350 NAC 14-004. PROCEDURES

REG-14-004 PROCEDURES 004.01 Identification of the parcel. 004.01A All land in the state of Nebraska can be identified using the public land survey system. The entire state has been laid out in townships north of the baseline running from east to west along the Kansas-Nebraska border and ranges east and west from the 6th parallel which runs perpendicular to the baseline approximately 108 miles west of the eastern tip of the state. The parcel should be identified using the public land survey system legal description. 004.01A(1) Government lots may be identified using the appropriately assigned government lot number. Government lots are irregularly shaped lots which most often occur along the north and west sections in a township. 004.01A(2) Irregular lots may be identified using the appropriately assigned "tax lot" number. 004.01B Every county shall prepare and maintain a parcel numbering system based on the cadastral mapping program. The property identification numbering system is addressed in REG-10-004.03. 004.02 Identification of the rights to be appraised. 004.02A The assessor is to value all the rights that may legally be owned, including the rights to sell, lease, use, gift, enter, or refuse to do anything are considered to be the rights being appraised for property tax purposes. 004.02B Rights in other than the surface estate are to be valued and assessed separately to the owner of those rights when they have been severed from the surface rights. See, Mineral Interest Regulation, Chapter 13, procedures for assessing mineral interests. 004.03 Date of assessment is as of January 1 of the current assessment year. The assessor shall complete the assessment process for all real property on or before March 19 of each year, prior to filing of the county's abstract of assessment. 004.04 Classes of agricultural and horticultural land. The assessor is responsible for an accurate inventory of each parcel into its current agricultural and horticultural land class. 004.04A Irrigated Cropland. 004.04B Dryland Cropland. 004.04C Grassland. 004.04D Wasteland. 004.04E Government Programs Land which is voluntarily enrolled in the Conservation Reserve Program (CRP), Conservation Reserve Enhancement Program (CREP), Environmental Quality Incentives Program (EQIP), the Stewardship Incentive Program, the Tree Assistance Program, the Water Bank Program, or any other programs may require separate market analysis. The land should be classified at its current use such as grassland or timbered grassland; however, the values for land enrolled in government program acres should be adjusted to reflect the local market for similar property. 004.04F Intensive Use Areas: Agricultural or horticultural land which has been designed for intensive uses such as feedlots, nurseries, vineyards, sod farms, and orchards should be valued in a separate category. A separate land classification for these intensive use areas shall be determined. Intensive use areas must be valued independently from rural farmsites. Land not directly associated with buildings in these instances would be assessed at seventy-five (75) percent of value as determined by a market study. 004.04G Forestland and Shelterbelt Areas: Include natural and planted stands of trees and/or shrubs where livestock grazing is not practiced or possible. Areas where grazing occurs will be classified as timbered grassland. This includes any natural stands of timber. Planted forests include areas planted for windbreaks, shelterbelts, wildlife habitat, wood products, and living snowfence. Areas that include a combination of both planted and natural forests will be in this classification. Trees planted for nursery stock, tree farms, orchards, and other horticultural purposes will be categorized and analyzed separately to determine their value. 004.05 Accretion Land: Includes land that has been formed by alluvial deposits associated with a body or stream of water. The State of Nebraska is unique in its recognition of the riparian rights of individuals to own land lying under water. Accretion land can be classified into any agricultural use category. 004.05A In counties adjoining rivers which represent the state boundary, the county surveyor shall survey the land adjoining the river before June 1, 1960, and at least once within each five-year period thereafter. 004.05B In counties with rivers which are not state boundaries, the county surveyor shall cause a survey of lands believed to be altered by adjoining bodies of water when ordered by the county board of equalization or requested by the Property Tax Administrator. 004.05C A report of such survey findings of changes in land areas or a certificate of the opinion that the acres as noted on the current tax lists have not changed due to actions of adjoining bodies of water shall be filed with the assessor. 