Roads in Managed Forests
A Position Statement of the Society of American Foresters
Originally adopted on February 20,1998 and subsequently revised and renewed by the SAF Council on December
7, 2014. This position will expire in May of 2020, unless, after subsequent review, it is decided otherwise by the
Board.
Position
The Society of American Foresters (SAF) believes forest roads are necessary to provide access for managing and sustaining our nation’s federal, state, private, and tribal forest lands. Strategies and practices to maintain healthy and productive forests for multiple uses by present and future generations, such as timber harvesting, prescribed burning, wildfire control, recreation access, and habitat and watershed improvement require access on well-constructed and maintained road systems. Access is essential to provide for many critical environmental, economic, and societal needs from forest lands. There are widely developed and accepted best management practices (BMPs) whether regulatory or
nonregulatory, to guide forestry professionals in providing these services. Forest managers must also have the ability to restrict use of forest roads when necessary to ensure public safety, prevent wildlife disturbance, protect threatened or endangered species, or meet other resource management objectives. As such, SAF also believes that some public lands merit roadless protection due to their unique qualities.
Issues
The impacts of forest roads on water quality and fish and wildlife habitat and methods for mitigating those impacts have been widely studied. If roads are not located, constructed, and maintained properly sedimentation and fisheries damage could result. Roads must be well designed, constructed, and maintained to mitigate impacts to other resources. Proper management of roads on public land requires significant public investment in order for the roads to meet BMP standards. On private lands, the owners make these investments to comply with BMPs.
Environmental Concerns
To address concerns about the resource effects of forest roads, SAF promotes the use of BMPs to protect water quality and habitats for fish and wildlife. BMPs, along with ongoing monitoring and research, can target specific design features and methods that effectively limit surface erosion and mass soil failures, provide for safe storm flows, fish passage through culverts, and other environmental safeguards. Most states have thorough BMPs in place, whether they are mandatory, quasi-regulatory, or voluntary, with high compliance rates. These standards are mandatory for forest landowners whose lands are third-party certified to a sustainable forestry standard (SFI, FSC, ATFS, etc.) or deliver forest products to a certified facility.
There has been some attempt to increase regulations of forest roads, including requiring Clean Water Act NPDES (National Pollutant Discharge Elimination System) permits for stormwater discharges. SAF strongly supports the Environmental Protection Agency ruling, upheld by the Supreme Court, that forest roads are nonpoint sources and are not subject to the NPDES permitting process. Rather, potential discharges associated with forest roads are best mitigated by the effective use of state BMPs.
Roadless Areas on Public Lands
SAF recognizes that some roadless areas on federal lands may have special qualities that deserve protection, such as providing for remote recreation or protecting a rare plant or animal community. These areas may manifest forest health problems and access may be needed to control insects and disease or reduce hazardous fuels to prevent catastrophic wildfire and protect communities, watersheds, and wildlife habitat. In these instances, SAF favors access that maintains the roadless character of the area, and that is consistent with forest plans and stakeholder input.
Road Funding on Public Lands
Properly maintaining the vital forest road infrastructure on federal lands has become increasingly challenging as congressional appropriations have steadily declined. The model of forest road construction and maintenance being funded largely through receipts from commodity timber sales is no longer effective given the reality of the greatly reduced timber sale program. Federal land managers should look at other innovative ways to address road maintenance, decommissioning, and removal, including tools such as stewardship contracting that can be used to restore or maintain roads while also conducting forest restoration projects. Though this is only part of the solution to the road issue, it helps maximize the amount of work done with less funding. Controlling public access is another appropriate method to limit environmental impacts on some forest roads.
Background
As railroad logging declined in the 1930s and ‘40s, an extensive network of access roads began to evolve on forestlands, first on more accessible private lands and later, as demand for wood products greatly increased following World War II, on federal and state lands. Although forest roads were built primarily to facilitate timber harvest and log transport, the expanding road system significantly improved fire protection and provided access for more effective forest management and to fulfill the multiple-use mission of federal agencies. Forest roads became popular with the public, who used the improved access to public lands for outdoor recreation. By fiscal year 2000, recreation had become the largest single use of the national forest road system, accounting for 90 percent of the daily traffic (US Forest Service 2000).
