The Hardwood Federation Newsletter

Hardwood Federation March 2021 Newsletter

From the Executive Director:  Carbon, Climate, and Infrastructure - OH MY!

The Biden Administration has made abundantly clear that the twin concepts of carbon and climate will be a main focus of the next 4 years and will be entwined into every aspect of the executive level of government.  It is now up to the Hardwood Federation and the hardwood industry to make the case that our goods and products are viewed as part of the solution to the environmental issues identified by the President and his team and not relegated to the problems pile. 

The Hardwood Federation team is working closely with the Board Level Forestry and Climate Task Force to refine and adapt our longstanding policy priorities in response to the Administration’s focus.  We are also busy coordinating with other forest products associations and supply chain groups, meeting with Congressional members and staff, as well as Administration officials, including several meetings with key contact Robert Bonnie, Deputy Chief of Staff and Senior Climate Advisor at USDA.  Through these conversations we are providing input into their debates about implementing the President’s Climate Executive Orders and the 30x30 strategy document.  The main point made by the Federation is that markets and hardwood products must be a part of any carbon accounting system structured by the Administration.

To support our positioning and to provide talking points to the industry we have developed several documents including the attached:

• Hardwood Federation Principles (including carbon specific priorities)
• Benefits of Forest Management
• Sustainability of Hardwoods

We are also working on preparing comments to the recently issued Request for Public Comment regarding the Biden Executive Order on addressing Climate Change.  Comments are due at the end of April, but we hope to finalize much sooner and share with our member association directors as several would also like to submit comments.

In addition to the above, the Federation is paying close attention to the American Jobs Plan, the  $2.25 trillion infrastructure package announced by the President on Wednesday, March 31^st.  The infrastructure plan is a collection of commitments to invest in roads and bridges, ports, mass transit and other areas.   That measure is being paired with the upcoming Made in America Tax Plan to raise over $2 trillion in revenue over 15 years to pay for the infrastructure package and reduce federal budget deficits.

On the transportation front, the plan includes $621 billion in proposed spending across a broad range of priorities including $25 billion for airports and increased funding for improvements at ports and inland waterways.  The plan also envisions reconstructing 20,000 miles of interstate highways and adjoining roads and well as refurbishing 10,000 of the country’s most deteriorated small bridges and the 10 largest and most economically significant bridges.  In addition, the measure includes an extension of a number of renewable energy tax breaks and $100 billion to build a more resilient electricity grid. 

There are a number of proposed tax increases outlined in the 25-page summary that was released on Wednesday.  Among them is an increase in the corporate tax rate from 21 to 28 percent.  We have not seen actual text yet but will be reviewing the document carefully to assess how S-Corporations and other pass-through entities are treated.  The Hardwood Federation team will be preparing a more thorough analysis of the overall proposal once specific details are available. 

Issues

Trade Agenda – Biden Administration Releases Trade Agenda

As required by Congress, the President released his 2021 Trade Agenda on March 1, 2021.  The trade priorities outlined in the report seek to:

• Address COVID-19 and restore the economy by increasing vaccine production and distribution, ensure that frontline workers have access to personal protective equipment and increase domestic production of essential medical equipment.
• Ensure that new trade policies and agreements include strong, enforceable labor standards and commitments to fight forced labor and exploitative labor conditions.
• Include strong environmental standards, consistent with the development of market and regulatory approaches, in trade discussion to reduce greenhouse gas emissions and achieve net-zero global emissions by 2050.
• Understand the projected impact of proposed trade policies on communities of color and consider those impacts before pursuing such policies.
• Develop a comprehensive strategy to combat alleged unfair trade practices by China, including unfair subsidies to favored industries and use of forced labor that targets Uyghurs and other ethnic minorities.
• Partner with global allies to hold China accountable by implementing reforms to the World Trade Organization's substantive rules and procedures to address inequality, digital transformation, and impediments to small business trade.
• Seek to expand global market opportunities for American farmers, ranchers, food manufacturers, and fishers and to enforce global agricultural trade rules.
• Review of existing trade programs to evaluate their contribution to “equitable economic development.” As part of this review, the Biden Administration will seek to incorporate corporate accountability and sustainability into trade policies.
• Comprehensive enforcement of trade agreements’ labor and environmental standards.

Clearly, this is an ambitious set of priorities and we will have to work hard to understand the implications for the hardwood industry and develop strategies of our own to make sure we benefit from the Administration’s global action.  As always, this will include clear communication of facts to policy makers at all levels.  We have already started the outreach process and will continue throughout the year.

