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Timber Talk 2/9/15

Posted By Administration, Tuesday, February 10, 2015

2015 OFA Annual Meeting, Feb.11-12 at the Dublin Embassy Suites#
Last call for late registrations. On-line registration is closed. Those wishing to register can call the OFA office at 614-497-9580 and ask for Gayla through 12:00 today. After that, registrations can be taken the day of meeting at the registration desk.

Ohio Statehouse News#
Ohio SB 1, Algae Control, Introduced in Senate; Transfers Ag Pollution Abatement from ODNR to ODA -
The first bill hitting the Senate in this session is SB 1 dealing with Algae Control, one of the hot-button issues from the last session. There are a number of requirements on farmers regarding fertilizer and manure application. One of the provisions transfers authority for the Agricultural Pollution Abatement Program from the Department of Natural Resources to the Department of Agriculture. The Agricultural Pollution Abatement Program includes silvicultural activities as part of its oversight. It remains to be seen how this proposal will play out and whether the silvicultural component will be included with the change if it takes place. This is something that OFA will take a close look at to see what impact this will have on SWCD involvement with the Ag Pollution Abatement program. Currently, ODNR staff work closely with OFA on the Master Logger Program and there is a strong relationship in dealing with silvicultural pollution issues.


Administration Tax Proposal Shows Up in Budget submission - Governor Kasich released his tax reform proposals last week with the release of the executive budget proposal. Among the tax items included are a 23% across-the-board income tax cut and elimination of most small business income taxes. The top marginal tax rate would be set at 4.1% in 2017, down from 5.925% in 2011, and there would be an expected loss of $4.6 billion in revenues over the 2016-2017 fiscal biennium. The proposal would also eliminate taxes on income from all "pass-through entity” businesses with annual gross receipts less than $2 million, which would reduce tax revenues nearly another $700 million. For low and middle-income Ohioans, the budget would ease tax burdens by increasing the income tax personal exemption from $2,200 to $4,000 in 2015 for those earning less than $40,000. For those earning $40,000 to $80,000 the exemption would increase from $1,950 to $2,850. To pay for all these reductions, the administration proposes a number of tax increases including;

  • an increase in the sales tax rate from 5.75% to 6.25%;
  • oil and gas severance tax rates increased to 6.5% for oil and gas produced at the wellhead, with a lower rate of 4.5% for natural gas and gas liquids taken downstream;
  • an increase in cigarette taxes from $1.25 to $2.25 per pack;
  • raising the commercial activity tax rate from 0.26% to 0.32% while cutting the annual minimum amount from $800 to $150 for companies with less than $2 million in gross receipts;
  • means-testing income tax deductions and credits for wealthier taxpayers which would eliminate the retirement income credit, Social Security deduction and lump sum senior credit for those with more than $100,000 in income.

All together these tax "adjustments” would raise $5.2 billion in revenues and off-set the income tax revenue reductions. The budget also calls for the creation of a tax expenditure review committee to assess the roughly $8.5 billion in credits, deductions, and exemptions found in Ohio code now. The committee would meet over a 4-year period and include members from the legislature, state agencies and public.


ODOT Director Proposes New Freight Division and Says No Recommendation for Gas Tax Increase - Ohio Department of Transportation (ODOT) Director Jerry Wray last week in his budget testimony asked the House Finance and Appropriations Committee to authorize the creation of a new Freight Division within ODOT that would oversee the rail, maritime, and trucking industries. He advised the committee that Ohio has become a hub of intermodal activity, particularly with expansion of rail capacity by Norfolk Southern at the Rickenbacker complex, CSX expansion in North Baltimore and the Columbus Buckeye Yard as well as smaller projects throughout the state. During the testimony, he advised the committee that the administration has no plans for an increase in gas taxes to raise additional road maintenance funding, and that the agency would try to be more efficient with spending existing funds.


Energy Mandates Study Committee Told Carbon Rules Could Affect Green Energy Mandates - The legislature created an Energy Mandates Study Committee (EMSC) to review Ohio’s current green energy laws and make recommendations for revising the law. Last week, OEPA and PUCO Directors advised the committee that they believed the current federal carbon mandates should figure into discussion on the green energy law, but they aren’t sure how they will play out at this point. Both directors advised that they think the carbon emission rules for power plants will prove costly for Ohio consumers. They also advised that they weren’t sure if the current renewable and energy efficiency standards will help or hinder state compliance with carbon mandates.

