BUCKINGHAM COUNTY BOARD OF SUPERVISORS AND PLANNING COMMISSION LAND USE WORK SESSION SEPTEMBER 18, 2017 467 Buckingham County Board of Supervisors/ Planning Commission Work Session September 18, 2017 At a reconvened meeting from September 11, 2017 held on Monday, September 18, 2017 at 7:00 p.m. in the Peter Francisco Auditorium of the Buckingham County Administration Complex, the Board of Supervisors and Planning Commission held an informational work session on land use. The following members were present: Robert C. Jones, Chairman; Danny R. Allen, Vice- Chairman; Donald E. Bryan; Don Matthews; Joe N. Chambers, Jr.; E. Morgan Dunnavant; and Harry W. Bryant. Also present were the following Planning Commission members: Alice Gormus, Chairperson; John Bickford, Vice-Chairman; Royce Charlton; Sammy Smith; Pat Bowe; James D. Crews. Chet Maxey was absent. Also present were Rebecca S. Carter, County Administrator; Karl Carter, Asst. County Administrator; Rebecca S. Cobb, Zoning Administrator; and E.M. Wright, Jr., County Attorney. Special guest speakers were Nicholas Morris, Virginia Department of Taxation; Dean Cumbia, Department of Forestry; Lex Bruce, Virginia Tech and Gordon Groover, Virginia Tech. Re: Establishment of a Quorum Chairman Jones certified there was a quorum of the Board of Supervisors. Seven of seven members present and the Board of Supervisors meeting could continue. Chairperson Gormus certified there was a quorum of the Planning Commission. Seven of eight members present and the Planning Commission meeting could continue. Re: Invocation and Pledge of Allegiance Supervisor Chambers gave the invocation and the Pledge of Allegiance was said by all who were in attendance. Re: Call to Order Chairman Jones and Chairperson Gormus called the work session to order. Re: Adoption of Agenda Gormus: Mrs. Cobb, is there any change to the agenda? Cobb: No, maam. Gormus: I need a motion to adopt the agenda as presented.
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BUCKINGHAM COUNTY BOARD OF SUPERVISORS AND PLANNING COMMISSION LAND USE WORK SESSION SEPTEMBER 18, 2017
467
Buckingham County
Board of Supervisors/
Planning Commission
Work Session
September 18, 2017
At a reconvened meeting from September 11, 2017 held on Monday, September 18, 2017 at 7:00
p.m. in the Peter Francisco Auditorium of the Buckingham County Administration Complex, the
Board of Supervisors and Planning Commission held an informational work session on land use.
The following members were present: Robert C. Jones, Chairman; Danny R. Allen, Vice-
Chairman; Donald E. Bryan; Don Matthews; Joe N. Chambers, Jr.; E. Morgan Dunnavant; and
Harry W. Bryant. Also present were the following Planning Commission members: Alice
Gormus, Chairperson; John Bickford, Vice-Chairman; Royce Charlton; Sammy Smith; Pat
Bowe; James D. Crews. Chet Maxey was absent. Also present were Rebecca S. Carter, County
Administrator; Karl Carter, Asst. County Administrator; Rebecca S. Cobb, Zoning
Administrator; and E.M. Wright, Jr., County Attorney.
Special guest speakers were Nicholas Morris, Virginia Department of Taxation; Dean Cumbia,
Department of Forestry; Lex Bruce, Virginia Tech and Gordon Groover, Virginia Tech.
Re: Establishment of a Quorum
Chairman Jones certified there was a quorum of the Board of Supervisors. Seven of seven
members present and the Board of Supervisors meeting could continue.
Chairperson Gormus certified there was a quorum of the Planning Commission. Seven of eight
members present and the Planning Commission meeting could continue.
Re: Invocation and Pledge of Allegiance
Supervisor Chambers gave the invocation and the Pledge of Allegiance was said by all who were
in attendance.
Re: Call to Order
Chairman Jones and Chairperson Gormus called the work session to order.
Re: Adoption of Agenda
Gormus: Mrs. Cobb, is there any change to the agenda?
Cobb: No, maam.
Gormus: I need a motion to adopt the agenda as presented.
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Allen: So moved.
Smith: Second.
Gormus: Motion by Mr. Allen and second by Mr. Smith, all those in favor raise your right
hand, or left, some kind of hand. That passes.
Commissioner Allen moved, Commissioner Smith seconded and was unanimously carried by
the Planning Commission to adopt the agenda as presented.
Re: Informational Work Session
Gormus: That brings us to New Business. Land Use Information Session. Mrs. Cobb.
Cobb: Yes, we have several guest speakers tonight. First will be Gordon Groover with Virginia
Tech.
Gordon Groover: Gordon Groover: While we’re waiting I’ll answer any questions except
about football. Alright thank you.
Groover: We were invited to make presentation about the ag values of…ag and horticultural
values for the use-value assessment and also some other issues that we think are important in the
decisions that the county will be making relative to that. Lex Bruce who is here is a colleague
and works with me on the project. I will talk and he can answer questions when you ask them
and he may even talk about football but anyway.
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The next presentation…the next slide is the outline of what we’re doing. I guess I should look
up here but I’m not used to looking in multiple places. Kinda an overview of the program. The
use value we’ll talk about the ag and forestal districts. Two approaches to… to the income
approach and rental rate approach which we use in calculating the values that are used in the
estimates that we publish and then we’ll walk through an example with the changes in the tax
rates. The use-value assessment program is adopted and we’ll look at what the deferred taxes
would be and the impact that would occur on an example piece of property. So that’s where
we’re going.
The Use-Value Assessment Program was started in 1974 with State enabling legislation. Almost
all 50 states have use-value assessment. They’re in varying forms. Michigan where my oldest
broth lives, I talked to him numerous times about it. I still don’t understand what they do. Most
BUCKINGHAM COUNTY BOARD OF SUPERVISORS AND PLANNING COMMISSION LAND USE WORK SESSION SEPTEMBER 18, 2017
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of the other ones follow something similar to what Virginia’s doing. In Michigan they have a
homestead exemption which really is not tied to acreage or anything else. But it seems to work in
Michigan. There are two…we’re going to talk a little bit about the costs and the benefits. The
costs are pretty easy to quantify. We can look at reported numbers. We can calculate the cost of
that to the taxpayers in the county. The benefits are much harder to quantify. There are lots of
studies and we’ll look at those. We’re looking at long term benefits to the community both from
economic development, tourism other aspects of that that occur over a longer period of time.
