| (a) Adoption of the Manual for the Appraisal of Timberland.
The Comptroller of Public Accounts adopts Manual for the Appraisal of Timberland.
This document is published in booklet format by and is available from the
Comptroller of Public Accounts, Property Tax Division, P.O. Box 13528, Austin,
Texas 78711-3528.
(b) Introductory comments concerning the timber manual.
(1) In 1978, voters approved a constitutional amendment, Article
VIII, §1-d-1, permitting appraisal based on the productive capacity or
"productivity value" of timberland. The new constitutional amendment took
effect in 1979. In enacting the Property Tax Code that year, the 66th Legislature,
1979, adopted Property Tax Code, §§23.71-79, implementing §1-d-1
for land qualified for timber productivity appraisal.
(2) The Property Tax Code assigns most qualified timber
appraisal responsibilities to the chief appraiser. However, the Property Tax
Code, §23.73 and §23.75, direct the comptroller to develop a manual
for appraising qualified timber and an application form and distribute them
to appraisal districts. Property Tax Code, §23.73, also directs the comptroller
to develop procedures for verifying that land qualifies for timber use appraisal.
(3) This manual sets out both the eligibility requirements
for timberland to qualify for productivity appraisal and the methodology for
appraising qualified timberland. Appraisal districts are required by law to
follow the procedures and methodology set out in this manual.
(c) The qualification of timberland for productivity appraisal.
(1) In this manual, the word "timber" refers to standing trees
that are grown to produce commercial wood products, such as sawtimber, pulpwood,
poles, and chips. "Timberland" refers to forest land that is capable of producing
commercial wood crops.
(2) Timberland in Texas varies in many ways. A pine plantation
may have trees just over a year old, while another pine plantation may have
much older and taller trees. Hardwoods may be the only timber on one tract,
while other tracts may have pine trees or a mixture of hardwoods and pine.
In addition, soil productivity--a key determinant of timber growth--often
varies dramatically from one timber tract to another, even within the same
county.
(3) The degree of intensity with which timber producers
manage the land also differs. Some owners practice custodial care, which means
the owner does nothing to manage the land, while other owners manage their
land intensively. Timber plantations are usually managed intensively. However,
some plantation land may require little management for a few years, then need
sophisticated, intensive management for several years. For example, a timber
plantation that is between thinning activities and prescribed burning may
need little management, but final harvest and preparation for replanting require
intensive management.
(4) These variations among timber tracts and timber growing
operations make determining eligibility for timber productivity appraisal
a challenge for a chief appraiser. The chief appraiser must be familiar with
timber activities in the immediate area and the forest region of which the
appraisal district is a part.
(5) A valuable source of information about timber activity
and timberland use in the area is the "agricultural appraisal advisory board."
The Property Tax Code, §6.12, requires the chief appraiser to appoint,
with the advice and consent of the appraisal district's board of directors,
an agricultural appraisal advisory board consisting of three or more members
as determined by the board of directors. The law requires that one of the
members must be a representative of the county agricultural stabilization
and conservation service. The other members must own land in the district
that qualifies for productivity appraisal and must have been residents of
the district for at least five years. The function of this board is to advise
the chief appraiser on the valuation and use of land qualified for productivity
appraisal, including agricultural land and timberland.
(6) If chief appraisers plan to seek the advisory board's
advice on timber characteristics and timber management activities within their
respective appraisal districts, they should appoint individuals who are knowledgeable
about the area's timber.
(7) The Texas Constitution permits timber productivity
appraisal only if the property and its owner meet specific requirements defining
timber use. Land will not qualify simply because it has timber standing on
it. In addition, timberland that is used principally for aesthetic or recreational
purposes will not qualify.
(8) The Property Tax Code, §23.72, sets the standards
for determining whether land qualifies: "Land qualifies for appraisal . .
. if it is currently and actively devoted principally to production of timber
or forest products to the degree of intensity generally accepted in the area
with intent to produce income and has been devoted principally to production
of timber or forest products or to agricultural use that would qualify the
land for appraisal . . . for five of the preceding seven years."
(9) To qualify land for timber productivity appraisal,
a property owner must show the chief appraiser that the land meets the Property
Tax Code, §23.72, standard. To do so, the property owner must apply
for the appraisal and give the chief appraiser the information necessary to
determine if the land qualifies. The owner also must notify the chief appraiser
of any changes in the land's status.
(10) To qualify for timber productivity appraisal, landowners
must meet each of the following six eligibility requirements.
(A) The land must be currently and actively devoted to timber
production.
(B) The land must be used principally for timber production.
(C) The land must be devoted to timber production to the degree
of intensity generally accepted for the area.
(D) The owner must have an intent to produce income.
(E) The land must have been dedicated principally to agriculture
or timber production for any five of the preceding seven years.
(F) The property owner must file a timely and valid application
form.
(11) Timber appraisal applies only to land and its
potential for growing timber. It does not apply to improvements on land or
to minerals. If the land is qualified for timber productivity appraisal, the
timber standing on it may not be taxed separately.
(A) Improvements. Buildings and structures such as barns, sheds,
or other outbuildings must be appraised separately at market value. Fences,
however, are appurtenances and are not appraised separately. Land beneath
out-buildings and other improvements related to timber use qualifies for
the special appraisal because the owner uses it in the timber producing operation.
(B) Minerals. Oil, gas, or any hard mineral must be appraised
separately at market value.
(C) Harvested timber. Harvested timber in the owner's hands
on January 1 is personal property and taxed separately from the land.
(12) Some man-made alterations of, or additions to,
timberland are appraised as part of the land. These appurtenances to the land--canals,
water wells, roads, stock tanks, and other similar reshaping of the soil--are
included in the value of the land and are not separately appraised.
(13) Under the Property Tax Code, §23.72, land must
be "currently and actively devoted to timber use" to qualify for timber productivity
appraisal. Unlike other types of property, the land may not have visible physical
characteristics of qualification on January 1, but may still qualify. If timber
use is not evident on January 1, the chief appraiser should investigate further
to see if the owner can show that the land will be devoted to active timber
production for the calendar year for which he or she is applying, by reason
of other indications or evidence of current and active devotion.
(14) Determining if the owner is currently and actively
devoting land to timber production is often a difficult and complicated task.
Consider the following situations.
(A) The chief appraiser may not be able to see signs of activity
when a timber operation is young, even though the owner may have spent a
great deal of time, money, and effort to start the operation and is currently
and actively devoting the land to timber use.
(B) A chief appraiser may not be able to see any management
activity at the time of inspection if the owner has not harvested for some
time.
(C) The chief appraiser may not be able to find evidence of
active devotion if the size of the tract means that management activities
take place away from the roads that give the chief appraiser access to the
land.
Cont'd... |
