Pope & Talbot, Inc., & Subsidiaries - Page 16

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               In determining the logging costs, both experts included                
          contract logging and associated costs (i.e., the costs that would           
          be incurred by a landowner in harvesting the timber and                     
          delivering it to the point of sale).  Specifically, these costs             
          include:  (1) Falling, or cutting the trees; (2) bucking, or                
          sectioning the trees into log lengths that maximize volume and              
          value; (3) yarding, or moving the bucked logs from the woods to a           
          roadside landing; (4) loading the logs onto trucks; (5) hauling,            
          or transporting the logs to the mill; (6) road construction and             
          maintenance; (7) excise taxes; and (8) contract administration,             
          or keeping track of the contractors hired to harvest the timber.            
               Petitioner’s expert, however, included scaling,                        
          reforestation, and slash disposal costs in addition to the                  
          contract logging costs.  Scaling is the measuring and grading of            
          logs once they have arrived at the log dump or mill.  It is                 
          generally performed by an independent third party, and the cost             
          is typically paid by the purchaser of the timber.  Slash burning            
          and reforestation involve cleaning the ground and replanting the            
          timber that has been removed from the timberland.  Reforestation            
          is required by Washington law in order to maintain the property’s           
          designation as forestland.  If the owner fails to reforest the              
          property, it will be converted to ad valorem land, which is taxed           
          at a higher rate.  In addition, upon conversion, the owner must             
          pay a conversion tax equal to the additional amount of tax that             






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Last modified: May 25, 2011