[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                    THE U.S. WOOD PRODUCTS INDUSTRY: 
                FACILITATING THE POST COVID-19 RECOVERY

=======================================================================

                                HEARING

                               BEFORE THE

               SUBCOMMITTEE ON CONSERVATION AND FORESTRY

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 21, 2021

                               __________

                           Serial No. 117-13
                           

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                             __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
45-627 PDF                 WASHINGTON : 2021                     
          
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                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                 ______

               Subcommittee on Conservation and Forestry

               ABIGAIL DAVIS SPANBERGER, Virginia, Chair

FILEMON VELA, Texas                  DOUG LaMALFA, California, Ranking 
CHELLIE PINGREE, Maine               Minority Member
ANN M. KUSTER, New Hampshire         SCOTT DesJARLAIS, Tennessee
TOM O'HALLERAN, Arizona              RICK W. ALLEN, Georgia
JIMMY PANETTA, California            TRENT KELLY, Mississippi
J. LUIS CORREA, California           DUSTY JOHNSON, South Dakota
KIM SCHRIER, Washington              MARY E. MILLER, Illinois
                                     BARRY MOORE, Alabama

             Felix Muniz, Jr., Subcommittee Staff Director

                                  (ii)
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
LaMalfa, Hon. Doug, a Representative in Congress from California, 
  opening statement..............................................     4
Spanberger, Hon. Abigail Davis, a Representative in Congress from 
  Virginia, opening statement....................................     1
    Prepared statement...........................................     3
    Submitted statement on behalf of National Lumber and Building 
      Material Dealers Association...............................    61
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     6

                               Witnesses

Schienebeck, Henry, Chair, Governmental Relations Committee, 
  American Loggers Council, Gilbert, MN..........................     8
    Prepared statement...........................................     9
Dauzat, Caroline, Co-Owner, Rex Lumber, Graceville, FL...........    20
    Prepared statement...........................................    22
    Submitted questions..........................................    63
Imbergamo, William, Executive Director, Federal Forest Resource 
  Coalition, Washington, D.C.....................................    26
    Prepared statement...........................................    28
Macdonald, Iain, Director, TallWood Design Institute, Oregon 
  State University, Corvallis, OR................................    30
    Prepared statement...........................................    32
    Submitted question...........................................    64
    Supplementary material.......................................    63

 
                   THE U.S. WOOD PRODUCTS INDUSTRY: 
                     FACILITATING THE POST COVID-19
                                RECOVERY

                              ----------                              


                        WEDNESDAY, JULY 21, 2021

                  House of Representatives,
                 Subcommittee on Conservation and Forestry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:02 a.m., in 
Room 1300, Longworth House Office Building, Hon. Abigail Davis 
Spanberger [Chair of the Subcommittee] presiding.
    Members present: Spanberger, Pingree, Kuster, O'Halleran, 
Panetta, Schrier, LaMalfa, DesJarlais, Kelly, Johnson, Miller, 
Moore, Thompson (ex officio), and Baird.
    Staff present: Grayson Haynes, Ross Hettervig, Martin 
Prescott III, Felix Muniz, Jr., John Busovsky, Patricia 
Straughn, Erin Wilson, and Dana Sandman.

     OPENING STATEMENT OF HON. ABIGAIL DAVIS SPANBERGER, A 
            REPRESENTATIVE IN CONGRESS FROM VIRGINIA

    The Chair. This hearing of the Subcommittee of Conservation 
and Forestry entitled, The U.S. Wood Products Industry: 
Facilitating the Post COVID-19 Recovery, will come to order.
    Welcome, and thank you for joining today's hearing. After 
brief remarks, Members will receive testimony from our 
witnesses today and then the hearing will be open to questions.
    Members will be recognized in order of seniority, 
alternating between Majority and Minority Members and in order 
of arrival for those Members who have joined us after the 
hearing was called to order.
    When you are recognized, you will be asked to unmute your 
microphone and you will have 5 minutes to ask your questions or 
make a comment. If you are not speaking, I ask that you remain 
muted in order to minimize background noise.
    In order to get to as many questions as possible today, the 
timer will stay consistently visible on your screen.
    Good morning. Thank you for being here today for today's 
hearing, ``The U.S. Wood Products Industry: Facilitating the 
Post COVID-19 Recovery.''
    The U.S. wood products industry directly employs about one 
million people and contributes more than $5 billion in state 
and local taxes. In my home of Virginia, we have 16 million 
acres of forested land and forest-related businesses contribute 
$156 million to our state's economy each year and it supports 
more than 27,000 jobs.
    And as we join today to talk about the opportunities within 
our wood products industry and our forest lands, I must 
acknowledge the raging forest fires bringing devastation to 
much of the western United States, including in Mr. LaMalfa's 
district and the districts represented by so many of our 
colleagues on this Subcommittee and full Committee.
    While our next hearing will dive directly into issues 
related to forest fires, focusing on wood products industry 
with our attention on the infrastructure and resource that is 
America's forestland it is an important element of that larger 
future conversation.
    Like so many industries, the wood products industry 
experienced severe and uneven impacts as a result of COVID-19, 
and while some sectors of the industry maintained or even 
increased economic activity, many sectors have been negatively 
impacted through market pressures, supply chain interruptions, 
labor shortages, and transportation challenges, among other 
disruptions.
    These effects have rippled through the supply chain, in 
many cases adversely affecting landowners, harvesting and 
holding businesses, processors, manufacturers, retailers, and 
consumers.
    Independent reporting suggest economic losses for various 
sectors within the wood products industry have ranged upwards 
of 40 percent. American consumers also saw the pandemic's 
impact on the industry firsthand.
    For many consumers, the pulp and paper sector was top-of-
mind during widespread shortages of tissue products, while the 
lumber sector reported record high prices due to manufacturing 
and processing constraints.
    In the wake of the pandemic, Congress provided relief to 
small businesses through various legislative packages, the 
Paycheck Protection Program authorized by the CARES Act and 
later extended in subsequent legislation, provided short-term 
low interest loans to small businesses for payroll and 
operating costs.
    More recently, Congress authorized direct relief to the 
industry through the Consolidated Appropriations Act of 2021. 
This bill provides up to $200 million in relief to timber 
harvesting and hauling businesses who have experienced a loss 
of at least ten percent due to the pandemic.
    Both the Ranking Member and I supported this effort and 
wrote the Biden Administration to request that the relief be 
released and questioning why months after the fund was created 
the support still hadn't been released. I led a similar effort 
with the Virginia delegation.
    However, yesterday I was thrilled to see that the USDA 
finally announced that applications for these funds will go 
live tomorrow, July 22nd.
    I would like to thank Secretary Vilsack and those at USDA 
for their work in getting these funds to the timber haulers and 
harvesters impacted by the pandemic, and our Subcommittee 
stands ready to support USDA as these funds are disbursed to 
make sure that those who need the relief are able to access it.
    And as we turn the corner from the worst of the pandemic, 
Congress has an important opportunity before us. All across 
Capitol Hill and, certainly, in my district, we are talking 
about the physical infrastructure needs of our country, and as 
negotiations continue towards a potential bipartisan physical 
infrastructure bill, our opportunity is to ensure that we are 
putting resiliency, the next generation of climate-smart 
infrastructure, and, importantly, our American forestry sector 
at the forefront of that conversation.
    Our forests as well as the products they support are 
critical American infrastructure. They are natural 
infrastructure. They are green infrastructure.
    They sequester carbon while growing our economy, and the 
innovative wood products that come from this industry present 
tremendous opportunity.
    The use of nanocellulose-infused concrete and cross-
laminated timber as examples present tremendous benefits and 
opportunities.
    They can reduce building weight, equal or exceed the 
strength of traditional concrete or steel beams, all while 
making use of an American domestic asset, and all while 
reducing the embodied carbon footprint of our buildings, all 
while expanding opportunities for rural communities and our 
efforts to build a more resilient supply chain here in the 
United States.
    I am excited to hear from our witnesses about how Congress 
can support infrastructure policy that protects our 
forestlands, expands reforestation efforts, provides incentives 
for the use of these innovative technologies and leads us into 
the future.
    I am also curious to hear from our witnesses today about 
their experiences and challenges as a result of COVID-19, 
whether the short-term relief has been helpful, how temporary 
relief could have been better designed to weather the economic 
downturns, and while the worst of COVID-19 is, hopefully, 
behind us, being prepared for the possibility of future 
disruptions and future challenges is always a good effort to 
undertake.
    I hope we can explore more durable policy options to ensure 
the industry can thrive well into the future.
    I look forward to hearing from our witnesses today
    [The prepared statement of Ms. Spanberger follows:]

 Prepared Statement of Hon. Abigail Davis Spanberger, a Representative 
                       in Congress from Virginia
    Good morning! Welcome to today's hearing--``The U.S. Wood Products 
Industry: Facilitating the Post COVID-19 Recovery.'' The U.S. wood 
products industry directly employs about one million people and 
contributes more than $5 billion in state and local taxes. In my home 
of Virginia, we have 16 million acres of forested land, and forest-
related businesses contribute $156 million to our state's economy each 
year and support more than 27,000 jobs.
    Like many industries, the wood products industry experienced severe 
and uneven impacts as a result of COVID-19. While some sectors of the 
industry maintained or even increased economic activity, many sectors 
have been negatively impacted through market pressures, supply chain 
interruptions, labor shortages, and transportation challenges--among 
other disruptions. These effects have rippled through the supply chain, 
in many cases adversely affecting landowners, harvesting and hauling 
businesses, processors, manufacturers, retailers, and consumers.
    Independent reporting suggest economic losses for various sectors 
within the wood products industry have ranged up to 40 percent. 
American consumers also saw the pandemic's impacts on the industry 
firsthand. For many consumers, the pulp and paper sector was top-of-
mind during the widespread shortage of tissue products, while the 
lumber sector reported record high prices due to manufacturing and 
processing constraints.
    In the wake of the pandemic, Congress provided relief to small 
businesses through various legislative packages. The Paycheck 
Protection Program authorized by the CARES Act and later extended in 
subsequent legislation, provided short-term low-interest loans to small 
businesses for payroll and operating costs. More recently, Congress 
authorized direct relief to the industry through the Consolidated 
Appropriation Act of 2021. The bill provides up to $200 million in 
relief to timber harvesting and hauling businesses who experienced a 
loss of at least 10% due to the pandemic. Both the Ranking Member and I 
supported this effort and have written to the Biden Administration to 
request that relief be made available as soon as possible.
    Yesterday, I was thrilled to see USDA announce that applications 
for these funds would go live July 22nd. I would like to thank 
Secretary Vilsack and all those at USDA for their work in getting these 
funds to those timber haulers and harvesters impacted by the pandemic. 
Our Subcommittee stands ready to support USDA as these funds are 
disbursed to make sure all those who need relief are able to access it.
    As we turn the corner from the worst of the pandemic, Congress has 
an important opportunity before us, as we consider options for more 
resilient and climate-smart infrastructure. Our forests--as well as the 
wood products they support--are critical green infrastructure that help 
sequester carbon while growing our economy. I am excited to hear from 
our witnesses about how Congress can support infrastructure policy that 
protects our forestland, expands reforestation efforts, provides 
incentives for the use of innovative wood products in construction like 
nanocellulose-infused concrete and cross-laminated timber that reduce 
the embodied carbon footprint of our buildings--all while expanding 
opportunities for rural communities and building more resilient supply 
chains in the industry.
    I am also curious to hear from our witnesses today on the 
challenges they have experienced as a result of COVID-19, whether 
short-term relief has been helpful, and how temporary relief could be 
better designed to weather economic downturns. Though the worst of 
COVID-19 is hopefully behind us, we must be prepared for the 
possibility of future disruptions. I also hope we can explore more 
durable policy options to ensure the industry can thrive well into the 
future.
    I look forward to hearing from our witnesses today. With that I 
would like to recognize Ranking Member LaMalfa for any opening remarks 
he may have. Thank you.

    The Chair. And with that, I would like to recognize Ranking 
Member LaMalfa for any opening remarks he may have.

  OPENING STATEMENT OF HON. DOUG LaMALFA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. LaMalfa. Thank you, Madam Chair. I appreciate your 
convening this hearing today and also your work in partnership. 
I appreciate our ability to work on these issues together in a 
bipartisan way, in a productive way. So thank you for that.
    So good morning. Indeed, from furniture to baseball bats 
and paper to lumber, our forests provide countless products and 
essential feedstocks for many American industries.
    Collectively, forest-related businesses support over one 
million direct jobs and 2.9 million indirect jobs nationwide, 
generating approximately $107 billion in GDP.
    These industries are economic engines that provide rural 
jobs and revenues to forest counties while also promoting 
important forest health.
    Active forest management encourages healthy forests and 
will decrease the threat and severity of wildfire by restoring 
forest stands to their natural conditions.
    In 1987, our Federal forests saw more than 11 billion board 
feet harvested. Last year, only 3.2 billion board feet was 
harvested, almost \1/4\ of what had been normal. This has led 
to more overstocking in our forests.
    The COVID pandemic did create immeasurable challenges for 
families and individuals, small businesses, and the economy 
nationwide.
    In countless ways to varying degrees, these difficulties 
were felt in forest communities and throughout the various 
industries within the forest products supply chain.
    Over the past year, there has been considerable attention 
on the lumber and housing industries as lumber prices, indeed, 
have skyrocketed due to a dramatic and unexpected spike in 
demand.
    At its peak, lumber prices exceeded $1,600 per 1,000 board 
feet, an increase of three to four times the historical prices. 
While today's lumber prices are still somewhat elevated, it is 
important to note that they have moderated somewhat recently as 
supply-and-demand have slowly began to realign.
    However, as this normalization continues to occur, COVID-19 
has highlighted some of the issues that exist in the forest 
products and lumber supply chains very importantly, such as a 
lack of sawmill capacity.
    We have seen so many sawmills drop out of the industry in 
the last 20 to 30 years, as well as ongoing workforce and 
transportation needs.
    As we have today's discussion on issues impacting forest 
products, we must also address the elephant in the room. I am 
not sure it is really an elephant in the room these days 
because it is so obvious for everybody. We will invite donkeys, 
too.
    The massive wildfires that are burning across California 
and in the West and, really, it is no joking matter. It is tens 
of thousands of new acres going up each day.
    I believe the haze we have over Washington, D.C., right 
now, is rooted in fires coming from California and Oregon, and 
sending that smoke across the whole continent.
    I believe we must be also talking about timber harvesting 
and the need for more active management in our National 
Forests, which all goes hand-in-hand with the issue of wildfire 
and safety, as well as the supply chain we are talking about 
mostly here today.
    The wildfire crisis continues to wreak havoc on the West. 
We should focus on practical solutions that will address 
wildfire prevention, the declining health of our National 
Forests, the overload of inventory in the forests.
    Just tour California for a little while and you will see 
the urgent needs of millions of Americans who live in these 
areas.
    The West is still reeling from the 2020 fire year, which 
burned over 10 million acres of forest, and it appears that 
2021 could be an even more difficult year as we have already 
surpassed that number of fires and acres at the same point in 
time last year, already 1 million acres burned, and it looks 
like a very, very long season in front of us. God help us that 
maybe it doesn't have to be.
    We hope to have the Chief of the Forest Service and the 
Chief of NRCS testify before the Subcommittee sometime this 
year.
    We also need hearings on the very thoughtful forestry bills 
that our Members have put forward this Congress, which are 
designed to empower the Forest Service to better manage our 
forests and reduce wildfire.
    At its inception, the fundamental goal of our National 
Forest System was active management of our National Forests to 
provide the nation with a reliable source of timber and forest 
products, indeed, the multiple uses that they used to 
advertise.
    The Forest Service must return to this model. Our job in 
Congress is to provide them the authorities and resources to 
proactively address this crisis while also being able to 
fulfill all the other statutory mandates we have placed upon 
the agency.
    The forest products industry is an important partner with 
both the Forest Service and our rural communities. With the 
right tools and policies in place, we can encourage more 
effective forest management, healthy rural economies, and a 
vibrant forest products industry.
    I want to thank our witnesses for being with us today. We 
look forward to their testimonies, expertise, and your 
recommendations on how we can fix these important issues.
    I yield back, Madam Chair. Thank you.
    The Chair. I would like to recognize Ranking Member 
Thompson for his opening comments.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Chair Spanberger, Ranking Member LaMalfa, 
thank you both for convening today's very timely and incredibly 
important hearing.
    The forest products industry is critically important to 
many rural communities, supporting both economic and forest 
health. I look forward to hearing from our witnesses today to 
discuss how this critical industry has been impacted over the 
years and how we can support it.
    As part of this discussion, it is essential that we also 
consider the ongoing challenges before the Forest Service, the 
great need for dramatically increased forest management and the 
devastating wildfires that continue to burn the West.
    With over 80 major fires burning in the West, more acres 
and more fires have already burned this year than in the same 
time last year.
    The Bootleg fire raging in Oregon has now become the third 
largest wildfire in the state's history and air quality is 
being affected as far away as New York City.
    There are urgent issues that must be addressed by the 
Forest Service and this Congress, we need more active 
management, and the Forest Service needs our support to do 
that.
    I very much appreciate today's discussion and the 
recommendations from our witnesses to support the forest 
products supply chain.
    And thank you once again, Madam Chair and Mr. Ranking 
Member, and with that I yield back.
    The Chair. The chair would request that Members submit 
their opening statements for the record so that witnesses may 
begin their testimony to ensure that there is ample time for 
questions.
    I am pleased to welcome a distinguished panel of witnesses 
at our hearing today. Our witnesses bring to our hearing a wide 
range of experience and expertise, and I thank you all for 
joining us.
    Our first witness today is Henry Schienebeck. Mr. 
Schienebeck was a self-employed logger and trucker for 32 years 
prior to being named Executive Director of the Great Lakes 
Timber Professionals Association in 2008. He leads the 
organization in its mission of, quote, ``enhancing a multiple 
use forest for future generations.''
    Mr. Schienebeck also serves on the Wisconsin Council on 
Forestry and Sustainable Resource Institute Board of Directors 
and the American Loggers Council Legislative Committee in 
addition to a number of other forest industry-related 
committees and boards.
    Our next witness today is Caroline Dauzat. Mrs. Dauzat is a 
fourth-generation co-owner at Rex Lumber, a high-volume 
southern yellow pine sawmill in Graceville, Florida. Rex Lumber 
has been manufacturing forest products since 1926 and 
specializes in southern yellow pine lumber.
    The company has four mills--two in Florida, one in 
Mississippi and one in Alabama. Mrs. Dauzat also serves as 
President of the Apalachee Pole Company, Incorporated. She 
received a Master's of Business Administration from Loyola 
University and a Bachelor of Arts from the University of 
Florida.
    Our third witness today is Bill Imbergamo. Mr. Imbergamo is 
the Executive Director of the Federal Forest Resource 
Coalition, a position he has held since 2011. He has 30 years 
of natural resource experience in Washington as an association 
Executive Policy Analyst and senior Congressional staff member.
    Prior to his current position, he served as professional 
staff on the House Agriculture Committee, and then a senior 
professional staff on the Senate Agriculture, Nutrition, and 
Forestry Committee.
    Mr. Imbergamo holds a Bachelors degree from the State 
University of New York at Plattsburgh.
    Our fourth and final witness is Iain Macdonald. Mr. 
Macdonald is the Director of TallWood Design Institute, a 
unique research and education collaboration between the Oregon 
State University Colleges of Forestry and Engineering and the 
University of Oregon College of Design.
    The TallWood Design Institute conducts applied research and 
provides outreach and education to professionals in the 
architecture, engineering, construction, and wood products 
manufacturing sectors.
    Mr. Macdonald has been in his current role since 2016 and 
has worked in roles supporting innovation in the wood products 
industry for more than 20 years.
    Welcome to our witnesses today. We will now proceed with 
hearing your testimony. You will each have 5 minutes. The timer 
should be visible on your screen and we will count down to 
zero, at which point your time has expired.
    I apologize if I have pronounced any of your names 
incorrectly and I welcome you to correct me as part of your 
opening statement. We will begin with Mr. Schienebeck. Please 
begin when you are ready.