004.06 Classification of agricultural land in Nebraska requires that there be a set of complete and accurate maps or digital imageries that reflect the location, identification, and inventory of all parcels of land within every jurisdiction. The general procedures used in these regulations require that the counties have their soils classified by parcel, soil, and land use. If the soils have not been counted in a county, the county needs to have the following items available: 004.06A Up-to-date aerial photographs or digital imageries of the entire county. 004.06B Supplemental land valuation records, to inventory the acres of every soil type by land use for every parcel. 004.06C The current soil conversion legend prepared by the Department of Revenue, Property Assessment Division that reflects the land capability groups by dryland soil type. 004.06D Property record cards that list the soils, the land use, the number of acres for each use, and the land capability groups for each parcel of agricultural land being assessed. 004.07 The following general procedures for a soil inventory shall be followed for those counties without digital imagery: 004.07A Prepare and organize the aerial photos and soil maps or "Mylars" so they can be filed in a systematic manner for retrieval. Prepare photo index maps as needed. Use property lines that can be changed and some means of identification for each parcel on these photos. 004.07B Record the current land use on the photos or the "Mylar" map after verifying and physically reviewing the land use in the county. 004.07C Display the land use groups for the soils on the maps or "Mylars" depending on the procedure preferred. 004.07D Tabulate and record the acres and soils for each land use on the property being appraised. Since data may be, or already is, computerized, all data will need to be recorded for each soil type. A separate record will be needed for each ownership. No single parcel shall be larger than one section. 004.07E Consolidate the data on each record into individual land capability groups by grouping the soils together according to the soil conversion legend and the value assigned to the land capability group for that market area. 004.07F Transfer the consolidated summary of acres by land capability groups to the property record cards. 004.07G Summarize and check all land value data on the property record card. A separate property card is needed for each parcel in each section. 004.07H File all photos, supplemental records, and property cards and keep them for reference. When parcels are later split or combined, the information for each unit will need to be regrouped and summarized according to the new property lines. 004.07I An organized maintenance program is desirable for the maps. If maps are not maintained and changed when property is split, combined, or changes ownership, the original investment in a mapping program is lost and eventually an expensive and time consuming remapping program will become necessary. The current land use on agricultural land must be annually updated and maintained. Aerial photos or digital imagery can be utilized for this purpose. 004.08 Classification by Land Capability Groups. 004.08A Soil surveys are one of the principal tools and sources of information used in the classification of agricultural land in Nebraska. The classification of agricultural land for assessment purposes is based on each county’s most recent soil survey and the most recent technical updates available. A county’s soil survey is not required to be published for its implementation to occur. 004.08B All soil types in a county are assigned to a Land Capability Group. As soil mapping is completed, conversion legends are prepared by the Department of Revenue, Property Assessment Division according to the dryland capability classification of each soil that shows, in a general way, the suitability of each soil for most kinds of field crops. Grouping and inventorying soils in this way creates a uniform classification system and is the next step in the assessment of agricultural land. The conversion legend shows the LCG for each soil in the county whether in grassland, dryland or irrigated cropland. The conversion legend groups similar soils throughout their area of occurrence into the same LCG. A conversion legend of the soils of Nebraska is made available to the assessors. 004.08C Soil types that have similar capabilities and characteristics are placed in the same land capability group. The main criteria for different land capability groups are types of soil, slope, and erosion. A few of the other soil characteristics that help to determine land capability and subsequently the land capability group are texture, attributes, saline or alkali conditions, water tables, flooding hazards and depth of soil over bedrock or gravel. All of these characteristics affect the capability of a soil. 004.08D Procedures have been established to achieve a fair and uniform method of using soil maps and interpretations in the classification and inventory of land. It sets forth a consistent and standard land classification and inventory system which can be used statewide for all land classes. It was developed by using pertinent factors such as soil classification, characteristics, properties, limitations and hazards, land use, precipitation, and length of growing seasons. The following procedures are designed to achieve uniform and equitable assessments for similar kinds of agricultural land throughout the State of Nebraska: 004.08D(1) The highest capability soils in cropland are classified into the highest Land Capability Group under that use. 004.08D(2) The lowest capability soils are classified into the lowest Land Capability Group. Every Land Capability Group may not occur in every county. 