CAPITAL IDEAS -- LIVE!

Hayes D. Brown

starting time: (00:00)
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Hayes D. Brown, attorney and forest owner, will moderate this news conference. Hayes' email address is hbrown@hayesbrown.com.

Click Here to View & Hear Prior News Conferences.

Thomas J. Saunders

(00:27)
Hear Conference

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Tom Saunders is General Counsel and Director of Government Affairs for the Alabama Forestry Association, based in Montgomery, Alabama. We asked Tom to help us understand the process by which property taxes are increased and how the statewide Amendment 2, on all Alabama ballots November 2, will affect that process. From the AFA webpage we read:

AMENDMENT 2

"Proposing an amendment to the Constitution of Alabama of 1901, to amend to Section 269 of the Constitution of Alabama of 1901, as amended by Amendment No. 111 to the Constitution of Alabama of 1901 now appearing as Section 269 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, relating to special county educational taxes, to provide that the taxes may be levied by a majority vote, not by three-fifths vote, of those voting at the election." [as it will appear on the ballot]

Section 269 of Alabama’s Constitution provides authority for Alabama counties to “levy and collect a special tax not exceeding ten cents on each one hundred dollars of taxable property…for the support and furtherance of education….” The original authors required that this tax be approved by “three-fifths” of all those voting on the measure. (Note that the tax currently authorized by Section 269 applies not only to forest and agricultural land, but to ALL property, including homes, cars, boats, motorcycles, etc.)

Amendment 2 lowers the threshold for approval of any tax increase from “three-fifths” to a simple “majority” of those voting. If adopted, this amendment would make it easier for a county to raise taxes.

The Alabama Forestry Association recommends a “NO” vote on Amendment #2.

Suggested Reading:

• HB253 2009
• From Onpolitix
• Givens on Amendment 2
• Sample Ballot with Amendment 2 on right about halfway down

Phone: (334) 481-2126
Email: tsaunders@alaforestry.org

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William C. Hopewell

(03:13)
Hear Conference

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Bill Hopewell is Senior Appraiser for Alabama Farm Credit. Everyone has probably heard about the fall in values of condominiums along the Alabama coast and we have been wondering if timberland prices have been affected by the recession, too. A few weeks back we heard that the "recreational component" of timberland appraisals had "disappeared," and we immediately thought of Bill Hopewell because he compiles a lot of comparable sales information on north Alabama timber tracts. We asked Bill about trends in appraisal values and also about availability of credit on forested tracts.

Land For Sale:

• Forestland For Sale on AFOA's website
• Rural Land For Sale on Ala. Farm Credit's website

Phone: (256) 878-2631
Email: bhopewell@farmcreditbank.com

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John Robert Britt

(07:39)
Hear Conference

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John Britt, John Britt & Associates, LLC, is a consulting forester who helps individual and institutional forest landowners meet their varied and multiple forestland ownership objectives. In a conversation about cost cutting to help us get through the recession, Dr. David South (see: Rectangular Spacing: An Economic Benefit?) mentioned that changing tree spacing from 9' wide rows x 8' between trees to 18' wide rows x 4' between trees, for example, would plant the same number of trees per acre (605), and provide savings in such operations as bedding, hardpan ripping, herbicide band applications, and machine planting (less rows, less passes through the planting area). We suppose the wider row spacing might make it easier to harvest pine straw, too, and later, might eliminate the need to take out every fifth row when thinning the pulpwood trees. David recommended we talk to John Britt about the pros and cons of the wider spacing because he has planted trees with wide rows and co-authored a paper entitled, Volume and Crown Characteristics of Juvenile Loblolly Pine Grown at Various Ratios of Between and Within Row Spacings.

Phone: (706) 662-0036
Email: john@jbanda.net

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Will Ricks

(12:13)
Hear Conference

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Will Ricks, now Assistant Region Supervisor, Georgia Department of Natural Resources, is frequently found peering through his binoculars. Will is the co-author of Fringe Benefits, Quality Whitetails, April-May 2010, a report on the value of game food plots to small mammals and songbirds that use the habitat found in and around the plots. Besides capturing small mammals during the study of the plots, he spent a lot of time listening and watching for songbirds. He recommends Thayer's Guide to Birds of North America, which can be downloaded to an iPod or iPad, "so you can carry it with you and verify the birdsongs you are hearing." Dr. Karl Miller, Warnell School of Forestry and Natural Resources at the University of Georgia, directed the project on game food plots and Quality Deer Management Association was a project cooperator.

