Característica 9. Carrera docente

Prior to 1929, all private forestland in Oregon (8 million acres) was taxed based on the value of

standing timber and the land beneath it. At the time, it was common for landowners to log old growth, and to not invest further in replanting. Lands would often revert to farm or urban uses after being logged. Some lands even reverted to county ownership, as private landowners stopped paying property taxes on logged lands that were viewed as worthless. In response to these foreclosures, the 1929 Legislature implemented an optional Forest Fee and Yield tax.

The tax applied to reforestation lands (860,000 acres) and allowed taxation on the value of timber upon the cutting of trees rather than a property tax each year as the trees grew. Forests that qualified as reforestation lands were subject to a 5 cents per acre “forest fee” annually as well as a 12.5% “Yield Tax” on the value of timber that was harvested. This system continued until it was repealed in 1977. In 1947, a Forest Products Harvest Tax was imposed per thousand board feet on all merchantable harvests from both public and private land (first 25,000 bf exempt). Under 1961 legislation, most Western Oregon land was subject to partial property tax exemption where all timber under 12’’ in diameter was exempt from property tax due to its designation as “reproduction timber.” Larger trees were placed on the property tax roll at a percentage of their immediate harvest value. In the year of harvest, the local property tax rate was applied to 70% of the value of the harvested timber. For small tracts, the Western Oregon Small Tract Optional Tax (WOSTOT) allowed small forestland owners to pay property tax on the productivity value of qualified forestland (200,000 acres). Forest land’s productivity value was categorized by site class ranked I (most productive) through V (least productive) and values were set accordingly. Eastern Oregon began a severance tax during this time, where owners paid 5% of the market value of all private timber harvested.

Beginning in 1962 (eastern Oregon) and in 1978 (western Oregon), severance taxes on timber harvest were imposed on the value of timber harvested in lieu of property tax on the value of standing timber (not applicable to forestland under WOSTOT). The 1977 Legislature repealed the Forest Fee and Yield Tax, returning the reforestation lands to the regular program phased in over the next 20 years. State collected severance taxes were distributed to local taxing districts as an offset to property taxes.

In 1991, in response to Measure 5 (1990), severance taxes were converted to privilege taxes with temporary rate reductions. The 1993 Legislature exempted standing timber from property tax, set new statutory forestland values, assessed forestland at 20% of the statutory value, reduced privilege tax rates, and completed the transition for reforestation lands. Privilege taxes were imposed in lieu of property tax on 80% of forestland value.

Under Measure 50 (1997), WOSTOT productivity values were converted to statutory forestland values and maximum assessed values were established for all forestland (see RR #6-00 for more detail). The 1999 Legislature phased in a new program for forestland in ownerships of 5,000 or more acres and the 2001 Legislature extended this program to all forestland as of 2003. Forestland was assessed at 100% of the lesser of its maximum specially assessed value or its specially assessed value as determined by the Department of Revenue (Department). Privilege taxes were repealed. The 2003 Legislature passed HB 2197, which extended the 1999 phase in for one year for ownerships of less than 5,000 acres and created an optional Small Tract Forestland (STF) program (see below). The 2005 Legislature simplified the time requirements for filers who apply for a continued classification of a parcel as STF; and clarified that unless the Tax Assessor determines that the property does not constitute forestland, a disqualified STF parcel will automatically be qualified as either Western or Eastern Oregon forestland. A $200 late filing fee was also enacted for applications for continued classification as STF parcels if the applications are filed after a 30 day notification period has ended.

Current Law

As of July 1, 2004, all forestland is subject to the Forest Products Harvest Tax and all private forestland is taxed under the Oregon Forestland program (sometimes referred to either as the 100% program or the industrial program) unless the owner elects to have qualified parcels taxed under the Small Tract Forestland (STF) program. Under the Oregon Forestland program,

value or its specially assessed value as determined by the Department. There are no privilege or severance taxes imposed at the time of harvest other than the Forest Products Harvest Tax. The Forest Products Harvest Tax Rate is established annually.