004.08E A Land Capability Group (LCG) is a grouping of various soils according to their limitations for field crops, the risk of damage if they are used for crops, and the way they respond to average management. Since the soil conservation service maps major natural bodies of soil in a mapping area, the criteria used for grouping the soils do not include major land reformation that would change slope, depth or other characteristics of the soils, nor do they include unlikely major reclamation projects. When such areas have been mapped and assigned capability units by the Natural Resources Conservation Service, the assigned capability unit is used. A LCG is determined for each kind of soil and its current land use. Nebraska has three primary land uses. The eastern part of the state is principally a dryland farming area. The central and western regions of the state generally require irrigation for the intensive production of common cultivated crops. Approximately one-half of the acreage in the state is in native grassland. Scattered throughout, there is recreational land, timberland and wasteland. 004.08F Due to the wide range of climate and soils in Nebraska, there is a minimum of 12 LCGs to classify the various kinds of soil by land use throughout the state. Some counties may not have every land capability group. Four principal LCGs are established for each of the following agricultural uses and they are coded as shown below: 004.08F(1) Irrigated cropland (includes irrigated grassland) 1A, 2A, 3A, and 4A. 004.08F(2) Dryland cropland 1D, 2D, 3D, and 4D. 004.08F(3) Grassland 1G, 2G, 3G, and 4G. 004.08G Land capability groups defined. The general definition for each of the four land capability groups applies to irrigated cropland, dryland cropland, and grassland. 004.08G(1) LCG 1 includes soils that generally have the capability to produce high to very high yields of grain or forage crops, including native and introduced grasses, and foods and crops produced for processing such as, soybeans, corn, sugar beets, potatoes, field beans, and others. 004.08G(2) LCG 2 includes soils that have the capability to produce moderately high to above average yields of either grain or forage crops, including native and introduced grasses, and foods and crops produced for processing. Soils in this group have moderate limitations and hazards that affect use and management. 004.08G(3) LCG 3 includes soils that have the capability to produce average or moderately low yields of either grain or forage crops, including native and introduced grasses, and foods and crops produced for processing. Soils in this group have moderately severe limitations and hazards that affect use and management. 004.08G(4) LCG 4 includes soils that have the capability to produce low or very low yields of either grain or forage crops, including native and introduced grasses, and foods and crops produced for processing. Soils in this group have very severe limitations and hazards that affect use and management. 004.08H Additional Land Capability Groups. The foregoing cropland and grassland LCGs may be subdivided if intermediate or additional LCGs and land values are needed. In many counties, the four LCGs are not adequate to show the range of classifications needed for the diversity of the soil capabilities within the area. In such cases, the LCGs are divided and identified by the addition of the number 1 (one) to the LCG. (Example: 2G1, 4D1, 3A1, etc.) If the irrigated cropland LCG 1A needs to be subdivided, LCG 1A1 will be used for the soils with the higher capability. Intermediate or other appropriate groups will be used as needed when a LCG is divided. The following LCGs are generally adequate for classifying and inventorying agricultural land throughout most of the state. 004.08H(1) 1D1 and 1A1 - Cropland soils generally capable of producing very high yields. 004.08H(2) 1D and 1A - Cropland soils generally capable of producing high yields. 004.08H(3) 2D1 and 2A1 - Cropland soils generally capable of producing moderately high yields. 004.08H(4) 2D and 2A - Cropland soils generally capable of producing above average yields. 004.08H(5) 3D1 and 3A1 - Cropland soils generally capable of producing average yields. 004.08H(6) 3D and 3A - Cropland soils generally capable of producing moderately low yields. 004.08H(7) 4D1 and 4A1 - Cropland soils generally capable of producing low yields. 004.08H(8) 4D and 4A - Cropland soils generally capable of producing very low yields. 004.08H(9) 1G1 - Grassland and meadows generally capable of producing very high yields of forage. 004.08H(10) 1G - Grassland and meadows generally capable of producing high yields of forage. 