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Rule Title: FOREST LAND VALUATION FORMULA
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Department: REVENUE
Chapter: REAL PROPERTY
Subchapter: Forest Land
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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42.20.725    FOREST LAND VALUATION FORMULA

(1) Noncommercial forest land and nonforest land shall not be eligible for valuation as forest land. Standing and down timber on forest land shall not be separately valued and assessed.

(2) The valuation of forest land shall be as provided in 15-44-101 through 15-44-105, MCA.

(3) The valuation of forest land shall be based on the average of income and expenses for the most recent ten-year period ending in the calendar year immediately preceding the year published by the department in ARM 42.18.124 and the capitalization rate identified in (5)(c)(i).

(4) Income and expense data is expressed in real dollars using Gross Domestic Price (GDP) indices. Real dollars are brought forward to the closest quarterly calendar date published by the department in ARM 42.18.124.

(5) The department shall determine the forest potential productivity value for each forest valuation zone using the formula V=I/R, where:

(a) V is the per-acre forest potential productivity value of the forest land;

(b) I is the per-acre net income of forest lands in each valuation zone and is determined by the department using the formula, I = (M x SV) + NAI - C, where:

(i) I is the per-acre net income;

(ii) M is the per-acre mean annual net wood production expressed in board feet per acre;

(iii) SV is the per-acre stumpage value;

(iv) NAI is the per-acre agricultural related income; and

(v) C is the per-unit cost of the forest product and agricultural product produced, if any; and

(c) R is the capitalization rate.

(i) For the appraisal cycle beginning after December 31, 2014, and concluding on December 31, 2020, the capitalization rate used is 8 percent.

(6) Net income (I) shall include stumpage value derived from the harvest of timber on state timber sales.

(7) The mean annual net wood production (M) shall be determined in board feet using the Scribner Log Rule.

(a) MAI is the weighted mean volumetric average of each forest productivity site in each forest valuation zone.

(8) Agricultural related income is the average net income for grazing livestock on forest lands in each forest valuation zone. Agricultural related income shall be determined by using the formula AI = GF x AUM x GC where:

(a) AI is the per-acre agricultural related income;

(b) GF is the average per-acre grazing fee on private land;

(c) AUM is the average per-acre animal unit months on forest land; and

(d) GC is the percentage reflecting grazing costs used by the department to value agricultural grazing land.

(9) The effective tax rate shall be calculated by dividing the total estimated tax due on private forest lands by the total forest value of those lands.

History: 15-1-201, 15-44-105, MCA; IMP, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA; NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.167 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16.


 

 
MAR Notices Effective From Effective To History Notes
42-2-942 1/1/2016 Current History: 15-1-201, 15-44-105, MCA; IMP, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA; NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.167 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16.
42-2-924 12/12/2014 1/1/2016 History: 15-1-201, 15-44-105, MCA; IMP, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA; NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.167 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14.
42-2-814 2/26/2010 12/12/2014 History: 15-1-201, 15-44-105, MCA; IMP, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA; NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.167 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10.
8/29/2003 2/26/2010 History: 15-1-201, 15-44-105, MCA; IMP, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA; NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.167 and AMD, 2003 MAR p. 1888, Eff. 8/29/03.
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