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Non-industrial Timber Management Plans
The following information pertains to Non-industrial Timber Management Plans (NTMPs). If you have a question that is not answered here, e-mail it to us at forestry@mcn.org.
NTMPs and Conservation Easements
NTMPs and Tax Benefits
NTMPs and Landowner Objectives
NTMPs and the Forest Practice Act
An NTMP (Non-industrial Timber Management Plan) is a rather intensive resource planning project for landowners with less than 2,500 acres that gives the landowner a high level of knowledge, flexibility and freedom in the management of their properties. It can also be a crucial document in the preparation of a conservation easement that could significantly reduce your federal income tax burden as well as the inheritance taxes on the your properties.
The NTMP focuses on timber management and, in addition to documenting the existing and projected future stands, specifies a maximum harvest allowed in a certain minimum time period. The NTMP also includes information on such subjects as wildlife habitat, archaeology, water quality, etc. The plan allows the landowner to do less harvesting than is scheduled and to have some flexibility in the timing of harvests so as to respond to changes in the market and/or changing financial needs. Special areas, such as old growth groves, may be excluded or included in the plan. If included, they would be inventoried and assigned a certain function that is in accordance with your objectives, with specific limits on what management activities could take place within them. You could, for example, allow the salvaging of a windthrown tree but not allow the harvesting of any standing trees.
The following pages include a summary of what an NTMP includes as well as examples of what landowner objectives might be enhanced or maximized. This includes a brief description of potential tax and estate planning benefits. It is very important to us to gain a good sense of the landowner's wishes and values and to tailor the plan to those specific objectives. We also understand that these objectives and values change and evolve as the plan progresses, and that regular communication is invaluable in formulating a plan that truly meets the needs and desires of the landowner. The goal is to craft a plan which fits the objectives of the landowner, the resources of the property, and the laws and rules of the government.
Our services for previous clients have included an inventory and stocking cruise of the property, plan preparation, preparing applications for the federal Stewardship Incentive Program (a cost-share program for tree-planting projects designed to help restore timberlands), interviews with the prospective logger, assessment of current timber markets, and consultation and preparation of correspondences to secure right-of-way agreements.
An NTMP carries certain tax benefits. First, when combined with a conservation easement, it can reduce the appraised value of a property or group of properties by permanently rescinding certain property rights that you do not intend to use anyway. These might include the right of anyone (forever) to harvest certain specified trees or stands of trees, or the consolidation (forever) of two or more parcels into a single parcel. The dollar amount by which this reduces the appraised value of your property can then be taken as a charitable contribution. The IRS recognizes the NTMP as having a conservation benefit, and so any such charitable contribution may be taken as a deduction to your federal income tax and spread out over a six-year period.
Second, the reduction in the appraised value of the property may significantly lighten future inheritance tax burdens on heirs. Of course, the use of an NTMP in this way requires the services of a real estate appraiser, a tax consultant, and a land trust. Land trusts usually require a fairly substantial endowment so that they formulate and legalize the easement as well as defend it in court if it is ever threatened. The amount of the endowment is determined by the land trust is sometimes determined as a percentage of the charitable contribution made to them.
A "Nonindustrial Timber Management Plan" (NTMP) is a management plan for owners of less than 2,500 acres of timberland who are not primarily engaged in the manufacture of forest products. Its objective is the creation of an uneven-aged managed timber stand and sustained yield for each parcel or group of contiguous parcels meeting the requirements.
The NTMP:
- assesses the areas with soils capable of timber production;
- assesses the present stand structure, volume and growth;
- assesses the potential growth and predicts future volumes;
- assesses the current road system;
- specifies new road construction, reconstruction and maintenance;
- assesses and mitigates for soil erosion problems;
- assesses the residual skid road system from prior harvests;
- assesses pest, disease, and fire potential;
- assesses the priority of forest values of the landowner;
- establishes a schedule of harvests, rehabilitation, and regeneration activities so that, when fully regulated, no more is harvested than has grown since the previous harvest. In other words, provides sustained yield;
- assesses the impact of the planned operations on wildlife, water quality, aesthetics, grazing, recreation, and traffic.
Forestland owners can use an NTMP to help meet many diverse objectives including engaging in activities which:
- create a sustainable forest structure;
- improve the existing stand;
- favor the growth of larger trees, especially redwood and Douglas-fir;
- reduce the risk of catastrophic fire;
- recognize the value of and maintain the diversity of species (including hardwoods);
- consider and provide for wildlife habitat;
- are aesthetically pleasing;
- add value to the property;
- provide regular future income;
- provide for a well designed and maintained system of roads
- have a conservation benefit;
- contribute to the local economy;
- enhance other management objectives such as grazing and hunting.
Z'Berg-Nejedly Forest Practice Act of 1973. Article 7.5 of Chapter 8 of Part 2 of Division 4 of the Public Resources Code. Nonindustrial Timber Management Plan.
4593. Legislative findings and declaration
- (a) The Legislature finds and declares that a substantial acreage of timberlands of the state are held by private non-industrial owners and that it is the policy of the state to increase the productivity of these timberlands under prudent management plans to serve the public's need for timber and other forest products.
- (b) The Legislature further finds and declares that minimal environmental harm is caused by prudent management of non-industrial timberlands because low volume production and dispersion around the state of these small tracts reduces damage to aesthetics, air qualify, watersheds, and wildlife.
- (c) The legislature further finds and declares that it is the policy of the state to encourage prudent and responsible forest resource management of non-industrial timberlands by approving non-industrial timber management plans in advance and withdrawing governmental discretion to disapprove non-industrial timber harvest notices submitted pursuant to the approved non-industrial timber management plans.
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