Agenda - 09-02-2008 - 4e - Laserfiche WebLink

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.:';`,•.-e0,1-',r 2' , -.4 USE-VALUE ADVISORY BOARD MANUAL Following are explanations of the major components of this manual. I. Cash Rents Beginning in 1985, the basis for determining present-use value for agricultural land was based on i the soil productivity for growing corn and soybeans. At that time, corn and soybeans were considered the predominant crops in the state. Over time, fewer and fewer acres went into the -: production of corn and soybeans and the land used for these crops tended to be lower quality. As li a result, both the productivity and value of these crops plummeted, thus resulting in lower present-use values. A viable alternative was sought to replace corn and soybeans as the basis for present-use value. Following a 1998 study by North Carolina State University, cash rents for agricultural and horticultural land were determined to be the preferred alternative. Cash rents are a very good indicator of net income, which can be converted into a value using an appropriate , capitalization rate. - „: .• The General Assembly passed legislation that established cash rents as the required method for . E-K determining the recommended present-use values for agricultural and horticultural land. The cash rents data from the NCSU study served as the basis for determining present-use value for -. 1g the 2004-2007 UVAB manuals. However, starting in 2006, funding became available for the .. ti., 444' .4c North Carolina Department of Agriculture to perform an extensive statewide cash rents survey At. on a yearly basis. The 2006 survey became the basis for the 2008 UVAB recommended values, [let- ;-,..:14;, W, 5 . :.• ;R:i.i:::