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Hardwood Federation November 2020 Newsletter

From the Executive Director:  An Election for the History Books

As we come to the end of November the seemingly endless 2020 Election finally appears to be over.  Now that the votes are cast and the people have spoken it seems that we have a new President, and what will prove to be a narrower, but similar Senate and House.  Regardless of how your preferred candidates fared, we as a country will go on and the Hardwood Federation will continue to work across the aisles in our nation’s Capital to move legislation that supports the U.S. hardwood industry.  In fact, we are not going to be idle the last month of the year as the Lame Duck session putters on into December.

Election Results 2020

While most professional pollsters in the days leading up to the elections predicted a Democratic wave to take the White House and the Senate, as well as add seats to the Democratic majority in the House, voters had other ideas.  The election overall was much closer than expected.  

In the main draw the Presidential race ended up having the largest number of voters in U.S. history, well over 154 million.  After numerous recounts and ill-fated lawsuits Joe Biden will be sworn in on January 20th as the 46th President after receiving 306 Electoral College votes to 232 for Donald Trump.  In an ironic twist, this is the same total that President Trump won in his 2016 victory over Hillary Clinton.  President-elect Biden took the victory by re-establishing the so-called Midwest “Blue Wall” in Minnesota, Wisconsin, Michigan, and Pennsylvania – flipping WI, MI and PA on the way – and also taking Arizona and, most surprisingly Georgia.

Democrats will retain control of the House but by a much smaller margin than anticipated as Republicans unexpectedly gained seats in the lower house.  As of this publishing there are a few races still too close or yet to be called, but the margin stands at 222 – 205 (218 are needed for control) with 8 seats outstanding, many of which are expected to be declared in Republican’s favor.  This margin will be the closest between the two parties since WWII – which will get even smaller as multiple House Members are expected to join the Biden Administration leaving their seats open for months until special elections can be held to fill them.

For the time being, the Senate will remain in Republican hands, although only very narrowly with a 50-48 split.  Both Georgia Senate races will go to a runoff to be held on January 5th, and this scenario could change if both races go to the Democratic candidates.  However, it is important to keep in mind that, whoever controls the Senate, that party’s margin will be very slim and if there were to be a 50-50 tie VP-elect Kamala Harris would be the deciding vote.  Typically, 60 votes are needed to move legislation in the upper chamber which requires opposing party support to pass any legislation.   There are parliamentary ways around this, but historically the 60-vote requirement has been honored. 

Overall, the Hardwood Federation PAC (HFPAC) had another banner cycle of support.  We always say that it is not just about picking winners, rather establishing long-lasting relationships and educating Members across the political spectrum, but it also feels good to see our supported members remain in Congress and remain in our corner.  HFPAC supported 12 Senators and 96 House Members in the 2019-2020 cycle.  Of the Senators we supported 3 were not up for election this cycle (Sens. Lisa Murkowski (AK), John Boozman (AR), and Joe Manchin (WV)) and another retired (Sen. Pat Roberts (KS).  Additionally, Sen. David Perdue (GA) will be in the afore-mentioned runoff in January.  Otherwise, HFPAC was 7-0 in our Senate Support.  In the House, again there are a few races to be called, with 2 retiring members and 1 member losing in a Primary, but the HFPAC supported members currently stand at 91-1 (the lone current loss is Rep. Collin Peterson (D-MN, 7) the sitting Agriculture Chairman).

We will again most likely be working with a split government with both parties exerting some control over pieces of the legislative process.  Gridlock will continue to be the rule, not the exception.

The first order of business in the new year for the Hardwood Federation staff will be to connect with new Members of Congress and the Administration to educate them about the U.S. hardwood industry and its contributions to the economy at both the state and federal levels.  We have at least 7 new U.S. Senators to touch base with and roughly two dozen new House members.  

We also need to re-connect with returning Committee Chairs and make ourselves known to new leadership. Identifying those in positions to help us, what points of agreement exist and who we need to win over to our way of thinking are at the top of our to-do list.  The Committee Chairs of the House and Senate Agriculture Committees will both be new.  As noted above, Rep. Collin Peterson (D-MN-7) lost his reelection bid after decades in the House.  He shepherded several Farm Bill re-authorizations through the process and he and his staff knew our sector well.  The silver lining is that the three House members vying for his post are Jim Costa (D-CA-16), Marcia Fudge (D-OH-11) and David Scott (D-GA-13).   Representative Costa is a moderate who always comes to the Hardwood Federation fly-in breakfast and knows us well.  Likewise, Representatives Scott and Fudge are both from big hardwood states and knowledgeable about hardwood issues.   Congresswoman Fudge is on the short-list to be named the U.S. Secretary of Agriculture in the Biden Administration which would also be a positive for our industry.

