Forest Land Protection Act

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Forest Land Protection Act
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Forest Land Protection Act

• Georgia Forest Land Protection Act of 2008
• HR 1276 created a new class of property known as
  Forest Land Conservation Use Property

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Terms Defined in Regulations

• Application (a)
• Contiguous (b)
• Department (c)
• FLPA (d)
• Forest Land (e)
• Good Faith Subsistence (f)
• Local Board of Assessors (g)

• Notice of Breach (h)
• Permissible Breach (i)
• Primary Use (j)
• QFLP (k)
• QFLP Covenant (l)
• Secondary Use (m)

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Forest Land Protection Act

• BOA will now have 3 separate values to track for
  properties entered into this covenant
• Each will be discussed later
• Forest Land Fair Market Value
• Legislated FMV based on 2008 FMV adjusted by
  indexes
• True Fair Market Value
• True-Blue old fashioned FMV (based on sales)
• Forest Land Conservation Use Value
• Woodland values of the old trusty conservation
  use values

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Forest Land Protection Act

• Defines Forest Land Fair Market Value
• New digest class F
• Used in the calculation of the amount of
  assistance grants the state will pay to reimburse
  revenue lost.

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FLPA

• New digest code J will be used to identify the
  true-blue fair market value.
• Used in the calculation of any penalties
  resulting from a breach

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48-5-2Forest Land Conservation Value

• Forest land conservation value of forest land
  conservation use property means the amount
  determined in accordance with 48-5-271
• 271 values same as CUV forest land values with
  same 3 limit.

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48-5-2Forest Land Fair Market Value

• Forest land fair market value 2008 FMV of the
  forest land.
• 2008 valuation may increase from one taxable year
  to the next
• Rate of increase equal to the percentage change
  in the price index
• Index from US Government report
• Gross output of state and local government from
  the prior year to the current year as defined by
  the US Bureau of Economic Analysis and indicated
  by the Price Index for Government Consumption
  Expenditures and General Government Gross Output
  (Table 3.10.4)

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FL Fair Market Value (cont)

• US index
• DOR will annually publish index and make
  available for counties beginning in 2010 there
  is no index for 2009

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FL Fair Market Value Simplified

• 2008 Fair Market value
• Value may increase the amount of the index
• 2009 FL FMV is 2008 FMV (Base Value)
• 2010 FL FMV is either
• 2009 FL FMV index
• 2009 FL FMV no adjustment

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Value Examples

• 2010 True FMV (J) 200,000
• 2010 FL FMV(F) 154,770
• (2008 base US index)
• 2010 CU value 48,500
• 48-5-271 (limited to 3 annually)
• Penalty calcs between 200,000 vs 48,500
• Grant calcs between 154,770 vs 48,500

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FL FMV Examples
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FL FMV Examples

• Covenant begins in digest year 2011
• FL FMV is 2008 Base FMV

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QFLP Qualifications Synopsis

• BOA is responsible for approving applications
• At least 50 of the tract must be used for a
  qualifying purpose
• Portion not in qualifying use must meet certain
  criteria so as not to breach the covenant
• Covenant is Jan 1 of year filed, provided
  owner(s) sign and return Covenant to BOA in year
  of application

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48-5-7.7(b)(1)

• Forest land conservation use property means
  forest land - more than 200 acres
• Excludes improvements

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Primary Uses

• Good faith subsistence or commercial production
  from or on the land of
• Trees
• Timber
• Other wood and wood fiber products

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Secondary Uses

• May include one or more
• Wildlife habitat
• Carbon sequestration
• Mitigation and conservation banking
• Ecosystem products and services

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Other Primary Uses

• Certified Environmentally Sensitive
• May be managed in accordance with a sustainable
  forestry certification program

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FLPA Additional Rules

• When one-half or more is used for the qualifying
  purpose, tract shall be qualified UNLESS some
  other type of business is operated on the tract
  and provided the rest of the tract is managed to
  avoid erosion

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FLPA Additional Rules

• The lease of hunting rights or the use of
  property for hunting purposes shall not
  constitute another type of business

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FLPA Additional Rules

• The charging of admission for use of property for
  fishing purposes shall not constitute another
  type of business.

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FLPA Additional Rules

• The production of pine straw shall not constitute
  another type of business.

