A Steadfast Commitment
Legislative Support Continues for Landowners and Forestry
By John Casey
Summer 2023
Summer 2023
The effort to support agriculture and forestry landowners by reducing tax burdens has spanned nearly a quarter century — including the most recent Georgia legislative session. One issue: Georgia had — and still has— one of the highest average property taxes of all states in the Southeast.“Efforts to mitigate the impact of ad valorem taxes on property owners in agriculture and forestry first became a concern in the early 1990s,” said former Georgia State Representative Richard Royal. “We allow local governments to levy property taxes to fund their education efforts. That’s unlike most of the states in the Southeast, which fund education through their general fund budget.
The Start of a Solution
In 1991, Royal introduced Georgia House of Representatives legislation to establish a Conservation Use Valuation Assessment (CUVA) program. The constitutional amendment, approved that year by Georgia voters, reduced the ad valorem tax burden on all of agriculture, including forestry, by changing how the state assesses agricultural land. “We came up with the thought of taxing the land based on its ability to produce a crop rather than on its real estate value,” said Royal. “It has been a tremendously popular program. ”Landowners sign a 10-year covenant in which they agree to not develop any of the land and to keep it in its agricultural state. According to the Georgia Department of Revenue, as of today, CUVA provides a $270 million annual ad valorem tax reduction for agricultural lands in the program.“We ... have saved thousands and thousands of acres from going into development,” said Royal. “We’ve reduced the property tax burden almost two-thirds and allow the landowner to be competitive in the market. ”During the same legislative session, the Georgia Forestry Association (GFA) and Georgia Farm Bureau (GFB) pushed forward on another critical policy initiative benefiting forestry landowners. At the time, standing timber was taxed annually at fair market value — even before it was cut. This led to sky-high tax bills for forestry landowners, prompting the state legislature to pass legislation to change taxation of timber to the time of harvest only. “With many metro areas across the state rapidly expanding into rural areas, ensuring that property is taxed based on its current use rather than its potential use has been critical to protecting agricultural lands,” said Tom McCall, GFB president. “With the encroachment of urbanization in some areas and skyrocketing ad valorem taxes, the policies that we’ve put in place over the past few decades have kept farmers and forest owners on their property and kept them in agriculture and forestry production. It also has helped keep timber companies in Georgia and not [moving] out because of strict land taxes. That’s important because they’re not making any more land. We need to preserve what we have and keep it in productive production — whether it be trees, crops or pasture.
The Start of a Solution
In 1991, Royal introduced Georgia House of Representatives legislation to establish a Conservation Use Valuation Assessment (CUVA) program. The constitutional amendment, approved that year by Georgia voters, reduced the ad valorem tax burden on all of agriculture, including forestry, by changing how the state assesses agricultural land. “We came up with the thought of taxing the land based on its ability to produce a crop rather than on its real estate value,” said Royal. “It has been a tremendously popular program. ”Landowners sign a 10-year covenant in which they agree to not develop any of the land and to keep it in its agricultural state. According to the Georgia Department of Revenue, as of today, CUVA provides a $270 million annual ad valorem tax reduction for agricultural lands in the program.“We ... have saved thousands and thousands of acres from going into development,” said Royal. “We’ve reduced the property tax burden almost two-thirds and allow the landowner to be competitive in the market. ”During the same legislative session, the Georgia Forestry Association (GFA) and Georgia Farm Bureau (GFB) pushed forward on another critical policy initiative benefiting forestry landowners. At the time, standing timber was taxed annually at fair market value — even before it was cut. This led to sky-high tax bills for forestry landowners, prompting the state legislature to pass legislation to change taxation of timber to the time of harvest only. “With many metro areas across the state rapidly expanding into rural areas, ensuring that property is taxed based on its current use rather than its potential use has been critical to protecting agricultural lands,” said Tom McCall, GFB president. “With the encroachment of urbanization in some areas and skyrocketing ad valorem taxes, the policies that we’ve put in place over the past few decades have kept farmers and forest owners on their property and kept them in agriculture and forestry production. It also has helped keep timber companies in Georgia and not [moving] out because of strict land taxes. That’s important because they’re not making any more land. We need to preserve what we have and keep it in productive production — whether it be trees, crops or pasture.