            STATEMENT OF HENRY SCHIENEBECK, CHAIR, 
  GOVERNMENTAL RELATIONS COMMITTEE, AMERICAN LOGGERS COUNCIL, 
                          GILBERT, MN

    Mr. Schienebeck. Good morning, Chair Spanberger, Ranking 
Member LaMalfa, and distinguished Committee and Subcommittee 
Members.
    My name is Henry Schienebeck and I appear before you today 
representing the American Loggers Council based in Gilbert, 
Minnesota, as Chair of the Government Relations Committee.
    The ALC is a national trade organization providing 
exclusive representation for timber harvesting and hauling 
businesses across the United States.
    I report today that the impact of COVID-19 is severe enough 
that for the first time in my lifelong history as a logger, 
timber harvesters and haulers found it necessary to ask the 
Federal Government for financial assistance.
    Except for toilet paper, tissue paper, face masks, paper 
gown products, the forest products manufacturing including 
sawmills, building material manufacturers, and printing paper 
producers drastically curtailed or stopped production at the 
beginning of the pandemic.
    While we are thankful the Federal Government determined 
timber harvesting and hauling to be essential, it is 
understandable that with stay-at-home orders, product demand 
was unpredictable, which had an immediate negative impact on 
the industry's ability to purchase raw material produced by 
timber harvesters.
    As the pandemic evolved, the appetite for homeowners to 
implement do-it-yourself projects increased sharply and demand 
for building materials skyrocketed.
    Contrary to what many believe, timber harvesters and 
haulers have not benefited from the record high finished 
product prices.
    This is especially true for Michigan, Minnesota, Wisconsin, 
where wood consumers have closed their doors because of COVID, 
causing an overabundance of raw material. It became a supply-
and-demand market on both the raw material end and finished 
product side of manufacturing.
    It is important to understand that, like farmers, these 
small family-owned and -operated logging and timber hauling 
businesses are capital intensive and generate income only when 
product is delivered to market.
    Reduced prices for raw material, coupled with increased 
operational costs, particularly fuel, has resulted in a ten to 
40 percent loss in revenue for many companies compared to the 
same 2019 time-frame.
    Proof of an approximately $1.8 billion loss in revenue is 
supported with multiple studies and surveys which are included 
in the full testimony. The ALC survey showed 61 percent of 
loggers received financial help from the Paycheck Protection 
Plan.
    Timber harvesters and haulers are very appreciative of 
having PPP funds available and their lenders are as well. 
Without additional COVID relief, the generational businesses 
will continue struggling financially to survive.
    If they fail, the nation will be hard pressed to find 
individuals willing to make the investments required to keep 
wood fiber supplied to manufacturers of products we all use 
daily.
    The Consolidated Appropriations Act allows the Department 
of Agriculture to provide up to $200 million in assistance for 
timber harvesting and hauling businesses. Through no fault of 
their own, the Farm Service Agency has no experience in dealing 
with timber harvesters and haulers.
    USDA and the Forest Service and FSA worked diligently to 
make these funds available, which happened yesterday, as was 
pointed out, and we greatly appreciate their efforts.
    In addition to clean air, healthy forests provide clean 
water, wildlife habitat, and generate billions of dollars worth 
of well-paying forest industry jobs in rural America.
    Healthy forests and healthy forest industry go hand-in-
hand. One cannot effectively exist without the other. Post 
pandemic, economic recovery is challenged logistically by 
limited transportation capacity.
    ALC continues advocating for safer, more efficient 
transportation with the introduction of H.R. 2213, the Safe 
Routes Act. This legislation will allow states to authorize 
truck weights on the Federal interstate equal to state-approved 
local road weight limits.
    The timber industry grows and harvests trees just like 
other agricultural commodities. Recognizing the timber industry 
as agriculture would provide silviculture parity with 
agriculture.
    To maintain and improve America's forests for maximum 
social benefit, including climate change, sequestration of 
carbon, supportive of rural economies and recreation, 
sustainable forest management must continue to improve.
    Forest management is possible only with a secure 
professional logging workforce. In addition, recognizing new 
technologies like laminated and cross-laminated timber and 
biofuels industry will promote investment in facilities to use 
wood and produce new value-added products.
    These recommendations will have minimal fiscal impact and 
are simply policy and legislative changes to support climate 
change initiatives, reduce fossil fuel consumption, improve 
forest health, and contribute significantly to post COVID-19 
wood products industry recovery.
    That will end my testimony.
    [The prepared statement of Mr. Schienebeck follows:]

Prepared Statement of Henry Schienebeck, Chair, Governmental Relations 
            Committee, American Loggers Council, Gilbert, MN
    Chair Spanberger, Ranking Member LaMalfa, and distinguished Members 
of the Subcommittee on Conservation and Forestry, my name is Henry 
Schienebeck. I am the Governmental Relations Committee Chair for the 
American Loggers Council, the Executive Director for the Great Lakes 
Timber Professionals Association (GLTPA) representing Michigan and 
Wisconsin, and a former self-employed logger who has worked in forest 
industry for the past 47 years. I appear before you today representing 
the American Loggers Council (ALC). The ALC is the only national trade 
organization providing exclusive representation for timber harvesting 
and timber hauling businesses across the United States of America.
    I report to you the impact of COVID-19 is severe enough that for 
the first time in my life-long career as a logger, timber harvesters 
and haulers have found it necessary to ask the Federal Government for 
financial assistance. Except for toilet paper, tissue paper, face 
masks, and paper gowns, forest products manufacturers including 
sawmills, building material manufacturers, and printing paper 
producers, drastically curtailed or stopped production altogether when 
COVID-19 turned into a pandemic. While we are thankful the Department 
of Homeland Security determined timber harvesting and hauling as 
essential, it is understandable that with stay-at-home orders, product 
demand was unpredictable which had an immediate negative impact on 
industries ability to purchase raw material from timber harvesters.
    Minnesota and Wisconsin were impacted further with the announcement 
that two of the region's largest consumers of roundwood pulp would 
close their doors due to the impact of COVID 19. (Press release 
attached). The announcement to close the Wisconsin Rapids, Wisconsin 
and Duluth, Minnesota paper mills owned by Verso, came to GLTPA's 
office on June 9th, 2020, at 8:45 a.m. By 9:15 a.m. the same day, all 
shipments of wood to these mills were completely halted. In fact, some 
producers were told that if their trucks were more than an hour away, 
they would be turned around and sent back with their cargo.
    The regions timber harvesters and truckers were shocked and in 
disbelief that something like this happened. The Wisconsin Rapids mill 
alone, which employed between 800 and 900 workers, consumed 
approximately twenty five percent (25%) of the areas roundwood pulp. 
Ultimately these closures, coupled with the curtailment of lumber and 
building material production, created an oversupply of raw material. 
The imbalance of supply-and-demand resulted in reductions for the 
delivered price and the slashing of quotas for raw material added to 
the harvesters and haulers entered a state of panic. Timber harvesters 
and haulers are paid by production and only when raw material is 
delivered to the mill do they receive compensation. They must produce 
and deliver wood volume to generate income.
    Stimulated by the pandemic, the sale of toilet paper and other 
household paper product purchases escalated to the point shortages 
occurred and purchases were limited to one product per customer per 
visit. Along with the paper shortage the appetite for homeowners to 
implement do-it-yourself projects increased sharply and demand for 
building material skyrocketed along with prices for this material.
    Contrary to what many believe, timber harvesters and haulers have 
not benefitted from the record high finished product prices. This is 
especially true in Michigan, Wisconsin, and Minnesota where wood 
consumers have closed their doors because of COVID. It is important to 
understand that, like farmers and ranchers, these small, family owned, 
and operated logging and timber hauling businesses are capital 
intensive and generate a very modest 1% to 3% profit on an annual 
basis.
    It is not unusual for a two- or three-person timber harvesting 
operation to have $3.5 million worth of equipment on a bank loan. This 
does not include the daily operating capital needed for fuel, 
insurance, parts, and other consumables. Without COVID relief for these 
generational businesses to survive, the nation will be hard pressed to 
find individuals willing to make the investments required to supply 
wood fiber to manufacturers of products we all use daily.
    Reduced prices for raw material coupled with increased operational 
costs, particularly fuel, has resulted in a 10% to 40% loss in revenue 
for many companies compared to the same 2019 time-frame. Proof of this 
loss is supported in two ways. The American Loggers Council began an 
annual logging business survey on November 1, 2020 and followed up with 
an additional survey on January 15, 2021. The 2021 survey included 
general questions about how the COVID-19 pandemic impacted operations. 
Detailed answers from the questions are included as Exhibit A in this 
testimony.
    In general, the survey results show sixty nine percent (69%) of 
logging businesses surveyed reported the pandemic had either a somewhat 
or very negative impact on their businesses. Sixty one percent (61%) 
reported getting some relief from a Federal relief program with the 
majority of those who participated stating relief funds came through 
the Paycheck Protection Plan (PPP). Twenty six percent (26%) of the 
businesses did not participate in any Federal relief fund program as of 
December 31, 2020. Ninety-five percent (95%) of the businesses surveyed 
supported efforts to secure additional funding for timber harvesting 
and timber hauling businesses. Also, please know that timber harvesters 
and haulers are very appreciative of having PPP funds available and we 
are quite certain their lenders are as well.
    In addition, the ALC contracted with Forest2Market to conduct a 
study on the actual losses incurred by the industry due to the COVID-19 
pandemic. The study, attached as Exhibit B shows a loss of 
approximately $1.8 Billion to the industry because of the pandemic 
related loss of markets for raw material.
    On December 27, 2020, the Consolidated Appropriations Act became 
law and included language allowing the U.S. Department of Agriculture 
to provide up to $200 million to assist those timber harvesting and 
timber hauling businesses that have lost 10% or more of their revenue 
from January 1, 2020, through December 1, 2020, compared to the same 
period in 2019. The lack of parity between agriculture and silviculture 
is the main reason for the delay to access of the $200 million for 
timber harvesters and haulers. Through no fault of their own the Farm 
Service Administration (FSA) has no experience in dealing with timber 
harvesters and haulers however, USDA, USFS and FSA are working 
diligently to make these funds available, and we greatly appreciate 
their efforts. When available, these monies will aid timber harvesters 
and haulers in recovering from the pandemic induced losses and keep 
them from losing their businesses.
The Role of Forest Management in Addressing Environmental Concerns
    Healthy forests are vital to addressing climate change. Healthy 
forests are those which have been sustainably managed for multiple use, 
and are growing live, healthy trees of all ages which sequester carbon. 
Dead and dying trees, caused by insect and disease infestation, and 
catastrophic fire, contribute to carbon emissions. Sustainably managed 
forests are a major contributor to carbon sequestration and climate 
change mitigation which is why the U.S. and much of the world have 
joined the Trillion Tree Initiative. In addition to clean air, healthy 
forests provide clean water, wildlife habitat and generate billions of 
dollars providing well-paying forest industry jobs and outdoor 
recreation in rural America.
    The most effective way to maintain healthy forests is through 
forest management. This is proactively accomplished with trained 
logging professionals and land managers guided by fully vetted 
management plans. Timber harvesting provides the raw material to 
produce forest products such as paper, boards, biomass-based fuels, and 
other products used every day by all people. Forest products from 
harvested and processed timber ``store'' captured carbon well beyond 
the life of the trees that absorbed it. Healthy forests and a healthy 
forest industry go hand-in-hand. One cannot effectively exist without 
the other.
    Forest management is a renewable, sustainable cycle of growing 
trees, harvesting trees, converting them into products and includes 
both natural regeneration and reforestation by planting. As seen with 
global imaging the United States now has more forested land than it did 
100 years ago, and more trees are grown annually than are harvested. Of 
note, is that tree harvesting, and removal occurs on less than two 
percent (2%) of forest land annually as compared to Three percent (3%) 
of forest land disturbed annually by natural events such as insects, 
disease, and fire.
    Increasing timber product utilization through new technology and 
product development can facilitate the Post COVID-19 U.S. Wood Products 
Industry Recovery. As an example, Cross Laminate Timber (CLT) ``Mass 
Timber'' construction technology has developed structural timber 
products comparable to steel and concrete products for use in multi-
story building construction. Additionally, cellulosic forest-based bio-
crude has been developed utilizing wood waste residuals, biomass and 
unmerchantable timber that can supplement or replace fossil fuel in 
refineries or boiler systems.
Infrastructure Bill Support for Wood Products Industry Recovery
    The Post Pandemic economic recovery is being challenged 
logistically by limited transportation capacity. It is similar in the 
timber industry. The American Loggers Council continues advocating for 
safer, more efficient transportation with the introduction of the 
``Safe Routes Act''. This legislation would allow for states to 
authorize truck weights on Federal interstates equal to local and state 
road weight limits. When passed into law, this legislation will reduce 
the number of trucks on local roads and reduce driver hours by reducing 
the number of truck trips necessary to transport timber. Reduced truck 
trips will reduce fossil fuel consumption and exhaust emissions. 
Similar Federal legislation has been enacted in Minnesota and Wisconsin 
for specific corridors.
    The American Timber Industry grows and harvests trees similar to 
how other agricultural commodities are grown and harvested. However, it 
is not always classified or afforded the same benefits other 
agricultural commodities receive.
    As an example, standing timber is considered an agricultural 
commodity, yet timber harvesting and hauling timber is not considered 
an agricultural activity. A Virginia Pine can be harvested as a 
Christmas tree and receive recognition as an agricultural activity. If 
the same tree is harvested and transported to a pulp mill or sawmill it 
does not qualify as an agricultural activity. The ALC requests 
consideration be given to provide parity between silviculture and 
agriculture.
    Wisconsin is the first state to establish a co-op of timber 
industry stakeholders to purchase closed mills and reopen them. This 
structure would be like farmers and ethanol co-op's and allow for the 
vertical integration of the logging and trucking supply side within the 
entire forest products process. Federal support and assistance for the 
timber industry to implement this new business model will contribute to 
the stabilization and recovery of the American timber industry.
    To maintain and improve America's forests for maximum social 
benefit including climate change mitigation, sequestration of carbon, 
support of rural economies and recreation, sustainable forest 
management must continue to improve. Forest management is possible only 
with a secure, professional logging work force to perform the work. To 
have such a work force, forest products industry is needed to absorb 
the vegetation being grown in the nation's forest. Every consideration 
must be given to provide new technologies such as laminated and cross 
laminated timer, and the emerging biofuels industry, the ability to 
acquire raw material. This in turn will promote investment in 
facilities to produce value-added products.
    These recommendations will have minimal to no governmental fiscal 
impact but are simply policy and legislative changes that will support 
climate change initiatives, reduce fossil fuel consumption, improve 
forest health, address supply chain disruptions, improve transportation 
safety, and contribute significantly to the post COVID-19 wood products 
industry recovery.
    Again, thank you for allowing the ALC to provide testimony 
regarding the impacts of the COVID-19 pandemic on timber harvesters and 
haulers. We look forward to working with Members to ensure a speedy 
post pandemic recovery for the timber harvesting and timber hauling 
sector.
    I am happy to answer any questions.
                               Attachment
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

[http://investor.versoco.com/2020-06-09-Verso-Announces-Necessary-
Actions-to-Offset-Unprecedented-Market-Decline-Due-to-COVID-19]
Verso Announces Necessary Actions to Offset Unprecedented Market 
        Decline Due to COVID-19
    Miamisburg, Ohio, June 9, 2020/PRNewswire/ \1\--Verso Corporation 
(NYSE: VRS) today announced that it is taking immediate actions to 
offset unprecedented market decline due to the COVID-19 pandemic and to 
reposition the company for future success.
---------------------------------------------------------------------------
    \1\ http://www.prnewswire.com/.
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    Verso will indefinitely idle paper mills in Duluth, Minnesota, and 
Wisconsin Rapids, Wisconsin, while exploring viable and sustainable 
alternatives for both mills, including restarting if market conditions 
improve, marketing for sale or closing permanently. The decision to 
reduce production capacity is driven by the accelerated decline in 
graphic paper demand resulting from the COVID-19 pandemic. The stay-at-
home orders have significantly reduced the use of print advertising in 
various industries, including retail, sports, entertainment and 
tourism. According to Fastmarkets RISI, North American printing & 
writing demand fell by 38% year-over-year in April, and operating rates 
are expected to drop well below 70% during the second quarter.
    ``It is critical that we maintain a healthy balance sheet and focus 
on cash flow, while balancing our supply of products and our customers' 
demand,'' said President and Chief Executive Officer Adam St. John. 
``After a comprehensive review of post-pandemic demand forecasts and 
capacity, we made the difficult decision to idle the Duluth and 
Wisconsin Rapids mills. We expect the idling of these facilities to 
improve our free cash flow. The sell through of inventory is expected 
to offset the cash costs of idling the mills.''
    Verso expects to idle the Duluth Mill by the end of June 2020, and 
the Wisconsin Rapids Mill by the end of July 2020, resulting in the 
layoff of approximately 1,000 employees. Verso will continue to supply 
graphic and specialty papers in roll and sheet form, as well as 
packaging papers and pulp.
    ``Decisions to idle facilities are always difficult because they 
impact employees, their families, and communities,'' said St. John. 
``Verso is committed to treating all of our affected employees with 
fairness and respect. As always, safety is our highest priority and 
will be our primary focus during this difficult time.''
About Verso
    Verso Corporation is the turn--to company for those looking to 
successfully navigate the complexities of paper sourcing and 
performance. A leading North American producer of graphic and specialty 
papers, packaging and pulp, Verso provides insightful solutions that 
help drive improved customer efficiency, productivity, brand awareness 
and business results. Verso's long-standing reputation for quality and 
reliability is directly tied to our vision to be a company with passion 
that is respected and trusted by all. Verso's passion is rooted in 
ethical business practices that demand safe workplaces for our 
employees and sustainable wood sourcing for our products. This passion, 
combined with our flexible manufacturing capabilities and an unmatched 
commitment to product performance, delivery and service, make Verso a 
preferred choice among commercial printers, paper merchants and 
brokers, converters, publishers and other end users. For more 
information, visit us online at versoco.com.
Forward-Looking Statements
    In this press release, all statements that are not purely 
historical facts are forward-looking statements within the meaning of 
Section 27A of the Securities Act of 1933 and Section 21E of the 
Securities Exchange Act of 1934. Forward-looking statements may be 
identified by the words ``believe,'' ``expect,'' ``anticipate,'' 
``project,'' ``plan,'' ``estimate,'' ``intend,'' ``potential'' and 
other similar expressions. Forward-looking statements are based on 
currently available business, economic, financial, and other 
information and reflect management's current beliefs, expectations, and 
views with respect to future developments and their potential effects 
on Verso. Actual results could vary materially depending on risks and 
uncertainties that may affect Verso and its business. Verso's actual 
actions and results may differ materially from what is expressed or 
implied by these statements due to a variety of factors, including: 
uncertainties regarding the duration and severity of the COVID-19 
pandemic and measures intended to reduce its spread; the long-term 
structural decline and general softening of demand facing the paper 
industry; adverse developments in general business and economic 
conditions; developments in alternative media, which are expected to 
adversely affect the demand for some of Verso's key products, and the 
effectiveness of Verso's responses to these developments; intense 
competition in the paper manufacturing industry; Verso's ability to 
compete with respect to certain specialty paper products for a period 
of 2 years after the closing of the Pixelle Sale; Verso's business 
being less diversified following the sale of two mills after the 
closing of the Pixelle Sale; Verso's dependence on a small number of 
customers for a significant portion of its business; Verso's limited 
ability to control the pricing of its products or pass through 
increases in its costs to its customers; changes in the costs of raw 
materials and purchased energy; negative publicity, even if 
unjustified; any failure to comply with environmental or other laws or 
regulations, even if inadvertent; legal proceedings or disputes; any 
labor disputes; and the potential those risks and uncertainties listed 
under the caption ``Risk Factors'' in Verso's Form 10-K for the fiscal 
year ended December 31, 2019 and Quarterly Report on Form 10-Q for the 
fiscal quarter ended March 31, 2020, and from time to time in Verso's 
other filings with the Securities and Exchange Commission. Verso 
assumes no obligation to update any forward-looking statement made in 
this press release to reflect subsequent events or circumstances or 
actual outcomes.
                               Exhibit A
American Loggers Council 2020 Logger Survey
Q30  Has the coronavirus pandemic had a positive or negative impact on 
        your overall business operations?
Answered: 404  Skipped: 4



------------------------------------------------------------------------
         Answer Choices                Responses
------------------------------------------------------------------------
              Very positive                 3.71%                  15
          Somewhat positive                 7.92%                  32
Neither positive or negative               19.80%                  80
          Somewhat negative                41.09%                 166
              Very negative                27.48%                 111
                                                     -------------------
  Total.........................                                  404
------------------------------------------------------------------------

Q31  Do you support the American Loggers Council's or other logging 
        association's efforts in seeking relief for the logging and log 
        trucking industry during the pandemic?
Answered: 404  Skipped: 4



------------------------------------------------------------------------
         Answer Choices                Responses
------------------------------------------------------------------------
                        Yes                94.80%                 383
                         No                 5.20%                  21
                                                     -------------------
  Total.........................                                  404
------------------------------------------------------------------------

Q32  Did you receive any type of COVID related relief from a Federal 
        program for your business in 2020?
Answered: 402  Skipped: 6
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


------------------------------------------------------------------------
         Answer Choices                Responses
------------------------------------------------------------------------
                        Yes                60.95%                 245
                         No                39.05%                 157
                                                     -------------------
  Total.........................                                  402
------------------------------------------------------------------------

Q33  What Federal relief program did you participate in?
Answered: 398  Skipped: 10
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


------------------------------------------------------------------------
         Answer Choices                Responses
------------------------------------------------------------------------
 Payroll Protection Program                54.27%                 216
  Economic Injury Disaster Loan             4.77%                  19
        SBA Express Bridge Loan             2.01%                   8
            SBA Debt Relief                 2.01%                   8
Coronavirus Food Assistance                 0.50%                   2
                     Program
 Did not participate in any                36.43%                 145
                 Federal as-
           sistance program
                                                     -------------------
  Total.........................                                  398
------------------------------------------------------------------------

                    Exhibit B Forest2Market Analysis
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    The Chair. Thank you very much, Mr. Schienebeck, and, 
certainly, working frequently with the Virginia Loggers 
Association, as I do, some of the comments you made, I thought, 
were particularly impactful.
    Certainly, what we have heard on the ground relates back to 
the fact that with the rise in price in timber products, so 
many of our timber haulers and foresters did not see the 
benefit there.
    So thank you for making sure that that was a central part 
of your opening statement.
    Mrs. Dauzat, you are now recognized for 5 minutes.

