AB 561

This bill makes numerous changes to the managed forest land (MFL) program

administered by the Department of Natural Resources (DNR).

Introduction

Under current law, certain forested land may be designated as MFL under a

program administered by DNR. Under this program, the owner of land designated

as MFL makes an annual acreage share payment that is lower than, and in lieu of,

the property taxes that normally would be payable. In exchange, the owner must

comply with certain forestry practices and have a management plan prepared for the

land. The owner must also open the MFL to the public for hunting, fishing, hiking,

sight-seeing, and cross-country skiing, but may designate up to a certain number

of acres as being closed to the public. For MFL that is designated as closed, the owner

must pay an additional closed acreage fee. An owner seeking to have land designated

as MFL submits an application to DNR that contains a management plan for the

land. If the MFL meets the eligibility requirements under the program, which

include minimum acreage requirements and requirements as to how much

merchantable timber can be produced on the land, DNR approves the application

and issues an order designating the land as MFL. An owner may choose to have the

order last 25 or 50 years.

A similar program exists for land designated as forest croplands (FCL). Since

July 1985, no new land may be subject to the FCL program. However, there is forest

land that is currently in this program since the designations last for 25 or 50 years.

Taxes and fees

Under current law, an owner pays a severance tax for wood products removed

from FCL and a yield tax for merchantable timber cut from MFL. This bill eliminates

both taxes.

Under current law, subject to limitations, land may be withdrawn from the

MFL program with payment of a withdrawal tax. The withdrawal tax is the higher

of two amounts: the amount of past tax liability, less the taxes paid, or 5 percent of

the fair market value of the merchantable timber on the land, less the taxes paid.

Variations on this method of calculating the withdrawal taxes are used depending

on when the land was designated as MFL, how long the land has been designated as

MFL, and whether the MFL is subject to an original order or an order that has been

renewed. Under this bill, those methods are replaced with a single method of

calculating this tax: the total net property tax rate imposed by the municipality in

which the land is located is multiplied by the assessed value of the land being

withdrawn, with the result then multiplied by ten years, or the number of years the

MFL was subject to the order, whichever is fewer.

Under current law, the amount that is collected as closed acreage fees is

collected by the applicable taxation district and paid to the applicable county, which

pays these amounts to DNR for deposit into the conservation fund. This bill requires