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Committee approves correction to agricultural land valuation formula in administrative rule
Summary
The committee approved docket 35-0103-2401, amending Property Tax Rule 617 to correct the gross-income-per-acre calculation for agricultural land valuation and to remove ancillary language. The Tax Commission said assessors will rely on local questionnaires or published third‑party data to compute income-per-acre used in capitalization.
Kathleen Ireland, property tax research specialist for the Idaho State Tax Commission, presented docket 35-0103-2401 to the Local Government and Taxation Committee and described a corrective amendment to Property Tax Rule 617.
"This amendment corrects the calculation of gross income per acre. The current rule calculates acres per gross income, which is generally unhelpful," Kathleen Ireland said, explaining the change. She described the corrected approach: calculate animal unit months (AUM) as cow-calf pairs times months grazed, multiply by a five-year rolling average of rents per AUM to get total income, then divide by acres grazed to get gross income per acre. Expenses are then deducted to arrive at net operating income to be capitalized into an assessed value per acre.
Ireland told the committee that assessors typically derive the income data from locally sourced questionnaires completed by ranchers in the assessment area; if local data are not available the rule allows the use of published third‑party providers. She also said subsections with ancillary language were removed and subsection 7 was redacted under the Governor's executive order for zero-based regulations and the Red Tape Reduction Act.
Ireland thanked Farm Bureau representative Russ Hendricks and county assessors, including Mr. Bridal Stender, for reviewing and approving the changes.
Senator Riggs moved to approve docket 35-0103-2401; Senator Taylor seconded. The committee approved the docket by voice vote.
The amendment is corrective (formula orientation) rather than policy-creating in the committee discussion and is intended to standardize the capitalization approach assessors use for grazing land valuations.
