Timberland Tax Reform Heads to November General Election Ballot

Governor Nathan Deal recently signed House Resolution 51, a constitutional amendment, and House Bill 85, its enabling legislation, into law, which is the most significant update to the ad valorem tax system in more than 10 years. Now, voters will be asked to approve the constitutional amendment on the November general election ballot.

Given the lengthy interval between harvests, taxes are a significant carrying cost that have a notable affect on the potential profit from a timberland investment. So for several decades, the Georgia Forestry Association (GFA) has led the discussion of timberland ad valorem taxes in Georgia. We have raised awareness of the issues, helped passed keystone constitutional amendments and legislation to establish CUVA (current use valuation assessment) and FLPA (forestland protection act). 

This year, the Association’s primary focus during the 2018 Legislative Session was to pass House Resolution 51, a constitutional amendment, and House Bill 85, its accompanying enabling legislation. Together, the legislation creates a more uniform, fair market valuation of timberland for ad valorem taxation purposes. 

Key Provisions of HR 51 and HB 85

The highlights of of HR 51 and HB 85, sponsored and championed by Representative Jay Powell (R-Camilla), Chair of the House Ways & Means Committee, include:

  1. Establishing 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.
  2. Reducing 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.
  3. Adjusting 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.

We need your help! 

As a constitutional amendment, this legislation must be approved by Georgia voters on the November general election ballot. We need your help in getting the bill approved! If you would like to sign up to receive regular updates and action alerts, please add your email address and click “subscribe”.