Lacey Act

ABMA is hearing that Senate Finance Committee Chairman Ron Wyden (D-OR) is planning to introduce legislation soon that would amend the Lacey Act, a statute enacted in 1900 to combat illegal trafficking in wildlife, fish and plants. The law was amended as part of the Farm Bill in 2008 to include trees and products derived from them, including wood building materials and pulp and paper. At that time, the wood products and pulp and paper sectors supported the Lacey Act amendments (as they were known) as a way to preclude illegally harvested timber from flooding the U.S. market at prices that undercut U.S. producers. The law requires importers to submit import declarations on wood and wood products coming into the U.S., noting the species, import value and country of harvest among other information. It also requires importers to exercise “due care” in ensuring all wood products are derived from legally and sustainably managed forests. There are serious penalties for non-compliance.

While U.S. wood products and pulp and paper manufacturers continue to support the intent of Lacey, there have been hiccups with implementation and enforcement since 2008. Among other things, Senator Wyden’s bill would require that the Animal and Plant Health Inspection Service (APHIS) immediately begin enforcing Phase 8 of Lacey, which is the import declaration requirement on pulp and paper. Complexities with tracking the various sources of wood and wood fiber that end up at a pulp and paper mill has stalled implementation of this last tranche of affected entities. While that provision will not affect our sector, ABMA is monitoring the situation closely in the event that the legislation veers into areas affecting wood building products.

There is considerable activity in this space of late. The European Union has enacted its EUDR—the European Union Deforestation Regulation which probits wood and pulp and paper (among other commodities) from entering the EU marketplace unless the producer can prove that that product is derived from a legally harvested and sustainable forest. The EUDR is creating major angst for U.S. companies as it imposes a geolocation requirement whereby producers have to be able to identify the exact parcel of land where the lumber is sourced.  Here in the U.S., the World Wildlife Fund and the Environmental Investigation Agency are making the rounds with various groups on Lacey Act-related policy issues and there is also legislation proliferating at the state level.

Tax

Members of Congress return next week after a two-week recess. We are watching developments on the tax front closely as Senate Majority Leader Chuck Schumer (D-NY) was signaling that he intended to bring up the House-passed tax bill (H.R. 7024) for a vote on Senate floor—bypassing Senate Finance Committee consideration. ABMA has been visiting with key Senate staffers and representatives from other trade groups that are working this issue. What we are hearing is that Leader Schumer may be reluctant to move quickly to a Senate floor vote as it threatens to poison the well with Senate Republicans and may have serious repercussions for negotiations on other policies/legislation. However, the politics are intriguing for Democrats as forcing a vote in the Senate would put Republicans on record as opposing key business tax benefits (100 percent bonus depreciation, R&D tax credit) as well as the Child Tax Credit. The situation is fluid, but ABMA is close at hand and will report on our efforts and developments.