Appendix 2: Tax and Business Management
The property is currently zoned APZ and TPZ. The total property tax liability was $1060 for the 2012-2013 tax year. It is expected that these taxes will increase as development of the property progresses.
Timber harvest and agricultural revenue generating activities generally produce a federal and state income tax liability. For federal income tax purposes, income is reported on Form 1040, Schedule F. Tax credits may be available for some management activities.
The State of California also charges a timber yield tax on the harvest of timber. Information about this tax and on current harvest value schedules may be obtained from the Board of Equalization at http://www.boe.ca.gov/proptaxes/timbertax.htm.
Estate planning can help to reduce the costs, including taxes, of managing the estate and ease the paperwork burden of the executor.
Records should be kept of all pertinent transactions, expenses and income related to Skunk Ranch business. This will aid in tax preparation and in tracking the economic health of the operation.
One-half (160 acres) of the Ranch is currently zoned APZ (APN 011-100-0100) and one-half is zoned TPZ (APN 011-100-0200 and 011-060-0100). The requirements of each zone are in Trinity County Ordinance 315 (Section 13.1 for APZ and 14.1 for TPZ), as follow:
SECTION 13.1 AGRICULTURAL PRESERVE DISTRICT OR “AP” DISTRICT
A. GENERAL DESCRIPTION: Agricultural Preserve Zoning Districts are those areas of the County containing agricultural lands of at least 100 acres which qualify for inclusion under the California Land Conservation Act (Cal. Govt Code, Sec. 51200 et, seq.). Purpose of this Zoning District is to preserve and insure the continuing utilization of lands for agricultural production purposes. To obtain the benefits of Agricultural Preserve Zoning the property owner must enter into a contract with the County. Failure to abide by this contract will result in cancellation of the Zoning and its benefits as well as severe tax penalties.
B. LIST OF USES PERMITTED IN AN AGRICULTURAL PRESERVE DISTRICT:
Agricultural Packing Plant
Row and Field Crops
Other uses found to be similar in nature as determined by the Planning Commission.
C. LIST OF USES PERMITTED ON A PARCEL ONLY AFTER OBTAINING A USE PERMIT:
Cattle Feed Yard
Farm Labor Quarters
Hydroelectric power generating facilities for commercial use
D. ACCESSORY BUILDINGS AND USES: The following accessory uses are deemed to be compatible with agricultural uses provided they do not significantly detract from the use of the property for, or inhibit, agricultural uses:
Accessory buildings and uses normally incidental to the uses permitted.
One single family dwelling per parcel and normal residential accessory to harvesting or planting operations.
Temporary labor camps, less than one year in duration, accessory to harvesting or planting operations.
Recreational use such as walking, hiking, picnicking, swimming, boating, fishing, or hunting.
E. MINIMUM PARCEL AREA: The minimum acreage to be considered for an Agricultural Preserve District shall be one hundred (100) contiguous acres. Parcels within an Agricultural Preserve shall not be less than forty (40) acres, or a quarter-quarter section.
F. BUILDING HEIGHT: The maximum building height shall be forty (40) feet.
G. FRONT YARD SETBACK: The front yard setback shall have a minimum depth of twenty (20) feet. (Ord. 315-722)
H. SIDE YARD SETBACK: Each side yard shall have a minimum setback of twenty (20) feet.
I. REAR YARD SETBACK: The rear yard setback shall be a minimum of twenty (20) feet.
J. CONTRACT ELIGIBILITY: Land zoned as Agricultural Preserve may qualify for property tax benefits conferred through a “Land Conservation Contract” as provided by this section and the California Land Conservation Act.
K. CRITERIA FOR INCLUSION: The following criteria must be met before land is included in a “Land Conservation Contract”. Each parcel proposed for inclusion in a contract shall meet these criteria individually rather than collectively (i.e., merger of parcels may be required prior to inclusion).
1. There shall be a capital outlay for agricultural capital improvements affixed to the land in the minimum total sum of $20,000.00, excluding applicant’s residence and original cost of land. The value of such capital improvements shall be made on the basis of replacement cost. Not more than 25% of such capital outlay may consist of breeding stock.