004.08H(11) 2G1 - Grassland and meadows generally capable of producing moderately high yields of forage. 004.08H(12) 2G - Grassland and meadows generally capable of producing above average yields of forage. 004.08H(13) 3G1 - Grassland and meadows generally capable of producing average yields of forage. 004.08H(14) 3G - Grassland and meadows generally capable of producing moderately low yields of forage. 004.08H(15) 4G1 - Grassland areas generally capable of producing low yields of forage. 004.08H(16) 4G - Grassland areas generally capable of producing very low yields of forage. 004.09 The assessor may create any further sub-classification of agricultural land necessary to achieve uniform and proportionate valuation. (Neb. Rev. Stat. Section 23-304, R.R.S. 1997, Neb. Rev. Stat. Section 57-236, R.R.S. 2004, Neb. Rev. Stat. Sections 76-2,111, 76-2,112, 76-2,113 through 76-2,118, 77-102, 77-1306.01 and 77-1329 , R.R.S. 2003, Neb. Rev. Stat. Sections 77-1301, 77-1303, 77-1343, 77-1361, 77-1363 and 77-1379, R.S. Supp., 2006 and Neb. Rev. Stat. Sections 77-103, 77-201, 77-702, 77-1344 and 77-1345, R.S. Supp., 2007.) REG 14-005 OTHER AGRICULTURAL AND HORTICULTURAL LAND USES 005.01 There are other land uses on a agricultural or horticultural parcel which are not classified as agricultural land and horticultural land uses. All of these areas will need to have market studies conducted by the assessor to determine the proper assessment of the land. Other land uses shall not be classified as agricultural and horticultural land and shall be assessed at 100% of actual or market value. 005.01A Farm home site shall mean one acre or less of land that is contiguous to a farm site and upon which is located a residence and necessary improvements needed for residential purposes. This land shall not be classified or assessed as agricultural or horticultural land. 005.01B Farm site shall mean land containing improvements that are agricultural or horticultural in nature, including an uninhabitable or unimproved farm home site, all of which is contiguous to agricultural or horticultural land. This land shall not be classified as agricultural or horticultural land and shall not include a home site. 005.01C Roads and ditches are to be counted and inventoried when the county is maintaining a public road on privately owned land. The public road and adjoining ditch acres will carry no taxable value to the land owner. Generally public roads and ditches will not exceed 4 acres per mile or 16 acres per section. 005.01D Other non-agricultural and horticultural uses including but not limited to: 005.01D(1) Intermittent small drainage ways, with or without small channels, should be included with the surrounding land. They usually carry runoff only after rains. 005.01D(2) Stream channels of principal streams should be deducted from the surrounding cropland or grassland. 005.01D(3) Large lakes created by watershed dams may have different values. Watershed dams are comprised of various components that will not necessarily be classified differently from the surrounding land. The components include a permanent water basin and silt pool, a temporary storage basin, the dam, and the spillway. The classification of these areas may vary for each location. A value for each individual watershed will need to be established. 005.01D(4) Private lakes and ponds, whether natural or artificial, and not developed or used for recreational purposes, may be classified with the adjacent land. In many situations an analysis needs to be completed to determine the proper classification and valuation of these areas. Included with lakes are sandhill lakes, inactive gravel pits, ox bow lakes in old stream channels, and intermittent bodies of water caused by depressions and claypan soils. 005.01D(5) Reservoirs or lakes that are developed for or have recreational potential will be classified as such. An analysis will be completed to reflect the current market value. These lakes will occur in an agricultural land area and will be separate from the agricultural land classification. When classifying these lakes, zoning regulations should be checked for compliance. 005.01D(6) Sewage lagoons on private land should be valued as amenities to the farm site or the building site. (Neb. Rev. Stat. Section 23-304, R.R.S. 1997, Neb. Rev. Stat. Section 57-236, R.R.S. 2004, Neb. Rev. Stat. Sections 76-2,111, 76-2,112 and 76-2,113 through 76-2,118, 77-102, 77-1306.01 and 77-1329, R.R.S. 2003, Neb. Rev. Stat. Sections 77-1301, 77-1303, 77-1343, 77-1361, 77-1363 and 77-1379, R.S. Supp., 2006 and Neb. Rev. Stat. Sections, 77-103, 77-201, 77-702, 77-1344 and 77-1345, R.S. Supp., 2007.) REG 14-006 VALUATION OF AGRICULTURAL AND HORTICULTURAL LAND 006.01 A market or sales comparison approach may be used to determine the actual value for each class and subclass of agricultural and horticultural land. 006.01A A valuation per unit of comparison, or per land capability group, may be made based on matched pairs analysis of comparable sales. 