VFA actively represents the forestry community in order to protect the interests of forest landowners, loggers, foresters, and wood product businesses.
Silviculture Regulatory Consistency Act
Congressmen Rob Wittman and Robert Hurt have signed on as cosponsor of H.R. 2026 and VFA members are asked to let them know we appreciate their help. Members are also urged to use the information about this legislation to contact and inform our other U.S. Representatives and Senators about the importance of this issue and to ask for their cosponsorship and support of the Silviculture Regulatory Consistency Act.
2013 Farm Bill
The Senate passed the 2013 Farm Bill last week. No changes that would affect the industry were made between passage in Committee and final passage on the floor. Senator Angus King (I-ME) engaged in a written colloquy with Chairwoman Debbie Stabenow (D-MI) regarding the intent of including all forest products in USDA’s biobased program. This colloquy will provide an excellent reference for the industry moving forward. The House Agriculture Appropriations Committee passed its annual bill which is now headed to the House floor, possibly this week. Report language was included at the request of Chairman Bob Aderholt (R-AL) and Alan Nunnelee (R-MS) that directs USDA to “expeditiously implement changes to the program to include forest products that meet the biobased content requirements as included in the 2013 farm bill.” It is still uncertain as to whether there are votes to actually pass the full bill in the House. Please remember to reach out to your delegations and encourage them to support final passage.
Write to Congress Today: Urge your Representative and Senators to Pass a Farm Bill with Strong Forest Programs and Policies with this tool provided by the Family Forest Action Network at ATFS.
H-2B Workforce Coalition Update
It has been a busy spring for the H-2B visa program, which governs employers who bring in low-skilled seasonal workers to work in jobs that domestic workers are unwilling or unable to fill, such as the manual planting of tree seedlings.
The Senate’s recently released legislative proposal for broad immigration reform appears to treat the need for seasonal, low-skilled guestworkers seriously, and some are optimistic that a legislative project, as a component of an immigration overhaul, might provide clarity to the foggy situation labor plaintiffs and federal judges have created.
On April 1, a panel of three judges in the Eleventh Circuit Court of Appeals unanimously upheld a lower court’s rejection of the Department of Labor’s “Program Rule” governing H-2B workers’ housing and other working conditions.
- This ruling is entirely favorable; the Program Rule DOL promulgated last year was literally unworkable, at least for reforestation.
- The central point of the Appeals Court’s unanimous judgment was that the Department of Labor had no statutory authority to undertake this rulemaking; that authority rests with the Department of Homeland Security.
- The ruling gives the District Court an opportunity to convert the present “preliminary injunction” against implementing the rule into a “permanent injunction.”
With respect to the H-2B “Wage Rule,” which determines how wage rates for foreign treeplanting workers, and other H-2B workers, are derived, developments point toward a continued struggle.
- Congress has blocked implementation of DOL’s (unfavorable) 2011 “Wage Rule” through September 30, 2013; however, a federal judge almost simultaneously prevented DOL from going back to the (acceptable) 2008 “Wage Rule” it replaced.
- Facing that dilemma, DOL initiated an “emergency rulemaking” to produce an interim “Wage Rule” to govern the program in the meantime. The resulting rule, released in late April, continues to set wage rates unrealistically high.
- H-2B contractor interests are considering their options, which may include litigating the “emergency rule.”
Support for Truck Weight Reform
The Safe and Efficient Transportation Act (HR 612), which would empower states to permit 97,000-pound, six-axle trucks on their Interstate systems, continues to build co-sponsorship, although slowly in view of the rail interests’ continued campaigning against it in relevant Congressional districts. Bipartisan co-sponsorship in the House has grown to 18. Introduction of companion legislation in the Senate should come soon.
On April 22, SETA got a boost in the form of an endorsement from the National Taxpayers Union, which sent an open letter to every member of the U.S. House of Representatives supporting the bill, pointing out that it is essentially a states’ rights “opt in” proposal and that the user fee provision conforms structurally to NTU’s position of opposing tax increases.
VFA urges all its members to send a message to their House members urging them to co-sponsor HR 612. Forest Resources Association also provides a customizable letter on this topic than can be used by anyone with their “Write Your Legislators” module at this link.
The purpose of this report is to provide an overview of key legislation actively addressed by the Virginia Forestry Association during the 2013 Virginia General Assembly. Our organization worked diligently to represent the interests of forest landowners, loggers, foresters, and wood product businesses. For a complete listing of legislation passed during the Virginia General Assembly visit Virginia’s LIS.
Most of the final new laws will take effect on July 1 as part of the Code of Virginia.
