Thanks to Bruce ZumBahlen for submitting the following guest post to the VFVC blog.
Dear VF/VC readers,
During the 2007 MN legislative session, the Governor vetoed an Omnibus Tax Bill that included a property tax break for woodland owners who have a forest management plan, The veto was for reasons unrelated to the woodland tax provisions. So close was the forestry community to having a law that would help in achieving the goal of having another 1 million acres under forest management plans.
But, you can’t keep good legislation down. That 2007 Omnibus Tax Bill was resurrected during the 2008 legislative session. It passed this time minus the provisions that the Governor opposed. The Governor signed it in early March. For the first time, MN has a law that provides the opportunity for woodland owners who are managing their property under a forest stewardship plan to receive a reduction in their property taxes payable in 2009 and thereafter.
As reported earlier by Matt Rezac on this blog site, the new law allows forest owners to apply to their county assessor to have their lands assessed at 0.65% rather than 1%. The management plan must meet the Sustainable Forest Incentive Act (SFIA) standards but the land can not enrolled under the SFIA (to avoid the perception of double dipping). The Tax Bill also changed the SFIA law. With the strong support of Senate Tax Committee Chair Tom Bakk, the SFIA minimum annual payment was raised from $1.50 per acre to $7.00 per acre.
Building on what had already been enacted, another bill sponsored by Representative Hosch was introduced this session to aid in administering the new property tax break. An attempt to lower the class rate to 0.55% failed, but the other provisions to improve what is now titled in statutes as “2c managed forest lands“ made it into another Omnibus Tax Bill. It was a nail biter, but the Tax Bill passed in the closing hours of the legislature.
This second Tax Bill raised the minimum acreage eligible for the tax break to 20 acres from 10 acres enacted earlier keeping the maximum acreage to not more than 1,920 acres. It eliminated the annual application requirement that will save time for county assessors and the landowners alike. Another provision allows split classifications of parcels with a structure so that woodlands could be separated from being subject to a higher assessed classification. The Bill also exempted the 2c managed forest lands from being classified as to their highest and best use.
The MN Department of Revenue will be preparing guidance to county assessors on how to implement the new law in the new future. So, give it a little time before approaching your county assessor to take advantage of the new law.
The following organizations partnered with the MN Forestry Association in support of the legislation: the Audubon Society, Avon Hills Initiative, MN Center for Environmental Advocacy, MN Deer Hunters Association, MN Forest Industries, MN Seasonal Recreation Property Owners Coalition, MN State Tree Farm Committee, MN SWCD Forestry Association, Ruffed Grouse Society, and the Nature Conservancy. Thanks to all for your support in encouraging retention and sustainable management of family forest lands.
MN Forestry Association