Department of Taxation sent me a research study done by George Mason looking at the two shore
counties Accomack and Northampton County and they were looking at results that said that the
programs that project land like the Use-Value Assessment Program really did not have any basic
economic problems or reduce the economic growth within the county. There are lots of studies
out there. That’s the most recent one and we have a website and we will post that study on there
if people are interested along with this presentation and others.
How’s it organized? I am a staff member on something called the SLEAC the State Land
Evaluation and Advisory Council. It’s made up of my boss, the Dean the College of Agriculture,
the Commissioner of Taxation, the State Forester and the Director of DCR. They’re responsible
for overseeing the project and also providing input into the values that we calculate, or the
estimates that we calculate on an annual basis. One thing I’ll point out is that in all cases the
assessing officer or the Commissioner of the Revenue, in each county that has adopted the
enabling legislation, is the final authority on the use-value assessment value. The values that are
applies to an acre of land, whether it’s agriculture and horticulture, forestry or open space…open
space regardless of what our estimates may show, the local assessing officer has that final
authority per the Code of Virginia. The other thing that sometimes is confusing for folks it’s the
raw land that qualifies, not the buildings, not the structures, not the ag buildings, not you know
the home farm place. In a lot of cases you may have a farm that has a house and grain bins and
whatever else they may allocate a 5 acre lot and the house and that’s taxed at fair market value.
And only the land that is in the program gets the tax break or the assessed value reduction for the
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ag and the horticultural or forest of open space land. So everything else is taxed at fair market
value.
What qualifies in the ag and hort side there’s a Code of Virginia, and Nick Morris and I both
were talking at dinner, you need to read the Code of Virginia. There’s lots of details in there that
will help in understanding. We abbreviate what we’re talking about just for the time sake of it.
Ag and hort you have to have 5 acres of land. It needs to be a bona fide farm and there’s also
statements about what qualifies is that and that’s pretty much it. There’s also a point that a
$1,000.00 of net income or product that’s worth that can qualify the 5 acres. There’s a lot of
variation between 5 acres of say boxwoods and somebody’s that got a 2,000 acres of cash grain.
But both of those are agricultural enterprises and the onerous is on the owner of that parcel of
land to be able to meet the qualifications per the Code of Virginia. Forest land 20 acres and then
open space of 5 acres. Dean Cumbia will talk about the agricultural side. You have to
participate to qualify in the…or qualify to get the use value assessment. If you don’t meet those
needs or you do something that throws you out then they can apply or impose 5 years of rollback
taxes and/or as well as interest just depending on the ordinance that’s passed by the county and
adopted in that case. But clearly you know the 5 acres is a…or I’m sorry the 5 year rollback of
that is required by the statute. I’m going pretty fast because I’m supposed to stay on a 20 minute
schedule and save time for questions at the end.
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Here’s a map of Virginia. Of the different counties we go from ag and hort, forestry and open
space those are…I’m colored blind…but those are the darker colored counties. And then ag and
hort and forestry are the lighter counties. And then the gradation goes to throughout from the
standpoint of what counties in this are jurisdictions because we have cities in Virginia that also
qualify for those as well. And you can see somewhat consistent across the state but south…the
south side and far south west are counties that have not readily adopted the Use-Value
Assessment Program. There are 92 counties that do have ag and horts, 75 that have forest and
then 56 counties that have open space.
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There’s also something called ag and forestal districts which was passed in 77. And then there
were some modifications to it or simplifications of it in 2011. The county just like with use
value has to approve ag and forestal districts. There has to be an advisory committee and then if
the Planning Commission has 4 farmers on it they can actually be part…they can be the advisory
committee for the ag and forestal district. An owner of it…owners that have contiguous 200
acres of land can ask for an ag and forestal district. Once the county has approved that and there
needs to be public hearings and again that core of 200 acres and then land can be added to those
within a mile radius of the core 200 acres that make up that and then…not all of that has to be
contiguous with the original land. You can also piggy-bank or piggy jump over top of some of
the other lands and go further than a mile depending on that. One recommendation is if you
consider ag and forestal districts is you need to engage the county attorney or legal advice in
terms of that because the Code of Virginia has been changed since 2011 and there’s not a lot of
the information about the new simplification of that. In theory you might be able to have 4 ag
and forestal districts in the county divided by the highways. We do have some counties in the
state that have over 100 ag and forestal districts. So every time a piece of property goes in or
goes out there has to be an Advisory Committee meeting and they have to be voted on. So you
don’t want to tie up the local political power as well as farmers and other members of those
committees in constant meetings throughout. The one thing about the ag and forestal districts
you have to be able…any land added or taken out has to be approved by the county.
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They qualify just like use-value assessment for the deferred taxes and reduction in those. They
can be in place for 4-10 years. It’s not an imperturbability. It’s a time…it’s a limited time for
those ag and forestal districts to exist then they have to revote on them and continue those.
They’re more flexible for decisions what land should enter them. So you know some complaints
in jurisdictions and areas are that you know somebody’s got 5 acres and hires a neighbor down
the road to make hay for him will qualify and the question is is that a legitimate farm operation
or something of that nature. With the ag and forestal districts you have some ability within that
committee to be able to work with those. Same thing is true with withdrawal of the property.
There are rollback taxes based on the local ordinance. There’s also some issues related to
unrealistic restrictions on ag and forestry. You’ll need to read the Code on some of those things
but a lot of that has to do with special use value or special assessments and taxes say to fund a
water line going through the property or through near that area of the county.
We have…we’re moving now to how we determine values, the values that would be placed on
the ag and horticultural land. We have an income and rental rate approach.
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The income approach is based on the ag census and a composit farm. So in effectwe get to the
USDA Census that’s done every 5 years. There is one in process right now that will be available
in 2019. We take the number of crops grown in the county divide through by the number of
farms and if we get more than one acre then we model that as producing…will it produce a
profitable crop or the net returns for those. In effect what we’re coming up with is that if you’re
farming this is the price that you could pay for an acre of land in the market place. And that’s
the purpose of the use-value assessment. What’s the value of land in its use, not in a speculative
use, not as in an investment but in the agricultural and/or forestal use for that land.
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Here’s a…I’ll quickly go through these. These are the crops that are grown in Virginia.
Buckingham has 680 acres of alfalfa. You can read down through there and there are 391 farms.
