FRA Update: Legislative Developments Impacting the Forest Industry

The following information was recently published by our friends at Forest Resources Association (FRA)

Tax

The House Ways and Means Committee began a marathon markup yesterday on its portion of the $3.5 trillion budget reconciliation package. Text of the revenue raising sections of the Chairman’s mark has not been released, but we anticipate a number of problematic tax provisions to be included. FRA signed onto a letter being led by the Family Business Estate Tax Coalition opposing the inclusion of language repealing the “stepped-up basis” for calculating capital gains when assets are passed on to heirs following death. Other items under discussion are modifications to the 20% pass-through deduction enacted as part of the Tax Cuts and Jobs Act. FRA is close to the action and will provide you with details on tax proposals in the mark once specific information is available.

Workforce Development

Yesterday, the House Education and Labor Committee began marking up its piece of the $3.5 trillion budget reconciliation package to deliver on the Administration’s Build Back Better plan. In the committee’s mark released prior to the proceedings, there is considerable funding proposed for career training, apprenticeships, and other workforce development initiatives. Overall, the package invests $80 billion in this space, including:

• $5 billion to fund apprenticeship programs.
• $2 billion for grants on a competitive basis to eligible institutions for expanding workforce development and employment opportunities in high-skill, high-wage, or in-demand industry sectors or occupations. Funds would also be targeted at establishing, improving, or scaling high-quality, evidence-based education and training programs, such as career and technical education (CTE) programs, career pathway programs, and work-based learning programs (including programs of registered apprenticeships or pre-apprenticeships).
• An additional $3 billion for CTE under the Carl D. Perkins Career and Technical Education Act.

While these provisions are positive, the Education and Labor Committee’s proposal is controversial in a number of other areas, including numerous provisions problematic for employers that would trigger more safety, anti-discrimination, and fair wage enforcement. FRA will be following developments in committee and subsequent action as this portion of the reconciliation package advances in the House.

In a related development, Representatives Raja Krishnamoorthi (D-IL-8) and Jim Langevin (D-RI-2), co-chair of the House Career and Technical Education Caucus, introduced a resolution last week calling upon Congress to enact increased spending on CTE and other workforce development initiatives as part of the budget reconciliation process. Specifically, the resolution affirms the importance of the Perkins V program for training the workforce but recognizes that the current $1.35 billion for Perkins initiatives for FY 2021 is insufficient to address current and future employer and employee needs. The resolution requests that $10 billion in new spending be set aside for Perkins V programs and innovative, evidence-based career and technical education over the next ten years.

Mass Timber

Last week, the full House Armed Services Committee marked up and approved the FY 2022 National Defense Authorization Act or NDAA. The final committee product includes language authorizing a pilot program for each branch of the military to complete at least one construction project using mass timber, defined in the legislation as cross-laminated, glue-laminated, or nail laminated timber, as well as laminated strand timber and laminated veneer lumber. The language calls for a report on the actual or projected carbon footprint, resilience to extreme weather events, construction timeliness, and cost-effectiveness of the military construction project under the pilot program using mass timber as compared to other materials.

The development is a positive one, as there was concern that advocates of the concrete industry, who strongly oppose the language, would work to strip this provision out during markup. The mass timber movement presents a potentially enormous new market for wood building materials which will deliver benefits up and down the wood building material supply chain. FRA will be following developments closely on this legislative effort and working with our champions on Capitol Hill for a successful outcome.

Forestry

The House Agriculture Committee will begin marking up its piece of the budget reconciliation bill today. There are a number of forestry-related provisions in the 52-page Chairman’s mark that was released yesterday. Among them are:

• $50 million for Forest Service research to carry out greenhouse gas life cycle analyses of domestic wood products.
• $50 million for the Forest Inventory and Analysis (FIA) program for technology investments in cloud computing and remote sensing.
• $50 million for the FIA program to accelerate and expand existing research efforts to improve forest carbon monitoring technologies to better predict changes in forest carbon due to climate change.
• $100 million for the FIA program to carry out recommendations from a panel of relevant experts on current priorities and future needs of the FIA program regarding climate change, forest health, sustainable wood products, and increasing carbon storage in forests.
• $250 million for competitive grants to support the participation of underserved forest landowners in emerging private markets for climate mitigation or forest resilience.
• $250 million for competitive grants to support the participation of forest landowners who own less than 2,500 acres of forest land in emerging private markets for climate mitigation or forest resilience.
• $500 million for competitive grants to provide payments to private forestland owners for implementing forestry practices that provide measurable increases in carbon sequestration and storage beyond customary practices on comparable land.

There are also numerous provisions for reducing hazardous fuels, primarily in wildland-urban interface areas. Based on our review of the text, there does not appear to be any meaningful federal forest management reform provisions in the proposal. The FRA team continues to evaluate the measure and will be working with forestry and forest products industry allies in advocacy around this package going forward.