April22,2019

TheHonorableRichardNealChairmanHouseWaysandMeansCommittee 1102LongworthHouseOfficeBuildingWashingtonD.C.20515

TheHonorableKevinBradyRankingMemberHouseWaysandMeansCommittee1139LongworthHouseOfficeBuildingWashington,D.C.20515

DearChairmanNealandRankingMemberBrady,

TheundersignedorganizationssupporttheForestRecoveryActof2019andurgetheHouseCommitteeonWaysandMeanstoimmediatelyscheduleahearingonthelegislation.TheForestRecoveryAct(H.R.1444)willhelpAmerica’sforestlandownersrecover from the loss of their forests afternaturaldisasters.TheHousepassedemergency disaster packageprovidesmuchneededreliefforagriculture crops and farmers butdoesnot provide economic relief for forestlandownerswhose timber crops were devastated.TheForestRecoveryActisnotasubsidyortransferoffundsprogram.Itsimplyallowslandownerstodeductthefairmarketvalueoftimberdestroyed bynaturaldisasters.

Undercurrenttaxlaw,landownersareonlyallowedtodeductthelesseramountofthefairmarketvalue,thecostbasis,ortheadjustedtimberbasis.Unfortunately,thedeductionamounttypicallyequalszero afterthe7-yearamortizationperiodoronlyafractionofthefairmarketvalueofthedestroyedtimber.Thisisproblematicforforestlandownersbecauseinmostcasestheirtimberbecomesmarketable25to40-yearsafterbeingplanted.Forestlandownersmustpayexpenses,includingtaxesannually,withoutcropincomeduringthisentiregrowthcycle.Forestlandownersdifferfromothercropproducersbecausetheyarenotprovidedfundstocoverthefairmarketvalueoftheirlostcropthroughdisasterrelieffundingandinsurancefortimberlandisprohibitivelycostlyintherarecasesitisavailableatall.The Forest Recovery Act would amend the tax code to allow forest owners to deduct the full market value of their timber prior to the loss caused by the federally declared natural disaster.

America’sforestlandisvitaltotheenvironmentandcommunities,accountingfor30percentoffilteredfreshwatersupply,providinghabitatfor60percentofat-riskspecies,andcapturingenoughcarbontooffset10-15percentofU.S.industrialcarbonemissionsannually.Withouteconomic assurancesafteranaturaldisaster,thepublicandenvironmentalbenefitsprovided by forests will begintodeclineasnaturaldisasterscontinuetoaffecttheUnitedStates.This common-sense policy would provide forest owners the security of knowing their 25 to 40-year investment in growing healthy forests will not be a complete economic loss if a natural disaster strikes; incentivizing keeping land in forest use for environmental benefits for both rural and urban communities.

Amendingthetaxcodetogive landownersimmediate relief and remain economically viablewillhavebothenvironmentalandeconomicbenefitsforall Americans.TheundersignedsupportthepassageofH.R.1444,theForestRecoveryAct,whichprovidesthenecessaryincentivestokeep forestland as forests afteracatastrophicdisasteroccurs.Thislegislationwillnotonlysupportfamiliesinthetimberlandandforestindustrybutcontributepositively

to environmentalconservation.WeurgeCongresstosupportAmerica’sforestlandownersbypassingtheForestRecoveryAct.

Signed,

AlabamaForestryAssociation

ArkansasForestryAssociation

AssociationofConsultingForesters

The ConservationFund

FloridaForestryAssociation ForestLandownersAssociation

ForestResourcesAssociation

ForestryAssociationofSouthCarolina

GeorgiaForestryAssociation

Gulf Coast Land Trust

GulfCoastLandTrust

HardwoodFederationThe LongleafAlliance

LouisianaForestryAssociation

MassachusettsForestAlliance

MississippiForestryAssociation

MississippiRiverTrust

NationalAssociationofForestOwners

NorthCarolinaForestryAssociation

OregonForest&IndustriesCouncil

PennsylvaniaForestProductsAssociation SocietyofAmerican

Foresters

SouthernLumberManufacturerAssociation

TennesseeForestryAssociation

Southern Group of State Foresters

VirginiaForestryAssociation Washington ForestProtectionAssociation

WestVirginiaForestryAssociation

WildlifeMississippi

TexasForestryAssociation