This is the 2012 census. We divide 391 into those acres and that becomes a composite farm. So
the composite farm will have 2 acres of alfalfa, 2 of corn, get my bifocals right here, 42 acres of
hay and so on. So the average farm is about 121 acres in Buckingham County. And then we
calculate the net returns for those crops in the county. So we’re looking at a net profit on an
annual basis of about $14.00. You’ll also notice that the majority of the land in Buckingham
County in the agricultural side is hay and pasture even though you’re looking at soybeans
making 100 almost 170 dollars an acre this is…those farmers in the room this is a average over
the last 7 years or Olympic average over the last 7 years. Not last year. But our rates are low
because we’re looking at hay and pastures being a lower profitable crop than the grain crops that
are grown.
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We capitalize that. The formula there shows that we take that $13.00, divide it through by cap
rate and that gives us a value of that land in perpeturity based on generating $13.00 worth of net
returns per acre. And the cap rate is based on farm credit or federal loan bank rates and then the
tax rate. We’re not double…we don’t want to…we do not charge taxes in our budgeting process
so we add those back in to make sure we fully adjust for it. So we have a value of land of
$118.00 basically is what a typical farm, the farm in Buckingham County could pay.
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We also make adjustments on the soil class. Those of you that are familiar with soils, the old
soil conservation service ranks soil from Class I to Class VII, one being best. We adjust those
values to reflect soil productivity so they will range from 300 to 20 dollars. Class VII soils I say
you can’t stand on them. Their either too steep or too wet. You sink in them or you roll down
the hill. So those really are not productive ag land. We have pasture and crop lands that are
reflected there.
We have a rental rate approach. National Ag Statistics collects rental rates. We use the same
approach. We take the rental rates for crop land, divide it through by the cap rate that we use in
the income approach and we come out pretty close to our previous rate based on income of about
280 to 290 dollars per acre. When you see our numbers published we round up. We round off
those numbers to make it easier for the Commissioners of the Revenue.
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And then this is the NASS or summary of the NASS report looking at the rental rates on pasture
and the crop land. And you can see in Accomack County we have almost $1400.00 calculated
value based on $84.00 of rental rate. And then irrigated crop land $95.00. So they vary across
the state from extremely productive ag land to other lands of the state that are not as productive.
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Here’s… the point is that if you participate, Buckingham County participates, in the Use-Value
Assessment Program there will be defered values. So that every parcel of land the difference
between the fair market value and the use-value assessment will have a value that is deferred for
5 years because you remember the penalty is for a 5 year period of time. And if we look across
the top that’s the 2015 fair market value. The Department of Taxation reports that and that’s the
most recent year. And then the next column is the % of fair market value that’s deferred. In
Virginia I’ll just make a note that we have to…that the State has to, or localities have to assess at
100% of fair market value. Then the total fair market value and in 2015 Buckingham had 1.4
billion dollars worth of value. Since you’re not in the program it’s zero. At that time the
nominal tax rate was 50 cents and then the taxes on the $200…or $200,000 piece of property, or
house whatever was $1000. So if we look at how much of that eligible land is deferred from 1 to
10% you can see…and we’ll have this on our website if folks want to go back and go dig
through the details, but at 1% that was in effect have a raise in the tax rate to hold everything
equal the same levy which is the levy for on real property is $7,054,000…or million
dollars…that’s at the bottom of the table. To hold that consant then the tax rate has to go up and
it varies at 1% that would be an addition $10 to someone that owns a $200,000 piece of property
down to a 10% participation rate of $111. And again this applies if you’re a farmer or forester
that you get the tax break on the ag and forestry land but you don’t get it on their dwelling or
their personal property…not their personal their real property that’s not involved in those
farming or forest activities.
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What happens in surrounding counties you’ve got participation rate. Let’s see, Amelia and
Prince Edward don’t have that forestry. They only have ag. How much is deferred? Albemarle
11%, about 7% in Amelia. Obviously Buckingham has none. The high one is Nelson County
and then Prince Edward is almost…well basically 1% deferred. Nottoway is round off to 3%.
So you can see these numbers are available from the Department of Taxation. You can look at
counties and see what the deferral rates are over time.
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I’m speeding up. Some additional comments. We did a survey Lex and I and a grad student did
a survey of Commissioners of Revenue. There’s about ½ time full…1/2 time equivalent as this
program is adopted that will be required within the Commissioner’s office to be able to handle
the additional validation and application process. Timber management plans. There’s a
requirement that you have timber management plans. Don’t actually have those. I’ll do the first
year because we’ll kill the field foresty people and the local jusidiction. They just can’t handle
the load. So that needs to be staged in. Application process, forms, proof, fees and validation
cycle all those things need to be decided on. You can charge a fee for the application to be in
use-value. As I understand it from other Commissioners of Revenue that’s one way to fund that
additional ½ time equivalent. If you use the land class and apply that having a GIS capable
system within the Commissioner of Revenue or the real estate area will greatly help that. And
then the assessment cycle how frequently do you assess or reassess because the use-values
assessment values can not change except during a reassessment cycle. So if you’re doing one
every 6 years, we’ve had some problems where you have some very low estimates that were
used and 6 years later during a reassessment we were at the peak of net returns for agricultural,
Lex and I got lots of calls. They…people were not happy about it obviously so. But those things
need to be considered as you look at the implications of this.
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Our website as you can see here. You can go…I sometimes recommend this for insomnia
problems. You can go and read things on our website. But it’s very useful. Dean and the
Department of Taxation and DCR, we all have information on there. We try and be the
repository for that information so. I think I’m done. I think we’re taking questions at the end. I
appreciate your attention and we’ll be glad to answer questions.
Cobb: So next is Dean Cumbia with the Department of Forestry
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Dean Cumbia: Pleasure to be here with you all tonight and I’d like to greet the Board and the
Planning Commission and thank you and let you know that I’m not accustomed to that seat. And
that is your seat and thank you for allowing me to be in it tonight but… It’s good to be here and
thank you for the invitation. I work with the Department of Forestry up at our office in
Charlottesville which is our headquarters office, and Gwynn Tyler who is the area forester for
Buckingham and colleague and have worked together for many years. And so really just to
provide you information about our role for the forestry section of land use. And in some ways
what I’m going over will be similar to what Dr. Gordon… I call him…Dr. Groover has done.
But we’ll get right into it. Seems like…here we go…well let’s see. How about that?
Groover: Put your glasses on.
