Fees Assessed for Forest Fire Protection

DNR is responsible for the Forest Fire Protection Assessment — an annual fee for fire preparedness activities

DNR pays for preparedness activities based on where staff are located, not where assessment funds are collected

Forest Fire Protection Assessment pays for activities like preparedness and training

State law authorizes the Department of Natural Resources (DNR) to impose the Forest Fire Protection Assessment (assessment) on owners of forest land parcels to fund fire protection activities. The current annual fee is $17.50 per parcel, plus 27 cents for each acre over 50. In some cases, landowners can request a refund or combine multiple properties to reduce their total assessment. The Legislature has increased the rates 10 times since the beginning of the program in 1917, most recently in 2010.

JLARC staff analysis found that landowners pay the assessment on 486,000 parcels across the state. Between fiscal years 2007 and 2016, DNR collected $104 million and spent $92 million. Expenditures include preparedness, training, education, and program administration (Exhibit 2.1).

Exhibit 2.1: Assessment funds fire protection activities

Program	Amount (millions)	Description
Preparedness	$42	Planning, equipment maintenance, fire detection, fire weather, administering the assessment
Training	$10	Wildfire training for DNR staff
Smoke Management	$7	Activities required to deliver the smoke management program
Education	$4	Activities to educate the public about fire prevention
Fire District Assistance	$2	Provide training and equipment to fire districts
All other	$28	Includes administrative overhead
Total expenditures over 10 years	$92

Source: JLARC summary of data from DNR. Total may not match the sum of individual parts due to rounding.

Collections exceed spending in westside regions, while spending exceeds collections in east

DNR reports that there is no relationship between the amount of assessment funds collected in a region and the amount of fire protection funds that DNR spends in that region (Exhibit 2.2).

• DNR allocates assessment funds to each of its six regional offices based on the number of full-time equivalent staff positions in the region.

Exhibit 2.2: No relationship between where assessment funds are collected and spent

Part of state	Region/Division	Percent of Collections	Percent of Spending
Eastside	Northeast	20	26
Eastside	Southeast	8	21
Westside	Pacific Cascade	18	15
Westside	South Puget Sound	24	9
Westside	Northwest	15	7
Westside	Olympic	8	7
Non-regional statewide collections and spending percentages		8	16

Source: Regions shown on DNR website, spending and collections from JLARC staff analysis of DNR data. Total may not match the sum of individual parts due to rounding.

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Inconsistent decisions about whether a parcel is subject to the assessment can lead to unequal treatment of landowners

DNR must determine which lands are forest land, but definitions remain unclear

While statute provides a broad definition of forest land, it also states that the Department of Natural Resources (DNR) must use its judgment to determine which lands are forest land and subject to the Forest Fire Protection Assessment (assessment).

The law gives DNR explicit authority to create rules implementing the assessment. DNR has not issued administrative rules or published guidelines to clarify which parcels should be assessed.

DNR reviewed parcels for eligibility until 2010

DNR previously directed staff in each of its six regional offices to review 20 percent of the parcels in each county annually, so that each parcel would be reviewed every five years. DNR staff used parcel boundaries and ownership records from the county assessors, as well as aerial imagery and field observations to make decisions about which parcels should be assessed.

Despite the requirement to complete reviews, DNR had no agency-wide training or guidance for the staff who did the work.

• DNR did not specify how each region should perform the reviews.
• DNR had no criteria or guidelines for determining which parcels met the definition of forest land. Policy stated only that cemeteries, air strips, gravel pits, and swamps were exempt.
• DNR had no formal process to check the work of the staff performing the reviews.

In 2010, DNR stopped reviewing parcels after it received negative feedback regarding a decision to assess 526 previously non-assessed parcels. The feedback raised concerns about inconsistent determinations.

Determinations about eligibility for assessments can be inconsistent

In the absence of agency-wide guidance, regional staff developed their own informal criteria, or used no criteria at all, to make determinations when parcels did not clearly fall within or outside the statutory definition. As a result, determinations were inconsistent, and remain so because there have been no updates.

For example, similar parcels in different areas could be treated differently. The exhibit below shows the different determinations for similar parcels in two DNR regions. One pays the assessment, while the other does not.