2. Each parcel shall lie within an Agricultural Preserve. Parcels considered for contract shall not be less than forty (40) acres, or a quarter-quarter section.
3. The gross income derived from such agricultural land must be at least fifty percent (50%) of its estimated agricultural (production of food or fiber for commercial purposes) capabilities. Said estimated capabilities to be determined by the Board of Supervisors with assistance from appropriate advisory agencies. This clause refers to the qualifications of the applicant, and does not affect the findings of the County Assessor.
4. The applicant shall furnish supporting information concerning the land’s agricultural capabilities and use, including gross annual income and expenses, inventory of livestock, capital improvements and such other information as the County may deem necessary in making its determination of eligibility and the payments the landowner should receive under the contract.
5. Each application shall be signed by all owners and security holders of record.
6. All contracts and each renewal thereof will be for a term of ten (10) years. Each contract shall be automatically renewed annually on the renewal date, so long as notice of non-renewal has not been filed by either party.
7. The initial date and the renewal date for all contracts shall be July 1.
8. All applications for contract shall be submitted prior to October 1 of the year preceding the year in which the landowner desires to effectuate the contract. If the application is approved and the contract is signed prior to the lien date in any year, the contract shall be effective as of July 1 of that year. If approval is obtained upon or after the lien date, the contract shall be effective as of July of the succeeding year.
L. NOTICE OF NONRENEWAL: If either the landowner or the County desires in any year not to renew the contract, that party shall serve written notice of nonrenewal of the contract upon the other party in advance of the annual renewal date of the contract. Unless such written notice is served by the landowner at least 90 days prior to the renewal date or by the County at least 60 days prior to the renewal date, the contract shall be considered renewed for 10 years.
M. CANCELLATION: Failure to utilize land zoned Agricultural Preserve consistent with the intent of this Ordinance as determined by the County shall be grounds for cancellation of the contract. Cancellation of the contract by the property owner shall be in accordance with the following procedures:
A sum equal to the tax savings for each and every year the contract has been in effect, plus a compounded interest component to be determined by an announced rate which has the same yield rate for long term United States Government Bonds as published by the Federal Reserve Board for each year, rounded to the nearest one-quarter percent (1/4%) or an amount equal to seventy percent (70%) pursuant to Chapter 7, Article 5, Paragraphs 51283 and 51283.3 of the California Government Code, whichever is greater, shall be provided to the County prior to cancellation of the contract.
N. RECORDATION: All contracts, cancellations of contracts, and notices of non-renewal of the contracts shall be recorded with the County Recorder.
SECTION 14.1 TIMBERLAND PRODUCTION DISTRICT OR “TPZ” DISTRICT
A. GENERAL DESCRIPTION: The Timberland Production Zone or TPZ is intended to provide for timberland zoning and restrictions for a minimum of a ten (10) year period. Such zoning allows land to be valued for property taxation, in general, on the basis of its use for growing and harvesting timber and compatible uses.
B. USES PERMITTED: The following uses are permitted or deemed compatible to the growing and harvesting of timber:
Growing and harvesting timber.
Wildlife and fisheries habitat improvement.
Roads, landings, and log storage areas integral to the growing and harvesting of timber.
Portable sawmills, chippers, and similar equipment.
Grazing and other agricultural uses.
Recreation uses including walking, hiking, picnicking, swimming, boating, fishing, hunting and skiing.
C. USES PERMITTED SUBJECT TO FIRST SECURING A USE PERMIT: Uses allowed under this section cannot be approved if such use will significantly detract from the use of the property for, or inhibit, growing and harvesting timber.
A Single Family Dwelling and accessory structures.
Labor camps accessory to timber harvesting or planting operations which are less than one year in duration.
Mining operations whose purpose is to provide material for log hauling roads both on and off-site.
