Senate Bill No. 151
(By Senators Tomblin, Mr. President, and Buckalew,
By Request of the Executive)
[Passed March 3, 1998; in effect from passage.]
AN ACT to amend and reenact sections two and eleven, article one- c, chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; to further amend said
article by adding thereto two new sections, designated
sections eleven-a and eleven-b; and to amend article three
of said chapter by adding thereto a new section, designated
section five-a, all relating generally to taxation of real
property; creating legislative findings and intent; adding
definitions; classification of managed timberland for
taxation; directing tax department to propose legislative
rules relating to setting timberland tax values; requiring
written report of impact of the program; setting
requirements for county assessors applying certain
valuations; providing for objection to assessor valuation by any person and for appeals; establishing appeal procedures
for designating and changing uses of managed timberland
property for tax purposes; establishing new taxing
guidelines for managed timberland; collecting back taxes on
property improperly classified; creating limitations and
criteria for assessing back taxes; creating an appeal
process for classification determinations; establishing
rates and interest collected for taxes due; providing for
collection and liens associated with back taxes; and
establishing effective dates for the provisions of this
Be it enacted by the Legislature of West Virginia:
That sections two and eleven, article one-c, chapter eleven
of the code of West Virginia, one thousand nine hundred thirty- one, as amended, be amended and reenacted; that said article be
further amended by adding thereto two new sections, designated
sections eleven-a and eleven-b; and that article three of said
chapter be amended by adding thereto a new section, designated
section five-a, all to read as follows:
ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.
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 ten 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 forty 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 forty 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.
(c) "Tax commissioner", "commissioner" or "tax department"
means the state tax commissioner or a designee of the state tax
(d) "Valuation commission" or "commission" means the
commission created in section three of this article.
(e) "County board of education" or "board" means the duly
elected board of education of each county.
(f) "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
(g) "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
The definitions in subdivisions (f) and (g) of this section
shall apply to tax years beginning on or after the first day of
January, one thousand nine hundred ninety-nine.
§11-1C-11. Managed timberland; findings, purposes and
declaration of legislative intent; implementation;
inspection and determination of qualification.
(a) The Legislature finds and declares that the public
welfare is enhanced by encouraging and sustaining the abundance
of high quality forest land within the state; that economic pressures may force industrial, residential or other land
development inconsistent with sustaining the forests; and that
tax policy should provide an incentive for private owners of
forest land to preserve the character and use of land as forest
land and to make management decisions which enhance the quality
of the future forest.
(b) In exercising the authority granted by the provisions of
section fifty-three, article VI of the constitution of West
Virginia, the Legislature makes the following declarations of its
(1) Notwithstanding the provisions of section twenty-four,
article three of this chapter, timberland certified by the
division of forestry as managed timberland shall be valued as
managed timberland as provided in this article when it is managed
under a cooperative contract with the division of forestry and
the certification has not been surrendered by the owner of the
property or revoked by the director of the division of forestry.
The division of forestry shall, at the time of contracting,
notify the owner that the owner shall incur a penalty as set
forth in section five-a, article three of this chapter if the
owner fails to provide written notice to the county assessor of
a change in use of the managed timberland.
(2) Property certified as managed timberland which prior to certification is properly taxed in Class II, as defined in
section five, article eight of this chapter and section one,
article X of the constitution of West Virginia, may not be
reclassified to Class III or Class IV, as defined in section
five, article eight of this chapter, merely because the property
is certified as managed timberland unless there is some other
event or change in the use of the property that disqualifies it
from being taxed in Class II.
(c) To aid the Legislature in assessing the impact of the
managed timberland program on the state of West Virginia, the
division of forestry and the tax commissioner, on or before the
thirty-first day of December, two thousand one, and on the
thirty-first day of December each year thereafter, shall report
in writing to the joint committee on government and finance of
the Legislature or its designated subcommittee. The tax
commissioner shall include in his or her report a complete and
accurate assessment of the impact of the managed timberland
program on the tax collections of the state, including projected
increases or decreases in tax collection. The division of
forestry shall include in its report detailed information on the
number of acres designated as managed timberland and any
identified impacts of the program on the state's timber industry.
§11-1C-11a. Certification of managed timberland; assessment of property; penalty for failure to comply.
(a) Any person who owns timberland comprising ten or more
contiguous acres may qualify for identification as managed
timberland for property tax purposes as set forth in subdivision
(1), subsection (d), section ten of this article.