In the Senate, should the Republicans maintain control, Pat Roberts is retiring and on track to replace him as Chair of the Agriculture Committee is John Boozman (R-AZ).  Again, Sen. Boozman is a longtime friend of the hardwood industry and would make a fantastic choice to lead this key panel.  Another big change is on the Senate Energy & Natural Resources (SENR) Committee where Sen. Lisa Murkowski (R-AK) is ending her term as Chair.  Slated to replace her is Sen. John Barasso (R-WY).  This committee is critical for us as it takes the lead on federal forest management and most natural resource policy issues. Sen. Barasso currently chairs the Senate Environment and Public Works (EPW) Committee.   Should he move over to SENR as expected, Sen. Shelley Moore Capito (R-WV), a long-time friend and strong ally to the Federation, would take his place to head EPW.  This committee is also critical for us as it has primacy on most environmental policy and also transportation issues such as the highway bill.   

Should Democrats take control, Sen. Debbie Stabenow (D-MI) will most likely return to head up Agriculture and Sen. Joe Manchin (D-WV) would serve as Chair of the Senate Energy & Natural Resources Committee. The Federation has great connections with both and have worked with them and their staffs over the last several years.  They are very aware of our industry’s issues and have been helpful in the past.

But 2020 Is Not Quite Over

Although everyone is looking forward to January 2021, there is still remaining business in 2020.  The post-election “Lame Duck” session of the 116th Congress is in “full swing”, even if not too much is going on.   Lawmakers have a couple of major deliverables confronting them, namely a year-end federal government funding deal for Fiscal Year 2021 and another round of COVID relief.   Regarding the former, the Senate is expected to post the text of all 12 of its FY 2021 appropriations bills on Tuesday.  This will serve as the upper chamber’s starting point for negotiations on an omnibus spending bill with the House.   Recall, that the House has already passed 10 of its 12 appropriations measures earlier this year.

On the pandemic aid front, both Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) have signaled in their post-election commentary to the media that they are committed to another round of federal assistance to help businesses and individuals cope with the continuing economic fallout from the virus.   Their respective positions remain far apart, however, and it remains unclear whether or how the Administration will factor in the discussions.  

The short-term funding measure or continuing resolution (CR) that is keeping the government funded expires December 11, so lawmakers have roughly a month to reach a deal.  Of course, they could always extend this deadline with another CR farther into December or into next year, but the hope among both sides is that—at a minimum—an omnibus spending deal will be reached and passed before December 11.  Other items that may be addressed in the Lame Duck include a water infrastructure package, energy efficiency legislation, extension of renewable energy tax incentives and a defense authorization bill.   Your Hardwood Federation team will keep you regularly apprised of developments as the 116th Congress winds down and we look forward to the gaveling in of the 117th Congress in January.


Issues

Appropriations – Biomass Language Included in Latest Senate Bill

Earlier this month, Senate leadership unveiled all of the 12 Fiscal Year 2021 appropriations measures.  Recall that the Senate is way behind the House, which has passed most of its funding measures already while the Senate has not had a single hearing or markup.  On a positive note, the Senate’s FY 2021 Interior, Environment and Related Agencies spending bill includes Hardwood Federation-supported language directing federal departments and agencies to recognize the carbon neutrality of forest-based biomass energy.  The House-passed FY 2021 Interior bill does not have this directive, which sets up a negotiation between House and Senate leaders that may occur in the Lame Duck session that runs out December 11. 

The Hardwood Federation team is reaching out to our champions in the House and Senate requesting that the Senate position prevail in any final omnibus appropriations package that may come together.    

