42.20.725 FOREST LAND VALUATION
(1) The department determines productivity value of forest land by dividing the state into four regional forest valuation zones (zone) designed to recognize unique marketing areas, timber types, growth rates, access, and other pertinent factors affecting value. The counties contained within each zone are:
(a) Zone 1 - Northwest: Flathead, Lake, Lincoln, and Sanders counties;
(b) Zone 2 - Southwest: Deer Lodge, Granite, Mineral, Missoula, Powell, Ravalli, and Silver Bow counties;
(c) Zone 3 - Central: Beaverhead, Broadwater, Cascade, Chouteau, Fergus, Gallatin, Glacier, Golden Valley, Hill, Jefferson, Judith Basin, Lewis and Clark, Liberty, Madison, Meagher, Park, Pondera, Sweet Grass, Teton, Toole, and Wheatland counties; and
(d) Zone 4 - Eastern: Big Horn, Blaine, Carbon, Carter, Custer, Daniels, Dawson, Fallon, Garfield, McCone, Musselshell, Petroleum, Phillips, Powder River, Prairie, Richland, Roosevelt, Rosebud, Sheridan, Stillwater, Treasure, Valley, Wibaux, and Yellowstone counties.
(2) The valuation of forest land is provided in 15-44-101 through 15-44-105, MCA. Each zone's productivity value is calculated using the statutory formula provided in 15-44-103, MCA. However, the department applies the formula per industry standard as I/R=V. The department calculates each forest valuation zone's net income per acre (I) by:
(a) multiplying the potential forest productivity, expressed in board feet per acre, by the average per acre stumpage value for the specific forest zone; and
(b) adding the zone-specific per acre agricultural net income provided in (3); and
(c) subtracting zone-specific per unit cost of the forest product provided in (4).
(3) The department calculates the agricultural-related net income of a zone by:
(a) multiplying the average per acre grazing fee on private land by the
zone-specific average grazing productivity of forest land expressed in animal unit months (AUM) per acre; and
(b) deducting the landowner's grazing expenses of 25 percent from the gross income per acre value.
(4) The department assigns a potential productivity which is a weighted mean of volume produced, expressed in board feet per acre, to each forest acre based on the culmination of MAI measured by the Scribner Log Rule.
(5) The department calculates the per unit cost of forest product produced over the base period provided in 15-44-103, MCA, and determined by:
(a) averaging the actual expenditures for reforestation, fire assessment, slash disposal, timber stand improvement, timber harvest, and forest practices of the Department of Natural Resources and Conservation (DNRC) in each zone over the base period;
(b) adding the average fire assessment fees charged by the DNRC over the base period; and
(c) adding the average severance tax paid by landowners for harvested timber over the base period.
(6) The department uses the capitalization rate of eight percent as set in
15-44-103, MCA, to convert the net income to a forest land productive value.
(7) The department classifies one-acre of land beneath any residence located on forest land as a forest home-site. The value of the one-acre site will be determined using the sales comparison approach to value.
(8) Land under structures which are associated with forest land management are classified and valued as forest land.
(a) For the purpose of this rule, "associated with forest land management" means the primary use of a structure that supports the health, maintenance, growth, or harvest of the forest land on the property.
(b) If a residence and structures associated with forest land management share the same area, the department will value the one-acre site using the sales comparison approach to value.
History: 15-1-201, 15-44-105, MCA; IMP, 15-6-134, 15-7-103, 15-8-111, 15-44-101, 15-44-102, 15-44-103, 15-44-104, 15-44-106, 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; AMD, 2020 MAR p. 1743, Eff. 9/26/20.