TIME TO ACT and ACT FAST!

State Representatives of the House Transportation & Infrastructure Committee have proposed the elimination of the LOG and FARM PLATE in Michigan along with all other specialty plates.  Their initial proposal is to remove the Log Plate and have log trucks placed under the commercial gross vehicle weight (GVW) class at 50% of that fee.  This would change your yearly plate fee from around $300 to around $1200 PER TRUCK.

They need to hear from YOU about the importance of the LOG PLATE and what it means to keeping your business viable.  They also need to hear from loggers and mill owners who rely on the log truck drivers to get raw material to the mills.  An increase in the plate fees would have catastrophic effects on the industry.  Please take a few moments and let these committee members know how you feel in YOUR OWN WORDS.  Handwritten notes are fine and even carry a stronger message.  Form letters are NOT suggested; they carry little strength.  If you need help developing your thoughts into a letter, contact the Newberry office.  We are here to support you at every opportunity.  906-293-3236 or email Brenda at:  owen.brendalee@gmail.com

Legislative Report for MAT Judy Augenstein, Legislative Consultant June 2013

With the U.S. Senate expected to approve the so-called Marketplace Fairness Act, state officials and many Republican Michigan legislators support the move, especially as the latest estimates from the Michigan Department of Treasury show losses from sales both through mail order and the Internet could total $491 million in the 2013-14 fiscal year. The Michigan Department of Treasury supports the proposal and argues the issue has always been and remains one of tax fairness.

Michigan is one of 24 states that is part of the Streamlined Sales and Use Tax Agreement, which has been in place since 2005. Under the agreement, the states work together to develop smoother administration of sales tax collections and distribution, including collections of taxes from catalog and Internet sales. Also, since 1999, Michigan has included a line in its tax return that would let individuals pay use tax on sales they had made.  The most recent data on those collections comes from 2011 when approximately $5.6 million was collected from nearly 108,000 taxpayers.

This House Tax Policy Committee has been debating HB 4202 and HB 4203.The bills force the collection of the sales and use tax on purchases made through on-line entities that have affiliations in the state.  Supporters of the bills, such as the Michigan Retailers Association say the bills provide main street fairness. Retailers testifying on the bills this week say they feel like they have a 6 % disadvantage when customers want them to complete on price and being required to charge sales tax.

Governor Rick Snyder held his first 2013 Forest Products Summit in Lansing. The Summit brought together about 150 representatives from industry, government, the financial sector and academia to stimulate conversations for growing the state’s forest products industry. Governor Snyder addressed the group with his usual optimism, enthusiasm. Snyder encouraged the group to take a strategic and collaborative approach to reinvention.

J.R. Richardson, chair of the Natural Resources Commission and the Timber Advisory Council, commented that Snyder’s interest in holding the summit illustrates his commitment to the forest products industry, especially in making it a part of his mission to reinvent the state. Richardson also commented that the Summit sets the stage for the future of the timber industry and for support of land based industries in Michigan. Following presentations, panel discussions and breakout work-group sessions, Bill O’Neill, chief of the Department of Natural Resources Forest Resources Division, reminded attendees that in order to be successful, discussions need to continue beyond the Summit.

The Timber Advisory Council will use the five year goals it endorsed prior to the summit to move forward with the ideas and opportunities discussed.

The goals included:

Increasing the export of value added timber products by 50 percent

Increase forest products related careers by 10 percent

Supporting existing industry, and

Encouraging regionally based industry developments

DNR Director Keith Creagh closed the Summit by telling attendees that the TAC will be tasked with looking at the outcomes and focusing on the opportunities and impediments to the growth of the forest products industry in Michigan. Creagh said “The next steps include charging the TAC to put form and structure to the ideas presented at the Summit. We will continue to assure the long term sustainability of this resource for all the people of Michigan.”

House Bill 4242, legislation requested by GLTPA, has passed the House and now awaits debate by the Senate Regulatory Reform Committee. The bill requires new administrative rules be necessary and not overly burdensome to an individual. The point of differences between sponsors of the Qualified Forest Act bills and Governor Rick Snyder appear to be resolved. The Governor is expected to sign the bills into law.

The House Transportation and Infrastructure Committee continues to work towards a road funding solution.  The log/farm plate and other specialty plates are in jeopardy because committee Democrats are threatening to withhold their votes if the specialty license plates are NOT eliminated.  House leadership does not have enough Republican votes for a road budget plan and are trying to “bargain” with Democrats for votes. The leading House Democratic Committee legislator, Rep. Marilyn Lane (D-Fraser) opposes specialty license plates and the 160,000 weight limit. Representative Lane is being very vocal about her opposition.  We continue to work with our legislative friends to maintain the log plate and I encourage you to write, e-mail or call your legislators to encourage them to maintain the log plate and explain to them your reasons to keep the plate.

The 2014 annual Timbermen Convention has been set for May 1-2, 2014, at the Kewadin Casino in Sault Ste. Marie.

More information will be available in January of 2014.

