[Congressional Record (Bound Edition), Volume 152 (2006), Part 18]
[Senate]
[Pages 23483-23484]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             TIMBER TAX ACT

  Mrs. LINCOLN. Mr. President, we are here at the end of a session, a 
2-year session where many of us have worked very hard to try to come up 
with commonsense solutions for some age-old problems in our Nation and 
looking for commonsense solutions to new and different challenges that 
our Nation and its business leaders as well as workers face as our 
business models change and grow and the more complicated nature of how 
businesses are set up changes and grows. We have worked hard this 
year--I certainly have for my State--to look at how we can balance 
those things and how we can create a good environment for all of the 
good, solid, responsible corporate citizens who exist out there in this 
great Nation who are trying desperately to present the kind of good 
jobs, the good-paying jobs working Americans need to stay where they 
are, to live in the communities in which they grew up, and to provide 
for not just their children but their aging parents.
  So I think as we come to the close of this session, we have all kind 
of gotten into a hustle and a bustle, much like any holiday season 
brings, where we tend to get a little overexcited about some things, 
yet we don't stay focused enough on what it is we really need to be 
doing. The working families of this country need us right now. They 
need us to be responsible. They need us to focus on the things that 
will be productive for them, productive for this country, and the 
companies that are working hard to produce and maintain jobs in many of 
our States across this great land in order to make sure that those 
working families can stay working, that their children can stay in 
school and that their future for higher education is there, and that 
these families can stay together and care for their aging loved ones.
  So I come to the Chamber to speak about a subject which I believe is 
immediate and serious or certainly has immediate and serious 
consequences to the working people of my State. I am talking about the 
hemorrhaging of jobs in the forest products industry particularly.
  Here to my side is really an outdated map because we have seen the 
loss of well over 700 jobs since June of this year in the forest 
products industry. But in any case, there has been a tremendous amount 
of loss in employee layoffs, closed saw mills and paper mills in this 
country. I think it really, if you take a look at this, drastically 
shows the hemorrhaging that is occurring and what it means to good, 
hard-working American families across this country.
  Over the last year and a half, the State of Arkansas has lost 1,800 
timber manufacturing jobs. These are good jobs. They are negotiated 
union jobs. They are located in our small rural towns. They are the 
jobs which are the foundation of these families, these American 
families who are the fabric of our country, whom we come to the floor 
every day, day in and day out, to talk about.
  But it doesn't end there. For every highly skilled, highly paid plant 
job that is lost, another job is lost out in the forest--not just these 
which are represented here but jobs including truckdrivers and 
foresters, the cafe along the way that supports that industry, and 
those people who are out working in the forest--the loggers, all of 
those different entities. That means about 3,600 families are not 
having a very merry holiday this year.
  In fact, we have lost over 1,000 jobs in just the last 10 days alone. 
But it is going to get worse. If the Congress does not do something 
here, with the opportunity that has been presented to us--many of us 
have been working on this issue over the last 8 to 10 months. But here 
in the close of this session and this week, we have an opportunity to 
do something, to help stop the loss of these manufacturing jobs out of 
our

[[Page 23484]]

