COMPETENCIA ACTUAL

The present-use value statutes consistently use the term “tract” except for G.S. 105-296(j) which uses the term “parcel.” Additionally, tax offices consistently refer to property as tax “parcels,” although the term “tract” is sometimes used in a more general sense when discussing a property.

The question arises as to whether a tract is the same as a parcel. This has significance primarily in determining whether a particular property meets the minimum size requirement. If tract and parcel are synonymous, then there must be at least one tax parcel that meets the minimum size requirement. However, if tract is a more general term encompassing more than one tax parcel, then more than one contiguous tax parcel may be used in meeting the requirement.

In Chester vs. Carteret (1990), the North Carolina Property Tax Commission concluded that contiguous tax parcels can be considered one tract and therefore the tract (singular) would qualify if the contiguous tax parcels had enough acreage in production to meet the size requirement (in this specific case, neither parcel had enough acreage in production to qualify on its own merits). Specifically, the Commission found that the two contiguous parcels were managed as a single tract. In their view, a contiguous piece of land is one where the borders of which may be traced on a map without lifting the pen. This would best be considered as being able to trace the outline without crossing another property owner’s border. It should not mean that the tracing could not cross roads since even single qualifying tax parcels often cross roads.

The Commission also found that where the tract is conveyed by more than one deed, the burden of proof is on the owner to clearly show the contiguous nature of the tract and to show unity of use and management.

The Property Tax Commission decision does not carry the weight of case law but seems to be a well-reasoned approach to the dilemma. It is acknowledged that there may be some added administrative headaches in trying to implement this approach but that should not be the determining factor.

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It is therefore recommended that the Commission decision that tract and parcel are not synonymous serve as the guide for counties in determining size qualification for present-use value. Therefore, contiguous tax parcels could be used to meet the minimum acreage in production requirement for the initial qualifying tract.

[It should be noted that this recommendation reverses the NCDOR position on this issue as stated in the 1997 Assessor’s Manual for the Administration of the

Present-Use Value Program.]

II. Other Acreage on the Initial Qualifying Tract

 Agriculture—Initial qualifying agricultural tract can contain woodland and

wasteland under certain conditions.

 Horticulture—Initial qualifying horticultural tract can contain woodland

and wasteland under certain conditions.

 Forestland—Initial qualifying forestland tract can contain wasteland, but not agriculture or horticulture land.

While forestland cannot bring in agricultural or horticultural land, the agricultural or horticultural land can still qualify for present-use value if a proper application is submitted that demonstrates that the land meets all the requirements for classification as either agricultural land or horticultural land.

A. Woodland

If an agricultural or horticultural farm unit contains less than 20 acres of woodland, the woodland is not required to be under a sound forestry management plan.

If an agricultural or horticultural farm unit contains more than 20 acres of woodland, the woodland is required to be under a sound forestry management plan. This includes all the woodland, not just the woodland over the 20-acre threshold. (See the only exception below in Section B: Exception for Certain Woodland Acreage on Agricultural and Horticultural Tracts. Also see

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Specifying the Farm Unit for discussion on the possible option for excluding land from the farm unit.)

Note that woodland is a generic term for wooded land and is not the same as forestland. Forestland is statutorily designated as a special class of property. Woodland is only forestland when it meets the statutory requirements for classification as forestland.

The definitions of agricultural and horticultural land require that woodland of at least 20 acres on agricultural and horticultural farm units be under a sound forestry management plan. While the statutory language does not specifically state that the management plan must be for the commercial growing of trees (as required for forestland), this statutory language was specifically enacted to equalize the requirements between forest-only units and “woodland” on agricultural and horticultural farm units. The clear and widely recognized intent was that the woodland on agricultural and horticultural farm units be subject to the same requirements as forestland on forest units, if the agricultural and horticultural farm units contain at least 20 acres of woodland (subject to the one exception below in Section B: Exception for Certain Woodland Acreage on Agricultural and Horticultural Tracts).

Therefore, the woodland (if 20 acres or more) on agricultural and horticultural farm units must be under a sound management program for the commercial growing of trees, which is the same requirement for exclusively woodland tracts that qualify as forestland. A sound management program for woodland on agricultural and horticultural farm units that does not have the commercial growing of trees as a primary objective will not be in compliance with the statutory requirements. Woodland on agricultural and horticultural farm units that meet all the requirements for forestland classification should be considered forestland.

It is also necessary to clarify the phrase “not included in a farm unit” as found in G.S. 105-277.3(a)(3) which defines forestland as “Individually owned forestland consisting of one or more tracts, one of which consists of at least 20 acres that are in actual production and are not included in a farm unit.” (emphasis added) The last phrase (in an earlier similar version) was added in 1979 and reflected the previous statutory position that woodland on agricultural and horticultural farm units was not required to be under a sound management plan for the commercial production of timber.

It is likely that the General Assembly anticipated that counties would determine a limit on how much woodland could be included in the agricultural or horticultural farm unit and would require all other woodland to qualify as forestland. However,

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without any statutory direction, counties historically often allowed large amounts of woodland on agricultural and horticultural farm units to qualify without a forestry management plan. This excessively permissive and inequitable historical pattern resulted in the legislative changes that are discussed in this section.

Therefore, the phrase “not included in a farm unit” as found in G.S. 105- 277.3(a)(3) should not serve to excuse the woodland on agricultural and horticultural farm units from the same commercial production requirements as forestland, when such woodland is now statutorily required to be under sound management when the acreage equals or exceeds 20 acres.

B. Exception for Certain Woodland Acreage on Agricultural