Disaster Relief Protections Sought In New Farm Bill

With a September deadline looming, both the House and Senate agriculture committees are busy working on draft bills that reauthorize a new Farm Bill. In addition to the continuation of a range of agriculture, conservation, forestry, and energy programs, an effort is under way to have the bipartisan Disaster Reforestation Act (DRA) (H.R. 655/S. 217) included in the measure.

Farm Bill conservation programs are the largest single source of federal funding available to private forest landowners. These voluntary programs provide cost-share and technical assistance for a wide range of forestry and conservation practices such as tree planting, forest stand improvement, hazardous fuel reduction, and fire breaks.

The Forest Landowners Association (FLA) is working with lawmakers to include the DRA in the Farm Bill to aid forest landowners in recovering from the loss of timber destroyed by natural disasters. With the rise in natural disasters, including hurricanes, tornados, wildfires, and invasive species, FLA said this issue has become more critical than ever for forest landowners.

Under current law, forest landowners are only allowed to deduct the lesser of the fair market value (FMV) or the cost basis, which is often $0 or a fraction of the fair market value. Under the DRA, forest owners would be able to deduct the fair market value of the timber destroyed.

The inclusion of a tax-related policy in the Farm Bill is not new. Previous Farm Bills have included a cellulosic ethanol tax break and a temporary cut in the capital gains taxes on timber.

While forestry is often considered a part of the agricultural sector, it does not enjoy the same safety net protections as traditional agricultural products, such as price supports, crop insurance, or tax code benefits. The DRA provisions would correct this oversight by fixing the tax code to provide forest landowners with economic certainty and the ability to replant trees quickly and maintain their forests for generations to come.

The devastation caused by Hurricane Michael in 2018 is a prime example of why the DRA is urgently needed. The storm damaged more than five million acres of forestland in Florida and Georgia with an estimated value of $2 billion. Most of the forest landowners impacted by the storm received little or no compensation for their trees. Allowing a fair market value deduction reduces risk for timberland owners and makes it easier to justify capital investments and holding timber on the stump.

Forest owners are encouraged to contact their representatives in Congress to voice their support for including the DRA in the Farm Bill.

FOR MORE INFORMATION ON THE ISSUE AND FOR CONTACTING YOUR REPRESENTATIVES: https://bit.ly/3J7vvVf