CORRECTED COPY
LRBs0354/1
MGG&RNK:eev&cjs:jm
2013 - 2014 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO ASSEMBLY BILL 700
March 3, 2014 - Offered by Representatives Mursau and Clark.
AB700-ASA1,3,7
1An Act to repeal 20.370 (1) (cx), 77.81 (5), 77.82 (1) (bn), 77.82 (2m) (ac), 77.82
2(2m) (ag), 77.82 (2m) (am), 77.82 (2m) (c), 77.82 (2m) (dm) 1., 77.82 (2m) (dm)
32., 77.82 (3) (am), 77.82 (4g), 77.82 (4m) (d), 77.83 (2) (am), 77.83 (4) (b), 77.86
4(2), 77.86 (3) (title), 77.87 (1g) (d), 77.88 (2) (a) 1., 77.88 (3g), 77.88 (4), 77.88 (5)
5(a) 1. and 2., 77.88 (5) (ab), 77.88 (5) (ar), 77.88 (5) (b), 77.88 (5) (c), 77.88 (6) and
677.91 (3);
to renumber 77.81 (1), 77.83 (1m), 77.83 (4) (a), 77.86 (1) (a), 77.86
7(1) (b) and 77.89 (2) (b);
to renumber and amend 28.11 (8) (a), 77.06 (1), 77.81
8(2m), 77.82 (12), 77.83 (1), 77.86 (1) (title), 77.86 (1) (c), 77.86 (1) (d), 77.86 (3),
977.88 (2) (a) (intro.), 77.88 (2) (a) 2., 77.88 (2) (a) 3., 77.88 (2) (e), 77.88 (2) (f),
1077.88 (3), 77.88 (5) (a) (intro.) and 77.89 (2) (a);
to amend 20.370 (5) (bv), 20.370
11(5) (bz), 74.23 (1) (a) 2., 74.25 (1) (a) 2., 74.25 (1) (a) 3., 74.30 (1) (b), 74.30 (1)
12(c), 77.07 (2), 77.07 (3), 77.81 (6), 77.82 (1) (a) 1., 77.82 (1) (a) 2., 77.82 (1) (b) 3.,
1377.82 (2m) (title), 77.82 (3) (title), 77.82 (3) (ag), 77.82 (3) (ar), 77.82 (3) (c)
1(intro.), 77.82 (3) (g), 77.82 (4), 77.83 (2) (a), 77.83 (2) (b), 77.84 (3) (b), 77.86 (4),
277.86 (5) (a), 77.86 (5) (b), 77.87 (1), 77.87 (2), 77.87 (3), 77.87 (5), 77.876 (1),
377.876 (4), 77.88 (title), 77.88 (1) (b) 1., 77.88 (1) (c), 77.88 (2) (am), 77.88 (2) (b),
477.88 (2) (c), 77.88 (3) (title), 77.88 (3j) (c), 77.88 (3m), 77.88 (5) (am) 1., 77.88
5(5m), 77.88 (7), 77.88 (8) (b), 77.883 (3), 77.885 (intro.), 77.89 (1), 77.89 (2) (title),
677.895 (2), 77.91 (3m) and 167.31 (4) (cr);
to repeal and recreate 77.86 (title);
7and
to create 28.11 (8) (a) 2., 77.10 (2) (d), 77.81 (1d), 77.81 (2r), 77.81 (4m),
877.82 (1) (a) 1m., 77.82 (1) (bp), 77.82 (3m), 77.82 (12) (a) 2., 77.82 (12) (a) 4.,
977.82 (12) (a) 5., 77.82 (12) (a) 6., 77.83 (1b), 77.83 (1c), 77.83 (1m) (b), 77.83 (2)
10(ar), 77.83 (2) (d), 77.86 (1g) (title), 77.86 (4m), 77.88 (2) (a) (title), 77.88 (2) (ac)
11(title), 77.88 (2) (d) (title), 77.88 (2m), 77.88 (3) (am), 77.88 (3) (b) (title), 77.88
12(3) (b) 1. (intro.) and 2., 77.88 (3) (c), 77.88 (3) (d), 77.88 (3j), 77.88 (3k), 77.88
13(3L), 77.88 (4m), 77.88 (5) (ac), 77.88 (5) (am) (title), 77.89 (3) (title) and 77.91
14(7) of the statutes;
relating to: eligibility requirements under the managed
15forest land program relating to parcel size and production of merchantable
16timber, management plans for managed forest lands, orders adding and
17withdrawing managed forest land, renewal of orders designating managed
18forest land, areas of managed forest lands that are open for public access,
19allowing managed forest lands to be used for recreational activities, regulation
20of cutting of timber on managed forest land and on forest croplands, withdrawal
21taxes and fees imposed on the withdrawal of managed forest land and yield
22taxes imposed for cutting timber from managed forest land, the sale or transfer
23of managed forest land, expiration of orders designating managed forest land,
24withdrawal of forest croplands that are held in trust for Indian tribes, a study
25of the managed forest land program, a report on exempt withdrawals from the
1managed forest land program and the forest cropland program, elimination of
2references to the woodland tax law, grants for land acquisition for certain
3outdoor activities, payments to counties for designated county forest lands,
4extending the time limit for emergency rule procedures, providing an
5exemption from emergency rule procedures, granting rule-making authority,
6requiring the exercise of rule-making authority, making an appropriation, and
7providing a penalty.