Exhibit 3.1: Similar parcels in different counties had different determinations

Source: Parcel and assessment data provided by county assessors, imagery is 2015 National Agricultural Imagery Program mosaics.

Determinations may be inaccurate due to changes since the last reviews

DNR made its last parcel determinations in fall 2009. Since then, there have been changes in the landscape, parcel boundaries, and ownership that impact whether a parcel should be subject to the assessment. For example, a forested parcel may have been cleared, divided into smaller parcels, and developed. Some county assessors reported that the new parcels still carried the assessment, while others stated that they did not, regardless of remaining tree coverage.

Logging and regrowth also have changed the landscape. In the exhibit below, the recently logged parcel on the left is subject to the assessment, despite having no trees and little other forest material. However, the parcel on the right is not subject to the assessment, despite regrowth since the last determination.

When DNR stopped the reviews, staff expressed concern that the long interval between reviews could lead to “inaccurate, inequitable FFPA assessment[s]” and "charging citizens incorrectly." The scale of the problem is unclear because DNR cannot determine how many parcels are affected without completing a full review statewide. However, JLARC staff analysis identified nearly 5,500 parcels that are treated as forest land for property tax purposes but do not pay the assessment.

Exhibit 3.2: Logging and regrowth affect accuracy of determination

Source: Parcel and assessment data provided by county assessors, imagery is 2015 National Agricultural Imagery Program mosaics.

DNR considered, but did not implement, program reform

After halting the reviews, in 2010 DNR created a staff work group to propose program changes and parcel evaluation criteria. DNR disbanded the work group in January 2011 before it completed its work, citing workload priorities.

In 2014, DNR again assigned staff to develop recommendations for improving the process and restarting reviews. Staff presented findings, recommendations, and a new review process to executive management, but the program was not changed.

DNR has not designated forest protection zones statewide

In 1988, the Legislature passed a law requiring DNR to clarify its geographic areas of responsibility by working with local fire districts to create “forest protection zones.” DNR and the local fire districts must decide if any forest land in the zone would be better protected by local fire districts. Those lands would not be subject to the assessment.

DNR has created three forest protection zones — one each in King, Kitsap, and Pierce counties. While DNR has updated the boundaries a number of times, it has not created zones in the rest of the state. Forest land in a local fire protection district may be subject to the assessment in a county without zones, while similar land in a zoned county may not. DNR has no written policies or procedures for creating the zones.

Other states have developed means to improve consistency in identifying which parcels to assess

DNR can learn from similar programs in Oregon, Idaho, and Montana. These states also assess forest lands for fire protection through a combination of per-parcel and per-acre charges. The other Western states have created systems, including administrative rules, for classifying and reviewing forest land subject to the charges.

• Idaho has developed proprietary software that gathers data from county assessors to help staff identify lands to review. The Idaho Department of Lands uses a five-year review cycle so that 20 percent of assessed parcels are reviewed annually. The Department of Lands also is creating a training program for staff that review parcels, including photographs and examples to facilitate consistent decisions.
• Oregon divides responsibility for reviews by county. Each county has a classification committee that is responsible for periodically reviewing parcels. The detailed criteria for classifying lands are defined by administrative rule.
• In Montana, the state's wildfire agency has defined administrative rules with criteria for classifying forest land.

Recommendation: DNR should clarify the definition of forest land and implement a process to consistently apply the definition across the state

DNR should clarify the definition of forest land, either through administrative rule or by proposing requested legislation. In doing so, DNR should identify how the process of determining Forest Protection Zones is germane to the assessments, including whether statutory changes are needed. DNR should design and implement a process to consistently apply the definition to parcels across the state.

The Department of Natural Resources concurs with this recommendation. You can find additional details on the Recommendations tab.

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In the absence of systematic guidance from DNR, county officials use different processes to apply the assessment

County officials play a key role in administering the Forest Fire Protection Assessment (assessment). County assessors record the assessment on the tax rolls and treasurers collect the fee. Each county uses its own data system to track parcel records, including whether each parcel is subject to the assessment. Since the Department of Natural Resources (DNR) has not provided updated lists of parcels since 2009, county assessors generally apply the assessment to the same parcels as the year before.

DNR does not currently provide guidance to county officials

Changes to a parcel can affect the assessment. For example, if a parcel is logged or developed, it may be appropriate to reduce the number of acres subject to the assessment or remove it entirely. The law does not define what should happen and DNR does not provide any systematic guidance to county officials.

