Joint Legislative Council prefatory note: This substitute amendment was
prepared for the Joint Legislative Council's Special Committee on Review of the Managed
Forest Land (MFL) Program.

FOREST ENTERPRISE AREAS

This substitute amendment directs the department of natural resources (DNR) to
designate forest enterprise areas in administrative rule. The DNR may designate forest
enterprise areas with a combined area of no more than 200,000 acres. However, before
January 1, 2013, the DNR may only designate up to 10 forest enterprise areas with a
combined area of not more than 75,000 acres of land. The minimum size of a forest
enterprise area must be 5,000 acres. In designating forest enterprise areas, the DNR
must give preference to areas that include at least 1,000 acres of land enrolled in the MFL
program.

In order to create a forest enterprise area, a town or county must apply to the DNR
for designation of a forest enterprise area. The proposed forest enterprise area must be
consistent with the town or county forest preservation or development plan if one exists.
The DNR is required to promulgate rules as to what information must be included in an
application.

A town within a forest enterprise area will receive, from revenues collected by the
state from the forestry mill tax, an annual payment of $1 for each acre of the town
designated as MFL that is included in a forest enterprise area. A county within a forest
enterprise area will receive, from the forestry mill-tax revenues, an annual payment of
50 cents for each acre of the county designated as MFL that is included in a forest
enterprise area. The DNR may not include an acre of land in more than one enterprise
area.

A town or county must use these funds for sustainable forestry and forest-based
economic development within the town or county, including educating landowners about
the benefits of participating in a forest enterprise area, and contracting with a private
forestry consultant to assist landowners in preparing MFL applications or MFL owners
in preparing management plans.

REVIEW OF SOUND FORESTRY PRACTICES BY MANAGED FOREST LAND
REVIEW BOARD

Under current law, an applicant for participation in the MFL program or an owner
of managed forest land who is adversely affected by a decision of the DNR is entitled to
a contested case hearing under ch. 227, stats.

This substitute amendment creates an optional procedure for MFL owners who are
dissatisfied with a DNR decision regarding the practice of sound forestry. Under this
procedure, an MFL owner who is dissatisfied with a DNR decision regarding the practice

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of sound forestry may request review of the decision by the MFL Board. The board
members are appointed by the DNR secretary for 3-year terms. The board consists of 7
members: one DNR regional forester; one private consulting forester, one forester who
represents the Society of American Foresters; one forestry academic; one county forest
administrator; one member of a nonprofit conservation organization; and one private
nonindustrial owner of a woodland enrolled in the MFL program.

The board must review and decide the issues included in the MFL owner's request
within a reasonable time. Upon conclusion of the review process, the board must issue
an opinion for review by the chief state forester, who must then determine whether to
accept the opinion of the board. All decisions of the chief state forester must be in writing
and include sufficient facts in order to substantiate the decision.

The DNR must promulgate rules establishing the procedures and timeline for
filing, review, and decision of the issues that come before the board for its review and
action.

An MFL owner who receives a decision of the chief state forester retains the right
to a contested case hearing under s. 227.42, stats., on the issues decided by the chief state
forester.

MANAGED FOREST LAND MANAGEMENT PLANS AND TIMBER
HARVESTS

Under current law, s. NR 46.18 (4), Wis. Adm. Code, permits the DNR to modify the
requirements of management plans under the MFL program for ownerships exceeding
1,000 acres. Management plans may be modified after consideration of the following:

• Other land of the owner entered as MFL or forest crop land.

• The number of counties in which lands proposed for entry or renewal or the
owner's existing MFL and forest crop land lie.

• The existence and availability for review of a management plan prepared by or
for the owner and acceptable to the DNR.

• Submission of a written commitment from an owner to provide, upon DNR
request, information from the management plan for review or audit. The commitment
shall describe the management plan and outline the procedure used to update and amend
the management plan.

• An owner's demonstrated consistent accessibility to competent technical forest
management assistance through staff or consultant services.

This substitute amendment shifts the contents of s. NR 46.18 (4), Wis. Adm. Code,
to the managed forest land subchapter of ch. 77, stats. Additionally, the substitute
amendment directs DNR to promulgate rules to permit the management plans of groups
of owners of managed forest land to be modified in the same manner as permitted for large
ownerships. The substitute amendment directs the DNR to submit its proposed rules on
this topic to the administrative rules clearinghouse no later than the first day of the 12th
month after the effective date of the substitute amendment.

Under current law, s. 28.025, stats., directs DNR to establish annual allowable
timber harvests for forested property owned by this state and forest property under the
jurisdiction of DNR from which timber is harvested.