STATEMENT OF CAROLINE DAUZAT, CO-OWNER, REX LUMBER, GRACEVILLE, 
                               FL

    Mrs. Dauzat. Chair Spanberger, Ranking Member LaMalfa, and 
Members of the Committee, thank you for holding this hearing 
and for your continued work to support the forest products 
industry.
    I am Caroline Dauzat, a fourth-generation owner of Rex 
Lumber, which operates four southern yellow pine sawmills. I am 
also a member of the Southeastern Lumber Manufacturers 
Association, which represents mills, lumber treaters, and their 
suppliers throughout the southeast.
    Additionally, I chair the Softwood Lumber Board. My family 
has been in the lumber industry since the early 1900s. Rex 
Lumber Company was founded by my great grandfather, D.W. McRae, 
in 1926 in Graceville, Florida.
    Through years of hard work and dedication, our sawmills now 
employ more than 650 hard-working men and women while on track 
to produce over 800 million board feet of lumber per year in 
2022.
    In addition to lumber, we own a pole and piling 
manufacturer, land management company, and trucking operation. 
In total, we employ 715 individuals.
    We also own timber land in Florida, Georgia, and Alabama. 
Like the rest of the world, the pandemic and market volatility 
took us by surprise. Our mills were at maximum production 
before COVID. When the pandemic hit, we implemented strict 
safety protocols and COVID infections within our company were 
not widespread.
    We were able to utilize the tax credits made available in 
the COVID relief package to offset the cost of providing for 
our employees and their families that were impacted by the 
virus.
    Our smaller trucking company, procurement and pole 
companies were also able to participate in the PPP Loan 
Program. The lumber industry received essential status and the 
market rebounded quickly.
    Rex Lumber was able to produce 689 million board feet from 
June of 2020 to May of 2021, compared to 575 million board feet 
over the same period in the prior year. That is an increase in 
production of 20 percent.
    As a whole, the North American lumber industry increased 
production by 1.4 billion board feet last year. Most of this 
growth was in the South, where production increased 1.1 billion 
board feet, marking a five percent increase over 2019.
    With housing starts being depressed over the past decade, 
the pandemic ushered in skyrocketing demand for new homes, 
renovations, and DIY projects, outpacing production.
    Sawmills have continued to manufacture lumber as quickly as 
possible to meet demand. However, we are constrained by 
manufacturing infrastructure as 36 southern sawmills 
disappeared during the Great Recession. In fact, production of 
southern pine did not return to the previous peak of 19 billion 
board feet in 2005 until 2019.
    Construction of new mills is impeded by the availability of 
sawmill machinery, and while we understand the importance of 
protecting air and water quality, the permitting process can be 
lengthy.
    For example, the Rex Lumber Mill in Troy, Alabama, which 
employs 175 people, broke ground in 2018 and will not meet our 
full production target of 300 million board feet annually until 
next year.
    Throughout the South, projects currently underway are 
expected to increase production more than 2 billion board feet 
over the next 2 to 3 years. This will increase the supply of 
lumber in the long-term, while creating more markets for timber 
land owners.
    Short-term, our primary constraints are workforce and 
transportation shortages. While residential construction has 
been and will continue to be a major portion of our customer 
base, the industry is looking for ways to diversify our markets 
to lessen the impact on sawmill infrastructure when the next 
recession hits.
    Specifically, we are working to increase the use of mass 
timber for nonresidential and larger multifamily housing 
construction projects. In addition to diversifying the domestic 
lumber market, utilizing more wood through mass timber also 
locks up carbon in the built environment.
    This expands markets for landowners that produce trees for 
the benefit of society and the environment, but most 
importantly, creates and sustains good-paying jobs in our rural 
communities.
    The government can encourage increased utilization of wood 
products by supporting the U.S. Forest Products Lab to continue 
valuable research for current and new wood products.
    Additionally, increased utilization in government projects 
such as those managed by the General Services Administration 
and the Department of Defense not only expands mass timber 
markets directly, but also enhances awareness and acceptance of 
these innovative pro-environment products in the commercial 
market.
    In conclusion, volatility within the markets continues to 
be difficult for lumber producers and consumers. Sawmills 
remain drivers in rural economies while providing opportunities 
to meet society's demand for reduced carbon emissions.
    Thank you for your time and I look forward to taking your 
questions.
    [The prepared statement of Mrs. Dauzat follows:]

     Prepared Statement of Caroline Dauzat, Co-Owner, Rex Lumber, 
                             Graceville, FL
    I would like to thank the Committee for holding this hearing on the 
impact that the COVID-19 pandemic has had on lumber supply-and-demand. 
I would also like to thank the Committee for your ongoing work in 
support of the forest products sector to provide benefits for the 
American people, including essential forest products such as lumber and 
packaging, habitat for wildlife, carbon sequestration, recreational 
opportunities, and economic growth.
Company Background
    I am Caroline Dauzat, a fourth-generation owner of Rex Lumber, 
along with my brother and two sisters. Rex Lumber operates four 
Southern Yellow Pine lumber mills in Graceville and Bristol, Florida; 
Brookhaven, Mississippi; and Troy, Alabama. I am also a member and past 
director of the Southeastern Lumber Manufacturers Association (SLMA). 
SLMA is a trade association that represents sawmills, lumber treaters, 
and their suppliers throughout the Southeast. SLMA's members produce 
more than 4.5 billion board feet of solid sawn lumber annually, employ 
over 12,000 people, and responsibly manage over 2 million acres of 
forestland. These sawmills are often the largest job creators in their 
rural communities, having an economic impact that reaches well beyond 
people that are in their direct employment. Additionally, I serve as 
the current chair of the Softwood Lumber Board.
    My family has been involved in the lumber industry since the early 
1900s. Rex Lumber Company was founded by my great grandfather, W.D. 
McRae in 1926 in Graceville, Florida as a cypress sawmill, which later 
became an oak flooring manufacturer. In 1971, my grandfather, Robert 
McRae and his children, including my father Finley McRae, acquired full 
control of the company and proceeded to add a Southern Yellow Pine mill 
in Graceville. In 1980, the Graceville mill was sold and the family 
constructed a new sawmill in Bristol, Florida under the name North 
Florida Lumber. In 2001, my family bought the original Rex Lumber mill 
in Graceville out of bankruptcy and proceeded to completely rebuild the 
mill, restarting production in 2003, marking the return of the Rex 
Lumber name. In 2009, in the depths of the Great Recession, our family 
decided to purchase another sawmill in Brookhaven, Mississippi and 
upgraded the facility for improved high quality, high volume lumber 
manufacturing that is now leading the industry in safety, quality and 
production. In 2017, we made the decision to invest in a greenfield 
mill in Troy, Alabama, which is now a state-of-the-art mill that 
continues to increase production as additional equipment comes online 
and our workforce continues to grow.
    In total, our sawmills employ more than 650 hardworking men and 
women while on track to start producing over 800 million board feet of 
lumber per year in 2022. The lumber we produce is used primarily in 
residential and commercial construction applications. In addition to 
lumber mills, our family owns Apalachee Pole Company, Inc. which 
manufactures utility poles and pilings, North Florida Woodlands, Inc., 
a timber procurement company, and Rex Transportation, which is a 
flatbed and boom trucking company that transports our lumber and poles 
to customers. We also own timberland in Florida, Georgia and Alabama.
    The forestry and forest products sectors directly support over one 
million American jobs. That number increases to 2.9 million jobs if you 
include the indirect jobs supported by the industry.\1\
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    \1\ https://www.forest2market.com/blog/new-report-details-the-
economic-impact-of-us-forest-products-industry.
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COVID-19 Impact and Unexpected Demand Increase
    Like the rest of the world, the pandemic and proceeding market 
volatility took us by surprise. Our mills were operating at maximum 
production before the pandemic hit. When governments ordered the 
economy to shut down, we scrambled to keep our employees safe while 
simultaneously preparing for a recession. Fortunately, COVID infections 
within our company were not widespread. However, when employees were 
unable to work due to COVID infection or exposure, we found the tax 
credits provided for in the Families First Coronavirus Response Act 
helpful in offsetting the cost of providing income and benefits, on a 
temporary basis. Additionally, while Rex Lumber is too large by Small 
Business Administration standards to have participated in the Paycheck 
Protection Program, it was a very useful Program for our trucking and 
pole companies and other smaller lumber producers to maintain payroll 
at the initial uncertainty of the pandemic, before lumber prices 
bounced back and began the drastic increase we witnessed over the last 
year. While there were some issues around implementation of the 
Program, it was helpful overall.
    Our industry received ``essential industry'' status and we 
implemented strict COVID protocols within our operations, so we faced 
minimal disruptions in lumber production. With the continued ramp up of 
our new Troy mill and upgrades to our existing mills, we were able to 
produce 689 million board feet from June of 2020 to May of 2021 
compared to 575 million board feet over the same time period in the 
prior year, an increase in production of 20%. As a whole, the North 
American lumber industry increased production by 1.4 billion board feet 
last year. Most of this growth was in the U.S. South, where production 
increased 1.1 billion board feet, marking a 5% increase over 2019.\2\
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    \2\ https://forisk.com/wordpress//wp-content/assets/Press-
Release_Mill-DB_20210518.pdf.
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    In spite of this increase, new home construction was up nearly 12% 
in 2020 vs. 2019.\3\ According to the U.S. Census, the demand for new 
housing continued into 2021, as seasonally adjusted housing starts were 
up 37% in March 2021 compared to March 2020.\4\ In addition to new 
housing starts, the DIY and home renovation markets also unexpectedly 
increased more than 20%, when people began quarantining due to COVID-
19.\5\ This unforeseen market demand reduced lumber inventories while 
mills were adjusting production levels in response to the economic 
slowdown and government mandated restrictions at the on-set of the 
pandemic.
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    \3\ https://www.marketwatch.com/story/new-home-construction-
activity-soars-to-highest-level-in-over-a-decade-as-builders-rush-to-
produce-single-family-homes-2021-01-21.
    \4\ https://www.census.gov/construction/nrc/pdf/newresconst.pdf.
    \5\ https://www.cnbc.com/2020/08/18/home-depot-hd-q2-2020-
earnings.html.
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    Recently, we have seen lumber demand and supply begin to balance, 
and prices drop accordingly. In fact, prices are now down more than 60% 
since the May highs.\6\ While we have no way of knowing whether this 
down trend will continue, we do know that lumber production capacity 
continues to increase with new greenfield mills and expansions across 
the Southeast while new single family home permits are 37% higher in 
May 2021 compared to May 2020.\7\
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    \6\ https://markets.businessinsider.com/commodities/news/lumber-
price-today-outlook-august-analyst-commodities-prices-2021-7.
    \7\ https://eyeonhousing.org/2021/07/may-single-family-permit-
gains/.
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Sawmill Infrastructure Constraints
    As the country and the economy slowly return to normal, sawmills 
have continued to manufacture lumber as quickly as possible to meet on-
going high demand. However, we have been constrained by manufacturing 
limits, and increasing production is more complicated than simply 
deciding to make more lumber. Sawmill infrastructure declined 
significantly when the Great Recession began in 2007. In the South, for 
example, the total number of pine mills operating in 2007 was 276. In 
2017, the total was only 240.\8\ Production of Southern Yellow Pine's 
previous peak was 19 billion board feet in 2005. The industry did not 
return to this level until 2019.\9\ Meanwhile, housing starts grew 
almost 200% between the fourth quarter of 2010 and first quarter of 
2021.\10\
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    \8\ https://www.forest2market.com/blog/making-more-lumber-is-not-
so-simple.
    \9\ Southern Forest Products Association. May 6, 2021.
    \10\ https://www.forest2market.com/blog/making-more-lumber-is-not-
so-simple.
---------------------------------------------------------------------------
    Adding additional capacity through expansion of existing mills or 
building new mills takes eighteen months to 3 years to complete. 
Equipment manufacturers are also experiencing high levels of demand, 
leading to higher prices for concrete and steel to build the new 
equipment and structures. Another ongoing factor is the regulatory 
burdens, such as long permitting processes for air and water. For 
example, the Rex Lumber mill in Troy, AL, which employs 175 people, 
broke ground in 2018, started limited operations in 2019, produced over 
100 million board feet in 2020, and is on target to produce 175 million 
in 2021. Upcoming 2022 projects at our Troy mill will increase 
production to 300 million board feet annually. In total, projects that 
are currently underway across the South are expected to increase 
Southern Yellow Pine production by more than 2 billion board feet over 
the next 2 to 3 years.\11\ Lumber manufacturing expansion projects will 
increase the supply of lumber in the long term while creating more 
markets for timberland owners.
---------------------------------------------------------------------------
    \11\ Ibid.
---------------------------------------------------------------------------
    Workforce shortages, rail car availability and trucking capacity 
constraints are also hindering our ability to increase lumber supply. 
Our industry requires a variety of skill sets ranging from hourly mill 
production and maintenance positions to salaried supervisors, managers, 
and administrative personnel. Hiring qualified people to fill these 
various roles is always difficult but has become more challenging 
during the economic recovery. As enhanced unemployment benefits have 
subsided in the states where we operate, we are seeing capable 
individuals begin to apply for work again. Rex Lumber, in addition to 
other members of SLMA, are taking various approaches to find qualified 
candidates. For example, we have coordinated with local community 
colleges to manage paid internship programs in hopes of finding 
qualified people that are able to quickly move up the company ladder. 
Additionally, SLMA has worked with sawmill members to design outreach 
materials for high school students that want to go directly into the 
workforce.\12\
---------------------------------------------------------------------------
    \12\ https://www.lumber.works/.
---------------------------------------------------------------------------
    Rail car availability along with trucking capacity was problematic 
before the pandemic and has become increasingly difficult to manage. At 
Rex Lumber, we are planning to increase our truck fleet over the next 
few years as we are unable to find outside companies to move our 
products in a timely fashion. This is another issue that is widespread 
in our industry. For example, another SLMA member in South Carolina had 
7 million board feet of sold lumber sit at his mill for a week last 
month because he could not secure trucks to transport finished products 
to customers.
Economic and Environmental Sustainability for Forest Products
    The impact of the Great Recession has been long felt in the lumber 
industry, while the impact from the pandemic appears to be a shorter 
term phenomenon as it relates to forest products supply-and-demand. To 
make the industry more resilient to future market volatility, 
diversification will be critical. Housing, both single family and 
multi-family is a large majority of our markets, and we expect that to 
continue to be the case for the foreseeable future. However, we do 
believe that looking at other opportunities for our products throughout 
the built environment would help offset the drastic impact that another 
housing recession might have on sawmill infrastructure capacity. 
Additionally, using more wood products for construction purposes has 
the benefit of being a more environmentally friendly building product 
than competing building materials.\13\
---------------------------------------------------------------------------
    \13\ https://www.thinkwood.com/blog/4-things-to-know-about-mass-
timber.
---------------------------------------------------------------------------
    Innovative building materials, such as mass timber, have the 
potential to open new markets in the commercial, defense, and other 
infrastructure sectors. Thanks to updated 2021 International Building 
Code changes that allow 18 story mass timber buildings,\14\ on-going 
efforts by the forest products industry, support for research and 
innovation grants from this Committee as well as the Forest Service, 
along with increased societal demand for greener building products, we 
are seeing growth in the utilization of mass timber. Recent examples 
include Wal-Mart's new 2.4\2\ million headquarters in Arkansas that 
will be constructed of cross laminated timber and glulam mass timber 
composed of southern yellow pine and the five cross laminated timber 
hotels built through the Privatized Army Lodging (PAL) program on bases 
in different regions of the country. We are also excited about the 
potential for mass timber bridges, sound barriers, and other 
infrastructure research that is being supported through the U.S. Forest 
Products Lab and academia.
---------------------------------------------------------------------------
    \14\ https://www.awc.org/pdf/education/des/AWC-DES607A-
TallWood2021IBC-190619-color.pdf.
---------------------------------------------------------------------------
    To encourage continued growth for these innovative new markets, 
Congress and the Administration should support utilization of these 
products through the government procurement process. The General 
Services Administration (GSA) owns and leases over 376\2\ million of 
space.\15\ GSA's Green Building Advisory Committee has recommended ``a 
whole building life cycle assessment approach for larger projects (over 
$3 million), requiring that buildings be designed in such a way that 
life-cycle carbon assessment shows that the selected design results in 
a 20 percent carbon reduction.'' \16\ Utilizing forest products in 
place of traditional more carbon intensive building materials can help 
GSA meet this ambitious goal.\17\ Additionally, the Department of 
Defense spends billions of dollars per year on military construction. 
Mass timber was accepted into the Unified Facilities Code in 2016, but 
we have seen very little utilization of mass timber in military 
construction beyond the PAL hotels. Given the positive data surrounding 
these hotel projects, we would like to see the Department of Defense 
look for additional opportunities for mass timber construction.\18\ 
Given the impact of Hurricane Michael on the Florida Panhandle, the 
rebuilding of Tyndall Air Force Base is one example where mass timber 
could be deployed.
---------------------------------------------------------------------------
    \15\ https://www.gsa.gov/real-estate/gsa-properties.
    \16\ https://rmi.org/press-release/the-us-federal-government-takes-
the-lead-on-low-embodied-carbon-buildings/.
    \17\ https://www.researchgate.net/publication/
344694854_Wood_buildings_as_a_climate_solu
tion.
    \18\ https://www.woodworks.org/wp-content/uploads/4-Story-CLT-
Hotel-WoodWorks-Case-Study-Redstone-Arsenal-01-05-16.pdf.
---------------------------------------------------------------------------
    In addition to encouraging the GSA and DOD to prioritize forestry 
products as an environmentally friendly domestic building material, we 
request strong support for the Forest Service's Forest Products Lab and 
Wood Innovation Grants to continue needed research and experimental 
projects to continue finding new and innovative markets for wood 
products.
Conclusion
    In conclusion, lumber mills continue to produce lumber as quickly 
as possible to meet on-going demand and as the industry invests in 
greenfield mills, new supply will rise to meet future demand. To dampen 
the impact of the next housing recession on sawmill infrastructure 
capacity, we hope to diversify markets beyond the traditional housing 
sector, which we believe fits with on-going societal demands to 
decrease the carbon footprint of the built environment. Continued 
efforts by the industry with continued support of the Committee will 
play a critical role in meeting these economic and environmental goals. 
Thank you for the opportunity to participate in this important hearing.
                              [Attachment]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    The Chair. Thank you so very much, Mrs. Dauzat, for your 
opening testimony.
    And, Mr. Imbergamo, please begin whenever you are ready, 
and welcome back to the Agriculture Committee.

           STATEMENT OF WILLIAM IMBERGAMO, EXECUTIVE 
         DIRECTOR, FEDERAL FOREST RESOURCE COALITION, 
                        WASHINGTON, D.C.

