Legislation to encourage owners of the 11 million acres of private forestlands in Michigan to join the state’s Qualified Forest Program for timber harvesting and management was signed into law today.
The nine-bill package, which includes a measure sponsored by Rep. Ed McBroom, R-Vulcan, updates the program’s property tax incentives and offers educational and technical assistance.
In addition to providing tax incentives, the bills offer educational and technical assistance for owners who choose to enter the program. Currently, only 20 percent of privately owned forestlands in Michigan are actively managed.
“By encouraging private land owners to get involved with active forest management, Michigan can give a boost to the timber industry and improve the environment by nurturing the health of privately managed forests,” Governor Rick Snyder said.
Active forest management includes harvesting, habitat improvement and enhanced environmental protection. The legislation will be an economic driver for property owners and the timber industry, providing potential gains in employment along with increased rural development. The bills also help ensure a steady, future supply of timber that will bring more certainty to businesses as they decide to locate or expand timber processing in Michigan.
The legislation will help meet the goals set during the governor’s Forest Products Summit, held in April, which emerged from Snyder’s November 2012 Special Message on Energy and the Environment. The summit brought together representatives from industry, government, the financial sector and academia to consider how to grow the state’s forest products industry while protecting the state’s forests and environment. Michigan’s timber industry generates $14 billion annually and directly employs 26,000 residents.
Highlights of the 9-bill package include:
* Eliminating the punitive nature of the recapture tax, which requires property owners to repay exempted taxes when their land is removed from the Qualified Forest Program;
* Reducing land fragmentation by allowing property owners with larger tracts of land totake part in the program;
* Improving the process for establishing qualified forest property;
* Enhancing technical and program support for private forest landowners, and
* Fostering of stronger working relationships with private forest landowners.
Senate Bill 51, sponsored by state Sen. Darwin Booher, transfers oversight of the Qualified Forest program from the Department of Natural Resources to the Department of Agriculture and Rural Development. It is now Public Act 42 of 2013.
SB 54, sponsored by state Sen. Tom Casperson, amends the Qualified Forest Property Recapture Tax Act to require Qualified Forest Program recapture penalties to be placed in the newly created Private Forestland Enhancement Fund instead of the General Fund. It is now PA 43.
SB 55, sponsored by state Sen. Mike Green, amends the definition of a “qualified agricultural property” in the General Property Tax Act to provide that a parcel would be devoted primarily to agricultural use if more than 50 percent of its acreage were devoted to both agriculture and qualified forest property. It is now PA 44.
SB 56, also by Booher, allows conservation districts to advise landowners about the value of managing their land for timber harvest, habitat, conservation and recreation. It also creates the “Private Forestland Enhancement Fund” to support private forestland management assistance. It is now PA 45.
SB 57, sponsored by state Sen. Arlan Meekhof, adds forest management as a consideration under the Michigan Agriculture Environmental Assurance Program, providing for the assessment of managing areas of land not used for traditional or production agriculture purposes, for environmental, ecological, and economic benefits. It is now PA 46.
SB 58, sponsored by state Sen. John Moolenaar, requires MDARD and the DNR to jointly carry out a number of tasks related to the development and promotion of the state’s forest products industry. It is now PA 47.
House Bill 4069, sponsored by state Rep. Frank Foster, eliminates a property tax recapture charge assessed when property is withdrawn from a program granting tax exemptions to owners of large tracts of forest generally grown for industrial uses (like paper mills), if the property is entered into a similar “qualified forest” tax break program for private owners of smaller parcels. It is now PA 48.
HB 4243, sponsored by state Rep. Ed McBroom, revises the Qualified Forest Property Recapture Tax Act to change the method of calculating the recapture tax imposed on qualified forest property that has been converted by a change in use and is no longer eligible for the tax exemption. It is now PA 49.
HB 4244, sponsored by state Rep. Bruce Rendon, amends the General Property Tax Act to revise the requirements for an individual transferring qualified forest property to file an affidavit in order to avoid an adjustment in the property’s taxable value. It is now PA 50.
The program is capped at 1.2 million acres but less than 80,000 acres have been enrolled in the program designed to ensure and increase a steady, sustainable supply of timber to an industry that generates $14 billion annually and directly employs 26,000 residents.
The package includes Public Acts 42-50 of 2013.