CONGRESSMAN DAVIS INTRODUCES BILL TO HELP FOREST LANDOWNERS
WASHINGTON, D.C. -- Alabama forest owners and the state's abundant wildlife would benefit from a bill introduced by Alabama Congressman Artur Davis, D-Montgomery, according to the Alabama Farmers Federation.
|Congressman Artur Davis|
The bill, which amends the Internal Revenue Code, would allow a tax deduction for 60 percent of qualified timber gains and exempt deductible timber gains from the excise tax on the undistributed income of real estate investment trusts (REITs).
"The TREE Act will contribute to the long-term preservation of the pulp and paper industry in West Alabama. Our bi-partisan work on this legislation reflects my office's commitment to putting the 7th District's economic priorities first," said Davis.
Federation Forestry and Wildlife Resources Director Steve Guy said the tax code change would provide a boost for forest owners hit hard by high production costs and low prices.
"The 60 percent reduction in capital gains on the sale of timber would certainly be a welcomed relief to Alabama forest landowners who are struggling to find funding to replant trees after they are harvested," Guy said. "Tree planting across the South has fallen to pre-1985 (Conservation Reserve Program) levels as costs for replanting have escalated and prices for timber have fallen. This change would also provide additional income for timber stand improvement practices such as prescribed burning, invasive species control and wildlife habitat enhancement."
Davis' bill is cosponsored by 48 representatives, including Alabama Congressmen Jo Bonner, R-Mobile, and Bud Cramer, D-Huntsville.
In addition to changing the capital gains and excise taxes for timber, the bill would provide for the treatment of timber gains as qualifying REIT income and for mineral royalty income as qualifying income for timber REITs. The legislation includes special rules relating to income limitations and prohibited transactions for timber REITs.
Ninety-five percent of Alabama's 23 million forest acres are privately owned. Alabama's forest industry employs about 13 percent of Alabama's total workforce, either directly or indirectly, and more than half of America's agricultural producers intentionally provide habitat for wildlife.