Analysis by the Legislative Reference Bureau
Under current law, certain forested land may be designated as managed forest
land (MFL) under a program administered by the Department of Natural Resources
(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 landowner 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 make an
additional payment per acre. A landowner 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. A landowner 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.
Eligibility under the managed forest land program
Under current law, for a parcel of land to be eligible to be designated as MFL
it must be at least ten contiguous acres in size. Also, at least 80 percent of the parcel
must be producing or be capable of producing a minimum of 20 cubic feet of
merchantable timber per acre per year. The parcel may have public or private roads
or railway or utility rights-of way running through it. This substitute amendment
increases this minimum acreage requirement from ten acres to 15 acres except for
certain parcels that are already designated as MFL.
Under current law, a parcel that is developed for a human residence is not
eligible for designation as MFL. Under the substitute amendment, a parcel is not
eligible if there is any building, or any improvement associated with a building,
located on the parcel. The substitute amendment defines a building to include any
structure used as shelter, as a place of employment, or as storage. Under the
substitute amendment, an "improvement" includes any accessory building,
structure, or fixture that is placed on a parcel for the parcel's benefit. The substitute
amendment also specifically excludes roads, certain rights-of way, fences, and other
structures from being considered improvements.
Open and closed lands
This substitute amendment requires the owner of open MFL to ensure that the
public has access to the land, except with respect to certain parcels of MFL that are
a large property. The substitute amendment defines a large property to be one or
more separate parcels of MFL and FCL that are under the same ownership and that
are collectively greater than 1,000 acres in size. Sometimes, open MFL is surrounded
by closed MFL or other private property, making it impossible for the public to have
access to the land without having permission from an owner of some of the
surrounding land. Under the substitute amendment, the method and location of
access to open MFL must be equivalent to the method and location that is used by
the owner of the MFL. If the owner is unable to provide such access, DNR must
modify the designation of the land from being open to being closed.
Under current law, an owner of MFL may not lease the land or enter into any
other agreement under which the owner receives consideration for the purpose of
allowing persons to engage in certain recreational activities, such as hunting, hiking,
horseback riding, and staying in cabins on the MFL. Current law provides an
exception for agreements under which reasonable membership fees are charged by
a nonprofit organization and that are approved by DNR.
This substitute amendment repeals this prohibition and specifically authorizes
owners of MFL to enter into leases or other agreements to allow closed MFL that is
not part of certain large properties to be used for recreational activities (leasable
MFL). The substitute amendment also expands the types of recreational activities
for which the land may be leased to include any recreational outdoor activity that
DNR determines to be compatible with the practice of forestry.
Current law imposes limitations on the amount of MFL that may be closed to
public access. Generally, the maximum amount that may be closed is 160 acres in
a single town, city, or village or one or a combination of any two of the following areas
as found on government surveys: quarter quarter sections (40 acres), fractional lots
(usually somewhat less than 40 acres), or government lots (also, usually somewhat
less than 40 acres). This substitute amendment modifies this limitation so that an
owner of MFL, other than an owner of a large property that is not leasable, may close
any or all of the owner's MFL.
