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Timberland Tax Exemption Bill Passes House
HB 358 Lowers Assessment to Encourage Logging, Cut Fire Danger

(JUNEAU) - Municipalities would have an additional tool to lower the threat of fires on spruce bark beetle-killed forest land under House Bill 358, which passed the House today allowing municipalities to waive property taxes on roads or other property improvements that facilitate removal of the timber.

Rep. Mike Chenault (R-Nikiski) introduced House Bill 358 in response to efforts by the Kenai Peninsula Borough to encourage owners of beetle-killed spruce timber to build roads to make it easier to cut down or remove dangerously dry wood from their land, and reduce the general threat of fire.

"The spruce bark beetle has infected about half of the 2.2 million acres of spruce forest on the Kenai Peninsula, and that means that we're living in the middle of a huge tinderbox just waiting for a spark to set it off," said Chenault. "It's a big hazard, and I'm glad to be able to help reduce that threat."

Because much of the land is in large parcels lacking roads, utilities or staging areas necessary for logging, the borough last April tried to enact a property tax waiver program as part of its beetle mitigation efforts. But the plan was blocked when borough attorneys found state law did not allow for such breaks, he said.

"House Bill 358 simply makes the necessary changes to state law for the Kenai Borough or other municipalities in a similar situation to encourage people to help protect themselves and their neighbors without having to take on additional tax liabilities," Chenault said.

The measure does not mandate the tax breaks, but merely allows municipal assemblies the option to hold property assessments to the original value of the land, upon a finding that the improvements are primarily intended to aid in reducing fire danger. Property improvements unrelated to addressing beetle-killed spruce would still be liable for additional property taxes at the normal assessed rate.

While some people have said it is inappropriate to grant tax benefits when people might try to make money selling beetle-killed spruce as timber, the state Division of Forestry has said that most of the beetle-killed spruce has little or no commercial value, Chenault noted.

HB 358 moves next to the Senate for consideration.

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