WSR 13-10-065

PROPOSED RULES

DEPARTMENT OF REVENUE


[ Filed April 30, 2013, 10:36 a.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 13-06-053.

     Title of Rule and Other Identifying Information: WAC 458-40-660 Timber excise tax -- Stumpage value tables -- Stumpage value adjustments.

     Hearing Location(s): Capital Plaza Building, Fourth Floor Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on June 11, 2013, at 10:00 a.m. Copies of draft rules are available for viewing and printing on our web site at Rules Agenda.

     Date of Intended Adoption: June 28, 2013.

     Submit Written Comments to: Mark E. Bohe, P.O. Box 47453, Olympia, WA 98504-7453, e-mail markbohe@dor.wa.gov, by June 11, 2012 [2013], at 10:00 a.m.

     Assistance for Persons with Disabilities: Contact Mary Carol LaPalm, (360) 725-7499, or Renee Cosare, (360) 725-7514, no later than ten days before the hearing date. For hearing impaired please contact us via the Washington relay operator at (800) 833-6384.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: RCW 84.33.091 requires the department to revise the stumpage value tables every six months. The department establishes stumpage value tables to apprise timber harvesters of the timber values used to calculate the timber excise tax. The values in the proposed rule will apply to the second half of 2013.

     Reasons Supporting Proposal: RCW 84.33.091 requires that the stumpage values provided in WAC 458-40-660 be updated as of January 1 and July 1 of each year.

     Statutory Authority for Adoption: RCW 82.32.300, 82.01.060(2), and 84.33.096.

     Statute Being Implemented: RCW 84.33.091.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Department of revenue, governmental.

     Name of Agency Personnel Responsible for Drafting: Mark Bohe, 1025 Union Avenue S.E., Suite #544, Olympia, WA, (360) 534-1574; Implementation and Enforcement: Stuart Thronson, 1025 Union Avenue S.E., Suite #300, Olympia, WA, (360) 534-1300.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. No small business economic impact statement is required.

     A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Mark E. Bohe, Interpretations and Technical Advice Division, P.O. Box 47453, Olympia, WA 98504-7453, phone (360) 534-1574, e-mail markbohe@dor.wa.gov. The proposed rule is a significant legislative rule as defined by RCW 34.05.328.

April 30, 2013

Alan R. Lynn

Rules Coordinator

OTS-5419.2


AMENDATORY SECTION(Amending WSR 13-02-034, filed 12/21/12, effective 1/1/13)

WAC 458-40-660   Timber excise tax--Stumpage value tables -- Stumpage value adjustments.   (1) Introduction. This rule provides stumpage value tables and stumpage value adjustments used to calculate the amount of a harvester's timber excise tax.

     (2) Stumpage value tables. The following stumpage value tables are used to calculate the taxable value of stumpage harvested from ((January)) July 1 through ((June 30)) December 31, 2013:


Washington State Department of Revenue
STUMPAGE VALUE TABLE

((January)) July 1 through ((June 30)) December 31, 2013

Stumpage Values per Thousand Board Feet Net Scribner Log Scale(1)
Starting July 1, 2012, there are no separate
Quality Codes per Species Code.