B. MINIMUM LOT AREA FOR DIVISION OF PARCELS ZONED TPZ: The minimum lot area for division of parcels zoned TPZ shall be as designated in the Zoning District. In the event no minimum parcel size has been specified in the Zoning District, minimum lot area shall be 160 acres. The minimum acreage requirement may, at the discretion of the Planning Commission and Board of Supervisor’s pursuant to Section 31 of the Zoning ordinance, be reduced when necessary to resolve adjacent land use conflicts through lot line adjustment.
E. GENERAL REQUIREMENTS: A Timber Management Plan shall be prepared for all parcels to be rezoned pursuant to Section 51113 of the Government Code. The rezone application shall meet the requirements of Section 51113 as it now reads or may hereafter be amended, and shall meet the following requirements:
1. The minimum lot area for entry into TPZ for lots legally created prior to March 1, 1988 shall be no less than 40 acres for Site I-III timberlands and 160 acres for Site IV and V lands. In the event a parcel consists of a mix of Site I-III and IV-V, the parcel shall be eligible if fifty percent of the area is Site III or better timberland, but at no time shall parcels, which contain less than 40 acres of Site I-III timberland be eligible. The minimum parcel size for entry into TPZ for parcels created after March 1, 1988 shall be no less than 160 acres, or a quarter of a Section.
2. A Timber Management Plan for the property must be prepared, or the content approved, by a Registered Professional Forester. Such plan shall provide for the eventual harvest of timber, as determined by the preparer of the plan; specific information that must be included in the plan is as follows:
a. A map shall be prepared showing the legal description or the assessor’s parcel number of the property desired to be zoned;
b. Topographic Map(s) (scale 4″ – 1 mile) which includes:
(1) Existing and proposed roads (public and private)
(2) Watercourses, lakes ponds, domestic water systems, etc…
(3) Site Classification (minimum area breakout -10 acres). The State Version 7-5-12 35 of California’s Board of Equalization’s Instruction’s For Timberland Site Grading adopted July 26, 1976 shall be utilized for site determinations.
(4) Timber/vegetation classification and age distribution.
(5) Under stocked areas as defined in current Forest Practice Rules.
(6) Location of all existing and proposed permanent structures.
c. Management and Silviculture Objectives.
1. History of management and existing volume, acreage and age.
2. Future silviculture, inventory, stand improvement, harvesting operations planned (including cutting and thinning cycles, volumes and rotation ages), subdivisions and lot line adjustments.
1. Average stocking within each sub-area
2. Under stocked areas may be included in the TPZ District under the provisions of Section 51113 of the Government Code. (See “3” below).
e. Forest Insects and Disease Protection Practices.
3. The parcel shall currently meet the timber stocking standards as set forth in Section 4561 by the Public Resources Code and the Forest Practice rules adopted by the State Board of Forestry for the district in which the parcel is located, or the owner must sign an agreement with the Board of Supervisor’s to meet such stocking standards and forest practice rules by the fifth anniversary of the signing of such agreement. Failure to meet such stocking standards and forest practice rules within this time period provides the Board with a ground for rezoning of the parcel pursuant to Section 51121 of the Government Code.
F. MINIMUM LOT WIDTH: Each lot shall be not less than 400 feet wide.
G. YARD SETBACKS: All yard setbacks shall be a minimum of 50 feet, except that 100 feet shall be maintained from other TPZ or federally managed lands.
H. ADDITIONAL BUILDING SETBACKS: Buildings shall not be located on landings, roads, or storage areas as shown on the Timber Management Plan, or Timber Harvest Plan. The placement of the proposed structure shall be reviewed related to compatibility with the growing and harvesting of timber by Planning Staff after consultation with the State Department of Forestry.
I. APPLICABLE PROVISIONS OF THE GOVERNMENT CODE: Provisions of Article 1 “General Provisions” (Section 51100), Article 2 “Establishment of Timberland Production” (Section 51110- 51119.5), Article 3 “Rezoning” (Sections 51120-51121), Article 4 “Immediate Rezoning” (Section 51130-51134) and a portion of Article 5 “Removal From Zone” (Sections 51140-51146) of the Government Code of the State of California as it now reads or may hereafter be amended shall apply.