the visible hand

it is the theory which decides what can be observed – einstein

Weyerhauser on Tree Act II

Posted by ecoshift on October 8, 2008

Weyerhaeuser FEDERALISSUES_TIMBERTAX

Update

October 7, 2008

TREE Act II: the quest for renewal

On May 22, 2008, a one-year modified version of the TREE Act bill passed into law as part of the larger Farm Bill legislation.  Since the provision passed for only one year, Weyerhaeuser’s new tax rate is still in jeopardy of more than doubling unless the TREE Act is extended or made permanent.

To this end, Weyerhaeuser Company government affairs representatives launched an extension campaign with key Congressional and industry supporters.  The focus for the next few months to request cosponsorship of TREE Act II (HR 6896 and S 3399), while also educating for the need for extension and permanency. The bills would make the current one-year provision permanent.

On Sept. 15, Representatives Artur Davis (D-Ala.), Kevin Brady (R-Texas) and Jim McDermott (D-Wash.) introduced H.R. 6896, TREE Act II. Joining them in this effort are a bipartisan, geographically-diverse group of 36 other supporters. The introduction follows the July 31 introduction of the Senate’s TREE Act II legislation, which now has 13 sponsors and cosponsors, with Senators Blanche Lincoln (D-Ark.) and Gordon Smith (R-Ore.) leading this effort.

Why is this helpful?

Virtually all tax extenders that require annual extension have a ‘permanency bill.’ This serves as a rallying point for grassroots efforts, and gives the congressional leader of the effort a platform to request an extension. Introduction of this bill demonstrates momentum and congressional interest in making the Farm Bill-passed provision permanent, or at least granting an extension.

In addition, if the extension effort spills into next year, the next Congress is expected to have larger democratic majorities in the House and Senate, as well as change in the White House administration. This bill will serve as a marker for the new White House administration and new members to refer to when the need for their support of this provision is discussed.

What happens next?

On Oct. 3, Congress officially adjourned for the November elections without extending the TREE Act.  We were successful in securing a commitment from Senate leaders to work to pass the bill next Congress in January (colloquy).

Because Congress is expected to return for a ‘lame duck session’ after the elections, Weyerhaeuser continues to seek cosponsor support and raise awareness for the bill.  We be working towards inclusion of TREE Act in any tax legislation under consideration.

This also lays the foundation for the 111th Congress when it convenes in January 2009, even though the bills will need to be reintroduced. The strategy also accounts for building third party endorsements of this bill, such as national and state forestry associations, and other key stakeholder organizations supportive of the previous TREE Act.

Continue to monitor this page for updates as we continue to build support of TREE Act II with members of Congress.

TREE ACT II makes permanent the one-year provisions passed in the Farm Bill, which are:

* Maintaining the new 15% rate for corporations on gains from timber that has been held for at least 15 years. (This 15% rate is comparable to that paid by many of Weyerhaeuser’s competitors; without passage of TREE Act II, on May 22, 2009, C-Corporations like Weyerhaeuser will revert back to a 37% rate on timber gains.)
* Maintaining the timber real estate investment trust (REIT) modernization provisions.

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