State Transportation Plan
For at least the past five years, transportation funding discussions have dominated almost every General Assembly session. Special sessions have been called by Governors, with no bipartisan solution resulting. Legislation to fund roads has been passed, only to be stricken down in the courts system. This year marked a turning point for transportation funding within Virginia. For the first time in over 25 years, the General Assembly approved a major transportation funding plan by bipartisan votes in both the House and Senate. The plan will impact all members of the forestry community and virtually all Virginians.
HB 2313 will invest nearly $3.5 billion over five years in the state’s roads, highways, bridges and transit network. It is anticipated that this historic legislation will improve Virginia's economic competitiveness, help create jobs and make sure the Commonwealth stays one of the nation's top states for business. Devised by Governor Bob McDonnell and introduced by Speaker Bill Howell, the bill ended successfully as a compromise between the House, Senate, and the Governor's office. The bill will generate over $880 million in statewide transportation funding annually within five years of implementation through several means, including:
- elimination of the current gasoline tax and replacement with a wholesale motor fuel sales tax
- incremental increases in the statewide sales tax rate
- additional fees for certain users and purchases
- re-direction of general funds towards transportation
- new regional taxes in Northern Virginia and Hampton Roads
Specifically, starting July 1, the sales tax will go up from $.05 to $.053 in most of the state and up to $.06 in Northern Virginia and Hampton Roads. The 17.5¢ tax on a gallon of gasoline is also shifted to a 3.5 percent tax on wholesale gas. The more than $1 billion projected over the next five years in additional regional taxes (tax increases for buying a home, selling a car and staying in a hotel), will stay in that region for local transportation projects.
The funding package also contains an important prohibition on tolls on I-95 South of Fredericksburg. VFA had joined with a coalition of other organizations in favor of legislation opposing highway tolls.
Reforestation of Timberlands Funding
The Virginia Senate and House of Delegates approved budget amendments introduced by Sen. Emmett Hanger and Del. Beverly Sherwood to add $250,000 for the Reforestation of Timberlands Program for the remaining year of the biennial budget. This amendment to the final Budget Bill allows the state to more closely match the Forest Products Tax paid by the forestry industry for reforestation efforts, as called for in the Code of Virginia.
Sales Tax Exemption for Logging Equipment
Del. Chris Peace introduced HB 2054 based on concerns expressed by VFA and the forestry community. The legislation clarified that the exemption would be valid for any equipment or supplies “used” for timber harvesting, replacing prior terminology of “necessary” for timber harvesting. This minor but important clarification will allow the Department of Taxation to recognize in-woods chippers as exempt from sales and use taxation as already applied to other logging equipment.
Virginia Port Volume Increase Tax Credit
Beginning calendar year 2013, HB 1824 (Del. Bob Purkey) will provide a tax credit for increases in volume of product shipped through Virginia's ports to agricultural, forestry, coal, and natural gas producers (in addition to the tax credit already in place for manufacturers). VFA supported efforts by the Virginia Agribusiness Council to add agriculture and forestry products to those able to apply for the credit. The tax credit is capped at $250,000 per taxpayer and a cumulative amount of $3.2 million per year.
Paper company interests had concerns about expanding the list of eligible entities and were specifically opposed to the eligibility of pellet manufacturers. Because of their concerns, the Senate removed the applicable forestry language from the House approved bill, with the effect of excluding all forestry products, including logs, lumber, and chips. VFA worked with House leaders to refuse the Senate version and then with the three Delegates and three Senators appointed to a conference committee. Forestry products were added back to the bill in conference, however the committee did incorporate language meant to specifically disallow raw wood fiber or wood pellets used for the generation of electricity, potentially restricting wood pellet manufacturers who export their product for overseas energy production from qualifying for the credit.
The VFA Executive Committee met on March 4 after the General Assembly and voted to “oppose the exclusion of any specific sector of the forest products industry from being able to apply for the port tax credit as provided for in HB 1824.” This position was communicated to the Governor as he reviewed legislation for veto or amendment. The Governor chose not to amend the language of concern. The impact of the exclusionary language remains unclear and perhaps open to interpretation.
The Port Authority and the Tax Department will need to issue guidance for the new category of tax credits authorized by the legislation and have committed to bringing together a stakeholder group to advise them in this process.
Del. Roslyn Tyler (HJ 586) and Sen. Louis Lucas (SJ 370) introduced matching memorializing resolutions designed to garner Virginia Congressional Delegation support for states to authorize higher weight limits for commercial motor vehicles carrying agricultural and forestry products on interstate highways. The resolutions
referenced the Moving Ahead for Progress in the 21st Century Act (MAP-21) passed by Congress and signed by the President. This Act requires the United States Secretary of Transportation, in consultation with the states and federal agencies, to complete a comprehensive truck size and weight limits study over the next two years, to include information regarding each state's laws and practices authorizing the operation of vehicles that exceed federal weight limits. The House version passed, but neither resolution made it out of committee in the Senate due to a Senate policy of not approving Congressional resolutions.
