2015 Wisconsin Act 358 prohibits the enrollment of a parcel if it contains a building or improvement associated with a building. The definition of “building” in s. NR 46.15 (1m) was clarified to administer this provision, and provides an exception for recreational vehicles (e.g., campers and RVs). For purposes of administration, what it means to be an improvement associated with a building has also been defined in s. NR 46.15 (17r), using guidelines developed to assess improvements for purposes of taxation. With the passage of Act 358, certain exemptions from improvements were outlined, including exemptions for hunting blinds and structures and fixtures needed for sound forestry. Hunting blinds has been defined in s. NR 46.15 (17) (g). Structures and fixtures needed for sound forestry has been defined in s. NR 46.15 (30m). Clarification regarding which building rules apply to which orders, since the change affecting building rules was prospective only, was created in s. NR 46.15 (3) (b). Accessibility
2015 Wisconsin Act 358 provides that the public must be able to access any land designated as open-MFL on foot. Section NR 46.20 states that this requirement can be satisfied if the land designated as open-MFL is (1) contiguous to other public land, (2) contiguous to other land under the same ownership as the open-MFL parcel, or (3) if the landowner secures an easement or agreement that allows the public to cross neighboring lands. Additionally, to be designated as open-MFL landowners must certify that they will inform the department if their access changes and that they are aware their land may need to be closed or withdrawn if they cannot provide public access. Posting standards and map requirements in s. NR 46.21 were also updated to reflect this requirement. Additions
2015 Wisconsin Act 358 allows all MFL entries to have land added to them if certain criteria are met. Section NR 46.16 (7), interprets and clarifies the requirements for additions in s. 77.82 (4), Stats., including that the additional parcel must be at least 3 contiguous acres, must be contiguous to the existing entry, and all eligibility requirements must be met. For eligibility purposes, productivity is evaluated on the parcel as a whole (existing MFL land plus added MFL land), not just the portion being added. Furthermore, in s. NR 46.16 (5), this rule removes the requirement that qualifying contiguous land in a separate municipality to be on a separate order, now all lands eligible to be an addition can be added to an existing order. Yield and Severance Tax
2015 Wisconsin Act 358 eliminated severance and yield taxes. As a result of this repeal, references to the assessment and collection of these taxes have been repealed from this chapter of administrative code. This rule also repeals s. NR 46.16 (1) (cm) as a result of the statutory repeal of the mechanism to calculate Forest Crop Law termination tax in Wisconsin Act 358. Now that there is no termination tax, there is no reason to provide FLC landowners additional time to apply to the MFL program after a land conveyance occurs. Contracts
2015 Wisconsin Act 358 provides that department orders designating land as MFL are contracts. When a material change occurs in statute or administrative code, the department will contact landowners impacted by the change. Section NR 46.27 (2) provides the process that the department will use to contact landowners and establishes a timeline for landowner response to be eligible for withdrawal from the program without assessment of a withdrawal tax and fee following a material change. To implement the process for contacting landowners after a material change, s. NR 46.31 provides that landowners are responsible for supplying the department with updated contact information if it has changed since the time of entry, and that the department’s attempt to notify the landowner at a supplied address is considered to meet the requirement of contacting a landowner. As a result of all orders designating land as MFL being contracts, s. NR 46.18 (9) was created to clarify amendments to management plans that may need to occur during an order period for the management plan to remain in compliance with the program Department orders
To codify long-standing policy, s. NR 46.27 (1) was added to clarify when the department may issue orders to correct or alter existing MFL entries. Additionally, a long-standing policy whereby orders may be rescinded if a land sale occurs prior to the effective date was clarified in s. NR 46.16 (1) (d). Large Ownerships
2015 Wisconsin Act 358 changed a number of aspects related to MFL entries. Now that orders are considered contracts and land is eligible for withdrawals without tax and fee when certain criteria are met, it is increasingly important that more information is obtained and the program is implemented more consistently across order types. Section NR 46.16 (4) requires large ownerships to have available for department audit, information that more closely aligns to what is required for other entry types. This will allow the department to evaluate when large ownerships are eligible for certain withdrawal types. In addition, now that landowners can sell any description of land, productivity must be evaluated at the time of transfer to determine if land eligible to remain in the program. Opportunities toWithdraw Land
2015 Wisconsin Act 358 provides new voluntary withdrawal options for landowners enrolled in MFL. Section NR 46.22 (3) provides requirements for landowners who choose to voluntarily withdraw land using the construction and small land sale withdrawal type. In using this withdrawal type, landowners are responsible for following zoning requirements and providing the department with information on where the withdrawal will occur. Additionally, this provision allows landowners to use this small acreage withdrawal to rectify enforcement situations. As a result of Act 358, landowners can request to withdraw land with no penalty if the withdrawal is needed for a parcel of managed forest land to resume compliance with the MFL productivity requirements. Section NR 46.22 (4) establishes the requirements that need to be met for a landowner to use this withdrawal type. Productivity Eligibility Criteria
Changes in how productivity is evaluated as an eligibility requirement were made to address potential administrative issues that could arise as a result of the new productivity withdrawals. Specifically, s. NR 46.17 was amended to clarify that if land is part of the 80% productive portion of the entry and the land is capable of producing at the level required, but is not currently meeting the density requirements established in s. NR 46.18 (2) (d) at the time of entry, mandatory practice to address density requirements must be included in the management plan. Such practices are not eligible for a withdrawal without tax or fee based on productivity issues until restoration measures have been sufficiently attempted. The density requirement table, previously called the minimum medium density table was moved and renamed to clarify density requirements of land entered in the program. In addition to clarifications regarding what it means to be capable of producing merchantable timber at the required level, clarification was also made to the method of evaluting productive and non-productive areas within an entry. This change was made s. NR 46.18(3) (b)1., wherein non-productive areas comprising of ½ or more contiguous acres will be used in the calculation of productivity levels. Restoration
