2023 saw the introduction of LB 820, a significant legislative bill in Nebraska known as the Agricultural Valuation Fairness Act. The act's objective is to streamline the assessment of agricultural and horticultural land across the state, ensuring fairness and uniformity.
LB 820 addresses the issue of non-agricultural factors influencing agricultural land sale prices, aiming to evaluate farmland based on its income-generating potential, agricultural use value. This revenue-neutral valuation is in compliance with the Nebraska Constitution and addresses the disparity between agricultural and horticultural worth.
Under the provisions of LB 820, an Agricultural Land Valuation Committee will be established. This committee's role will be to define agricultural land values using a productivity-based approach, wherein the land's gross income is adjusted for expense ratios to arrive at net income. This net income is then capitalized to calculate the land's assessed value.
The committee also has the responsibility of deciding the capitalization rate to ensure that valuations align with 69-75% of the market value.
The proposed legislation maintains local control by assigning the task of land classification to county assessors. The county assessors' representative will be part of the Agricultural Land Valuation Committee.
The assessors will also have the option to petition the tax commissioner for alternative values if they feel the set values are not proportionate or uniform.
LB 820 proposes a yearly increase cap of 3.5% and a maximum value limit of 75% of the market value for agricultural lands. This ensures a balanced approach to assessment, contributing to fairness and standardization across Nebraska.
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Categories: Nebraska, Government & Policy