PORTABLE SAWMILLS -A VALUABLE ASSET FOR SMALL WOODLAND OWNERS

High winds often topple trees of a wide variety of species, size and quality making it difficult to get the best value from randomly downed logs. While past options have sometimes been limited, today many forested landowners are finding portable, thin kerf band sawmills can recover downed timber with environmental and economical benefits.

In Oregon. Ralph Pelham had downed Douglas fir trees that could not be profitably marketed. However, his neighbor used a portable thin-kerf LT40 Wood-Mizer band saw to cut them into lumber for a construction project at a fraction of the cost had he sold the logs and bought the lumber.

For Burt Harker, insect infestations on his 120 acres of pine forest near Cambridge, Idaho have also presented challenges. Mills pay only a small fraction of the value for trees killed by pine beetles but Burt's portable hand mill allows him to optimize the value by sawing insect killed trees into lumber himself.

Like Ralph and Burt, woodland owners nationwide are finding portable sawmills a significant management tool that maximizes options, optimizes resource utilization and increases revenues while making a positive environmental contribution.

Portable Thin Kerf Milling Profits the Small Woodland Owner

When first introduced commercially 25 years ago, portable thin kerf band sawmills drew little attention from the commercial forest industry. However, the low cost, ease of operation and the capacity to produce fine quality lumber, led to enthusiastic acceptance by farmers, wood lands owners, and others wanting to saw relatively small quantities of inexpensive lumber to support personal needs.

More importantly, the availability of this new technology provided a tool to profitably turn previously "useless and worthless" trees into valuable lumber with an initial investment less than the cost of a small tractor. The highly portable mills are easily towed behind a small pickup, set up in minutes and can be operated by a single operator to produce quality lumber from logs conventional sawmills cannot or will not accept.

The thin blades often yield 30-200% more lumber from a log than log scale would indicate and more lumber enhances value and profit generated.

In many cases sawmill owners have realized they can turn a profit from their own woodlands and supplement their income by custom sawing for others. Ralph Pelham's neighbor ended up purchasing Wood-Mizer's LT40 thin-kerf mill to saw lumber for his own use having seen others would pay for the service he could provide.

Mills equipped with hydraulic lifting arms, clamps and log turner eliminate much of the labor from milling logs as big as 36 inches in diameter and up to 21 feet long. Oversized logs can be split with a chainsaw prior to milling. Optional features enhance the mill's usability including computerized setworks, debarkers, lubrication systems, automatic clutches and attachments to cut shakes or beveled siding.

Environmental Benefits- A Significant Bonus

A number of tangible and measurable environmental benefits are realized by utilizing thin-kerf sawmills.

Although there is considerable controversy regarding greenhouse emissions and global warming, most agree that where greenhouse gases can he reduced with little difficulty or expense. they should be. Portable sawmills can, and do, play an important role in some of the carbon mitigation strategies many believe to be critical to atmospheric carbon reduction.

Portable saw mills often utilize raw materials that otherwise would he left to rot, burn or at best, be processed into chips, all of which eventually release significant amounts of carbon into the atmosphere. A double benefit is realized as the need for harvests in healthy forests is reduced so more healthy trees are allowed to remain standing. Those trees "scrub" carbon from the air and release oxygen providing significant environmental enhancement.

Portable Thin Kerf Sawmilling-An Alternative to Commercial Harvests

 Portable mills allow landowners flexibility to manage small woodlands for optimum long term production. Individual trees can be profitably removed and milled to improve future stands instead of harvesting larger volumes of timber to pay for logging and full load shipment to mills. A better alternative than shipping "poor quality" logs to mills willing to pay minimal amounts, portable mills can glean much valuable lumber for the owner's personal use or to sell to others.

Thin- Kerf Mills Have a Successful Record

With perhaps 50,000 or more very thin kerf units operating world wide today, portable thin kerf sawmilling has demonstrated its viability as both a profitable business venture and an important asset for those seeking to enhance the earth's environment.

For small woodland owners, portable thin kerf sawmills provide flexibility in management and harvesting practices. Greater short and long term yields can be realized from trees harvested and positive environmental benefits are achieved.

Biographical Information: Jeff Mullins is an Oregon Small Woodlands Association member who pastors a rural church in north west Oregon where he lives with his wife and seven children. He is a regular contributor to a number of forest and timber publications and has recently purchased a portable sawmill himself.