Trade – Biden Administration Likely to Review and Adjust Trade, but Not Make Major Changes

A question that HF gets asked all the time is what is the incoming Biden Administration going to do on Trade?  While we do not have the full answer yet, there are some telling points which can give us some direction at this time.  In talks with long-time trade professionals, looking at the Obama Administration and Biden’s previous voting record, as well as those who we think may join the Administration there are a few assumptions that can be made.  These include:

  • Beefing up “Buy American” government procurement mandates with a “historic procurement investment” worth $400 billion to promote domestic manufacturing.
  • Putting trade deals in the backseat, at least for the time being.
  • Pushing for climate provisions in any future trade deals.
  • Calling for a united front and working with allies on China and the WTO
  • Unfinished tariff business.  This means that some tariffs may be put back in place and others adjusted, but it is almost impossible to believe they will be taken off altogether.

These are just a few of the potential actions and directions, but they are those that seem most likely in the initial phases of the new Administration.

Vietnam Trade – Action Continues on Both Sides of the Developing Trade Situation

As we reported back in October the US Trade Representative announced an investigation into illegal timber activity in Vietnam.  The Hardwood Federation provided comments to USTR supporting efforts to reduce the illegal harvest of timber, but advising caution in moving forward with any punitive action that could impede exports of U.S. hardwoods to Vietnam

In early November the American Hardwood Export Council (AHEC) provided further information about Vietnamese activities related to timber imports.  Vietnam’s “Decree 102” regulates their Timber Legality Assurance System (VNTLAS) which follows a risk-based approach to imports.  According to AHEC, this means that “Vietnam is separating their wood supplying countries into “Positive” (sometimes translated as “Active”) and “Non-positive” (sometimes translated as “Negative”) groups. Countries in the “Positive” group do not need additional chain of custody documentation beyond what has been provided in the past and should not have additional requirements as long as the importer is able to show the species and country of origin. Countries in the “Non-Positive” group will need to provide chain of custody or certification documents for their shipments.

The official list of Positive and Non-Positive countries has not yet been published, although the Decree went into effect at the end of October. However, according to AHEC contacts in Vietnam, the US State Department, and the US Embassy, the United States is included in the “Positive Geographical Area”, meaning there will be no additional chain of custody or certification documentation required to export hardwood products to Vietnam. However, this is unconfirmed at this time.

In order to make sure a clear region of harvest and country of origin for your export shipment, AHEC recommends creating an American Hardwood Environmental Profile (AHEP) document for your shipments through their website (www.ahec.org). This form can be applied to a range of shipments and will meet global requirements including Decree 102 and the European Union Timber Regulations (EUTR).

The status and future of USTR’s action remains unclear and we are now in a wait and see period on whether the Trump Administration will levy duties on Vietnam on their way out the door before January 20th. White House National Security Advisor Robert O’Brien and U.S. Ex-Im Bank Chief Kimberly Reed have just wrapped up a trip to Vietnam intended to “advance economic growth and reaffirm the U.S. support for a strong, prosperous, and independent Vietnam” and U.S. and Vietnamese officials are trying to work out a schedule to hold virtual negotiations regarding these investigations in early December.  The Federation will continue to work with AHEC to monitor this situation and report as things develop.

USDA’s translation of Decree 102/2020/ND-CP is available here.

IRS Regulatory Review – IRS Seeks Comments on Economic Recovery Support

On May 19, 2020 the President signed Executive Order (EO) 13924, the Executive Order on Regulatory Relief to Support Economic Recovery, which directed agencies to consider principles of fairness in administrative enforcement and adjudication and to consider rescinding, modifying, or waiving any regulations and other requirements that may inhibit the ongoing economic recovery from the Coronavirus Disease 2019 Pandemic.  The IRS is not asking the public for comments regarding this EO and the regulation and requirements therein as they effect businesses and individuals.

You may view the Federal Register listing here and submit comments here.

Forest Service – USFS Finalizes Rules on Environmental Reviews of Projects

On Wednesday November 18th the U.S. Forest Service (USFS) finalized a decision to provide flexibility of environmental review and analysis on its plans and projects, excluding a number of actions from potential scientific review or from community input.  This rule allows USFS exemptions which sidestep National Environmental Policy Act (NEPA) requirements, which will aid in faster approval of many projects.  Environmentalists are concerned that cutting scientific methods from the process could work, but the service will essentially be guessing where and what to do without the proper analysis.  U.S. Department of Agriculture Secretary Sonny Perdue asserted the changes “will ensure we do the appropriate level of environmental analysis to fit the work, locations and conditions.”