Phone: (912) 262-3378
Email:  will.ricks@dnr.state.ga.us

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Lehman H. Bass

(15:25)
Hear Conference

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Leh Bass is Owner and President of Green South Land & Timber, Inc., a consulting forestry firm based in Opelika, Alabama. For a long time Leh noticed that most of the pine straw used for landscaping in Alabama was imported from Georgia, North Carolina and other states. He recognized that Alabama forest owners, as well as straw harvesters, haulers, and others could be earning significant income if the market for pine straw were better developed in our state. About 6 months ago Leh told AFOA that he was going to start the Alabama Pine Straw Association and today he is introducing us to the new association. The association's website has pages devoted to landowners, producers, marketing, and membership. To see what's going on in the business, check out:

• North Carolina Pine Needle Producers Association
• MSU's Business Resources: Pine Straw
• Make Money Growing Pine Straw
• Pine Straw Income & Fire Prevention, Too.

Phone: (334) 749-0598 office, (334) 321-7925 cell
Email: lehb@charter.net

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Zachary Green

(20:16)
Hear Conference

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Zachary Green is President (and Illuminating Genius) at MN8, a Cincinnati, Ohio, company "that specializes in the different applications of photo luminescent technologies in various products and applications." Although Zach has focused on the use of his glow-in-the-dark paint for fire fighter safety, we immediately thought of the times we've loaded up equipment in the woods (after dark) and didn't miss a chain saw or brush saw until we began unloading at home. It would have been so nice if the equipment had glowed a warning, Don't forget me! Some of the MN8 videos will give you ideas (trail to parking area from deer stand comes to mind) and you may need information on how to buy the Do-It-Yourself Illumination Kit. If you decide to buy an MN8 product, let AFOA know how you used it and how it worked.

Phone: (513) 235-6383
Email: zach@mn8products.com

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Dr. John L. Greene

(23:40)
Hear Conference

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John Greene is a Forest Economist, with the USDA Forest Service Southern Research Station. He has been a long-time co-author of Tax Tips for Forest Landowners and a frequent guest on Capital Ideas - Live! So you might imagine our surprise when we invited John to join us today, he suggested we not discuss the examples given in the 2010 version of Tax Tips (reprinted in AFOA's October newsletter, Capital Ideas), but instead focus on old tax law provisions that are or will soon be no longer available to us.

Examples:

• The 50 percent depreciation “bonus” put in place by the Economic Stimulus Act of 2008 and extended by the American Recovery and Reinvestment Act of 2009 is not available for most property purchased and placed in service in 2010.
• The enhanced deduction for donation of a conservation easement put in place by the Pension Preservation Act of 2006 and extended by the 2008 Farm Bill is not available for donations made in 2010.
• The Economic Growth and Tax Relief Reconciliation Act – which put in place the current federal tax rates for long-term capital gains – is set to “sunset” after 2010. If this occurs, the tax rate will return to 20 percent (compared with 15 percent now) for most long-term capital gains and 10 percent (compared with 0 percent now) for amounts which, if added to a forest owner’s ordinary income, would fit into the 10 or 15 percent income tax brackets.
• For owners who hold their forest as part of a trade or business, the current section 179 limits – put in place by the Economic Stimulus Act of 2008 and extended by the Hiring Incentives to Restore Employment Act of 2010 – also are scheduled to end after this year. If this happens, the maximum section 179 deduction will return to $25,000 (compared to $250,000 now) with a phase-out limit of $200,000 (compared to $800,000 now).

Phone: (919) 549-4093
Email: johnlgreene@fs.fed.us

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Prof. Thomas G. Harris

(26:43)
Hear Conference

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Tom Harris, like John Greene, above, has been a frequent contributor to Capital Ideas - Live!. For our market report today, we asked the publisher of Timber Mart-South to tell us about stumpage markets. Tom pointed out that sawmill capacity in the U.S. South has trended upward for the past 15-20 years (slide 10, first bullet, below). The Southern United States has become the leading producer of softwood (pine) lumber in the world. Unfortunately, as southern timber growers have become more and more dependent on sawtimber for income, sawtimber and chip-n-saw prices have been on a downward slide for the past 10 years (slides 12 & 14, first bullet, below). Alabama sawtimber and chip-n-saw prices had been generally higher than prices in the rest of the South, but in the last 4 or 5 years that difference has disappeared (slide 10 & 11, second bullet, below).  

Suggested Reading:

• Southern Timber Market Trends
• Alabama Timber Price Trends
• Alabama State-wide Average Prices

Phone: (706) 542-4756
Email: harris@warnell.uga.edu

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