    Mr. Imbergamo. Thank you, Chair Spanberger. Happy to be 
here.
    And Ranking Member LaMalfa and Chair Spanberger, thanks for 
the opportunity to speak to you today about the public lands 
timber industry and our experience in the pandemic and as the 
economy has continued to recover.
    Our industry weathered the pandemic with remarkable 
resilience. At the outset, lumber prices fell further in a few 
weeks than they did during the entirety of the Great Recession 
in 2007 to 2009. Mills reacted by reducing production, dropping 
shifts, and in some cases, closing entirely.
    As Members of the Committee know, however, demand for wood 
products rapidly rebounded as the DIY market and housing starts 
picked up steam.
    Prices climbed to record highs in early May of this year, 
but since then, lumber prices are down more than 65 percent, 
proving that the laws of supply-and-demand remained very much 
in effect.
    I want to be clear. The Forest Service is to be commended 
for their efforts to continue delivering timber sales during 
2020. They took steps to quickly provide contract extensions 
and other flexibility when the market collapsed, and then 
delivered a 3.2 billion board feet Timber Sale Program during 
the pandemic and a historically bad fire year.
    While this was amongst the highest level sold in over 2 
decades, it still represents less than \1/2\ the allowable sale 
quantity identified in current forest plans.
    As the market for solid wood products has remained strong, 
however, the Forest Service Timber Sale Program has not kept 
pace. At the end of the second quarter of this fiscal year, 
timber sales from the National Forests were down 19 percent 
compared to the same quarter last year.
    Modest efforts to salvage burn wood from last year's fires 
has been limited by the threat of litigation and this includes 
even just modest roadside hazard tree removal.
    Many forests that burned in 2020 will convert to brush 
fields if they are not harvested and replanted. Brush fields 
are more susceptible to future fires and do not sequester 
carbon in the way healthy growing forests do.
    Salvaging burned timber would store carbon in long-lasting 
wood products while generating revenues to pay reforestation 
costs.
    Since the 1990s, the Forest Service has presumed that 
sensitive species--grizzly bears, spotted owls, and others--
need closed canopy high-density forests in order to survive. We 
reduced harvests by more than 80 percent across the National 
Forest System as a result. We have had more than 20 years to 
see the results and they are not pretty.
    As harvests have dropped, wildfires have increased. 
Overstocked National Forests have succumbed to fires driven by 
drought, climate change, and insects. Communities have been 
decimated as mills, which serve as economic engines, were 
forced to shutter.
    The benefits we were told to expect, from tourism, 
healthier watersheds, and improved wildlife habitat, have not 
materialized either. Over 360,000 acres of northern spotted owl 
habitat were destroyed by catastrophic fire in Oregon last year 
alone, and there was more in California and Washington as well.
    We have seen similar destruction in grizzly bear habitat in 
Montana. Sometimes National Forests simply fail to offer 
sufficient timber for sale regardless of whether there is a 
species of concern in the forest. This threatens nearby mills 
and the blue-collar jobs they provide.
    Just this year, one of my member companies, Neiman 
Enterprises, was forced to shutter their mill in Hill City, 
South Dakota, after the Black Hills National Forest failed to 
meet its timber target for 3 consecutive years.
    Over 120 people in the small town of just over a thousand 
are now out of work and the ability to manage the Black Hills 
has been permanently reduced.
    Given the widespread forest health and wildfire crisis we 
are seeing on our National Forests, we hope that at the very 
least, the agency would not reduce their current timber sale 
levels. Loss of mill capacity permanently reduces the ability 
of the Forest Service to manage forests and drives up land 
management costs.
    Congress has enacted numerous streamlined authorities to 
get management done and has more than doubled the hazardous 
fuel budget since 2005. Many of the authorities originated in 
this Committee, including key provisions adopted in the 2014 
and 2018 Farm Bills.
    We urge Congress to treat our National Forests as critical 
green infrastructure and invest further in increases in 
management, focusing on mechanical thinning and harvest as well 
as collaborative approaches like Good Neighbor Authority.
    The funding in the bipartisan Outdoor Restoration 
Partnership Act (H.R. 2682) would be a good start on this 
investment. The threat of litigation remains a significant 
burden on the Forest Service.
    Congress must address the extremely disruptive Cottonwood 
precedent, which the Obama Administration fought all the way to 
the Supreme Court. That one precedent has led to over 400 
million board feet being tied up in litigation in one region 
alone. That is enough to build 24,000 houses.
    The Forest Service should also plan in advance how it is 
going to help National Forests recover from increasingly 
frequent and, therefore, increasingly predictable disturbances 
like wildfires and hurricanes.
    While a few forests have taken steps to prepare in advance 
for salvage and recovery efforts, Congress can provide clear 
support and direction that will help these steps stand up in 
court.
    I have other specific recommendations in my testimony, and 
I appreciate the opportunity to share these thoughts with you 
today. I look forward to your questions.
    [The prepared statement of Mr. Imbergamo follows:]

 Prepared Statement of William Imbergamo, Executive Director, Federal 
              Forest Resource Coalition, Washington, D.C.
    Thank you for the opportunity to speak to you today about the 
impact of the pandemic on the public lands timber industry, and our 
experiences as the broader economy has continued to recover. Congress 
has an opportunity to use the upcoming infrastructure legislation to 
make badly needed investments in the management of our National 
Forests. However, Congress must understand both the urgency of the need 
for management, and the difficulties Forest Service managers face as 
they grapple with an expanding forest health crisis on our public 
lands.
    The Pandemic and the Public Lands Timber Industry: When the 
pandemic began, widespread economic disruption caused lumber prices to 
plummet by more than 43 percent in the space of less that 6 weeks. This 
is a bigger drop in lumber prices than the one that took place over 3 
years during the 2008-2011 ``Great Recession.'' While toilet paper and 
other household paper demand initially skyrocketed due to hoarding, my 
industry, like most others, anticipated a prolonged recession and began 
taking steps to prepare. This meant curtailing production, and in some 
cases closing mills. The industry, smaller in 2020 than it was in 2009, 
scaled back production, anticipating depressed demand.
    The Forest Service moved quickly to allow timber contract holders 
flexibility to extend current timber contracts. Over 700 timber 
contracts were granted extensions within a few months of the beginning 
of the pandemic. Individual National Forest units took steps to adjust 
field operations and managed to maintain a timber sale program in 2020 
that matched the roughly 3.2 Billion Board Feet sold in 2019. While 
among the highest level sold in over 2 decades, this still represents a 
little more than half the Allowable Sale Quantity identified in current 
Forest Plans.
    Operating during [COVID] was a challenge for my member companies, 
just as it was for many other industries. Although we were designated 
as an essential sector by the Department of Homeland Security, our 
mills had to adjust operations to allow for social distancing and other 
[COVID]-related precautions. Occasional outbreaks required mills to 
take downtime or reduce production.
    The Forest Service deserves credit for keeping the timber sale 
program going in 2020, during both the disruptions caused by the 
pandemic and the onset of the record-breaking fire season. Many of the 
larger fires took place in the last month of the fiscal year, a time 
during which many sales are awarded each year.
    The Lumber Recovery: As you know, the disruption caused by the 
pandemic led to a sudden--and very much unexpected--rebound in lumber 
markets. After tanking dramatically in March 2020, by the first week in 
July, prices began to recover. By May of this year, the DIY market, 
combined with the strongest year in new single-family home construction 
in more than a decade, sent lumber prices to record highs. Since May, 
however, lumber markets have proven that the law of supply-and-demand 
remains very much in effect: The CME lumber index has fallen 62 percent 
in the last 2 months as production and market demand have equalized.
    The capacity of mills to meet demand has not been the sole issue in 
lumber markets. Efforts to recruit professional loggers and truck 
drivers has been lagging for some time. Several of my members have told 
me that the lack of trucking capacity--due to a shortage of drivers--is 
a major bottleneck in their efforts to meet market demand.
    The forest products industry is capital intensive, and it is 
difficult to raise the capital needed to build and modernize mills 
without a reliable supply of timber. The lumber and panel industry 
shrank significantly in the wake of the Great Recession. The sudden 
demand for lumber and other building materials in the last 18 months 
caught our industry by surprise, much as is it did other observers.
    For the mills I work with, the 2020-2021 Fiscal Year was an 
opportunity to make up for decades of generally low prices for our 
products. It's important to note that not every segment of the wood and 
paper industry has enjoyed strong pricing as we've been through the 
pandemic. The closure of in-person schools and offices has severely 
depressed demand for printing and writing paper, for instance.
    However, as market demand for solid wood has remained strong, the 
Forest Service timber sale program has not kept pace. At the end of the 
second quarter, timber sales from the National Forests were down by 
over 19 percent compared to the same quarter last year. More 
alarmingly, modest effort to conduct removal of fire-killed timber near 
roads and campgrounds has been limited by threats of lawsuits from 
environmental groups. Salvage of burned timber from National Forests in 
Oregon and California has been limited, in keeping with patterns in 
recent years. Failure to remove burned wood from unreserved lands 
condemns these forests to convert to brush fields, which are more 
susceptible to future fires and do not sequester carbon the way 
healthy, growing forests do.
    Salvage of this burned timber would store carbon in long-lasting 
wood products while generating revenues to defray reforestation costs. 
Outside groups, such as The Nature Conservancy and American Forests, 
estimate that there are over 7 million acres of National Forest 
requiring reforestation, figures that were arrived at before the 
disastrous 2020 fire season.
    Going Forward: Strong Lumber Markets Can Help Save Our Forests, 
Store Carbon, and Create Jobs: Outgoing Chief [Vicki] Christiansen told 
Congress last year that up to 40 percent of the National Forest System 
is at moderate to high risk of catastrophic fires.
    Throughout the 1990's, the management of our western National 
Forests was changed to ``protect'' several species, including Spotted 
Owls, several salmon species, and the Grizzly bears. In each case, the 
Forest Service has presumed that closed-canopy, high-density forests 
were the preferred habitat for each of these species. We've had more 
than 20 years to see the results, and they are not pretty.
    As harvests have dropped, wildfires have increased. Overstocked 
National Forests succumb to fires driven by drought, climate change, 
and insects. Communities have been decimated as mills, which served as 
the economic anchor for those small towns, were forced to shutter.
    The benefits we were told to expect--from tourism, healthier 
watersheds, and improved wildlife habitat, have not materialized 
either. 360,000 acres of Northern Spotted Owl habitat were destroyed in 
catastrophic fire last year in Oregon alone.
    Where species listings aren't enough to force mills out of 
business, simple failure to deliver on the timber sale program can 
often stand in. Just this year, one of my member companies, Neiman 
Enterprises, was forced to shutter their mill in Hill City, SD after 
the nearby Black Hills National Forest failed to meet its timber target 
for 3 consecutive years. Over 120 people in the small town of just over 
1,000 people are now out of work, and the ability to manage the 1.2 
million acre Black Hills National Forest is permanently reduced.
    Unfortunately, this is not the only example. In January of last 
year, R-Y lumber, another member of mine, was forced to shutter their 
mill in Townsend, Montana. The economic damage in the small town of 
1,800 will be significant.
    Given the widespread forest health and wildfire crisis we're seeing 
on our National Forests, we'd hope that at the very least the agency 
would not reduce their current timber sale level. Congress has enacted 
numerous streamlined authorities to get management done, and has more 
than doubled the Hazardous fuels reduction budget since 2005. Many of 
those authorities originated in this Committee, including key 
provisions adopted in the 2014 and 2018 Farm Bills.
    We would urge Congress to treat our National Forests as critical 
green infrastructure and invest in further increases in management, 
focusing on mechanical thinning and harvest, as well as cooperative 
approaches like Good Neighbor Authority.
    Congress should:

   Support infrastructure spending that invests in Forest 
        Management on our Federal lands--The Forest Service has a 10 
        year, $20 Billion strategy to begin to reverse the overstocking 
        and fire dangers we see threatening so many communities. The 
        bipartisan, bicameral Outdoor Restoration Partnership Act is a 
        good starting point for this effort.

   Clarify that outside of ``reserved'' acres, such as Roadless 
        Areas and Wilderness Areas (which make up about half of the 
        National Forest System), the top priority should be reducing 
        fuel loads and managing for a healthier, more diverse National 
        Forest System.

   Direct the Forest Service to plan in advance how it will 
        help National Forests recover from increasingly frequent--and 
        therefore increasingly predictable--disturbances like fires, 
        hurricanes, and other wind events.

   Finally and fully address the disastrous Cottonwood case, 
        which has led to litigation that has tied up over 400 Million 
        Board Feet of timber in one Forest Service Region alone (that's 
        enough lumber to build over 25,000 houses).

   Invest in essential workforce development to ensure a 
        vibrant and capable forest workforce to conduct needed forest 
        management and restoration work on the National Forests and 
        other Federal lands.

    Conclusion: In the late 1990s, we made a public policy mistake. We 
assumed that large land set asides would protect wildlife habitat, 
ensure clean water, and stimulate the economy. We're now paying the 
price for that mistake. The species that were supposed to benefit 
haven't. The watersheds we were told were protected are now burnt. In 
some cases, entire towns--and lives--were lost. And mills continue to 
struggle when the National Forests they rely on fail to meet current, 
modest timber targets.
    As the economy continues to recover following the pandemic, we hope 
Congress supports a concerted effort to restore, reforest, and manage 
the 193 million acre National Forest System. We have to move to a new 
paradigm where the National Forests are treated as renewable resources 
to be managed for climate, social, and economic benefits. We've tried 
producing those things through a strategy that focused on large set 
asides and reduced management. We know now that that approach is a 
failure. We look forward to working with this Committee to move forward 
into a better future for our National Forests.

    The Chair. Thank you very much.
    Mr. Macdonald, could you please begin your testimony when 
you are ready?

        STATEMENT OF IAIN MACDONALD, DIRECTOR, TallWood 
          DESIGN INSTITUTE, OREGON STATE UNIVERSITY, 
                         CORVALLIS, OR

    Mr. Macdonald. Chair Spanberger, Ranking Member LaMalfa, 
and Members of the Subcommittee, thank you for the opportunity 
to testify today.
    My name is Iain Macdonald. I serve as the Director of the 
TallWood Design Institute collaboration between the Colleges of 
Forestry and Engineering at Oregon State University and the 
College of Design at the University of Oregon.
    We carry out applied research education, product 
development and testing for designers, builders, and 
manufacturers. Much of our work focuses on a new breed of 
engineered wood products known as mass timber.
    In my testimony today, I will focus my comments on the role 
of wood as a tool to sustainably rebuild our infrastructure and 
economy.
    The capacity to process wood into mass timber with reliable 
and predictable performance is facilitating a sea change in 
sustainable construction around the world. Mass timber is 
precision engineered and robotically fabricated.
    This enables wood, which has typically been restricted to 
single-family homes and low-rise multifamily structures, to be 
used in buildings that are larger and taller than ever before.
    In 2015, with support from researchers at OSU, Oregon was 
the first state to produce cross-laminated timber panels 
certified for use in buildings.
    As a result, Oregon became home to many of the nation's 
earliest mass timber buildings and a vibrant cohort of 
pioneering architects, engineers, and construction firms with 
expertise that is now in demand across the country.
    Nationwide, the rate of adoption of mass timber has been 
dramatic. In 2013, there were less than five construction 
projects started. As of June 2021, 1,169 mass timber buildings 
have been constructed or are in design with projects in all 50 
states.
    Manufacturing capacity has expanded in lockstep from just 
one U.S. production facility in 2015 to nine today. All these 
are bringing back high-value jobs to rural communities, from 
Washington to Alabama.
    But these buildings still represent only 5 million of the 
93\2\ billion of U.S. commercial building space. In addition 
to the economic impacts, there are carbon reduction benefits 
from expanding wood construction, as we have heard.
    Currently, 40 percent of U.S. greenhouse gas emissions are 
derived from buildings. We can improve their thermal efficiency 
to reduce the energy needed for heating and cooling. But this 
alone will be insufficient to achieve the steep reductions we 
need in carbon.
    Manufacturing processes for timber products have a much 
lower carbon footprint than those for concrete and steel. 
Timber products sequester carbon for the building's lifetime 
and can be recycled and given a second life afterwards, and 
lighter wood structures mean that less concrete is needed in 
the foundations.
    It all adds up to a ready-made formula for reducing our 
carbon emissions by doing what we already planned to do, 
modernize and improve our physical infrastructure.
    Mass timber can help our nation rebuild in other ways too. 
Two innovative Oregon projects are embracing the use of 
underutilized species and restoration timber to tackle the 
housing crisis.
    They aim to design kit-of-parts housing systems using 
domestic timber that can be prefabricated at high volumes and 
low unit cost for communities in need, whether these are urban 
centers addressing homelessness, rural communities ravaged by 
fire or other natural disasters, or working families caught in 
the missing middle who cannot afford to own homes.
    Research has played a key role in driving innovation, 
showing us that mass timber buildings can deliver fire and 
seismic safety on par with any concrete or steel structure.
    Further work is critical, however, to help our industry 
drive down costs, optimize fiber use and allow mass timber to 
be implemented on a broader scale. The USDA Agricultural 
Research Service, the Forest Products Lab, and the U.S. Forest 
Service have been invaluable partners for our research.
    The leadership and financial contributions of these 
agencies have been matched 200 percent by state and private-
sector support, and industry has worked hand-in-hand with us.
    To fully realize the enormous potential of timber 
construction, I offer these recommendations.
    First, continue and expand the support to USDA-ARS, the 
Forest Products Laboratory, and the Wood Innovations Program 
for this important applied work.
    Second, facilitate support for workforce training and 
development. This is critical for the successful growth of the 
manufacturing base.
    Last, I would encourage this Subcommittee to consider 
opportunities for incentivizing the use of domestically-
produced low-carbon building materials at Federal, state, and 
municipal levels.
    In closing, thank you for the opportunity to testify today 
and I would welcome the opportunity to answer any questions.
    [The prepared statement of Mr. Macdonald follows:]

