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WATERSHED AND CLEAN WATER GRANTS PROGRAM

Tax Strategies to Conserve and Restore Watershed

Forests

BACKGROUNDPrior to European settlement, forests covered 90 percent ofIndiana. Clearing for agriculture caused forests to dwindleto an all-time low of 6 percent by 1900. Through propermanagement, incentives, and enacted laws to protectforests, forestland coverage in the State rose to 20 percentby 2000. Even with this good news, the Indiana Divisionof Forestry struggles to maintain forests in the State.Forests are continually being converted to housing andcommercial development as more people move out of thecity into rural areas. One solution in addressing thisproblem is to work with landowners to encourage them toprotect and increase forestland acreage by enrolling in the

Classified Forest Program.

The Indiana Classified ForestProgram, referred to as the forestproperty tax law, is designed tokeep Indianas private forestsintact. The Forest Service grantwill help the State broadenoutreach efforts to landowners incritical state watersheds, resultingin an increase in classified forestenrollment, the use ofconservation easements, and estate

tax planning. The State defines aclassified forest as an area of 10acres or more, that supports agrowth of native or planted trees, which have been setaside for the production of timber and wildlife, theprotection of watersheds, or the control of soil erosion.The Classified Forest Program has the backing of the 1921Classified Forest Act and requires the classified forestowner to follow minimum standards of good timbermanagement as prescribed by the Department of NaturalResources. Landowners follow a written managementplan approved by the district forester. The Department ofNatural Resources (DNR), Division of Forestry,administers the program.

Once enrolled in the program, landowners receive a 95percent property tax break, an annual informationalnewsletter from the DNR, forestry literature, and freeinspections by a professional forester. Foresters post theproperty as a Classified Forest and submit an annual reportof activities occurring on the property.

LOCATIONThis project is beingimplemented statewide with extra emphasis in watershedsidentified by the State as high priorities for restoration.

ISSUES BEING ADDRESSEDForestland is being lost to development throughout theState. The project will encourage forest landowners tokeep their lands in forest use by making them aware of thetax breaks offered in the Classified Forest Program.

GOALSThe project will increase the amount of forestland enrolled

in the States forest property tax law by increasing thenumber of landowners enrolled in conservation easementprograms. When the project is completed, it will have metor surpassed a variety of goals.!

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Develop/enhance local partnerships to promote theprogram.Recruit 2,500 acres into the Classified ForestProgram.Develop new forest stewardship plans.Develop publications on tax strategies to conserveforestland.Add tax strategies to the consolidated forestry website.

Enhance web site water quality content andaccessibility.Develop publications on conservation practices toprotect water quality.Cross train cooperating agencies on forest retentionprograms and forest water quality practices.Develop and distribute a forestry newsletter toprogram participants and collect landowner activityreports.

METHODOLOGYThe project has three main components:

1) Secure voluntary conservation easements and property

tax reductions with forest landowners in priority watershedcounties through land trusts and the Classified ForestProgram.

Forest Stewardship plans will be prepared for all enrolledlandowners. Properties will be inspected every 5 years tomonitor stewardship compliance and update stewardshipplans.

Since 1999, the Northeastern Area and the Northeastern Area Association of State Foresters havesponsored a cooperative challenge grants program to promote watershed health and restorationthrough the conservation, restoration, and sound stewardship of trees and forests.

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Promotional efforts, such as brochures, a web site, newsreleases, and forestry field days will occur. This willutilize State and local partnerships to distributeinformation and recruit lands into the program.

2) Conduct training with cooperating agencies on foresttax strategies, forest watershed values, and water qualitypractices.

3) Develop a consolidated web site for the Indiana forestrycommunity through the Woodland Steward Institute.

The web site www.Inwoodlands.org will feature taxstrategies, conservation easement programs, and foreststewardship practices, such as BMPs to conserve, protect,and enhance watershed forests. The site will be advertisedthrough a variety of sources, including the WoodlandSteward, a publication for forest landowners whosecirculation exceeds 20,000. The web site will also utilizethe tax expertise of Dr. William Hoover from Purdue

University to develop tax strategies, publications, and website features.

OUTCOMES/ACCOMPLISHMENTS!

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Enrolled approximately 11,000 acres of productiveforestlands in the Classified Forest Program for thepurpose of watershed protection, stewardship, and thebenefits of healthy forests.Developed materials and information including a website on tax strategies for forest conservation.Worked with local partners to develop the WhitewaterValley Land Trust in East Central Indiana to facilitatefuture conservation easements.

PARTNERSWoodland Steward Institute A not-for-profitconsortium of 11 conservation groups, has helpeddevelop a web site and written materials. The Instituteincludes Purdue University, Hoosier National Forest,Indiana Association of Consultant Foresters, IndianaHardwood Lumbermans Association, Indiana Forestand Woodland Owners Association, Indiana TreeFarm Committee, Indiana Society of AmericanForesters, Indiana DNR Division of Forestry, IndianaLeague of Resource Conservation and DevelopmentCouncils, and Indiana Forest Industry Council.

White Water Valley Land Trust Buildspartnerships in watersheds modeled after othersuccessful Indiana efforts. Consultant foresters are topromote watershed forests and deliver technicalassistance.

FUTURE PLANSIndiana DNR is currently developing a PowerPointprogram on tax strategies, an extension publication on

conservation easement, and a brochure on forestconservation options.

Indiana DNR will enroll 480,000 acres in the States foresttax program by 2005. They will also continue thedevelopment of working forests, conservation easements,and provide all land trusts with models of working forestconservation easements.

The Indiana DNR is developing enhanced outreach thatwill result in new Forest Stewardship Plans covering 5,000acres.

New and effective publications encouraging forestretention and stewardship are still under development.

An up-to-date web site containing forestland conservationinformation, tax strategies, easement options, forest andwater quality news, and more is still ongoing.

Indiana DNR will co-sponsor a conference for naturalresource managers. It will focus on forestland use andstrategies for conservation.

CONCLUSIONThe project has increased the number of acres enrolled inthe Classified Forest Program and helped to stimulate ahigher level of awareness and action on forestlandprotection. In the next few years, property taxes will beraised; therefore, there will be more emphasis and interestin the Classified Forest Program. A high level ofawareness of the program will be critical.

Project ContactDan Ernst402 West Washington, Room 296WIndianapolis, IN 46204Phone: 317-232-4101Fax: 317-233-3863Email: dernst@dnr.state.in.us

Federal Contact

Lloyd CaseyUSDA Forest Service11 Campus BoulevardNewtown Square, PA 19073

Phone: 610-557-4135Fax: 610-557-4200Email: lcasey@fs.fed.us

Grant Amount: $45,000

December 2001 IMA-MFO