‘It’s the right thing to do’: State forestry program provides tax benefits to woodland owners

A portion of Ed Kocal’s winters are spent outdoors in his woodland. With a chain saw in hand, he works to control invasive species and remove unhealthy trees.

“I’m a very active forest manager and I’m a master woodland steward,” Kocal said. “So, I spend a lot of time out there.”

Kocal has spent years working to restore his woodland, ground that was previously used for grazing.

“It was largely pastured, and it was not as dense,” said Kocal, who’s “trying to restore it with more oak-hickory and eliminate some of the undesirable trees.” In addition to removing unwanted trees, he also has been planting trees.

When it came time to decide whether he should enroll his 41 acres of Cedar County woodland in Iowa’s Forest Reserve program, it was a “no-brainer.”

In 2002 shortly after Kocal purchased the land, he went to his county assessor’s office and enrolled 38 of his 41 acres in the program.

Kocal, who is a former Iowa Department of Natural Resources conservation officer, enrolled with the program not only to make his forest land healthier and because he plans to always keep his acres as woodland, but also because there is a tax advantage to the program.

The Forest and Fruit Tree Reserve program, established by the Forest and Fruit Tree Reservation Act, has helped eligible Iowans maintain healthy woodlands and keep some money in their pockets since its inception in 1906.

  Buy Photo

In Kocal’s case, he saves $15 to $20 in property taxes per acre each year through the program. This saves him upward of $500 per year.

Kocal’s 38 acres of woodland in the program represent a slice of the roughly 840,000 acres Iowans have enrolled statewide.

What is the Forest Reserve program?

The Iowa Legislature established the Forest and Fruit Tree Reserve in 1906 to “reduce or eliminate” property taxes for woodland owners with eligible property, to help with erosion control, watershed protection and game cover.

The program incentivizes woodland owners to manage their land by offering a 100 percent tax exemption for eligible woodlands.

To be eligible for the program’s tax exemptions, the woodlands must:

To stay enrolled in the program, the woodland owner has up to one year to replace trees that are cut down so the woodland program’s baseline 200 growing trees requirement is met.

According to the Iowa Department of Natural Resources, the land must be under the same ownership for 10 years.

The benefits of the program include providing habitat for wildlife; watershed protection; economic gain from raising trees that provide fruit, nuts or other products; air quality enhancement; and outdoor recreation.

  Buy Photo

When Paul Millice was retiring from a career in manufacturing with Procter & Gamble, he and his wife wanted a “nice, quiet place in the country.” He found a six-acre plot of land in Johnson County and bought it in January 2002.

Millice and his wife bought the land without even seeing it first because they knew it was right for them.

He wanted to enroll the land in the Forest and Fruit Tree Reserve program for the tax advantages, but at the County Assessor’s Office he found out the previous owner enrolled the land before him, so he didn’t have to re-enroll it.

Millice had “no hesitancy” about whether to get involved with the program.

“There would be no incentive to not enroll in the program, because it just makes economic sense,” he said.

Millice has spent a couple thousand dollars over the years on woodland supplies, like tree seedlings and for wire tubes and vinyl fences to put around the budding trees to protect them from deer.

He used to plant seedlings yearly but has stopped some planting in recent years due to the lack of room in the woodlands.

Similar to Kocal, Millice said his woodlands used to be farm and grazing land, so he’s actively working to restore it, too.

Millice, who is the past president and current board member of the Iowa Woodland Owners Association, said he wants to participate in the program because it is morally right.

“Iowa is the most altered state in the nation, and to do this, to take care of these trees and to plant, is the right thing to do,” he said. “My goal is to leave my mark on the world [and] to leave it a better place than where I found it.”

  Buy Photo

Breaking down the numbers

Over the last two centuries, Iowa has lost a significant portion of its woodlands.

“Around 1800, we had about 7 million acres of woodlands in the state. Present we have about 3 million,” said Billy Beck, an assistant professor at Iowa State University and an extension forestry specialist with Iowa State University Extension and Outreach. “We've lost 4 million acres of woodlands over the last couple centuries.”

Beck said that most of the remaining woodlands are clustered around the Eastern side of the state and along the state’s southern border, in Taylor, Ringgold and Van Buren counties.

He said about half the state’s woodlands are along rivers and streams and the other half are on land that is sloped.

