(1) Grazing land productivity values for each year of the reappraisal cycle beginning January 1, 2009, are:

(a) Calculated by using the formula defined in 15-7-201, MCA, where the agricultural land productivity valuation formula is:

(i) V = I/R;

(ii) V is the productivity value of the agricultural land;

(iii) I is the net income attributed to the acre of land using an adjusted average private grazing lease rate; and

(iv) R is the capitalization rate or the rate that converts an ongoing income stream into an estimate of value.

(b) For the reappraisal cycle beginning January 1, 2009, the per acre grazing land value is calculated as follows:

(i) Average private grazing lease = $15.72 per Animal Unit Month (AUM);

(ii) Less expense allowance = $ 3.93 per AUM ($15.72 X 25%);

(iii) Adjusted gross income per AUM = $11.79 ($15.72 minus $3.93);

(iv) Statewide average productivity = 0.31 AUM per acre;

(v) Net income per acre = $11.79 per AUM times X AUM per acre; and

(vi) Productivity value per acre = Net income per acre divided by 0.064, which is the capitalization rate of 6.4%, in decimal form, as set forth in 15-7-201(4)(c), MCA.

(c) For lands with an increase in value the department will apply a phase-in percentage as defined in 15-7-111, MCA, and ARM 42.20.503 to the full reappraisal productivity values for grazing land for the reappraisal cycle beginning January 1, 2009.

(i) For lands with a decrease in value as a result of the 2009 reappraisal, the lower value will be implemented immediately.