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Yeah. There we go. Thank you Rebecca. Appreciate it. With age comes the glasses. So just a
little overview on the forestry land. Forest in Virginia…Virginia is really blessed to have a great
forestry resource. Really after so many years of human settlement we still have almost 2/3 of
Virginia, 62% is covered with forest land which is 16 million acres. So it’s a great resource for
lots of reasons.
Economic benefit is one and land use is tied to timber activity through code so. Many jobs a new
study by the Well and Cooper Center up at UVA indicated $21 billion of economic activity for
forestry. Buckingham is a big part of that. Lumber, paper, wood for energy, outdoor recreation,
wildlife habitat, clean water, clean air so lots of good things come from the forest. So we depend
on the forest for many good things and Buckingham is really a foundation block for that.
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So here in Buckingham we have a forest inventory that we’ve been doing with a series of
randomize plots since 1940. On about a 5 year cycle re-measurement and indicates about 86%
of Buckingham is forested. Lots of forest land of over 3000,000 acres. So it’s quite a rich
resource here for the county. And primarily it’s owned by private individuals and companies.
Private ownership it mirrors many counties in Virginia. Of course we have a little state forest
land and some game lands but mostly private ownership.
As far as the timber types in Buckingham County it’s kinda about half between pine and
hardwood, hardwoods being the trees that lose their leaves; oaks and hickory, maple and such,
poplars. A little over half and then the rest is in pine and then some mixed pine and hardwood
stands. You see a lot of pine riding around the county but looking on the aerial photographs
you’ll see lots and lots of hardwoods too. So you’ve got a good balance of types of timber here
in Buckingham.
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Timber activity. From some of our records we track all the timber harvests and for last year
almost 150 different sites of harvesting activity for nearly 10,000 acres. And this makes it
number 2 in Virginia as far as harvesting activity. So Buckingham is definitely a big player in
forestry in Virginia. From the economic stand…well actually this is from forest products tax
data indicates that this would be the landowner benefit direct…direct landowner benefit from
harvesting timber is over $12 million. And the total economic output and this is from the UVA
study from primary process and secondary process and it’s some other benefits is $64 million.
And then employment over 500 and that’s not necessarily right in Buckingham but the timber
generates this much, this many jobs in Virginia. So Buckingham is very important from a
forestry standpoint.
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Ok back to land use. The role of the state forester and as Gordon said the state forester is one of
the members of the State Land Use Evaluation Advisory Committee or Council and Todd Grove
who’s my assistant and I work together on the specifics of the land use taxation evaluation and
represent the state foresters from that standpoint. So one of our missions or tasks through the
code is to provide a uniform standards by which all of the counties would go by for real estate
that’s devoted to forest use. And when requested by the Commissioners of Revenue, for the
county or citizens, landowners we provide opinions render opinions about qualification of
various properties for land use. And then on an annual basis as from the ag side and
conservation we provide a range of suggested values to the Commissioners of Revenue for the
forest land use values. And those are provided to Nick in the tax department and they publish
those. And just last week they were adopted for the 2018 year.
So land use with forestry through code is really focused on timber management. So I
mean…we’ll put a capital T on Timber. We have lots of benefits from the forest but when the
code was enacted it was about timber producing crops the timber on land as well as soil
conservation practices. Things that would enhance the growth of desirable species that are
commercially valuable that can be sold. Reduce soil erosion and prevent soil erosion. Now the
intent can be in two ways and Gordon mentioned this by either a signed commitment with the
county, an affidavit saying I’m devoted…this land is devoted to timber management. So some
counties will use that as a landowner can sign and re-enroll in that or the other is to have a forest
management plan in place on that property that’s developed by a professional forester. So it’s
two ways a landowner can demonstrate their commitment to timber management.
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Qualifications must be at least 20 acres of productive land capable of producing a timber crop.
You know some areas that have very poor soils really can’t meet that timber crop criteria, but
very little of that in Buckingham. Well distributed, commercially valuable trees of any size and
that’s important. What we call 40% of normal stocking of what a normal forest would be. So it
has to have…we have a table that indicates the numbers of trees and the density. And then this is
important too because in counties like Buckingham where there’s a lot of timber harvesting
activity land that has been recently harvested. Well there’s no trees now but it’s in the process of
being planted or naturally regenerated they still qualify because that land is still productive. And
in Virginia if you walk away from a piece of land it will have trees on it eventually because
that’s just the nature of land in Virginia, the seed source, the climate, the rainfall. You will have
a forest there so. Young forests count as well as older forests.
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So the use values how do we determine those? So this is again very important. It’s based on the
potential of the site to produce. It’s not based on what’s there now or what could be in the
future. It’s based on its potential to produce a forest crop. So that’s very important. Not the
standing timber. It could be again a one year old small tree or it could be a 100 year old large
oak tree. But it’s based on the land not on the current crop. So we determine the present value
so on that and I’ll go into that on my next slide.
Trees are used for many things. Trees go from lumber to many products and we have many of
those here in Buckingham County.
And we work on a total stand not individual tree basis but the volume and the potential of a
whole forest.
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We do some modeling and based on a lot of research and study by Virginia Tech other places,
we can actually predict growth and yield on various types of soil based on area scenarios. So we
predict a yield and then the volume. Volume’s important because volume translates to value. We
have a forestry financial analysis tool that we use based on the specific variables and parameters
we put on it. And there’s a bunch of them. And we have to do one that fits the various areas and
the various types of timber. And we run that similar to the soil values once they’re rate. We
have just three values we classify for forests whether it’s fair land, good land or excellent land.
And again based on the ability of the soil to produce timber crops.
Then all that we roll into the formula and then determine the present values of the costs and the
revenues. There’s timber revenues and then there’s also costs of owning land and some of these
are that affect that are what type of timber is it? Is it pine or hardwood? How quickly does it
grow? The current market value of timber is what we call stumpage prices. We usually go with
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an average stumpage price averaged over several years. The reforestation costs if it’s planted.
How much…that’s a cost up front? How much does it cost to plant it? And then the time frame
whether it’s long or short depending upon the timber type. Then again we have some other
variables or parameters we put in the equation whether it’s interest rate, the inflation, annual
costs and then taxes.
Well we do something similar again to agricultural. We kinda come up with a composite forest.
Pine has a shorter rotation as many of you know. Pines can grow to be cut from 20 to 40 years.
Hardwoods are usually much right longer you know up to 80 years. So we have different
management regimes, different growth and yield models for each of those.