    Prepared Statement of Iain Macdonald, Director, TallWood Design 
           Institute, Oregon State University, Corvallis, OR
Introduction
    Chair Spanberger, Ranking Member LaMalfa, and Members of the 
Committee, thank you for the opportunity to testify today. My name is 
Iain Macdonald and I serve as the Director of the TallWood Design 
Institute (TDI), a unique collaboration between the Colleges of 
Forestry and Engineering at Oregon State University and the College of 
Design at University of Oregon.
    TDI carries out applied research, works in partnership with 
industry on product development and testing, and offers education and 
outreach to current and future designers, builders and manufacturers. 
Our mission is to conduct the science that can open up viable new 
applications for the use of wood in the built environment and to 
disseminate the results of that work efficiently to stakeholders in the 
public- and private-sectors. The data we generate is used to validate 
designs for innovative new buildings, evolve building codes, increase 
the knowledge of design and construction practitioners, and help U.S. 
manufacturers develop and launch new products and compete effectively 
in domestic and export markets. Our work focuses heavily on a new breed 
of engineered wood products collectively known as mass timber, which 
can make use of small-diameter logs that can be sourced from 
sustainably managed forests and forest restoration projects, and 
contribute to the reduction of greenhouse gases and wildfire risk.
The U.S. Wood Products Sector and COVID Impacts
    The forestry and wood products sector is a major contributor of 
employment and GDP to the national economy. Overall, forest products 
comprised about 1.5% of the total U.S. economy in 2018, supported 
almost three million jobs, and represented about 5% of the entire 
manufacturing output of the country. The sector is particularly 
important to the hundreds of rural communities in which processing 
facilities are located, from the Pacific Northwest to the Southeast. 
Importantly, the forest sector in the U.S. is one of the only 
significant economic sectors with net negative carbon emissions, making 
wood products the most climate-sensitive structural building material 
available today.
    During the COVID-19 pandemic, most forestry and wood product 
manufacturing businesses stayed open as essential services, but there 
were still significant impacts to this sector. The need to implement 
safety and social distancing protocols in plants resulted in temporary 
shutdowns and lower concentrations of staff in certain spaces, both of 
which decreased productivity. Delivery logjams further constrained 
supply. Lumber producers anticipated reduced housing demand in the 
early days of the pandemic and decreased production levels accordingly. 
Broadly, the industry has faced these lumber supply constraints while 
also experiencing high demand for lumber for remodeling and renovation 
work, which has caused a record spike in prices.
    Outside of the supply of lumber for single-family homes, the mass 
timber product industry experienced reduced demand when some commercial 
office and hotel projects that would have used mass timber were put on 
hold or canceled altogether. Additionally, uncertainty around the 
extent to which remote employees will return to offices continues to 
impact the commercial construction sector. In the pulp and paper sector 
there were some mill closures due to a lack of demand for high-quality 
paper for events, programs, etc. And, critically, the logging industry 
lost approximately $1B of revenue.
Wood as a Tool to Sustainably Rebuild our Infrastructure and Economy
    Wood is the only major building material that can be renewed and 
regrown. The capacity to process this basic material into engineered 
products with reliable and predictable strength and performance 
attributes has undergone a renaissance of late. A family of relatively 
new engineered products, known as mass timber, is facilitating a sea 
change in sustainable construction around the world. The 
characteristics of these products allow wood, which has typically been 
restricted to single-family homes and low- and mid-rise multifamily 
dwellings, to be used in buildings that are larger and taller than ever 
before.
    Wood fell out of favor as a building material in office, 
institutional and commercial buildings around 100 years ago, as 
concrete and steel became dominant. At the time there were justifiable 
concerns about wood use in these types of structures, relating to fire, 
structural strength and seismic resilience. Today this landscape is 
radically different. Mass timber products are precision-engineered and 
robotically-fabricated to offer specific strength and stiffness 
characteristics, depending on where they are needed in a building and 
what loads they must bear. Modern fire suppression and alarm systems 
have greatly improved fire safety, and mass timber beams, columns and 
panels are supplied in large cross-sections, meaning that the face of 
the wood element will char at a slow, predictable rate, while 
insulating the core structure and preserving its load-carrying 
capacity. All of this has been empirically validated through applied 
research at our major universities and institutes, due in large part to 
investments made to and through the USDA Forest Service, Forest 
Products Lab, and Agricultural Research Service.
    As a result of this work, we are continually pushing the boundaries 
of what is possible with wood. In 2015, with support from researchers 
at OSU, Oregon was the first state to start producing cross-laminated-
timber panels certified for use in buildings. This product can be 
fabricated in large dimensions up to 12 by 60 for wall and floor 
applications, and is a game-changer in terms of construction speed and 
efficiency. As a result, Oregon became home to many of the nation's 
earliest mass timber buildings. A vibrant cohort of pioneering 
architects, engineers and construction firms have emerged in the state, 
with expertise that is now in demand across the country. In Milwaukee, 
Wisconsin, a 25 story mass timber apartment building named Ascent will 
shortly become the tallest wood building in the world, at 284, with 
the timber engineering, fabrication and installation performed by a 
company in Portland, Oregon.
    In the last 5 years, the rate of adoption of mass timber in the 
United States has been dramatic. In 2013, there were less than five 
construction projects started. In 2020 more than 100 projects 
commenced, and as of June 2021, 1,169 mass timber buildings had been 
constructed or were in design, with projects in all 50 states. 
Manufacturing capacity has expanded in lockstep, from just one U.S. 
production facility in 2015 to nine today.\1\ These are now bringing 
high-value jobs back to rural communities, from Colville, Washington to 
Dothan, Alabama.
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    \1\ 2021 International Mass Timber Report, Forest Business Network.
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    This progress is impressive for a new-to-the-U.S. construction 
technology, but mass timber buildings still represent a tiny fraction 
of U.S. real estate that is built each year. There are currently just 
over 5\2\ million of mass timber buildings in the nation, but in 2019 
there was 93\2\ billion of commercial building space.\2\ The U.S. has 
the capacity and know-how to significantly ramp up the number of mass 
timber structures, and there are compelling reasons for doing so.
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    \2\ US Energy Information Administration: Annual Energy Outlook 
2020.
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    The manufacturing processes for timber products have a 
significantly lower carbon footprint than those for concrete and steel. 
Furthermore, the carbon naturally sequestered in wood is stored within 
the building for its lifetime, and the wood components have the 
potential to be recycled and given a second life afterward. The lighter 
strength-to-weight ratio also means that less concrete is needed in the 
foundations. All these things are important, given that the general 
scientific consensus is that the warming effects of CO2 
emissions will be irreversible unless we can achieve significant 
reductions by 2030.
    Currently 40% of U.S. greenhouse gas emissions are derived from the 
construction and operation of buildings. Efforts to improve the thermal 
insulation of windows, doors and walls to reduce the energy consumed 
for heating and cooling are laudable, but these alone will be 
insufficient to achieve reduction targets. Mass timber building can 
further advance efforts to achieve measurable new gains in the sector 
and nation's carbon reduction efforts. As soon as we construct a mass 
timber building we immediately avoid emissions. For example, District 
Office, a six story office building in Portland, avoided 750 tons of 
carbon emissions by using timber instead of concrete, the equivalent of 
taking 570 cars off the road for a year. The amount of timber used to 
build it took Oregon's forests just 21 minutes to grow.
Research is Driving the Expanded Use of Sustainable Wood Products
    Research and development are driving innovation and adoption of 
mass timber products and modern wood construction. The work that is 
ongoing at TDI and other institutions aims eliminate a number of key 
barriers to wood use, as well as learning more about how we can enhance 
technical, sustainability and cost performance. We already know that 
mass timber buildings, when designed correctly, can deliver fire and 
seismic safety on par with any concrete or steel structure. However, 
further research is critical to help our industry drive down the cost 
of doing that, while at the same time optimizing fiber use and allowing 
mass timber to be implemented on a broad scale.
    At TDI, we are putting data into the public domain on fire, 
seismic, structural and acoustic performance of tall wood buildings, so 
that more architects and engineers have the tools and confidence they 
need to effectively design them and contractors have the know-how to 
build them. And the research goes beyond the wood itself. We are 
testing different kinds of connectors and assemblies to find out which 
ones offer the best combinations of cost-efficiency, strength, fire 
resistance, moisture protection and acoustic separation. We are working 
on termite-resistant CLT for Hawaii and the southern states, and 
energy-efficient structural panelized systems for use in Alaska. Along 
the way we are even learning important things about the psychological 
and physiological benefits of wood in our indoor environments, which 
have important ramifications for wellness and disease control.
    All of this work involves a high degree of collaboration, both 
across university research institutions and between the public- and 
private-sector. Early next year, ten universities, twenty companies and 
the USDA Forest Products Lab will be working together to test a ten 
story mass timber building on the shake table at UC San Diego. The test 
will yield a treasure trove of new information about the behavior of 
these buildings in earthquakes, enabling us to further optimize their 
performance.
    The USDA Agricultural Research Service, the Forest Products Lab and 
the U.S. Forest Service have been invaluable partners for our own 
research at TDI. Since 2015 their support has enabled our affiliated 
researchers to launch more than 50 research projects and acquire state-
of-the-art technical equipment that is helping us train our 
manufacturers in critical new skills like computer-aided design and 
fabrication. The leadership and financial contributions of these 
agencies have been matched 200% by state and private-sector support, 
and industry has worked hand-in-hand with our researchers to identify 
the applied research projects that can generate tangible market impacts 
in a 3 to 5 year timeframe. This year we launched the REACTS Consortium 
for Research on Engineering, Architecture and Construction of Timber 
Structures. The organization consists of pioneering firms in those 
industry sectors who are partnering with us and pooling cash 
contributions and technical expertise to jointly drive the innovation 
agenda. Notably, work at OSU funded by the Economic Development 
Administration directly resulted in the launch of a first-in-the-world 
mass timber product--the Mass Plywood Panel--by Oregon's Freres Lumber 
Company, and their investment in a $40M greenfield manufacturing 
facility.
    Mass timber innovations can play a positive role in our nation's 
rebuilding in other ways too. TDI is working hard to evaluate the 
viability of using under-utilized species in these products, and 
research is underway already to test the strength properties of 
ponderosa pine, white fir and Alaskan spruce for use in CLT. Each year 
sees our forestlands and the communities in proximity to them 
increasingly threatened by wildfire. By selectively thinning these 
overstocked forests and using the restoration fiber in our buildings we 
can simultaneously reduce fire risk, improve the safety of humans and 
property, and support high-value jobs in rural communities as well as 
design and construction jobs in urban centers.
    Two innovative projects in Oregon seek to embrace opportunities for 
developing wood products made with under-utilized species while at the 
same time tackling the housing affordability crisis that plagues many 
of our major cities. Their aim is to design kit-of-parts housing 
systems using domestic mass timber that can be prefabricated in a 
factory and deployed in high volume and at low unit cost to communities 
in need--whether these are urban centers addressing homelessness, rural 
communities ravaged by fire or other natural disasters, or working 
families caught in the `missing middle' who cannot afford to move from 
rental housing into their own homes. The projects exploit the rapid 
assembly advantages of mass timber and utilize design principles that 
enable disassembly and reuse at end of life, helping to further extend 
the sustainability of these structures. What has been particularly 
invigorating about these projects is the momentum and determination of 
all involved to make a lasting impact on these challenges--from Federal 
agencies like FEMA and EDA to Oregon state agencies and private firms.
Key Roles that Government can Play
    The research funding and scientific leadership provided through the 
USDA Agricultural Research Service and the Wood Innovations Program has 
been pivotal in advancing the science around mass timber buildings, and 
TDI is grateful to the Subcommittee for its work in supporting these 
key agencies and their research programs. Continuing and expanding the 
support available for this critical applied research work will enable 
the innovative collaborations between research institutions, Federal 
and state agencies and the private-sector to make even greater impacts.
    Support for workforce training and development will also be 
critical for the growth of the mass timber supply chain in the U.S. 
When firms move up the value chain from commodity products such as 
lumber to custom products such as mass timber, they pivot from a focus 
on producing products of low complexity and low variation in high 
volumes to a business model in which each component is designed for a 
specific place in a specific building. This typically means that those 
firms must train or hire for new digital skills such as 3D computer-
aided-design and computer-controlled fabrication. The good news is that 
these digitally-oriented jobs are more likely to be appealing to young 
people than traditional physical work, provided that training is 
available. TDI is rolling out a certificate program on these topics for 
industry learners. However, it will be important to implement 
strategies to introduce these new careers to young people and encourage 
them to take them up, in particular among demographics that have not 
traditionally been associated with the forest industry.
    And, regarding the Subcommittee's current efforts to consider 
priority needs for modern infrastructure investment, the INVEST in 
America Act includes some key investments in rail infrastructure that 
would help to address critical lumber supply chain constraints. For 
example, in Oregon, TDI completed a supply chain analysis last year 
that revealed existing rail infrastructure is serving as an impediment 
to growth, due to loading constraints on some bridges.
    Last, I would like to encourage the Subcommittee to consider 
opportunities for incentivizing Federal, state and municipal levels of 
government to accelerate adoption of green construction with the use of 
domestically-produced low carbon building materials. By stimulating 
domestic demand for products like mass timber, we can divert logs from 
offshore export to domestic processing, grow our manufacturing base and 
maximize the socioeconomic benefits provided by each tree harvested. 
This is the best way to ensure that forests remain as forests.
    In closing, thank you for the opportunity to testify today. I 
welcome the opportunity to answer any questions.

