tors have a definite bearing on stumpage value, 

 however, normally the single most important 

 item is distance from market. The importance 

 of this factor will be reflected in the hauling 

 costs. While adequate allowance must be made 

 for hauling, it should not be over-allowed for. 

 That is, transportation costs should be figured 

 to the nearest permanent market, which nor- 

 mally purchases for further manufacture and/ 

 or distribution the particular type of forest 

 products being produced from the tract under 

 consideration. The election of an owner to trans- 

 port his forest crop to a more distant market, 

 is not justification for allowing, in the appraisal 

 of his stumpage value, the additional hauling 

 cost experienced. 



One of the major cost factors to consider 

 in an appraisal is road development. However, 

 Section 63-326 states . . . "shall be assessed on 

 the cash value of the crop immediately prior 

 to severance . . .", and this eliminates the neces- 

 sity of deducting road development costs. The 

 phrase "immediately prior to severance" indi- 

 cates a point in time at which the necessary 

 road development would already be completed. 



Below are two formulas, either one of which 

 can be used to determine the value of the forest 

 crop immediately prior to severance. 



Formula No. 1 



Adj. Stumpage Val. = Ave. log selling price — 

 (LC + HC + SD + SC + P&R + ST) 



Adjusted stumpage value is: The value of the 

 forest crop, in place in the woods, after all nec- 

 essary road development has been completed. 



Average log selling price is: The average 

 price per unit that forest crops of the same 

 species and quality could be expected to bring at 

 the nearest permanent market which normally 

 purchases the particular forest products being 

 considered. 



Note: As used in this formula, the term 

 "log selling price" should be interpreted to mean 

 the market value per unit of any forest product 



being produced of whatever nature — to include, 

 but not limited to the following: sawlogs, ex- 

 pressed in dollars per 1,000 bd. ft.; pulpwood, 

 expressed in dollars per cord; poles and piling, 

 expressed in dollars per piece or dollars per 

 foot of length ; fence posts, expressed in dollars 

 per piece ; Christmas trees, expressed in dollars 

 per bundle. 



LC: Logging cost. This factor is to include 

 direct logging costs only. In the case of sawlogs, 

 this would be the dollars per 1,000 bd. ft. that 

 it takes to convert standing trees into logs on 

 the truck at the landing. (Does not include road 

 development costs.) 



HC: Hauling cost. In the case of sawlogs, this 

 would be the dollors per 1,000 bd. ft. that it 

 costs to transport the logs from the landing to 

 the nearest permanent market which normally 

 purchases the particular species and grades be- 

 ing produced. 



SD: Slash disposal. The amount withheld for 

 slash disposal purposes under Sec. 38-108 I.C., 

 is to be expressed in dollars per unit of measure. 



SC: Scaling cost. The cost of scaling and/or 

 grading the forest crop being appraised to be 

 expressed in dollars per unit of measure. 



P&R: Profit & risk. Factor as used in ac- 

 cepted stumpage appraisal practices. 



ST: Severance tax. This is the estimated tax 

 to be paid on the forest crop in the year of 

 harvest. 

 Formula No. 2 

 Adj. stumpage val = Stumpage value + RD 



Adjusted stumpage value: The value of the 

 forest crop, in place in the woods, after all 

 necessary road development has been completed. 



Stumpage value: The price that a prudent 

 operator would pay for a comparable forest 

 crop, all conditions being equal. To be expressed 

 in dollars per unit of measure. 



RD: Road development cost. This would be 

 the cost of developing roads necessary to har- 

 vest the particular forest crop being appraised. 

 To be expressed in dollars per unit of measure. 



ILLINOIS 



Procedure for Appraisal of Merchantable 

 Timber 



"The following outlines the procedure for 

 valuing merchantable timber. The base land 

 value of merchantable timberland on any tract 

 is determined by adding the value of merchant- 

 able timber to the base land capability value as 



described in the preceding paragraphs on rural 

 land valuation. 



"The general practice provides that mer- 

 chantable timber is not valued separately unless 

 such tracts have pole size and saw log size 

 stands and are used exclusively for the growing 

 of timber. Thus, young timberland or small 

 windbreaks and cattle shelter timber tracts are 



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