Under current law, an owner of MFL may modify a designation of open or closed
land two times during the term of a MFL order. Under this substitute amendment,
an owner of leasable MFL who has modified a designation two times before January
1, 2015, may make one additional modification during the term of the order.
Sales and transfers of land under the managed forest land program
Under current law, an owner may sell or otherwise transfer an entire parcel of
MFL. An owner may also sell or transfer part of a parcel of MFL if the land being
sold or transferred is all of the owner's land located in a quarter quarter section or
in a government lot or fractional lot. This substitute amendment eliminates these
restrictions so that any owner may sell or transfer an entire parcel or any part of a
parcel.
Under current law, the land remaining under an MFL order after a sale or
transfer of part of a parcel continues to be eligible as MFL and does not need to be
withdrawn regardless of its size if it is all in one piece (contiguous) and will meet the
productivity requirements for producing merchantable timber, if it is not developed
for a human residence, and if it is not used for commercial recreation, for industry,
or for any other purpose that DNR determines to be incompatible with the practice
of forestry. Under the substitute amendment, in order for the remaining land to
continue to be eligible as MFL, it must be contiguous and at least 15 acres in size and,
under most circumstances, a building or structure may not be on the land.
Withdrawals of managed forest land
Under current law, DNR may issue an order withdrawing land from a parcel
that has been designated as MFL under certain circumstances. These include a
determination by DNR that the land does not comply with the eligibility
requirements under the program or that the owner has failed to comply with the
requirements of the program or with the management plan prepared for the land.
Current law also allows owners to voluntarily withdraw land under certain
circumstances. Under current law, an owner may withdraw all of the owner's land
or all of the land that is in a quarter quarter section or in a government or fractional
lot. An owner may also voluntarily withdraw land on a one-time basis under certain
circumstances for the purpose of construction of a residence. When land is
voluntarily withdrawn for this purpose, the owner must pay withdrawal taxes on the
MFL that is withdrawn and a withdrawal fee.
This substitute amendment creates additional provisions that allow MFL to be
voluntarily withdrawn. The substitute amendment eliminates the provisions that
apply only to withdrawal for construction of a residence. Under the substitute
amendment, an owner may voluntarily withdraw part of an MFL parcel for the
purpose of selling it or using it as a construction site, regardless of whether the
construction site is a construction site for a residence. Under this provision, the land
withdrawn may not be less than one acre and may not be more than five acres. The
substitute amendment limits the number of times that MFL may be withdrawn for
this purpose and requires the owner to pay the withdrawal taxes and the withdrawal
fee.
Under the substitute amendment, MFL may also be voluntarily withdrawn by
an owner if DNR determines that part of a parcel is unsuitable for the production of
merchantable timber, due to environmental, ecological, or economic or other
concerns, or if DNR determines that the parcel is unable to produce merchantable
timber in the amount required under the MFL program. The owner may withdraw
only the number of acres that is necessary for the parcel to resume sustainable
production of merchantable timber or to resume its ability to meet the merchantable
timber production requirement described above. The owner is exempt from paying
a withdrawal tax or fee for these types of withdrawal.
Assessment of withdrawal taxes and yield taxes
Under current law, when DNR issues an order of withdrawal that requires the
payment of a withdrawal tax and fee, DNR determines the amount of the tax and
assesses the tax and fee against the owner. Withdrawal taxes are assessed for
voluntary and DNR withdrawals, as described above, withdrawals that are required
when land is no longer eligible as MFL due to the sale or transfer of part of a parcel,
and withdrawals that are required as a result of failing to pay property taxes.
Under this substitute amendment, once DNR has issued the order of
withdrawal, the county in which the MFL is located, instead of DNR, determines the
amount of the tax and assesses the tax and the fee against the owner.
Similarly, under current law, when merchantable timber is cut from MFL, DNR
determines the amount of the yield tax and assesses that amount. Under the
substitute amendment, the county in which the MFL is located assesses the yield tax.
Calculation of withdrawal taxes
Under current law, the withdrawal tax is the higher of two amounts: the
amount of past tax liability, less the acreage share payments and yield taxes paid
(taxes paid), or 5 percent of the stumpage value of the merchantable timber on the
land, less the taxes paid. Under current law, 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.
