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Senate OKs Bill Aimed at Closing Tree Growth Tax Loophole
03/29/2012   Reported By: A.J. Higgins

Maine's tree growth protection law has attracted a lot of attention this year, in large part due to a political controversy involving State Treasurer Bruce Poliquin. He had 10 acres of his shore front property in Georgetown under tree growth protection to enjoy the benefits of a major property tax reduction.

But when his political opponents pointed out that he was prohibited by a deed restriction from harvesting timber on the property, Poliquin moved the land out of tree growth protection. Now members of the Maine Senate have given initial approval to a bill that supporters said will help close loopholes in the law.

To qualify for a tax break under the tree growth protection law, the owner of 10 acres or more must demonstrate that the parcel is used primarily for commercial forest harvesting. Then a forest management plan must be drawn up and monitored by a licensed forester. The plan then is classified as a confidential business document and that's an aspect of the law that state Sen. Troy Jackson of Allagash says Maine would be better off without.

"I just can't see why anyone would be against allowing this transparency, especially whenever it's coming out everyone else's pocket," Jackson said.

The tree growth tax abatement program is designed to strengthen the forest products economy. The required management plan is shielded from inspection to avoid compromising any confidential business information it might contain. So, to show compliance, a licensed forester certifies forestry plan to the state every 10 years. But if the forester fails to observe deviations from the plan and there is no commercial harvesting, critics say tree growth protection can turn into a taxpayer subsidized tax shelter. Jackson said he's willing to keep competitive information in the plan confidential, but he says those circumstances exist for very few Mainers who are currently enjoying the benefits of the law.

"You know there's obviously a cure for this, if people that are in tree growth don't want to show their plans to the public, then they shouldn't be taking the public's money when they're getting their taxes reduced," said Jackson.

Jackson had offered his transparency requirement as an amendment tacked onto a tree growth bill sponsored by Maine Senate President Kevin Raye. Raye's bill authorized a random audit by the Maine Forest Service of existing tree growth properties, but that didn't go far enough for senate Democrats, including Jackson, who offered the amendment with a parting shot to Republicans.

"So if anyone wants to go back home and say that it's OK that we take your tax dollars but we show you no absolute benefit to the program - none - because you can't ever see the plan, then that's fine. Go ahead and go back home and campaign on that," Jackson said.

"It's kind of a poke in the eye to the president, but he's got thick skin, he'll get over it," said Senator Jon Courtney (R-Springvale). He's the Senate Majority Leader and he said Jackson's amendment could have unintended consequences, and he said it might have been more productive to attach it instead to a measure that's being considered over in the House.

"The process is that it needs to go on the other bill if it needs to go at all," Courtney said. "There are unintended consequences perhaps. I don't know that for sure, but perhaps. We depend on the large landowners for pulp for the mills and so we want to be cautious about just throwing something on there without fully vetting it."

Senate President Kevin Raye acknowledged that the time may come for language similar to that in Jackson's amendment.

"I am not unsympathetic to what he is getting at," Raye said. "A couple of my concerns around the tree growth program have to do with the secrecy of these plans."

Jackson's amendment was killed in a party-line vote and Raye's audit plan was adopted. The bill faces further votes in the House and Senate


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