Although the Wilderness Act of 1964 reflected a different view of some unique areas, the public generally regarded the expanding road system on other federal lands as a desirable feature because it enhanced access for recreation opportunities. Beginning in the 1970s, there was a growing recognition that road construction could have adverse
environmental impacts, particularly on water quality. The Clean Water Act Amendments of 1972 identified forest roads as a nonpoint source of pollution and increased attention at both the federal and nonfederal levels to road construction and maintenance practices. During the 1970s, some states — including California, Oregon, and Washington — enacted state forest practices laws with specific road construction and maintenance requirements. Other states, with federal technical and financial assistance, began developing forest road BMPs for private, state, and local forestlands. By the 1990s, states in the South developed BMPs designed to improve water quality associated with silvicultural activities, with emphasis on reducing sediment related to forest roads (Wear and Gries 2002). These BMPs have proven to be effective. Documented compliance rates approach 90% nationwide (Ice et. al. 2010), including in states with voluntary programs. Voluntary BMPs have an additional benefit of having lower administrative costs. BMPs are state- and site-specific, allowing them to most appropriately address the geomorphological attributes unique to each state. In addition, proper road construction and maintenance practices on forestlands is mandated by forest certification programs such as the Sustainable Forestry Initiative (SFI) (Wallinger 2003), the American Tree Farm System (ATFS) (American Tree Farm System 2015), and the Forest Stewardship Council (FSC) (Washburn and Miller 2003) for landowners certified to those standards.
Extensive public debate, media coverage, and litigation over administrative rulemaking and extensive federal roadless area proposals, together with policy efforts to more effectively address forest health and wildfire concerns, have highlighted the role of forest road systems on federal forestlands. A broadening of natural resource concerns on federal forests and limited budgets for road maintenance has required federal managers to assess existing road systems to determine if older roads are compatible with current resource goals, legal mandates, and budget needs. This has resulted in decisions to decommission roads or restrict motor vehicle access to protect wildlife or other resources, but also has raised concerns among recreational groups that use forest roads. Closed or decommissioned roads often need removal or restoration to protect soil and water quality. The availability of appropriated funding for this work is not adequate. Combining appropriated funds with other forest restoration projects that generate revenue increases the opportunity to fund road management.
There have been increasing efforts by states and cities to develop roadless areas on nonfederal lands to protect water quality and provide recreational solitude. Some public entities are using a variety of mechanisms including a subsidy to private landowners who use BMPs and acquiring development rights as both cost-effective and functional alternatives to accomplish this goal.
Federal and State Tax Treatment of Private Forestland
A Position Statement of the Society of American Foresters
Originally adopted on April 21, 1986 and subsequently revised and renewed by the SAF Board
in December of 2016. This position shall expire in May of 2021, unless, after subsequent review,
the Board decides otherwise.
Position
The Society of American Foresters (SAF) believes tax policies based on equity and certainty are required to encourage the nation’s private forest landowners to make sustained, long-term capital investments in forest management. Rather than distorting market forces, taxation of private forest landowners should be comparable if not equitable to other capital ventures, including agriculture, as this will encourage practices that retain forests that contribute monetary and societal benefits to the nation. Alleviating any prevailing uncertainty in tax policies relating to forest management is important to forest landowners due to the unique and long-term characteristics associated with timber and forest management investments, including the intergenerational transfer of forestlands and the acceptance of long term risks by forest landowners. Ultimately, the nation should strive for sustainable forests, where the economic, environmental, and social values provided from forests are in balance. Sound tax policy will ensure sustained environmental and social benefits within a predictable economic framework. Incentives such as use value property taxation, expensing of management expenses, capital gains treatment of timber sale revenue and the reforestation expense and amortization are tools to reduce the burden of forest management and should be maintained. To encourage management of healthy forests, equitable tax treatment as well as strong markets and reasonable regulations are necessary.
Issue
Private forests provide essential watershed protection, carbon sequestration, wildlife habitat, and many recreational opportunities, as well as the major share of forest products produced in the United States. As a result, private forest landowners will need to take a leadership role in the practice of sustainable forestry, conservation, and best management practices. Private forest landowners incur costs related to the production of these benefits without often receiving revenues for many years. In addition, private forests can be subject to a variety of development pressures to convert to other land uses. Federal and state tax policies can play an important role in counteracting these pressures that reduce private forests’ ability to provide these wide-ranging benefits. Well-crafted tax policy can further the public’s interest in promoting adequate investment in, and sustainable management of, the nation’s privately owned forests. Also of concern is the ever-changing nature of our tax policies. Forest landowners are invested in the property for the long-term and thus need stability in the tax codes under which they operate. They cannot plan for the future under tax codes that are unstable or in flux with provisions that can be threatened by each legislative session.