BENIGN NEGLECT
By Bill Cook 

Benign neglect, at best, is a state of good intention without action. Often times, the failures of omission have more dire consequences than errors of commission. In other words, what we don't do can be just as important as what we do do. Forests are far too often managed through benign neglect.

Doing nothing generates opportunity for unpleasant things. A vegetable garden ignored is a garden lost. Forests are much the same way.

Many a well-intentioned forest owner allows nature to take its course, thinking that nature-knows-best. Nature -knows- nothing. However, natural processes have predictability. More often than not, this leads to unintended and undesirable consequences.

In a way, natural-forests don't exist, at least not in the romantic sense of some set of pre-human environmental conditions. We have inherited a legacy shaped by historic over-harvest, wildfires, and exotic species introductions. Therefore, forests can no longer follow an entirely natural course. The notion of returning to pre-Euro-American-forest conditions is not only ecologically impossible, but its absurd from the social and economic standpoints as well. Forests may look-natural to the casual observer, but the way something looks is an exceptionally poor indicator of forest health and quality.

Looking to the future, and imagining what might be, is a far more valuable exercise than benign neglect. Securing a healthy and vigorous forest that meets the demands of society takes more than good intentions: it takes management and a sense of community welfare. We often forget the importance of forests, other than for trophy-possessions or a place to stick a house into. Forests are essential elements for our survival. Relegating forests to a mere recreational role is extremely short-sighted and calls into question a range of social justice issues. Owning forest land opens up a rich and exciting set of purpose-driven possibilities.

Forest resources produce valuable commodities. Some folks may not acknowledge their personal use of wood-based products, but wood is just as vital to our livelihood as oil, coal, gas, metals, water, and any other raw material. One main difference. of course, is that wood is renewable. If we put our collective minds to the task, more of our supply could be produced domestically, and responsibly.

Forest resources also have a wide range of non-commodity values, such as wildlife habitat, water and soil protection, recreation, etc. Recognition of these values has been long-in-coming in some cases, but they are also very important values that can be enhanced through management.

Benign neglect can lead to the degradation of all these values. There are numerous examples. Timber quality and dollar values decline long before the trees become outwardly unhealthy. As stream-side forests crumble, they may not be replaced by new forests. This can lead to deterioration of both stream quality and trout habitat. Thoughtless recreation has introduced and spread a variety of exotic and invasive species. The patterns of second home and retirement construction are alarming. Forests that grow too dense will lose structure, affecting wildlife habitat, and slowed tree growth creates a forest under stress, an unhealthy condition. Too much shade or too much light can prevent the regeneration of many trees, shrubs and flowers. Mismanaged and unmanaged forests frequently have less tree species diversity. making the forest more susceptible to diseases and insects. The ravages of beech bark disease in the eastern Upper Peninsula and the spread of oak wilt across the region are good case studies of forest damage tied to human neglect.

Forest management seems to be one of those activities with numerous win-win outcomes and is the only sensible choice to deal with the increasing pressures on our forest resources. Cultivating a sense of stewardship through better management becomes a cherished mission. Not only can competitive and renewable revenues be enjoyed. but all the other benefits of forest ownership can be increased, and forests can be better protected. Forestry is a solution to many of our environmental challenges. We practice benign neglect at our own peril.

FREQUENTLY ASKED QUESTIONS
Commercial Forest (CF) & Qualified Forest Property (QFP) Tax Programs

1. Question: My land is enrolled in the CF program. but I heard there is also qualified forest property tax exemption. What does this mean to me as a CF landowner'? Do I have to do anything to keep my land in the CF program? Do I have to re-apply to keep my land in the CF program? Can my land be both CF and QFP? If I withdraw my land from CF, is there any payment involved'?

Answer: If your land is currently listed in the CF program and you want it to remain in the CF program, do nothing. The CF program is a voluntary program and as long as you are in compliance with the requirements of the CF law and program, your listing continues indefinitely. You may. however, apply to withdraw from the program at any time. There will be a withdrawal application fee and withdrawal penalty payment due if you decide to withdraw your land from CF.

CF and QFP are two separate property tax programs. Your land cannot have both a CF and QFP tax designation. The CF law was amended in September 2006 to allow a one-time withdrawal without penalty if your land is first approved for QFP. A QFP designation must he approved prior to your applying to withdraw land from the CF program without penalty. The time frame for applying to withdraw from the CF program without penalty is up to September 26, 2007.

