42.20.901 LANDFILL VALUATION DEFINITIONS
The following definitions apply to terms contained in this subchapter:
(1) "Appraisal period" means the reappraisal cycle provided for in 15-7-111, MCA.
(2) "Compaction ratio" refers to the ratio that expresses the relationship of the number of tons that will fill one cubic yard of capacity. For example, if the compaction ratio is .70, then 70% of one ton, 1,400 pounds of waste, can be deposited into one cubic yard of capacity. Compaction ratios for landfills are typically in the .50 to .70 range. Unless the landfill owner or its agent can provide by a preponderance of evidence to the contrary, the compaction ratio will be .70.
(3) "Cover materials" means at least six inches of dirt or a dirt-like substance that is applied to the exposed garbage each day and is not removed. It does not mean a tarp or tarp-like product.
(4) "Discount rate" is a rate expressed in a percentage that is used to discount the annual royalty payments over the projection period to a present value. The majority of the discount rates for landfills are in the 20% to 30% range. Unless the landfill owner or its agent can provide by a preponderance of evidence to the contrary, a discount rate of 20% will be used.
(5) "Improvements" means buildings, scales, and other structures permanently affixed to the ground necessary to operate a landfill.
(6) "Other property related income" means landfill income generated by the property, such as land/dirt farms and methane gas collection.
(7) "Reversionary value" means the market value of the landfill after it is closed.
(8) "Royalty rate" means a rate applied to the annual gross receipts that results in the estimated royalty payment for each year of the projection period. Unless the landfill owner or its agent or the department can provide by a preponderance of evidence to the contrary, the royalty rate will be 10%.
(9) "Royalty method" means a discounted cash flow analysis based on the premise that a landowner would lease land to a licensed landfill operator for a set percentage of the tipping fees received for dumping at the site. The present value of the annual royalty rate of payments must be estimated over the projected economic life of the licensed landfill, plus the present value of the landfill after it is closed.
(10) "Licensed Landfill" means an area of land or an excavation where wastes are placed for permanent disposal, and that is not a land application unit, surface impoundment, injection well, or waste pile. Licensed landfills are subject to federal regulations of the Environmental Protection Agency (EPA) and law as "permitted landfills" under Subtitle D of the Resource Conservation and Recovery Act of 1976 (RCRA) and state regulations through the Department of Environmental Quality (DEQ).
(11) "Tipping fees" are the dollar charge per ton for dumping municipal solid waste and other approved waste at the licensed landfill.