Growing Trees and Jobs for the Pacific Northwest Rep. Jim McDermott Introduces TREE Act

Press Release

Rep. Jim McDermott (D-WA) introduced the Timber Revitalization and Economic Enhancement Act of 2009 today, which promotes timber jobs and the competitive position of the timber industry in the Pacific Northwest by making permanent several one-year provisions McDermott had inserted into the 2008 Farm Bill.

"Look out any window in the Pacific Northwest and you know immediately that timber plays a major role in the economy of the region," Rep. McDermott said. "The TREE Act will strengthen the timber industry and grow jobs as well as trees in the Pacific Northwest in the years ahead."

McDermott said his legislation, HR 2543, responds to the significant overseas competition that is battering the industry on prices and jobs and forcing increasing pressure on American timber companies to produce returns for shareholders that may not always be in concert with good forest management practices.

"I want a healthy and environmentally responsible timber industry in the Pacific Northwest for generations to come and the TREE act is the acorn that will grow into a legislative stand to accomplish that goal."

The TREE Act has two major elements; the first is the bill provides an alternative maximum tax rate of 15 percent for gain on qualified timber harvested by a C corporation, which is a for profit corporation. This provision would apply to all C corporations including the numerous small companies that make up the timber industry. For purposes of the tax code, qualified timber gain is defined as gain from the sale or exchange of timber held for at least 15 years.

The second major provision would modernize Real Estate Investment Trust (REIT) rules for timber property. Many of the existing rules under which timber REITs are required to operate are outmoded and ineffective, and don't reflect many modern practices in the timber industry.

The bill has been referred to the House Ways and Means Committee for further consideration. Rep. McDermott is a senior Member of the committee.

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