AB 959

Under current law, the Department of Natural Resources (DNR) administers

the managed forest land (MFL) program that exempts a landowner from payment

of municipal property taxes on land in the program in exchange for the landowner's

payment of an acreage share (acreage share payments), which is lower than the

municipal property tax, and for the landowner's compliance with approved forestry

and other conservation practices. The duration of an MFL order may be either 25

or 50 years.

Current law also provides that, when merchantable timber is cut from MFL, a

yield tax of 5 percent is imposed on the stumpage value of the timber. "Stumpage

value" is the value of timber before it is cut as estimated in rules promulgated by

DNR.

This bill allows the owner of MFL to apply to DNR to extend the due date for

the payment of yield taxes by an additional ten years from the date on which those

taxes would ordinarily be due, under certain circumstances. An owner may apply

for an extension if a catastrophic event caused a 50 percent or more reduction in the

total stumpage value of the merchantable timber on all of the tracts of MFL for which

the owner applies for an extension. The bill defines a "catastrophic event" as damage

caused by fire, ice, snow, wind, flooding, insects, or disease. The bill provides that

the owner is eligible for the extension only if the damaged tracts of MFL constitute

at least 15 percent of the land under the owner's MFL order.

The bill also allows an owner of MFL to make acreage share payments in a

reduced amount for a period of ten years following the expiration of the MFL order

under certain limited circumstances. To be eligible for the reduced payments, the

MFL owner must qualify for an extension of the due date for the payment of yield

taxes on the MFL based on a catastrophic event that occurred within 15 years before

the expiration of the MFL order for the land. The land must also be reenrolled in the

MFL program. Under these circumstances, the owner may make acreage share

payments in the amount required under the MFL order that was in effect at the time

of the catastrophic event instead of the amount that would otherwise be due.