Category Archives: Practices

Best management practices for woodland managagement

Update on Timber Property Valuation reform efforts

Jim Corum, a KWOA past president, updated the KWOA board at its November meeting on his fifteen-year effort to bring the tax valuation of Kentucky woodland properties in line with applicable legislation and case law. Don Miniard, Kentucky Farm Bureau, indicated that at the KFB committee level  has agreed to support the idea of preferable tax treatment for certified woodlands. This proposal is scheduled to be presented to the KFB board of directors on December 1. It will not require new legislation and the intent is to meet with the Revenue Cabinet to present the idea.

For background on the timber property valuation issue see the Special Edition Fall 2012 and Special Property Tax Assessment (August 2013) KWOA newsletters. Those efforts include presentations, discussions, appeals and plaintiffs with the Kentucky Department of Revenue – 2011 and 2012, Kentucky Board of Tax Appeals – 2014, Kentucky Legislature and Harlan County Circuit Court – 2015.

Hearing before Kentucky Board of Tax Appeals – 2014

Corum challenged the assessment of the family tree farm on November 18, 2014 at the Kentucky Board of Tax Appeals. The Appellant Brief challenges the Harlan County property valuation administrator’s agricultural use assessment of the Corum tree farm. The Harlan County PVA assessed the tree farm on the basis of pasture rents, not income from timber. According to the appellant, this results in two errors:  First, there is no rational relationship between the income generated by pasture land and the income generated by a tree farm. Second, pasture land yields an annual crop at a minimum whereas a tree farm operates on a 70-year cycle.

Therefore, instead of a pasture rent basis, cash rents from tree farms should be computed on the basis of a generally accepted forest industry standard measurement (the Faustmann method) which is used within the industry to value the annual growth of timber. The UK College of Agriculture has developed and published the average annual growth values of an acre of woodland based upon current market prices collected and published by the Kentucky Division of Forestry.

By the above method the tree farm’s annual growth would be multiplied by the current market price for such timber less the amount payable to the typical logger. The resulting cash rent amount (stumpage value) would be subjected to the same capitalization rate (9.2%) used for cropland and pastureland as well as a present value multiplier (.0021) to equalize the 70-year crop cycle of trees with the annual crop cycles of cropland and of pastureland.

Based on the above findings, the appellant brief requests rulings from the Board of Tax Appeals that assess the Corum property applying a timber-based process that yields an accurate agricultural use value.

Brief of Appellee, Harlan County Property Valuation Administrator, in response to the Corum appeal

Currently, forestland is classified as agricultural property. If the state provided a lower rate for forestland, it would have to also apply that lower rate to all agricultural property. The state cannot constitutionally mandate a particular valuation method. Application of the prevailing class cash rental is divided by rate of return to arrive at an assessment that is fair and “equally burdensome” to all farmers. The constitution mandates that all property shall be assessed for taxation at its fair market value. It also allows for the assessment of agricultural or horticultural land according to its value for agricultural or horticultural use. This value is based upon the income-producing capability and comparable sales of farmland purchased for farm purposes.

The brief also noted other “weaknesses” with the appellant’s argument including:

  • Assessment of properties based upon their income only is inappropriate.
  • Most tree farms conduct periodic harvests, not just one every 70 years.
  • Most woodland properties have saleable timber at the time of purchase.
  • Woodlands are used for agricultural purposes other than harvesting timber.

The appellee brief recommends that the Corums lobby the legislature to address the desire for timberland to be exempt or nearly exempt from ad valorem property taxation. It recommends denial of the appeal and sets a fair cash value for the subject property based on the above findings.

At the November board meeting Corum again referenced a 1984 Kentucky Supreme Court case Doland v. Land that concluded the current PVA method made no adjustments for the characteristics of individual farms and therefore did not result in an equal tax burden:

“The method employed by the Fayette County PVA in assessing agricultural lands did not achieve the result required by Section 172A of the Kentucky Constitution in that it did not result in an equal tax burden.”

“There is a violation of constitutional rights if the effective tax rate is not uniform and thereby results in an unequal tax burden. Any method of assessment which fails to follow the constitutional directions and accordingly does not produce an assessed value based on agricultural use of each individual parcel, violates the constitution.”

Corum’s on-going appeal regarding property assessment is based on a lack of constitutional appropriateness regarding the disparity in application of property assessment criteria. For example, as a percentage of net income, woodland owners pay 15.6 percent of net income compared to 3 percent for corn farmers. The current assessment has economic implications for landowners regarding forestland as an investment given the carrying cost of the tax burden.

EPA, USDA and DOE will encourage the use of biomass as an energy solution

In a letter to Congress EPA, USDA, and DOE will encourage the use of biomass as an energy solution.

Labeling wood burning as environmentally friendly is at odds with environmental groups and some scientists, who say that the process releases all of the carbon dioxide that the trees had previously removed from the atmosphere and may endanger forest biodiversity.

To read more….

Nature and humans, not forest management, blamed for California’s devastating wildfires

Despite President Donald Trump’s claims, fire scientists say nature provides the dangerous winds that have whipped the fires, and human-caused climate change over the long haul is killing and drying the shrubs and trees that provide the fuel.