    The Chair. At this time, Members will be recognized for 
questions in order of seniority, alternating between Majority 
and Minority Members.
    The Ranking Member and I would like to recognize the 
Ranking Member of the full Committee, Mr. Thompson, if he would 
like to begin with asking his questions.
    Mr. Thompson. Madam Chair, Ranking Member, thank you very 
much. I very much appreciate it.
    To all of the witnesses, thank you so much for your 
testimony today. Thanks for your advocacy and your work in 
terms of our forest products, our forest industry, your 
perspectives that can help us have both a healthy environment 
and a healthy economy.
    And so, Mr. Imbergamo--Bill, in your testimony, you 
discussed the impact that lower timber targets have on sawmills 
and the supply chain, and the Administration has proposed 
reducing the Forest Service's timber targets in the Fiscal Year 
2022 budget request from 4 billion board feet to 3.4 billion 
board feet.
    What can we do to encourage the Forest Service to harvest 
more timber system-wide and closer to each forest's allowable 
sustainable growth or Sales Quantity Act?
    Mr. Imbergamo. Yes. So, the Administration's budget 
actually proposed 3.4 billion board feet, and that would 
represent an increase over the current year's expected output 
and it would be an increase over last fiscal year. But it is 
down from the 4 billion board foot target that was in the prior 
year's budget request.
    The reality is on the National Forest System the timber 
outputs have been climbing steadily since bottoming out in 
2000. But, we are not even close to capturing either growth or 
mortality.
    And, I think one of the things I mentioned is preparing in 
advance to be ready when you have a disturbance event. There 
are portions of the National Forest System that aren't going to 
get managed--wilderness areas, roadless areas, for the most 
part.
    But the general forest--each unit of the National Forest 
System should be prepared to capture value and capture the 
carbon from damaged trees. The response in different parts of 
the country of the Forest Service to these events is markedly 
different.
    The National Forests in Mississippi salvaged 85 percent of 
the acres that were damaged by Hurricane Katrina, whereas in 
the West, it is rare for a forest, say, in California, where 
the Ranking Member of the Subcommittee is from, to harvest, to 
salvage more than five to 15 percent. So 85 percent of what is 
burned is just, basically, converting to brush fields.
    So that is a big area where the Forest Service can do 
better. It would help sustain local industry and we would have 
substantial carbon benefits as well.
    Mr. Thompson. Thank you for that.
    Markets, obviously, are extremely important. We have to 
have markets for our timber, for our board feet, in order to be 
able to have that demand to be able to do that healthy 
management of the forests, let alone support our economies and 
rural America.
    What can Congress do to incentivize new markets for wood 
waste and low-grade wood, and would growing new markets for 
these materials benefit both forest health and hazardous fuels 
reduction?
    Mr. Imbergamo. That is for me? Yes, absolutely. I think one 
of, whenever you have had the Forest Service in front of this 
Committee or other committees, they always talk about the 
difficulties they have in selling low-value trees. And, I think 
the markets for residuals and lower-value materials are 
critical to making the entire industry work.
    When we saw schools and offices go virtual last year, 
demand for printing and writing paper evaporated, and that was 
already a sector that was under a lot of stress, and Henry can 
perhaps talk a little bit more about that.
    But, right now what we would like to see is for the Forest 
Service to sustain the mills that they have, like Rex Lumber's 
mill in Bristol, Florida, and the remaining mills in the Black 
Hills.
    If you don't have those primary wood processors, the entire 
wood value chain is going to break down. It is difficult to 
make it go strictly on residuals and low-value biomass.
    Mr. Thompson. And my final question for you, Bill, or 
anyone that would have insight on this, tell us more about the 
Cottonwood precedent and why it is so damaging and what can 
Congress do on that front.
    Mr. Imbergamo. So the Cottonwood precedent was a decision 
of the Ninth Circuit Court of Appeals that the Obama 
Administration challenged and, basically, it has allowed 
environmental groups to win injunctions against timber and 
forest management projects while forcing the Forest Service to 
go back and consult with the Fish and Wildlife Service on the 
underlying forest plan.
    It is important to understand there is no conservation 
benefit here because the Fish and Wildlife Service would have 
already signed off on the project. So there is no project level 
of concern, and in some cases, these forest plans are over 30 
years old.
    So Congress fixed part of that with the critical habitat 
designations. I believe that was in the 2018 Farm Bill. But 
there are three other prongs in the Cottonwood test. And as I 
mentioned in my testimony, 400 million feet are tied up just in 
Region 1 and that is putting a substantial strain on the 
industry in that part of the world.
    Mr. Thompson. Well, once again, thank you. Thank you to all 
of our witnesses.
    Madam Chair, thank you so much.
    The Chair. Thank you very much.
    And the chair now recognizes Ms. Pingree of Maine for 5 
minutes.
    Ms. Pingree. Thank you very much, Madam Chair. I really 
appreciate you holding this hearing. Thank you to all the 
witnesses. All of you really have provided excellent insights 
into some of the challenges that we are facing from the Forest 
Service to our private industry.
    Representing the State of Maine, we are the most forested 
state in the nation. We don't have a lot of Forest Service land 
but we face some of the same challenges that I heard from 
Minnesota and some of the Midwestern states: closure of our 
paper mills, all the things you talk about, trucking, labor. 
They are all issues for us as well.
    I want to ask my first question to Mrs. Dauzat. Thanks for 
telling us a little bit more about the ups and downs of your 
lumber mill. I am sure this has been a really challenging 
couple of years with the loss of demand and then huge interest 
in it, and I really appreciate the expansion that you are 
making in the jobs you provide in your area.
    You talked a little bit about the Forest Service Wood 
Innovations Grant Program in helping the industry to diversify 
and look to the future. I am really interested in the 
innovation side, and I also chair the Interior Appropriations 
Subcommittee.
    So we are trying to increase the funding there. But I am 
working on a new bill to expand and make some improvements to 
that program and other Forest Service programs.
    Could you talk a little bit more about how in your industry 
they have helped or how they could be changed to benefit you?
    Mrs. Dauzat. I think any supportive research--research is 
wonderful, but those end-markets being viable are very 
important.
    There is a lot out there and we would love some of it to 
get to fruition. We personally have looked into biochar as 
something, especially as we have been impacted by Hurricane 
Michael.
    But we are not finding the markets there to support the 
investment, and so--and the research is critical. It is very 
important. But getting to that end-user to where there is an 
industry that can be supported has to be available.
    Ms. Pingree. That is great. Yes, thank you for saying that, 
and I think you are right. It is one thing to have the 
research, but we also have to figure out how to make sure there 
is a market there so it is economically viable, and that is 
really important.
    And we are hoping to add a biochar facility in Maine, so we 
are huge fans of that as well. But you are right, there are 
some challenges.
    Mr. Macdonald, thank you for the work that you are doing 
and your really interesting testimony. We are sorry you are on 
the West Coast instead of the East Coast, but we have some 
great research going on in Maine as well.
    And you talked a little bit about the climate benefits of 
materials like mass timber, which is something we are really 
interested in exploring more in terms of the infrastructure 
investments that Congress is making.
    In May, we were working on some of those things as well, 
and including wood fiber insulation product, which we think 
also expands those markets and we hope you include in some of 
your prototype products.
    But can you talk more about any thinking that you have done 
about how we could get the GSA or the Department of Defense or 
other sections of the Federal Government to kind of use our 
purchasing power to increase and better utilize these products?
    Mr. Macdonald. Thank you for the question, Congresswoman.
    I am a Canadian citizen, and there are some precedents in 
Canada that worked quite well. In 2009 in British Columbia, 
there was something enacted called the Wood First Act (SBC 
2009), which was a piece of legislation that specifically 
incentivized the use of wood in buildings paid for with 
provincial funding.
    That catalyzed a lot of the early interest in mass timber. 
In fact, British Columbia was the first place in North America 
that really got going with this. And, there was no particular 
teeth to the legislation in terms of there being a penalty for 
not using wood.
    But the general principle was that if it could be done 
within the bounds of building codes and so on, then it should 
be done, and it really got a lot of that early work going in.
    And as a result, in the same province of British Columbia 
52 municipalities enacted their own Wood First resolutions to 
say, when we do build a municipal building that we use wood.
    Ontario did a similar thing in 2012. I know that in Oregon 
there was thought about doing that a couple of years--maybe 5 
years ago, but there was a little bit of resistance from other 
industries.
    A low-carbon building materials incentive would be 
something that would be palatable to a wide range of 
industries. There are really good innovations going on in other 
materials, too, like concrete, as the Committee has previously 
heard. And so that would be something that could really drive 
adoption.
    Ms. Pingree. Great. That is a wonderful suggestion and I 
will look more into that, because I think that, as I think you 
might have suggested in your testimony, it is something we 
should use Federal, state, and local governments to really 
encourage this.
    And it is kind of a crying shame if in states like Maine or 
Oregon we don't have a wood first ordinance in our communities, 
because that is a great way to support it.
    I am out of time. Thank you, Madam Chair. I yield back the 
time I don't have.
    The Chair. The chair now recognizes Ranking Member LaMalfa 
for 5 minutes.
    Mr. LaMalfa. Thank you again.
    Let me turn to Mr. Schienebeck for a moment here. We, of 
course, are seeing the issues for the last year of trying to 
get the product from the woods to the shelf.
    What can we think about in terms of a pandemic situation 
like we currently are trying to come out of or one that may 
happen in the future?
    And just as a practical matter, I got frustration out there 
on the front line with people saying, we are outside. We are 
out in the woods.
    We are not in large groups of people--if there was really 
hesitancy to be able to do that work in a spread out situation 
of whether it was Federal forestlands or even somewhat in the 
private-sector, too.
    What do you think we could do to improve protocols to allow 
people to do more outside work and not have such tight 
constrictions such as COVID, and basically, people having to 
stay home?
    Mr. Schienebeck. It was really good to see that Homeland 
Security did recognize the timber haulers and harvesters as 
being essential workers. That was good to know, because most of 
our folks do work in machines by themselves.
    They don't, and a lot of the larger logging companies they 
did do different protocol. They didn't put a whole group of 
four people in one vehicle and send them off to the woods. Some 
of them did different things. They might have paid gas stipends 
and stuff for them to take their own vehicles and separate 
them.
    From that regard, probably one of the bigger issues that we 
ran into was really having access to agency folks when the 
stay-at-home orders took place.
    So, a timber sale goes on and you want to close the timber 
sale out, it was difficult from time to time to get a hold of 
somebody to actually close the timber sale out.
    There are certain requirements that are needed. You have to 
have your roads cleaned up. You have to have different things 
done to get that approval to close out. I think that is really 
an improvement that could be made is having better access.
    We have all gotten more used to Zoom and those types of 
things and we are trying to create apps for loggers and 
truckers. Everybody carries a computer in their pocket and over 
the phone and being able to give them access to those people.
    Mr. LaMalfa. And that is--that is what we were running into 
a lot of is ability to get the permitting done, getting the 
work done for the agencies to allow those folks to get out 
there and do that, and we do need to find improvement there.
    Mr. Imbergamo, talk a little bit about increasing the 
salvage situation. I mean, we have so much potential in the 
West, millions of acres, and I will say it again, that when you 
fly over after, say, a few years after a fire in a particular 
area and you can see there is the checkerboard pattern of 
private land versus Federal land, and you can tell which one is 
which just by flying over and seeing which one has been 
recovered, which ones have been starting to replant and 
restoration, et cetera.
    How the heck are we going to increase the salvage on 
Federal lands? What do we need to do to help the Federal 
agencies to get on track from lawsuits or get motivated to get 
this out, maybe fight the lawsuits?
    Because we are not helping our Federal lands with this lack 
of recovery and that window of time where you have--you can 
salvage trees and actually get value out of them within a year 
after a fire and we lose that because of lawsuits dragging on 
for years and years.
    What do you see as one of the linchpins of being able to 
speed that process up and get the value and actually get them 
restored again for markets that still seems to want it?
    Mr. Imbergamo. Yes. I think you have it exactly right. The 
problem is right now we do fight the lawsuits and frequently 
the agency prevails. So, ultimately, the projects go forward.
    The problem is that they go forward sometimes too late. If 
it is a proactive project, and we actually had a great example 
of this in your district back in 2012 where the Forest Service 
had tried for over 6 years to do a thinning in some land that 
was a Spotted Owl habitat.
    And they finally prevailed in the lawsuit and before the 
project could be implemented the project area burned. That was 
not good for the owls. I think that that fire burned 20 or so 
Spotted Owl nesting areas.
    And then on the salvage side, you said it. If we don't move 
fast enough, you lose value fairly quickly, much more quickly 
in the eastern U.S. than in the West.
    As I said, if Congress would bless the idea of preplanning 
the salvage so that resalvage outside of wilderness and 
roadless can go forward in an expedited fashion, that would 
enable us to get the fiber on a timely basis and help pay for 
the reforestation that we know is going to be needed.
    Mr. LaMalfa. Yes, exactly. It seems we just keep running 
into, one particular case in east Butte County in northern 
California there is grant money sitting there waiting to be 
used for Fire Safe Council work, but they couldn't get out of 
their own tracks due to some combination of NEPA or CEQA 
(California Environmental Quality Act). And so that grant money 
sat for 2 years. Finally, the area burned and it is just a 
horrific story. So we need to expedite.
    So I yield back. Thank you, Madam Chair.
    The Chair. Thank you, Mr. LaMalfa.
    The chair now recognizes Ms. Kuster of New Hampshire for 5 
minutes.
    Ms. Kuster. Thank you, Madam Chair, and thanks so much for 
holding this important discussion.
    New Hampshire is the second most densely forested state in 
the entire country, and nearly 60 percent of all our 
agricultural lands are working for us.
    A strong conservation ethic is deeply embedded in our 
state's history as is a heritage of maintaining forests that 
are responsibly managed.
    However, the forestry sector in our region, like the rest 
of the country, is facing serious challenges that have only 
been exacerbated by the uncertainties of the COVID pandemic.
    I was pleased to hear from foresters and loggers who were 
able to access Paycheck Protection Plan funds to get some 
relief at the height of COVID, and I was also proud to help 
champion $200 million in direct relief for those businesses 
that was signed into law in December and rolled out by the USDA 
just this week.
    I have heard from timber stakeholders in my district that 
this assistance is vital and cannot come soon enough. And while 
I am glad we were able to work in a bipartisan way to help this 
industry, we must not lose sight of the long-term issues that 
still need to be addressed.
    For New Hampshire, the future of forest products has a 
direct correlation to the future of our rural economies and our 
iconic wild places. With land prices climbing rapidly and 
residential development increasing, the survival of our small 
family-owned forests depends upon having strong markets for 
their wood products.
    As New England's paper mills had, largely, closed over the 
past couple of decades, it is imperative to help connect 
foresters with new market opportunities.
    So I am excited about the tremendous progress being made to 
incorporate mass timber and wood products into tall building 
construction and other infrastructure, including, I might add, 
in a new building addition to a building in the Navy Yard in 
our neighborhood here in D.C.
    I have also been proud to champion legislation that 
provides incentives to help transition families and businesses 
away from fossil fuels and toward modern wood boilers and 
heating systems.
    The forest products industry desperately needs new markets 
like this for low-grade wood that could otherwise accumulate on 
the forest floor and accelerate fires.
    And these are just a few of the avenues that should be 
pursued in order to maintain and grow a healthy market for wood 
products. Congress can play a role in fostering this progress.
    Now, Mr. Schienebeck, your testimony highlighted just how 
severe an impact the pandemic has had on the financial health 
of many businesses in the timber industry. Could you elaborate 
on why high demand and prices for products like lumber did not 
trickle down the supply chain to small business harvesters and 
haulers?
    Mr. Imbergamo. Sure, I would be happy to answer that 
question.
    So it really becomes a supply-and-demand thing. So when you 
look at, I would say, especially in Wisconsin, Minnesota, and 
Michigan, we had three pulp and paper mills close, and they 
bought a substantial amount of wood. They bought, roughly, 25 
percent of the pulpwood that was harvested in this region.
    And when that closes, we have a lot of loggers that are out 
there that are--they have a lot of equipment and stuff and they 
produce a lot of wood. So when you lose that market, you have a 
supply-and-demand issue.
    I mean, it only makes sense. If I am going to purchase for 
development just way overproduction out there, I am not going 
to pay as much for that.
    And then on the other hand, when we saw a lot of the 
markets kind of curtail a little bit from purchasing because 
they had no idea what the pandemic was going to bring with 
stay-at-home orders, they basically stopped production and 
these mills actually closed their production and those markets 
no longer existed.
    But then for building material all of a sudden it just took 
off, I am not sure--I am not sure we knew we had that many do-
it-yourselfers at home.
    Ms. Kuster. Yes. It certainly--my husband has done a lot of 
projects and the price goes up every week when we go back to 
the lumberyard.
    Mr. Macdonald, the work that you and your colleagues are 
doing at the TallWood Design Institute is very exciting and I 
am interested in the workforce development components necessary 
to support mass timber in tall and intricate building 
construction.
    How long will it take to complete the Certificate Program 
you are rolling out in Oregon, and do you think this could be a 
model that could inspire similar programs in community colleges 
and schools across the country?
    Mr. Macdonald. Thank you, Congresswoman, for the question.
    Yes, the work will be completed, largely, over the next 12 
months. We are rolling out a combination of e-learning and 
blended learning to kind of maximize the access to 
manufacturers in remote communities.
    A lot of the work that we are doing is focusing on the 
digital skills that are missing. If you are a lumber 
manufacturing company and you start to manufacture with 
something like mass timber, you are designing for customized 
products.
    Instead of selling in high volume and low complexity, you 
are selling customized building components for a specific place 
in a specific building.
    So a lot of the skills gaps are in things like computer-
aided design, computer numerical control, fabrication, and that 
kind of thing. So we do feel it is important to partner with 
community colleges to really, say, maximize the access to those 
programs in all the communities where they are needed.
    Ms. Kuster. Great. Thank you so much. My time is well over. 
I yield back.
    The Chair. The chair now recognizes Mr. DesJarlais from 
Tennessee for 5 minutes.
    Mr. DesJarlais. Thank you, Madam Chair. I would like to 
pick up where we left off a little bit on lumber prices. What I 
am hearing back home from people is, they were going to build a 
house, they started building a house, and now the costs have 
gone up exponentially. And, Mr. Schienebeck, you touched on 
this in your opening testimony.
    I guess the question is, these prices are high. The 
producers are not getting paid more. The haulers are not 
getting paid more. They did get some relief from PPP and that 
is good. The big box lumber stores are charging these high 
prices.
    The question would have answered is who is getting rich off 
these high lumber prices.
    Mrs. Dauzat. Being a lumber producer, we are a commodity 
and the prices of lumber go up and down. I will tell you our 
highest average price, weekly average price, was $1,200. We are 
now, I am seeing, $350 to $450 average price.
    So it has corrected, and I believe we submitted a chart 
showing kind of lumber prices over the last 5 or so years and 
you can see the anomaly that happened in 2020 and 2021 due to 
the demand created by the pandemic. So demand just outpaced 
supply and the prices went up----
    [The chart referred to is located on p. 26.]
    Mr. DesJarlais. Okay. But somebody was making some money 
somewhere, whether it is Georgia Pacific, Sierra Pacific. These 
companies, their stock has gone up.
    We saw a similar phenomenon in the beef industry. The 
producers couldn't sell their cattle. The packers were shut 
down due to COVID. But the prices we are paying in the grocery 
store are high. People are asking who is making money, is it 
the grocery stores, is it the big producer.
    Somewhere in both these industries it seems like down the 
chain people were getting paid by the taxpayer COVID relief, 
but somebody is making money somewhere.
    And I don't believe it is the producers. I don't believe it 
is the haulers. But I do think there are big companies in there 
that almost seem to be like price gouging we see sometimes with 
gasoline.
    Do any of you feel that that is the case?
    Mrs. Dauzat. It is a commodity market. It goes up and it 
goes down. So, we have lived with this. I have been in this 
industry for 23 years.
    In 2009, I was selling lumber for under $200 per 1,000 and 
losing money every day. It is a supply-and-demand industry. Our 
country is not real used to commodity markets and the 
volatility they can create.
    But what happened was just an extreme demand. Also, due to 
depressed housing, we lost so many mills through the Great 
Recession and then housing starts have been depressed for 
over--it has been over 10 years. So we just had an under supply 
of housing on top of this.
    Mr. DesJarlais. They are projecting, though, it is going to 
take 2 or 3 years to normalize. You say they have already come 
down tremendously, but a lot of prognosticators are disagreeing 
with that.
    But let me move on. And this one, I guess, is for anyone 
who wants to answer it. We have heard some talk recently of 
potential changes to the inheritance tax, including a recent 
proposal from the Administration discussing the possibility of 
eliminating the step-up in basis that allows families to leave 
certain assets to their heirs and reduces their capital gains 
liability. Would anyone here be able to discuss what this would 
look like for the timber industry?
    Mrs. Dauzat. I can tell you what it would look like for a 
family business. We are fourth generation and I am actively 
trying to get this business into the fifth generation.
    But it takes planning on day one. The minute you have a 
child, you have to start planning and start gifting. Because we 
are not cash rich. We are not a cash rich industry. We are an 
equipment rich industry. We have to invest a lot of money into 
our businesses.
    And so when someone passes away, you have to have a lot of 
life insurance or you have to have gotten it out of your estate 
to maintain the business.
    Mr. DesJarlais. Okay. Let us just touch briefly on labor 
issues as well. Most industries, restaurants, service 
industries, cannot get people back to work. There are nine 
million available jobs out there. How is this impacting this 
industry in terms of being able to get people who were laid off 
due to COVID back on the job?
    Mrs. Dauzat. Well, in the states we operate in the 
unemployment assistance has ended. I think both the last--
Florida ended it at the end of June and Alabama and Mississippi 
were a little bit earlier.
    We are starting to see people come back into the market 
looking for jobs. It was very tough through the last few months 
getting employees into the workforce. So with the reduction of 
that, we are seeing more people come into the workforce.
    Mr. DesJarlais. Though the take on there is that if we end 
these additional benefits that we have been seeing around the 
country, then we are going to see people go back into the 
workforce. But as long as we continue to provide the extra $300 
per week, we are going to continue to have the problem.
    And, Madam Chair, I went over, too. I am sorry. I yield 
back.
    The Chair. Thank you, Mr. DesJarlais.
    And the chair now recognizes Mr. O'Halleran for 5 minutes.
    Mr. O'Halleran. Thank you, Madam Chair and Ranking Member, 
for putting on today's hearing.
    The COVID-19 pandemic raised unique challenges. I remember 
in a number of fires talking to Forest Service people also and 
when they were fighting fires, and the challenge that was 
presented to them.
    And as we have heard today, it will help us better 
understand the lasting effects and identity opportunities for 
future economic growth. My district includes part of six 
National Forests in addition to the Grand Canyon. We are loaded 
with pinyon pine. That is the largest pinyon pine forest in the 
world, and the wood products industry in my district plays a 
key role in forest health and wildfire risk.
    In cooperation with the Four Forest Restoration Initiative, 
4FRI, the role of low-value small-diameter ponderosa pine 
remains a major issue in the success of 4FRI in the 
establishment of a sustainable restoration economy. At one time 
this year in my district we had 14 fires going at one time, 
none of them over 10,000 acres.
    So I remain hopeful that we can develop an efficient and 
sustainable use of these products to reduce the fire risk in 
Arizona's forests. Careful forest management is critical to 
ensuring the safety and stability of the region and the wood 
products industry in Arizona.
    Mr. Macdonald, you mentioned ways in which mass timber 
innovations play a role in helping with other key challenges, 
such as wildfires and the need for new products to reduce costs 
for thinning, a critical element, and reducing fuel loads in 
western states like Arizona.
    Can you describe the challenges and the opportunities for 
creating mass timber products and using underutilized species 
like ponderosa pine?
    Mr. Macdonald. Thank you, Congressman, for the question.
    We are doing a lot of work on ponderosa pine specifically 
and what we have found is that the technical characteristics of 
the material are such that there is no significant barrier to 
their use in mass timber products.
    In some cases, for example, they might use them in the 
middle layers of a cross-laminated timber panel with stronger 
material on the outside.
    But, really, the strength characteristics are not as good 
as something like Douglas fir. But there are applications in 
buildings that have lower loading requirements, for example, 
that kind of thing.
    So more of a challenge right now looking forward, is 
working out the logistical, the business case, the economics of 
the supply chain and the logistics.
    How do you get that restoration fiber to a sawmill that can 
process it, set up to work with sometimes small-diameter 
timber, and then to a mass timber processing facility in a way 
that is commercially viable?
    For sure, any markets we can create for this product will 
help to offset the cost of restoration work, which is really 
critical to reducing fire risk.
    But I think the business case, looking at logistics and 
transportation, is the problem that we have to work on next.
    Mr. O'Halleran. Thank you, and is there more targeted 
support we can provide, we in the government or others, in the 
area to make a better impact?
    Mr. Macdonald. Yes. The Wood Innovations Program and 
programs like that have been very, very useful to a large range 
of projects--not just research, but pilot projects.
    There is a great example in John Day, Oregon, of the 
community working hand-in-hand with a sawmill that was--that 
was experiencing a--basically, they ran out of fiber, 
traditional fiber, and the community worked with them, 
environmentalists worked with them, and came to an 
understanding that it is better to use this wood to thin the 
forest to save the forest, basically, and protect it than to 
try to oppose the use of it.
    And so it resulted in the sawmill being able to remain open 
and continue to employ people in the community and for this 
restoration work to happen in a commercially viable way.
    So, the continuation and the continued funding for the Wood 
Innovations Program would be very, very useful for that kind of 
thing. And if there is ways to provide tax incentives to those 
kinds of projects where you are retooling, for example, a 
dormant sawmill, trying to bring it back online to----
    [The information referred to is located on p. 63.]
    Mr. O'Halleran. We will have to talk about it later. We are 
over our time.
    Madam Chair, I do want to say that I would hope the Forest 
Service starts to use the 20 year contracts that we have 
allowed them to use now for a couple of years.
    They seem to be going slow at getting that up to speed, and 
it is critical that this be part of the process.
    And I yield back.
    The Chair. Thank you, Mr. O'Halleran.
    The chair now recognizes Mr. Allen for 5 minutes.
    Mr. Allen. Thank you, Chair Spanberger, for having this 
hearing today. Although I would tell you, we have been getting 
an earful from my timber industry and our home builders for 
quite some time, and I wish we could have gotten together 
earlier. But we are here and thank you for doing this.
    For the last half year, we have been dealing with these 
challenges facing our timber industry, and, of course, COVID-19 
gets blamed most of the time for it.
    The most critical issues the timber industry tells me they 
are facing right now are lack of labor, shipping costs, 
combined with lack of truck drivers, low prices for uncut 
timber and insufficient domestic milling capacity, and the 
inflation that is caused by this insufficient milling capacity.
    We do know and I had noted, in previous hearings as much as 
2 to 3 years ago, that we were seeing a lot of consolidation in 
our building industry, particularly from non-U.S. companies and 
that was a concern.
    And so, Mr. Schienebeck, in your testimony, you highlighted 
the slim profit margin that timber harvesters and haulers 
receive.
    Obviously, you all feed the milling facilities, and why 
haven't we investigated why the stump prices are depressed and 
then when you get to the mill you get these inflated prices?
    Do you not have safeguards in your industry to deal with 
something like that or does the government have to get 
involved?
    Mr. Schienebeck. Well, typically, I guess, I would say a 
lot of that gets into antitrust violations. We would be looking 
at that as a collective industry.
    Typically, it depends on supply-and-demand, and being a 
logger myself for 32 years, I went through a lot of those 
challenges where I would buy a timber sale.
    I knew exactly what my costs were. It is a little bit 
different in our industry. It is not like going to Wal-Mart and 
you pay whatever price is on the product, right.
    You don't go up to the cash register and say, ``Well, I 
don't think this is really worth that much money so I am only 
going to pay you $10 for this pair of shoes instead of the $15 
that you are asking.''
    So we know what our costs are. We know exactly what they 
are. Most of our folks are very good businessmen. Yet, when we 
go into the mill, it is, like, well, we are only going to pay 
you what we think we can pay you based on what we are selling 
our end-product for, and that is kind of the way it works in 
our industry.
    So it is very difficult for a group of loggers to get 
together and even discuss anything like that. We just don't do 
it because antitrust is a very serious violation and we treat 
it that way.
    Mr. Allen. But you could not, like, demand an investigation 
into this, whatever the--again, I don't know who benefited from 
the price of lumber when it--but, obviously, it came from--it 
wasn't the timber owners.
    It was not the loggers and, of course, like I said, with 
the mills, we just had this consolidation, which is creating 
big, in my opinion, a lack of competitiveness and, certainly, 
the Federal Trade Commission needs to look into that issue.
    Moving on to the next big disturbing piece of this whole 
thing to me is the forest fires, and it is amazing to me that a 
developed nation like the United States allows people who know 
nothing about our greatest resource, our timber lands, to 
control the management of those timber lands and allow these 
fires to take place.
    And so, Mr. Schienebeck, as a logger, can you give us your 
take on what it is going to--I mean, and of course, we 
understand this has been going on for 20, 30 years, and we are 
way behind in managing.
    Do you see a way out on this? How do we fix this and how 
can we fix this problem quickly?
    Mr. Schienebeck. Well, one thing I think we need to do is 
support the industry that we have and also make sure that 
everybody has got affordable raw material.
    I mean, I--personally, I don't see any good reason why we 
should be importing a lot of the lumber products and stuff that 
we are when we are growing it right here in this country.
    We just don't have access to it a lot of times, and it 
needs to be affordable because we do compete globally anymore 
if we don't, and we have other industries that we could be 
supporting--biofuel industry.
    I was recently passing through the central United States 
and saw, I don't know, hundreds of windmill towers. I would 
rather see a growing forest there that is being harvested 
sustainably and having that go into energy production in 
biofuels or wood pellets or whatever they are.
    But the biomass industry just hasn't taken off because 
there are a lot of subsidies for other types of energy that are 
out there, and that industry is not included in that.
    Mr. Allen. Okay.
    Mr. Schienebeck. But, if we really support a good 
manufacturing base that we will be able to--I mean, we got to 
have a place to go with the wood. We are growing it.
    Mr. Allen. Right.
    Mr. Schienebeck. We harvest it----
    Mr. Allen. I am sorry, but I am out of time and the Chair 
is looking at me so I better yield back here.
    But thank you. I think you are right on and thank you for 
your input, and thank you, Madam Chair, for this hearing.
    The Chair. Thank you very much, Mr. Allen, and I am far 
more comfortable tapping the gavel at my colleagues who should 
be looking at that timer than I am at our guests. But, I was 
giving Mr. Allen an eye.
    Thank you very much for that very good answer to the 
question, Mr. Schienebeck.
    The chair now recognizes Mr. Panetta for 5 minutes.
    Mr. Panetta. Great. Thank you, Madam Chair. I appreciate 
this opportunity and, obviously, my friend, Ranking Member 
LaMalfa, as well.
    Mr. Schienebeck, let me follow up on that question real 
quick that my friend from Georgia asked in regards to not 
necessarily suppression of wildfires, which we are doing, 
unfortunately, plenty of, not just this year but a few years 
back we have been doing that, especially out on the West Coast 
where I come from there in California.
    I have to say, what about forest management but, obviously, 
level-headed reasonable forest management in which we can 
reduce the potential for wildfires, things like including 
removing dead and dying trees, using controlled burns to reduce 
fuel in larger fires and removing invasive and nonnative 
species to create habitat that is better suited for wildlife 
and native species.
    What about if we did something where if we had 
reforestation projects that would be for at least 100,000 
acres? What if we did something like my Wildfire Emergency Act 
(H.R. 3534) that authorizes $250 million to do something like 
this?
    Mr. Schienebeck, do you think projects of this nature and 
scope that big are needed to restore our forests that face the 
threats of climate change and the effects of climate change 
that we are seeing right now, even out here in Washington D.C. 
with the haze that we are seeing from the smoke of the 
wildfires that are out West?
    Mr. Schienebeck. Yes, I think that would be very helpful. I 
think it is a helpful tool, number one, for the agencies to be 
going and doing their EISs and their NEPA documents based on 
those larger acreages and kind of being a bit more inclusive on 
that, and then breaking those down into smaller affordable 
timber sales that loggers and companies can afford to buy.
    When you look at it kind of across the landscape it is more 
efficient. Economically, it just makes more sense to do it that 
way on those larger projects like that. I think that goes a 
long ways with climate change. You are looking at smoke there.
    Well, we are getting smoke here in Rhinelander, Wisconsin, 
from Canada right now. There is a haze on the road and that is 
what the newscasters tell us that it is coming from. So, it is 
out there and that is not healthy either. So I think that would 
go a long ways in helping that.
    Mr. Panetta. Thank you. And another bill I have called the 
REPLANT Act (H.R. 2049), which addresses the important issue, 
the reforestation and, basically, dealing with the 
Reforestation Trust Fund, which I am sure you are familiar 
with.
    Right now, as you know, Mr. Schienebeck, that there is a 
cap at $30 million and, basically, it is finance. That trust 
fund to reforest is financed through tariffs collected on wood 
products but it is capped at $30 million, and what my bill 
would do, excuse me, would, basically, take that cap off.
    Would you think something like that would help, obviously, 
one, reforestation projects, but also lead to more resilient 
and healthier forests?
    Mr. Schienebeck. Yes, it would. I mean, in today's world, 
$30 million is not a lot of money. Probably look pretty good in 
our retirement accounts but, in reality, it is not a lot of 
money.
    And I think that if you would allow, because a lot of our 
forests regenerate naturally but there is a lot of it that 
needs to be replanted from storms, that type of thing.
    And for us, we have seen some of those in industry shut 
down and that really stifles their ability to research better 
trees that can perhaps resist emerald ash borer, oak wilt, some 
