Washington, D.C. - Congressman Kevin Brady (R-The Woodlands) is pleased that the U.S. House of Representatives on Thursday included a provision in its latest energy bill that would protect Texas timber companies from being forced to sell valuable land no longer profitable for timber purposes and which is often sought by real estate investors.    In doing so, the provision also increases the competitiveness of Texas and American timber companies against foreign producers, who are gaining a larger share of the U.S. market for wood and paper products.
 
Congressman Brady was a chief sponsor of the bi-partisan timber bill, which he led with Congressman Artur Davis, a Democrat from Alabama and fellow member of the House Ways & Means Committee.
 
“America’s timber industry is being swallowed up by major real estate funds because the tax code favors certain types of timber ownership.  We are leveling the playing field and helping keep our Texas timber companies whole, while boosting their competiveness against foreign producers,” said Brady.  The measure is supported by The American Forestry and Paper Association, whose members include Temple-Inland, International Paper, and MeadWestvaco.
 
Congressman Brady lead Republican support for H.R. 1937, the Timber Revitalization Timber Revitalization and Economic Enhancement (TREE) Act of 2007, which allows a tax deduction for up to 60% of the gains from certain sales or exchanges of timber, and changes the real estate investment trust (REIT) rules for timber property. 
 
Rural School Funding Cut
 
He expressed his disappointment, however, that Democrat leaders also chose to under-fund Texas rural schools in the same bill by cutting a key program providing funding to rural schools, counties and fire departments. 
 
“The Secure and Rural Schools program is critical to our forest communities, especially our schools, counties and fire departments located in areas with national forest land,” said Brady. “I am hopeful we can change the formula which hurts our school children in East Texas.”
 
Mr. Brady has also been a long supporter of the Secure Rural Schools and Payment in Lieu of Taxes programs, which provide financial support to counties that have a large amount of federal forest land on which they are unable to collect property taxes to fund local schools.   The new legislation extends the current programs, but recalculates the funding distribution formula, costing Texas communities an estimated $1.1 million.
 
The House energy bill is expected to be changed drastically in the Senate, which has already rejected the House proposal, and faces a presidential veto.