2. Question: I bought some land already listed in the CF program. Can the land stay listed in this program?

Answer: Land listed in the CF program can he transferred to a new owner and remain in the program as long as the new owner complies with all requirements of the CF law and program. The CF law requires an owner notify the Department of Natural Resources of an ownership change in writing within 30 days of a title transfer. The new owner will be required to submit a copy of the deed or land contract as recorded with the register of deeds in the county the property is located evidencing the legal title transfer, a copy of their forest management plan (plans are generally not transferable from one owner to another) and will also be required to certify the forest management plan exists and is in effect.

3. Question: What are the differences between CF and QFP

Answer: Both the CF program and QFP tax exemption provide a property tax reduction to private landowners as an incentive to maintain and manage their forestland for long-term timber production. Both require land be managed by following a forest management plan prepared by a professional forester.

4. Question: What are the tax benefits of the CF and QFP exemption to forest landowners?

Answer: CF land is taxed at $1.20 per acre annually through December 2011 . On January 1, 2012. and every 5 years thereafter, the CF tax will increase 5 cents per acre annually. QFP is exempt from the tax levied by a local school district for school operating purposes to the extent provided under section 1211 of the revised school code.

5. Question: What qualifies for the QFP tax exemption'?

Answer: Private landowners who own between 20 acres and 320 acres in a taxing jurisdiction where the land is capable of producing at least 20 cubic feet of wood volume per year.

6. Question: What constitutes QFP land?

Answer: 2006 PA 378 says QFP land that meets all of the following conditions:

1) Is not less than 20 contiguous acres in size, of which not less than 80% is productive forest capable of producing wood products. Contiguity is not broken by a road, a right-of-way, or property purchased or taken under condemnation proceedings by a public utility for power transmission lines if the 2 parcels separated by the purchased or condemned property were a single parcel prior to the sale or condemnation. As used in this subparagraph, "productive forest" means real property capable of growing not less than 20 cubic feet of wood per acre per year. However. if property has been considered productive forest, an act of God that negatively affects that property shall not result in that property not being considered productive forest.

2) Is stocked with forest products.

3) Has no buildings or structures located on the real property.

4) Is subject to an approved forest management plan.

7. Question: I see that a forest management plan is required. What is a forest management plan and how do I get a plan written?

Answer: Information included in a complete forest management plan will include unbiased information about the trees and vegetation currently growing on the land, potential forest stands that could be grown on the land, soils present and their qualities, wildlife habitat quality, any threatened and endangered species, any invasive species or insect/diseases noticed, and management recommendations that will help the landowner meet their objectives for owning the land and keeping the resource sustainable. Plans may be written by professional foresters or certified natural resource professionals. There is usually a fee to have a plan written. The Department of Natural Resources maintains a list of certified Forest Stewardship Plan writers. There is cost share money for having a Forest Stewardship Plan written at: http://www.michigan.gov/dnr/0.1607.7-153-30301-30505-34240-107504-00.html. The Tree Farm organization also provides plan writers at: http://www.treefarmsystem.org/. Other plan writers maybe found by contacting other forestry organizations.

8. Question: What is required to enter land into QFP?

Answer:

a) State wide acreage limitation for the year may not have been reached.

b) The acreage limitation for each owner must not be exceeded.

a. An owner may claim an exemption under this section for not more than 320 acres of qualified forest property in each local tax collecting unit.

b. If an exemption is granted under this section for less than 320 acres in a local tax collecting unit, an owner of that property may subsequently claim an exemption for additional property in that local tax collecting unit if that additional property meets the requirements of this section.

c. Department of Treasury affidavit must be completely filled out by landowner and submitted to the Department of Natural Resources. The affidavit shall be on a form prescribed by the Department of Treasury and shall require the person submitting the affidavit to attest that the property for which the exemption is claimed is qualified forest property and will be managed according to the approved forest management plan. This Department of Treasury affidavit is currently under development and is expected to be available in the near future.

d. Local assessor must approve and submit to Department of Treasury. The local assessor shall determine if the property is qualified forest property based on a recommendation from the Department of Natural Resources and confirmation that the acreage limitation set forth in subsection 1) has not been reached and, if so, shall exempt the property from the collection of the tax as provided in subsection 1) until December 3 l of the year in which the property is no longer qualified forest property.

9. Question: Are there requirements for public access to CF or QFP lands?

Answer: The CF program requires the land be open to the public for hunting and fishing (foot access only). Additionally, CF land that also has an approved sustainable conservation easement must be open to the public for non-motorized recreational use. Land with a QFP exemption is not required to be open to the public.