Legislative Report for MAT
Judy Augenstein, Legislative Consultant
May 2013

In a defeat for environmentalists, the Supreme Court sided with the U.S. timber industry in a dispute over whether loggers should have to get special EPA permits because of gravel and dirt falling into nearby waterways. In a 7-1 vote, the court reversed a lower court ruling which said the run-off from logging sites is the same as any other industrial pollution, requiring a Clean Water Act permit from the Environmental Protection Agency.

The Supreme Court justices said the logging companies did not need to get the permits. During the arguments, the timber companies had said a ruling against them would put the U.S. timber industry out of business, and that would cost millions for every single logging project to get EPA permits. The EPA itself disagreed with the lower court ruling. Supreme Court Justice Anthony Kennedy said for the court that the agency’s reading of its own regulations is entitled to deference from the court. In any event, the agency has since issued a new regulation that removes any doubt that water from logging roads is the same as runoff from a farmer’s field, not industrial pollution.

Justice Antoni Scalia dissented, saying that the court gives EPA and other agencies the authority to say what their rules mean “for good reason.”

The House DNR budget committee chaired by Rep. Jon Bumstead (R-Newaygo) has completed action on the House DNR budget bill. Chairman Bumstead restored the cord mandate which requires the DNR prescribe treatment on 79,000 acres, prepare for harvest 67,500 acres and reinstated language to require the DNR report to the legislature on a quarterly basis the status of the cord mandate. Bumstead added additional monies for the Wildfire Protection Program and language to require $20.3 million of the Forest Development Fund be appropriated to the Forest Management and Timber Market Development line item. The Senate DNR budget committee chaired by Senator Mike Green (R-Mayville) has reported the Senate DNR budget bill which includes the cord mandate language and additional monies to the Fire Protection Program. Both budget bills will now be considered by a special conference committee charged with hammering out a compromise on the point of differences between the two bills before the Legislature votes on the final DNR budget bill.

Judy Augenstein
716 E. Scott St., Grand Ledge, MI 48837
Phone 517-242-3043 Fax 517-627-2186
JAugensteinGee@juno.com

http://www.augensteingee.com/

Good news on runoff from forest roads!

Knowing When to Say No

If you are still in the logging business today, you have probably become very adept about calculating the cost of doing business. With the rising price of equipment and parts; consumables such as fuel, tires and lubricants; not to mention higher labor costs and costs associated with regulation of the industry, you have to be on top of your game, knowing just what your fixed costs are and also have a good idea of your variable costs.
For years, the leadership of our industry has stressed the importance of knowing what it costs to produce a unit of fiber. There have been numerous studies completed by Universities and organizations such as the Wood Supply Research Institute that help to determine some of the inefficiencies in the wood supply chain and thoughts on how best to reduce cost in our operating environment. While models have been developed to calculate what it “should” cost to produce a volume of fiber, they oftentimes leave out the many variables such as topography, quality of timber, regeneration harvest vs. thinning, tract size and other expectations that a consulting forester or landowner expect well after the ink is dry on a contract. Other variables that influence the cost of production include DOT inspections, turn- around time at the mill, breakdowns, labor shortages and weather, to name a few.
There continue to be meetings across the country that look at the entire wood supply chain and discussions that include the need for a cultural change in the way that business is conducted from the stump to the mill. Meetings and discussions are only as good as the follow-up and on-the-ground practices that occur as a result.
The old business model that has existed over the past 100+ years between loggers and their customers, the landowners and the consuming mills is no longer working. What has been missing from this model is the logger knowing when to say NO; NO to the landowner if they expect a higher price for their stumpage that would make you unprofitable or expectations of services that were not included in the contract; NO to the mill if the delivered rate is less than you can afford to pay a reasonable stumpage rate and charge a reasonable rate for the services that you will be providing. When there is not enough money left to make a reasonable profit for the business that you are depending on to afford a decent living and provide a retirement for you and your family, it is time to say NO.
You have equipped yourself with the tools and knowledge that you need to make these decisions over the past several years as your business has gained efficiencies both on-the-ground and through better management. Now you must use them. Perhaps it is time that logger training include negotiation skills for loggers. Would you attend?
While there are many variables that impact profitability and success in this industry, oftentimes loggers can be their own worst adversaries. Until we view ourselves in a better light and learn the business ropes better, including negotiation, can we really expect to do any better?
As we have all heard repeatedly, “There are three legs to the supply chain, and all need to be strong.” Opportunities are coming back for the professional timber harvester as markets improve across the country. Let’s not blow it by selling ourselves short. Know when to say NO, and realize an opportunity where one exists. As upbeat 2013 quarterly reports from some of the major forest products corporations begin to trickle in, a quote from a good colleague simply states, “We don’t mind sharing some of the pain in the down cycles, but it would be great if we could also share some of the gains in the up cycles.”

The American Loggers Council is a non-profit 501(c)(6) corporation representing professional timber harvesters in 30 states across the US. For more information, visit their web site at www.americanloggers.org or contact their office at 409-625-0206.