Young Driver Pilot Program – Comment Period Open and Fingers Crossed

In September, the Federal Motor Carrier Safety Administration (FMCSA) unveiled a proposed pilot program that would allow younger drivers between the ages of 18 and 20 to operate commercial motor vehicles (CMVs) across state lines. Currently, 49 states and the District of Columbia allow 18, 19, and 20-year-old drivers to operate trucks within a single state’s borders. These same drivers, however, are not allowed to drive these vehicles interstate.  For example, a young driver currently can drive a CMV over 300 miles down Interstate 81 between the two Virginia towns of Winchester and Bristol but could not drive that same truck the roughly 5 mile trip from Alexandria, Virginia to Oxon Hill, Maryland.  The pilot program embodies the concept of Hardwood Federation-supported legislation pending in Congress known as the Drive Safe Act and will allow the FMCSA to examine the safety, feasibility, and potential economic benefits of allowing 18 to 20-year-old drivers to operate on the interstate.  The Bureau of Labor Statistics estimates that the average age of a commercial truck driver in the U.S. is 55, which portends a looming truck driver shortage in this country and the need to attract a younger universe of drivers.  We are hopeful that data collected by this program will support potential solutions to this driver shortage such as passage of the Drive Safe Act, which will be introduced in the 117th Congress next year.  Currently the FMSCA is collecting comments and on the initiative and HF has signed on to multiple letters encouraging the programs advancement.

Career Technical Education (CTE) – Apprenticeship Bill Passed in the House

Late in November, the full House of Representatives passed H.R. 8294, the National Apprenticeship Act of 2020 by a vote of 246-140.  The bill would invest more than $3.5 billion over five years to expand opportunities and access to registered apprenticeships, youth apprenticeships and pre apprenticeships to boost the nation’s workforce. 

Specifically, H.R. 8294 would:

  • Encourage employer participation and recruitment for individuals with barriers to employment, including those impacted by the criminal justice system.
  • Codify and streamline standards for registered apprenticeships, youth apprenticeship and pre apprenticeship programs, including requirements for apprenticeship agreements and program registration to ensure consistency in quality standards and worker protections. 
  • Ensure that all individuals have equal opportunities to participate in programs under the national apprenticeship system and increase diversity in the occupations offered and the individuals participating in programs, especially high-skill, high-wage and in-demand industry sectors.

One of the amendments that was adopted during floor consideration was one sponsored by House CTE Caucus Co-Chair Rep. Jim Langevin (D-CT-2).  The Langevin amendment would allow pre-apprenticeship programs to use grant funds authorized by the bill to underwrite stipends for participants to cover out of pocket costs like housing, transportation and childcare.   

About 20 Republicans joined all Democrats in voting for this bill.  These proposals are usually more bipartisan, but this legislation drew opposition from House Republicans and the Administration when it failed to include White House-requested language that would allow the funds to be funneled to the Industry Recognized Apprenticeship Program or IRAP.   

While House passage was a positive step in support of apprenticeships, we do not expect this legislation to move any further in the Lame Duck session of Congress.   Bipartisan interest in CTE and apprenticeships remains high in both the House and Senate, however, and we look forward to substantive action on both of these fronts after the 117th Congress convenes in January.  

Invasive Species - APHIS To Begin Eradicating the Asian Longhorned Beetle in South Carolina

On November 9th the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS), in partnership with Clemson University, announced their plans to begin the fight to eradicate the Asian Longhorned Beetle (ABL) starting in Charleston County, SC.  Their strategy will be similar to other areas experiencing infestation around the country, which includes quarantine, removal of infested trees, and the possibility of a chemical treatment where landowners grant permission.  The quarantine will encompass 58.6 square miles and affects firewood, nursery stock, logs, branches, etc., which may not be removed from the area without special permission.  In the U.S. there are currently 278.1 square miles under ALB regulation.   


Happening in the Hardwood World

New AHMI Video: “Appalachian Hardwood Forest to Finish”

A fun and educational video from the Appalachian Hardwood Manufacturers Inc. and students from High Point University in North Carolina explores wood from its stand in the forest to a final product.  Watch this great video here.

White Oak Initiative

Please click here to view an informative short video on the White Oak Initiative.

Woodworking Network Survey on Covid-19 Impacts on the Industry

Click Here for an informative article from the Woodworking Network charting the Covid-19 impact on the woodworking industry.

Hand Carved Ford Ranger Raptor

Just a cool video of a woodworker carving a 2020 Ford Ranger Raptor from a block of wood.  Click here.


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