This bill establishes a new method for valuing real property used for affordable housing in Arkansas. It amends Arkansas Code 26-26-1202 to require county assessors to use an income-based approach when assessing properties that have federally or state-imposed restrictions related to rent limitations or operational requirements. The income-based approach is defined as a calculation that divides the actual net operating income of the property by a market-derived capitalization rate, ensuring that the assessment does not exceed the average current market data for comparable income-producing properties in the county. Additionally, the bill specifies that this approach will not apply to properties once their land-use restriction agreements have expired.

The legislative intent of the bill is to clarify and remediate existing laws regarding property valuation. It includes provisions that outline the specific types of properties that qualify for this income-based assessment, such as those eligible for federal tax credits or constructed with HUD or USDA incentives. The bill also sets an effective date for the new assessment method, which will apply to assessment years beginning on or after January 1, 2026.

Statutes affected:
Old version HB1894 Original - 3-31-2025 08:19 AM: 26-26-1202
Old version HB1894 V2 - 4-8-2025 09:48 AM: 26-26-1202
HB 1894: 26-26-1202