Our composite forest is based on how much forest of each type is here in Buckingham County.
And so we blend those two to say what’s a composite forest based on that.
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And then finally we…the formula is we annualize the costs and revenues, discount those to the
present time and then capitalize it divide it by the interest rate. That gives us the value. And so
some examples of nearby counties that we have…actually these are…I have a little mistake here.
These are 2018 values that have been…were just adopted last week by obviously our council for
neighbors over in Cumberland County and a little bit to the south in Campbell County. So that
gives you an idea of similar Piedmont areas for the 2018 values. These are suggested to the
Commissioner of Revenues and it’s up to the Commissioner whether they use these or not so. So
that’s our process with forestry. Again some similarities. Forestry important to landowners for
many reasons. Forestry important to the county and we try to do our best to a scientific and
unbiased approach to come up with values based on the code and based on good science.
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Nicholas Morris: Good evening. My name is Nick Morris and I’m with the Virginia
Department of Taxation. My unit works with the localities. It’s called Property Tax and what
we do is provide some guidance what we call Law Advisory Aide and Assistance. We typically
get…interact with the assessing offices, most frequently the Commissioners of the Revenue and
Assessors in those localities that have an assessor. Generally we are asked about the laws, how
to best interpret them and we try to give them general guidance. We do not offer official
opinions or rulings that would come from the tax commissioner. I get, myself, every day, calls
or emails with questions. We have the opportunity to interact with a lot of localities and hear
some of the things that they are dealing with and the kind of challenges they are coming up with.
My presentation is basically going to be drawn for that. There is going to be some focus on the
laws that apply. But in addition I’m going to be talking about some things that may be of interest
on a more general, I’m sorry, did someone say something.
Cobb: No sir.
Morris: Then to be kind of drawn on focusing on the laws that might apply and some general
concerns that you may want to look at in a broad term. More specific questions will be best
addressed by Dr. Groover and Dean.
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The program is called Special Assessment for Land Preservation. It is a program for property
and land specifically in special classifications that are in a qualified and compliant use. I want to
emphasize compliant and qualified. Local enactment of the program by the governing body is
required in the form of an ordinance and implementation and ongoing functions become the
responsibilities of the Commissioner of Revenue or Assessing Officer.
Foremost, suggestions in terms of best practices, staff responsible for the program administration
should be trained and all local property owners should be informed of program benefits and
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responsibilities, costs, and potential benefits. The qualified use of the enrolled properties and
other related manners needs to be fully understood to ensure local satisfaction with special
classification programs and compliance with all program requirements.
To really know the program if you are seriously going to consider implementing it in
Buckingham County, there needs to be a thorough examination of the statute because there are
certain options that localities have that they can utilize. It’s not a set one size fits all. There are
different approaches that can be taken and there are specific laws that apply. I’m going to select
a few statutes that basically address the implementation or the start us of the program from the
ordinance from the council or Board of Supervisors and the administration from the Assessors
office. The laws that apply to this program are located in the Code of Virginia. Titled 58.1
Taxation. Chapter 32 deals with Real Property tax.
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It comes under Article 4 of that chapter. Special Assessment for Land Preservation. It
encompasses the statutes #58.1-3229 through 3244. Again, I have to emphasis, if you are seriously
interested in it, a complete look at the statutes is needed. The intent of the this article is to provide
for the classification and permit the assessment of such real estate in a manner that will promote
the preservation of it for the public benefit.
In subparagraph 3229, is the Declaration of Policy which is not set out in Code and if you will
bear with me I’ll read it to you because I don’t think you can find anything else that would
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describe the benefits of the program better than that particular statute. I’m disappointed it’s not
included because I think everybody from citizens to legislatures we have at the General
Assembly should understand what the program is actually about. I need to read that from here.
It’s a mouthful but I think it does a good job of stating what the policy is about. What the
program is about. To summarize it is to ensure a readily available source of real estate, to be
within the concentrations of population, conserve natural resources, promote land use planning
and orderly development, and promote a balanced county.
58.1-3231 is the statute that gives authority to the counties, cities and towns to adopt ordinances
which will allow for the program to proceed. The governing body shall be authorized to direct a
general reassessment of real estate in the year following adoption of said ordinance and should
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note that the land values in the use program are only updated with each reassessment. I’m not
familiar with how often you reassess but if you are on a 4-6 year cycle like most counties, land
use values would be changed within that period of time with each reassessment and not between
intervals.
The governing bodies and the assessing officer under 3234 have responsibilities that are relevant
to the application by the property owners to the program. The governing body will also have
ordinances to deal with which pertain to application fees, revalidation and continuation of
valuation assessment.
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There are determinations under 3233 that the assessing officer has to make to make sure the
property meets the qualification requirements to be in the program. Ok. There is no income test
like with disability or tax benefits of that type. It’s simply how the land is going to be used. If
its used in a qualifying manner and the application is submitted and meets all the qualification
requirements and continues the use, it can continue in the program as long as several things
happen.
The valuation under 3236 is the responsibility of the assessing officer who is only to consider
those indicia of value that come from the use of the property. What this basically means is that
people are paying $1500 an acre for the land, to use it for whatever purposes but it’s being
farmed and the indication is the value of the land is only $150 an acre, that’s what its going to be
taxed on. Ok. So what the assessing officer has to do is find ways to determine what is the fair
use value of that property. The law does provide that the assessing officer can use personal
knowledge, judgement and experience as to the value but they can also consider other means.
The SLEAC committee or council that I mentioned earlier is established to get those values and
there are scientific ways they go about coming up with those values for every locality in
Virginia. Many localities do use them and it’s well recommended to consider them at least.
Some localities rely simply on what the assessing officer or Commissioner of the Revenue
decides they are worth. Obviously there needs to be support of whatever methods you take.
When the property is listed in the land book, both the use value and fair market value need to be
reported. I’ll explain why that is a little later. But both values need to be reported in the land
book.
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Now a property can be taken out of the program. Ok. One of the disqualifying conditions is
mentioned in 3237 and is also the responsibility of the assessing officer. If there is a change in
the use of the property, one other than what it was qualified for being in the program, that
property is to come out of the program. If the owner or its agent requests a change in zoning to a
more intensive use, the property comes out of the program. There are penalties that are called
roll back taxes. Roll back taxes will only apply under those conditions.