country to places such as South America and Asia. I am talking about 
enacting the Timber Tax Act which we have talked about over this past 
year.
  For many months, the Timber Tax Act has consistently and repeatedly 
been included as part of the extenders packages we talked about. For 
example, it was included in the Senate conferees' agreement in the 
pension bill, in the Reid extenders amendment, and in the Baucus 
extenders amendment. The bill has broad bipartisan support, with over 
33 cosponsors from every part of the country. That should come as no 
amazement to any of us when you look at this map and realize that it is 
not just one region of our country that is suffering, but it is many 
parts of our country that are suffering.
  Additionally, this provision provides relief to the entire industry 
across the board, from the smallest woodlot owner to some of our 
largest, oldest forest companies. Over 9.9 million individual tree 
owners will receive immediate and significant regular and minimum tax 
relief.
  Unfortunately, we have found some concern about whether we need 
competition or greater competition in this industry. We come to this 
floor every day talking about how competition makes our Nation 
stronger. We talk about how competition can help us grow, not just as 
individuals, not just as companies, not just as a nation, but as a part 
of the global community. I believe that. I believe competition is a 
good thing. If it is done in a fair way and if people are given the 
opportunity to show what they are made of and to get out there and do 
the job they believe they are capable of doing and really compete, 
working together to compete in a global marketplace, I think everyone 
is a winner. But when we keep in artificial stopgaps or actually keep 
away opportunities and continue to keep an artificial circumstance 
which stymies the kind of competition that can make us strong, we all 
end up being losers. I think that is a lot of what has occurred here. I 
think it is extremely shortsighted and it opens all of our similarly 
situated companies--all of them, whether it is the forest products 
industry, which has multiple different types of entities, or any of our 
entities--it situates them and puts them up against unbelievable 
scrutiny and criticism.
  The timber tax provision is sound tax policy. Over the past several 
years, forest products companies have been under intense pressure to 
reduce their Federal taxes by either reorganizing as a nontaxpaying 
entity, or to sell their timberlands, whether they sell them to pension 
funds or to timber management organizations--wherever they may go to 
offload that part of their industry. But I want us to think a little 
bit more about that. We talk about being shortsighted. Think about what 
that means to the conservation of this country. You look at the small, 
family-owned timber companies that exist out there that are fighting 
and trying hard to keep their heads above water in an industry and in 
circumstances where they are put at a disadvantage. Who is most likely 
to be a good steward of the land? Who is most likely to go in and 
reforest? It is the third- or fourth-generation small business owner, 
the small family-owned timber company that is going to go in and take 
good care to be a good steward of this land. Those are the most likely 
ones.
  Let's not put them at a disadvantage because then, all of a sudden, 
all of our timberland, particularly the family-owned timber company, is 
going to be owned by big groups, and all they want to do is go in and 
cut and then sell off to developers. Let's make sure we have diversity 
in this industry; a good, diverse, competitive industry that looks at 
all sides of what we are trying to protect here: family jobs, the 
environment, the landscape of many of our small rural States. It is 
very important.
  As the integrated companies separate their mills from their plants 
and from their timber, there are obvious results: plant closures and 
job loss, not to mention what happens with that family-owned business 
that is such a good steward in the conservation of the land.
  As a result of this sort of artificial, short-term tax-driven 
pressure, the amount of U.S. timberland held by integrated forest 
products companies has fallen from 50 million acres to 15 million 
acres. Think about that. I want my colleagues to think, when you take 
those kinds of lands out and put them under a bigger umbrella where 
nobody is going to really be able to come in and say you can't come in 
and clearcut that and sell it to a developer or whatever, they are more 
likely to wave their hand, do it, and go on.
  But when you have a small family-owned business that has been there 
for generations, they are so much less likely to do any of that. They 
are going to go back in, and with a great sense of pride and respect as 
well as confidence that this is going to continue to be a small family-
owned business, they are going to reforest and they are going to 
reinvest in that forest product and that timber company.
  By enacting the timber tax provision, Congress will forestall a 
further decline, and we will allow forest products companies to make 
their decisions based exclusively on sound business principles--not 
looking at what they have been backed into a corner to do in order to 
simply keep their business or to simply keep one piece of their 
business. They will lay off the jobs, they will break up the integrated 
company, and they will move on because it is easier and because it 
keeps them alive--as opposed to making good, sound, principled business 
decisions.
  Without its passage, I fear the State of Arkansas will see further 
immediate closures and loss of jobs. I plead with my colleagues, we 
cannot lose this opportunity. We cannot lose this opportunity to take 
something that we have looked at and talked about and developed over 
the last 10 or so months. We have seen it in other packages, and we 
know how productive it can be. I hope the majority of this body will 
join me in seeking a collaborative effort to make sure that we do not 
see even what the current map would look like if this one were updated, 
or to think of what it may look like 5 or 10 years from now, with the 
incredible loss of jobs in timberland and our family-owned timber 
businesses. It would be devastating.
  I thank my colleagues for their attention to this issue. I plead with 
them on behalf of the people of Arkansas, those unbelievably hard-
working families who live in those rural communities, who know our 
forests and know how to take good care of them: Please let us work to 
keep those jobs and to keep those businesses going in order that we can 
not only save those jobs but save a way of life in parts of rural 
America, as well as making sure that we have the best interests of our 
forest lands at heart, private forests and others. I think we have a 
great opportunity to do it, and I hope we will act on that.

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