Relates to excluding the value of trees for the purposes of real property tax assessments

1 Co-sponsor

• James L. Seward

BILL NUMBER:S2081

Title of bill

An act to amend the real property tax law, in relation to excluding the value of trees for the purposes of assessment

Purpose

The purpose of this legislation is to exclude standing timber on privately owned forestland from the definition of real property for purposes of real property tax assessment.

Summary of provisions

Section 305 of the real property tax law is amended by adding a new subdivision 4 which removes standing timber on privately owned forest-land from the definition of real property for purposes of real property tax assessment.

Justification

This legislation would exclude standing timber on privately owned forestland from the definition of real property for purposes of real property tax assessment. The escalating costs of municipal services have placed tremendous pressure on the real property tax system. Local governments have improved their information management systems and looked for ways to increase their tax base. As assessors look harder at ways to increase value, some are beginning to change their assessment on forestlands. Those applying this change note that the current definition of real property includes the value of standing timber in the assessment of forestlands. New assessments that attempt to reflect current timber values can produce a steep tax increase on these properties. The practical results are likely to be over harvesting, liquidation cuttings or conversion to development. At the very least, this policy is an incentive for landowners to practice poor forest management. Changing the definition of real property to exclude standing timber on private forestland will simplify the assessment process, reduce inequities and encourage landowners to manage their forest resources in a more sustainable manner.

Legislative history

2011,2012: S.788 Referred to Local Government 2009,2010: S.2432 Referred to Local Government 2007,2008: S.2412 Referred to Local Government 2006: S.6818/A.6638 Referred to Local Government

Fiscal implications

To be determined.

Effective date

Effective immediately.