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Timber Talk 11/23/15

Posted By Gayla Fleming, Monday, November 23, 2015
Ohio Legislative and Policy News:
  • CAUV Legislation Introduced - Last week, legislation (SB 246) addressing some of the problems with CAUV value determinations was introduced in the Senate. The bill is sponsored by Senator Cliff Hite (R-Findlay) and co-sponsored by Sen. Randy Gardner (R-Bowling Green), Sen. Bob Peterson (R-Washington Court House) and Sen. Capri Cafaro (D-Hubbard). Briefly, the bill would change the way the capitalization rate in CAUV is determined and allow lands enrolled under for conservation programs be included as agricultural lands. However, there does not appear to be any specific language that would affect or require determinations on specific costs, such as land clearing. OFA will be following this legislation closely.
  • SB 75, Agritourism in the House - SB 75, Agritourism sponsored by Sen. Shannon Jones (R-Springboro) and Sen. Bob Peterson (R-Washington Court House) is making its way through the Ohio House after being passed by the Senate. This bill promotes agritourism on Ohio farms by giving CAUV determinations to farm land used to tourism purposes. It also prohibits county commissioners and local boards from limiting agritourism by ordinances.
  • HB 176, Alternative Fuel for Vehicles Passes Committee - A bill that is designed to encourage the conversion of vehicle fleets to compressed natural gas passed the House Finance & Appropriations Committee last week. The bi-partisan bill is sponsored by Rep. Dave Hall (R-Millersburg) and Rep. Sean O’Brien (D- Bazetta). Among several provisions, the bill would allow a credit against the income or commercial activity tax of a company for the purchase or conversion of a vehicle and reduce the amount of sales due for a purchase or lease of a qualifying vehicle. Also, the bill would allow motor vehicles fueled by liquid natural gas to exceed gross vehicle weight limits by 2,000 pounds.
  • 2020 Tax Policy Study Commission Gets Testimony on Transition to Flat Personal Income Tax - The 2020 Tax Policy Study Commission began accepting testimony last week on ideas for the state to transition to a flat personal income tax. Well-known tax advisor Ohio University Economics Emeritus Professor Richard Vedder, advised the commission that the idea has merit and now is the time to make the change, when unemployment is low and the state is running budget surpluses. The state is considering changing the tax structure to a 3.5% or 3.75% flat rate on state income tax by the year 2018. It was noted that Michigan, Pennsylvania, and Indiana all have flat state tax rates. Part of the proposal would include establishing a minimum threshold below which no state income taxes would be paid. In additional testimony, it was suggested that the state reexamine the Commercial Activity Tax which has a "punishing effect” on businesses with lower profit margins.
  • Workers’ Comp Board Approves Out-Of-State Policy Option - Ohio businesses who work out of state will soon have the opportunity to get workplace injury insurance through BWC. The BWC Board of Directors approved the opportunity for an optional policy and this will be implemented in the first half of 2016. Currently, employers can only go to private insurers or various state funds for coverage options out-of-state. The new option allows the state to create the program, which was made possible by law change in the 130thGeneral Assembly. BWC is now allowed to contract with insurers outside of Ohio to provide the optional coverage. To be eligible for the coverage, employers must do the majority of their business in Ohio.
EPA Environmental Standards Recommendations Discriminate Against Forest Certification Programs
Recently, the U.S. EPA published interim recommendations for specifications, standards, and ecolabels with federal government procurement. For the purchase of wood products, the recommendations include only wood acquired from FSC certified woodlands and excludes wood grown per Sustainable Forestry Initiative (SFI), American Tree Farm System (ATFS), and other Programme for the Endorsement of Forest Certification (PEFC)-endorsed certifications. In response to this action by EPA, SFI sent a letterto EPA Director expressing concern with the recommendations and that they are misdirected and not based on sound science. What is very surprising about these recommendations is that other federal agencies, among them the USDA, GSA, and the Department of Education already recommend procurement standards for wood and wood fiber products that recognize the broader range of valid certification programs. The recommendations are interim only, so presumably there is opportunity for the EPA to take comment and modify the standards. ATFS and those interested in the fair and broad interests of forest certification will no doubt weigh in heavily with EPA on these recommendations.

Ohio State University Extension Posting for Forest Economics and Management Position
OSU is moving ahead with filling the Forest Products Extension Specialist position vacated by Dr. Eric McConnell, who left over the last year to take a position at North Carolina State University. You can take a look at the position posting on the Society of American Foresters website. There are a several changes in the appointment from what it had been with Dr. McConnell. This will be a 9-month appointment, and the position includes a forest products economics focus. OFA worked with OSU to make sure the School of Environment and Natural Resources and the Extension Program understood the importance of forest products in Ohio’s economy and the value of an extension specialist dedicated to forest products and management. After early concerns that the position might not be posted, OFA is glad that the position is moving ahead, albeit with changes in focus.

Wayne National Forest Cancels Buckeye Habitat Improvement Project
Earlier in the year, OFA responded to the Wayne National Forest (WNF) request for public comments on Buckeye Habitat Improvement Project (BHIP). The BHIP, if carried out according to initial plans would have resulted in a significant amount of forest management and harvesting on the Ironton District of the WNF. OFA provided comments supporting the project, and members were asked to weigh-in accordingly with support. Last week, OFA learned from the Ironton District Ranger that the project was being cancelled pending a strategic review process involving interested parties, one of which is OFA (see notice here). OFA provided feedback to WNF that the forest was conducting far too little land management that supports the forest products industry and creates diversity of habitat on the forest. Then we receive this announcement…

Report Indicates Southern Biomass is Sustainable
The National Alliance of Forest Owners (NAFO) commissioned an independent report studying the data on the impact of the pellet trade on southern forests and wood markets. Issues have been raised by some groups that U.S. pellet production, much of which is exported to Europe, is unsustainable. The results of the study indicate otherwise. Pellet production is sustainable and annual removals from southern forests constitute about 3.3% of the forest inventory, with only 2.4% of the removals supporting export pellet production. In many cases, the pellet production has replaced fiber mill capacity lost to closures for other paper and container production. This is all good news. However, I should mention that in a conference call last week with forestry association executives, there was indication that Europe’s government-subsidized alternative fuel promotion may in fact be hurting America’s forest landowners through lower stumpage payments.
Fall 2015 Forest Operations Review
One of the outstanding publications for the forest products industry comes from the Forest Resource Association (FRA). The Forest Operations Review is filled with important information to the forest products industry, ranging from a host of technical bulletins on such issues as fuel consumption rates for log haulers, drones used for logging companies, remote cameras for manufacturing, etc. as well as important safety information to help prevent injuries and casualties. Take a look at the Fall 2015 digital version at the clickable link above.

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