Understanding Michigan's Commercial Forest program
Nov. 21, 2013
By 1925, the lumbering era had left Michigan void of an important commodity to ensure future industry success -- abundant private forests. In an effort to encourage landowners to begin reforesting, a property tax incentive called the Commercial Forest (CF) program was created.
"As the forests became re-established, the law has changed over the years to provide a property tax incentive that encourages private landowners to retain and profitably and sustainably manage their forest land for long-term timber production," explained Shirley Businski, who oversees the CF program, which is administered by the Department of Natural Resources' Forest Resources Division.
"Today, nearly 1,800 private landowners participate in the program."
CF landowners range from large, industrial timber producers to small, non-industrial businesses, private individuals, civic groups and trusts. There are more than 2.2 million acres listed in the CF program, the vast majority of which is in the northern two-thirds of the state.
Landowners do not pay ad valorem taxes, which are based on a property's assessed value, but pay a specific tax of $1.25 per acre per year for land enrolled in the program. Additionally, the state of Michigan makes an annual payment (from the General Fund) of $1.25 per acre to each county with CF land, to help offset the lost local tax revenue.
"The commercial forest program was designed to promote the forest products industry in Michigan and allow landowners to maintain tracts of timber without making it necessary to develop the land to pay the property taxes," explained Bill O'Neill, chief of the Forest Resources Division.
O'Neill, who also serves as state forester, said the law is very important to Michigan's forest products industry. The industry agrees.
"The Commercial Forest program is a crucial program for large timber management companies doing business in Michigan," said Charlie Becker, senior resource manager of Plum Creek, a timber producer and wood products manufacture that is the state's largest CF landowner with more than a half million acres in the Upper Peninsula
"Property taxes, in general, are relatively high in Michigan compared to other areas of the country, but the CF program provides an attractive alternative that helps forest industry and timber investors remain competitive in the state, If the Commercial Forest program was ever to go away, so would the large corporate investments in Michigan's timberlands."
In order to be eligible for the CF program, landowners must adhere to certain rules and responsibilities.
"The CF statute requires landowners to manage the property for commercial timber production by having a written forest management plan, and certifying that the plan is in effect," Businski explained.
CF statute prohibits other land uses including agriculture, grazing, industrial, developed recreation, residential, resort, and commercial or developmental activities. There are also restrictions related to mineral extraction and wind energy development on CF land.
The statute also requires that landowners not deny the public the privilege of hunting and fishing on listed land, unless that land is closed to hunting, fishing or both, by the DNR or an act of the Michigan Legislature.
Hunters and anglers who want to use CF land must be aware, however, that many activities that they may associate with hunting and fishing are not covered by the law.
Although the CF statute opens listed land to the public for hunting and fishing, the statute does not address the public's use of the land. This has resulted in many questions and misunderstanding surrounding public use for hunting and fishing.
"It is important for hunters and anglers to understand that CF land is not public land," Businski said. "CF land is privately owned land that, although open to the public for the acts of hunting and fishing, is otherwise subject to private property rights, such as trespass and littering."
Businski said the DNR relies on two court rulings from the mid-1990s and general advice from the Attorney General's office to address questions about the public's use of CF land.
Based on the court rulings, AG advice and Michigan's private property laws, CF land must be open to foot access for the acts of hunting and fishing. It is up to the private landowner to decide whether to offer visitors on CF land such things as:
- Motorized access;
- The right to leave anything unattended; and
- The right to pursue any activity other than the acts of hunting and fishing (even if those activities might aid visitors in hunting or fishing).
As for motorized access, although many CF lands have logging roads that have traditionally been used by the public to access the property, the use of such roads by the public is entirely up to the individual landowners.
CF land cannot be posted in a manner that restricts or infers restriction for hunting and fishing access, but landowners can restrict access for activities other than hunting and fishing (e.g., motorized access, mushroom hunting and bird watching). The exception to this rule is during active timber harvest or mineral-exploration operations when CF land can be closed to hunting and fishing for safety reasons.
A 2013 amendment to the statute provides for CF land that becomes inaccessible through no fault of the landowner to remain in the program. For instance, if access to a particular CF parcel was through an adjacent CF property owned by someone else, and that neighbor withdraws their parcel from the program, the CF parcel that is now inaccessible may remain in the program.
So what should a hunter or angler know before accessing CF land?
- Landowners must allow foot access to CF land to individuals to hunt and fish; landowner permission is not necessary.
- CF land may be fenced and gated as long as foot access is available to hunters and anglers.
- Access to CF land by motor vehicle or activities other than the acts of hunting and fishing are at the discretion of the landowner.
- The only buildings or improvements permitted on CF land are those used exclusively for forest management operations. Landowners must withdraw land on which they wish to build or improve.
- The use of nails, bolts or tree steps that could lessen the value of timber is not allowed and the cutting of shooting lanes or the destruction of brush, trees or other vegetation is prohibited.
Landowners may withdraw their land from the CF program at any time, but they must pay a penalty to the township treasurer upon withdrawal. This payment is a partial reimbursement of the tax revenue that was not paid to the township while the land was listed in the program. The withdrawal penalty is calculated using a formula that is in statute.
Maps and legal descriptions of currently listed CF lands can be found online at www.michigan.gov/privateforestland.
CF land is also included in the DNR's Mi-HUNT interactive map application, which can be found by visiting www.michigan.gov/mihunt.