of those types of things.
    So I think that funding would go a long ways to help those 
nurseries develop trees that are more resilient to those types 
of things, which in turn, would be planted and really help to 
sequester carbon.
    Mr. Panetta. And part of that is nursery capacity as well. 
Can you speak to the importance of shoring up the nursery 
capacity for these types of products?
    Mr. Schienebeck. Yes, it has been, so we have had a few 
that have shut down in Wisconsin that the agency had, that the 
Department of Natural Resources had and it is, so far they have 
been--and it switched a little bit.
    A lot of folks have been going to containerized trees, 
which has taken more time and they feel like they are better 
stock to plant.
    But having accessible and, again, affordable stock to 
replant is very important. So just like everything else, if you 
reduce the amount that is available and you reduce the places 
that you can get it from, transportation costs go up if you 
have to bring them farther, yes, it would definitely help if 
there was a better, more available nursery capacity.
    Mr. Panetta. Great. Great. Thank you, Mr. Schienebeck. My 
time is up. Thank you, and I thank all the witnesses.
    And, Madam Chair, thank you. I yield back. Excellent job, 
Abby. Thank you.
    The Chair. Thank you very much. The chair now recognizes 
Mr. Johnson from South Dakota.
    Mr. Johnson. Thank you, Madam Chair. My questions will be 
for Mr. Imbergamo and, obviously, there are lots of regional 
differences. But, we want to be concerned anytime you have a 
forest inventory that is higher than the mill capacity. We see 
that in a lot of places and, frankly, in the Black Hills of 
South Dakota we are concerned about getting there.
    We want to do what we can to protect that mill capacity 
because we know that that processing capacity is incredibly 
important from a healthy forest perspective, from a safe forest 
perspective, and also just making sure we are in a position to 
develop innovative wood products. We have to have that capacity 
out there.
    So this really builds, sir, on some of the questions my 
colleagues have asked. But what should we be doing in places 
like the Black Hills of South Dakota to make sure that we are 
providing the predictability and the certainty that that 
industry needs to make the long-term investments that are going 
to keep them around because we want that capacity 10 and 20 and 
30 years from now because we want healthy forests 10 and 20 and 
30 years from now?
    Mr. Imbergamo. Yes. Thanks for the question.
    I guess the first step is not to have a sudden and drastic 
decline in a Timber Sale Program that has really done a good 
job of keeping the Black Hills from being entirely damaged or 
destroyed by the mountain pine beetle.
    They had a significant mountain pine beetle outbreak. The 
presence of those three mills on that forest helped the Forest 
Service limit its spread and they helped capture that value and 
they put that carbon into long-lasting wood products while 
providing jobs in small communities. I don't need to tell you. 
You know these communities.
    The northern half of the Black Hills is overstocked and 
really needs both pre-commercial and commercial thinning, and 
in many cases, it is like a lot of forests in the West. Before 
you can say if we prescribe burn, you have to reduce the stand 
density.
    And, right now that forest seems to have backed itself into 
a very bad position where it is unclear how much timber they 
are going to be able to get out in the next 2 years.
    And if that further compromises the wood value chain there, 
the danger of South Dakota becoming somewhat like Mr. 
O'Halleran's district where you have a substantial ponderosa 
pine forest and just no ability to get the management done is 
very, very real and very immediate.
    Certainly, financial support to the agency to conduct NEPA. 
But, some clear direction to use some of the authorities, 
again, that this Committee was the author of to get projects 
through the pipeline and out as timber sales as quickly as 
possible is what is going to enable you to manage that northern 
half of the Hills and avoid a repeat of the pine beetle 
outbreak that happened on the southern side of the Hills.
    Mr. Johnson. And so we want to make sure that they get the 
proper staffing needed to conduct these sales, right?
    Mr. Imbergamo. Right.
    Mr. Johnson. I mean, is there a role for expanded CE 
authority? I mean, the last farm bill did a lot on that front, 
but is there room for improvement?
    Mr. Imbergamo. Sure. I mean, the 3,000 acre CEs that the 
farm bill created in 2014 and then expanded their use to some 
other uses in 2018 is a proven method of getting things done. 
The question is, is it equal to the challenge that we are 
seeing--is 3,000 acres enough.
    And, I think that we are seeing, again, in a lot of cases 
that it is not enough. It is not enough to get substantial 
projects that will keep the logging infrastructure working and 
feed the mills.
    And, again, these things do not apply in the 50 percent of 
the National Forest System that is in either wilderness or 
roadless areas. This is not about opening acres that are not 
available for management in current forest plans.
    This is about managing the portion of the landscape that we 
are supposed to be managing.
    Mr. Johnson. Do we--I mean, in the Black Hills--and I 
understand. I mean, the scientists, they want to have a good 
data-driven process and we want them to have a good data-driven 
process.
    I have, at times, had concerns that when they look at the 
inventory they are only looking at areas that have been 
historically logged, and I wonder if we could be more 
innovative in putting roads to some places that could be logged 
that are overstocked. Am I on the right track there?
    Mr. Imbergamo. I think you are. As I understand it, the 
general technical report you are referring to only looked at a 
subset of about 700,000 acres on a 1.2 million acre National 
Forest.
    And, again, they are--that I believe that is just the 
suited base, which is--in every National Forest they are 
supposed to identify acres that are suited for timber 
production. It doesn't mean that harvest is not allowed on 
other acres and there are other acres where--that are or should 
be open to management.
    My understanding is the Hills is one of the best roaded 
forest. Has a very extensive road network. So, getting to those 
other acres and making sure that the assumptions behind the GTR 
are correct is critically important, and that the existence of 
that report can't lead to a rapid changing direction on the 
forest without causing a lot of havoc locally.
    Mr. Johnson. Thank you very much, sir.
    And thank you for your indulgence, Madam Chair.
    The Chair. Thank you very much, Mr. Johnson.
    I now recognize myself for 5 minutes.
    And to our witnesses, thank you for a wonderful discussion. 
I was interested in listening to my colleagues ask their 
questions first because I really wanted to see where this 
conversation would go.
    It has been informative, instructive, and I think so very 
interesting, and as follow-up to some of what has already been 
asked, I would like to begin with a question for Mr. Macdonald.
    So as we look forward to the opportunities that exist for 
wood products to play a significant role in the future of 
America's infrastructure, you mentioned briefly in response to 
Ms. Pingree some of what has happened in your native Canada in 
terms of incentives or legislation that has helped pave the way 
for innovative wood products.
    But I was wondering if you could sort of take us back a 
step. You mentioned concrete. You mentioned cross-laminated 
timber. Could you speak, just very briefly, to the structural 
and climate benefits of using these products and why they are 
of such great value?
    Mr. Macdonald. Yes. Thank you, Madam Chair, for the 
question.
    The Committee is very well informed on mass timber in 
general and some of the benefits of being able to sequester 
carbon for--in one with products like buildings, the ability to 
manufacture buildings with less embodied energy than other more 
energy-intensive materials like concrete and steel.
    And rapid construction, there are, of course, economic 
benefits, too. But, and I think we are, there are direct links 
between creating markets for these kinds of wood products and 
keeping forests as forests.
    The Chair. Yes.
    Mr. Macdonald. If you have robust demand for good products 
it is the best way to ensure that forests stay as forests.
    The Chair. And, Mr. Macdonald, and certainly, the concept 
of nanocellulose and innovations in concrete are something that 
is of great interest to me and something that I, frankly, talk 
about with my constituents when we look at where are some 
climate-friendly solutions that we can bring to the 
infrastructure investments that we are making in our country.
    So that is why I asked the question because it is an 
important one for anyone at home watching the Conservation and 
Forestry Subcommittee hearing to have a bit more information 
and background on that.
    And I would stop there and say from the perspectives of a 
sawmill operator or from the logging perspective, Mr. 
Schienebeck or Mrs. Dauzat, is there anything you would add 
about where you see or where you are hopeful about the 
innovative wood products and new technologies that continue to 
be studied by people like Mr. Macdonald at his university?
    Mrs. Dauzat. In the South, we have a very healthy 
byproducts market in Florida. Everybody is always surprised we 
do that.
    But we have paper mills and other things and--but in 
Mississippi it is a struggle with byproducts and I know we have 
heard that repeated over and over. Alabama is okay. But 
anything that can come out and build that byproducts market so 
that the system can be whole----
    The Chair. And, Mrs. Dauzat, can I--let me ask you a 
question. Are the byproducts market difficulties that you have 
had is that just not generating enough interest?
    Is that the actual supply chain for the production of those 
byproducts? Where are the challenges that you are seeing there?
    Mrs. Dauzat. Well, it is the markets for the byproducts. So 
in Florida, we have paper mills. You have WestRock in Panama 
City.
    You have GD in several locations in Georgia and in Florida, 
and also International Paper. So we have a good market for our 
pulpwood, our chips. We also have a pellet mill down the road 
that also purchases byproducts.
    In Mississippi the markets are just very limited, and what 
we are doing at our Brookhaven mill we are actually putting in 
a containerized dry shavings pellet plant where the pellets 
will be exported, and we will be buying our own dry shavings 
but we are also going to have a market for other people to sell 
their dry shavings to us.
    So we are actively looking for ways to support the 
byproducts market in the locations where it is struggling.
    The Chair. And, ultimately, is that an additional revenue 
stream for you?
    Mrs. Dauzat. It is.
    The Chair. Excellent. Excellent.
    Well, I want to thank our witnesses. I want to abide my 
time, and I am going to yield back to myself and recognize Mrs. 
Miller of Illinois.
    [No response.]
    The Chair. And I am not seeing Mrs. Miller on the screen so 
I am going to go to Mr. Moore of Alabama.
    Mr. Moore. Thank you, Madam Chair, and I appreciate you 
holding this hearing today.
    First, let me say thanks to all our witnesses for 
testifying at the Subcommittee today. In Alabama, we have about 
23 million acres of timberland, and that is large in a lot of 
states, if you know about the size of some of these states.
    But, well, basically, Mrs. Dauzat, I want to ask you a 
question. I appreciate, by the way, Rex Lumber investing in the 
Second Congressional District. I have heard great things about 
the mill. I have been to a couple of them. I want to get up and 
see yours.
    But I want to ask a specific question, if you don't mind. 
You outlined some obstacles to expanding your mills and 
facilities to heavy and prolonged regulatory burdens.
    Would you go into a little more detail on regulatory 
obstacles that stand in your way? And what can Congress do to 
remove the excessive red tape to help streamline practices at 
the Federal level to assist your industry?
    Mrs. Dauzat. Well, the permitting process always takes at 
minimum 4 to 6 months. In the South, we are lucky. I think we, 
generally, keep it into that 4 to 6 month range. But anything 
that would streamline that process, and we want to protect our 
water and air quality where we are, it is so precious to all of 
us.
    But the process is onerous. It is expensive. It requires a 
lot of people gathering a lot of information, and just anything 
we could do to streamline that process would help mills get 
started up more quickly. Did that answer your--and thank you, 
and you are welcome anytime at the mill as well.
    [Laughter.]
    Mr. Moore. Thank you so much. So do you think there is some 
probably--are there mills on the drawing board right now in the 
area maybe that are coming in--they will be coming into 
production anytime soon provided we can help you get the 
regulatory restrictions out of the way?
    Mrs. Dauzat. Yes. Mississippi has three Greenville mills 
announced. There is another one announced in Louisiana. These 
are all in the last, I would say, year, year and a half. There 
are additional mills that are under construction right now. So 
we do have a lot of supply coming online.
    Mr. Moore. Well, that is fantastic. Hopefully, we can find 
labor. I have been critical of sending mail, checks to 
everybody's mailboxes. I hate it when government dollars 
compete against the private-sector dollars for the labor force.
    So anyway, hopefully some of that, like you said earlier, 
our states are starting to clear that up. So with any luck, we 
will get people back to work.
    But thank you, and we will set something up. I look forward 
to coming to the mill and seeing it sometime. Thank you.
    And, Madam Chair, with that I will yield back.
    Mrs. Dauzat. Thank you.
    The Chair. I appreciate that efficiency, Mr. Moore.
    Next, I recognize Mr. Kelly of Mississippi.
    [No response.]
    The Chair. No. Mr. Kelly of Mississippi is not present at 
this time. And I now see Ms. Schrier has returned.
    So, Ms. Schrier, we are going to recognize you for 5 
minutes. Thank you.
    Ms. Schrier. Thank you, Madam Chair, and I want to thank 
you for holding this hearing. This is such a vital issue from 
my district, and I have a ton to talk and ask about.
    So I will be submitting more questions to the record about 
uses of wood products, the jobs the timber industry creates, 
and small-diameter mills.
    Last year, a report from the Washington Department of 
Natural Resources identified 3 million acres of forestlands in 
my home State of Washington in need of restoration. A 
significant percentage of those acres are in central 
Washington, including about 700,000 acres in the Okanogan-
Wenatchee National Forest in my district.
    A major challenge for removing fuels from overcrowded 
National Forest lands is that central Washington has lost the 
sawmill and contractor infrastructure needed to make forest 
health treatments feasible, both economically and ecologically.
    And as a result, public and private land owners must truck 
saw logs over 150 miles away from central Washington to the 
nearest mills at high costs that dramatically reduce revenue. 
It just doesn't pencil out.
    Developing a small-diameter sawmill in Chelan County 
presents a unique opportunity to create family-wage jobs, make 
our forests more resilient to catastrophic wildfire, support 
the wood products industry, and reduce housing prices.
    Since approximately 85 percent of Chelan County is National 
Forest lands, a mill would generate revenue for landowners as 
well as for the Okanogan-Wenatchee Forest to pay for critical 
forest restoration needs including the reduction of fire risk.
    There is substantial momentum and desire locally and 
regionally to invest in this work. The effort to bring a 
sawmill to central Washington has the support of the community, 
local, state, and Federal Government officials as well as 
environmental groups.
    And not only will this effort make forest restoration more 
cost effective but it will also become profitable, benefiting 
state, Tribal, and private lands that are currently too far 
from markets to be economically viable.
    Through active restoration and thinning we can make our 
forests more resilient to drought, climate change, and 
pestilence, in addition to mechanical thinning, makes 
prescribed burns more effective and renders forests less 
vulnerable.
    So I have a question for Mrs. Dauzat. In your experience, 
what are the impediments to the development of new lumber mills 
on or near Federal lands and how can Congress and this 
Committee help overcome those obstacles?
    Mrs. Dauzat. Well, we have a very personal story with the 
National Forest.
    In the South, we have a large majority of private 
landowners, but when my dad and grandfather sold the mill in 
Graceville and moved to Crystal, Florida, which is right by the 
Apalachicola National Forest, we were guaranteed that we would 
have a supply of timber for the life of the mill.
    So we are in 2021. That was in 1981. They did not honor 
that promise, and so we have been struggling with timber out of 
the Apalachicola National Forest since the late 1990s, early 
2000.
    With Hurricane Michael in 2018, our timber base was 
decimated around the mill. If you look at the path of where 
Bristol is, it, basically, wrapped around the mill.
    It was necessary--it is required that the National Forests 
step up and sell more timber out of the Apalachicola, which 
they have and I am very grateful for that.
    But it is the long-term solution for us to bridge the gap 
in that very rural community so land owners can get their land 
cleaned up, replanted, and that is starting to happen as the 
funds have started flowing out over the last year for cleanup 
and replanting.
    So the impediment is you can't--you just can't depend on 
the supply, I guess, to put it simply.
    Ms. Schrier. It sounds like increasing the requirement to 
harvest could guarantee that supply and make a mill financially 
viable. Make it a sure thing.
    Mrs. Dauzat. Correct.
    Ms. Schrier. Okay. Thank you. I also wanted to highlight an 
example from my district of what can be done with wood 
byproducts. There is a company called Forest Concepts. It is a 
wood product company based in Auburn, Washington.
    I had the opportunity to go visit them and learn about some 
of the innovative ways they use wood products. One example is 
wood straw, which they can provide in bales, like bales of hay, 
but this is wood.
    It is their signature product, and after a fire this 
innovative product can be used to prevent landslides and to 
promote the growth of new vegetation, and support for the wood 
products industry would be tremendous, both with small-diameter 
mills and also with looking at these kind of unique products 
that can really help us get over forest fires afterwards. It 
helps everyone.
    So I look forward to working with the Administration, 
Forest Service, and my colleagues on this Committee to support 
the wood products industry.
    And I yield back. Thank you.
    The Chair. Thank you very much.
    I would like to thank our witnesses for being with us 
today. Ranking Member LaMalfa and I would each like to ask an 
additional question as we have at this point recognized all of 
the other Members of the Committee.
    So I am going to yield to Mr. LaMalfa for his 5 minutes of 
questions.
    Mr. LaMalfa. Thank you again. I appreciate, again, the line 
of questions. Ms. Schrier's questions are just right up the 
alley I was looking at, too.
    For Mrs. Dauzat, now, could we elaborate a little bit more, 
we have opportunities to use this forest biomass in not just 
maybe the typical way of timber, lumber products, and paper 
products but you were talking about the needs for the 
facilities to processes this and we were talking about logging 
and long trucking distances, as Ms. Schrier was saying. The 
transportation becomes a real impediment as well.
    So can you elaborate a little bit more on the possibilities 
of having more smaller mills, or in my area where so much is on 
fire right now we are going to have so much material either 
left behind from a logging operation, the slash and such, or 
this salvaged material?
    We need to be converting this into electrical power. We 
need to make power plants. How practical would it be to have 
more smaller power plants spread around so that we are having 
the zone from which you would truck from be a little more 
closer, a little more reasonable?
    I have at least one plant in my district that runs into 
issues with the proximity towards the material, the forest 
material that would be used in the plant for making 
electricity.
    Could you elaborate a little bit on that, what we need to 
be focusing on and can we have more plants maybe a little 
smaller in size to meet a better regional need?
    Mrs. Dauzat. Well, in the sawmill smaller is not better, 
usually. Usually, higher volume drives down your manufacturing 
costs and allows you to be profitable--hopefully, profitable in 
most scenarios.
    2008, 2009, 2010, and 2011 were not a time period where--it 
was difficult time period. As far as you know, I will relate it 
to my experience after Hurricane Michael because it is a lot of 
timber left on the ground.
    And so what our mills did is went into salvage mode, and 
WestRock and Georgia Pacific, all the paper mills, Enviva 
pellet mill, we all switched to just trying to salvage the 
timber on the ground.
    Now, in the South, we have a life for--a log about 9 months 
in our weather, unless you can get them underwater, which is 
what we were trying frantically to do.
    We did not have that infrastructure in place, and it is 
called a wet log yard and, basically, you stack the logs under 
water and you can store them from anywhere 18 months to 2 
years, depending on size of the log.
    So we were not able to do that. We do have that 
infrastructure in place now should another hurricane come in 
and destroy more timber, which that would be a catastrophic 
event for us at this point.
    But I do think we all need to do more planning on what can 
be rapid response to these devastating events. I don't know if 
western logs can go under a wet log yard and be stored for a 
longer period.
    Your climate is much different from ours, where we are hot 
and humid most of the summer and our lumber starts to--our logs 
start decaying pretty quickly if they are not preserved 
properly.
    But that is where we are--our solution has fallen is with 
these wet log yards where we can store a decent amount of 
timber underwater to salvage them.
    Mr. LaMalfa. You expressed frustration with the permitting 
process for any of these milling type facilities, and so do you 
think we would have a little better luck with a right size one?
    You have to have your economies-of-scale. That makes 
perfect sense on a size of a mill.
    But, is there a possibility the permitting, licensing, all 
those things could go easier if we are--we are spreading them 
out a little bit more and then sizing them a little more 
regionally?
    Mrs. Dauzat. Yes, and just the time. If you are going to 
build something new, it is just the time-frame of building 
something new as well that hinders when you are trying to 
respond to a serious event.
    Mr. LaMalfa. What should Congress be doing to help this? 
Because we need the facilities. We need somebody--it isn't lack 
of material.
    It is not lack of wood product and it is not lack of 
willing people to fall it and haul it. But what do you--what do 
we--could really put our finger on here to help----
    Mrs. Dauzat. If we could focus on the General Services 
Administration and DOD utilizing mass timber. Just anything 
that utilizes wood in every form, and then some of these other 
side industries follow.
    But I think that is what Congress can do is support that 
idea of really getting mass timber out there in the market.
    Mr. LaMalfa. Thank you.
    Madam Chair, I yield back.
    The Chair. Thank you very much, Mr. LaMalfa. I now 
recognize myself for 5 minutes for additional questions.
    This conversation, again, has just been fascinating and I 
really thank our witnesses for your time here. I think we have 
heard you all loud and clear, and Mr. Macdonald, and, I 
believe, our other witnesses spoke to the need to have end-
users for these technologies.
    Mrs. Dauzat, I believe you said it is important to invest 
in the research, but we do need the end-users. So I hear you 
loud and clear on the references to DOD and GSA in places where 
we can incentivize or prioritize investments in our own 
domestic product within the wood product industry. And I 
believe, Mr. Macdonald, you spoke of that and included it in 
your written testimony as well.
    I would like to ask a question related to forest management 
and additional wood products that, Mr. Macdonald, some of it is 
in your written testimony and you spoke to some of it in your 
opening statement, mentioning the innovative products and 
projects, excuse me, in Oregon where you are using 
underutilized species in tackling housing affordability crisis 
as one piece. But you also talk about how forest lands and the 
restoration fiber can reduce fire risks.
    And so could you speak to that a bit more as we see fires 
raging on the West Coast, we talk about forest management?
    What opportunity exists in our forests that could 
simultaneously help us mitigate and address or at least reduce 
to some degree the risk of large-scale forest fires but also 
create new revenue streams, new industries, and, frankly, good 
products from a sustainability, resiliency, and climate change 
perspective?
    Mr. Macdonald. Thank you for the question. I think putting 
together a lot of what we have talked about already today. 
There are enormous opportunities to use restoration timber. We 
still need to work on, as I say, the logistics, the economics 
of getting that to a processing facility.
    But there is a large project being put together in Oregon 
right now, and there is a lot of moving pieces but, 
essentially, it is to take restoration fiber and to process 
that in high volumes and that low unit cost to create kit-of-
parts housing that I kind of alluded to earlier where we are 
really driving up the cost of each unit of housing by 
automation, using automation in the factory that would assemble 
these modules or these prefabricated systems.
    So that by doing that, we kind of close the loop of 
reducing fire risk, using this fiber for profitable use, and 
creating jobs in rural communities in the mass timber 
facilities and the sawmills, and also creating urban jobs in 
prefabrication factory, and designers and architects as well.
    The Chair. Thank you very much.
    Mr. Imbergamo, you had mentioned in your statement the 
differences, I believe it was, between the utilization of post-
disaster materials as a result of hurricanes and natural 
disasters in the South versus what we are seeing in areas 
ravaged by forest fires.
    Could you speak to that a bit more and where there is areas 
of opportunity that we could potentially be seizing on, and 
what some of the hindrances might be for that real difference 
that we see between the two regions?
    Mr. Imbergamo. Sure. Yes.
    I mean, as Caroline said, in the humid and warm South logs 
don't last very long. We saw some of my member companies in the 
central Rockies were conducting salvage operations 3 or 4 or 
even 5 years after we had seen mortality from pine beetles. In 
arid climates, the wood doesn't decay quite as fast.
    Fire salvage, it kind of depends on where you are. The 
ability to capture value can extend for up to 2, maybe 3 years. 
The thing about salvage is that it is, again, I believe we need 
to do more of it. Again, this is not opening areas that are not 
currently available to harvest. But we do need to do more of it 
on the general forest landscape.
    But again, if--the trick to attracting investment for--as a 
forest land base is to be a reliable supplier of wood fiber. 
And, as Caroline said, we need the end-use market. We also need 
some relative certainty of supply.
    And what we have seen with the Forest Service over the 
years in quite a number of places is they have tried to attract 
new investment to take advantage of the--to get the thinning 
down to prevent the need to do salvage and then they failed to 
deliver the logs that were needed to keep those investments in 
place.
    Some of my California companies, for instance, invested in 
small log lines when the Forest Service said they were going to 
move away from larger-diameter material, and then those forests 
tried to get sales up and they weren't able to get them up, and 
those investments, which are substantial, wound up being just 
stranded assets and had to be closed and broken up.
    So reliably providing a fiber supply from the general 
forest landscape is what is going to enable you to do the 
thinning to reduce the fire danger and have to mill capacity 
there to get the salvage done while the wood is still viable.
    The Chair. Thank you very much.
    Before we adjourn today, I would like to invite the Ranking 
Member to share any closing comments that he may have.
    Mr. LaMalfa. Thank you again, Madam Chair, for the hearing 
and for this opportunity to talk about something that has been 
a bit of a mystery for people on lumber, wood supply, and how 
that ties into forest management and the fire season that we 
can't ignore either.
    As far as solutions here, there are a lot of people on this 
panel that could be very helpful for us long-term, and in the 
industry to help us point in the right direction.
    We really just have to focus on getting out of our own 
tracks and having an atmosphere where the type of harvest we 
need and the type of processing, a streamlined process to get 
these products to be produced domestically, whatever it takes, 
and I am so focused, in our western states and California, 
where I am from, that the overload of wood inventory we have we 
have to accelerate rapidly if we don't want to have the fire 
situation we have year after year.
    And so everything has to be on the table. We have to have a 
permit process that gets a lot more salvage wood out a lot 
sooner so we can recover the value of that, and the green 
harvest.
    And we are not talking about--we are not talking about 
clear cutting every tree, and that is the fear that is often 
struck in media or in the environmental world there. That is 
not what we are after.
    It is not about big timber and big profit and all that. 
There is a responsible way to manage these lands that does take 
timber, but it leaves it behind, too. It leaves good habitat 
behind.
    We have to have everything on the table as far as the 
private-sector helping with our Federal lands and even things 
on the table like being able to export more. Whether it is a 
finished product or saw logs, we have a lot of catching up to 
do.
    So if we are ever going to catch up, we have to have open 
mind on how all these things can be part of the solution.
    And so I look forward to this conversation, going forward, 
and, again, appreciate Madam Chair's partnership on this, and I 
yield back.
    The Chair. Thank you very much, Mr. LaMalfa.
    I would like to thank our witnesses for their testimony 
today. It has been incredibly helpful to hear firsthand how you 
all have managed the challenges of the past year, how you view 
the challenges of the past year and a half, and how you view 
the future and potential areas for us to increase our 
resiliency, assist the industry, and ensure that it can thrive 
long term.
    I think the conversation has moved to various different 
topics throughout the questions. Certainly, the challenges that 
we see with, perhaps, insufficient number of sawmills, some of 
the challenges that sawmill operators have faced.
    Mrs. Dauzat, when you mentioned the 36 closures of sawmills 
across the South that is, certainly, something that I have 
heard about from members of the Virginia's Loggers Association, 
the challenges that that creates for the larger supply chain.
    And Mr. Macdonald's comments and in his written testimony 
there is discussion of rail infrastructure investments that we 
could be making to help mitigate some of the supply chain 
constraints that we see in the lumber industry.
    And I think that is an important element of the 
conversation and, certainly, something that I think we are all 
taking back as we think through additional legislation in the 
future.
    We have heard you all loud and clear in the ways that we 
can play a role in helping to inspire, create, and normalize 
the industry of innovative wood products and byproducts related 
to the timber industry and, certainly, the job opportunities 
that exist but the need for workforce training there.
    We are at a critical juncture. We have the ability to apply 
some of the lessons that we have learned from the pandemic the 
past year and a half, but also ensure that the steps we are 
taking forward as a nation as we consider investments in 
infrastructure and other Federal investments and decisions are 
informed by the research, the development, and the future of 
the timber industry.
    We have the opportunity to strengthen the wood products 
industry as Congress considers our funding choices and our 
decisions related to infrastructure, how we can be climate-
smart on these areas as well, and I do look forward to working 
with all of you as well as Ranking Member LaMalfa and my 
colleagues from the Subcommittee into the future.
    Again, I thank you for your time, for all that you have 
provided to this important conversation and all of the work 
that you do in this industry.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
witnesses to any question posed by a Member.
    This hearing of the Subcommittee on Conservation and 
Forestry is now adjourned.
    [Whereupon, at 12:02 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Statement by Hon. Abigail Davis Spanberger, a Representative 
 in Congress from Virginia; on Behalf of National Lumber and Building 
                      Material Dealers Association
    The National Lumber and Building Material Dealers Association 
(NLBMDA) would like to thank the House Committee on Agriculture's 
Subcommittee on Conservation and Forestry for the opportunity to 
provide written comments regarding the hearing titled, ``The U.S. Wood 
Products Industry: Facilitating the Post COVID-19 Recovery'' on July 
21, 2021.
    NLBMDA with its state and regional association partners represent 
over 6,000 building material retail locations nationwide who operate 
single and multiple lumber yards and component plants serving 
homebuilders, subcontractors, general contractors, and consumers in the 
new construction, repair and remodeling of residential and light 
commercial structures. The majority of NLBMDA members are small, 
family-owned lumber and building material (LBM) operations, in many 
instances providing lumber products and building material in the same 
communities for generations.
    Like many small businesses, lumber and building material dealers 
were deeply impacted by the economic downturn caused by the COVID-19 
pandemic in 2020 and subsequent supply chain disruptions that are still 
affecting our industry today. We write today to highlight solutions 
that the House Committee on Agriculture and Congress should consider as 
you examine concerns involving the wood product supply chain and forest 
product industry. NLBMDA believes these solutions will strengthen the 
wood product supply chain moving forward and provide necessary relief 
to businesses in our industry as they continue to recover from the 
COVID-19 pandemic.
H.R. 4302--Active Forest Management, Wildfire Prevention and Community 
        Protection Act
    Sustaining an efficient wood supply chain process is crucial for 
the viability of the forest products industry and the overall health of 
public and private forestlands in the United States. NLBMDA supports 
legislation recently introduced in the House of Representatives and 
referred to the House Committee on Agriculture which would take 
proactive and meaningful actions to improve the health of our nation's 
forests. NLBMDA calls on Congress to pass H.R. 4302, the Active Forest 
Management, Wildfire Prevention and Community Protection Act, which 
would authorize active management decisions for targeted forestry 
management actions, remove bark beetle-killed trees, protect property, 
stop frivolous litigation, provide a local source of revenue for 
counties, and prevent catastrophic wildfires.
    As of the end of last month, over 40 large wildfires were burning 
more than 660,000 acres throughout the country, preventing travel, 
hindering business, causing property damage, and creating poor air 
quality for citizens. In addition, the Western U.S. is still afflicted 
by a bark beetle epidemic that attacks healthy trees and creates more 
fuel for these wildfires. The bark beetle epidemic currently affects 
all eight National Forests in the Rocky Mountain Region. Bark beetles 
have destroyed more than 45 million acres of forest including 15 
million acres of Forest Service land.\1\
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    \1\ https://boebert.house.gov/media/press-releases/rep-boebert-
introduces-comprehensive-bill-prevent-catastrophic-wildfires.
    Editor's note: the referenced press release is retained in 
Committee file.
---------------------------------------------------------------------------
    The Active Forest Management, Wildfire Prevention and Community 
Protection Act would tackle these challenges head on and implement 
bipartisan reforms to support the health of our forests and strengthen 
the wood product supply chain. Importantly, the bill is fully paid for 
and will bring in billions to the U.S. Treasury.
Softwood Lumber Agreement
    NLBMDA supports the renewal of a Softwood Lumber Agreement (SLA) 
with Canada and believes a resolution to the softwood lumber dispute 
will contribute much needed certainty in the lumber market moving 
forward. The most recent SLA expired on October 12, 2015 and has not 
been renewed. Under the previous agreement, Canadian softwood lumber 
shipped to the United States was subject to export charges and quota 
limitations when the price of U.S. softwood products fell below a 
certain level. From 2006-2015, this agreement helped foster a period of 
stability in the U.S. lumber market and strengthened our relationship 
with a critical North American trade partner.
    Since the agreement's expiration in 2015, the U.S. and Canada have 
been involved in a contentious trade dispute that has resulted in the 
U.S. placing both countervailing duties and antidumping duties on 
Canadian softwood lumber imports. These duties, while not the sole 
cause, have contributed to price volatility for U.S. small businesses 
and consumers that rely on a supplemental steady supply of softwood 
lumber from Canada when domestic production cannot meet demand.
    The impact of these duties is particularly urgent as our economy 
experiences lumber price volatility and supply shortages which 
threatens the availability of affordable housing for millions of 
Americans. This volatility, when coupled with other factors, has caused 
the price of an average new single-family home to increase by more than 
$30,000.\2\
---------------------------------------------------------------------------
    \2\ https://www.nahb.org/news-and-economics/housing-economics/
national-statistics/framing-lumber-prices.
---------------------------------------------------------------------------
    While the SLA is not the ultimate solution to price volatility and 
supply chain disruptions, reenactment of the agreement with beneficial 
terms for both domestic producers and consumers down the supply chain 
will contribute to needed stability in the marketplace. Due to these 
pressing concerns, NLBMDA believes that Members of the House Committee 
on Agriculture should urge the Biden Administration to re-enter SLA 
negotiations with Canada and continue to follow-up with the 
Administration as necessary in the coming months.
Labor Shortages and Workforce Development
    Labor shortages continue to pose a very real risk to the long-term 
health of the lumber and building material dealer industry and wood 
product supply chain. The impacts of this shortage are affecting 
stakeholders ranging from small, family-owned businesses to large 
corporations. The lack of labor throughout the industry could have dire 
implications for the entire supply chain and have a negative impact on 
meeting the nation's demand for wood and paper products.
    NLBMDA calls on Congress to support the following measures to help 
improve labor and workforce development challenges within wood product 
supply chain:

