Glimpses of the challenges ahead in the upcoming session

I suppose every legislative session since I began this job in 2004 has been unique, but the 128th was what I call “historic.” Michele MacLean spearheaded our lobbying efforts with assistance from Bill Ferdinand, and Roberta Scruggs managed the membership advocacy outreach. The active participation of members on the Friday morning policy committee calls is rewarding with all the experience and insight that goes into our discussions, and it reaffirms staff confidence in representing the collective positions we determine. 

See MFPC Legislative Tracking Sheet

On several issues your response to alerts made the difference in the outcome of legislation; legislators want to hear from their constituents! The net result is a very good batting average, but don’t ask too many questions about the secret to our success as we rode the roller coaster. Our staff tracked 131 bills during the first session. 

Members of the Legislative Council, comprised of 10 leaders of the House and Senate, met Oct. 26 to consider 272 bills proposed for the second session, accepting only 63. The Council heard appeals on Nov. 30 from lawmakers whose bills were initially rejected and passed an additional 30, which will be added to 319 other bills that have been carried over, including 30 on our watch list, from this year’s Legislative session. (Read BDN story).  

Here are some of the areas of focus that I think will be challenging as we move forward:

TREE GROWTH TAX LAW: In 2016, Governor LePage summoned me to his office to discuss the tree growth taxation program. He understood that the program was important but he believed there were some participants that were not committed to forest management and they were undermining the program. The differential between ad valorem and tree growth land values is greatest on high value coastal properties and that region is the focus of the current debate. The challenge is understanding the magnitude of the problem and developing a solution that does not undermine the proven effectiveness of the program. We worked with the administration to identify an appropriate remedy, but the Taxation Committee elected to carry the original TG bill LD 1599 forward into this coming session. The Taxation Committee requested interested parties, including MFPC, Maine Woodland Owners, Maine Municipal Association, the ACF Department and Maine Forest Service, meet to discuss the issue, and the governor issued a proclamation encouraging municipalities to work with the MFS to monitor the program. We will continue the discussion and keep members notified this session.

CANADIAN BORDER: Alert!  Maine shares 61 percent (611 miles) of its border with Canada. The rest is shared with the ocean (23 percent) and New Hampshire (16 percent). Our membership is made up of U.S.  and Canadian firms, which emphasizes the importance of shared trade between these countries. While NAFTA and the Softwood Lumber agreement are negotiated in the coming year, the Council will keep our membership and policymakers informed on the process. Our recent publication on secondary manufacturing contains a variety of perspectives on these issues. At the state level, I anticipate the discussion will continue this session as we look at cross border relationships.

MARKETS FOR WOOD FUEL: The news stories about the “biomass bailout” are numerous, but despite the negative connotations the industry is appreciative of some time to develop a more comprehensive plan. The 2016 Wood Processor Report verifies the decline in harvest levels — from 15.2 million in 2015 to 13.2 million last year) — and biomass consumption.

The stand-alone biomass plants are diversifying to find partners to use their energy and thermal (steam) load which will diversify their income and increase overall efficiency ratings. A series of bills have been carried over with some proposed solutions requiring subsidies in the form of long-term power agreements or revised Renewable Portfolio Standards. Bonds to help finance long-term capital investments are also in the mix. I’m also concerned about the challenges facing sawmills, which have about 750,000 tons of wood chips and 300,000 tons of sawdust that need to find a home. This will lead to a discussion about building scaled combined heat and power facilities. We’re working to build a comprehensive plan for discussion. 

Biomass harvesting volume was 2.2 million tons in 2016, down from 2015 (3.0 million tons). Biomass energy facilities consumed 2.0 million tons in 2016, down 30 percent from 2015 (2.9 million tons). Eighty-five percent originated from Maine’s forests; 15 percent was imported. 

ROAD MAP GAINS FUNDING: Momentum is growing for the forest industry’s Road Map Project, including active committee participation by industry and government. Funding has been secured for phase one and we will be communicating more about this effort to everyone interested in the forest economy. Our focus will be to further define what Maine needs to do to attract capital investments.

The dramatic loss of markets in our industry requires active outreach and consideration of how we market Maine. As the industry and state search for manufacturers to consume tons of low grade softwood and  biomass, the Legislature is reviewing some of the business incentive programs (i.e. Pine Tree Development zones) that are important to attracting new capital investment in this state.

2018 ELECTIONS: Apparently the most popular job in Maine is that of Governor with more than a dozen candidates announcing their bids and others considering it. (See Ballotpedia list) The gubernatorial race is a chance for us to highlight our policy positions and discuss issues of importance. We are reaching out to candidates and will continue to seek ways for our membership to connect with policymakers. We’ll send out information on the January legislative reception as the date approaches, but in the meantime please make a connection with your legislators and take them out to your woods or into your mills.