Md. Code Regs. 15.15.02.06 - Formula for Determining Agricultural Value
To determine the agricultural value of the land on which the landowner has applied to sell an easement, complete the following five steps:
A. Step 1. Using the following
method, determine the soil productivity index of the parcel of land on which
the applicant has applied to sell an easement. First, note how many acres of
cultivatable land (Class I through VI soils) are contained in this parcel.
Second, determine how many of these acres consist of Class I soils. Third,
using the table found in Regulation .07 of this chapter, multiply the number of
acres of Class I soils by the soil productivity index for Class I soils. Having
completed the calculation process for Class I soils, follow the same process
for Class II through Class VI soils. Next, add each of these calculations
together. Finally, divide this sum by the total number of acres of cultivatable
land contained in the entire parcel. This figure equals the soil productivity
index of the applicant's parcel. (For example, if the applicant's parcel
consists of 60 acres of Class II soils and 40 acres of Class III soils, the
following calculations must be made: 60 acres X 0.72 = 43.20; 40 acres X 0.50 =
20; 43.20 + 20 = 63.20; 63.20 divided by 100 acres = 0.632. The soil
productivity index of the applicant's parcel in this example equals 0.632.) Use
this calculation to complete Step 3.
B. Step 2. Determine the average distance the
applicant's land is from Baltimore and Washington. First, note the distance
this land is from Baltimore. Second, note the land's distance from Washington,
D.C. To obtain the land's average distance from Baltimore and Washington, add
these two distances together and divide by 2. (For example, if the applicant's
land is 50 miles from Washington and 20 miles from Baltimore, its average
distance from these areas is 35 miles. (50 + 20) divided by 2 = 35.) Use this
calculation to complete Step 3.
C.
Step 3. Using the mathematical equation discussed in Regulation .05 of this
chapter, determine the per acre rental value of the applicant's land. That
equation is as follows: Rent = -53 + (160 X productivity index) + (0.11 x
average distance from Baltimore and Washington, up to 100 miles). Insert the
figures derived from completing Steps 1 and 2 to complete the equation. The
productivity index number is the figure derived from completing Step 1. The
average distance is the figure derived from completing Step 2. If the average
distance is 100 miles or more, insert 100 into the equation. (Using the figures
from the examples noted in Steps 1 and 2, the equation is completed as follows:
Rent = -53 + (160 X 0.632) + (0.11 X 35) or, to answer the equation, $51.97 per
acre.) Use this calculation or the most recent 5-year average cash rent of the
county where the property is located, whichever is lower, to complete Step 4.
If the rental value calculated in Step 3 or if the running 5-year average cash
rent of the county is less than $25 per acre, use $25 per acre to complete Step
4.
D. Step 4. To determine the per
acre agricultural value of the applicant's land, divide the figure derived from
completing Step 3 (the per acre rental value of the applicant's land) by a
capitalization rate of 6 percent (the Department has estimated 6 percent to be
the capitalization rate). (Using the figure from the example noted in Step 3,
or $51.97 per acre, the per acre agricultural value is $742.43 ($51.97 divided
by 0.06).) Use this figure to complete the final step.
E. Step 5. To determine the agricultural
value of the applicant's land, multiply the figure derived from completing Step
4 (the per acre value) by the total number of acres of cultivatable land
comprising the applicant's land.
Notes
Regulations .06 adopted effective October 28, 1991 (18:21 Md. R. 2310)
Regulation .06C amended effective September 8, 1997 (24:18 Md. R. 1297)
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