   Oppose the extension of COVID-19 supplemental unemployment 
        benefits. While LBM dealers support reasonable policies to aid 
        workers in times of economic need, NLBMDA opposes any further 
        extension of the COVID-19 supplemental unemployment insurance 
        (UI) program which has been in place since the start of the 
        pandemic. According to the Bureau of Labor Statistics, the U.S. 
        economy continues to see a record number of job openings \3\ 
        and NLBMDA members have personally experienced the impact that 
        these supplemental benefits have had on employers' ability to 
        find and hire qualified workers. Due to the record number of 
        job vacancies combined with increased vaccination rates, NLBMDA 
        believes it is appropriate for Congress to wind down the 
        supplemental UI program and reject any further extensions.
---------------------------------------------------------------------------
    \3\ https://www.bls.gov/news.release/jolts.nr0.htm.
    Editor's note: the referenced news release is retained in Committee 
file.

   Pass the Future Logging Careers Act (H.R. 2727/S. 1262) to 
        help facilitate adequate successional planning for many multi-
        generational family-owned businesses common in the forest 
---------------------------------------------------------------------------
        products supply chain.

   Pass the DRIVE Safe Act (H.R. 1745/S. 659) which would 
        establish an apprenticeship program that would allow for the 
        legal operation of a commercial motor vehicle in interstate 
        commerce by CDL holders under the age of 21.

   Pass the Safe Routes Act (H.R. 2213) which would allow 
        logging trucks that meet state-determined legal requirements to 
        travel up to 150 air miles on the Federal Interstate Highway 
        System.

   Pass the Promoting Women in Trucking Workforce Act (H.R. 
        1341) which would require the Department of Transportation to 
        establish an advisory board charged with identifying barriers 
        to entry for women in the trucking industry and help identify 
        and establish training and mentorship programs for women.

   Support technical and vocational schools and apprenticeship 
        efforts in order to address the workforce skills gap.

    Thank you for the opportunity to submit comments on these critical 
issues impacting the lumber and building material dealer industry and 
wood product supply chain. As the national voice of lumber and building 
material dealers across the U.S., NLBMDA looks forward to working with 
your Committee to address these challenges in a manner that strengthens 
the LBM industry and U.S. economy in the future.
    For any questions, please contact NLBMDA's Director of Government 
Affairs Kevin McKenney at [Redacted] or [Redacted].
                                 ______
                                 
Supplementary Material Submitted by Iain Macdonald, Director, TallWood 
        Design Institute, Oregon State University
Insert
          Mr. O'Halleran. Thank you, and is there more targeted support 
        we can provide, we in the government or others, in the area to 
        make a better impact?
          Mr. Macdonald. Yes. The Wood Innovations Program and programs 
        like that have been very, very useful to a large range of 
        projects--not just research, but pilot projects.
          There is a great example in John Day, Oregon, of the 
        community working hand-in-hand with a sawmill that was--that 
        was experiencing a--basically, they ran out of fiber, 
        traditional fiber, and the community worked with them, 
        environmentalists worked with them, and came to an 
        understanding that it is better to use this wood to thin the 
        forest to save the forest, basically, and protect it than to 
        try to oppose the use of it.
          And so it resulted in the sawmill being able to remain open 
        and continue to employ people in the community and for this 
        restoration work to happen in a commercially viable way.
          So, the continuation and the continued funding for the Wood 
        Innovations Program would be very, very useful for that kind of 
        thing. And if there is ways to provide tax incentives to those 
        kinds of projects where you are retooling, for example, a 
        dormant sawmill, trying to bring it back online to----

    As I mentioned in my oral testimony the continuing support of the 
Subcommittee for research on timber construction through the USDA Wood 
Innovations Program and the Agricultural Research Service is extremely 
valuable, as researchers and the private-sector work to develop even 
more sustainable and cost-effective low-carbon buildings. Creating 
incentives for the use of low carbon materials in buildings funded by 
Federal, state, or local governments would also help to accelerate 
adoption of green construction. By stimulating domestic demand for 
products like mass timber, we can divert logs that might otherwise be 
exported offshore to domestic processing, thereby growing our 
manufacturing base and maximize the socio-economic benefits provided by 
each tree harvested.
                                 ______
                                 
                          Submitted Questions
Response from Caroline Dauzat, Co-Owner, Rex Lumber
Questions Submitted by Hon. Kim Schrier, a Representative in Congress 
        from Washington
    Question 1. Mrs. Dauzat, in your experience what are the 
impediments to the development of new lumber mills on or near Federal 
lands? How can Congress and the Agriculture Committee overcome those 
obstacles? What benefits can small mills bring to forests, local 
communities, and rural economies?
    Answer. The Rex Lumber mill located in Bristol, Florida exists 
because my father was assured a steady supply of timber from the 
Apalachicola National Forest in the early 1980s. Instead, it has been 
an ongoing struggle to access that timber due to a strenuous regulatory 
process. Primarily, the National Forest staff must go through extensive 
environmental reviews to meet NEPA requirements that can take months or 
years to complete before actually bringing a timber sale to market. As 
a company, and an industry, we support sustainable forest management 
and strong best management practices to reduce negative environmental 
impacts. However, the U.S. Forest Service should put forth greater 
efforts to streamline and expedite the process. Recently, we have had a 
better experience getting timber from the Apalachicola National Forest 
to supply the mill in Bristol, which has been critical to keeping the 
mill, and the jobs it supports, running since Hurricane Michael 
devastated much of the timber basket in the Bristol area. If this trend 
reverts to a more limited timber supply from the Federal forest, the 
mill will likely not be able to survive. To increase the presence of 
mills near Federal lands, Congress and the Forest Service must work to 
streamline the process for buying trees. Sawmills are capital 
intensive, with new mills costing $100-$200 million depending on the 
size. If a strong timber supply is not readily available, businesses 
are unlikely to make the necessary investment.
    The economic benefits of sawmills in their local communities are 
quite large, with some reports citing four indirect jobs supported for 
every direct job in the mill. A typical sawmill in the Southeast 
employs 100-200 people, so the multiplier effect is substantial. When a 
mill is built near a Federal Forest and buys Federal timber, the 
revenue from the Forest Service Sales goes back to the local counties 
to support community government and schools. Additionally, sawmills 
present an environmental opportunity for trees that need to be removed 
from the forest to be utilized while making way for new trees to be 
grown in their place. Young trees absorb carbon from atmosphere quicker 
than older trees, and forest products used in long term applications 
such as construction lock that carbon up for the life of the building 
or other wood products.

    Question 2. Mrs. Dauzat, your testimony mentions that we can reduce 
the likelihood of mill infrastructure collapse by encouraging increased 
market diversity for the forest products industry. Can you talk about 
some of the ways we can encourage increased market diversity?
    Answer. Market diversification is critical to maintaining domestic 
lumber production capacity. We would like to see the Federal Government 
take the following actions to encourage diversification:

  1.  Fully fund the U.S. Forest Products Lab to continue their crucial 
            research and technology transfer efforts for new wood 
            products while improving existing wood products.

  2.  Support the Wood Innovation Grant program, which provides 
            matching funds for selected proposals to utilize new or 
            improved wood products technology.

  3.  Increase utilization of domestically produced innovative wood 
            products by the General Services Administration and 
            Department of Defense.

      a.  As the GSA's Green Building Advisory Committee looks to 
            decrease the 
                carbon footprint of the government's built environment, 
            wood products, 
                such as mass timber, should be taken into 
            consideration. The GSA should 
                look at the life cycle analysis of various building 
            materials to meet carbon 
                reduction goals.

      b.  DOD continues to face a construction backlog while also 
            looking to reduce 
                their carbon footprint and be more resilient to extreme 
            weather events. 
                Mass timber products, such as cross laminated timber 
            (CLT), have been 
                approved in the military's Unified Building Code since 
            2016, passed anti-
                terrorism blast testing, and has been approved for up 
            to 18 stories of con-
                struction in the 2021 International Building Code. To 
            date, five CLT ho-
                tels have been completed on military bases around the 
            country through 
                the Privatized Army Lodging program. Due to the 
            prefabricated charac-
                teristics of CLT, these projects have gone up 30% 
            faster than similarly 
                buildings made of other building materials while 
            requiring much fewer 
                on-site construction workers. The DOD should put forth 
            a greater effort 
                to use innovative building technologies, including mass 
            timber, to meet 
                environmental, budgetary, and building needs.
Response from Iain Macdonald, Director, TallWood Design Institute, 
        Oregon State University
Question Submitted by Hon. Kim Schrier, a Representative in Congress 
        from Washington
    Question. Mr. Macdonald, in your testimony you mentioned that 
workforce training and development will be critical for the mass timber 
supply chain. I have also heard from stakeholders like the Cross 
Laminated Timber industry in my state about the need to bring more 
people into the wood products workforce. And I was excited to learn 
that Forest Concepts is partnering with Washington State University, 
Green River College, and the Auburn school district to create 
internships and apprenticeships to bring more workers into the wood 
products industry. In your experience, what are the wood products 
industry's workforce development needs? How can Congress support these 
efforts?
    Answer. There are a broad range of needs that span the spectrum 
from woodlands to manufacturing. The forestry sector is experiencing a 
shortage of workers in occupations like harvesting, as older workers 
retire and young people choose other careers. We believe that 
implementing new harvesting technologies can partly address this, as 
`upskilling' these occupations will be likely to make them more 
attractive. On the manufacturing side, the relatively new field of mass 
timber differs from the traditional lumber sector in that workers need 
to be conversant with a variety of digital tools, such as computer-
aided-design software and CNC fabrication (CNC stands for computer-
numerical control and refers to programmable manufacturing machines). 
Mass timber construction projects also commonly use Building 
Information Modeling (BIM) software, in which digital models of 
buildings are shared between architects, engineers, contractors and 
sub-trades. Our Institute, in collaboration with community colleges and 
school districts, is developing continuing education programs for 
workplace learners to provide opportunities to gain these skills. 
Support to promote these career opportunities and extend this kind of 
training to new audiences such as BIPOC communities would be extremely 
valuable.
    The U.S. construction sector is also facing an aging workforce and 
severe labor shortages in some regions. Building with mass timber is 
somewhat helpful in alleviating these problems, as more of the 
fabrication work is done in the factory and less on the construction 
site. A shift to a greater use of modular or panelized construction 
methods, in which components of buildings are pre-assembled in a 
factory and then joined together quickly onsite, is being seen as a 
further potential solution. The factory jobs offer a more comfortable 
work environment and more predictable schedules and commutes. In many 
cases, labor unions have also embraced this shift.
    Oregon has assembled a coalition of public agencies and 
universities that will shortly be submitting a proposal to the Economic 
Development Administration's Build Back Better Challenge. The focus 
will be to develop modular affordable housing solutions using mass 
timber that utilizes fiber from forest restoration. It is our hope that 
the `virtuous cycle' created by the project--reducing wildfire risk, 
creating urban and rural manufacturing jobs and tackling the housing 
affordability crisis faced by many cities--will serve as a model that 
can be replicated in many other parts of the U.S.

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