This bill further erodes the concept of fair market value by imposing even more artificial requirements on assessors. First, an arms length transaction cannot include any sale that exceeds the fair market value of properties in the appraisal neighborhood by three times or more. Appraisal neighborhood is undefined so it unclear what scope of application is intended. Second, use of the income approach is mandated (rather than merely being required to be considered) when the income of the property indicates a fair market value or 50 percent or less compared to the average of fair market values of other properties in the appraisal neighborhood. Again, the term appraisal neighborhood is undefined, with the same result noted above.

Under the current House substitute to this bill (LC 34 4893S), the only change being made is to require the income approach to be considered in determining FMV if actual and expense data are supplied by the property owner.