Under the STF program, forestland has an assessed value equal to 20% of the specially assessed forestland values determined by the Department. The 2014-15 values are shown in the table below. The amount of tax that is not imposed due to the 80% reduction is recovered when a severance tax is applied to harvested timber. The severance tax applies to the net volume of logs from harvested timber. The Forest Products Harvest Tax also applies to this volume. The severance tax rates for calendar year 2014 are $5.18 (Western Oregon) and $4.03 (Eastern Oregon) per 1,000 board feet harvested. These rates are indexed annually in proportion to the increase in value of forestland in the Program in each area.

For a parcel of forestland to qualify for the STF program, it must be held in common ownership of at least 10 acres but less than 5,000 acres of Oregon forestland and meet minimum stocking and species requirements. The owner must apply to the relevant county assessor(s) and the application must include all forestland owned in contiguous parcels. Assessors must disqualify forestland from the STF program if it fails to meet minimum stocking and species requirements or becomes part of an ownership of less than 10 acres or more than 5,000 acres. Disqualification from the program is subject to additional taxes equal to the tax on the 80% of value not assessed while in the program to a maximum of 10 years.

The values per acre shown in the table below are the maximum assessed values for forest land in the Oregon Forestland program (OFP) and the value limits for forest land in the Small Tract Forestland program (STF).

2014-15 Limit on Per Acre Forestland Value

Site Class by Region OFP STF Western Oregon FA _{$622.86 $123.58} FB _{$494.13 $98.06} FC _{$413.83 $81.92} FD _{$351.54 $69.83} FE _{$233.88 $45.65} FF _{$168.81 $33.54} FG _{$70.55 $13.36} FX _{$8.26 $1.30} Eastern Oregon _{$70.55 $13.36}

The historically complex distribution system for privilege taxes has been eliminated. Property taxes on forestland are treated like any other property taxes. The severance taxes under the STF program are deposited to the appropriate Eastern or Western Oregon Timber Severance Tax Fund. After payment of administrative expenses, the balance in each fund is distributed to the State School Fund (60.5%), the Community College Support Fund (4.5%) on May 1st of each year, and to the counties in either eastern or western Oregon (35%) on August 15th following the end of the fiscal year.

As noted above, the Forest Products Harvest Tax applies to harvests of merchantable timber from both publicly and privately owned forestland. The tax is levied per 1,000 board feet of timber harvested and the tax rates are set to fund various forestry related activities as listed in the table below. The activities include OSU forestry research, fire protection fund, and

Forestry. The ‘Other’ rates include $1.75 (11 months) for salmon reclamation in 1998, $0.15 for assistance to nonindustrial landowners in 2001 and 2001, and most recently, $0.10 to support Professional Forestry Education at the Oregon State College of Forestry. Rates shown for the Oregon Forest Research Institute (OFRI) are subject to change by the governing board of the institute. The statutory rate for fire suppression is $0.625 but the State Forester may suspend this rate if the balance in the Forest Land Protection Fund is estimated to exceed $15 million for a calendar year or increase the rate if additional funding is required.

FOREST PRODUCTS HARVEST TAX RATES

Year OSU Research Protection Fund Forest Practices OFRI Other

1990-91 $0.21 $0.30 $0.16 - - 1991-92 0.3 0.5 0.53 $0.31 - 1992-93 0.3 0.66 0.53 0.31 - 1993.2, 3 0.4 0.66 0.77 0.31 - 1994 0.4 0.66 0.77 0.31 - 1995 0.4 0.66 0.77 0.31 - 1996 0.5 0.5 0.6 0.51 - 1997 0.5 0.5 0.6 0.51 - 1998 0.55 0.5 0.7 0.51 $1.75 1999 0.55 0.5 0.7 0.79 - 2000 0.67 0.5 1.08 0.79 0.15 2001 0.67 - 1.08 0.79 0.15 2002 0.67 0.5 0.91 0.79 2003 0.67 0.5 0.91 0.79 2004 0.67 0.5 0.79 0.99 2005 0.67 0.5 0.79 0.89 2006 0.67 0.5 0.55 0.89 2007 0.67 0.5 0.55 0.89 2008 0.92 0.625 1.1456 0.89 2009 0.92 0.625 1.1456 0.89 2010 0.92 0.625 1.14 0.89 2011 0.92 0.625 1.14 0.89 2012 0.8739 0.625 1.2952 0.89 2013 0.8739 0.625 1.2952 0.89 2014 0.8439 0.625 0.9727 0.89 2015 0.8439 0.625 0.9727 0.89 0.10