(b) The assessor, upon receipt of an appraisal or
certification of the timberland from the tax commissioner, shall
assess the property as managed timberland 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) If the director of the division of forestry determines
that the owner of timberland failed to implement a certified
managed timberland plan within twenty-four 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 sixty 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 the first day of October 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) The sheriff shall deposit and account for the fines
collected under this section in the same manner as property
§11-1C-11b. Valuation; rulemaking; aggrieved person and taxpayer
protests; exhaustion of remedies; compliance inspection;
notice of revocation; appeal; effective date.
(a) The tax commissioner shall establish by legislative rule
two methodologies for determining the appraised value of managed
timberland, based upon the land's potential to produce future
income according to its use and productive potential as managed
timberland and whether the property is classified as Class II
property or as Class III or IV property for property tax
purposes. These values shall be determined by discounting the
potential future net income of the timberland to its present
value utilizing a discounted cash flow model based upon whether
the property is classified as Class II property or as Class III
or IV property for property tax purposes.
(b) The tax commissioner shall also establish by legislative
rule a method to determine the appraised value of timberland that
is not certified as managed timberland. All timberland that is
not certified as managed timberland shall be valued at its market
value, except for farm woodlots which shall be valued as part of
(c) Notwithstanding the provisions of section five-a of this
article, the legislative rules required by subsections (a) and
(b) of this section may be promulgated as emergency legislative
rules if they are filed in the state register on or before the
first day of July, one thousand nine hundred ninety-eight.
(d) The value of an acre of managed timberland in a county shall always be less than the value of an acre of timberland of
comparable soil quality in the county that is not certified as
(e) Any person aggrieved by any valuation of timberland may
file a written objection to the valuation with the county
assessor on or before the fifteenth day of January of the
assessment year. The written objection shall then be treated as
a protest filed by the taxpayer under section twenty-four-a,
article three of this chapter. If any person fails to exhaust
the administrative and judicial remedies provided in said
section, that person shall be barred from taking any further
administrative or judicial action regarding the classification of
the property for that assessment year.
(f) Upon request of the tax commissioner or the assessor or
county commission of the county in which the managed timberland
is located, the director of the division of forestry shall
inspect the property and determine whether or not the property
continues to qualify for preferential valuation as managed
timberland under this article. In the event the director of
forestry determines that a property does not qualify as managed
timberland due to a change in its use, or it is discovered that
a material misstatement of fact was made by the owner of the
property in the certification of the property as managed timberland under subdivision (1), subsection (d), section ten of
this article, or it is discovered that the property owner is not
complying with the terms of the managed timberland plan,
including any period of time for coming into compliance granted
the owner by the director of forestry, the director shall give
written notice to the owner of the property by certified mail,
return receipt requested, the tax commissioner and the assessor
of each county in which the property is located that the
certification of the property as managed timberland is revoked.
(g) The aggrieved owner of the property which had its
managed timberland certification revoked pursuant to any
provision of this code may, at any time up to sixty days from the
date of notification from the director of forestry, petition the
circuit court of the county in which the property is located for
(h) The provisions of this section shall apply to tax years
beginning on or after the first day of January, one thousand nine
ARTICLE 3. ASSESSMENTS GENERALLY.
§11-3-5a. Notification to assessor of changed use; independent
action of director; penalties; effective date.
(a) Whenever property receiving preferential valuation as
managed timberland is converted to a use that disqualifies the property from treatment as managed timberland, the person
converting the real estate to another use shall immediately, in
writing, notify the county assessor of the change in use. The
county assessor or tax commissioner, as the case may be, shall
then determine the value and classification of the property based
upon its new use.
(b) If the director of the division of forestry has reason
to believe that managed timberland was or is being converted to
a use that disqualifies the property from treatment as managed
timberland, the director shall investigate. If, upon
investigation, the director determines that the property no
longer qualifies for treatment as managed timberland, the
director shall revoke the property's certification as managed
timberland. The director shall give written notice to the owner
of the property by certified mail, return receipt requested, to
the tax commissioner and to the assessor of the county in which
the property is located that the property no longer qualifies for
valuation as managed timberland. If the property is located in
two or more counties, notice shall be given to each assessor.
(c) If any person fails to give written notice of the change
in use of managed timberland as required in subsection (a) of
this section, the person owning the property shall be subject to
a penalty in an amount equal to the amount of additional taxes the person would have paid on the property if written notice had
been timely given, plus interest calculated at the rate of nine
percent per annum: Provided, That the maximum penalty under this
section shall be five years of additional taxes plus interest.
This penalty may be assessed in the same manner as back taxes are
assessed under section five of this article for omitted property
and interest shall accrue until the day the penalty is paid.
(d) This section shall apply to tax years beginning on or
after the first day of January, one thousand nine hundred ninety- nine, and to changes in use occurring on or after that day.