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FLPA Additional Rules

• 15 Year Covenants
• Owners allowed a one-time opportunity to change
  property from a preferential or conservation use
  covenants
• One time Any Time

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CUV to FLPA All or None

• Original Covenant 500 acres
• Year 3, 230 acres sold and continued
• Both 230 acre 270 acre tract must both go or
  none go

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FLPA Additional Rules

• All or part of the property may be transferred to
  a new owner qualified to enter into an original
  forest land conservation use covenant
• If transfer results in tract being 200 acres or
  less the property can continue in current
  covenant but cant be renewed unless additional
  acreage is added to meet the 200 acre minimum

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Tracts in Multiple Counties

• Applicant must enter into a single QFLP Covenant
  for the entire contiguous tract(s)
• Covenant must be approved and recorded in each
  county where contiguous tracts are located

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Tracts in Multiple Counties

• If any of the counties deny an application, any
  portions of the tract that are approved, may
  still be eligible provided
• Remaining portion meets minimum qualifications of
  48-5-7.7 and DOR regulations
• Covenant is signed by all owners and appropriate
  BOA(s)
• Covenant is recorded in countys real property
  index

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Covenant Effective Date

• Covenant shall be effective upon
• County signing Covenant
• County recording Covenant
• Provided application is properly filed

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Covenant Effective Date

• Upon approval of application, owner(s) of record
  shall have until the end of calendar year to have
  all owner(s) sign the Covenant and submit to BOA
  in the county where the application was approved

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Deadline for filing applications

• 2009
• June 1
• May also be filed in conjunction with or in lieu
  of an appeal
• 2010
• Deadline for filing returns
• May also be filed in conjunction with or in lieu
  of an appeal

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Withdrawal of Applications

• Regs 560-11-11-.02 Page 216
• Applicant has 30 days from regs effective date
  to provide written notification to withdraw or
  amend their application.
• If 30 day period lands or holiday or weekend the
  notice must be post marked no later than the
  first day following holiday or weekend.

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FLPA

• Denial of applications require notice per
  48-5-306
• Owners may file Appeals per 48-5-311

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Appeals to Denial

• IF
• an appeal is not resolved until the subsequent
  year
• the applicant receives a favorable decision
• Applicant
• is entitled to benefits of QFLP Covenant
  beginning in the year application
• has until end of calendar year to satisfy all
  owners signature requirement

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Application Requirements

• All applicants shall include with their
  application
• A plat of the tract
• A legal description of the tract
• If plat or legal description is contested by
  county, county has burden to prove its assertion
  that item is deficient

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BOA Approve or Deny Applications

• BOA has 120 days to approve or deny
• Upon approval, BOA must notify applicant within
  30 days of decision
• Upon denial, BOA must notify pursuant to 48-5-306
• Fees must be returned to applicant within 30 days
  of denial.

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QFLP Covenant

• Shall be one (1) QFLP Covenant for all contiguous
  tracts
• Must be signed by all owners
• Effective Jan 1 in year of application and
  Covenant signed by all parties
• Applicant receiving favorable ruling in appeal
  still receives benefit starting in year of
  application irrespective of the date appeal is
  resolved.

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QFLP Covenant

• Covenants not signed by all required parties in
  the same year as application approval will expire
  on Dec 31 of that year.
• Owners must submit new application for QFLP
  designation
• If applicant receives approval in December
  applicant has until January 31 of following
  calendar year to obtain all required signatures.

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QFLP Covenant

• QFLP Covenant and benefits shall not extend to
  any portion of the tract not properly signed and
  recorded
• Responsibility for signatures and recording in
  EVERY county lies with the applicant.

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FLPA Approvals

• Annual Notification of any change in forest land
  fair market value or True-Blue FMV (48-5-306)
• Appeals of changes pursuant to 48-5-311

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Notice of Breach

• Notice of breach sent within 30 days from date
  breach is reported or discovered to
• All owners of record
• Local BOA(s) in every county where QFLP is located

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Notice of Breach

• Contents of Notice
• Location of breach
• Date the breach was reported or discovered
• Explanation of the breach
• Whether remedy is remediation of cease and desist
• Date remedy must be completed
• Penalty for failure to remedy or cease

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Notice of Breach

• Thirty (30) day period for remedy begins when
  owner receives Notice of Breach that complies
  with DOR regulations

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Inspection of QFLP Breach

• BOA has 45 days, starting first after owners 30
  days to remedy or cease, to physically inspect
  property to determine if remedy or cease has been
  completed.

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Release of Covenant

• Owner must file application for release within 60
  days
• BOA has 15 days to release covenant
• BOA has another 15 days to notify owner
• BOA must also notify Superior Court within 15
  days of decision to accept application for
  release.

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Forest Land Protection Act

• Penalty for Breach of Covenant
• Savings x factor
• Savings difference between true blue FMV
  taxes and FL CUV taxes
• 30 days to cure
• Penalty paid by party causing the breach

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Forest Land Protection Act

• Penalty for Breach of Covenant
• Year 1 5
• 3 x total savings (True FMV vs CUV)
• Year 6 10
• 2.5 x total savings (True FMV vs CUV)
• Year 11 15
• 2 x total savings (True FMV vs CUV)
• Interest of 1 per month accrues from the date of
  the breach

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FLPA Allowed w/o Breach

• Up to 25 acres sold or given to Church or
  Charitable entity under 48-5-41
• Property must be used for church or charitable
  purpose
• Entity cannot transfer until end of covenant
  period

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FLPA Allowed w/o Breach

• Lease up to 6 acres of every 2,000 acres for a
  cellular telephone transmission tower
• Acreage used is removed from covenant and
  appraised at FMV accordingto its use.

