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Timber Talk 1/11/16

Posted By Gayla Fleming, Tuesday, January 12, 2016

Ohio Legislative and Policy News - The Legislature will open its next session on January 20 at which time activity will resume. The following are some issues expected to be addressed in the coming session:

  • Oil and Gas Severance Tax - This is a contentious issue that has been in front of the legislature for several years. The Kasich administration some time ago proposed increasing the severance tax and use the increased revenues to offset further reductions in personal income taxes. The oil and gas industry has largely been very opposed to the tax and has argued even more so as oil prices have sharply curtailed and affected oil and gas exploration and development.
  • Controversial Unemployment Overhaul Will Take Center Stage - The legislature will resume work on a controversial bill to overhaul the state’s unemployment insurance program. The bill essentially splits support between business groups interested in reigning in unemployment costs with labor and advocates for the poor who believe it will cause harm to the low-income population. As of now, the bill would change the taxable wage base on which employers pay state unemployment taxes from $9,000 to $11,000 until the Unemployment Compensation Fund reaches a minimum safe level (expected to be reached in 2025.) Once the level is reached, the wage base would go back to $9,000. The bill would also reduce the maximum number of weeks a claimant may receive benefits from the current 26 weeks to a range of 12 to 20 weeks, depending on the state unemployment rate. Right now the state owes the federal government $775 million to pay off past unemployment responsibilities. That amount is down from $1.6 billion originally borrowed.
  • PUCO Issues Annual Renewable Energy Mandate Report to Legislators - The Public Utilities Commission of Ohio (PUCO) recently released a compliance report for 2013 highlighting how utility companies went beyond the state’s renewable energy standards. For 2013, utilities were supposed to get 2% of the state’s energy from renewable sources, with 0.09% from solar and 1.91% from non-solar sources. Providers reported 2.5 million megawatt-hours on non-solar energy, approximately 8,700 more than required while 1.285 million megawatt-hours came from solar, more than the 1.259 required. The renewable energy mandate was placed on hold last year until 2017 while a legislative committee studies the mandate for future determination on whether it will be retained, modified, or eliminated.

Paper and Wood Manufacturers File Biomass Litigation on Clean Power Plan
The American Forest and Paper Association and the American Wood Council have filed a joint petition for review in the D.C. Circuit Court on the U.S. EPA treatment of biomass energy in the Clean Power Plan. It has been an ongoing issue that the federal government does not treat biomass on a level playing field with other renewable energy sources. The forest products industry has long contended, and has data to support, that biomass energy is carbon neutral and should be considered as an appropriate alternative energy source that does not add to atmospheric carbon loads. The legal action is intended to get the U.S. EPA to fully recognize biomass within state action plans which are required according to the Clean Power Plan.

Coalition Letter Supporting H.R. 712 - Sunshine for Regulatory Decrees and Settlements Act of 2015
We had reported previously that OFA was a co-signer of a letter of support on HR 712, the "Sue and Settle” legislation aimed at stopping the practice of groups using settlement agreements as a way of by-passing federal rule making authorities. OFA joined 250 organizations from 45 states in signing the letter, which helped push the legislation with Congress. Here is the letter. The legislation was passed by the House and will now go to the Senate for consideration.ODNR Plants American Chestnuts on Public Lands. ODNR Deputy Director and Division of Forestry Chief Bob Boyles announced recently that the department planted 1,000 genetically improved American Chestnut trees on Scioto Trail State Forest, Waterloo Wildlife Area, and Mohican State Park as part of a partnership with The American Chestnut Foundation (TACF). The "Restoration Chestnuts” as they are called by TACF are hybrid American-Chinese Chestnut combinations that are predominantly American chestnut (94%) and are resistant to the Chestnut blight while retaining a majority of the American chestnut characteristics. TACF has been working on blight-resistant chestnut varieties for decades and hopes to one day restore the chestnuts to the hardwood region landscape. At one time, American chestnuts were one of the most plentiful trees in the eastern hardwood region.

DOF Payments to Local Governments for State Forest Timber Sales
Last week, we shared a Division of Forestry (DOF) report on the amount of money shared with local counties, townships, and school districts from timber sold from state forest lands. The Columbus Dispatch printed an article on that subject during the holidays, that you can read here. In typical fashion, the article carries quotes from the Buckeye Forest Council (BFC)which has continually opposed timber sales from public lands. It is interesting to note that Joe Hazelbacker, the original Director of BFC, is back in the saddle there as an interim Director.

The Value of a Consulting Forester
Forest2Market recently published an article summarizing information it had obtained in a stumpage sale transactional analysis of consulting forester assisted timber sales, unlike virtually all other studies involving surveys of information and not actual sale data. According to the article, "The primary goal of this analysis was to distinguish the effect forestry consultants have on the outcome of timber sales (price paid for stumpage).” You should read the article, but the conclusion was that consulting forester assisted harvests resulted in higher values to landowners by a factor of at least 11% on per unit sales, and 12% on lump-sum sales.
Wayne National Forest to Treat for Gypsy Moth in 2016
According to this news release, the U.S. Forest Service will treat for Gypsy Moth on federal lands in Athens, Hocking, Morgan, Perry, and Vinton Counties in the spring and summer. Treatment will include Gypcheck, a mating disruption pheromone.
November 2015 Housing Commentary
This is themonthly housing report from Urs Buehlmann from Virginia Tech. You can find key conclusions on page 6. In general housing sales were up except for existing house sales, which were down 3.8% for November, 2015. The multi-family sector remains very strong. Housing prices continue to increase steadily, but fewer houses are being bought by first-time buyers. Both European and Chines economic conditions continue to constrain housing growth.

Webinar: Timber Tax Filing for the 2015 Tax Year
Due to the new tax law passed by Congress late in 2015, new timber tax provisions on capital gains will affect corporations and owners as well as changes on charitable donations for conservation easements and business deductions for equipment costs. To learn more about these changes, you can participate on a free webinar on January 22, 2016 at 1 pm (eastern time). The webinar should last about 1 hour, and those who participate can obtain continuing education credits if needed. Registration is on-line. Click on the link for more information.

2016 OFA Annual Meeting, March 9-10, 2016, Dublin Embassy Suites
Information on the meeting will be coming soon. Take a look at the OFA Website for preliminary information.

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