A Ramsey County judge in November ordered the state of Minnesota to make payments to three large timber companies through the Sustainable Forest Incentive Act.

However, the state has filed an appeal to the order.

The lawsuit seeking back payments, interest and guarantees that future SFIA payments won’t be affected was filed in January 2011 by Forest Capital Partners LLC subsidiary Meriwether Minnesota Land and Timber, Blandin Paper Co. and the Potlatch Corp.

On Nov. 3, Judge John B. Van de North ordered the state to make the payments that were due in 2010, according to Brian Kernohan, director of policy for Forest Capital Partners in Portland, Ore.

However, Kernohan said the state has filed an appeal to the Minnesota Court of Appeals.

The order calls for the Minnesota commissioner of revenue to recalculate and disburse supplemental 2010 SFIA payments to the companies based on a revised, court-ordered per acre SFIA formula rate for 2010 of $10.38, along with prejudgment interest.

In his order, Van de North said “The court agrees that the Legislature has the discretion and power (within constitutional bounds) to curtail what it deems an ill-conceived program prospectively, but the confiscatory retroactive changes made in 2010 cannot stand if justice is to be served.”

The three companies said in the lawsuit that the state reneged on a contract it had with the companies that should have provided nearly $8 million in 2010 for enrollment of a half million acres in the state’s Sustainable Forest Incentive Act program.

Meriwether says in court documents that it should have received $4.1 million for land enrolled in 2009. Instead, it only received $100,000, or 38 cents per acre, for its 262,884 acres because of a cap imposed by the Minnesota Legislature in 2010.

The suit stems from 2009 when then-Gov. Tim Pawlenty attempted to use executive authority to cap the payments for each company enrolled at $100,000. A court struck down the cuts, but the Legislature in 2010 agreed to the cap on land enrolled in 2009.

According to court documents, in 2009 the incentive to remain in the program was $15.67 per acre. Once enrolled, the land must remain in the program for at least eight years and there is a four-year waiting period for removal from the program.

The state implemented the Sustainable Forest Incentive Act in 2002. The act is designed to encourage private landowners to be better stewards of the forestlands. The act restricts the land from residential or agriculture use, has penalties for violating the restrictions, and allows for public access to the lands.

“The state is not free to disregard its contractual obligations,” the companies argued in their lawsuit. “By proposing these amendments to the Sustainable Forest Incentive Act, the Legislature simultaneously seeks to avoid its own contractual obligations while forcing plaintiffs to abide by new restrictions or face significant penalties.”