ATLANTA May 18, 2018
Governor Nathan Deal recently signed a key piece of timberland tax reform legislation, a big step in providing tax equity for the 450,000 private forest landowners across the state. House Resolution 51, a constitutional amendment, and House Bill 85, its enabling legislation, are aimed at creating a more uniform, fair market valuation of timberland for ad valorem taxation purposes. The legislation will be included as a referendum on the November ballot.
“Georgia’s working forests generate significant economic investment in our local communities due to the contributions of those who replenish and protect our natural resources. This legislation supports our timber growers and lessens the economic burden of producing quality products that sustain numerous industries, from construction to manufacturing,” Governor Nathan Deal said.
If approved by Georgia voters, the legislation will be the most significant update to the ad valorem tax law since the passage of the Forest Land Protection Act in 2008. House Ways & Means Chairman Rep. Jay Powell (R-Camilla) was the primary sponsor of the bill.
“Our private forest owners are consistently supporting our state’s economy and environment, using their own resources,” Rep. Powell said. “This legislation helps to address several issues in the conservation use assessment of timberland to create a fair system for forest landowners while maintaining funding for counties throughout the state.”
Major provisions of the legislation include:
- Established a new class of land titled “Qualified Timberland Property”
Provides landowners with the opportunity for their land to be assessed at fair market value as determined by the Department of Revenue (rather than county tax assessors). To qualify, the land must be a minimum of 50 acres and the land must be managed for producing commercial timber. Qualified landowners will not be required to sign a covenant, but they are required to file an annual return to maintain their status.
- Reduced the FLPA covenant length and property size requirement
Currently, land enrolled in FLPA must be 200 continuous acres and landowners must sign a 15-year covenant. Under the new legislation, an aggregate of 200 acres across the state may qualify (if parcels exceed 100 acres in any given county) and the covenant length is reduced to 10 years.
- Adjusted the FLPA formula used in calculating local assistance grants to counties
The current formula establishes fair market value (FMV) on 2008 base-year, which has resulted in over and under payments to counties. The new legislation will update the FMV base to the current year. To reduce the impact on counties that lose funding, a 5-year phase-in will be put in place to help smooth the transition.
“For more than 100 years, the Georgia Forestry Association has been instrumental in timber tax legislation, which has positioned the state as a global leader in forestry,” Georgia Forestry Association President and CEO Andres Villegas said. “Thanks to the leadership of our elected officials and Governor Deal, we can, once again, ensure that our tax policy supports the growth and vitality of our working forests and the communities that depend on them.”
Following Governor Deal’s approval, the constitutional amendment will appear on the general election ballot on November 6, 2018. For more information on the bill, visit: gfagrow.org.