Read more for why scientists know that management isn’t to blame according to Associated Press  science writer Seth Borenstein.

 

A CASE OF TIMBER THEFT IN KENTUCKY

Editor note to timber theft article

Editor’s note:  The following article is submitted by KWOA member Ed Sheehan. Although the owners do not live on the property in western Kentucky where the timber theft occurred, they had a boundary survey on file and immediately gathered extensive documentation regarding the theft that expedited prosecution of the thief. However, an unexpected action on the defendant’s part may have extended the prosecution for quite some time. Updates on this situation will be added as they become available.

Further information on Timber Theft and Trespass is available from the Kentucky Division of Forestry:

http://forestry.ky.gov/LandownerServices/Pages/TimberTheftandTrespass.aspx

And the UK Forestry Extension:  http://forestry.ca.uky.edu/trespass_theft

 

My wife and I have owned 20+ acres in Kentucky since 2010. The property was surveyed in 2010 and was only partially fenced.  In January, 2018 we found a freshly cut area on the back side of the property.  Someone had stolen multiple trees and damaged several more.  The damage trail led all the way to a neighbor’s property and we could see a logging truck loaded with fresh timber.  Aha, caught red-handed!

I immediately contacted the Kentucky Division of Forestry who informed me they could not help me and suggested I call the county sheriff. I called the county sheriff and he told me to call the police department, which I did. The police officer informed me that it was a civil matter and I would have to hire lawyer.  So, no one would come out to file a report!

I then contacted two lawyers. The first lawyer said he was too busy and gave me the name of another lawyer.

I was determined to fight for my property and this is the process I followed.

In February 2018 I hired a surveyor, at a cost of $1,100.00, to survey the unfenced area of my property and stake it for fencing.

In March 2018 I hired a forestry consultant for an estimate of damages.  I was also given a restitution estimate of $10,332.00 and $450.00 for erosion control cost. The cost for the estimate, documentation and photos was $250.00.

I contacted the second lawyer and was told he charged 1/3 of the settlement and 1/3 of $10,332.00 was not worth his time.  So, I wasn’t getting any help anywhere!

When I compiled all my information concerning the timber theft, I visited the county attorney’s office and completed a COMPLAINT INFORMATION FORM. I presented the completed form and my folder of documentation to the county attorney. I was informed that they did not have much luck in winning these cases. So, it looked like another turn down!

Then she looked at my documentation.  I believe my thorough file (containing the property survey, loss and damage estimates, and photos of tree stumps, damaged trees, and trails of the loggers) helped to change her mind rather quickly as it only took about 15 to 20 minutes for them to decide to take action.

I was informed that the penalty of three times the value of the timber could not be applied in this situation or any damages to property because that would require a civil suit.  I was just relieved that the prosecutor was going to prosecute the thief and bring attention to the situation.  We were on our way!

When we went to court in June 2018, I was surprised to be informed before the hearing began that the defendant had agreed to reimburse me $3,000.00 (this was the cost of the stolen trees per the forestry consultant) per an agreement between the defendant and the prosecutor.  The defendant agreed to this in order to keep from being charged with a felony and the money would be paid in three monthly payments. After to agreeing to the settlement, the Defendant paid $1,000.00 to me and then changed his mind and decided not to pay the remaining $2,000.00.  He has been indicted by the county prosecutor and we are awaiting a court date.

Things must change.

Timber theft is a big problem in Kentucky and counties do not have the resources to investigate these thefts.  I believe we landowners need a process to follow and I have some suggestions.

  • The police should be required to come out and complete a written report to the land owner. The officer does not need to know the value of the timber or be certain of the boundary lines. The report only needs to list the number of trees or the approximate acreage involved. This is to be included in the folder of documentation.
  • The landowner can then contact a surveyor to confirm the boundary lines if the landowner needs an updated survey. The original or updated survey is to be included in the folder of documentation.
  • The land owner could then hire a forestry consultant for an estimate of the stolen and damaged trees along with any damages to the property which will require seeding. This is to be included in the folder of documentation.
  • Take photos of tree stumps, damaged trees, trails of the loggers and anything else that applies. This is to be included in the folder of documentation.
  • All documentation can then be turned over to the county prosecutor for necessary action.

I believe the most important part of this process is the police report. The police report states that a crime (theft and property damage) has occurred. This report should be added to state statistics concerning timber theft. This gives a more accurate representation of timber thefts occurring in the state. Without statistics, it is not recognized as a problem and no action will be taken. The landowner needs to work with the police department because this documentation is necessary when contacting the prosecutor.

Timber thieves must be held accountable and doing so will help to reduce the temptation of stealing others property. Landowners really need to work with county prosecutors to lessen timber thefts and reduce the financial burdens they must endure.

Gov. Bevin Makes Appointments to Kentucky Forestry Best Management Practice Board

Media Contact: Nicole Burton

FRANKFORT, Ky. (Aug. 1, 2018) – Gov. Matt Bevin has made the following appointments to Kentucky Boards and Commissions:

Jack Stickney, Christopher Scott and Jeffrey Stringer have been appointed to the Forestry Best Management Practices Board.

