Category Archives: Policy

Government and Industry Policy Discussion

KWOA and NWOA support resolution to create Timber Theft and Trespass Reduction Task Force

HCR 29 directs the Kentucky Legislative Research Commission to establish a Timber Theft and Trespass Reduction Task Force to study issues regarding timber theft and trespass and to develop consensus recommendations to address those issues.

The task force would meet three times before submitting its final report to the LRCommission by November 30, 2016. The LRC has authority to alternatively assign the issues identified in the Resolution to interim joint committees or subcommittees.

Sponsored in the House by representatives Combs, Denham, Howard, Montell, Nelson, Osborne and Riggs, the resolution passed 95-0 in February. It is now in the Senate Natural Resources and Energy Committee.

KWOA voted at its annual meeting to support the resolution with a letter from President Frank Hicks. In addition, Keith Argow, President, National Woodland Owners Association submitted a letter of support to the senate committee. In his letter Argow notes that “…Kentucky has one of the weakest positions against timber theft of any state.” He argues that, in addition to inherent flaws, Kentucky’s current statute with respect to timber theft, KRS 364.130, is a civil statute that requires timber theft victims to file civil suits, an action that is out of reach for many landowners. The result, Argow concludes, is that “logging theft is an almost risk-free crime.”

KWOA members are encouraged to call and/or write their senators on the Natural Resources and Energy Committee in support of HCR 29. The 2016 legislative session adjourns April 12.

Senate Natural Resources and Energy Committee
• Sen. Jared Carpenter [Chair]
• Sen. Brandon Smith [Vice Chair]
• Sen. C.B. Embry Jr.
• Sen. Chris Girdler
• Sen. Ernie Harris
• Sen. Paul Hornback
• Sen. Ray S. Jones II
• Sen. John Schickel
• Sen. Johnny Ray Turner
• Sen. Robin L. Webb
• Sen. Whitney Westerfield

USDA promotes wood in green building rating systems

U.S. Secretary of Agriculture Tom Vilsack made a major announcement March 30th strongly promoting wood as a green building material and recognizing multiple green building rating systems. According to the Sustainable Forestry Initiative, the USDA announcement was made during the International Year of Forests celebration in Washington, DC. The event was co-hosted by the American Forest Foundation, the National Association of State Foresters, and the USDA Forest Service.

According to a March 30th USDA press release Secretary Vilsack laid out a three-part plan addressing the Forest Service’s and USDA’s current green building practices. The strategy includes the following parts:
1. The U.S. Forest Service will preferentially select wood in new building construction while maintaining its commitment to certified green building standards. USDA will also make a commitment to using wood and other agricultural products as it fulfills President Obama’s executive order on Federal Leadership in Environmental, Energy, and Economic Performance.
2. The Secretary has asked the U.S. Forest Service to examine ways to increase its already strong commitment to green building by reporting to him on ways to enhance the research and development being done around green building materials.
3. The U.S. Forest Service will actively look for opportunities to demonstrate the innovative use of wood as a green building material for all new structures of 10,000 square feet or more using recognized green building standards such as LEED, Green Globes or the National Green Building Standard.
The plan explicitly recognizes the Green Globes standard and the National Green Building Standard, both of which recognize multiple forest certification standards. Opening the door to other green building rating systems increases opportunities for third party certified wood to be used and recognized in green buildings.
“This is just the market signal we need to expand markets for sustainably grown wood from ATFS,” said Tom Martin, President and CEO of the American Forest Foundation.

Estate Planning for Forest Landowners

Regardless of the number of acres, woodland owners need to make arrangements for their estates while they are living and while they are competent to do so. An extensive guide is now available from the US Forest Service specifically for family-owned forests.

Estate Planning for Forest Landowners:
What Will Become of Your Timberland?
2009. General Technical Report SRS-112
Available as a pdf download at http://www.srs.fs.usda.gov/pubs/gtr/gtr_srs112.pdf

Although the report is more geared to large working timber holdings, its comparison examples of the impact of federal estate tax on family assets with and without estate planning are chilling. In the scenario (chapter 19) with no estate plan estate taxes could equal nearly one-eighth of the original estate. In the second example a simple plan leaving the estate to the surviving spouse avoids immediate estate tax. But the subsequent demise of that spouse could incur an estate tax equal to nearly one-fourth of the original combined estate. The final scenario presents three strategies that could reduce the example family estate tax bill by nearly $1.5 million compared to the simple plan. (These hypothetical examples are based on a family forest estate with assets valued at $10 million.)

The planning guide states that on the national level nearly three-fifths of all forest land is privately owned. More than four-fifths of that land belongs to nonindustrial owners. It also finds that the typical nonindustrial private forest owner is 60 years old. The importance of and urgency for timely forest estate planning should by now be evident. If you are still thinking it’s somebody else’s problem, complete the thirteen question “estate planning readiness” quiz on page 5 to better understand where you are in the process.

According to the book’s abstract, its purpose is to provide quidelines and assistance to nonindustrial private forest owners and the legal, tax, financial, insurance and forestry professionals who serve them on the application of estate planning techniques to forest properties. The book presents a working knowledge of the federal estate and gift tax law as of September 30, 2008.

KWOA and KWOF IRS Form 990

KWOA and KWOF filed forms 990 with the IRS for 2009. The forms, for tax-exempt organizations, were accepted by the IRS on 5/12/2010. A pdf (electronic file) of the completed forms is available by contacting KWOA via email: info@kwoa.net;  a paper copy may be obtained by calling 606-876-3423

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All information offered by KWOA to whomsoever, whether written or oral, is intended for the sole, express purpose of assisting woodland owners attain the best long-range dollar return from their forestry operation, while at the same time maintaining a healthy, beautiful forest. KWOA is not engaged in rendering legal, tax, accounting or other professional service. No one should undertake any suggestion offered by KWOA without first consulting experienced professional advisors.
KWOA does not endorse and is not responsible for any statement, opinion, or advice given or made by anyone other than authorized KWOA representatives. All postings are those of the authors and you rely on such information at your own risk.

Family Estate Tax Deferral Act of 2010

Source: American Forest Foundation

In early August U.S. Senators Diane Feinstein (D-CA) and Mike Crapo (R-ID) introduced legislation in the Senate that would help to fix the estate tax for family forest owners and farms. S. 3664, The Family Estate Tax Deferral Act of 2010, will help preserve forest land by helping families avoid the pressure of selling to pay taxes when land is passed down from one generation to the next.

If the estate tax is not reformed before 2011, any estate worth over $1 million will be subject to a 55% tax. This will affect many landowners, and may force some of them to sell or harvest their timber unsustainably in order to pay the tax.

S. 3664, the Feinstein-Crapo bill, is similar to the Thompson bill, HR 5475, in the House. The bill would provide family forest owners with an exemption from the estate tax, if they keep the land in their family and manage it as a forest. Landowners can harvest, if they harvest consistent with a forest stewardship plan.

More information about the bill and contacting your senators is available from the American Forest Foundation.