394 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
natural growth upon land from which the merchantable original 
growth timber has been removed to the extent of 70 percent of all 
trees over 16 inches in diameter. Timber is considered mature at 
such time after 40 years from the time of planting or removal of the 
original timber as shall be determined by a board representing the 
State board of forestry, State board of equalization, and the aSSeSsOTs 
of the county. This constitutional amendment is considered in 
effect without subsequent statutory enactment. 
It was the expectation that the California plan would have little 
immediate effect on local revenues, since it was the custom of assessors 
to recognize no value in young timber stands such as those exempted. 
The purpose of the enactment is to provide a safeguard against 
future burdensome taxation of immature forests and thus act as an 
incentive to private operators to hold and protect their cut-over 
lands. 
Opinions differ as to the effectiveness of this plan. Gross under- 
valuation is so widespread in California (12, pp. 59 and 60; 180, pp. 
17-26) that it would require a very intensive study to determine how 
immature forest lands are actually assessed in comparison with other 
property. If all assessments were made at 100 percent of value, it 
would be possible for owners to be certain of getting the advantage 
of the exemption allowed, and in such case the inducement to hold 
and protect cut-over lands for growing timber crops would be sub- 
stantial. Under the present system of general undervaluation, it is 
practically impossible for an owner to tell whether or not he should 
be entitled to a lower assessment on his cut-over lands on account of 
the exemption of the growing timber. If he should insist on a reduc- 
tion in assessment of his cut-over lands, the same condition of under- 
valuation would permit the assessor to offset the reduction by an in- 
crease on his other property. Therefore it is possible that the Cali- 
fornia tax amendment may have made little or no change in the pres- 
ent situation, but it does offer the promise of a substantial advantage 
to owners of growing timber properties in the futute, if ever a reform 
in the assessment system by which assessed values will be made to 
approach the legal standard is brought about. 
CriTicaL ANALYSIS 
The laws exempting timber from taxation without imposing any 
yield or other substitute tax have been shown to be in the nature of 
subsidies. In the laws of the kind which have just been discussed, 
the subsidy is strictly limited in amount through provisions restrict- 
ing the period of the exemption or the class of trees to which it is 
applicable. In all except the California and Connecticut exemption 
laws there are offsetting requirements or obligations imposed on the 
owner of a forest property as a condition of the exemption. 
The questions involved in the levy and collection of yield taxes 
are avoided in the exemption laws. Otherwise the difficulties en- 
countered in formulating yield-tax legislation are met in connection 
with exemption laws. There is the same difficulty of offsetting tax 
concessions by special requirements in such a way as to strike an even 
balance between the interest of the taxpayer and of the public as a 
whole. Also the problem of meeting revenue losses is generally met 
in these laws indirectly by restricting the exemption to classes of 