  • Jack Stickney, of Irvine, is a farmer and senior geologist for the Kentucky Rural Water Association. He will represent at-large woodland owners and serve for a term expiring April 22, 2022. Jack is a KWOA board member.
  • Christopher Scott, of Bowling Green, is a forest ranger technician with the Kentucky Division of Forestry. He will represent the Kentucky Division of Forestry and serve for a term expiring April 22, 2019.
  • Dr. Jeffrey Stringer, of Lexington, is a professor at the University of Kentucky. He will represent the UK Department of Forestry and serve for a term expiring April 22, 2022.

The Forestry Best Management Practices Board updates Kentucky’s forest practice guidelines for water quality management and the Division of Forestry’s administrative regulations regarding timber harvesting operations.

Also serving on the board are Portia Brown, KWOA vice president, Harry Pelle and Lyndle Barnes, KWOA board members.

Cooperative Forestry Act Celebrates 40 Years of Helping Private Forest Owners

Posted by Joyce El Kouarti, Office of Communication, USDA Forest Service in Forestry

Jun 28, 2018

The Cooperative Forestry Assistance Act of 1978 empowered the USDA Forest Service to partner with state forestry agencies to provide technical forest management assistance to landowners. Today the Forest Service Cooperative Forestry programs, created through the Act, help individual and family forest owners balance timber management with the conservation of water quality, fish and wildlife habitat, wildfire management, and opportunities for outdoor recreation. To learn more about the Forest Legacy, Landscape Restoration, and Urban and Community Forestry programs go to:

https://www.usda.gov/media/blog/2018/06/28/cooperative-forestry-act-celebrates-40-years-helping-private-forest-owners

Single Oak Project at Buffalo Trace Distillery focuses on oak wood

The Single Oak Project displays the culmination of an eight year study of, among other factors, the effect of different types of oak wood on the final bourbon product.

Started in 1999 the experiment individually selected 96 American oak trees that differed according to grain size (tight, average or coarse based on growth rings per inch) and growing location. A single barrel was constructed from the top and bottom each tree with various stave seasonings and charrings. These single oak barrels were then filled with different recipe whiskeys, at various entry proofs and aged in a variety of different warehouse styles. All of the single Oak Project bourbons were aged for eight years.

“Happiness is having a rare steak, a bottle of whisky, and a dog to eat the rare steak.” —Johnny Carson

This experiment allows whiskey connoisseurs to directly compare the impact of seven different critical variables across 192 bottles for a total of 1,396 taste combinations. The Single Oak Project is undoubtedly the most extensive bourbon experiment ever undertaken.

And the winner is …

The winning bourbon from Barrel #80 was a rye recipe bourbon, entered into a barrel made from oak harvested from the bottom half of the tree with staves seasoned for 12 months. The grain size of the wood was considered average and the barrel received a number four char inside. The whiskey entered the barrel at 125 proof and was aged in a concrete floor warehouse.

For more information:  www.singleoakproject.com

 

Legislative Alert: A NEW Challenge to Forest Health and State Focused Funding

A set of bipartisan bills introduced in the US House and Senate as Empowering State Forestry to Improve Forest Health of 2018 which aim to “fix” the problem of proposed budgets from the US Forest Service that reduce funding to state based initiatives.

Empowering State Forestry to Improve Forest Health Act of 2018

KWOA members are encouraged to contact federal legislators to request their support for the bills.

New Challenge to Forest Health

A message to new woodland owners

Thank you for your interest in being good stewards of your newly acquired woodlands. Kentucky Woodland Owners Association (KWOA) is an all-volunteer affiliate of the National Woodland Owners Association (NWOA); as such, we are a great resource for the journey of learning about and practicing sustainable woodland management. Field days, short courses, annual meetings, and other events help woodland owners learn about programs and resources to help them achieve their goals. KWOA advocates for public policies that promote sound management practices.

As you may have seen on our website (www.KWOA.net ), the 2018 KWOA Annual Meeting is just around the corner on March 20-21 at General Butler State Park. This is a great opportunity to network with some fellow woodland owners and learn more.

In addition to the annual meeting, KWOA supports and promotes other educational programs such as the Woodland Owners Short Course, Tree Farmer Field Days, Master Woodland Steward Program and others. In fact the 2016 Tree Farmer of the Year for Kentucky is Jack Stickney, a KWOA board member. Jack & Teresa Stickney just hosted the Annual Tree Farm Field Day in October 2017 on their farm in Estill County!

We send out hard copy newsletters quarterly. We are also in the process of developing a Mail Chimp email function to alert members to more time sensitive issues or opportunities as they arise. Available resources vary over time, by region and by practice focus, so there is not a specific program that meets everyone’s needs all the time.

You can join KWOA online http://kwoa.net/join.htm or print & mail in a hardcopy form. We hope you will join KWOA and attend some of the 2018 woodland owners’ events. Most importantly, you can help us carry the message that sustainable management practices create healthy forests that provide long term economic and environmental benefits to the larger community.