Administration Confirmations – USDA Sec. Vilsack and Other Important Confirmations

The last six weeks saw a significant flurry of activity related to confirmations of Biden Administration officials and Cabinet Members.  President Biden secured confirmations of his entire cabinet on March 22^nd (with the confirmation of Labor Secretary Marty Walsh), which is just ahead of the pace of Presidents Trump, Bush, and Clinton, and just behind President Obama.  Cabinet officials are important, but just a small percentage of the more than 1,200 positions that require Senate confirmation.  Of primary importance to the hardwood industry and our broad interests are:

• U.S. Department of Agriculture Secretary Tom Vilsack was confirmed by a 92-7 vote
• U.S. Trade Representative Katherine Tai was confirmed by a unanimous 98-0 vote
• U.S. Department of Interior Secretary Deb Haaland was confirmed by a 51-40 vote
• U.S. Department of Energy Secretary Jennifer Granholm was confirmed by a 64-35 vote
• Environment Protection Agency Administrator Michael Regan was confirmed by a 66-34 vote

As noted above, another key player is USDA Deputy Chief of Staff and Senior Advisor for Climate Robert Bonnie who did not require a confirmation hearing and is already in place.

Buy American – New Buy American Legislation Introduced in the Senate

Senator Debbie Stabenow (D-MI), along with Senators Mike Braun (R-IN), Rob Portman (R-OH), Gary Peters (D-MI) and Tammy Baldwin (D-WI), introduced S. 363—legislation to enhance enforcement of the existing Buy American statute. 

Specifically, the bill directs the Office of Management and Budget (OMB), acting through the Office for Federal Procurement Policy, to standardize and simplify how federal agencies comply with, report on, and enforce the Buy American Act, including guidelines to ensure that a project is not disaggregated for purposes of avoiding the applicability of Buy American requirements.  The legislation also increases American-made content requirements from 50 percent to 75 percent.

A couple of other notable provisions are included in the measure.  One, requires that prior to granting a waiver in the public interest with respect to a product sourced from a foreign country, a federal agency must assess whether a significant portion of the cost advantage of the product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods.

In addition, the bill would establish within the Office of Management and Budget a Made in America Office to maximize and enforce compliance with domestic preference statutes, develop and implement procedures to review waiver requests, ensure that contracting personnel at each federal agency annually complete training on obligations under these statutes, and ensure development of a domestic supply base to meet federal procurement requirements.

S. 363 was referred to the Senate Homeland Security and Government Affairs Committee.

Estate Taxes – Death Tax Repeal Act Re-introduced in House and Senate

On Tuesday March 9^th the “Death Tax Repeal Act of 2021” was reintroduced in both the House (H.R. 1712) by Reps. Sanford Bishop (D-GA) and Jason Smith (R-MO) and in the Senate (S. 617) by Minority Whip Sen. John Thune (R-SD).  The proposed legislation works towards repeal of the federal estate tax, which has been shown through multiple studies would spur job growth of more than 150,000 jobs and effect trillions of dollars in capital for small businesses.  The so-called “Death Tax” injects only a small amount to federal revenues but can drastically affect small businesses and families. 

HF has long supported efforts to repeal or modify Estate Tax laws and has signed on to letters in support through two different coalitions, the Family Business Coalition and the Family Business Estate Tax Coalition.

Trucking and Transportation – DRIVE Safe Act Re-introduced in both House and Senate

On March 10th the DRIVE Safe Act was re-introduced in both the House and Senate.  The bipartisan legislation attempts to address the shortage of qualified truck drivers in the U.S. and would create an apprenticeship program to train 18–21-year-old drivers to operate commercial vehicles on the interstate.   Currently, drivers in this age range may operate commercial vehicles within a particular state but cannot cross state lines.  This dynamic makes it difficult for interstate carriers to enter into long-term, valuable relationships with them.   It would also set up an apprenticeship program for these young drivers comprised of 400 hours, 240 of which must be drive time with an experienced driver. In addition, young drivers would be equipped with automatic transmissions and safety equipment such as automatic braking.  The Act was introduced in this Congress by Sens. Todd Young (R-IN), Jon Tester (D-MT), Joe Manchin (D-WV), Tom Cotton (R-AR), Angus King (I-ME), Kyrsten Sinema (D-AZ), Jerry Moran (R-KS) and Jim Inhofe (R-OK) in the Senate, and by Reps. Trey Hollingsworth (R-IN), Jim Cooper (D-TN), Henry Cuellar (D-TX), Elissa Slotkin (D-MI), Jared Golden (D-ME), Troy Balderson (R-OH), Ashley Hinson (R-IA), Bruce Westerman (R-AR) and Darin LaHood (R-IL) in the House.

It is estimated that the truck driver shortage will grow worse in the coming years as present drivers reach retirement and demand increases.  It is projected that over the next decade 1.1 million new drivers will need to be hired in order to keep up with demand. 

HF supported this initiative in the last Congress and will continue to do so.

PPP – Paycheck Protection Program Extension Legislation is Signed

Legislation extending the Paycheck Protection Program application deadline two months from March 31 to May 31 passed the House and Senate in March and was signed by the President on Tuesday.   Extension of this program was left out of the $1.9 trillion Covid relief package that was just enacted reportedly because including it would have run afoul of parliamentary rules associated with the budget reconciliation process used to enact the package.

Specifically, H.R. 1799—the PPP Extension Act of 2021—pushes out the filing deadline for PPP applications by 60 days and provides an additional 30 days for the U.S. Small Business Administration (SBA) to finish processing applications received by May 31.