This substitute amendment eliminates these methods of calculating the
withdrawal tax. Instead, the substitute amendment creates a single method of
calculating this tax. Under the substitute amendment, the amount of withdrawal
tax is calculated by multiplying the total net property tax rate imposed by the city,
town, or village (municipality) in which the land is located by the assessed value of
the land being withdrawn, and then multiplying that amount by ten years, or the
number of years the MFL was subject to the order, whichever is fewer.
Distribution of assessed withdrawal taxes and yield taxes
Under current law, DNR deposits the yield taxes and withdrawal taxes it
collects in the conservation fund. DNR then makes a payment to each municipality
in which the MFL is located that is equal to the amount of withdrawal tax or yield
tax assessed by DNR that is applicable to the MFL in that municipality. Under this
substitute amendment, the county that assesses the yield and withdrawal taxes
distributes to each municipality in the county in which the MFL is located 80 percent
of applicable yield or withdrawal taxes. The county retains the remaining 20
percent. The county also keeps the withdrawal fees.
Renewals of MFL orders
Under current law, an MFL order may be renewed at the end of its 25-year or
50-year term. DNR may deny an application for renewal only if the land does not
comply with the eligibility requirements, the owner has failed to comply with the
management plan for the MFL, or delinquent taxes are owed on the land. This
substitute amendment creates additional grounds that DNR may use for denying a
renewal application. Under the substitute amendment, DNR may deny the
application if the land that is subject to the renewal application is not identical to the
MFL under the existing order or if certain requirements for establishing, updating,
and reviewing mandatory forestry soil and conservation practices in a management
plan are not met.
Large properties; cuttings; management plans
This substitute amendment creates different cutting notice requirements for
large properties. Under current law, an owner of MFL or FCL must file with DNR
a notice of intent to cut merchantable timber at least 30 days before the cutting. DNR
must approve the cutting if it finds that the cutting is in conformance with the
owner's management plan and is consistent with sound forestry practices. The
substitute amendment exempts the owner of a large property from having to file
cutting notices if an independent forestry organization recognized by DNR certifies
that the owner is qualified to ensure that its timber cutting is consistent with sound
forestry practices and if the owner complies with rules regulating cutting practices
that are promulgated by DNR.
Under current law, a landowner must submit with the MFL application a
management plan that contains a statement of the owner's forest management
objectives, a description of the forestry and soil conservation practices that will be
undertaken on the MFL, and supporting maps, aerial photographs, or diagrams.
Under the substitute amendment, DNR may modify these general requirements for
management plans that are prepared for large properties. In determining whether
to do so, DNR must consider certain factors. These factors include how much MFL
the applicant already owns and whether the applicant has consistent access to
technical forest management assistance.
Other provisions
This substitute amendment creates a provision that allows an owner of MFL
that has been damaged by a natural disaster to restore the productivity of the land
so that it meets the requirements under the MFL for producing merchantable timber.
DNR determines the amount of time that the owner will have to restore the land.
If the owner fails to complete the restoration within that time period, either DNR
may order withdrawal of the land or the owner of the land may request withdrawal
of the land. The owner is exempt from payment of withdrawal taxes if the owner
makes the request and DNR determines that the MFL is unable to meet the
production requirements for merchantable timber and if the owner withdraws only
the number of acres necessary for the parcel to again meet the production
requirements.
The substitute amendment provides funding for grants that are awarded to
nonprofit conservation organizations and counties, cities, towns, and villages to
acquire land to be used for hunting, fishing, hiking, sightseeing, and cross-country
skiing.
Under current law, DNR must prepare management plans if DNR determines
that an owner submitting an application to have land designated as MFL is unable
to have a management plan prepared by an independent plan writer who is certified
by DNR but who is not acting on behalf of DNR. Also, DNR may complete a plan if
it does not initially meet DNR's approval. Under current law, DNR charges fees for
preparing and completing plans. This substitute amendment repeals all of the
provisions relating to DNR's preparation and completion of plans.
Under current law, DNR must issue a withdrawal order removing all lands
owned by an Indian tribe from the MFL program if requested to do so by the tribe and
if the tribe provides DNR with the date on which the MFL will be transferred to the
federal government to be held in trust for the tribe and if the tribe and DNR have in
effect a written agreement that the land will continue to be treated as MFL until the
date that the MFL order would have expired. This substitute amendment creates
a parallel provision for withdrawals from the FCL program.