Washington, D.C. – With one-third of forest land in the United States held by family owners who currently have little recourse for relief following floods, wildfires, and other disasters, U.S. Senators Tom Cotton (R-Arkansas) and Cindy Hyde-Smith (R-Mississippi) introduced legislation to amend the tax code to support recovery work. The measure is cosponsored by Senators Roger Wicker (R-Mississippi) and Marco Rubio (R-Florida).
The Forest Recovery Act (S.1687) would amend the U.S. tax code to establish a special rule for losses of uncut timber following natural disasters. Providing a tax deduction for casualty losses would not only help landowners recover, but also encourage investment in reforesting damaged acres.
“More than half of Arkansas is forestland that supports thousands of jobs and contributes to the state’s natural beauty. This bill will benefit Arkansas’s many family forest landowners and encourage the rehabilitation of our forests after natural disasters,” said Cotton.
“Not allowing these timber interests, many of whom are family-owned small business operations, to recover their losses doesn’t help anyone-not them, the local economy, or the environment,” said Hyde-Smith. “My bill would create an opportunity to make this right.”
“Mississippi’s millions of acres of forests are our state’s second largest agricultural product by value but are not eligible for tax relief in case of disaster,” said Wicker. “This proposal would provide landowners much-needed relief in the event of a catastrophe and encourage the return of this land to active production.”
“Hurricane Michael devastated Northwest Florida’s timber industry,” said Rubio. “I am glad to join my colleagues in proposing legislation to ensure that future timber losses due to natural disasters, like Hurricane Michael, will receive needed tax relief.”
“The nation’s family forest owners are grateful for the support of Senator Hyde-Smith in introducing legislation that can help them better care for their forests today and in the future,” said Tom Martin, President and CEO of the American Forest Foundation.
“There are more than 20 million families and individuals who own and care for the largest portion of U.S. forests, providing all Americans with important resources such as wildlife habitat, clean air and water, and wood for homes and products we use every day. When disasters like hurricanes and wildfires strike, family forest owners do not have access to affordable insurance like most farmers, yet face similar significant economic losses. We applaud Senator Hyde-Smith for addressing these important issues for family forest owners with the introduction of the Forest Recovery Act,” said Martin.
The legislation would adjust current tax law, which restricts casualty loss deductions to losses incurred in federally-declared disaster areas. Even when wildfires or floods do not result in a formal disaster designation, federal crop insurance coverage is unavailable for forest lands, and there are no affordable private insurance products.
Specifically, the Forest Recovery Act would:
- Modify the tax deduction for casualty losses to establish special rules for losses of uncut timber;
- Establish that basis used for determining the amount of the deduction in cases of uncut timber losses from fire, storm, other casualty, or theft may not be less than the excess of the fair market value of the uncut timber determined immediately before the loss was sustained over the salvage value of the timber;
- Apply the special rule only if (1) the timber was held for the purpose of being cut and sold and (2) the uncut timber subject to the loss is reforested within five years of the loss; and
- Exempt casualty losses from uncut timber from the rule restricting the deduction for personal casualty losses to losses attributable to a federally declared disaster.
A copy of the bill, which has been referred to the Senate Finance Committee, is available here.Original article source: http://www.cotton.senate.gov?p=press_release&id=1142 | Article may or may not reflect the views of KLEK 102.5 FM or The Voice of Arkansas Minority Advocacy Council