This substitute amendment requires modified management plans for ownerships
that exceed 1,000 acres to include the establishment of an annual allowable harvest. This
requirement would not apply to ownerships exceeding 1,000 acres whose lands are
certified by an independent third party. The substitute amendment directs DNR to
promulgate rules to establish annual allowable timber harvests in modified management
plans.

Finally, this substitute amendment specifies that, if the DNR requires an owner
of MFL to harvest particular timber from the land within a specified time period, the time
period may not be less than three years.

DESIGNATION OF ADDITIONAL MANAGED FOREST LAND

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Under the MFL program, an owner of land designated as MFL under an order that
takes effect on or after April 28, 2004, may apply to the DNR to designate an additional
parcel of land as MFL if the additional parcel is at least 3 acres and is contiguous to any
of the owner's designated land. The application must include a nonrefundable $20
application recording fee unless a different amount is established by the DNR by rule at
an amount equal to the average expense to the DNR of recording a managed forest land
order. The fee must be deposited in the conservation fund. An application must be
submitted on a DNR form and must contain any additional information required by DNR.
[s. 77.82 (4), stats.]

If an owner of land that is designated as MFL under an order that takes effect
before April 28, 2004, wishes to have designated as MFL an additional parcel of land that
is at least 3 acres in size, that does not satisfy the MFL program eligibility requirements,
but is contiguous to any of the owner's designated land, the owner may withdraw the
designated land from the original order and may file an application with the DNR for a
new order covering both the withdrawn land and the additional land. The withdrawal
tax and the withdrawal fee do not apply under these circumstances. [s. 77.82 (4g), stats.]
However, the filing of the new order has the effect of applying the current requirements
of the MFL program, including a higher rate of taxation to both the additional parcel and
the designated land from the original order.

This substitute amendment sunsets current law as it applies to owners of land
designated as MFL under orders that take effect before April 28, 2004. Instead, under
the substitute amendment, the land owner would be able to designate an additional
parcel of land as MFL in, generally, the same manner as an owner of land designated as
MFL under an order that takes effect on or after April 28, 2004.

Under the substitute amendment, only the additional parcel of land designated as
MFL would be subject to the taxes in effect when the application for addition of the parcel
is filed.

LEASING OF MANAGED FOREST LAND

Under current law, for land designated as MFL under an order that takes effect on
or after October 27, 2007, no person may enter into a lease or other agreement for
consideration if the purpose of the lease or agreement is to permit persons to engage in
a recreational activity. Any lease or other agreement for consideration that permits
persons to engage in a recreational activity was voided effective January 1, 2008.

The managed forest law defines recreational activities to include hunting, fishing,
hiking, sight-seeing, cross-country skiing, horseback riding, and staying in cabins.

This substitute amendment repeals the prohibition on leasing of MFL. Instead,
the substitute amendment permits the leasing of MFL, including leases and other
agreements for consideration, that permit persons to engage in a recreational activity, if
the use does not conflict with sound forestry practices or any forest management objective
contained in the management plan for the land. The substitute amendment also specifies
that any person who enters into a lease shall be subject to a forfeiture if the lease presents
a conflict with sound forestry practices or the forest management objectives contained in
the management plan.

TAXATION OF MANAGED FOREST LAND

Except as provided under the MFL program, no tax may be levied on MFL, except
that any building on the land is subject to taxation as personal property under ch. 70,
stats.

MFL Orders Effective Prior to April 28, 2004

Each owner of MFL must pay to the municipal treasurer an acreage share on or
before January 31. Originally, this acreage share was $.74 per acre. In addition to this
amount, each owner was required to pay $1 for each acre that is designated as closed
under s. 77.83, stats.

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Beginning in 1992 and in each 5th year thereafter, the department of revenue
(DOR) adjusts the amounts of tax by multiplying the original acreage shares specified by
a ratio using as the denominator the DOR's estimate of the average statewide tax per acre
of property classes under s. 70.32 (2) (b) 4., 5., and 6., 1993 stats. (agricultural, swamp,
or waste and productive forest land), for 1986 and, as the numerator, the DOR estimate
of the average tax per acre for the same classes of property for the year in which the
adjustment is made. Based on this adjustment, the current acreage share is $.67 per acre
of open land and $1.57 per acre of closed land. [s. 77.84 (2) (c), stats.]

MFL Orders Effective on or After April 28, 2004

For MFL orders that take effect on or after April 28, 2004, each owner of MFL must
pay to each municipal treasurer, on or before January 31, an amount equal to 5% of the
average statewide property tax per acre of property classified as productive forest land
under s. 70.32 (2) (a) 6., stats., for each acre of MFL.

In addition to this amount, each owner must pay to each municipal treasurer, on
or before January 31, an amount equal to 20% of the average statewide property tax per
acre of property classified as productive forest land under s. 70.32 (2) (a) 6., stats., for each
closed acre of MFL.