10. Question: Are there deadlines for signing up or turning in applications and. if so, when are the deadlines?

Answer: Applications to be considered for CF must be postmarked or delivered to the Department of Natural Resources not later than April 1 to be eligible for approval as commercial forest in the following tax year. To claim QFP tax exemption, landowners must file an affidavit and approved forest management plan or certified forest management plan provided by a third-party certifying organization with the Department of Natural Resources and local tax collecting unit by December 31 to be eligible for the exemption in the following tax year.

11. Question: How do I get the QFP tax exemption for my land'? Are there forms to complete? What is the process?

Answer: Landowners must submit an affidavit claiming qualified forest property exemption (Treasury Affidavit form 4449), a copy of the forest management plan, a copy of the forest management plan as certified by a third-party certifying organization and a fee to the Department of Natural Resources for consideration. The form will be available on the Department of Treasury web page in the near future (www. michigan.gov/treasurer). If the forest management plan is approved by the Department of Natural Resources, the Affidavit will be forwarded to the local assessor for final determination. If the forest management plan is not approved by the Department of Natural Resources, the Affidavit will be returned to the landowner with directions for revision and re-submittal.

12. Question: Can oil and/or gas minerals be extracted from these programs'?

Answer: The CF statute allows deposits of oil and gas may be removed upon application to and approval by the Department of Natural Resources. A form application is being created and should be available on the Department of Natural Resources web page in the near future. The statute creating the QFP exemption is silent as to whether oil and gas may be removed from land with this exemption.

13. Question: Once my land is QFP, what are my responsibilities'?

Answer: The owners of qualified forest lands must comply with the forest management plan approved by the Department of Natural Resources. On an annual basis, the owner must file (on a form prescribed by the Department of Natural Resources) the amount of timber products produced on the qualified forest and whether any buildings or structures have been constructed on the property. The property owner must file with the local assessor a rescission form (Treasury form 4450) when there is a change in use of the QFP. If this form is not filed. the property owner is subject to a penalty of $5.00 per day up to a maximum of $1,000. The property owner must file an updated forest management plan no later than 20 years after approval of a forest management plan. An owner of QFP shall inform a prospective buyer of that QFP that the property is subject to the recapture tax provided in the qualified forest property recapture act, if the qualified forest property is converted by a change in use.

14. Question: How does a landowner withdraw from QFP?

Answer:

a) File with local tax collecting unit a rescission form. Within 90 days of a change from QF, the landowner shall rescind the exemption for the applicable portion of the property by filing with the local tax collecting unit a rescission form prescribed by the Department of Treasury.

b) Becomes subject to the QF property recapture tax. If property for which an exemption has been granted under this section is converted by a change in use and is no longer qualified forest property, the property is subject to the qualified forest property recapture tax levied under the qualified forest property recapture tax act. An owner of qualified forest property shall inform a prospective buyer of that qualified forest property that the qualified forest property is subject to the recapture tax provided in the qualified forest property recapture tax act, if the qualified forest property is converted by a change in use.

15. Question: How may an assessor deny or modify an exemption for QFP?

Answer: This is based on the recommendation of the DNR, when the assessor of the local tax collecting unit believes that the property for which an exemption has been granted is not qualified forest property based on a recommendation from the Department of Natural Resources, the assessor may deny or modify an existing exemption by notifying the owner in writing at the time required for providing a notice under section 24c.

16. Question: If a Landowner is denied participation in QFP, what is the appeal process?

Answer: A taxpayer may appeal the assessor's determination to the Board of Review meeting under section 30. A decision of the Board of Review may be appealed to the residential and small claims division of the Michigan Tax Tribunal.

17. Question: What are the penalties if the land is deemed not eligible, but has been listed as QFP?

Answer: It is placed immediately on the tax roll.

a) If property for which an exemption has been granted under this section is not qualified forest property, the property that had been subject to that exemption shall be immediately placed on the tax roll by the local tax collecting unit if the local tax collecting unit has possession of the tax roll or by the county treasurer if the county has possession of the tax roll as though the exemption had not been granted.

b) A corrected tax bill shall be issued for each tax year being adjusted by the local tax collecting unit if the local tax collecting unit has possession of the tax roll or by the county treasurer if the county has possession of the tax roll.

