Lawmakers focus on future growth in the wake of an estimated $800 million loss.
A tax credit for timber losses is among the Hurricane Michael relief initiatives approved in the Georgia General Assembly’s special session.
“This is one of the greatest natural disasters we've ever seen in the state .... maybe the largest timber catastrophe in our nation's history,” said Andres Villegas, president and CEO of the Georgia Forestry Association.
The program won’t bring immediate payments like the supplemental appropriations bill, but it’s aimed at rebuilding a mainstay of the state’s economy. Capped at $200 million, it was vetted in the Senate Finance Committee chaired by Sen. Chuck Hufstetler, R-Rome, and the companion House committee.
Hufstetler said the credits can’t be claimed until the landowner replants the lost trees, and they aren’t expected to hit the state budget until 2021 and 2022. They’re limited to commercial growers in the 28 hurricane-ravaged South Georgia counties Gov. Nathan Deal declared disaster areas.
“We’re talking about a swath from Bainbridge that fans out,” Hufstetler said.
Chuck Walker, director of the Georgia Forestry Commission, said close to 2.4 million acres sustained damage and the loss is estimated at $800 million. That’s about 10 percent of the state’s total timberland, but Walker emphasized that the loss is concentrated — not spread out evenly.
“The individual losses are consequential and of importance, but realize there’s an impact on the processers, the mills, the support businesses,” he said. “In some of our small Georgia communities, timber and agriculture is really their economic base … That part of Georgia is hurting.”
About 7,000 forest landowners are affected, many of whom are relatively small farmers who set aside the acreage as back-up or for their retirement. They’ll be able to apply for tax credits of up to $400 an acre beginning early next year.
Lynn Riley, commissioner of the Georgia Department of Revenue, said they’ll take applications online through May 31. At that time, they’ll evaluate all the applications and pro-rate the credits.
Hufstetler said there were several changes made to the first version of the legislation, HB 4EX,
“Originally, they could only get credit up to their tax liability. This allows full value … Originally, it was first-come-first served. But there was concern that the larger (landowners) would take it over, so now it’s pro rata,” he explained. “Everybody gets an equal shot.”
The final version also added credit for pecan trees. Federal programs cover the loss of crops, including pecans, but not the loss of the trees.
Walker said an important companion piece of legislation is funding for debris removal. There are “millions of tons” of wood on the ground that increase the dangers of wildfire and insect infestation.
Villegas also emphasized the ecological and safety aspects along with the economic. The last component, he said, is human. Restoring hope to people who have lost everything is vital, he said.
“This is a generational loss … It really does, at the end of the day, affect our identity,” Villegas said. “It’s very important to us that the goal of this legislation is to get trees in the ground, to restore confidence in the economy, that we can be sustainable as a state.”