The Hardwood Federation Newsletter

Hardwood Federation July 2020 Newsletter

From the Executive Director:  More Covid Relief is Coming, We Just Don't Know When

With an election year in full swing there is an endless supply of messaging and information coming out of Washington, DC.  No matter what side of the political spectrum you fall on it is hard to wade through and digest everything.  Adding to the pile this week were Senate Republicans who finally released their proposal for additional Covid-19 relief.  Not surprisingly, their bill is significantly different from that of the Democratic led House of Representatives.  House and Senate Leadership are meeting with Administration officials to work on a compromise agreement and hope to eventually forge new language that both sides can vote in favor of.  The country eagerly awaits the benefits that will come out of the final bill, but a time frame for just when this will happen is murky as the legislative calendar for August is short.  Below is a breakdown of key aspects of the two proposals, where the two bills differ, and what can possibly be expected.

The Democratic led House passed their version of a next Covid-19 Relief and Stimulus bill, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act in May with an expected price tag of over $3 trillion.  The newly released Republican proposal, the Health Economic Assistance, Liability Protection and Schools (HEALS) Act, is estimated to cost a more modest $1 trillion.  The major, and comparable, pieces from each include:

Direct Stimulus Payments
Additional Direct Stimulus Payments to the American Public is one area of agreement.  Both proposals will send $1,200 to qualifying adults with declining scaled values for those making over $75,000 and phasing out higher income individuals completely.  Under the Democratic proposal, dependents also qualify for $1,200 each with a household max of $6,000, while the Republican version provides an extra $500 per dependent, regardless of age

Unemployment Benefits

The Democratic Bill would extend the $600 per month benefit through the end of January 2021, with certain individuals receiving regular state benefits extended through the end of March 2021.  The Republican version would lower unemployment benefits to $200 per month, while states work to compensate for approximately 70% of lost worker wages.  This $200 per month benefit would offend on Dec. 31, 2020.

Small Business Payments

The House Dem Bill includes no further money for the Paycheck Protection Program (PPP), although they did include a line for $10 billion for small business loans through the Economic Injury Disaster Loan (EIDL) program, which has dispersed all of the $20 billion allocated in previous packages.  Senate Republicans have included an additional $60 billion for the PPP and would allow businesses to apply for a second loan.  However, these loans would be limited to businesses with fewer than 300 employees, which have lost at least 50% of their revenue during 2020 Q1 and/or Q2.  It would also lower the amount of money a business can receive to a cap of $2 million, but with more flexibility with regards to how the money is spent.  They would also create a new low-interest, long-term loan program for seasonal businesses or those in low-income communities that meet certain requirements.

Hiring Tax Credits
The Republican Bill includes an expanded version of the employee retention tax credit for businesses that keep employees on their payroll.  This credit would be refundable against payroll tax liability, with companies getting payment back from the IRS if they qualify for a larger tax break than their owed payroll tax.  There would be an additional tax credit for larger businesses to hire currently unemployed individuals.

Liability Protections
Democrats generally oppose liability protections, and are instead, requesting new OSHA regulations that would have employers create new and expanded protection plans against Covid-19 for employees.  Republicans have been adamant about wanting liability protections and have included language that would shield businesses, schools, hospitals and other healthcare providers, and non-profits through Oct. 1, 2024.  The current language prevents eligible businesses from being sued due to Covid-19 infections in their facilities, as long as they make “reasonable” efforts to follow public health guidelines and don’t commit acts of “gross negligence” or “intentional misconduct.”. Liability protections was a key ask in the recommendations put forth by the Hardwood Federation. 

State and Local Funding
Democrats have included $500 billion for states and $375 billion for local governments, that can be used for budget shortfalls or Covid-19 related expenses.  Republicans do not include any additional funding for states or localities (which explains part of the enormous dollar gap between the two plans), but they do include some language giving more flexibility on money previously allocated in the CARES Act for revenue shortfalls.

It will be very interesting to see just were the two sides end up with such disparate starting points and exactly how long it will take to get to a “Yes” that can head to the President’s desk.  The Hardwood Federation will continually monitor these negotiations and keep you aware of the final product.  Stay Tuned!