VFA was very supportive of the intent of HB 1834, a bill patroned by Del. Charles Poindexter, to require the state Department of General Services to include certificate credits for forest products certified by the Forest Stewardship Council, the Sustainable Forestry Initiative or the American Tree Farm System in the state’s high performance building certification program. However, after meetings with other interests including the Department of General Services, it was determined that the issue needed further development. Del. Poindexter withdrew his bill and will consider future action to support use of Virginia grown wood in state buildings.
Department of Forestry
Three bills helpful to the Department of Forestry and supported by VFA made it through the General Assembly with broad support by legislators. HB 2035 (Del. Israel O’Quinn) deals with land exchange, HB 2069 (Del. Barry Knight) clarifies a seedling sales issue, and SB 1068 (Sen. Bill Carrico) deals with right-of-ways. A friendly resolution (HJ 559) by Del. Brenda Pogge recognizes the work of retired DOF Forester Billy Apperson for re-establishment of longleaf pine in Virginia.
Property Rights Legislation
Two bills related to private property rights have been approved by the General Assembly. HB 2004, introduced by Del. Ben Cline, provides that the possessor of real property owes no duty of care to a trespasser except in those circumstances where a common law right of action, statutory right of action, or judicial exception existed as of July 1, 2013. This bill was introduced as a result of discussions in the Virginia Tort Reform Coalition.
HB 2306, patroned by Del. David Ramadan, provides that just compensation paid for real property taken pursuant to eminent domain shall not be less than the appraisal of the fair market value of such property, if such an appraisal is required, or the current assessed value of such property for real estate tax purposes when the entire parcel for which the assessment has been made is to be acquired, whichever is greater.
Stream Bank Mitigation
VFA was engaged in discussions regarding a budget-related amendment dealing with use of the Cumberland State Forest for stream bank mitigation to offset losses from the proposed Cobbs Creek Reservoir project in Cumberland County. When the project was initially planned several years ago, it was concluded that not enough private land mitigation capacity was available in the area to provide stream bank mitigation for the reservoir, so local jurisdictions hoping to use the reservoir for water supply worked with various state agencies including the Department of Forestry to plan for use of the Cumberland Forest at an agreed upon compensation rate, the funds from which are to be used for conservation purposes. Since then, private mitigation consultants, businesses, and lands, including some VFA members, have become positioned to provide the mitigation needs on private lands at appropriate market rates.
The budget language sets a high cap on the amount of stream credits that can be used on the Cumberland Forest for the Cobb’s Creek reservoir, an amount unsatisfactory to private interests but deemed appropriate by the legislators given the already established agreement with impacted counties. The amendment is also intended to prevent Virginia’s government, including State Forests, from unnecessarily competing with privately owned, funded and permitted mitigation banks in the future. This is a complicated issue and may require further action by VFA and the forestry community.
Water Quality Programs
Del. Beverly Sherwood (HB 2048) and Senator Emmett Hanger (SB 1279) introduced administration bills proposing transfer of water quality programs from the Department of Conservation & Recreation (DCR) to the Department of Environmental Quality (DEQ). After much input by impacted groups, discussion by legislators, and as agreed upon by a conference committee, the legislation will only move non-agricultural programs (such as stormwater management, erosion & sediment control, and TMDL planning) to DEQ. Soil and Water Conservation Districts, Nutrient Management Planning, and Resource Management Plans will remain at DCR. A legislative and agency-head panel will conduct public hearings across the state during the coming year to discuss the appropriate oversight authority for Soil and Water Conservation Districts and DCR programs.
Land Use and Preservation
This year, there were several failed attempts to provide additional certainty for potential conservation easement holders. HB 1694 (Del. Randall Minchew) would have given landowners the option to apply for conditional approval of tax credits over $1 million in value prior to donation of property. HB 1462 (Del. Michael Webert) required the Department of Taxation to assess the credit within one year of a landowner claiming it. Neither bill made it out of subcommittee.
There was also an attempt to eliminate the land preservation tax credit program all together. HB 2034, introduced by Del. Chris Jones, would have repealed the program, but the bill was defeated based on statements regarding the success of the tax credit. One land preservation bill did survive this session; HB 1398 (Del. Lee Ware) caps the tax credit at $100 million per year and requires the Governor to allocate additional funds (approximately $13.9 million in 2013).
Del. Vivien Watts introduced a bill (HB 1457) opposed by VFA to reinstate the estate tax with some exceptions, with revenues devoted to specific purposes. The patron had the bill stricken in House Rules Committee.