((Species

Name

Species Code SVA (Stumpage Value Area) Haul Zone

1

2

3

4

5

Douglas-fir(2) DF 1 $344 $337 $330 $323 $316
2 389 382 375 368 361
3 321 314 307 300 293
4 389 382 375 368 361
5 380 373 366 359 352
6 210 203 196 189 182
Western Hemlock and WH 1 290 283 276 269 262
Other Conifer(3) 2 324 317 310 303 296
3 249 242 235 228 221
4 303 296 289 282 275
5 343 336 329 322 315
6 199 192 185 178 171
Western Redcedar(4) RC 1-5 756 749 742 735 728
6 509 502 495 488 481
Ponderosa Pine(5) PP 1-6 180 173 166 159 152
Red Alder RA 1-5 509 502 495 488 481
Black Cottonwood BC 1-5 105 98 91 84 77
Other Hardwood OH 1-5 221 214 207 200 193
6 59 52 45 38 31
Douglas-fir Poles & Piles DFL 1-5 797 790 783 776 769
Western Redcedar Poles RCL 1-5 1358 1351 1344 1337 1330
6 757 750 743 736 729
Chipwood (6) CHW 1-5 19 18 17 16 15
6 7 6 5 4 3
Small Logs (6) SML 6 24 23 22 21 20
RC Shake & Shingle Blocks(7) RCS 1-5 164 157 150 143 136
Posts(8) LPP 1-5 0.35 0.35 0.35 0.35 0.35
DF Christmas Trees(9) DFX 1-5 0.25 0.25 0.25 0.25 0.25
Other Christmas Trees(9) TFX 1-5 0.50 0.50 0.50 0.50 0.50))

Species

Name

Species Code SVA (Stumpage Value Area) Haul Zone

1

2

3

4

5

Douglas-fir(2) DF 1 $392 $385 $378 $371 $364
2 388 381 374 367 360
3 308 301 294 287 280
4 442 435 428 421 414
5 424 417 410 403 396
6 224 217 210 203 196
Western Hemlock and WH 1 361 354 347 340 333
Other Conifer(3) 2 353 346 339 332 325
3 260 253 246 239 232
4 340 333 326 319 312
5 352 345 338 331 324
6 211 204 197 190 183
Western Redcedar(4) RC 1-5 808 801 794 787 780
6 483 476 469 462 455
Ponderosa Pine(5) PP 1-6 190 183 176 169 162
Red Alder RA 1-5 479 472 465 458 451
Black Cottonwood BC 1-5 90 83 76 69 62
Other Hardwood OH 1-5 229 222 215 208 201
6 23 16 9 2 1
Douglas-fir Poles & Piles DFL 1-5 789 782 775 768 761
Western Redcedar Poles RCL 1-5 1379 1372 1365 1358 1351
6 854 847 840 833 826
Chipwood (6) CHW 1-5 10 9 8 7 6
6 1 1 1 1 1
Small Logs (6) SML 6 27 26 25 24 23
RC Shake & Shingle Blocks(7) RCS 1-5 164 157 150 143 136
Posts(8) LPP 1-5 0.35 0.35 0.35 0.35 0.35
DF Christmas Trees(9) DFX 1-5 0.25 0.25 0.25 0.25 0.25
Other Christmas Trees(9) TFX 1-5 0.50 0.50 0.50 0.50 0.50

(1) Log scale conversions Western and Eastern Washington. See conversion methods WAC 458-40-680.
(2) Includes Western Larch.
(3) Includes all Hemlock, Spruce and true Fir species, Lodgepole Pine, or any other conifer not listed on this page.
(4) Includes Alaska-Cedar.
(5) Includes Western White Pine.
(6) Stumpage value per ton.
(7) Stumpage value per cord.
(8) Includes Lodgepole posts and other posts, Stumpage Value per 8 lineal feet or portion thereof.
(9) Stumpage Value per lineal foot.

     (3) Harvest value adjustments. The stumpage values in subsection (2) of this rule for the designated stumpage value areas are adjusted for various logging and harvest conditions, subject to the following:

     (a) No harvest adjustment is allowed for special forest products, chipwood, or small logs.

     (b) Conifer and hardwood stumpage value rates cannot be adjusted below one dollar per MBF.

     (c) Except for the timber yarded by helicopter, a single logging condition adjustment applies to the entire harvest unit. The taxpayer must use the logging condition adjustment class that applies to a majority (more than 50%) of the acreage in that harvest unit. If the harvest unit is reported over more than one quarter, all quarterly returns for that harvest unit must report the same logging condition adjustment. The helicopter adjustment applies only to the timber volume from the harvest unit that is yarded from stump to landing by helicopter.

