February2012TreeTalk by Arkansas Forestry Association

February/March 2012

AFA engaged in process, supports strategic approach to funding solutions for the Arkansas Forestry Commission

uring a Legislative Joint Auditing Committee meeting on Friday, February 10, State Forester John T. Shannon announced his resignation. State auditors presented Max Braswell a report to the committee showing Executive Vice the misuse of President federal funds for Arkansas Forestry Commission (AFC) operations (see sidebar). On February 8, Gov. Mike Beebe announced that he will direct the Arkansas Agriculture Department to reallocate $550,000 annually in funds from its budget to AFC. The move allows the restoration of 15 firefighter positions throughout the state beginning February 21. Based on recommendations established by AFC and the Legislature, the positions will be in Bradley, Columbia, Conway, Drew, Fulton, Grant, Hempstead, Ouachita, Saline, Sevier and Union Counties. The $550,000 reallocation will restore the firefighter positions while ensuring that the Agriculture Department will maintain sufficient funds for other obligations. While the Governor’s announcement certainly helps ease AFC’s funding and firefighting concerns, there will be ongoing discussions and evaluations by the Legislature and the forestry community. In mid-January, the AFA Executive Committee approved a position for the association that supports increasing the forest fire protection assessment from 15 cents per acre to 20 cents per acre as part of a comprehensive strategy to address AFC funding and restore its ability to effectively

implement critical fire suppression efforts. AFA does not take lightly any decision to increase taxes. The entire timber and forest products community has suffered from a depressed housing market and general economic downturn. These and other factors contributed to the funding challenges at AFC, which resulted in 34 employee losing their jobs, including 14 firefighters. A fire protection assessment increase may not be part of the long-term solution. In addition to the Governor’s recent reallocation, AFA wants lawmakers to consider a variety of funding sources, but if necessary to provide the critical fire suppression and protection of our members’ assets, AFA supports an increase. An additional 5 cents per acre would generate about $700,000 and add about $2 a year for a landowner with 40 acres. No one approach will provide the solution to this budget crunch. One step that needs to happen during this year’s fiscal session is the approval of a supplemental appropriation that would allow AFC to repay funds owed on federal grants, pay for the cost of the impacted employees who worked until January 13, and reach the end of the current fiscal year on June 30. Please contact your State House and Senate members and ask them to support this supplemental appropriation during the fiscal session, which started February 13. This issue affects AFA in a variety of ways. In addition to the sadness we feel when friends lose their jobs, we’ve already seen a real impact on the Tree Farm program. Included in the layoff were several people who served as Tree Farm inspectors and one Tree Farm district chairman. AFC staff may be limited in future Tree Farm program

participation, which will create significant challenges for AFA’s administrative efforts. AFC employees are also active on most AFA committees and we value their input. There is a very complicated and fluid process. AFA is an active participant— working on behalf of its members—while also understanding the critical need for fire protection and other services AFC provides. We will provide updates as discussions continue and possible solutions arise.

Announcement from Gov. Mike Beebe

Effective at the end of business on Friday, February 10, John Shannon resigned as State Forester. Shannon’s decision came after reviewing the results of the Division of Legislative Audit’s investigation into financial problems at the Arkansas Forestry Commission. “John Shannon has helped develop the Arkansas Forestry Commission into a widely respected agency that Arkansans count on, especially in times of crisis,” Beebe said. “However, after Legislative Audit’s review of the financial troubles at Forestry, I agree that a change in management is needed. I thank John for his years of dedicated service to Arkansas.” The Arkansas Forestry Commission will make a recommendation to Gov. Beebe for an interim agency head. Shannon’s resignation does not change Beebe’s supplemental request for the rest of the fiscal year and will not alter plans to rehire 15 firefighters with reallocated Agriculture Department funds.

CALENDAR February 23 Forest Practices Committee 9:30 a.m. – AFA Office February 27 Communications Committee 10 a.m. – AFA Office February 29 Tree Farm Committee 10 a.m. – AFA Office March 1 PLT Steering Committee 12:30 p.m. – AFA Office March 9 - 10 Four-State Forestry on the Grow Conference - Idabel, OK March 14 Program Committee 10 a.m. – AFA Office May 10 -11 Spring Board of Directors Meeting Mount Magazine State Park Lodge

Forestry news... >> Joe Friend, Arkansas Forestry Commission District Forester, has been elected a Fellow of the Society of American Foresters, a national scientific and educational organization representing the forestry profession in the United States. Fellows are selected to honor those members who have provided outstanding contributions to the society and the forestry profession, and are limited to only 5 percent of the society’s more than 14,000 members. >> Pete Prutzman, with Kingwood Forestry Services, received an appointment to the Arkansas Appraiser Licensing and Certification Board, filling the slot held by Jim Foster, whose term ended recently. Jim was not eligible for reappointment. This position on the board must be filled by a forester.

