The Managed Forest Law (MFL) is a topic the WRA legal team rarely discusses because the average agent will not come across the MFL in their practice.
“Wisconsin’s 17 million acres of forestlands and millions of urban trees significantly enhance the quality of life in our state,” according to the Wisconsin Department of Natural Resources (DNR) at dnr.wisconsin.gov/topic/forestry. And for that reason, we thought it was time to offer a few reminders and pointers regarding the MFL.
What is the MFL?
Enacted in 1985, the MFL is an incentive program for landowners that encourages sustainable forestry on private woodland. The landowner pays reduced property taxes because they agree to follow a set forest management plan. A summary of the MFL by the DNR can be found at dnr.wisconsin.gov/topic/forestlandowners/mfl.
What land can participate in the MFL?
Any privately owned forestland.
How is a property eligible?
Per the DNR, “To be eligible for the MFL program, a landowner must have a minimum of 20 acres of contiguous land and at least 80% of that land must be productive forest land.” See dnr.wisconsin.gov/topic/forestlandowners/mfl.
How do landowners apply?
An application must be filed by June 1 for entry into the program the following January 1. To learn more about the application process, visit dnr.wisconsin.gov/topic/forestlandowners/mfl.
Can the property be withdrawn?
Yes. According to the DNR, land may be voluntarily withdrawn at any time by submitting a withdrawal form, which is the Declaration of Withdrawal Managed Forest Law (2450-140) form, located at dnr.wisconsin.gov/topic/forestlandowners/mfl. However, it is important to understand there will be fees, outlined in the next paragraph, associated with removing land from the MFL.
Is there a withdrawal fee?
Yes. As stated by the DNR, “A withdrawal tax plus a $300 withdrawal fee will be assessed. The type of order determines the way the withdrawal tax is calculated.” See dnr.wisconsin.gov/topic/forestlandowners/mfl. See dnr.wisconsin.gov/sites/default/files/topic/ForestLandowners/Withdrawal_Instructions.pdf to learn more about the withdrawal process and associated consequences.
Does the seller need to disclose that the land is in the MFL?
Yes. The seller must disclose that all, or part, of the property is managed forestland under the MFL.
Will the MFL continue after a change of ownership?
Yes. The DNR has an informational handout titled, “MFL Land Transfer of Ownership Factsheet.” Access the handout at www.wra.org/DNR/MFL/Handout.
How long is property typically in the MFL?
Property remains in the MFL typically for 25 or 50 years.
What must be done if the ownership of the land changes?
When ownership of land enrolled in the MFL program changes, the new owner must sign and file a report of the change of ownership on a form provided by the DNR as well as pay a fee.
By filing this form, the new owner agrees to the associated MFL management plan and the MFL program rules. The DNR Division of Forestry monitors forest management plan compliance. Changes made to the property that are subject to an order designating the property as managed forestland, or to its use, may jeopardize an owner’s benefits under the program, or may cause the property to be withdrawn from the program and may result in the assessment of penalties.
Is the MFL addressed in any WB offer?
Yes. In the WB-13 Vacant Land Offer to Purchase, in the Government Programs contingency, the MFL is addressed on lines 195-205.
MANAGED FOREST LAND: If all, or part, of the Property is managed forest land under the Managed Forest Law (MFL) program, this designation will continue after closing. Buyer is advised as follows: The MFL is a landowner incentive program that encourages sustainable forestry on private woodlands by reducing and deferring property taxes. Orders designating lands as managed forest lands remain in effect for 25 or 50 years. When ownership of land enrolled in the MFL program changes, the new owner must sign and file a report of the change of ownership on a form provided by the Department of Natural Resources and pay a fee. By filing this form, the new owner agrees to the associated MFL management plan and the MFL program rules. The DNR Division of Forestry monitors forest management plan compliance. Changes a landowner makes to property that is subject to an order designating it as managed forest land, or to its use, may jeopardize benefits under the program or may cause the property to be withdrawn from the program and may result in the assessment of penalties. For more information call the local DNR forester or visit https://dnr.wisconsin.gov/topic/forestry.
Can the buyer and seller modify the MFL agreement in the WB-13?
No. The landowner agrees to honor the MFL agreement and therefore the buyer is agreeing to the same terms if they move forward with the purchase.
Can the buyer force the seller to take the land out of the MFL?
No. While the buyer can attempt to negotiate, the seller will withdraw the land from the MFL, so the parties need to consider the financial consequences. Private legal counsel should be consulted when considering contingencies to withdraw the land from the MFL.
Cori Lamont is Senior Director of Legal and Public Affairs for the WRA.