     (d) The volume per acre adjustment is a single adjustment class for all quarterly returns reporting a harvest unit. A harvest unit is established by the harvester prior to harvesting. The volume per acre is determined by taking the volume logged from the unit excluding the volume reported as chipwood or small logs and dividing by the total acres logged. Total acres logged does not include leave tree areas (RMZ, UMZ, forested wetlands, etc.,) over 2 acres in size.

     (e) A domestic market adjustment applies to timber which meet the following criteria:

     (i) Public timber - Harvest of timber not sold by a competitive bidding process that is prohibited under the authority of state or federal law from foreign export may be eligible for the domestic market adjustment. The adjustment may be applied only to those species of timber that must be processed domestically. According to type of sale, the adjustment may be applied to the following species:

     Federal Timber Sales: All species except Alaska-cedar. (Stat. Ref. - 36 C.F.R. 223.10)

     State, and Other Nonfederal, Public Timber Sales: Western Redcedar only. (Stat. Ref. - 50 U.S.C. appendix 2406.1)

     (ii) Private timber - Harvest of private timber that is legally restricted from foreign export, under the authority of The Forest Resources Conservation and Shortage Relief Act (Public Law 101-382), (16 U.S.C. Sec. 620 et seq.); the Export Administration Act of 1979 (50 U.S.C. App. 2406(i)); a Cooperative Sustained Yield Unit Agreement made pursuant to the act of March 29, 1944 (16 U.S.C. Sec. 583-583i); or Washington Administrative Code (WAC 240-15-015(2)) is also eligible for the Domestic Market Adjustment.

     The following harvest adjustment tables apply from ((January)) July 1 through ((June 30)) December 31, 2013:


TABLE 9—Harvest Adjustment Table
Stumpage Value Areas 1, 2, 3, 4, and 5

((January)) July 1 through ((June 30)) December 31, 2013


Type of

Adjustment

Definition

Dollar Adjustment Per

Thousand Board Feet

Net Scribner Scale

I. Volume per acre
Class 1 Harvest of 30 thousand board feet or more per acre. $0.00
Class 2 Harvest of 10 thousand board feet to but not including 30 thousand board feet per acre. -$15.00
Class 3 Harvest of less than 10 thousand board feet per acre. -$35.00
II. Logging conditions
Class 1 Ground based logging a majority of the unit using tracked or wheeled vehicles or draft animals. $0.00
Class 2 Cable logging a majority of the unit using an overhead system of winch driven cables. -$50.00
Class 3 Applies to logs yarded from stump to landing by helicopter. This does not apply to special forest products. -$145.00
III. Remote island adjustment:
For timber harvested from a remote island -$50.00
IV. Thinning
Class 1 A limited removal of timber described in WAC 458-40-610 (28) -$100.00

TABLE 10—Harvest Adjustment Table
Stumpage Value Area 6
((January)) July 1 through ((June 30)) December 31, 2013


Type of

Adjustment

Definition

Dollar Adjustment Per

Thousand Board Feet

Net Scribner Scale

I. Volume per acre
Class 1 Harvest of more than 8 thousand board feet per acre. $0.00
Class 2 Harvest of 8 thousand board feet per acre and less. -$8.00
II. Logging conditions
Class 1 The majority of the harvest unit has less than 40% slope. No significant rock outcrops or swamp barriers. $0.00
Class 2 The majority of the harvest unit has slopes between 40% and 60%. Some rock outcrops or swamp barriers. -$50.00
Class 3 The majority of the harvest unit has rough, broken ground with slopes over 60%. Numerous rock outcrops and bluffs. -$75.00
Class 4 Applies to logs yarded from stump to landing by helicopter. This does not apply to special forest products. -$145.00
Note: A Class 2 adjustment may be used for slopes less than 40% when cable logging is required by a duly promulgated forest practice regulation. Written documentation of this requirement must be provided by the taxpayer to the department of revenue.
III. Remote island adjustment:
For timber harvested from a remote island -$50.00

TABLE 11—Domestic Market Adjustment


Class Area Adjustment Applies Dollar Adjustment Per Thousand Board Feet Net Scribner Scale
SVAs 1 through 5 only: $((11.00)) 9.00

Note: This adjustment only applies to published MBF sawlog values.