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Ok. Now there are other ways the property can come out of the program. If the treasurer
discovers that the property owner is delinquent in his taxes, the property will be taken out of the
program. The owner will be eligible again to reenter the program once the taxes and fees and
interest and penalties have all been brought up to date and as long as it’s going to continue in its
use. As long as its continuing in its use, even with delinquent taxes, it will not be roll back taxes
applied. That’s an important distinction. I found a locality that was charging roll back taxes
when there was a delinquency in the tax payment and that’s not part of the program.
Other considerations. These are some observations that have come to me through my experience
with it and talking with people around the state. I think things that citizens need to understand.
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It is likely there is going to be a reduction in the tax base. All things being equal, the use values
are going to be lower than market value and so the taxes that are applied to the property, the
value will be lower so you are not going to get the same revenue. In order to maintain the same
revenue, there will have to be an increase in the tax rate. In fact this is a subsidy that other
taxpayers in the locality are providing to properties in the use program.
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Program administration. The program needs to be administered and property in the land use
classifications needs to be monitored. This may require additional personnel, training and the
establishment of prescribed procedures. There are applications and updates from property
owners to be processed. The land is to be qualified, compliant use for it’s classification. In
fairness to the local taxpayers supporting the programs, periodic inspections are recommended to
ensure that those in the program are in compliance with it’s provision.
The Department of Education, the State Department of Education distributes money to the local
schools. That money is distributed based on calculations that are made known as the Composite
Index. One of the major components of the Composite Index is the value of taxable real estate in
the jurisdiction. With localities in the land use program, remember I mentioned earlier about the
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fair market value and the land use value are listed in the land book. When the property value for
your locality is calculated for the Composite Index is based on the fair market value because the
use value, what you are actually collecting tax on, is a local option that you agreed…you could
tax that property at it’s fair market value but as a locality you found the benefits of the program
worthwhile and agreed to institute the program if you so choose. But one of the costs is going to
be the value in the Composite Index is going to reflect higher value than you are actually
collecting taxes on. This may result in a higher position in the Index which would reduce the
portion you would get from the State in school board funding. You may want to ask me more
questions about it and I’ll try to answer them later. It’s a rather complex process but the net
result means that you are looking like you’ve got more taxable property than you actually are
getting tax on so you are not getting the taxes plus you are looking like the value of what you are
getting money from is actually higher than you are actually getting. I don’t know if that cleared
it up at all. If you have any further questions, I’ll be glad to address that.
Unintended Consequences. Again this comes from comments that have come to me from other
localities that do have the program. As you can see many localities do have the program and
they do see the benefit of it. But there are some things that need to be understood.
Unfortunately some people obtain land use classification, but do not comply with the program
requirements. The program is not intended to reduce taxes for those with land holdings that are
not in a qualified compliance classification use. Ok. Failure to properly monitor the properties
in a program can lead to what I call compliance drift. They are not being checked on. So, they
go out of compliant use and nobody is really following up and so people who shouldn’t be
getting the use value assessment are getting it. Again, the program is not intended to reduce
taxes for those with land holding that are not in qualified, compliant classification use.
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Another observation from comments I’ve heard and actually talking with some taxpayers that
were in the program but didn’t quite understand what it was about but with time local conditions
could change and the program may come to be seen as no longer beneficial for the locality as a
whole. Some in legitimate land use have come to see the programs as an entitlement, and
strongly oppose changes or discontinuance of the program. So there will be political pressure
and a desire to change or eliminate the program in the future. One other thing that I didn’t
mention in here that came to me after I wrote this, one of the land use classifications is open
space conservation. One of the accepted uses is the preservation of natural resources and I can’t
remember what the exact wording is now but it has to do with preserving natural resources. One
of the growth industries in Virginia right now are the rise of solar farms. Many localities
particularly in rural areas where there are large tracts of land where these solar farms pretty much
require in many cases 300-400 acres or more to make them economically viable. They…if a
locality has an open space classification program, there may be a time when that use is going to
be…an attempt to make that use a qualifying use. You need to understand that solar farms right
now, the legislatures have enacted rather substantial tax exemptions for the…what they call the
equipment, facilities and devices. Solar Energy equipment, facilities and devices. It’s rather
extensive on how it goes and I’ve got a 20 page book on that but they are either going to be at
80% or 100% exempt on the equipment. The land is not included in that. So for many localities
that have these solar farms, the land is going to be the source of revenue. In many cases you are
going to have land that was in land use, maybe not here because you don’t have it, but a locality
that had land use now in a manufacturing, industrial use which will put the land at a higher value
than even what would have been it’s value as farm land. Most of the time these require a special
use permit and looking at it as an industrial site rather than agricultural site. I’m concerned that
one of the unintended consequences will be that there’s a program...nothing has been done about
this yet. Nobody’s addressed it. I’m probably stupid for bringing it up but I feel it’s important
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for citizens to understand that this could happen because actually the use of solar energy is a
means of preserving natural resources. So, there could be a time when a smart attorney whose
going to look at it and say this should be a use. I suspect that the General Assembly will have to
act on it. So I don’t thinks it’s a lock. I don’t think anybody can come and say I think this is
how it should be and it’s going to happen but it could happen and I think there needs to be an
awareness of it.
Morris: I thank you all and if you have questions, I’ll be glad to address any questions you want
to ask.
Gormus: At this time we’ll invite questions from the audience.
Cobb: Just from the Planning Commission and Board of Supervisors.
Gormus: Just from the Planning Commission or Board of Supervisors to the presenters. Any of
the Board has questions, please state your name so they can get it correct on the recorder.
Dunnavant: Morgan Dunnavant, District 4 Supervisor. On the acreage requirements, I
remember hearing 20 for timberland and as little as 5 for ag and horticulture? Are those numbers
cast in stone or can they be adjusted by us in implementation should we chose?
Morris: They are cast in stone. They are part of the laws that are in place. Under 3220 I think
it is or 3230, I forget what the Code is, it specifies in law what the minimum requirements are in
acreage. There is a little bit of flexibility because the lower acreage is sometimes allowed for
specialty products. I’ve got a friend that raises mushrooms on a 2000 sq. ft. warehouse and
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that’s not a lot of land. He didn’t qualify but the point being that there are specialty products that
can be raised on very small tracts of land. That’s why I think it’s down to 5 acres. But the
locality does not have the option of changing the acreage.
Dunnavant: That was my question.
