Extends time from 6 to 12 months for the Attorney General to prosecute where the costs of the State Forester for fire suppression have become a lien on property.

Clarifies the obligation of timber or grazing land owner to pay assessments and taxes for fire protection.

State: Other Fund revenue increase of $500,000 for the 1997-99 biennium. This estimate embraces the Department of Forestry's estimate. It presumes that the changes will reduce legal challenges and will make the Department of Justice more successful in recovering fire costs. As such they are highly speculative.

Requires State Forester to establish a system for classifying land in forestland-urban interfaces. Requires 3 to 5 classes that recognize differences in fire hazard, fire risk, and structural characteristics.

Permits counties to establish forestland-urban interface classification committees. Specifies membership and procedures for committees. Requires committees to classify all forestland-urban interface within the county. Requires State Forester to make these classifications if a county fails to do so within two years.

Requires State Board of Forestry to set standards for minimizing fire hazard for each forestland-urban interface classification, to make these available to all owners, and to establish a written evaluation to certify compliance with the standards.

Makes owner who fails to meet standards liable for up to $100,000 of extraordinary fire suppression costs if a fire originates on the owner's land or the ignition or spread of a fire is directly related to failure to minimize fire hazards. Begins this provision two years after rules are adopted or January 1, 2002, whichever is later.

When determining fire protection district assessments, allows State Forester to allocate higher costs of fire protection in a forestland-urban interface classification to the owners in that classification.

State: Other Fund revenue increase for Department of Forestry of $168,666 in 1997-99 and $255,766 in 1999-01 from increases in fire protection district assessments. Landowners in forestland-urban interfaces will pay additional per acre assessments of about 3¢ a year for the 1997-99 biennium and about 4¢ a year for the 1999-01 biennium.

Extends funding of Small Tract Optional Tax (WOSTOT) and reforestation tax credit administration from Western Oregon Severance Tax receipts until June 30, 1999. Funds State Forestry costs of assisting Eastern Oregon non-industrial private landowners from Eastern Oregon Severance Tax receipts.

Values WOSTOT land in same manner as western designated forest land. Repeals law disqualifying WOSTOT land when stand age reaches 90 years. Increases maximum ownership from 2,000 to 5,000 acres. Repeals option to qualify a portion of a tax lot. Declassifies land solely devoted to Christmas trees and landowners with less than 10 acres if property sold or platted. Makes technical changes.

Begins July 1, 1997.

Local: Dedicating severance tax receipts to funding state programs reduces school revenue by $373,000 in the 1997-99 biennium. Diverting severance tax receipts that would have gone to non-schools increases property taxes. Thus non-school revenue is not affected. The reduced WOSTOT land values will shift about $135,000 a year ($270,000 per biennium) in taxes onto other taxpayers.

State: Other Fund revenue increase of $510,000 in the 1997-99 biennium.

Temporarily increases the maximum forest patrol assessments for forest fire protection to 55% of the per acre cost. Affects July 1, 1997 through June 30, 1999.

State: Increases fire protection district assessments (Other Fund) revenue by $1.3 million in 1997-99. Fire protection districts budgets are negotiated with the State Forester so that costs are split between the landowners in the district and the state General Fund. Assuming protection budgets are not affected, this bill reduces the state General Fund contribution and increases the contribution by landowners.

Imposes forest products harvest taxes of 55¢ per thousand board feet for the OSU Forest Research Laboratory and 70¢ for administering the Forest Practices Act.

Applies to 1998 and 1999 calendar years.

State: Increases Other Fund revenues as follows:

Note: These temporary taxes are renewed each biennium. The 1996 and 1997 rates were 50¢ for forest research and 65¢ for the Forest Practices Act. The revenue estimates represent partial biennium effects since the bill only affects the 1998 and 1999 calendar years.

Imposes temporary forest products harvest tax for watershed improvement. Sets the rate at $1.75 per 1,000 board feet for calendar 1998. Requires Department of Revenue set the 1999 rate, up to $2.00, to produce $15 million in total net receipts for the two years. Refunds any taxes collected after $15 million achieved.

Increases fishing license fee surcharges on January 1, 1998. Continues surcharges on catch fees and fishery permits. Sunsets surcharges on January 1, 2004. Dedicates first $1 million of 1997-99 surcharge revenue to watershed improvement.

Establishes Watershed Improvement Grant Fund from proceeds of above taxes above and other gifts and grants. Requires Governor's Watershed Enhancement Board to award grants from the fund for an independent science team, watershed and riparian habitat conservation and education, implementation of watershed enhancement and water quality improvement plans approved by ODOA or DEQ, and the acquisition of nonpossessory interests in land to protect watersheds. Limits eligible projects to those which are funded with matching contributions, are approved by technical committees, and benefit the public through improved water quality, fish or wildlife habitat, or education.

Makes harvest tax contingent on the appropriation of at least $15 million from the General Fund for the Oregon Coastal Salmon Restoration Initiative and related programs. Repeals the tax if any salmonid species is listed as threatened or endangered in Oregon under certain conditions.

State: Increase in Other Fund revenues of $8,244,000 in 1997-99 and $5,356,000 in 1999-01.

Note: This revenue impact is for the harvest tax imposed by this bill. Additional revenue also results from increased fees, as reported on the Fiscal Impact Statement.

Allows forestland owners to elect an alternative tax method. The alternative eliminates timber privilege taxes on harvest (the Western and Eastern Severance Taxes) and increases the property tax land value. Currently timberland is valued at 20% of indexed values set in statute. Under the alternative, the land would be at 100% of the statutory values. (In both cases, these values would be reduced by Measure 50.)

The election is irrevocable and applies to all designated forestland owned directly and indirectly by the person making the election. The election must be made between July 1, 1999 and January 1, 2000.

The land value increase under the alternative method begins in 2000-01 and the privilege tax elimination begins January 1, 2000.

Local: The bill reduces taxes of most timber owners. Some the tax savings mean lower government revenue while the rest represent tax shifts onto other taxpayers. The table below summarizes the statewide effect.

These estimates assume 98% of timber landowners elect the alternative. This appears reasonable because it produces lower taxes for most taxpayers, especially for large owners who are harvesting on a regular basis. Some owners, however, may elect to stay on the current system, particularly if their timber is far from harvest.

The estimates further assume Measure 50 as implemented in SB 1215. Under Measure 50, timber privilege taxes are offset against non-school taxes only. Measure 50 also fixes operating property tax rates. Because of this treatment, the effect of this bill varies by district.

For counties and other non-schools, eliminating privilege taxes does not reduce revenue. Instead it eliminates the offset, thus increasing property taxes to make up for the lost privilege taxes. In effect, this shifts the tax burden onto other taxpayers. Increasing land values, however, does increase revenue because Measure 50 fixes property tax rates. Thus counties and other local non-schools gain revenue under this bill.

For schools, eliminating the privilege tax reduces revenue. These losses outweigh the property tax gains. So schools lose revenue under the bill.

For bonds, property tax rates are not fixed. So all changes that affect bonds represent tax shifts.

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