     (4) Damaged timber. Timber harvesters planning to remove timber from areas having damaged timber may apply to the department of revenue for an adjustment in stumpage values. The application must contain a map with the legal descriptions of the area, an accurate estimate of the volume of damaged timber to be removed, a description of the damage sustained by the timber with an evaluation of the extent to which the stumpage values have been materially reduced from the values shown in the applicable tables, and a list of estimated additional costs to be incurred resulting from the removal of the damaged timber. The application must be received and approved by the department of revenue before the harvest commences. Upon receipt of an application, the department of revenue will determine the amount of adjustment to be applied against the stumpage values. Timber that has been damaged due to sudden and unforeseen causes may qualify.

     (a) Sudden and unforeseen causes of damage that qualify for consideration of an adjustment include:

     (i) Causes listed in RCW 84.33.091; fire, blow down, ice storm, flood.

     (ii) Others not listed; volcanic activity, earthquake.

     (b) Causes that do not qualify for adjustment include:

     (i) Animal damage, root rot, mistletoe, prior logging, insect damage, normal decay from fungi, and pathogen caused diseases; and

     (ii) Any damage that can be accounted for in the accepted normal scaling rules through volume or grade reductions.

     (c) The department of revenue will not grant adjustments for applications involving timber that has already been harvested but will consider any remaining undisturbed damaged timber scheduled for removal if it is properly identified.

     (d) The department of revenue will notify the harvester in writing of approval or denial. Instructions will be included for taking any adjustment amounts approved.

     (5) Forest-derived biomass, has a $0/ton stumpage value.

