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Adoption of the Manual for the Appraisal of Timberland. This manual sets out both the eligibility requirements for timberland to qualify for productivity appraisal and the methodology for appraising qualified timberland and restricted use timberland. Appraisal districts are required by law to follow the procedures and methodology set out in this manual. The Comptroller of Public Accounts adopts by reference the Manual for the Appraisal of Timberland. Copies of this manual can be obtained from the Comptroller of Public Accounts, Property Tax Division, P.O. Box 13528, Austin, Texas 78711-3528. Copies may also be requested by calling our toll-free number 1-800-252-9121. In Austin, call (512) 305-9999. From a Telecommunications Device for the Deaf (TDD), call 1-800-248-4099, toll free. In Austin, the local TDD number is (512) 463-4621. This manual and those that have been superseded are available from the Comptroller's office as well as the State Archives. [(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.] [(15)However, the absence of visible physical timber activities on the land does not mean that the land is not currently and actively devoted to timber production. The chief appraiser should look for other indications of current and active devotion. The following are some indications of current, active devotion.] [(A)Timber activity records. Is the owner able to produce records showing timber management activity? Some records that show timber management activity are documents showing the timber has been harvested, canceled checks for services, contracts of sale, and land leases.] [(B)Forest management plan. The owner operates under a current, written forest management plan. A forest management plan must be developed for the present time. An outdated plan is of no use as a management document. The plan also should be in writing and signed by the individual who prepared it. However, the existence of a current management plan does not always mean the owner is following the plan. The owner should be able to show that he or she is using or intends to use the plan for timber production. Knowledgeable timberland owners may prepare their own plans. If the owner of a marginal tract cannot afford a privately developed forest management plan, is on a waiting list to have a plan developed by a public agency, or lacks the expertise to develop his or her own plan, the chief appraiser should look for other evidence of current and active devotion.] [(C)Timber cost-sharing programs. The owner receives Texas Reforestation Foundation (TRe), Forestry Incentive Program (FIP), Agricultural Conservation Program (ACP) or Stewardship Incentive Program (SIP) cost sharing funds for reforestation and timber stand improvement. The Texas Forest Service coordinates the federal FIP, ACP and SIP programs. TRe is a privately funded cost-sharing program.] [(D)Efforts to sell timber. The owner has letters or other documents showing efforts to sell the timber.] [(E)Salvage activity. The owner has documentation showing that he or she has attempted to salvage damaged or dead timber that continues to have value.] [(F)Registered tree farm. A registered tree farm is privately owned, protected, and managed timberland. Timberland must meet several qualifications for certification as a registered tree farm: private ownership, management for growth and repeated timber crop harvests, adequate protection from fire, insects, disease, and destructive grazing. In addition, the owner's harvesting practices must assure prompt reforestation with desirable trees. A registered tree farm is inspected by professional foresters before it may qualify for the program. Each registered tree farm is reinspected periodically. Most registered tree farms are easily recognized by the green diamond-shaped "TREE FARM" marker placed in front of the property.] [(G)Memberships in associations. The owner is a member of the Texas Forestry Association or a county or local timber growers association.] [(H)Assistance programs. Does the owner participate in a forest industry landowner assistance program? Many firms in the forest products and the pulp and paper industry have entered into agreements with private timberland owners to manage their timber in exchange for first chance to buy the timber when it is ready to harvest.] [(I)Participation in forestry extension activities. The Texas Agricultural Extension Service offers periodic programs for timberland owners. These programs cover timber management practices. The Service also offers a correspondence course to show timber owners how to prepare a timber management plan.] [(J)Consulting foresters. Has the owner contracted with or hired a private consulting forester to help manage his or her timber? What were the results of this collaboration? Is the owner operating on the written advice of a consulting forester?] [(16)Land that is currently and actively devoted to timber production will not qualify for productivity appraisal unless timber production is the land's primary use. If the owner uses the land for more than one purpose, the principal use must be growing timber. Although the distinction between "currently and active devotion" and "primary use" may be subtle, there is a difference between the two criteria.] [(17)While timber production must be the primary use of the land, other compatible uses do not prevent land from qualifying if timber production remains the primary use. For example, an owner may use land principally to grow timber and lease it for hunting. However, if hunting activities are the primary use of the land, and the timber is used to create an environment for wildlife production, then the land would not qualify.] [(18)The chief appraiser must determine all the uses to which the owner puts the land and decide which use is the primary one. If any use is incompatible with timber production, or if it replaces timber production as the primary use of land, the land is not principally devoted to timberland use and cannot qualify for productivity appraisal.] [(19)There are situations where timber production may not be the land's primary use. The primary use test is particularly important for timberland because the kind of intensive management required to grow agricultural crops is not necessary to grow timber. This less visible management activity can make determining the land's primary use a difficult job.] [(20)The following situations are intended to illustrate situations in which timber production may not be the land's primary use, although the land appears to be currently and actively devoted to timber production. In these or comparable situations, the chief appraiser should use the situation as a trigger for further, careful investigation of the application.] [(A)Presence of deer-proof fences on the property. Although this is not always the case, the existence of deer-proof fences around the property may indicate that the property is being used for wildlife production. The chief appraiser must then determine if the owner's principal use is timber production, hunting or wildlife production.] [(B)Presence of stock or wildlife ponds on the property. Ponds are not normally necessary for the conduct of timber management activities or timber harvesting. The existence of ponds may trigger further investigation of the land's primary use.] [(C)Land being readied or held for development. Some timber harvests may indicate that the land is being prepared for housing development rather than used principally to grow timber. (These are commonly referred to as "real estate cuts.") Another possible indication that land is being used principally for development is a sign offering the land for development or one indicating it is zoned for industrial or residential use.] [(D)Presence of homes, vacation facilities, retreats, and recreational facilities on the property. The existence of dwellings and recreational facilities, such as retreats, camps, lodges, and similar facilities, may indicate that the timberland is being used to provide an aesthetic environment for these facilities. If this is indeed the case, timber production is not the land's primary use and the land would not qualify for productivity appraisal.] Cont'd...
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