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HomeMy WebLinkAboutLetter from Adam Molenda of Timber Products Manufacturers regarding the SBA Timber Sale Set-Aside ProgramTimber Products Manufacturers �1/1 ASSOC IATION 1,1 Serving the wood products indusig bn providing profitable & valuable businesssohdions. August 4, 2014 BUTTE COUNTY ADMINISTRATION Doug Teeter 25 County Center Dr Oroville, CA 95965 Dear Supervisor Teeter: AUG 0 7 2014 OROVILLE, CALIFORNIA It has come to our attention that many counties are being asked to weigh in on a proposal by the U.S. Forest Service (USFS) and the Small Business Administration (SBA) to fulfill a commitment they made to small family-owned sawmills almost a decade ago to publish a draft rule that would result in volume from Forest Service and BLM timber and stewardship sales be counted in the operation of the SBA Timber Sale Set -Aside Program. The language we have seen in the county's letters to Congress and the Land Management agencies says: "Subsidizing and diverting timber sales away from our communities will reduce timber sale receipts generated by timber sales, impacting our budget. Counties have traditionally received 25% of these funds. With the impending expiration of the Secure Rural Schools safety net, these funds will be more critical than ever. Likewise, if Stewardship contracts are included in the set-aside program fewer acres of at -risk forest will be restored. This is contrary to congressional authorization of local preference and best value contracting." We believe, given the letters we have seen from counties that someone is purposely misinforming county commissioners resulting in some commissioners sending letters opposing the proposed draft rulemaking that are fundamentally and factually flawed. We would ask you consider the language of two relevant laws prior to writing similarly flawed letters. And if you have already sent these letters you consider the information below and rescind or correct your letters. We are sending this letters to all county commissioners in the Western United States, as well as their federal delegations. The SBA Timber Sale Set-aside Program is a 50 -year-old program that is designed to ensure small forest product manufacturers are given a fair opportunity to purchase federal timber sales base on their historic purchase levels. Each five years the SBA share is recomputed and updated. The future of these small forest product companies rest upon a strong federal timber sale program that counts all federal volume sold into the operations of the SBA Small Business Set-aside program. Starting in 1999 Congress authorized the Forest Service and Bureau of Land Management to transact timber volume through a new contract form called Stewardship Contracting. When passed, and in each reauthorization since, Congress has exempted those contracts from having to help fund payments to counties, through 25% Payments, BLM O&C 50% Payments, or Secure Rural School Payments. Specifically the language in the FY 1999 Interior Appropriations that authorized the Stewardship Contracting Authority exempted any revenues from those contracts from being counted as gross receipts to be shared with counties (see provision highlighted in yellow below). 951 East Third Avenue, Spokane, WA 99202-2287 6 rots h=e (877) 535-4646 A Oh.�e (509) 535-4646 A. fox (509) 534-6106 A www.timberassociation.com LAO July 29, 2014 Doug Teeter Page 2 "Public Law 105-277 - FY 1999 Omnibus Consolidated Appropriations Act, as amended by Section 341 of P.L. 106-113 (2000) SEC. 347. Stewardship End Result Contracting Demonstration Project. (d)RECEIPTS.- (1) IN GENERAL. - The Forest Service may collect monies from an agreement or contract under subsection (a) so long as collection is a secondary objective of negotiating contracts that will best achieve the purposes of this section. (2) USE. - Monies from an agreement or contract under subsection (a) may be retained by the Forest Service and shall be available for expenditure without further appropriation at the demonstration project site from which the monies are collected or at another demonstration project site. (3) R4AIION7QS?TMER.f i#4NS=-Thi >)aluof senuige rFe(ue4 Thus SBA Set-aside program, or not, none of the revenues generated by these contracts will ever be shared the counties unless the fundamental underlying Stewardship law is changed. And the arguments being made by the counties are at best specious. The ratio of federal timber sale transacted through the Stewardship Authority has grown from less than 5% in 2004 to over 30% this past fiscal year. Whether that volume is counted in the SBA Set-aside program has nothing to do with the counties' share of the revenues shared by the federal land management agencies with the counties. Secondly, the county letters we have seen suggest that the federal revenue sharing programs will somehow be reduced if what is now only a proposed draft rule is finalized. Beyond the above cited provisions of law; the exempting Stewardship revenues from having to help contribute to paying counties 25 Percent or 50% Percent BUM payments is negated by the current Secure Rural Schools and Community Self-determination Act. That act first passed in 1999 and reauthorized in 2006 and then again in 2007, 2008 and 2013 requires the Secretary of the U.S. Treasury to make the Secure Rural School Payments no matter how much or how little the U.S. Forest Service or the Bureau of Land Management contribute in a given year (see bill language from PL 106-393 highlighted and underlined text). PUBLIC LAW 106-393—OCT. 30, 2000 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.—This Act maybe cited as the "Secure Rural Schools and Community Self - Determination Act of 2000". SEC. 102. PAYMENTS TO STATES FROM NATIONAL FOREST SYSTEM LANDS FOR USE BY COUNTIES TO BENEFIT PUBLIC EDU- CATION AND TRANSPORTATION. 951 East Third Avenue, Spokane, WA 99202-2287 A mnftee (877) 535-4646 1 phone (509) 535-4646 `fox (509) 534-6106 ♦ www.timberassociation.com July 29, 2014 Doug Teeter Page 3 !the sum of the in closing, we ask that you carefully consider this information before sending additional factually flawed letters to your federal delegations, or the Departments of The Interior and Department of Agriculture or their agencies. In our mind you have been asked to get involved in a dispute between large multi -national forest product companies (some of which are foreign owned) and small family-owned forest product companies located in some of the most rural communities in your states. We would hope that you get the facts before engaging in this dispute. Additionally, we believe, that given the ratio of federal timber sale transacted through the Stewardship Authority has grown from less than 5% in 2004 to over 30% this past fiscal year and given the exemption from sharing any of those revenues with counties; that the counties would be better served to lobby Congress to modify the Stewardship Authority to force the federal land management agencies to share revenues from those contracts with the counties. To that end the members of the Timber Product Manufacturers Association stand ready to help you in that effort. If you have any questions please contact Adam Molenda at 509-535-4646 and he will have our consultant give you a call or make a presentation to your members. Sincerely, Adam Molenda —President TPM cc: Congressional Offices County Commissioners Under Secretary of Agriculture Robert Bonnie The Director of the BLM The Small Business Administration David Loines, Kia Dennis, Yolanda Swift, William Bramwell, Thomas Clarke TPM-SBTC Members 951 East Third Avenue, Spokane, WA 99202-2287 A roa )me (877) 535-4646 ® pone (509) 535-4646 A fax (509) 534-6106 A www.timberassociation.com