Background
The Role of the Private Forest Landowner
Private forestry investments significantly add to the ecological, economic, and social prosperity
of the nation. Approximately 445 million acres (58%) of forestland in the United States is owned by private individuals, corporate entities, or other private groups. These lands accounted for more than 90 percent of the nation’s wood and paper products (Oswalt et al. 2014). The nation’s private forests represent an important pillar of job creation in rural areas where each 1,000 acres of privately owned forest is responsible for the creation of seven jobs. For example, Forest2Market’s (2013) 32-state study found that more than 2.4 million people were employed either directly or indirectly in forest-related sectors. In addition to wood fiber, the sustained management of private forests provides wildlife habitat, recreation opportunities, and numerous environmental amenities such as clean water, carbon sequestration, and biodiversity protection. Private forest landowners are also dealing with the very real risk of insect and disease issues, and natural disasters such as hurricanes, tornado’s, ice and wildfire. Some of these risks can be reduced through forest management practices.
Private forests face tremendous pressures from urban expansion, highway construction, utility rights-of-way, and the aforementioned reliance of society as the primary source of wood fiber. Increasing development pressure on private forests, combined with inconsistent treatment of forest management compared to agriculture in the federal tax system, discourages private forest owners from managing for long- term sustainability and environmental quality (see SAF’s Position Statement on Loss of Forest Land:
The Abbreviated Tax Treatment of Private Forest Lands
Three types of taxes affect private forest landowners: property, income, and estate taxes (Kimbell et al. 2010). The federal government levies income and estate taxes, while state and local municipal governments may collect all three. Property tax systems vary greatly across the country and often within a state. The property tax is often determined at the county or locality level, in most cases with a use tax provision in place for working lands. These use tax provisions allow forest land to be taxed at its current use value rather than its value for development purposes. In some instances, these use tax provisions result in a deferral of property tax which is then collected at the time of a timber sale or an outright reduction in assessed value.
In the federal income tax system, forest landowners generally qualify for long-term capital gains treatment on profits generated from the sale of timber (Greene et al. 2012). Federal tax provisions take into account the long-term nature of forest investments: the treatment of reforestation which allows $10,000 to be deducted in the first year for qualified expenditures, and the amortization of additional expenses for 84 months. Additionally, timber depletion deductions allow forestland owners to recover all or a portion of their investment costs upon liquidation. Deductions also allow for casualty losses, timber theft, public condemnation, and other involuntary conversions (Greene et al. 2012).
The federal estate tax rate can be an important factor in forest management planning. Though the estate tax is more often levied at the state level, studies have demonstrated that the federal estate tax can force heirs to suboptimize their assets, in effect distorting market forces, by either harvesting timber prematurely or selling the timberland outright to pay the levied tax. Greene et al. (2006) estimated that landowners harvest 2.4 million acres of forestland each year to pay the federal estate tax, which causes some forest landowners to fragment and parcelize their lands. However, maintaining the current estate tax package that carries a 40 percent tax on estates over the exemption with the exemption indexed for inflation and includes an allowance for a spouse to carryover unused exemption amounts as opposed to previous tax packages with taxes approaching 55 percent of estate (with exemption values) may influence landowner behavior and result in retention of forests. This package coupled with the ability to utilize section 2032A which can reduce the value of the forested part of the estate by up to $1,110,000 (2016 number, adjusted for inflation each year) may reduce the burdens on heirs that can result in suboptimization of assets.
Many aspects of private forestry infrastructure, including manufacturing plants, in-woods equipment investments, and sustained forest management have been encouraged by federal tax policies, such as tax rates more favorable than ordinary income rates, accelerated depreciation schedules, deductions, and tax credits (USFS 2011). Employing the functionality of the Federal tax code is preferable to subsidy programs since it provides for more equitable participation of private forest landowners.
The Unique Nature of Private Forestland Investments
Investments in private forest management are unique in many respects. Typically, they: must be held for a long period of time (i.e., decades), are subject to substantial physical and economic risk, have a low degree of liquidity, and sometimes yield rates of return that are low relative to other capital investment opportunities. These investment characteristics can have serious adverse consequences for the nation’s private forests where a significant investment might not yield an offsetting return for 20 to 120 years.
Collectively, these factors discourage many forest owners from investing in forest management, and contributes to reduced interest in forest regeneration, decreased timber production, liquidation of timber inventories, and makes forest ownership and timber investments less attractive than non-timber options. The associated adverse impacts are substantial with respect to ensuring a sustained stream of forest products and environmental services into the future from the nation’s private forests. Management of our forests is critical to the production of clean air, clean water, wildlife habitat, recreation as well as wood products. Sound tax policies at the state and federal level along with strong markets and reasonable regulations are key for sound private forest land management that leads to healthy forests.