reflects risk and profit. The assessed value of 

 woodland or forest land can be determined by 

 the following formula: 



Average net annual income divided by cap- 

 italization rate equals assessed value where 

 average net annual income equals growth in- 

 crement multiplied by stumpage value, less ap- 

 plicable expenditures. 



3.7-4. Source of Data for Formula. 



(A) The average annual growth increment 

 can be determined for each of the four areas 

 or U. S. Forest Service Survey Units from 

 yield tables for well stocked stands published 

 in "Growth and Yields of Natural Stands of 

 the Southern Pine", by F. Schumacher and 

 T. S. Coile, Exhibits 35 and 35a. These yield 

 tables predict the yield of well-stocked stands 

 of different site indexes for various rotations. 

 The predicted yield divided by the years of 

 the rotation will give the average growth in- 

 crement. 



(B) Pine stumpage prices can be determined 

 from information available from numerous 

 sources, among which are : 



(1) Florida Forest Service. 



(2) Local forest industries. 



(3) Local Consulting Foresters. 



Pine stumpage prices per cord as compiled 

 by the Florida Forest Service are shown in 

 Exhibit No. 34. 



(C) The growth and yield information used 

 in this presentation are predicted yields, and 

 are not based on present actual growth. To 

 realize the growth indicated for pine land for 

 the different site classes will require an in- 

 tensive forestry program, including annual ex- 

 penditures for stand conversion, planting, tim- 

 ber stand improvement, thinning and other 

 land development expenditures, such as water 

 control, access facilities, etc. 



The annual expenditure of $1.50 per acre is 

 used in this presentation to cover cost of es- 

 tablishment and maintenance of firebreaks, 

 basic fire protection, thinning, pruning, disease 

 control, ranger labor, etc. Property tax ex- 

 pense is provided for in the capitalization rate. 



(D) The minimum capitalization rate recom- 

 mended for forest land or woodland is 7%, 

 which provides adequately for hazard. 



3.7-5 Adjustments. 



(A) Consideration has been given the mat- 



ter of possible adjustments for accessibility 

 with the conclusion that no adjustment is indi- 

 cated. It is to be noted that the factors of ac- 

 cessibility of transport are reflected in the 

 standard price for the particular Forest Sur- 

 vey Units. The prices are average and they 

 represent market value which has been estab- 

 lished by bidders taking into consideration the 

 matter of accessibility, etc. 



(B) Deferment of income would not be a 

 valid adjustment since average annual growth 

 on a sustained yield basis is converted to mone- 

 tary income from which expense applicable to 

 produce such growth are deducted. The net in- 

 come is capitalized annually, thus the process 

 is not cumulative. This spreads property tax 

 expense over the life of the tree. Woodland 

 thus bears its share of the property tax base 

 through the use of an accepted method of valu- 

 ation consistent with statutory requirements. 



Exhibit 33 



Computation of Net Annual Income 

 Per Acre, Exhibit 33 



Formula — Stumpage price X average annual 

 growth per acre minus expense allowance 

 equals net annual income per acre. 



Example 1 : Slash pine, site index 80, North- 

 west Florida 



Stumpage price per 



cord $7.80 



Average annual growth 



per acre (cords) X -92 



Gross annual income 



per acre $7.18 



Expense allowance — 1.50 



Net annual income per 



acre $5.68 



Example 2 : Longleaf pine, site index 60, Cen- 

 tral Florida 



Stumpage price per 



cord $5.87 



Average annual growth 

 per acre (cords) X .44 



Gross annual income 



per acre $2.58 



Expense allowance — 1.50 



Net annual income per 



acre $1.08 



21 



