The Senate Finance Committee substitute to House Bill 223 combines the Timberlands Recovery, Exemption, and Earnings Stability (TREES) Act, with a tax credit to taxpayers who have suffered substantial economic losses and will have to incur significant expenses to slavage, clean, and restore timber sites due to damage from Hurricane Helene.

The first part of the bill, or the TREES Act, would allow the governing authority of a county, city, consolidated government, or school board to grant temporary ad valorem tax relief from taxes levied for eligible standing timber if the local governing authority is partially or wholly located in the FEMA declared disaster area as of November 4, 2024. The eligible local governing authority may grant temporary ad valorem tax relief during the final quarter of 2024 and each quarter of 2025.

In order to grant temporary ad valorem tax relief a local governing authority must adopt a resolution granting such relief and file it with the Department of Revenue. The local governing authority must also ensure that all eligible standing timber in its jurisdiction qualifies for such tax relief and refund each taxpayer the total amount of taxes levied for eligible standing timber during the final quarter of 2024. If the taxes were levied but unpaid, the local governing authority must provide an updated tax bill to the taxpayer showing that the amount is no longer due. The local governing authority must also not require taxpayers to pay any taxes levied for eligible standing timber during any quarter of 2025. Tax relief will be paid through the funds of the local governing authority.

The Commissioner of the Department of Revenue, subject to appropriation by the General Assembly, shall provide a grant to each local governing authority that has provided the temporary ad valorem tax relief. Grants will be allotted based on the local governing authority's estimated revenue loss, the revenue received by the local governing authority for the previous three years, and the estimated damage to eligible standing timber in the jurisdiction from Hurricane Helene and published in the Hurricane Helene Timber Damage Assessment by the Georgia Forestry Commission. The grant cannot exceed the average amount of the total revenue received by the local governing authority in 2021, 2022, and 2023.

The second portion of the bill provides a tax credit to taxpayers who have suffered substantial economic and timber losses due to Hurricane Helene. In order to qualify for a tax credit the property must be within the 66 counties of the Governor's renewed State of Emergency, be eligible timber property, and suffered timber casualty loss as a result of damage from Hurricane Helene. Tax credits may equal 100 percent of the taxpayer's timber casualty loss as long as the tax credits do not exceed the number of the taxpayer's affected acres of eligible timber property multiplied by $400.00. The taxpayer must submit an application for preapproval of the tax credits between July 1, 2025 and December 31, 2025 to the Department of Revenue. The bill provides for a cap of tax credits at $200 million in aggregate.

In order to claim tax credits, a taxpayer must first complete either the restoration of each acre for which timber casualty losses were incurred or the replanting of timber in a quantity projected to yield at maturity at least 90 percent of the value of the timber casualty loss claimed. The timber must be planted in the same county where the timber casualty loss occurred. The tax credits can only be claimed in the taxable year in which the taxpayer first completes either the restoration or replanting of timber land. Tax credits must be claimed before December 31, 2030. Claimed tax credits that are not used may be carried forward for ten years from the year in which the credits were claimed. Tax credits that are not used by the taxpayer against income liability or refunded can be transferred or sold one time to one other Georgia taxpayer. The transferee will not be eligible to transfer the tax credits or receive a refund for them.The transferee must acquire the tax credits for a minimum of 60 percent of the amount of the transferred tax credits.

The bill also provides a sales tax exemption until December 31, 2025 for building materials used to repair structures and fixtures used in the production of animals such as poultry sheds and livestock barns. The bill would become effective upon the Governor's signature.

Legislative Tracking

Georgia Municipal Association

Tagged Bills - Timber