BILL REQ. #:  S-0597.1 

Read first time 01/12/2007.   Referred to Committee on Natural Resources, Ocean & Recreation.

     TO THE HONORABLE GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES, AND TO THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, AND TO THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES, IN CONGRESS ASSEMBLED:
     We, your Memorialists, the Senate and House of Representatives of the State of Washington, in legislative session assembled, respectfully represent and petition as follows:
     WHEREAS, More than half of the state's forty-two million and one-half acres are forest lands and the majority of these lands are available for harvest; and
     WHEREAS, The forestry and wood products manufacturing sectors are an extremely valuable component of the Washington state economy, with the industry generating approximately nineteen billion dollars in gross revenues, two billion dollars in wages, and one hundred million dollars in tax receipts in 2005; and
     WHEREAS, Maintaining Washington state's working forest land base provides an array of environmental and social benefits to Washington state, including clean water, wildlife habitat, recreational opportunities, forest products, and the aesthetic value of forests; and
     WHEREAS, Federal tax rates place timber landowners within the United States, including Washington state's forest landowners, at a disadvantage against many of its international competitors. By practicing sustainable forestry, timber owners that are structured as corporations are faced with a cost-disadvantage due to the inequity in tax rates, not only at the international level, but also nationally. Currently, as a result of the federal tax laws, there is a trend of decreasing the United States' competitiveness in the forest products industry, resulting in a loss of manufacturing jobs in Washington state, as well as the nation. This trend needs to be reversed by creating a more equitable tax system; and
     WHEREAS, The inequity in federal tax laws has a negative impact on Washington state's forest sustainability, discouraging long-term investment in the health of our forests and creating a loss of jobs in our forest products manufacturing sector. The federal tax laws tax income from timber harvests differently based on an entity's ownership structure, with corporate income from harvests taxed at the corporate tax rate of up to thirty-five percent, while income from harvests by individuals and such entities as partnerships and real estate investment trusts receive more favorable treatment as capital gains, which are taxed at a maximum rate of fifteen percent;
     NOW, THEREFORE, Your Memorialists respectfully pray that the United States senate and house of representatives amend federal tax law to help sustain working forest lands in Washington state by strengthening the forest products manufacturing sectors' ability to compete internationally and by more uniformly taxing timber harvests for all private forest ownership structures.
     BE IT RESOLVED, That copies of this Memorial be immediately transmitted to the Honorable George W. Bush, President of the United States, the President of the United States Senate, the Speaker of the House of Representatives, and each member of Congress from the State of Washington.