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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Agricultural and Forest

Section 4.08 - RPTL Section 480-a

Forest
(Certified on or after 9/1/74)

Exemption Code(s): 47460

Year Originally Enacted: 1974

Related Statutes: RPTL § §480, 586

SUMMARY: Privately owned real property certified as an eligible tract of forest land by the NYS Department of Environmental Conservation (DEC) on or after September 1, 1974 is partially exempt from taxation but is liable for special ad valorem levies and special assessments. The exemption is limited to the lesser of either (1) 80% of the assessed value of the eligible acreage or (2) the amount by which the assessed value of the eligible acreage exceeds $40 multiplied by the latest state equalization rate (or special equalization rate) times the number of eligible acres.1

To qualify for exemption, the owner must annually commit the property to continued forest crop production for the next succeeding 10 years under either (1) a management plan approved by DEC, or (2) a forest certification program recognized by DEC regulations. If the owner fails to meet this requirement, eligibility for exemption must be terminated. Under certain circumstances, the property also becomes subject to penalty taxes (see Property Use Requirements below).

At least 30 days prior to any cutting of the forest crop, the owner must give notice of the planned cutting to DEC, which in turn notifies the county treasurer of the county in which the property is located. The cut timber is subject to a yield tax of 6% of its stumpage value, as certified by DEC (see Payments in Lieu of Taxes below).

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Property must be owned by a private organization or individual.
       
    2. Property Location Requirements: None.
       
    3. Property Use Requirements: Property must be certified as an "eligible tract" by DEC and must be annually committed to continued forest crop production for the next succeeding 10 years. An eligible tract is defined as forest land of at least 50 contiguous acres, exclusive of any portion of the property not devoted to the production of forest crops. Lands divided by roads, easements, or rights- of-way, energy transmission corridors, or similar facilities are considered to be contiguous unless vehicular access for forest management purposes is precluded. Lands from which a saleable forest crop has been cut or removed within three years prior to application for certification under this program are ineligible unless the cutting or removal was accomplished under a forest management program designed to provide for continuing production of saleable forest crops. The tract must be used in a manner prescribed by an approved management plan, which either (1) contains requirements and standards deemed necessary by DEC to ensure the continued production of saleable forest crops, or (2) entails participation in a forest certification program recognized in DEC regulations. The property is subject to a penalty tax and loss of exempt status if any of the following violations occurs:

      (a) The tract or any portion of it is voluntarily converted to a use which precludes management of the land for forest crop production.

      (b) The owner fails to comply with the DEC-approved management plan or applicable forest certification plan for the tract at any time during the 10-year commitment period.

      (c) The owner fails to make a cutting prescribed by DEC.

      (d) The owner fails to give notice of a proposed commercial cutting on the eligible tract.

      (e) The owner fails to pay on time the appropriate tax on the stumpage value of a forest crop harvest.

      In cases involving any but the first type of violation listed above, DEC may determine that a violation has not occurred if the failure to comply was due to reasons beyond the owner's control and such failure can be corrected forthwith without significant effect on the overall purpose of the management plan. In such cases, DEC may settle the matter by stipulation with the owner but must first notify the assessor. Ordinarily, however, a notice of violation will be issued to the landowner and the county treasurer for imposition of a penalty (plus interest charges). The penalty equals 2-1/2 times the amount of taxes applicable to the exempt assessed value for the current year and any prior years (not to exceed 10 years total); such taxes are to be calculated using the appropriate tax rates for each year, plus interest.2  If only a portion of the tract is converted, the penalty tax is to be imposed at twice the amount determined above, but based only on that portion of the tract that was actually converted to a use precluding management of the land for forest crop production. The collected penalty (and stumpage) tax is apportioned to the applicable municipal corporations by the county treasurer.

      Note: No fee, penalty, or rollback of taxes otherwise due may be imposed on New York City for failure to comply with a certified management plan for an eligible tract that the City acquires for watershed purposes.

    4. Certification by State or Local Government: Tracts receiving this exemption must have been issued a certificate of approval from DEC on or after September 1, 1974.
    5. Required Construction Start Date or Other Time Requirement: None.
       
  2. LOCAL OPTION: No.
     
  3. LIMITATION ON EXEMPTION:
      General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Levies
    Special
    Assessments
    1. Amount Yes* Yes* No
    exemption
    allowed
    No
    exemption
    allowed
    2. Duration Yes** Yes** No
    exemption
    allowed
    No
    exemption
    allowed
    3. Taxing Jurisdiction
    a. County or County
    Special Districts
    Ex NA Tax Tax
    b. City Ex NA NA Tax
    c. Town or Town
    Special District
    Ex NA Tax Tax
    d. Village Ex NA NA Tax
    e. School District NA Ex NA NA
      Ex-Exempt      Tax-Taxable      NA-Not Applicable
    * Exemption is limited to the lesser of (1) 80% of assessed value or (2) the assessed value in excess of $40 multiplied by the latest state equalization rate (or special equalization rate) and the number of acres eligible. See Calculation of Exemption below for sample calculations.