Labor Unions – Labor Union Organizing Legislation Passes House

Earlier this month, the House of Representatives passed the Protecting the Right to Organize (PRO) Act (H.R. 842) by a 225-206 vote. Five Republicans voted to support the bill, while one Democrat opposed it. The bill now heads to the Senate, where its future is uncertain. While the Senate companion bill (S. 420)) has 44 cosponsors in the upper chamber, all are Democrats with no Republican support.

Among other aspects, the bill authorizes the following:

• Removes the right to a secret ballot and institutes a “card check.” If a union claims that an employer committed an unfair labor practice during an organizing drive, the union can move to a card check election.
• Removes Right to Work laws nationwide. Currently, 28 states have passed Right to Work laws which provide workers the right to decide whether they want to join a union.
• Shortens the timeframe of union elections, making it harder for workers to learn the pros and cons of joining a union and restricting employers’ ability to seek legal counsel on complex labor matters.
• Limits innovative business models that manufacturers are using by essentially eliminating the independent contractor model and making more companies joint employers of their business partners.
• Requires employers to provide unions with employees’ home addresses, cell phone numbers, email addresses, and work shifts without the consent of employees.

In short, this legislation is a public policy wish list for the organized labor community and given that it has no Republican cosponsors in the Senate, its chances for passage are slim at this juncture.  However, we will continue to monitor the progress of this measure and will keep you

apprised of developments.

Manufacturing Announcement – Manufacturing Work Group Forms in the House

Earlier in March, House Majority Whip Jim Clyburn (D-SC-6) and Rep. Haley Stevens (D-MI-11) held a press event to announce and discuss the newly launched House Democratic Manufacturing Working Group. The working group will consist of 32 Members of Congress who are committed to examining key issues for strengthening the American manufacturing sector.  According to the announcement, areas of the working group’s focus will include workforce development, economic recovery, and access to capital; climate and sustainability; trade, access to markets, and the Export-Import Bank.

The Hardwood Federation team will be to reaching out to these Members of Congress to educate them about the needs of the wood machinery manufacturing sector in this country.

Logger Relief – Delay in Relief Expected While Rules Sorted Out

Implementation of the $200 million in relief payments to loggers and log truck haulers that was enacted as part of last year’s year end spending/COVID relief bill will be delayed at least a couple more months while the U.S. Department of Agriculture undergoes a formal rulemaking process.  Organizations representing loggers have been seeking expeditious processing of payments under this authorization for weeks, but given the transition and lack of staffing, the rulemaking process to ensure payments are distributed properly has been delayed.  We will be closely following developments on this rulemaking and keep you apprised of progress.

Hardwood CLT – Cross-Laminated Timber Made from Hardwoods Gains Traction

Happening in the Hardwood World

HF is Back on the Road with Dana at the HMA

After a long stretch of wishing she could travel but being held back by Covid-19 restrictions and cautions, HF Executive Director Dana Lee Cole finally hit the road again for the 2021 HMA Conference and Expo in Austin, TX. 

Although the crowd was a bit smaller than usual, it was great to see everyone’s faces…even if they were masked most of the time.  As always, the HMA was a great kick off to our PAC raising effort.  HFPAC Chairman Bob Miller and HFPAC member Scott Cummings were terrific advocates for the PAC and helped us raise a total of $15,900.  A big thanks to Linda Jovanovich, her team, and the HMA Board of Directors for making it happen.

Alaskan Timber Giant Walks Away

Sealaska Corp., the largest private landholder in southeast Alaska and one of the states’ largest timber entities with over 290,000 acres of forests, will stop it’s commercial logging operations.  Just a few years from recommending more Alaskan lands be opened up to timber operations, Sealaska will instead focus on other diversified growth industries.  There are a multitude of reasons for the shift, but the trade war with China certainly didn’t help and now the effects are being felt up and down the supply chain with millions of dollars of economic impact threatened.  You may read more in the article from E&E here.

A Minimum Wage Raise and the Logging Industry

A very interesting blog article looking at how a proposed $15/hr minimum wage raise would affect the logging industry from foresters, to trucking, to office support staff, as well as how wages would be affected regionally.  This is a hot topic that is not likely to disappear any time soon.  To read the article please click here.

A $185,000 Wood and Gold IPad Cover for That Special Someone

The IPad Pro Grand Apple (which can be seen here) from Caviar, a Russian manufacturer, can be yours for the low, low price of just $185,000.  This top item from Caviar’s new apple tree wood Apple accessories line also has 81 diamonds and more than 1kg of 18 karat gold inlay.  There will only be one produced so don’t delay!

Old Growth Oak Found for Notre Dame

In a previous HF newsletter, we highlighted an article on the difficulty of finding old growth oak that was sizable enough to replicate the beams and woodwork destroyed in the fire at Notre Dame Cathedral almost two years ago in April 2019.  Well, those perfectly straight and tall 18m oaks have been located in La Fôret de Bercé 250 km southwest of Paris.  The forest has a rich tradition of management and production and these 230-year-old oaks will carry on that tradition.  To read more about this historically fascinating project please click here.

Legacy Mahogany Used to Fix Capitol After Jan. 6