006.02 The income approach to valuation may be used to determine the actual value for each class and subclass of agricultural and horticultural land. 006.02A An estimate of potential gross income is made from: 006.02A(1) Typical cash rents for comparable land; or 006.02A(2) Estimated landlord's share of income on a crop/share basis; or 006.02A(3) For grassland, the rent should be based on animal unit months. 006.02B Typical expenses are deducted from the estimate of gross income to arrive at net income to the landowner. 006.02C Indicated net income is capitalized or divided by the appropriate capitalization rate to estimate the value of the parcel. 006.02C(1) Capitalization rate must consider: 006.02C(1)(a) Market derived discount rate; 006.02C(1)(b) Market derived rate of change; 006.02C(1)(c) Market derived sinking fund rate; and 006.02C(1)(d) Appropriate effective tax rate. 006.03 Reconciliation of final value is based on the appropriateness of the approach to value (market is preferred in the valuation of agricultural land) and the availability and reliability of the information used in each approach. 006.04 Miscellaneous land use adjustments. 006.04A Tree Canopy-Land with less than thirty-five (35) percent tree canopy should be classified as grassland. A market analysis will demonstrate if any adjustments are needed. Some soil mapping units consider tree canopy as typical and this has been considered when classifying the land into LCG’s. A determination will need to be made whether tree canopy along rivers and streams is used as agricultural land, timberland, or recreational land. 006.04B Soil Spot Symbols-Most soil surveys show some spot symbols on soil maps that are used to indicate special soil conditions that are not typical for the soil in the area. The symbols are used to show small areas of wet spots, alkali spots, saline areas, severely eroded areas, sand spots, gravelly areas, rock outcrops, small blowouts, or other conditions for which an adjustment in land value may be necessary. The symbol is used for areas that are too small to delineate, but are significant to the use of the soil in the area. Each county will need to review the spot symbols that are mapped in their county to determine if an adjustment is necessary and how much of an adjustment should be applied. If an adjustment is warranted, it is applied to all areas affected. 006.04C Other sub-classifications may be recognized in order to achieve proportionate market value. Examples of the sub-classifications include, but are not limited to: 006.04C(1) Irrigation from sources other than the parcel being assessed shall be classified as other properties by soil type; however, the market value should be based on transactions of irrigated land which is under the same limitation as to availability of water source for irrigation. 006.04C(2) Irrigable land as defined in REG 14-002.38 may be considered a sub-classification. The value of the land should reflect the current market value recognized for other similarly situated land that has the potential to be irrigated but is not currently irrigated. 006.04C(3) Conservation Reserve Program (CRP) Land, Conservation Reserve Enhancement Program (CREP), Environmental Quality Incentives Program (EQIP) and other lands which have been enrolled in a federally or state funded program that encourages the development of specific conservation practices in exchange for a guaranteed or contracted annual payment . This land is to be classified at its current use; usually grassland uses. The value for this land should be based on the current market value for land subject to similar restrictions and similar payments. 006.04C(4) Parcel size or shape may be detrimental to the value of the parcel for agricultural and horticultural use, while the market may indicate a higher value for smaller tracts as for other uses. Often small irregular shaped parcels are farmed in conjunction with the adjoining farmland rather than being left idle. These parcels shall be valued based on the classification of the soils as determined in the market analysis. 006.04C(5) Parcel location may affect the value of a parcel. The soil shall be classified as other like soils, but the value should reflect the market for properties with similar location limitations or enhancements. 006.05 Assessment of agricultural land and horticultural land.006.05A Valuations shall be developed in consideration of land capability group and market area, within a county in order to value all property at or near the statutorily required level of value. 006.05B Land which has been determined to meet the definition of being agricultural land or horticultural land in use shall be assessed at seventy-five (75) percent of the market value. 006.05B Land not meeting the definition of agricultural land or horticultural land in use shall be assessed at one hundred (100) percent of the market value. (Neb. Rev. Stat. Section 23-304, R.R.S. 1997, Neb. Rev. Stat. Section 57-236, R.R.S. 2004, Neb. Rev. Stat. Sections 76-2,111, 76-2,112, 76-2,113 through 76-2,118, 77-102, 77-1306.01 and 77-1329, R.R.S. 2003, Neb. Rev. Stat. Sections 77-1301, 77-1303, 77-1343, 77-1363 and 77-1379, R.S. Supp., 2006 and Neb. Rev. Stat. Sections 77-103, 77-201, 77-1344 and 77-1345, R.S. Supp., 2007.)