18. Question: Is there an appeal process if my land is not approved for the QFP tax exemption?

Answer: Yes, the appeal is made to the July or December Board of Review in the local unit where the property is located. A denial by the July or December Board of Review may be appealed to the residential and small claims division of the Michigan Tax Tribunal.

19. Question: Can I sell my land if it has a QFP tax exemption?

Answer: Yes, you may sell the land. The land may retain the QFP exemption if the purchaser desires and agrees to maintain the property as qualified forest. Additionally, the new owner may also file the appropriate forms with the register of deeds in the county in which the property is located and the local assessor to prevent the uncapping of the property. If, after this form is filed and accepted, the property ceases to be qualified forest property, recapture taxes will be collected.

20. Question: What is the definition of buildings or structures as used in QFP? I have 3 deer blinds with slant pole roofs that are not permanent. Are these or other deer blinds considered structures?

Answer: Under normal circumstances, a deer blind constructed as a small shelter used only to hunt deer is not considered a structure. However, permanently constructed buildings suitable for overnight accommodations, storage sheds, and similar buildings that are also used for deer blinds ARE considered structures and are not allowed on QFP land.

21. Question: Can other non-timber related products qualify to participate in these programs, such as land used for harvesting maple syrup or mushrooms?

Answer: No. These programs are intended to encourage management of private land for forestry.

22. Question: What happens to the QFP property tax exemption when I die: Answer: The exemption follows the property until such time as the property is no longer QFP. Property is no longer QFP when a rescission is made (Treasury form 4450), the forest management plan has not been revised during the past 20 years, or the requirements of the exemption are not met. The taxable value of the property will uncap when your heirs become the beneficiary of your estate. However, they may file the appropriate form with the register of deeds in the county the property is located and the assessor certifying that the property will remain QFP and the taxable value will not be uncapped. Once this form is filed, the property will be subject to recapture taxes.

23. Question: Can I remove my land from this QFP tax exemption?

Answer: Yes, QFP may be withdrawn by filing Treasury form 4450 with the local taxing jurisdiction. There is no penalty or fee for this withdrawal. The exemption will continue until December 31 of the year withdrawn. If a transfer of ownership has occurred and the proper forms have been filed to prevent the uncapping of the property, recapture taxes will be due.

24. Question: What is a QFP recapture tax?

Answer: The QFP recapture tax first becomes applicable after a transfer of ownership when a form is filed with the register of deeds and the assessor to exempt the property from uncapping. There are two taxes that will become due with the change of use. The first is a return of the amounts the property would have paid had it not been exempt from uncapping for a period of up to 10 years. The recapture tax portion is based on whether one or more harvests of forest products have occurred consistent with the approved forest management plan. If no harvest consistent with the approved forest management plan was conducted, the additional recapture tax is based on the formula: state equalized value at the time of the conversion of use times total millage of all taxing units in the local unit times 7 times 2.

If one or more harvests consistent with the approved forest management plan were conducted, the additional recapture tax is based on the formula: state equalized value at the time of the conversion of use times total millage of all taxing units in the local unit times 7.

25. Question: What property tax will I pay if my land has the QFP property tax exemption? What is the difference in my tax payment if I switch from CF to QFP?

Answer: The property tax for QFP is determined by multiplying the taxable value of the property by the total millage rate of all taxing jurisdictions in the local unit, except for the local school operating millage. This is an approximate 18 mill reduction from ad valorem taxes. CF lands will be taxed at a rate of $1.20 per acre per year. This rate will be increased by $0.05 per acre on January 1, 2012, and every 5 years thereafter. The QFP tax will be determined by the taxable value of the property and the millage rates minus the school operating millage rate. If the land has a $500 per acre taxable value and the local millage rate minus school operating millage is 25 mills, the tax will be $12.50 per acre. This rate will vary with the amount of mills voted by the people of the local unit and by the capped value formula. Since the inception of Proposal A, the capped value has increased an average of about 3% per year.

26. Question: I have a house and more than the 20 acre minimum to be eligible for QFP. Can I split the land and claim the QFP tax exemption for the acres without the house? What happens to the property tax for the house, i.e., is the property tax cap removed?

Answer: You may request the assessor divide your property into two parcels, one for the forest land and one for the residence, provided you have splits available under the Land Division Act. The taxable value of the house will not uncap provided there has been no transfer of ownership.

Prepared on February 9, 2007 by: Department of Natural Resources Forest, Mineral, and Fire Management Division; Michigan Department of Treasury; Assessment and Certification Division