Development poses a particular challenge for the assessment. County assessors assign value to parcels based on the land and improvements, including buildings. A JLARC staff analysis of parcels, aerial photographs, and maps showed that most parcels currently paying the assessment have some improvements. There is no common threshold or DNR guidance for how much improved value is sufficient to consider a parcel "fully improved" and no longer subject to the assessment.

Assessors use different processes to administer the assessment

Although many parcels remain unchanged from year to year, scenarios arise that may warrant changes to others. In the absence of guidance or communication from DNR, assessors have adopted different approaches and processes to address these scenarios.

JLARC staff surveyed county assessors and learned how they address common scenarios that arise with the assessment (Exhibit 4.1). The variation contributes to unequal landowner treatment discussed in the previous section.

Exhibit 4.1: Counties differ in how they address common changes to assessment scenarios

Scenario	Yes	No	In Some cases
Remove or change the assessment when land is cleared or developed	9	22	0
Add assessment to new parcels after a parcel is subdivided	29	1	1
Tell DNR when the county removes, or changes the assessment, or adds it to a parcel	9	20	2
Automatically combine the assessments for a landowner with multiple parcels	13	18	0

Source: JLARC staff survey responses from 31 county assessors. Out of Washington's 39 counties, five do not have any lands with the assessment and three did not respond to the survey.

DNR does not provide updated information to county officials

DNR does not routinely communicate updates or news about the program to county officials. For example, some county assessors told JLARC staff that they did not know DNR had stopped reviewing parcels in 2010 and were unaware that program management had shifted from regional offices to Olympia headquarters. DNR's primary contact with assessors is through annual form letters sent to each county.

Recommendation: DNR should create and communicate consistent guidance for administering the assessment, with input from county officials

DNR should develop consistent guidance for county officials to address parcel changes that impact the assessment. DNR should solicit input from county officials to ensure that they can efficiently and effectively implement the guidance. In addition to guidance, DNR should develop a policy regarding communications with county officials.

DNR will need to consistently determine which parcels should pay the assessment. This will require working with the county assessors who maintain their counties' parcel records and tax assessment rolls.

The Department of Natural Resources concurs with this recommendation. You can find additional details on the Recommendations tab.

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JLARC staff created statewide database of county-level parcel data to analyze forest lands for the Legislature

JLARC staff compiled data from 32 counties

Each county uses its own data system to track parcel records, including whether each parcel is subject to the Forest Fire Protection Assessment (assessment). As a result, there is no centralized system for analyzing assessments.

JLARC staff created a statewide database with calendar year 2016 parcel and assessment records from 32 of the state's 39 counties:

• 5 counties do not have forest land subject to the assessment: Adams, Benton, Franklin, Grant, and Whitman.
• 2 counties, Lewis and Wahkiakum, did not respond to the JLARC request for data.

The database includes 2.8 million parcel records. The records have information such as parcels not subject to the assessment, taxable value, and fire district. The database created by JLARC staff contains more detailed information than the Department of Natural Resources (DNR) needs, to manage the program going forward. While DNR has some information about assessed parcels, it is outdated and potentially inaccurate. Sections 3 and 4 of this report address the steps needed to update DNR's assessment information. Appendix 1 describes the methodology in detail.

Nearly 5,500 parcels pay property tax as forest but do not pay the assessment

JLARC staff identified 5,455 parcels that are classified as forest for property tax purposes, but the owners do not pay the assessment.

• Land use codes indicate the parcels are noncommercial forest timberland, non-agricultural open space, or designated forestland under RCW 84.33.
• Some likely should be subject to the assessment. Considering current assessment rates and parcel size, JLARC staff estimate that the parcels could generate up to $179,000 in annual assessment fees.
• This list is not exhaustive: There are likely parcels with other land use codes that also should be subject to the assessment.

As noted in Section 3, JLARC staff also identified parcels that are cleared of trees but still subject to the assessment.

Without clear and consistent definitions and a comprehensive review of parcels, DNR cannot confirm whether it is appropriately collecting assessment fees across the state.

Exhibit 5.1: There are 5,455 parcels taxed as forest that do not pay the assessment