Ensuring No One Gets Left Behind
In 2008, a group of forestry landowners, joined by GFA, approached then-Governor Sonny Perdue with claims that CUVA discriminated against them. “With CUVA, there was a 2,000-acre limitation and the ownership of property had to be strictly tied to family farm entities. We had so many forest landowners and businesses that weren’t getting any relief due to the limitations,” said Royal. “So, we came up with another plan called the Forest Land Protection Act. ”The Forest Land Protection Act (FLPA) allowed forestry property owners to receive the same tax relief as CUVA participants, but with unlimited acreage and no restrictions on ownership other than requiring the business be registered with the State of Georgia. Like CUVA, the legislation passed as a constitutional amendment. Today, FLPA is responsible for over $40 million in ad valorem tax saving sand, through both programs, landowners pay roughly $6.5 per acre compared to the standard $22 per acre without them.
In 2018, GFA and GFB approached the state legislature with a need to provide ad valorem tax relief to forestry companies that could not commit to a 10-year covenant. These companies bought and sold timber tracts, often within a 10-year period. The resulting legislation came to be known as the Qualified Timber Program (QTP), which allowed for a tax reduction without covenant or ownership requirements. Instead, landowners have to enroll annually with the Department of Revenue and prove or show evidence that their timberland was in active timberland production. Through QTP, property is taxed at approximately $10 per acre versus the standard $22 per acre for those not enrolled in the program.
In 2008, a group of forestry landowners, joined by GFA, approached then-Governor Sonny Perdue with claims that CUVA discriminated against them. “With CUVA, there was a 2,000-acre limitation and the ownership of property had to be strictly tied to family farm entities. We had so many forest landowners and businesses that weren’t getting any relief due to the limitations,” said Royal. “So, we came up with another plan called the Forest Land Protection Act. ”The Forest Land Protection Act (FLPA) allowed forestry property owners to receive the same tax relief as CUVA participants, but with unlimited acreage and no restrictions on ownership other than requiring the business be registered with the State of Georgia. Like CUVA, the legislation passed as a constitutional amendment. Today, FLPA is responsible for over $40 million in ad valorem tax saving sand, through both programs, landowners pay roughly $6.5 per acre compared to the standard $22 per acre without them.
In 2018, GFA and GFB approached the state legislature with a need to provide ad valorem tax relief to forestry companies that could not commit to a 10-year covenant. These companies bought and sold timber tracts, often within a 10-year period. The resulting legislation came to be known as the Qualified Timber Program (QTP), which allowed for a tax reduction without covenant or ownership requirements. Instead, landowners have to enroll annually with the Department of Revenue and prove or show evidence that their timberland was in active timberland production. Through QTP, property is taxed at approximately $10 per acre versus the standard $22 per acre for those not enrolled in the program.
Where We Are Today
In the past year, GFA and GFB have advocated on behalf of several critical pieces of legislation benefiting agriculture and forestry landowners and businesses. In November of 2022, GFA led the way for passage of Referendum A, a statewide vote allowing an annual ad valorem tax exemption for equipment used for managing, harvesting and replanting forests — an exemption that has been extended to owners of farm equipment for decades. During the 2023 legislative session, the state House of Representatives passed House Bill 96, which would build on the1991 legislation that changed standing timber from being taxed annually to only at harvest. Currently, harvested timber is taxed at 100% of fair market value as opposed to 40% for all other property in Georgia. House Bill 96 will change the taxation of harvested timber to match the 40% for all property in the state. The bill still needs to pass the State Senate in 2024 and then pass a popular vote referendum in the fall. Signed by Governor Brian Kemp in early May, House Bill 189 increases the maximum weight of some trucks on Georgia highways for two years. Current state law limits trucks to 80,000 pounds, though some trucks carrying certain products can weigh up to 84,000 pounds. HB 189 allows trucks carrying agricultural and forestry products to weigh up to 88,000 pounds. This weight increase will allow for more efficient transport of goods and provide a cost savings opportunity during a time of high inflation.■
John Casey is a strategic communications consultant with a primary focus on journalism, politics and public policy.
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Georgia Forestry Magazine is published by HL Strategy, an integrated marketing and communications firm focused on our nation's biggest challenges and opportunities. Learn more at hlstrategy.com
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