  Buy Photo

“Data suggests that woodlands provide us (with) water quality, erosion control, soil savings, aquatic habitat, all that kind of stuff,” Beck said.

About 85 percent of Iowa’s woodland are privately owned, with about 150,000 woodland owners statewide. The average ownership is about 20 acres of woodland per landowner, Beck said.

“We’ve got about 840,000 acres of forest reserve in the state, which is about 28 percent of our total woodlands,” Beck said. “There’s 61,000 parcels approximately in Forest Reserve.”

In comparison, there were about 692,934 acres and 47,500 parcels enrolled in the program statewide in October 2011.

Beck said taxing entities would receive about $21 per acre from the woodlands if they weren’t in the reserve program.

Although Beck said the price per acre varies by county and $21 is a statewide average, it equals about $17.6 million in tax revenue statewide each year.

An unclear future

Since its creation in 1906, there have been many attempts to alter the program, change its requirements or even to do away with it completely.

Although there have been legislative challenges, the last time the law changed was in 1984.

Tim Meyer is the current vice president of the Iowa Woodland Owners Association. In his time on the organization’s board, he said the program’s tax exemption has come up in the legislature for about 10 years.

During the 2024 legislative session, House File 2672 was introduced. The bill would have allowed counties to decide whether they would continue to provide tax exemptions for eligible landowners, rather than maintaining the program at the state level. It also would have increased the size of an eligible woodland from two acres to five.

The bill was passed by the Iowa House, but died in the Senate.

This year’s legislative session began Jan. 13. So far, two bills have been introduced that would affect the Forest and Fruit Tree Reserve program.

One of the bills, introduced by Rep. John Willis, R-Spirit Lake, would repeal the Forest Reserve Program and create conservation areas with modified property tax rates.

The bill — House File 142 — would tax commercial conservation acres at $12 per acre, and non-commercial conservation areas at $8 per acre.

Meyer said the program is too valuable to the state to repeal it.

“Most people see this as a fundamentally important program,” Meyer said. “It's not being driven by money. It's being driven by what we really think is good for the state of Iowa.”

  Buy Photo

Another bill, Senate File 17, introduced by Iowa Senate President Amy Sinclair, R-Allerton, would modify the requirements landowners must meet to qualify for the program.

Sinclair’s bill seeks to designate a county conservation assessor to inspect a landowner’s woodlands before accepting their application.

The bill also would require that the landowner already be receiving a homestead tax credit at the time of application. Homestead tax exemptions require that a property owner live in the property at least six months out of the year.

A spokesperson for Sinclair said a landowner would have to be receiving the homestead tax credit from anywhere in the state — not necessarily where the woodlands are located.

“Once the application is accepted, the area shall continue to receive the tax exemption during each year in which the area is maintained as a fruit tree or forest reservation,” the bill states.

A third bill was introduced in the Senate on Wednesday by Sen. Michael Klimish, R-Spillville. The bill would create a fee structure for landowners whose property is in the Forest and Fruit Tree Reserve program.

According to the bill – Senate File 219 – if a landowner lives in the same county as their woodlands, they would pay $2 per acre. If they live in a county that is contiguous to the county where the woodland is located they would pay $3 per acre.

For woodland owners who don't meet those first two requirements, the fee would be based on an equation that uses both agriculture land tax rates and corn suitability ratings in the Iowa county that has the most acres in forest reserve.

Chuck Isenhart, a longtime state representative who lost his bid for re-election in November, organized and hosted a panel discussion in Dubuque last month to discuss the future of the Forest Reserve program. More than 100 people attended.

“There seems to be a lot of grassroots support of people not wanting to do away with the program,” Isenhart said.

  Buy Photo

Forest reserve is important for many reasons, Isenhart said, including fostering a healthy woodland and incentivizing people to maintain tree cover in Iowa’s “altered landscape.”

“It would seem to be a good thing because with the altered landscape in rural Iowa, somebody mentioned that we don't hear of a lot of tourists coming to Iowa to look at the corn and soybeans,” he said.

Isenhart said tourists come to Iowa to hike in state parks and forests, and in the blufflands along the river to experience wildlife. The Forest Reserve program helps maintain those kinds of woodlands on private property.

  Buy Photo

Olivia Cohen covers energy and environment for The Gazette and is a corps member with Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues.

Comments: olivia.cohen@thegazette.com