As a result of Act 358, landowners may have a period of time in which their land does not meet productivity requirements if they have a restoration plan in place. Section NR 46.215 was added to outline when restoration may be required or offered as a solution when a parcel no longer meets productivity requirements defined in s. 77.82 (1) (a) 2., before land is withdrawn from the program, without tax and fee. If it is possible for the parcel to resume productivity through restoration within a reasonable timeframe and it is an economically feasible solution, restoration practices will be required and the management plan will be amended. Additional requirements were added in s. NR 46.17 (4) for land that has been withdrawn for a failure to meet productivity requirements. This change makes land withdrawn for productivity or sustainability reasons ineligible for re-entry unless the department determines there has been a change that would allow the land to meet productivity requirements in s. NR 46.18 (2) (d) since the time of withdrawal. This change reduces the amount of land that can be re-entered in the program if the landowner is unable or unwilling to restore the land to meet density requirements needed to establish merchantable timber. This reduces the burden on the local units of government who would otherwise receive back taxes for land that is removed from the program. Cutting Notices
2015 Wisconsin Act 358 added categories of individuals who can submit a cutting notice without department approval. Sections NR 46.10 and 46.185 clarify requirements for individuals to be able to submit a cutting notice without department approval. Such individuals will have to certify on the cutting notice form that they meet the requirements of submitting a cutting notice without department approval, and if the cutting notice is complete and adheres to sound foresty and the management plan and the landowner does not request department approval, then department approval is not required. For all other situations department approval is required. In addition to changes relating to who can submit a cutting notice without approval, long-standing policy was also incorporated allow cutting notices to be renewed if no significant change has occurred, the cutting will occur within a reasonable timeframe and the submitter is in contact with the department. This aleviates burden on an industry where harvesting contracts are often more than one year long.
Closed Land
2015 Act 358 increases the amount of acreage a landowner can close to public access to 320 acres per landowner, per municipality. Changes were made in s. NR 46.19 to allow for this and remove differences between lands enrolled before or after 2004 as those were also removed with Act 358. A long-standing policy regarding the signing of closed or unenrolled lands was also incorporated into rule under s. NR 46.21 (2) (c). It provides that if a landowner has open-MFL surrounded by other land they own that is not open to public access and decides to use “no trespassing” or similar signs on their lands that are not open to public access, that landowner is required to include information on the signs to show how to access the open-MFL lands. Leasing
Clarification on eligible leases and agreements was added in s. NR 46.17. Landowners may enter into any lease or agreement if it does not conflict with the program. Transfer of Ownership
2015 Act 358 allows landowners to sell or otherwise convey any amount of MFL land. After being notified of a land sale, the department will evaluate land retained and land conveyed to determine MFL eligibility. If the conveyed land does not meet eligibility requirements because it exceeds the non-productive requirement, the landowner can use the productivity/sustainability withdrawal, without tax and fee, to resume compliance with the productivity standards if the land sold/conveyed meets parcel size requirements after the withdrawal. If after the withdrawal, the rest of the parcel does not meet parcel size requirements, the remaining land will be withdrawn with a tax and fee. This same evaluation will be used for land retained after a land conveyance, if any. If land conveyed or retained does not meet size requirements that land will be withdrawn with a tax and fee. For land that is conveyed from a large ownership, the department will transfer the land if it meets parcel size requirements established in s. 77.82 (1) (a) 2., Stats., and the new owner will have one year to develop a management plan and determine if any land needs to be withdrawn due to productivity issues. 6. Summary and comparison of federal regulations:
There are no known federal rules which apply to stumpage rates or Managed Forest Law petitions.
7. Comparison of Adjacent States:
Checks with the surrounding states of Minnesota, Michigan, Iowa and Illinois indicate that while they offer some type of incentive program to forest landowners, none of the states have similar forestry practice requirements.
8. Summary of factual data and analytical methodologies
9. Analysis and supporting documentation used to determine effect on small business or in preparation of an economic impact analysis:
10. Effect on small business:
11. Agency Contact Person:
Amanda Koch - Tax Law Policy Specialist
Wisconsin Department of Natural Resources, Division of Forestry
101 South Webster Street, P.O. Box 7921, Madison, WI 53707-7921
SECTION 1. NR 46.01 is amended to read:
NR 46.01 Purpose. It is the purpose of this chapter to interpret, enforce and administer the provisions of the Wisconsin statutes pertaining to the forest croplands program, the woodland tax law program the managed forest land program, and any other tax programs concerning private forest lands.
SECTION 2. NR 46.02 (25) is amended to read:
NR46.02 (25) “Wood products” or “forest products” means those items listed on the current forest crop law stumpage values for severance tax.
SECTION 3. NR 46.03 is repealed and recreated to read:
NR46.03 Petitions or applications. The forest cropland program is no longer open for enrollment or renewal.
** NOTE TO LRB: Start of Subch. I**
SECTION 4. NR 46.08 is repealed.
SECTION 5. NR 46.09 (Note) is amended to read:
NR 46.09 Note: Forms for withdrawal must be filed by the deadline at: Bureau of Forestry, Forest Tax Section, PO Box 7963, Madison, WI 53707. Forms may be obtained at no charge by writing the same address online at dnr.wi.gov, search keyword “FCL”.
SECTION 6. NR 46.10 is created to read:
NR 46.10 Forestry practices. (1) Incomplete cutting notices. Incomplete cutting notices shall be returned.