Jones: I believe that one of you stated that there was 92 million of land in our county that’s
forestry, does that include property that’s owned by paper companies or just including those in
the private individual.
Gormus: Yall have to give names because it’s going to make it hard to know who said what for
our recorder.
Jones: Bobby Jones, Chairman of the Board of Supervisors.
Gormus: Thank you.
Cumbia: 90 percentile, I’ll have to look at my slide, but that privately owned which includes
any private company, individual organization, family so it will include paper companies as well.
Private not government owned. I’m sorry, Dean Cumbia. Department of Forestry.
Gormus: Further questions from the members?
Jones: Questions from the Board of Supervisors? You’ve gotta have some questions.
Bickford: Johnny Bickford from the Planning Commission. I work with some counties on
theirs and they have a five year term for their reevaluation and they have to submit a plan or go
over the one they had. Is that time frame established by the County for timber management.
Anybody?
Cumbia: Dean Cumbia, Forestry, I think Mr. Bickford, the question about longevity of forest
management plan, is that kinda what you are getting at?
Bickford: Not specifically about that but every five years you have to come back and revalidate
your application. There is a fee to do that. You submit it but you also have to have a forester go
over your timber management as well as I think ask for receipts on your farm account to make
sure you actually are still generating revenue. I’m asking is that the ability of the county to set
that time frame or is that by Virginia State Code?
Morris: Nick Morris. That is set by ordinance by the revalidation and reapplication is all set by
the ordinance. It’s provisions within the statute to create those time frames by ordinance.
Bickford: Ok, so in other words, if the County of Buckingham decided to do this, we could set
our own…we set the fee as well as the revalidation time frame. Am I correct on that sir?
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Morris: You can set the fee, let me see the specific statute on that for you. Ok. Chapter 32;
58.1-3234 Application by property owners. It talks about the initial time frames for application
but it also provides any locality which has adopted a fiscal tax year…wait a minute, wrong one.
The governing body, by ordinance, may permit applications to be filed within no more than sixty
days after the filing deadline…I’m sorry. I need to go a little further in here. The governing
body of any county, city or town may however require any such property owner to revalidate
annually with such locality, on or before the date on which the last installment of property tax
prior to the effective date of the assessment is due, on forms prepared by the locality, any
applications previously approved. Each locality which has adopted an ordinance hereunder may
provide for the imposition of a revalidation fee every sixth year. So the revalidation fee will be
every 6th year and revalidation every year. That would be implemented or enacted by ordinance
by the locality.
Bickford: Thank you sir. I do have one other question too. If this is implemented by the
County, I’ve had this question come up from some people I work for, not so much in timber
land, but farm land if you had grain crop, soy beans or whatever, if you are renting your farm
land, does that disqualify you for land use?
Groover: Gordon Groover, Virginia Tech. No. Rental property, most ag economy in the State
requires rental land to be functional. No, it’s not required. They may ask the property owner to
provide an affidavit of renting the property to that farmer or the farmer providing documentation
of the crops planted, yields and things of that nature to show that land is actually farmed. That’s
the requirement there. Rental property is definitely included in there as long as it meets the 5
acres and other requirements that the assessing officer, commissioner or the county adopts as the
procedures that they use.
Bickford: Thank you, sir.
Morris: The owner would have to put in the application though.
Bickford: Right. They understood that but the question, there was discussion that they might
loose their…because they weren’t actually farming it themselves, they were actually renting out
part of it.
Morris: It’s how the property is used. That’s really key.
Smith: Sammy Smith, Planning Commission. This question is for Dr. Groover. We do not
have to supply a lease or a copy of our lease to get the land use application?
Groover: That’s correct. You just have to show that the land is actively farmed. The property
owner is the one that provides that to the Commissioner or Assessing Officer.
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Matthews: Don Matthews, District 3. Board of Supervisors. Dr. Gordon, you stated that there
were 319 parcels or individuals in Buckingham as far as ag or horticulture. Is that including
forestry?
Groover: No that’s strictly agriculture. That’s the number of farmers in 2012. That annual
census is only done every 5 years and in 2012 there were 391 farmers in Buckingham County.
Matthews: 391
Groover: It’s on the slide.
Matthews: How many different parcels of forestry is related? Does the forestry guy know that?
Cumbia: Dean Cumbia. I don’t know. We have a statewide estimate of private forest land but
we have it done in our office and I guess it would have to be done parcel by parcel. I do not
know.
Matthews: Of the 391, the minimum acreage would be 5 acres. Is that correct?
Groover: No, that’s the number of individuals in most cases have filed a Schedule F tax return
and are identified by National Ag Statistics as farmers. They can also have a FSA Farm number
but those are just the individuals, the size and acreage, the average size farm is 121 acres or
whatever. That’s the USDA census is available online. The public library probably actually has
a copy of it so you can go in and look at all the data reported for Buckingham County.
Jones: Alright, Bobby Jones again, we know that the value that’s assessed if we had land use,
we know its set by the Commissioner of the Revenue. That information is supplied by the
Government as to what that figure is?
Morris: Can you repeat the question? Are you addressing it to me?
Jones: Whichever one knows the answer to that?
Morris: Nick Morris, Mr. Jones, you asked about the use values, how they are set?
Jones: Yes.
Morris: Ok. They are…the Code provides the assessing officer whether it be the Commissioner
of the Revenue or the Assessing Officer to use what they call experience judgement as long as
they are basing the value on factors that contribute or are the result of the use of the property.
So, you can’t value it as an industrial site. It has to be valued as a farm site or agricultural site.
The Virginia Tech, Dr. Groover and Dr. Bruce here, they build models in terms of coming up
with values for various soil types that are present in different localities around the State and they
come up with values for each of the localities, jurisdictions, counties, cities that implement the
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program, they recommend based on analysis, criteria from various sources. Most issues values
from the SLEAC council. Some localities, Commissioners do their own values. The State does
not do them per say. We do not tell anybody what values they have to use. Department of
Taxation doesn’t monitor any of that. It’s a local governing issue. I will point out again, I’m
sure everybody knows this, real property and tangible personal property are segregated from
local assessment taxation only. Our role is basically to provide some guidance on laws that are
enacted by the General Assembly and we don’t dictate what the locality has to do.
Jones: Alright, I’ve been to several meetings over the years on land use and what I understood
there was the key to land use is the amount of people that participate in the program. In other
words, not everybody even though you have land use, not everybody wants to put their property
in land use and some of them say that it’s because when you submit the application there are so
many things on the application that a lot of the farmers in particular don’t care to divulge to
people such as they have to show their taxes they had on the prior year. Is that true?
