SB543: Bill Text

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 bill eliminates these methods of calculating the withdrawal tax. Instead, the bill creates a single method of calculating this tax. Under the bill, 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by the city, town, or village (municipality) in which the land is located by the assessed value of the land being withdrawn, and then multiplying that amount by ten years, or the number of years the MFL was subject to the order, whichever is fewer.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 bill, 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 bill creates additional grounds that DNR may use for denying a renewal application. Under the bill, 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 bill creates different cutting notice requirements for parcels of either MFL or FCL that are under the same ownership and that are collectively greater than 1,000 acres in size (large property). 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 bill 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 bill, 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 bill 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.

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 bill 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 bill creates a parallel provision for withdrawals from the FCL program.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB543,1 Section 1. 20.370 (1) (cx) of the statutes is repealed.

SB543,2 Section 2. 20.370 (5) (bv) of the statutes is amended to read:

SB543,8,2 20.370 (5) (bv) Resource aids — county forests, forest croplands and managed forest land aids. A sum sufficient to pay county forest aids under s. 28.11 (8) (a), forest croplands cropland aids under subch. I of ch. 77 and managed forest land aids under ss. s. 77.85 and 77.89 (1).

SB543,3 Section 3. 74.23 (1) (a) 2. of the statutes is amended to read:

SB543,8,7 74.23 (1) (a) 2. Pay to the proper treasurer all collections of special assessments, special charges and special taxes, except that occupational taxes under ss. 70.40 to 70.421 and forest cropland, woodland and managed forest land taxes under ch. 77 shall be settled for under s. 74.25 (1) (a) 1. to 8.

SB543,4 Section 4. 74.25 (1) (a) 2. of the statutes is amended to read:

SB543,8,12 74.25 (1) (a) 2. Pay to the proper treasurer all collections of special assessments, special charges and special taxes, except that occupational taxes under ss. 70.40 to 70.421 and forest cropland, woodland and managed forest land taxes under ch. 77 shall be settled for under subds. 5. to 8.

SB543,5 Section 5. 74.25 (1) (a) 3. of the statutes is amended to read:

SB543,8,17 74.25 (1) (a) 3. Retain all collections of special assessments, special charges and special taxes due to the taxation district, except that occupational taxes under ss. 70.40 to 70.421 and forest cropland, woodland and managed forest land taxes under ch. 77 shall be settled for under subds. 5. to 8.

SB543,6 Section 6. 74.30 (1) (b) of the statutes is amended to read:

SB543,8,22 74.30 (1) (b) Pay to the proper treasurer all collections of special assessments, special charges and special taxes, except that occupational taxes under ss. 70.40 to 70.421 and forest cropland, woodland and managed forest land taxes under ch. 77 shall be settled for under pars. (e) to (h).

SB543,7 Section 7. 74.30 (1) (c) of the statutes is amended to read:

SB543,9,2 74.30 (1) (c) Retain all collections of special assessments, special charges and special taxes due to the taxation district, except that occupational taxes under ss. 70.40 to 70.421 and forest cropland, woodland and managed forest land taxes under ch. 77 shall be settled for under pars. (e) to (h).

SB543,8 Section 8. 77.06 (1) of the statutes is renumbered 77.06 (1) (a) and amended to read:

SB543,9,12 77.06 (1) (a) No Except as provided in par. (b), no person shall cut any merchantable wood products on any forest croplands where the forest crop cropland taxes are delinquent nor until 30 days after the owner has filed with the department of natural resources a notice of intention to cut, specifying by descriptions and the estimated amount of wood products to be removed and the proportion of present volume to be left as growing stock in the area to be cut. The owner of a large property, as defined in s. 77.81 (2r), does not have to file a notice of intention to cut if all of the requirements under s. 77.86 (4m) (a) have been met.

SB543,9,18 (b) The department of natural resources may require a bond executed by some surety company licensed in this state or other surety for such amount as may reasonably be required for the payment to the department of natural resources of the severance tax hereinafter provided prescribed in sub. (5). The department, after examination of the lands specified, may prescribe the amount of forest products to be removed.

SB543,9,21 (c) Cutting in excess of the amount prescribed shall render the owner liable to double the severance tax prescribed in s. 77.06 sub. (5) and subject to cancellation under s. 77.10.

SB543,9,23 (d) Merchantable wood products include all wood products except wood used for fuel by the owner.

SB543,9 Section 9. 77.07 (2) of the statutes is amended to read:

SB543,10,9 77.07 (2) Penalty, collections. If any severance tax remain remains unpaid for 30 days after it becomes due, there shall then be added a penalty of 10 percent, and such tax and penalty shall thereafter draw interest at the rate of one percent per month until paid. At the expiration of said 30 days the department of natural resources shall report to the attorney general any unpaid severance tax, adding said penalty, and the attorney general shall thereupon proceed to collect the same with penalty and interest by suit against the owner and by attachment or other legal means to enforce the lien and by action on the bond mentioned in s. 77.06 (1) (b), or by any or all such means.

SB543,10 Section 10. 77.07 (3) of the statutes is amended to read:

SB543,10,16 77.07 (3) Distribution of severance tax. All severance taxes collected under this subchapter shall be distributed as follows: The state shall retain an amount equal to the total acreage payments on the lands to which the severance taxes relate, made by the state under s. 77.05, and all penalties imposed under sub. (2) and s. 77.06 (1) (c), and the balance shall be paid to the town treasurer to be apportioned as provided in s. 77.04 (3).

