Timber-tax distribution bill draws timing concerns from county assessor

House Finance on Thursday held a public hearing on Senate Bill 5994, a bill that would adjust how timber tax revenues are distributed to taxing districts and certain school districts.

Rochelle Harris, committee staff, explained that the timber tax is a 5% excise on the assessed value of timber when harvested, with 1% going to the state general fund and the remaining 4% distributed to the county where the timber was harvested. Counties then allocate funds to taxing districts in a tiered order that prioritizes districts with debt-service or capital-project levies, then school districts with enrichment levies, and finally other taxing districts in proportion to timber assessed value.

Harris summarized SB 5994 as extending distribution eligibility to school districts that do not have a capital-project or enrichment levy in the current calendar year but had a qualifying levy in either of the prior two calendar years. Harris noted the bill may include an emergency clause to take effect immediately and said the fiscal note indicates no effect on state revenues and an indeterminate effect on individual school districts.

Jeff Chapman, Jefferson County assessor, described the practical timing issues this would raise for county distribution calculations. Chapman said assessors use levy information established in the prior year when setting levy rates and guaranteeing priority distributions; a retroactive insertion of a prior-year levy, he argued, would "completely throw the entire formula out of whack" and could make it impossible for counties to guarantee those distributions without additional state funds. He asked that the effective date be changed to Jan. 1, 2027 so counties could prepare; Chapman said he otherwise supports the bill.

The committee closed the hearing on SB 5994 without taking a vote. No committee action or amendment was recorded on the public record.