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FLPA Allowed w/o Breach

• Mineral Exploration
• Property lying fallow or idledue to
• Conservation programs
• Federal Ag assistance programs
• Health / Economic hardships(requires owner
  notice to BOA)
• Economic 2 out of any 5 yrs

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FLPA Breach w/ 1 Year Recapture

• Foreclosure
• Transfer in lieu of foreclosure
• Medically demonstrable illness of owner which
  renders the qualified owner of the property
  physically unable to continue the property in the
  qualifying use

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FLPA Breach w/ 1 Year Recapture

• Owner is 65 years old or older
• Has completed 3 years of renewal contract
• DOR opinion non-individual owners are considered
  ageless

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FLPA Breach w/ 1 Year Recapture

• Owner is 67 or older when entered covenant for
  the first time
• Has completed 3 years of covenant
• Has owned property for 15 years or inherited
  property

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FLPA New Digest Codes

• F Forest Land Assistance Grant Value
• 2008 base value any index adjustments
• J Forest Land Conservation Use Value
• BOA Fair Market Value
• SJ Exemption Amount difference of the 40
  Assessment (J property) and the Current Use
  Assessment

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Forest Land Protection Act

• Public notice posted in prominent location by
• tax commissioner
• board of assessors
• Rules Regulations will be issued by DOR
• Update Taxpayer Brochure

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Forest Land Protection Act

• New Code Section O.C.G.A. 48-5-271 provides
  method for establishing annual table of value
• Values for forest land conservation use property
  will be the same values that are applied to
  conservation use property for timber land
• Limited to 3 change annually

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Conservation Use Soil Conversion Table
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Forest Land Protection Act

• New chapter to Title 48 to be known as Chapter
  5A
• implement the forest land conservation use
  assistance grants
• To counties, municipalities, and school districts
• 48-5A-1 provides definitions
• 48-5A-2 provides for General Assembly to fund the
  program

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FLPA

• If property entered into this program causes a
  reduction in the ad valorem tax revenue,
  assistance grants will be paid to the taxing
  jurisdiction as follows
• Reimbursement of 50 of the first 3
• 100 of the amount over 3

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48-5A-3

• Grant will be paid based on difference between
  the forest land fair market value and the forest
  land conservation use value

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FOREST LAND PROTECTION ACTDigest Submission -
2009
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Tax Assessor

• Approve/Deny FLPA Covenants
• Classify and Stratify property
• Determine value
• 1. Fair Market Value
• 2. Forest Land Fair Market Value
• 3. Conservation Use Value
• Produce various certifications and reports

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No Buildings
No Buildings
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• STATE EXEMPTION CODES
• SP Personal Property valued less than 7500
• SF Freeport
• ST Residential Transitional
• SH Landmark/Rehabilitated Historic
• SA Preferential
• SV Conservation Use
• SB Brownfield
• SJ Forest Land Conservation
• SW Environmentally Sensitive

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New Digest Submission Reports
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REASON CODES LISTCounty should establish a code
for FLPAReason must not be INFLATIONARY
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CHANGE OF ASSESSMENT LISTSPrevious BTA value vs
Current BTA value
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INFLATIONARY GROWTHWill not include property
entered into FLPA
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PENDING APPEALS LISTS40 BTA (J) FMV vs. 40
Taxpayer Return
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Tax Commissioner

• Consolidation sheets and worksheet
• Forward adjusted digest amounts (PT32.1A
  worksheets) to Board of Commissioners and School
  Board
• Certify and Submit digest to DOR
• Bill Taxpayers
• Request FLPA Assistance Grant

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TAXPAYER BROCHURE
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Board of Assessors
2008 Factor
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Digest totals do not include FLPA FM Asmt
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FLPA Reimbursement Value
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State Forest Land Assistance Grant Value
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Tax Bills

• Taxpayers bill will be based on forestland
  conservation use value
• FMV Assessent (J) less SJ taxable value
• Taxable value mill rate tax bill

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FLPA Assistance Grant only applies to certain
levies

• 48-5A-1. any millage levied for those special
  districts reported on the 2004 ad valorem tax
  digest certified to and received by the
  commissioner on or before December 31, 2004, but
  not including any millage levied for purposes of
  bonded indebtedness .  

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PT-77 FLCUVA Reimbursement

• Must be accompanied by
• PT-32.1A
• FLPA Revenue Reduction Calculation Worksheet
• PT-35 PT-38
• Millage Rate Certification forms
• PT-77A
• Adjustments from prior years, if applicable

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DOR sends assistance grant to County Tax
Commissioner

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Forms for FLPA

• Application and Questionnaire
• Covenant (as shown in Regs)
• Notice of Breach (as shown in Regs)
• Application for Release (as shown in Regs)

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