Log and Lumber Yield Analysis Available for Ohio Sawmills From West Virginia University#
The West Virginia University - Appalachian Hardwood Center (AHC) has an ongoing program to help sawmills better understand their log and lumber grade yields as a means of determining whether their log pricing, by size and grade, is financially justified. AHC has the ability over the next few months to offer a limited number of Ohio sawmills the opportunity for conducting a yield study at their mill. There is currently no charge for this service. These studies ordinarily occur over a 2-day period and rely on some mill personnel to assist in tracking lumber through the sawmill. For more information or to schedule a study, please contact John Dorka at OFA (614-497-9580) or Curt Hassler at AHC, (304-282-5417).

Get Better Electric Rates Through Riverside Energy#
A number of OFA manufacturing members have taken advantage of better electric rates through the help and assistance of Riverside Energy, a preferred OFA service cooperator. Riverside Energy offers electric rate analysis and procurement services and will work with OFA manufacturers to find the best available electric rates available to them. Services are offered at no charge and there is no requirement to take their recommendations. RES advises that this year, AEP has offered their company capacity for demand response coverage in addition to their other demand response portfolio options. Look for Sherri Loscko, President of Riverside Energy Services at the OFA Annual Meeting on February 12 at the Dublin Embassy Suites.

U.S. Hardwood Exports Hurt by Rising Dollar#
A Hardwood Publishing article posted on the Woodworking Network site, noted that U.S. dollar appreciation against other currencies dampened demand for American hardwoods in export markets, particularly in the European market. In November, 2014, U.S. hardwood lumber exports were down 5% from November 2013 levels which ended more than one and a half years of monthly increases from previous year’s levels.

OFA Part of Coalition Supporting Retention of Current Timber Tax Policies
Here you can find two letters, one each to U.S. House Ways and Means Committee and the Senate Finance Committee, from a large coalition of forestry and industry partners urging the Congress to retain current desirable tax treatment measures for timber. Those provisions include:

  • Receive capital gains treatment for the harvest of timber or sales of standing trees. (Sections 1231(b)(2) and 631(a)&(b));
  • Deduct the costs of forest management, including prevention measures (fire, pest and disease), thinning, fertilization, interest, taxes, protection of wetlands, and forestry activities. (Sections 162 and 263A(c)(5));
  • Invest in timberland Real Estate Investment Trusts (REITS); and
  • Deduct up to $10,000 of reforestation costs per stand, with the remainder amortized over7 years. (Section 194).

The letter was initiated by the National Alliance of Forest Owners (NAFO) and organized the overall response.

US Forest Service Supports Wood Pellet Bioenergy; No Issue With Emissions
A recent USFS study shows that current European Union policies requiring renewable energy are driving demand for wood pellets and supplies are coming from U.S. sources, including the south and northern areas of the country. According to the report, this could lead to increased prices and an increase in the amount of forest land in the eastern United States. The report also indicates that USFS has no concerns with emissions from wood pellets causing carbon problems.

BWC Sign-Up Schedule for Group Rating and Group Retrospective Rating
Here
is a schedule provided by CareWorks Consultants, Inc. on the sign-up schedule for companies wishing to enroll in group rating. With the new requirements for a switch to prospective billing, BWC has moved up the schedule for sign-up. See the schedule for specific dates. November 19 is the deadline for Group Rating and January 2 is the deadline for Group RETRO. According to the Ohio BWC this switch to a prospective billing system will provide the following benefits:

  • Overall base rate reduction of 2 percent for private employers and 4 percent for public employers;
  • Opportunities for more flexible payment options (up to 12 installments);
  • Better opportunities for the BWC to provide quotes online or via the phone; and,
  • Increased ability for the BWC to detect employer non-compliance and fraud.

The OFA service representative with CareWorks Consultants, Inc. is Shawn Combs, (614)-526-7264 and Shawn.Combs@ccitpa.com. Members with questions should not hesitate to give Shawn a call.

Register for the 2015 American Tree Farm System (ATFS) Washington, DC Fly-In
ATFS is hosting a Fly-In April 28-29, 2015 for Tree Farmers and other forest landowners to travel to Washington, DC to talk with their Congressional representatives about forestry issues. If you are interested in participating with the event, you can register on-line. ATFS advises there are a limited number of travel scholarships available for the trip. Those interested should submit a scholarship application which can be found at the registration site.

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