Morris: That’s not really addressed in statute. You set up those kinds of application
requirements. But again, I can’t answer that. We in the Department of Taxation really don’t
dive into the county’s too much. We stick with the statutes and when a call comes in we look it
up and answer it. I’m pretty sure the application requirements are set by the locality in terms of
what they need to validate the property is actually going to be used for agriculture or horticulture
use or whatever.
Jones: Right. The last meeting I went to involving land use was at UVA and at that meeting,
this came up and they stated that only about 21-22% of the people that were eligible for land use
would submit to get land use.
Morris: I can’t answer that because we don’t collect any data like that.
Jones: Alright. I thank you.
Morris: Yes, sir.
Dunnavant: Morgan Dunnavant, District 4. I was to reiterate my acreage question. That is the
State minimum standard for acreages. The 5 for farm and 20 for the forestry. That’s the
minimum that’s acceptable. Is it within the county power to increase those required acreages?
Point in case. My question, we have a lot of land around here that has been sold to people that
come in and buy 5 or 6 acres as a farmette. They raise 2 or 3 goats and a pony and call
themselves farmers. Will they be able to take advantage of this program just like they were
raising adequate production cattle?
Groover: Gordon Groover. That’s a good question. It arises quite frequently. If you have 5
acres, they carve out a lot for the house, then you are no longer qualified.
Dunnavant: I thought of that.
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Groover: On the other side, you also have let’s say 8 acres and you carved out 3 and you’ve
still got 5 acres of open land. Again, that’s a local option but it’s a validation. Is it say a
bonafide farm? Are they able to show crop production records? Sales of product that equal a
minimum of $1000. Not necessarily sales but values. If hay sold for $100 a ton, then you need
10 tons of hay from that 5 acres to justify that you had $1000 of value. Also in the startup years,
I think and I’m not sure, Lex may be able to help me, you need 3 years of production history. So
they need to be able to show 3 years of producing a product on that farm that met those
minimum requirements over the 3 year period of time. Those can be used and an affidavit is
signed that will state that we meet these requirements and are asked for documentation.
Bruce: Those requirements are left up to the locality. Lex Bruce.
Dunnavant: The requirements are but the acreage is not.
Bowe: Pat Bowe, Planning Commission. Question, if the land has been subdivided it no longer
qualifies does it? If it’s cut into lots?
Groover: If it meets the 5 acres and you are producing $1000 worth of product. Those are the
minimum requirements. But you have to be able to produce farm at 5 acres. If it’s a house site,
you don’t qualify. So those are the kinds of qualifications and validations when the application
is submitted.
Bowe: Ok. Another thing, I think there’s a whole lot more to this than just the law. We sat in
here as a Planning Commission last year or year before redoing the master plan. I mean this
auditorium was filled with people 3,4,5 times. Everybody’s overwhelming opinion was they
wanted Buckingham to stay rural. This is simply a method of allowing them to receive what
they want. This was an overwhelming desire of about everybody unless my memory is totally
wrong. Anybody care to comment on that? Because it seems like all yall are covering is the
legalities of it.
Morris: Nick Morris, Department of Taxation. Yeah, there are a lot of things to consider. This
is what you all as Board members, Board of Supervisors and constituents have to understand.
There are a lot of things that you need to consider. The idea of hobby farm. That is not what this
is intended for. Ok. That’s what gets back to what I was talking about in my presentation in
terms of having adequate staff to make sure that the people that are…the property that is in the
program is actually in the qualified use and compliant use. Ok. It means when you are dealing
with…if you are a farmer you know that sometimes you have bad crops. You have bad yields.
Sometimes you got a lot of POA follow. These are things you have to consider on how you
administer the program because one year he’s not growing because he’s got to regenerate the
earth or something. These things come up. These questions come up and it’s a lot to consider
but the law gives you a skeleton. From that you can work or see what works for Buckingham
County. What works for Buckingham County might not work in another locality and what
works in another locality may not work in Buckingham County. You have to look at the statute
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and see what it has to offer. See what your limitations are but you also see what options you
have that you can use. There are quite a few statutes and if I sit here and read them to you,
everybody would be asleep in 5 minutes. You really have to sit down and look at them, break it
down in what applies to what and what applies to qualification requirements. What applies to
the ordinances. What applies to the qualifications. What applies to the implementation. What
applies to maintaining the program. Look at it in ways that you say ok, we can do this here, may
you want to do this other thing at this place here. That’s the only way to address it because it’s
not a one size fits all localities. I don’t know how to address it any other way. I can tell you
what the laws say, you can read that yourself but how you are going to use it…if you have
questions, if you say what about this, you can call me. I will look it up for you. I look for
Attorney General opinions. I look for Tax Commissioner and if I can find anything on the exact
question that you have, whether you can do it or not, I’ll get it for you. That’s what we do in our
department.
Smith: Sammy Smith, Planning Commission. This question is just thrown out, since the
General Assembly has changed the laws on farm use tags, it made it pretty simple, you either
have your federal farm number with you or your F-Form with you so why can’t we sweeten this
up and make the qualifications your F-Form for Federal Taxes or your Federal Farm Number?
Groover: Gordon Groover. I wish it was the case because an acre, you know the parcel of land
is what qualifies not the individual. That’s where you run into problems. The question about
rental rates as well. So it will be really simple if you walked in and showed your Schedule F and
said I rent these places. Farmers in some areas rent 100 parcels of land or more and be able to
blanketly qualify all that land. The Code of Virginia doesn’t do that. The individual owner
applies and qualifies that parcel of land. You are a farmer when you file a Schedule F and IRS
accepts then you are pretty much within those guidelines but when it comes to individual
property ownership that’s not the case.
Someone from the audience began to speak.
Gormus: If you can give her the mic, if she is going to speak we need to have it on record.
But…it is a work session just between our Boards. It’s just an educational session.
Any other Commissioners or Board of Supervisors have questions.
Jones: Seeing no more questions.
Dunnavant: Do we have contact information on these gentlemen, Mr. Jones?
Gormus: Yes, Mrs. Cobb does.
Dunnavant: So we can get back in touch with yall.
Jones: Any further business? Do I have a motion to adjourn? I don’t have to have a motion.
We adjourn now. Meetings over.
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There being no further business, Chairman Jones declared the meeting adjourned.