NAC361A.180. Annual study of value of lands designated for agricultural use.

      1. On or before the first Monday in October of each year, the Department shall conduct a study of the value of lands designated for agricultural use and present the study for approval by the Commission. The Commission will incorporate the results of the study so approved into the bulletin prepared pursuant to NRS 361A.140 for use by county assessors.

     2. The study conducted by the Department must, in accordance with NRS 361.325, be based on the productivity of the land. Productive capability of land may be determined by the classification of land and application of a capitalized earnings approach as follows:

     (a) For cultivated and native meadow or wild hay lands:

          (1) Agricultural income for lands designated as cultivated may be projected by developing estimates of gross income based on average commodity prices. Sources of commodity prices of agricultural products which the Department may use include, without limitation, the Nevada Agricultural Statistics Service and a survey of growers and local buyers.

          (2) A net operating income must be determined by subtracting an estimated allocation for expenses from the gross income. Expenses for lands must be appropriate to the type of land being valued and may include the typical costs for water and the maintenance of irrigation systems, and loss in production due to necessary management practices, such as loss in production during the seed year or the first year of the hay stand. The expenses subtracted from the gross income results in a net operating income.

          (3) A 5-year weighted average of net operating income may be capitalized into an indication of the value of the land per acre by multiplying the yield per acre, measured in tons per acre, by the net income per ton and then dividing the result by the capitalization rate. The result must be multiplied by the level of assessment to obtain an assessed value per acre.

     (b) For pasture and grazing lands:

          (1) Agricultural income for lands designated as pasture may be projected by developing estimates of gross income based on the carrying capacity of the land as measured by rentals per animal unit months per acre. Sources of rental prices for pasture and grazing lands which the Department may use include, without limitation, the Nevada Agricultural Statistics Service and a survey of growers and local buyers.

          (2) A net operating income must be determined by subtracting an estimated allocation for expenses from the gross rent per animal unit month. Expenses for lands must be appropriate to the type of land being valued and may include typical miscellaneous costs, including costs for management, insurance, stock water and maintenance of fences. The expenses subtracted from the gross income results in a net operating income to land.

          (3) A 5-year weighted average of net operating income must be capitalized into an indication of land value per acre by multiplying the net income per acre and then dividing the result by the capitalization rate. The result must be multiplied by the level of assessment to obtain an assessed value per acre.

     3. As used in this section, “carrying capacity” means the measure of the capacity of grazing land to provide adequate forage to sustain livestock for a given period.

     (Added to NAC by Tax Comm’n by R030-03, eff. 12-4-2003)