[Statutory Authority: RCW 82.01.060(2), 82.32.300, 84.33.096 and 84.33.091. 13-02-034, § 458-40-660, filed 12/21/12, effective 1/1/13; 12-14-065, § 458-40-660, filed 6/29/12, effective 7/1/12. Statutory Authority: RCW 82.01.060(2), 82.32.300, 84.33.096, 84.33.091 and 84.33.140. 12-02-040, § 458-40-660, filed 12/29/11, effective 1/1/12. Statutory Authority: RCW 82.01.060(2), 82.32.300, 84.33.096 and 84.33.091. 11-14-051, § 458-40-660, filed 6/29/11, effective 7/1/11; 11-02-014, § 458-40-660, filed 12/29/10, effective 1/1/11; 10-14-095, § 458-40-660, filed 7/6/10, effective 7/6/10; 10-02-032, § 458-40-660, filed 12/29/09, effective 1/1/10; 09-14-109, § 458-40-660, filed 6/30/09, effective 7/1/09; 09-02-043, § 458-40-660, filed 12/31/08, effective 1/1/09; 08-14-085, § 458-40-660, filed 6/27/08, effective 7/1/08; 08-02-064, § 458-40-660, filed 12/28/07, effective 1/1/08; 07-14-095, § 458-40-660, filed 6/29/07, effective 7/1/07; 07-02-039, § 458-40-660, filed 12/26/06, effective 1/1/07; 06-14-064, § 458-40-660, filed 6/30/06, effective 7/1/06; 06-02-005, § 458-40-660, filed 12/22/05, effective 1/1/06; 05-14-087, § 458-40-660, filed 6/30/05, effective 7/1/05; 05-02-040, § 458-40-660, filed 12/30/04, effective 1/1/05; 04-14-033, § 458-40-660, filed 6/29/04, effective 7/1/04; 04-01-125, § 458-40-660, filed 12/18/03, effective 1/1/04; 03-14-072, § 458-40-660, filed 6/26/03, effective 7/1/03. Statutory Authority: RCW 82.01.060(2), 82.32.300, 84.33.096, 84.33.091, and 84.33.140. 03-02-004, § 458-40-660, filed 12/19/02, effective 1/1/03. Statutory Authority: RCW 82.32.300, 84.33.096, and 84.33.091. 02-14-019, § 458-40-660, filed 6/21/02, effective 7/1/02. Statutory Authority: RCW 82.32.300, 84.33.096, 84.33.091 and 84.33.120. 02-02-033, § 458-40-660, filed 12/24/01, effective 1/1/02. Statutory Authority: RCW 82.32.300, 84.33.096, and 84.33.091. 01-13-105, § 458-40-660, filed 6/20/01, effective 7/1/01; 01-02-020, § 458-40-660, filed 12/21/00, effective 1/1/01. Statutory Authority: RCW 82.32.300, 84.33.096, 84.33.091, 82.32.060, and 84.33.077. 00-19-067, § 458-40-660, filed 9/19/00, effective 1/1/01. Statutory Authority: RCW 82.32.300, 84.33.096 and 84.33.091. 00-14-011, § 458-40-660, filed 6/27/00, effective 7/1/00; 00-02-019, § 458-40-660, filed 12/27/99, effective 1/1/00; 99-14-055, § 458-40-660, filed 6/30/99, effective 7/1/99; 99-02-032, § 458-40-660, filed 12/30/98, effective 1/1/99; 98-14-083, § 458-40-660, filed 6/30/98, effective 7/1/98; 98-02-015, § 458-40-660, filed 12/30/97, effective 1/1/98; 97-14-068, § 458-40-660, filed 6/30/97, effective 7/1/97. Statutory Authority: RCW 82.32.330, 84.33.096 and 84.33.091. 97-02-069, § 458-40-660, filed 12/31/96, effective 1/1/97; 96-14-063, § 458-40-660, filed 6/28/96, effective 7/1/96; 96-02-057, § 458-40-660, filed 12/29/95, effective 1/1/96. Statutory Authority: RCW 82.32.330, 84.33.096 and 84.33.200. 95-18-027, § 458-40-660, filed 8/25/95, effective 9/25/95. Statutory Authority: RCW 82.32.300 and 84.33.096. 95-02-038, § 458-40-660, filed 12/30/94, effective 1/1/95. Statutory Authority: RCW 84.33.091, 84.32.300 [82.32.300] and 84.33.096. 94-14-048, § 458-40-660, filed 6/30/94, effective 7/1/94; 94-02-047, § 458-40-660, filed 12/30/93, effective 1/1/94; 93-14-051, § 458-40-660, filed 6/30/93, effective 7/1/93; 93-02-025, § 458-40-660, filed 12/31/92, effective 1/1/93; 92-14-083, § 458-40-660, filed 6/29/92, effective 7/1/92; 92-02-067, § 458-40-660, filed 12/31/91, effective 1/1/92. Statutory Authority: RCW 84.33.096 and 82.32.300. 91-14-077, § 458-40-660, filed 6/28/91, effective 7/1/91; 91-09-030, § 458-40-660, filed 4/12/91, effective 5/13/91; 91-02-088, § 458-40-660, filed 12/31/90, effective 1/31/91; 90-14-033, § 458-40-660, filed 6/29/90, effective 7/30/90; 90-02-049, § 458-40-660, filed 12/29/89, effective 1/29/90. Statutory Authority: Chapter 84.33 RCW and RCW 84.33.091. 89-14-051 (Order FT-89-2), § 458-40-660, filed 6/30/89; 89-02-027 (Order FT-88-5), § 458-40-660, filed 12/30/88; 88-14-032 (Order FT-88-2), § 458-40-660, filed 6/30/88; 88-02-026 (Order FT-87-5), § 458-40-660, filed 12/31/87. Statutory Authority: Chapter 84.33 RCW. 87-14-042 (Order 87-2), § 458-40-660, filed 6/30/87; 87-02-023 (Order 86-4), § 458-40-660, filed 12/31/86.]