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DiNapoli: Weak Oversight Leads to Tax Breaks for Ineligible Properties

Audit Finds Properties in Forest Protection Program That Don't Qualify

April 20, 2022

The New York State Department of Environmental Conservation’s (DEC) inadequate monitoring and enforcement has resulted in landowners enrolled in two private forest conservation programs receiving property tax exemptions of up to 80% for which they may be ineligible, according to an audit by New York State Comptroller Thomas P. DiNapoli.

“New York state offers a property tax break for landowners who commit to protect their private forest land, but some property owners are not living up to their end of the agreement,” DiNapoli said. “This audit raises questions about whether these incentives are achieving their goal to improve private forest management. The tax benefits received are worth hundreds of thousands of dollars and demand greater scrutiny.”

The two programs, Real Property Tax Law 480a and 480, offer tax incentives to qualified private forest landowners who submit and follow a DEC-approved forest management plan for their property to promote healthy forests and increase the likelihood of a more stable forest economy. While local assessors are ultimately responsible for ensuring that only eligible acres receive tax benefits, the success of the programs hinge on the efforts of both the localities and DEC.

DiNapoli’s report found weaknesses in several aspects of DEC’s oversight of the 480a program, starting with poor monitoring and enforcement that undermined the agency’s ability to ensure only eligible properties were enrolled in the program and therefore eligible for tax exemptions, and that forest land continued to be protected and enhanced as an economic resource.

The audit examined a sample of 135 of the 6,858 properties in the program and found 45 (33%) were not in compliance with its requirements and may have improperly received the local tax exemption. The landowners of the 45 properties saved approximately $525,745 in local taxes between 2017 and 2019 because the property values were reduced by over $6.1 million annually for land valued at a total of almost $8.2 million.

The DEC did not have a comprehensive up-to-date data collection and monitoring system for tracking program participants. Auditors found the absence of such a database, along with administrative inefficiencies and insufficient staffing resulted in inadequate oversight. The report also found DEC’s oversight problems led to inadequate enforcement of management plans and submission of annual commitments. Further, local assessors granted exemptions to property owners who were not enrolled in the program and exemptions were given for potentially ineligible land, including those that did not meet the programs’ acreage requirements.

Additionally, there are 795 properties under the older 480 program for which landowners have been benefitting from local tax reductions for over 45 years that have gone largely unmonitored by DEC or the localities. In most cases, the DEC was not aware which properties were enrolled in the program. This program has lesser qualifying standards than the 480a program.

DiNapoli recommended:

  • DEC improve communication and partnerships with local assessors to ensure properties are appropriately enrolled, eligible and benefiting from the 480a and 480 programs, and management plans are followed, records are maintained, and enforcements are applied when violations occur.
  • Develop and maintain a centralized statewide database to improve oversight and administration of statewide forest tax programs, including compliance with management plans, work scheduled and annual commitments.

DEC agreed with many of the recommendations and acknowledged they should not have issued certificates without approved management plans and stated they are taking steps to prevent a reoccurrence.

Enrollment Requirements

To enroll in the 480a program, landowners must apply to certify their land through the DEC. Forest land is eligible if the tract is at least 50 contiguous acres exclusively devoted to, and sustainable for, forest crop production, and stocked with a stand of trees sufficient to produce a profitable crop within 30 years from DEC certification. The landowner must submit a forest management plan that includes, among other things, a map identifying boundary lines and acreage of eligible and ineligible forest land, and a 15-year work schedule of all work to be done each year, including all planned commercial and non-commercial harvests and road construction. The program requires the submission of an annual commitment form from the property owner recommitting the land for the next succeeding 10 years.

Once all requirements are met, the DEC issues the landowner a certificate of approval. DEC approval is required for any changes to the certificate. Since 2011, enrollment in the 480a program has increased by 30%, and between 2017 and 2019, landowners benefited from an approximate local tax reduction of $62 million.

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Oversight of New York State Forest Tax Programs

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