Federation Advocacy 2023 – Key Federal Initiatives Impacting The Hardwood Industry

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Approaching the end of a calendar year is always a good time for reflection. The Hardwood Federation team did just that as we look back on an eventful legislative year where lawmakers have addressed many of the industry’s top issues. This has also helped us look forward to 2024, which promises to be equally action packed. Below are highlights of key developments to help you track where industry has focused its advocacy in 2023…and an indication of where we will go in the new year.

Farm Bill 2023
Front and center in this year’s advocacy has been inclusion of Hardwood-friendly provisions within the context of Farm Bill legislation. Political turmoil in the House squashed hopes for an on-time for 2023 Farm Bill reauthorization, but on November 15, Congress finally passed an extension on the expired bill through September 30, 2024. The one-year extension will guarantee funding for key Hardwood initiatives such as the Market Access and Foreign Market Development programs. It is unclear what the exact language of current Farm Bill draft language looks like as House Ag Chair GT Thompson (R-PA) has indicated that he won’t release legislative text on the Farm Bill until leadership schedules floor time. But we are confident that as the Farm Bill moves forward in 2024, it will serve as a vehicle to capture other priorities for the industry. In addition to authorizing resources that promote Hardwood exports, the Federation is also leveraging the debate to promote related industry objectives:

Hardwood Access Program – In an important milestone for the Hardwood sector, Reps. Tom Tiffany (R-WI) and Annie Kuster (D-NH) have agreed to sponsor the Hardwood Access Program (HAP) bill for introduction in the House. Although fiscal constraints will make it very difficult to move HAP as part of the Farm Bill, the legislation will serve as a high-profile vehicle to educate Congress on the benefits of Hardwood products, laying the groundwork for enactment in future years. Stay tuned for updates as the industry bill moves forward.

Timber Innovation for Building Rural Communities Act – This bipartisan, bicameral bill, sponsored by Senators Wyden (D-OR) and Senator Crapo (R-ID) and Reps. Salinas (D-OR), Glusenkamp-Perez (D-WA) and Duarte (R-CA) could be folded into a final Farm Bill. The proposal includes several positive provisions for the industry including establishing a USDA platform measuring, collecting and sharing data related to the carbon benefits of wood products, and recognizing the value of carbon reduction and environmental benefits of wood in building design and furnishings in USDA grant programs. Through the Federation’s work with the Forest in the Farm Bill Coalition, several recommended changes to ensure that Hardwoods are eligible for the programs were incorporated into the bill language.

Jobs In the Woods Act – This fall, Senate and House members introduced the bipartisan “Jobs in the Woods Act.” (H.R. 5344, S. 3063), a bill that would provide education grants ranging in size from $500,000 to $2 million to promote jobs in the understaffed timber industry and U.S. Forest Service. Legislative champions include Reps. Chavez-Deremer (R-OR) and Gluesenkamp-Perez (D-WA) on the House side and Sens. King (I-ME) and Risch (R-ID). The bill’s champions are determined to fold this bill into Farm Bill reauthorization in 2024.

USDA Funding and Authorizations
Although not part of Farm Bill reauthorization, the Federation also advocates for bills that directly fund USDA initiatives that will boost the sector as well as steer agency authorities toward industry priorities:

Promoting Effective Forest Management Act of 2023 – On September 22, Senate Energy & Natural Resources (SENR) Committee heads, Chairman Joe Manchin (D-WV) and Ranking Member John Barrasso (R-WY), introduced the “Promoting Effective Forest Management Act of 2023,” (S. 2867), a bill to direct USDA’s National Forest Service to reduce wildfire risks and create a career pipeline for loggers.

Transportation
Transportation is another major issue on which the Federation has been active. Notably, industry supports bills, known as the “supply chain package,” that passed out of the House Transportation Committee earlier this year. The package includes:

Licensing Individual Commercial Exam-takers Now Safely and Efficiently (LICENSE) Act of 2023 (H.R. 3013) – Codifies two waivers issued during the pandemic to make the process of obtaining a commercial driver’s license more streamlined and efficient.

Ocean Shipping Reform Implementation Act of 2023 (H.R. 1836) – Builds upon the Ocean Shipping Reform Act of 2022, including by allowing the Federal Maritime Commission to review complaints about market manipulation and anti-competitive operations of maritime exchanges.

H.R. 3372, legislation that authorizes a pilot program whereby states may opt in to allowing 91,000-pound rigs equipped with a sixth axle to travel on their portion of the federal interstate highway system.

H.R. 3318, which establishes a 10 percent axle weight variance for dry bulk materials, which we read as including wood chips.

Taxes, Treasury Regs
Although advocacy on USDA programs and supply chain initiatives have been especially active this year, tax policy and business disclosures continue to present opportunities and challenges for the industry:

Business Tax Package – On November 2, the Federation joined the National Association of Manufacturers and allies in a letter to Capitol Hill urging action on a package of business tax benefit extensions that is currently pending on the House floor. It would extend through 2025 the 100 percent bonus depreciation benefit which began scaling down in 2023. It would also retroactively extend the research and development tax credit which was phased out in 2022 and restore more generous interest deductibility provisions. Following the election of a new Speaker of the House, we hope that Congress will act on this package by year’s end.

Main Street Tax Certainty Act of 2023 – The Federation also supports H.R. 4721, making permanent the 20 percent deduction for qualified business income (QBI) to benefit small businesses.

Corporate Transparency Act – HF has joined allies in the small to medium sized business community to urge Congress to delay implementation of the Corporate Transparency Act (CTA), a little-known federal anti-corruption law enacted in 2021 that takes effect January 1, 2024. The law will impose multiple reporting requirements on “beneficial owners” and trigger fines up to $10,000 for non-compliance. The Federation has signed a letter to congressional leaders urging Congress to delay its implementation.

Federal Agency Actions
EPA, Air Quality Rules – On November 16, 2023, the Federation and U.S. Chamber of Commerce met with the White House Office of Management and Budget to urge the Administration to reject EPA’s proposal to tighten standards for fine Particulate Matter (PM 2.5). This follows up on formal comments submitted in the spring advocating against EPA’s plans and includes references to a study by the American Forest & Paper Association showing that EPA’s proposal would impose up to $900 million in compliance costs on the wood products sector.

EPA, Low Carbon Construction Materials – On September 14, EPA announced that it would make grants available to parties to develop Environment Product Declarations (EPD’s) for low carbon construction materials, beginning after October 1 of this year. EPA’s action is consistent with HF comments filed in May arguing that any low-carbon construction materials program should take into account the carbon storage value of wood products.

European Union Deforestation Regulations: The American Hardwood Export Council (AHEC) and the Federation have been leading the charge the past 18 months to blunt the impacts of the EU’s now final deforestation rules to require geo-location of fiber included in the manufacture of wood products. HF and AHEC have met with Administration officials, including a meeting with the U.S. Trade Representative on November 28, to urge a work-around that will minimize additional red tape for Hardwood exporters to EU markets. HF and AHEC have established a working group of forest industry allies, including the AF&PA, to share information related to the rule’s implementation.

By Amy Snell

Amy K. Snell, Cae,

Executive Director, Wood Component Manufacturers Assoc., Lindstrom, Mn 651-332-6332 www.wcma.com

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