222-21-045 - Valuation
(1) The small forest landowner office will calculate the compensation amount for forestry riparian easements by determining a value for the qualifying timber. The office will use data gathered from or adjusted to the date the office received the complete forestry riparian easement application. The office will use the stump-age value determination method described in (a) of this subsection for qualifying timber that cannot be harvested because of forests and fish rule restrictions. For qualifying timber approved for harvest, the office will use both the stumpage value determination method and the small harvester tax return method to determine the highest compensation amount for the landowner.
(a) Stumpage value determination method. The small forest landowner office will create and maintain value tables to determine stumpage value of the qualifying timber. These tables will be created using a method coordinated with the department of revenue. The values will closely approximate the stumpage value for logs on the date the office received a complete forestry riparian easement application. The landowner will provide:
(i) The reference for the stumpage value table and any other needed information for use of the table; and
(ii) Any information the landowner would like the office to consider in its cruise and valuation of the qualifying timber.
(b) Small harvester tax return method.
(i) The landowner must provide comprehensive mill or buyer information for each harvest unit associated with the forestry riparian easement including:
(A) The delivered value by species;
(B) The total volume by species; and
(C) The actual harvesting and marketing costs as defined in the department of revenue small harvester instructions.
This information must be verifiable as proceeds from the timber harvests from documents such as mill receipts and/or forest excise tax returns. If the small forest landowner office does not receive a comprehensive packet of mill or buyer information or is not satisfied with the source of the documentation, the office will determine the qualifying timber value using the stumpage value determination method.
(ii) The office will use a time adjustment index to determine the qualifying timber value based on the date the office received the complete forestry riparian easement application. The office will generate a time adjustment index for each harvest associated with the easement based on log price changes.
(iii) The office will determine the adjusted stumpage value by subtracting the average logging and hauling cost per thousand board feet (MBF) from the value of the time adjusted mill or buyer information. The office will then determine the value of the qualifying timber by multiplying the time adjusted stumpage value of each species in the harvest unit by the net volume for each corresponding species in the inventory of qualifying timber.
(iv) The department determines the values of the timber species that exist in the easement premises, not the species in the harvest area. The department determines the easement value by multiplying the determined cruise volume of qualified timber in the easement premises by the appropriate stumpage value of those species shown on the appropriate table used for timber harvest excise tax purposes per RCW 84.33.091.
(2) Determining the forestry riparian easement compensation. The small forest landowner office uses a "high impact regulatory threshold" to calculate the compensation offered for a forestry riparian easement. This threshold is determined by multiplying the value of all timber covered under a forest practices application by 19.1 percent for timber in western Washington and 12.2 percent for timber in eastern Washington.
(a) When the percentage of the qualifying timber value to the total value of all timber covered under a forest practices application is equal to or less than the applicable high impact regulatory threshold (19.1 percent or 12.2 percent), the compensation offered for an easement will be fifty percent of the qualifying timber value.
(b) When the percentage of the qualifying timber value to the total value of all timber covered under a forest practices application exceeds the applicable high impact regulatory threshold (19.1 percent or 12.2 percent), the compensation offered for an easement will be more than fifty percent of the qualifying timber value up to the applicable high impact regulatory threshold, plus full compensation (one hundred percent) for the qualifying timber value that exceeds the high impact regulatory threshold. This is mathematically represented as follows:
Vq = the value of qualifying timber;
Vh = the value of harvested timber; and
t = the high impact of regulatory threshold (19.1 percent for western Washington, 12.2 percent for eastern Washington);
The compensation for easement = (((Vq/(Vq + Vh)) -t) * (Vq + Vh)) + (t * (Vq + Vh)/2).(Amended by WSR 21-06-020, Filed 2/22/2021, effective 3/25/2021)
Statutory Authority: RCW 76.090.040 [76.09.040], 76.09.370 and 76.13.120. 12-11-106, § 222-21-045, filed 5/22/12, effective 6/22/12. Statutory Authority: RCW 76.09.040, 76.09.370, chapters 76.13 and 34.05 RCW. 03-06-039, § 222-21-045, filed 2/26/03, effective 3/29/03. Statutory Authority: RCW 76.09.040, chapters 76.13, 34.05 RCW. 02-05-084, § 222-21-045, filed 2/20/02, effective 3/23/02. Statutory Authority: Chapter 34.05 RCW, RCW 76.09.040,[76.09.]050, [76.09.]370, 76.13.120(9). 01-12-042, § 222-21-045, filed 5/30/01, effective 7/1/01.
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