Issues

Hardwood Industry Support Letter – A Bipartisan Effort for Covid Relief

Earlier in July, a bipartisan letter was sent to Congressional leadership in the House advocating for specific hardwood focused policies that should be included in the next Covid relief package that may come together before the August recess.  Specifically, the letter calls for provisions that: 

• Ensure any liability protection reforms are extended to the hardwood and forest products industry
• Direct the Small Business Administration to reverse its decision to limit Economic Injury Disaster Loans (EIDL) to $150,000. Existing law authorizes EIDL loans of up to $2 million which is essential to the hardwood industry;
• Extend a sustainable building tax credit to building and construction projects, including U.S. wood products used in these projects;
• Increase government purchases of U.S. wood products, including structural and finished products, for federal building and transportation projects;
• Fund necessary research to approve increased use of U.S. hardwoods in U.S. military truck beds, replacing imported tropical woods;
• Provide funding for research to increase domestic and international consumer demand for U.S hardwood products including the environmental and home health benefits of hardwood product use.

The letter was led by Rep. Fred Keller (R-PA).  He was joined by Representatives Glenn “GT” Thompson (R-PA); Annie Kuster (D-NH), David McKinley (R-WV); Bob Gibbs (R-OH), David Kustoff (R-TN); Mike Kelly (R-PA); Trent Kelly (R-MS) and Bruce Westerman (R-AR). 

We are thankful for the efforts of these legislators and are using this letter as a platform for our advocacy efforts on Capitol Hill as negotiations proceed on a Covid four relief measure.  

NEPA – Trump Administration Finalizes Updates to the Venerable Act

On Wednesday July 15^th President Trump and the White House Council on Environmental Quality (CEQ) announced final modernization changes to the 40 year old National Environmental Policy Act (NEPA).  First, signed into law on January 1^st, 1970 the law “requires Federal agencies to consider the environmental effects of proposed major Federal actions significantly affecting the quality of the human environment.”  This broad purview applies to a wide range of actions affecting the daily lives of Americans and touching on infrastructure, land and animal management, protection, and restoration projects across the country.  The new changes are intended to streamline decision making for these projects and lessen costly delays and roadblocks that have long slowed or completely halted these critical investments.  The White House estimates that the average infrastructure project takes over 4 years to get a “go” versus “no go” decision and for transportation this number is closer to 7 years.  The last NEPA updates came in 1978.

Appropriations – A Number of Developments in the Annual Funding Packages

The many Covid relief legislative spending packages that have been enacted thus far this year have overshadowed the fact that Congress has also been busy fashioning appropriations bills for Fiscal 2021.  Late last week, the full House approved what is known as a “minibus” package of spending bills covering FY2021 spending for Interior-Environment, Agriculture, State-Foreign Operations and Military Construction-Veterans Affairs.  The legislation passed the House on a party-line vote with no Republicans voting in favor. 

There are a couple of notable items in this package.  One is the fact that the Market Access and Foreign Market Development programs are fully funded for next year.  Recall that in the last Farm Bill, these two programs were grouped under an umbrella International Market Development Fund.   This line item received $255 million in the House passed bill, with allocations for MAP and FMD at $200 million and $34.5 million, respectively.   Those are the fully authorized funding levels for these programs.   

Another positive development in this package is that the report accompanying the bill directs the Forest Service to spend the fully authorized funding level of $25 million for the Community Wood Energy and Wood Innovation Program (CWEIP).   This program, which was authorized in the last Farm Bill, seeks to incentivize deployment of highly efficient biomass heating systems that operate on our mill residuals.   Its other objective is to facilitate siting and construction of innovative wood products facilities such as those producing mass timber components or facilities experimenting with cellulosic nano materials. 

As expected, the Interior portion of this package did not include language extending the Hardwood Federation-supported biomass carbon neutrality directive.  It is important to note however that the legislation also does not include any anti-biomass provisions or language nullifying the existing carbon neutrality directive, which was and is an ongoing concern as the appropriations process moves forward.   This provision has historically been advanced by the Senate and we have been working with our forestry and forest products industry allies and champions on Capitol Hill to secure language reauthorizing the directive as the Senate takes up its FY 2021 appropriations measures.  

Happening in the Hardwood World

Conservation Report Recommends Forest Management

In their latest report released this month the American Wildlife Conservation Partners (AWCP) recommended specific actions to improve wildlife conservation including the need for better and more active forest management, including alternatives to costly forest litigation that has become so prevalent and has stalled many important projects.  The report can be read here.

How Oak Trees Evolved to Rule the Forests of the Northern Hemisphere

A fascinating study from a group of scientists from the Morton Arboretum, Duke University and the University of Minnesota on how the various forms of Oak trees and their ecological diversification grew from the tropical landscapes and evergreen forests of millions of years ago to be the most dominant species of the Northern Hemisphere.  To read the article please click here.