U.S. Supreme Court to hear Georgia-Pacific case
The U.S. Supreme Court has agreed to hear a case that could affect the bottom line of numerous lumber suppliers with timberlands in the United States.
Georgia-Pacific, along with the American Forest and Paper Association, is asking the nation’s highest court to overturn a 2011 ruling by the U.S. Ninth Circuit Court involving rainwater runoff from logging roads. The Ninth Circuit said that forest road operators in the states under its jurisdiction will be required to obtain Clean Water Act discharge permits, which would be a new requirement. Environmentalists, concerned about the effect on wildlife from built-up sediment in rivers and streams, considered the ruling a victory. But the forestry industry appealed the decision by the three-judge panel, arguing that rain runoff from forest roads is not the same as discharges from industrial sources such as factories and mines.
The Ninth Circuit governs Washington, Oregon, California, Arizona, Nevada, Idaho, Montana, Alaska and Hawaii. The Supreme Court is expected to hear the case this fall.
California lumber tax dropped
A proposed 1% additional sales tax on selected lumber products that was part of Governor Jerry Brown’s attempt to close a state budget gap has been dropped, much to the relief of California LBM dealers. The tax pitted retail lumber sellers against lumber producers by shifting fees the timber industry currently pays to its customers.
The 1% tax would have been used to fund the regulatory activities of four state agencies involved in reviewing and monitoring timber harvest plans that are required for all private and public timber cutting. Currently, those costs are paid by the landowners and from state general fund expenditures. The proposal to shift the program costs to the retail lumber dealers was supported by the California Forestry Association.
The Lumber Association of California and Nevada (LACN) lobbied hard against the tax, citing the additional cost and complexity of setting up a new tax collection system. It was also unclear exactly which wood products would be subject to the tax, the LACN pointed out.
LACN disagreed with that proposal and advocated that the fees should remain as they are and not be an additional cost to consumers. The timber industry wanted the fees to be passed on to the end user to lessen the competition they face from timber produced outside California and thus not subject to California regulations.
In a statement, the LACN said:
"The additional tax would have funded and expanded the budgets of the various state agencies that review, regulate and approve or deny timber harvest plans for the timber producers. In the past some of the costs of regulations were paid by fees charged the industry, but the various state agencies that oversee the timber industry actually wanted the fees and costs to the industry to be increased. The timber industry proposed those fees be passed on to the end user to lessen the competition they face from timber produced outside California and thus not subject to California regulations."
Perennial Wood Decking being tested at Lowe’s
An executive from Eastman Chemical discussed a test of a new treated wood product at Lowe’s in its northeastern stores this month. Speaking at the JP Morgan Diversified Industries conference on June 5, senior VP and CFO Curt Espeland told analysts that Perennial Wood, a treated (also described as “modified”) wood product launched at the Builders’ Show, was being made available at 50 Lowe’s stores that same day. The product is also being sold through independent lumberyards.
“We can go to a full U.S. launch with a larger facility, if the market data suggests, with [a] 75 million board foot plant,” Espeland said. ”I can time it depending on how the market data tells us and what the economic environment is.”
Harvested from U.S. Southern pine, Perennial Wood is processed using heat, pressure and an organic compound in what the company calls TruLast Technology. The proprietary process permanently expands the wood’s cell walls to a fixed position, helping to minimize water absorption and making the wood more resistant to shrinking and swelling, according to the manufacturer.