Code of Maryland Regulations › Title 15 - MARYLAND DEPARTMENT OF AGRICULTURE › Subtitle 15 - MARYLAND AGRICULTURAL LAND PRESERVATION FOUNDATION › Chapter 15.15.02 - Formula for Determining the Agricultural Value of Land › Section 15.15.02.06 - Formula for Determining Agricultural Value

Current through Register Vol. 51, No. 14, July 12, 2024
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.