    ** The tract remains eligible for exemption in each year that a 10-year commitment to continued forest production is appropriately filed.

  4. PAYMENTS IN LIEU OF TAXES: None required. However, payment of a yield tax of 6% of the stumpage value of cut timber, as certified by DEC, must be made whenever commercial harvests are made on the eligible tract. (The following are exempt from the yield tax: (1) annual cuttings of up to 10 standard cords or the equivalent for the owner's own use and (2) noncommercial cuttings prescribed in the DEC-approved management plan.)
     
  5. CALCULATION OF EXEMPTION:
    1. General Municipal and School District Taxes:

      The lesser of either (a) 80% of the assessed value of the eligible acreage or (b) the assessed value of the eligible tract which exceeds $40 multiplied by the latest state equalization rate (or special equalization rate) times the number of eligible acres.

      Sample calculations:

      (a) Assume an eligible tract of 100 acres with an assessed value of $20,000 (or $200 per acre) and an equalization rate of 50% (or .50):

      Exempt value using method (a) = $20,000 x 80% = $16,000

      Exempt value using method (b) = $20,000 - ($40 x .50 x 100 acres) = $18,000

      Thus the correct exempt value for this tract would be $16,000, the lesser of the two alternatives.

      (b) Assume an eligible tract of 100 acres with an assessed value of $15,000 (or $150 per acre) and an equalization rate of 90% (or .90):

      Exempt value using method (a) = $15,000 x 80% = $12,000

      Exempt value using method (b) = $15,000 - ($40 x .90 x 100 acres) = $11,400

      Thus the correct exempt value for this tract would be $11,400, the lesser of the two alternatives.

      Where a watershed conservation easement (pursuant to 49 ECL) is purchased by New York City on a parcel having this exemption, the exemption on the underlying fee interest is adjusted in the same proportion as the "allocation factor," as determined by the City's independent appraisal. (The allocation factor is defined as the portion of the value of each parcel (less improvements) which the easement represents, expressed as a percentage).

      Sample calculation:

      Assume an unimproved parcel with an assessed value of $500,000 which qualifies as an eligible tract, and receives an exemption of $400,000 (80% of total assessed value). The City of New York purchases a watershed easement on this parcel, and determines that the allocation factor for the easement on this parcel is 0.70. The assessed value of the easement is thus $350,000 ($500,000 x 0.70), which is taxable in the name of New York City.

      The exemption on the encumbered parcel is pro-rated at $120,000 ($400,000 - (0.70 x $400,000)). The exemption still comprises 80% of the total assessed value of the parcel taxable to the owner of the property ($150,000).

    2. Special Ad Valorem Levies and Special Assessments: No exemption allowed.
       
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    47460   

    Assessment Roll Section(s): Taxable (RPS Section 1).

    NOTE: This code should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute that applies.

  7. FILING REQUIREMENTS (Owner or Occupant of Property):
    1. First Year of Exemption:

      Form RP-480-a - Application for Real Property Tax Exemption for Eligible Forest Land (see sample form following Exemption Profile)

      Form must be accompanied by a copy of the certificate of approval filed with the county clerk and issued by DEC (which requires a previously filed application to DEC) and a certified copy of the 10-year commitment to forest crop production filed with DEC.

      NOTE: Forms issued by DEC which must accompany Form RP-480-a are available at its regional offices. The location of DEC regional offices as well as a description of this program can be found on the NYS Department of Environmental Conservation's website .

    2. Each Subsequent Year:

      Copy of new 10-year commitment to forest crop production must be filed with the assessor.

      If the owner fails to file the 10-year commitment in any year following initial certification, the property is ineligible for exemption for that year. However, failure to file an annual commitment does not by itself subject the property to penalty taxes; the property remains free of such charges for 9 years following the last taxable year covered by an annual commitment, provided that none of the situations requiring the imposition of such charges occurs (see Property Use Requirements above).

      Exemption may be resumed in any later year by submission of a new 10-year commitment by the owner. However, if more than 5 years has elapsed since the last commitment was made, the owner must also file a new application with DEC to obtain certification and establish eligibility for exemption. A new application is also required whenever, during the preceding year, the approved management plan has been amended with respect to acreage or location of forestland committed under this program.

  8. REPORTING REQUIREMENTS (Assessor): None.
     
  9. SIMILAR EXEMPTIONS:
    Subject Statute
    Forest and reforested lands (Fisher Act) RPTL §480

    Exemption Application Form:

    Form RP-480-a

1 The special equalization rate is to be used where such a rate has been established as a result of a material change in the level of assessment of locally assessed properties from the prior to the current assessment roll.

2 The penalty tax is calculated by the county treasurer using an interest rate determined under RPTL §924-a, which pertains to delinquent taxes. (The rate is variable but is at least 12%.)

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