Annual Meeting set for Sept. 25-27

he Program Committee has scheduled the 67th AFA Annual Meeting for September 25-27 at the Holiday Inn Airport in Little Rock. “Although this a week or two earlier than the association typically holds its conference, the staff and committee believe the dates and the meeting facility will bring the best value and benefit to AFA members,” said Program Committee Chairman John Wainscott, with Weyerhaeuser. Initial plans for Tuesday include golf and sporting clays, a landowner workshop, Board of Directors meeting, exhibitors’ reception and dinner on your own. The tentative program for Wednesday includes presentations on the housing market, emerging forest product markets,

a panel of speakers addressing hot topics such as Boiler MACT and forest roads, the weather outlook, the impact of weather on forest management, wildlife management and feral hogs. The day will conclude with a fish fry at the Central Arkansas Nature Center. Building on the success from last year’s event, the meeting will conclude Thursday morning with an awards breakfast, highlighting outstanding achievements in the forestry community.

Shields Wood Products rebuilding

n January 19, an electrical fire at Shields Wood Products in Arkadelphia destroyed the company’s scragg mill, which cut small logs and produced industrial products and pallet lumber.

Mill owners Ritchie and Angela Shields have worked to keep every employee on board by running a second shift in another department. The other mill—a conventional sawmill that produces grade lumber and cross-ties— sustained no damage. “We plan to rebuild an even better facility,” said Angela Shields. “Everyone has cooperated so well to make things work.”

Firefighters work to contain a blaze at Shields Wood Products in Arkadelphia that destroyed part of the company’s business. Photo by Joe Phelps, The Siftings-Herald

Canadian agreement renewed

anada and the United States announced a two-year extension to the Softwood Lumber Agreement. But the warm U.S. welcome came with a disclaimer that highlighted a frequent point of contention: The agreement won’t work if the rules aren’t followed and enforced stringently.

U.S. politicians and lumber industry representatives have long complained that Canadian provincial governments in effect subsidize their lumber companies by charging low fees for the right to harvest timber on public land, while American producers must bid on the open market and

pay higher prices. Timber market woes in recent years have added another wrinkle to the long-standing dispute. The U.S. Lumber Coalition claims that Canada’s “unfair trade practices” have led to hundreds of American lumber mill closures, thousands of job losses and suppressed markets. Numerous disputes have landed in court. The agreement, originally enacted in 2006 and now extended until 2015, seeks to address those concerns and foster stable markets for both Canada and the U.S.

Landowner workshops address legal risks, feral hogs, recreation >> Foresters and forest landowners in Arkansas and Louisiana can learn how to manage their legal risks at any of three upcoming workshops: • February 24 - Hope • March 16 - Shreveport • April 13 - Monticello Topics will include wildlife management, insurance, leasing contracts, landowner liability and agritourism. Speakers include Tamara Walkingstick, Arkansas Forest Resources Center; Becky McPeake, UA Cooperative Extension Service; LSU AgCenter Agritourism Coordinator Dora Ann Hatch; and Rusty Rumley and Elizabeth Rumley, attorneys with the National Agricultural Law Center. The meetings will be held from 9 a.m. to 4 p.m. A registration fee of $20 per person or $30 per couple covers lunch. For more information or to register, contact Rusty Rumley at (479) 575-2636 or rrumley@ uark.edu. >> The University of Arkansas Cooperative Extension Service is hosting two workshops on Feral Hog Control. Agenda topics include: • Biology and distribution of feral hogs • Hog sign and damage problems • Laws and regulations • Control methods and demonstrations Seating is limited. There is no cost to attend either workshop. Call the following county extension offices to register:

February 23 - Monticello Call the Desha County Cooperative Extension Office at (870) 222-3972. The Drew County Farm Bureau is located at 656 Barkada Road in Monticello, near Highway 425. March 27 - El Dorado Call the Union County Cooperative Extension Office at (870) 864-1916 or Calhoun County Cooperative Extension Office at (870) 798-2231. The Union County Fairgrounds is at 334 W. Hillsboro St. >> Landowners who have considered an outdoor recreational enterprise, those who would like to expand an existing operation or anyone who is interested in generating additional income from their property should plan to attend a workshop on Business Plan Development and Legal Considerations for Outdoor Enterprises on at 9 a.m. on February 22 at the UA Rice Research and Extension Center in Stuttgart. Private landowners can put their land to work for them. The Natural Resource Enterprises Program advanced workshop can help you explore your land management options. Land management specialists, enterprise operators, attorneys and bankers will present the facts and figures and lead “hands-on” sessions to help you set up a rough-draft of a business plan. The cost is $15 per person or $25 per couple. To register, call (870) 946-3231. For more information, call Grant Beckwith at (870) 830-0473 or visit www.arnatural.org/ enterprise.

