1. CAUV ALLEN COUNTY AUDITOR Hon. Rhonda Eddy-Stienecker
Sponsored by:
Hon. Rhonda Eddy-Stienecker
ALLEN COUNTY AUDITOR
CAUV
Current Agricultural Use Value
Speakers:
Richard F. Hoffman, Esq.
LOCAL GOVERNMENT SERVICES
Richard H. Hoffman, ASA, CAE, MAI, CRE, FRICS
APPRAISAL RESEARCH CORPORATION

2. TONIGHTS AGENDA 1. Review the Current Formula
2. Discuss Current and Potential Changes
3. Timeframe
4. Answer Your Questions
I think we want to remove number 3 examining market value changes. We are not using that and so we really don’t want to talk about it.

3. 6-YEAR VALUATION CYCLE
we need to remember to define what a triennial in a revaluation really is as the opening to this slide.

4. WHAT IS AGRICULTURAL USE? OHIO REVISED CODE SECTION 5713.30
Must be for a commercial purpose
Animal or poultry husbandry, aquaculture, apiculture, commercial timber or timber contiguous to other qualifying land, field crops, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod, or flowers
Land devoted exclusively to biodiesel production, biomass energy production, electric or heat energy production, or biologically derived methane gas
At least 50% of feedstock must be produced on land under common ownership
Facility must be contiguous to, or on land under common ownership

5. EXPLANATION OF THE CALCULATION OF VALUES FOR VARIOUS SOILS (2015)
CAUV land values are calculated by the capitalization of net income from agricultural products assuming typical management, cropping and land use patterns, and yields for given types of soils.
There are 3514 different soil types with slopes of 25% or less.

6. CAUV HISTORY
When CAUV was adopted in 1974 it was designed to reduce values by approximately 50%
In 2005 CAUV provided a 90% reduction in value
In 2010 the reduction was 77%
In 2014 the reduction was 62%
In 2015 the reduction was 52%
CAUV was adopted in 1974 – – we need to change 1975 to 1974

7. AGRICULTURAL ADVISORY COMMITTEE
WHO SETS CAUV VALUE?
OHIO DEPARTMENT
OF TAXATION
Order
AGRICULTURAL ADVISORY COMMITTEE
We need to get a list of everybody that’s on the agricultural advisory committee and probably add a slide or an addition to this slide that lists the people that are part of the program
COUNTY AUDITOR

8. SOIL HISTORY SAMPLE

9. WHY THE INCREASE? 1984-2005 Yield Adjustment (catch up)
Lower Prices Leaving Formula
Higher Prices Joining Formula
Lower Cap Rates (Fed Reserve Policy – Current)
Change in cap rate formula (2016 and Beyond?)
I have added the world “yield” to the top line

10. FACTOR CHANGES & CAP RATE 2015
Timelines of Data
Reduce two-year lag to one year
Crop yields & Crop prices
Non-land production costs
Current OSU Crop Enterprise Budgets (2015)
Capitalization Rate
Revise debt/equality split: 80% loan/20% equity
Farm Credit Services 25–year fixed multi-flex rate for loan amounts over $25,000 and over.
Prime rate plus 2% at Bankrate.com WSJ Survey

11. WOODLAND VALUATION CHANGES
Deduction for subsurface tile drainage
Increase from $500 to $770
OSU Farm Custom Rates, 2014 – statewide survey
Deduction for surface drainage
Increase from $250 to $380 (37 soils)
Deduction for clearing
Increase from $500 to $1,000 (all soils)

12. FACTORS IN FORMULA

13. TIMEFRAME DTE uses a seven-year Olympic average
The high and the low years removed
2015 Years
2008, 2009, 2010, 2011, 2012, 2013, 2014
I’ve taken out 2005 and added 2012

14. YIELD ADJUSTMENT FACTORS
Base year = (Used from )
Annual adjustment since 2006
10 year statewide yield average
Data from Ohio Department of Agriculture
I’ve added the word “from” in the 1st line

15. AVERAGE CROP YIELDS BY YEAR IN OHIO
Source: USDA/National Agricultural Statistics Service

16. Source: USDA National Agricultural Statistics Service

17. ADJUSTED CROP PRICES IN THE MODEL 2012-2015
CAUV 2015, Public Hearing 5/28/2015

18. Crop Yields/Cropping Pattern
Single crop pattern for most soils based on the most recent five-year average of acres harvested, :
Corn 40.0%
Soybeans 52.6%
Wheat 7.4%
A pattern of 50% corn and 50% soybeans for organic soils.
Source: USDA, National AG Stats Service – 2014 Summary

19. Non-Land Production Costs Base & Added Unit, 2012-2015
Source: Field Crop Enterprise Budget 2015, OSU Extension, Department of Agriculture
CAUV 2015, Public Hearing 5/28/2015

20. Capitalization Rate TY 2012-2015
I think I’ve updated this slide correctly for the numbers for 2015
Source: Ohio Department of Taxation

21. 2015 RESULTS– CAPITALIZATION RATE

22. 2015 Sample Calculation - Miami
Source: Ohio Department of Taxation & Ohio Agricultural Statistical Service
CAUV 2015, Public Hearing 5/28/2015

23. 2015 RESULTS vs. 2012

24. Average CAUV and Ohio Cropland Value - USDA Dollars per Acre, 2000-2014
Source: Ohio Department of Taxation

25. Cropland, Average CAUV Dollars per Acre - 2000-2015
We need to add a 2014 number 2 to this slide and the total is $1668 for 2014.
Source: Ohio Department of Taxation

26. 2014 AVERAGE CAUV VALUES
Source: Ohio Department of Taxation

27. 2014 MARKET VALUES
Source: Ohio Department of Taxation

28. Source: Ohio Department of Taxation

29. YOUR QUESTIONS?