Managed Forest Law

The Managed Forest Law (MFL), enacted in 1985, is attractive because of the flexibility and many benefits it offers. MFL combines some characteristics of both the Forest Crop Law (FCL), which closed enrollment in 1986, and the former Woodland Tax Law. Landowners have the option to choose either a 25- or 50-year order period. Enrollment in MFL is open to all private owners of 10 or more acres of contiguous woodlands.

• Conditions
• Obligations
• Benefits
• Withdrawals of MFL Lands
• Statutes
• Forms
• Publications

Managed Forest Law petitions must be completed and POSTMARKED by July 1 to be effective in 18 months. Example: Petitions postmarked by July 1, 2006, would be entered effective January 1, 2008. A second deadline of May 15 also exists. To be eligible for this deadline, a petition must include a complete management plan prepared by a certified plan writer. Petitions which meet these criteria will take effect 7 1/2 months after this deadline.

Conditions

• At least 10 acres of contiguous forest land
• At least 80 percent of the land must have a minimum productive capacity of 20 cubic feet of timber per acres in a year
• A minimum forest cover of 80 percent
• A minimum average width of 120 feet

Obligations

• Submit management plan
  Note: Beginning November 1, 2005, all MFL management plans must be prepared either by a certified plan writer or a DNR Forester.
• Follow management plan
• Pay annual tax on land as follows:

  Year Entered	Open	Closed
  1987 - 2004	$0.67	$1.57
  2005 and later	$1.67	$8.34

• On open land, permit public access for hunting, fishing, cross-country skiing, sight-seeing, and hiking.
• Adopt sound management practices
• Submit cutting notice before harvesting; unauthorized cutting is subject to a maximum of $1,000 fine
• Submit cutting report after harvesting
• Report accurate volumes of timber harvested
• Pay yield tax based on current rates at time of harvest
  Note: For most MFL lands enrolled under the law in 2005 and thereafter, no yield tax will be assessed on timber harvested during the first five years the lands are enrolled. However, a yield tax will be assessed, regardless of when the timber is harvested, on the following MFL lands enrolled under the law in 2005 and thereafter: those converted from FCL; those renewed into MFL at the end of the original FCL order period; those renewed into MFL at the end of the original MFL order period; and those that are the result of pre 2005 MFL lands being withdrawn and redesignated because additions are no longer allowed to pre 2005 orders.
• Apply post-harvest treatment
• Permit field inspections

Benefits

• Sustainable management plan
• Automatic eligibility for ATFS group certification
• Protection against overcutting
• Protection against annual tax hike
• Lower property tax
• Deferred tax until harvest
• Landowners are allowed to close up to 160 acres of their lands to the public but no more than 80 of the 160 acres may have been entered in 1987 through 2004.
• Technical assistance
• Permits conversion from FCL prior to the end of the FCL agreement.
• Predictable taxes
• Long-term investment
• Encourages woodland expansion

Withdrawals of MFL Lands

• An entire parcel(s) of MFL land, or
• All MFL land within a quarter-quarter section, government lot or fractional lot, or
• An entire MFL entry.

Withdrawals that do not meet one of these conditions may jeopardize the eligibility of the remaining land. Lands remaining after a withdrawal must meet the minimum eligibility requirements. Forest tax law lands sold to a governmental agency may be exempt from a withdrawal tax.

A withdrawal tax (see calculations below) plus a $300 withdrawal fee will be assessed. The type of order determines the way the withdrawal tax is calculated. See your local DNR forester for information on the type of order.

• For regular MFL orders and additions, the withdrawal tax is the higher of 1 or 2 below. See How to estimate your MFL withdrawal tax [PDF, 163KB]
• For lands that were converted from FCL to MFL prior to the expiration of the FCL order, the withdrawal tax will be:
• The higher of 1, 2 or 3 below, during the first 10 years of the MFL order.
• The higher of 1 or 2 below in years 11 through 25 (or 50) of the MFL order.
• For land entered under a withdrawal and re-designation option for which the expiration year of your original order has not passed, the withdrawal tax is the sum of 4 and 5 below (see example**). (If the expiration year has passed, the withdrawal tax is the higher of 1 or 2 below.)

1. 5% of the value of the merchantable timber on the land less any acreage share tax and any yield taxes paid on wood products cut.
2. The net tax rate multiplied by the assessed value of the land in the municipality in the year prior to the withdrawal, as computed by the Department of Revenue. This amount is then multiplied by the number of years the land was under the law, less any amounts paid by the owner for acreage share tax or yield tax payments.
3. An amount equal to the FCL withdrawal tax at the time of conversion to MFL (FCL withdrawal tax equals taxes saved plus interest while designated as FCL). This applies to FCL conversions only.
4. Original acres: The net tax rate multiplied by the assessed value of the land in the municipality in the year prior to re-designation, as computed by the Department of Revenue. This amount is then multiplied by the number of years the land was under the original order, less any amounts paid by the owner for acreage share tax or yield tax payments.
5. All acres: The net tax rate multiplied by the assessed value of the land in the municipality in the year prior to the withdrawal, as computed by the Department of Revenue. This amount is then multiplied by the number of years the land was under the new order, less any amounts paid by the owner for acreage share tax or yield tax payments.

Contact your DNR county forester for more information.