NRCS conducts CRP sign up

he U.S. Department of Agriculture (USDA) will conduct a four-week Conservation Reserve Program (CRP) general signup, beginning on March 12 and ending on April 6. CRP has a 25-year legacy of successfully protecting the nation’s natural resources through voluntary participation, while providing significant economic and environmental benefits to rural communities across the United States. CRP is a voluntary program available to agricultural producers to help them use environmentally sensitive land for conservation benefits. Producers enrolled in CRP plant longterm, resource-conserving covers to improve the quality of water, control soil erosion and develop wildlife habitat. In return, USDA provides participants with rental payments and cost-share assistance. Contract duration is between 10 and 15 years. Producers with expiring contracts and producers with environmentally sensitive land are encouraged to evaluate their options under CRP. Producers are encouraged to look into CRP’s other enrollment opportunities offered on a continuous, non-competitive, signup basis. For more information on CRP and other FSA programs, visit a local FSA service center or www.fsa.usda.gov.

Guide helps forest owners plan woodland tours

oodland owners who would like to share their property with others can download Walk in the Forest—a free guide that will help plan an event for adults, families, students or teachers. A Walk in the Forest event helps people of all ages unplug from their busy lives

and witness the wonder of nature. It provides a great opportunity for people to appreciate forests and to teach others about the benefits forests provide and how forest management can enhance those benefits. Download the guide from the American Forest Foundation at www.forestfoundation.org/ publications.

Goals of Walk in the Forest: • Inform the public of the many benefits of trees and forests. • Increase public awareness of the dynamic nature of the forest. • Help the public understand that foresters are uniquely qualified to maintain the integrity of forest environments while providing many benefits for society. • Inform the public that private family forest owners have multiple objectives and their forest management results in benefits that we all enjoy.

Help ATFS fix the estate tax burden on Tree Farmers

ust outside Little Rock, a thousand-acre Tree Farm seems worlds away from the politics in our nation’s capital. Yet in 2005, the *White family came face to face with a very political issue when they received an invoice from the Internal Revenue Service for $1.8 million in estate taxes. In the 1960s, Tom White started buying land in Arkansas. Bit by bit, acre by acre, he poured his savings into the land. Tom particularly focused on rehabilitating forestland that had been mismanaged and cut over by the previous tenants. By the mid-2000s, the White Tree Farm had grown to nearly 1,000 acres. Tom’s only child, Rich, was a full partner in the Tree Farm and was poised to carry on his father’s legacy. Despite estate planning, when Tom passed away in 2005, Rich was shocked when he received the invoice for $1.8 million in estate taxes due. Tom was “land rich and cash poor,” virtually his entire estate was tied up in the value of the land and his equipment, not in stocks and bonds. Facing this bill due in 6 months, Rich and his family needed to make a difficult and risky decision—either develop anywhere

from 300 to 500 acres, clear cut the land at firesale prices or cash out Rich’s entire retirement savings fund to pay the tax. After much deliberation, the Whites chose to cash out Rich’s retirement plan. They just couldn’t bear to see White Tree Farm decimated or subdivided. While it felt like the right decision, the Whites are fully aware of the giant risk they chose—Rich is past 50 and has just a little over 10 years to rebuild his nest egg. With the collapse of the housing and timber markets, Rich’s income is down and now he worries that he won’t be able to rebuild his nest egg. Unfortunately, we don’t often find families like the Whites. Many families, when faced with a large estate tax bill and few options, feel pressed to sell their land or prematurely harvest timber to pay the tax. If a family has no other available assets, they are left with no other way to pay the tax. The estate tax burden is one that many families cannot afford, making it a major threat to the future of America’s family forests. Families own more than 9.3 million acres of Arkansas’s forestland. The American

Tree Farm System (ATFS) is their voice in Washington D.C., working to get Congress to fix the estate tax so family forest owners will not be forced to make the tough decision the Whites did. Tree Farm families should have the flexibility to decide what’s best for their land without the pressure of a large estate tax bill. In 2010, Congress passed a temporary fix that works for many family forest owners, but the temporary fix will expire at the end of 2012. We need help in the campaign to fix the estate tax! Visit familyforestaction. org to share your estate tax concerns and stories, and get tools and tips to advocate for a permanent fix to the estate tax. This site also provides tools for advocating for Tree Farmers and ways to contact members of Congress to encourage them to support a permanent fix. * The family name and location have been changed to protect the identity of the Tree Farmers; however, this is a true story. Author Melissa Moeller is Public Affairs Manager for the American Tree Farm System in Washington, D.C. She can be reached at mmoeller@ forestfoundation.org or (202) 463-2456.