SB543,11 Section 11. 77.10 (2) (d) of the statutes is created to read:

SB543,10,21 77.10 (2) (d) Upon request of an Indian tribe, the department shall issue an order of withdrawal for the land that is owned in fee and that is subject to a contract under s. 77.03. The land withdrawn is not subjected to the tax payment calculated under par. (a) if all of the following apply:

SB543,10,23 1. The Indian tribe provides the department the date of the order to transfer the land to the United States to be held in trust for the tribe.

SB543,11,3 2. The tribe and the department have in effect a written agreement under which the tribe agrees that the land shall continue to be treated as forest croplands until the date on which the contract under s. 77.03 would have expired.

SB543,12 Section 12. 77.81 (1) of the statutes is renumbered 77.81 (1j).

SB543,13 Section 13. 77.81 (1d) of the statutes is created to read:

SB543,11,8 77.81 (1d) "Building" includes any structure used for sheltering people, machinery, animals, or plants; used for storing property; used for parking, sales, or display space; or used as a place of employment.

SB543,14 Section 14. 77.81 (2m) of the statutes is renumbered 77.81 (1g) and amended to read:

SB543,11,13 77.81 (1g) "Independent certified Certified plan writer" means a plan writer certified by the department but who is not acting under contract with the department under s. 77.82 (3) (g).

SB543,15 Section 15. 77.81 (2r) of the statutes is created to read:

SB543,11,17 77.81 (2r) "Large property" means one or more separate parcels of land that are under the same ownership, that collectively are greater than 1,000 acres in size, and that are managed forest land or forest croplands or a combination thereof.

SB543,16 Section 16. 77.81 (4m) of the statutes is created to read:

SB543,11,20 77.81 (4m) "Natural disaster" means fire, ice, snow, wind, flooding, insects, or disease.

SB543,17 Section 17. 77.81 (5) of the statutes is repealed.

SB543,18 Section 18. 77.81 (6) of the statutes is amended to read:

SB543,12,2 77.81 (6) "Recreational activities" include means recreational outdoor activities that are compatible with the practice of forestry, as determined by the department. "Recreational activities" includes hunting, fishing, hiking, sight-seeing, cross-country skiing, horseback riding, and staying in cabins.

SB543,19 Section 19. 77.82 (1) (a) 1. of the statutes is amended to read:

SB543,12,7 77.82 (1) (a) 1. It consists of at least 10 contiguous acres, except as provided in this subdivision. The par. (am). This subdivision applies to applications under sub. (2), (4m), or (12) that are filed before the effective date of this subdivision .... [LRB inserts date].

SB543,12,14 (am) For purposes of par. (a) 1. and 1m., the fact that a lake, river, stream or flowage, a public or private road or a railroad or utility right-of-way separates any part of the land from any other part does not render a parcel of land noncontiguous. If a part of a parcel of at least 10 contiguous acres is separated from another part of that parcel by a public road, that part of the parcel may be enrolled in the program, even if that part is less than 10 acres, if that part meets the requirement under subd. 2. and is not ineligible under par. (b).

SB543,20 Section 20. 77.82 (1) (a) 1m. of the statutes is created to read:

SB543,12,18 77.82 (1) (a) 1m. It consists of at least 20 contiguous acres, except as provided in par. (am). This subdivision applies to applications under sub. (2), (4m), or (12) that are filed on or after the effective date of this subdivision .... [LRB inserts date].

SB543,21 Section 21. 77.82 (1) (a) 2. of the statutes is amended to read:

SB543,12,22 77.82 (1) (a) 2. At least 80% of the parcel must be producing or capable of producing a minimum of 20 cubic feet of merchantable timber per acre per year, except as provided in s. 77.88 (2m).

SB543,22 Section 22. 77.82 (1) (b) 3. of the statutes is amended to read:

SB543,12,25 77.82 (1) (b) 3. A parcel that is developed for a human residence on which a building or an improvement associated with a building is located.

SB543,23 Section 23. 77.82 (1) (bn) of the statutes is renumbered 77.88 (3g) (d) and amended to read:

SB543,13,7 77.88 (3g) (d) For purposes of par. (b) 3. this subsection and sub. (3j), the department by rule shall define "human residence" to include a residence of the applicant regardless of whether it is the applicant's primary residence. The definition may also include up to one acre surrounding the residence for a residence that is not the applicant's primary residence.

SB543,24 Section 24. 77.82 (1) (bp) of the statutes is created to read:

SB543,13,10 77.82 (1) (bp) 1. For purposes of par. (b) 3., and except as provided in subd. 2., an improvement is any of the following:

SB543,13,12 a. Any accessory building, structure, or fixture that is built or placed on the parcel for its benefit.

SB543,13,13 b. Landscaping that is done on the parcel.

SB543,13,14 2. An improvement does not include any of the following:

SB543,13,15 a. A public or private road.

SB543,13,16 b. A railroad or utility right-of way.

SB543,13,18 c. A fence, unless the fence prevents the free and open movement of wild animals across any portion of the parcel.

SB543,13,19 d. Culverts.

SB543,13,20 e. Bridges.

SB543,13,22 f. Other buildings, structures, and fixtures that are needed for sound forestry practices.

SB543,25 Section 25. 77.82 (2m) (title) of the statutes is amended to read:

SB543,13,24 77.82 (2m) (title) Fees for applications and management plans.

SB543,26 Section 26. 77.82 (2m) (ac) of the statutes is repealed.

SB543,27 Section 27. 77.82 (2m) (ag) of the statutes is repealed.

SB543,28 Section 28. 77.82 (2m) (am) of the statutes is repealed.

SB543,29 Section 29. 77.82 (2m) (c) of the statutes is repealed.

SB543,30 Section 30. 77.82 (2m) (dm) 1. of the statutes is repealed.