-23-101. Definitions.
33 As used in this subtitle:
34 (1) "Cost approach" means an approach used to estimate the fair
35 market value of property based on the estimated current cost to construct
36 improvements plus the value of the land minus all forms of depreciation,
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SB573
1 including without limitation any loss in value caused by physical
2 deterioration, functional obsolescence, economic obsolescence, or any
3 combination of physical deterioration, functional obsolescence, or economic
4 obsolescence;
5 (2) "Economic life" means the period of time over which a
6 structure or component of property may reasonably be expected to be
7 profitably used for the purpose originally intended;
8 (3) "Economic obsolescence" or "external obsolescence" means the
9 loss in value of property caused by factors external to the property,
10 including without limitation the economics of an industry, increased costs or
11 loss of material or labor sources, lack of utilization, excess operating
12 costs, new legislation or regulation, changes in ordinances, reduced demand,
13 increased competition, inflation or interest rates, and other factors;
14 (4) "Fair market value", "market value", "true and full market
15 or actual value", "true market value", or "usual selling price of similar
16 property" means the value prescribed by Arkansas Constitution, Article 16, �
17 5, which is the most probable price expressed in terms of money that a
18 property will bring on the open market in a transaction between a willing and
19 knowledgeable seller and willing and knowledgeable buyer in an arms-length
20 transaction;
21 (5) "Functional obsolescence" or "internal obsolescence" means
22 the loss in value of property caused by the inefficiencies or inadequacies of
23 the property itself, resulting from changes in tastes, preferences, technical
24 innovations or improvements, market standards, or other factors;
25 (6) "Income approach" or "income and expense approach" means an
26 approach used to estimate the fair market value of property based on the
27 present value of the projected income stream ultimately attributable to the
28 taxable portion of the property;
29 (7) "Market approach" or "sales comparison approach" means an
30 approach used to estimate the fair market value of property based on
31 comparing sales of similar properties by identifying appropriate units of
32 comparison and making qualitative comparisons with or quantitative adjustment
33 to the sales prices of the comparable properties based on relevant market-
34 derived elements of comparison;
35 (8) "Physical deterioration" or "physical depreciation" means a
36 loss in value of property resulting from the using up or expiration of the
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SB573
1 useful life or economic life of the property caused by ordinary wear and
2 tear, deterioration, physical stresses, the forces of nature, or other
3 factors;
4 (9) "Physical life" means the period of time over which a
5 structure or component of property may reasonably be expected to physically
6 exist before deteriorating or fatiguing to an unusable condition from
7 physical causes; and
8 (10) "Useful life" means the period of time over which a
9 structure or component of property may reasonably be expected to perform the
10 function for which the structure or component of property was designed.
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12 SECTION 3. EFFECTIVE DATE. Section 2 of this act is effective for
13 assessment years beginning on or after January 1, 2025.
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3 03/28/2025 9:06:16 AM JLL314Every fact on this page links to its source, starting with the official bill record.