WAC 222-21-045   Valuation.  (1) This section is designed to establish methods and standards for valuation of forestry riparian easements for purposes of establishing the compensation. It applies only to the department, small forest landowners, and the small forest landowner office in connection with the forestry riparian easement program.

     (2) The small forest landowner office will calculate the fair market value of the forestry riparian easement as of the date of receipt of the forest practices application associated with the qualifying timber, or the date the landowner provides written notification to the small forest landowner office that the harvest is to begin. Data obtained or maintained by the department of revenue under RCW 84.33.074 and 84.33.091 will be used and adjusted to the applicable date. For easements with an approved forest practices application, the small forest landowner must indicate whether valuation will be calculated using method (a) or (b) of this subsection. Only method (a) of this subsection is available for qualifying timber for which an approved application for timber harvest cannot be obtained because of restrictions under the forest practices rules under WAC 222-21-061. In either method (a) or (b) of this subsection, the time adjustment index will be based on log price changes. The small forest landowner office will determine the specific log species and/or sorts and the log price reporting service to use after consultation with the small forest landowner advisory committee established under RCW 76.13.110(4) and the department of revenue. The small forest landowner office will generate an index that reflects the time adjustments using information and data obtained from a log price reporting service determined by the department in consultation with the small forest landowner committee.

     (a) Stumpage value determination. The small forest landowner office will create and maintain value tables to determine stumpage value of the qualifying timber. These tables will be created using a method coordinated with the department of revenue. The values will closely approximate the stumpage value for logs that would be sold in the ordinary course of business for the date of receipt of the forest practices application. The landowner must provide the small forest landowner office with:

     (i) The reference for the stumpage value table and any other needed information for use of the table (see the board manual section 17 for details); and

     (ii) Any information the small forest landowner would like the department to consider in its cruise and valuation of the qualifying timber.

     (b) Small harvester tax return. The landowner must provide mill or buyer information to the department on the sale breakdown. This includes:

     (i) The volume and scaling bureau log grades of each species harvested;

     (ii) The amount received for each species; and

     (iii) The actual harvesting and marketing costs as defined in the department of revenue small harvester instructions.

     The price received for the timber is adjusted to the applicable date using the time adjustment index and then the average logging and hauling cost per MBF is subtracted to arrive at the stumpage value. The value of the qualifying timber is determined by multiplying the time adjusted stumpage value of each species in the harvest unit by the net volume for each corresponding species in the inventory of qualifying timber. A residual value approach is used to determine the value of species in the easement, which are not present in the harvest area. The prices for species not present in the harvest unit are based on the delivered log price report approved by the small forest landowner office that corresponds closest to the date of the forest practices application, minus the average logging and hauling costs.

     (3) Removal of any qualifying timber before the expiration of the easement must be in accordance with the forest practices rules and the terms of the easement. There shall be no reduction in compensation for reentry.



[Statutory Authority: RCW 76.09.040, 76.09.370, chapters 76.13 and 34.05 RCW. 03-06-039, § 222-21-045, filed 2/26/03, effective 3/29/03. Statutory Authority: RCW 76.09.040, chapters 76.13, 34.05 RCW. 02-05-084, § 222-21-045, filed 2/20/02, effective 3/23/02. Statutory Authority: Chapter 34.05 RCW, RCW 76.09.040, [76.09.]050, [76.09.]370,76.13.120 (9). 01-12-042, § 222-21-045, filed 5/30/01, effective 7/1/01.]