October 6, 2014
NOTICE TO IDAHO LANDOWNERS
Re: Amended statute and IDAPA proposed rule increases forest lands assessments
The Idaho Rules of Administrative Procedure of the Idaho Forest Products Commission found at IDAPA 15.03.01 will dramatically change under the proposed rules. The rule changes originated in the 2014 Legislative Session in Idaho House Bill 371 signed into law March 17, 2014. House Bill 371 amended Idaho Code section 38-1515.
Under the current rules, businesses owning 50,000 acres or more of forest lands and no Idaho manufacturing facilities (among other criteria), may pay annual assessments to the Commission. Under the proposed rule, the allowable assessments criteria change to apply if you own 10,000 acres or more whether or not you have a manufacturing facility. This change caused us to write you today.
Macomber Law, PLLC is a real property law firm. We are not lobbyists, and take no position on this matter. We write today simply to let you know of the proposed rule, so you may plan for or address the proposed change. The enclosed two pages will assist you, if you are so inclined.
In addition to minor changes related to at-large membership on the Commission, the proposed rule change to IDAPA 15.03.01.200.01 adds words in bold type, and removes crossed-out type:
Assessments. An assessment for all logs harvested, measured or processed within the state of Idaho and for all employees, including self employed, engaged in the harvest or transport of timber, logs, unfinished lumber, chips, sawdust, shavings or hog fuel in Idaho, and for each acre of forest land owned by a business entity or person that has no Idaho manufacturing facilities and owns more than fifty ten thousand (510,000) acres of forest land shall be set by the Commission no later than January 1 of the assessment year. Notice of the assessment shall be mailed no later than the last day of the fourth week of May of the assessment year to the last known address of each financial supporter. Assessment shall not be reduced for financial supporters who cease business during an assessment year.
Two changes are key: (1) Lowering the amount of acreage and (2) including owners of Idaho manufacturing facilities subject to assessments will raise new revenue for the executive branch.
Certain definitions are key to whether this new rule applies to you. The important definitions are “business entity,” “forest lands,” “private forest lands,” and “person.”
Chapter 15 of Title 38 of Idaho Code has the first three, and the IDAPA has the last one:
I.C. § 38-1502 (3): “Business entity” means a person, firm, partnership, corporation, association, trust or other recognized legal entity.
I.C. § 38-1502 (6): “Forest lands” means federal, state and private land growing forest tree species which are, or could be at maturity, capable of furnishing raw material used in the manufacture of lumber or other forest products. The term includes federal, state and private land from which forest tree species have been removed but have not yet been restocked, but it does not include land affirmatively converted to uses other than the growing of forest tree species.
I.C. § 38-1502 (9): “Private forest lands” means forest lands not owned by the federal government, state government, an Indian tribe or a political subdivision of the state.
IDAPA 15.03.01.004.07: “Person.” An individual, partnership, association, corporation or other entity qualified to do business in the state of Idaho.
Therefore, my interpretation is that the proposed rule will allow assessments to be levied on business entities or persons who own more than 10,000 acres of forest land in Idaho. This will be a new assessment on those owning between 10,000 and 50,000 acres. It will also be a new assessment on those having manufacturing facilities in Idaho who are currently exempted.
The definition of a “manufacturing facility” is not found in either Idaho Code or the IDAPA, but the closest useable IDAPA definition is:
IDAPA 15.03.01.004.06: “Forest Product Manufacturer” is “a person that engages in the processing, cutting, fabricating or other process which converts timber, chips, sawdust or shavings into lumber, paper, plywood, particle board or other usable products for sale in commerce, provided, however, as used in this chapter, forest products manufacturers shall not include the following business entities engaged in:
- The production of fence or corral posts or rails;
- Producing shingles or shakes;
- Producing firewood or pellets for energy; or
- Producing logs which have been shaped or scribed and used in the construction of log structures.
I hope this letter assists you in your private land ownership planning. Please visit our website at www.macomberlaw.com to determine whether our real estate practice may be beneficial to your land ownership.
Arthur B. Macomber
Attorney at Law
Enc. Pages 239 and 240, Idaho Administrative Bulletin dated October 1, 2014, Vol. 14-10