House 3402

WEST VIRGINIA LEGISLATURE

2025 REGULAR SESSION

Introduced

House Bill 3402

By Delegate Adkins

[Introduced March 17, 2025; referred to the Committee on Finance]

A BILL to amend and reenact §11-1C-2 and §11-1C-11a of the Code of West Virginia, 1931, as amended, relating to establishing a new classification for managed timberland leased for substantial income.

Be it enacted by the Legislature of West Virginia:

Article 1C. Fair and Equitable Property Valuation.

§11-1C-2. Definitions.

For the purposes of this article, the following words shall have the meanings hereafter ascribed to them unless the context clearly indicates otherwise:

(a) "Timberland" means any surface real property except farm woodlots of not less than 10 contiguous acres which is primarily in forest and which, in consideration of their size, has sufficient numbers of commercially valuable species of trees to constitute at least 40 percent normal stocking of forest trees which are well distributed over the growing site.

(b) "Managed timberland" means surface real property, except farm woodlots, of not less than ten contiguous acres which is devoted primarily to forest use and which, in consideration of their size, has sufficient numbers of commercially valuable species of trees to constitute at least 40 percent normal stocking of forest trees which are well distributed over the growing site and that is managed pursuant to a plan provided for in section ten of this article: Provided, That any tract or parcel of real estate, regardless of its size, which is subject to contract, agreement, a deed restriction, deed covenant, or zoning regulation which limits the use of that real estate in a way that precludes the commercial production and harvesting of timber upon it may not be considered as managed timberland within the meaning of this article: Provided, however, That a landowner whose land is subject to, or may become subject to, a conservation or preservation easement may not be prevented from entering into a timberland management plan with the West Virginia Division of Forestry. This may include managed timberland that is leased for substantial income as described in §11-1C-11a of this code.

(c) "Substantial Income" means a percentage of the land's assessed value or a minimum dollar threshold consistent with Category A requirements.

(c)(d) "Tax Commissioner," "commissioner" or "tax department" means the State Tax Commissioner or a designee of the State Tax Commissioner.

(d)(e) "Valuation commission" or "commission" means the commission created in section three of this article.

(e)(f) "County board of education" or "board" means the duly elected board of education of each county.

(f)(g) "Farm woodlot" means that portion of a farm in timber but may not include land used primarily for the growing of timber for commercial purposes except that Christmas trees, or nursery stock and woodland products, such as nuts or fruits harvested for human consumption, shall be considered farm products and not timber products.

(g)(h) "Owner" means the person who is possessed of the freehold, whether in fee or for life. A person seized or entitled in fee subject to a mortgage or deed of trust securing a debt or liability is deemed the owner until the mortgagee or trust takes possession, after which such mortgagee or trustee shall be deemed the owner. A person who has an equitable estate of freehold or is a purchaser of a freehold estate who is in possession before transfer of legal title is also deemed the owner.

(h)(i) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

(i)(j) "Paper" means a tax map or document that is not electronic.

The definitions in subdivisions (f) and (g) (g) and (h) of this section shall apply to tax years beginning on or after January 1, 2001.

§11-1C-11a. Certification of managed timberland or managed timberland that is leased for substantial income; assessment of property; penalty for failure to comply.

(a) Any person who owns timberland comprising 10 or more contiguous acres may qualify for identification as managed timberland, or managed timberland that is leased for substantial income, for property tax purposes as set forth in §11-1C-10(d)(1) of this code.

(b) The assessor, upon receipt of an appraisal or certification of the timberland from the Tax Commissioner, shall assess the property as managed timberland, or managed timberland that is leased for substantial income, beginning with the next ensuing assessment year. Except as otherwise provided in this section, the classification of timberland included in a certified managed timberland plan shall not change for property tax purposes until such time as there is: (1) A change in the use of the property which requires a change in classification; (2) a change in the classification of the property from Class III to Class IV; or (3) a change in the classification of the property from Class IV to Class III.

(c) In order to encourage sustainable timberland leasing and management, to provide tax consistency for landowners and lessees, and to ensure that income-generating timberland is appropriately categorized, there shall be an additional category for managed timberland that is leased for substantial income.

(1) Properties within this classification will be taxed at the same rate as Category A managed timberland regardless of the timber's quality or growth stage.

(2) To be eligible for the managed timberland that is leased for substantial income certification, the landowner must:

(A) Lease the property under a formal contract; and

(B) The lessee must use the land primarily for timber-related economic activities.

(3) The West Virginia Division of Forestry and the State Tax Division shall oversee classification and compliance.

(c)(d) If the director of the Division of Forestry determines that the owner of timberland failed to implement a certified managed timberland plan within 24 months of certifying that the property meets the definition of managed timberland, the director shall give written notice to the owner by certified mail, return receipt requested, that such certification is removed and the owner of the timberland shall pay to the sheriff of the county in which the property is located a fine equal to the amount of property taxes saved due to the property being assessed as managed timberland plus interest calculated at the rate of nine percent per year. Additionally, the assessor shall reassess the property. The amount of this fine is equal to the sum of the following calculations:

(1) For each assessment year, the county assessor shall determine the market value of the property and subtract from that value the value at which the property was appraised as managed timberland. This amount shall be multiplied by 60 percent. This result shall then be multiplied by the applicable levy rate.

(2) Interest shall be imposed on the amount calculated under subdivision (1) of this subsection at the rate of nine percent per annum beginning with October 1, of the tax year in which the taxes should have been paid based upon the timberland value of the property. Interest shall continue to accrue until the day the fine is paid.

(d)(e) The sheriff shall deposit and account for the fines collected under this section in the same manner as property taxes.

NOTE: The purpose of this bill is to establish a new classification for managed timberland leased for substantial income.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.