Senate Bill No. 370
(By Senators Snyder and Fanning)
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[Introduced January 29, 1999; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
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A BILL to repeal sections eleven-a and eleven-b, article one-c,
chapter eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to repeal section five-a,
article three of said chapter; and to amend and reenact
sections two and eleven, article one-c of said chapter, all
relating to taxation of real property; providing for
inspection of managed timberland; and removing definitions.
Be it enacted by the Legislature of West Virginia:
That sections eleven-a and eleven-b, article one-c, chapter
eleven of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be repealed; that section five-a, article
three of said chapter be repealed; and that sections two and
eleven, article one-c of said chapter be amended and reenacted, all
to read as follows:
ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.
§11-1C-2. Definitions.
For the purposes of this article, the following words shall
have the meanings hereafter ascribed to them unless the context
clearly indicates otherwise:
(a) "Timberland" means any surface real property except farm
woodlots of not less than ten contiguous acres which is primarily
in forest and which, in consideration of their size, has sufficient
numbers of commercially valuable species of trees to constitute at
least forty percent normal stocking of forest trees which are well
distributed over the growing site.
(b) "Managed timberland" means surface real property, except
farm woodlots, of not less than ten contiguous acres which is
devoted primarily to forest use and which, in consideration of
their size, has sufficient numbers of commercially valuable species
of trees to constitute at least forty percent normal stocking of
forest trees which are well distributed over the growing site, and
that is managed pursuant to a plan provided for in section ten of
this article.
(c) "Tax commissioner", "commissioner" or "tax department"
means the state tax commissioner or a designee of the state tax commissioner.
(d) "Valuation commission" or "commission" means the
commission created in section three of this article.
(e) "County board of education" or "board" means the duly
elected board of education of each county.
(f) "Farm woodlot" means that portion of a farm in timber but
may not include land used primarily for the growing of timber for
commercial purposes except that Christmas trees, or nursery stock
and woodland products, such as nuts or fruits harvested for human
consumption, shall be considered farm products and not timber
products.
(g) "Owner" means the person who is possessed of the freehold,
whether in fee or for life. A person seized or entitled in fee
subject to a mortgage or deed of trust securing a debt or liability
is deemed the owner until the mortgagee or trust takes possession,
after which such mortgagee or trustee shall be deemed the owner.
A person who has an equitable estate of freehold, or is a purchaser
of a freehold estate who is in possession before transfer of legal
title is also deemed the owner.
The definitions in subdivisions (f) and (g) of this section
shall apply to tax years beginning on or after the first day of
January, one thousand nine hundred ninety-nine.
§11-1C-11. Managed timberland.
(a) The Legislature finds and declares that the public welfare
is enhanced by encouraging and sustaining the abundance of high
quality forest land within the state; that economic pressures may
force industrial, residential or other land development
inconsistent with sustaining the forests; and that tax policy
should provide an incentive for private owners of forest land to
preserve the character and use of land as forest land and to make
management decisions which enhance the quality of the future
forest.
(b) In exercising the authority granted by the provisions of
section fifty-three, article VI of the constitution of West
Virginia, the Legislature makes the following declarations of its
intent:
(1) Notwithstanding the provisions of section twenty-four,
article three of this chapter, timberland certified by the division
of forestry as managed timberland shall be valued as managed
timberland as provided in this article when it is managed under a
cooperative contract with the division of forestry and the
certification has not been surrendered by the owner of the property
or revoked by the director of the division of forestry.
The division of forestry shall, at the time of contracting, notify the owner that the owner shall incur a penalty as set forth
in section five-a, article three of this chapter if the owner fails
to provide written notice to the county assessor of a change in use
of the managed timberland.
(2) Property certified as managed timberland which prior to
certification is properly taxed in Class II, as defined in section
five, article eight of this chapter and section one, article X of
the constitution of West Virginia, may not be reclassified to Class
III or Class IV, as defined in section five, article eight of this
chapter, merely because the property is certified as managed
timberland unless there is some other event or change in the use of
the property that disqualifies it from being taxed in Class II.
(c) To aid the Legislature in assessing the impact of the
managed timberland program on the state of West Virginia, the
division of forestry and the tax commissioner, on or before the
thirty-first day of December, two thousand one, and on the
thirty-first day of December each year thereafter, shall report in
writing to the joint committee on government and finance of the
Legislature or its designated subcommittee. The tax commissioner
shall include in his or her report a complete and accurate
assessment of the impact of the managed timberland program on the
tax collections of the state, including projected increases or decreases in tax collection. The division of forestry shall
include in its report detailed information on the number of acres
designated as managed timberland and any identified impacts of the
program on the state's timber industry.
Upon request of state, county or other taxing authorities or
appropriate jurisdiction, the division of forestry shall inspect
property under contract as managed timberland and determine whether
or not such properties do qualify. In the event that a property is
found not to qualify by reason of a change in use, or it is
discovered that a material misstatement of fact was made by the
owner in the certification required in subdivision one, subsection
d, section ten of this article, the division of forestry shall
notify the state tax commissioner that the property is disqualified
from its identification as managed timberland.
NOTE: The purpose of this bill is to repeal the changes made
to the method of certification and valuation of managed timberland.
Under current law managed timberland is appraised on a discounted
cash flow model. The bill removes this preferential property tax
treatment and appraises managed timberland based on market value.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.