Letter: FLTAC recommends common sense taxation revisions

A number of people -- private citizens, elected legislators and state staff  -- achieved a quiet accomplishment recently.  During the 2021 Legislative Session, two bills (SB 262 and SB 263) were passed to revise the duties of the Forest Lands Taxation Advisory Committee (FLTAC) and charge that advisory committee to examine and modernize the tax rate on Forest Land (Class 10) properties.

Members of FLTAC have been meeting since July 9, 2021. Members include four forestry experts appointed by both parties of Montana's Senate and House, along with two industrial forest landowners, two nonindustrial forest landowners, and a county commissioner appointed by the Governor. The FLTAC is supported by staff at the Montana Department of Revenue (DOR), and accepts public comment.

Between July 2021 and April 2022, FLTAC held seven meetings and numerous subcommittee meetings to analyze and develop recommendations to forward to the Legislative Revenue Interim Committee. The advisory committee's review included productivity and stumpage value, wood production, and agriculture-related income.

Montana's industry professionals have seen 32 mills closed since 1990 -- only five remain. In 2000, there were over 4,300 production workers in our wood products industry with nearly $150 million in wages and 1,177 million board feet produced here. By 2021, workers tally 1,515 and wages totaled less than half of the 2000 figure, and production rates dropped to 421 million board feet. Private timberland ownership is declining, yet product demand and costs continue to increase. The work by FLTAC examined DOR methodologies, and made recommendations to update tax policy in a manner reflecting the industry's current status.

FLTAC's meeting in April resulted in the following recommendations be incorporated into a draft bill for the 68th Legislative Session: revise the DOR reappraisal cycle for forest properties to a two-year schedule beginning in tax year 2025; utilize a ten-year averaging method; revise the tax rate for tax years 2023 and 2024; and to require FLTAC meet at least once annually. The Revenue Interim Committee unanimously adopted the recommendations during its June 18th meeting.

The recommendations by FLTAC are common-sense taxation revisions in support of Montana's forest land industries. Special thanks to the following members:  Gordy Sanders, Pyramid Mountain Lumber, Seeley Lake; Paul McKenzie, FH Stoltze Land & Lumber, Columbia Falls; Randy Mannix, Helmville; Nancy Mehaffie, Thompson Falls; Senator Mike Cuffe, SD1-Eureka; Senator Pat Flowers, SD32-Belgrade; Representative Marilyn Marler, HD90-Missoula; and Greg Chilcott, Ravalli County Commissioner, Hamilton.

It was my honor and privilege to serve alongside these advisory committee members. Thank you.

/s/Rep. Becky Beard,

HD80-Elliston

FLTAC Chair