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Bill would add board members, divert forest products taxes from agency under media scrutiny in 2020.

A debate in the House over the money that goes to the Oregon Forest Resources Institute reflected tensions on several fronts.

The institute is a quasi-governmental agency — its budget is not controlled by the Legislature or the executive branch — that draws its money from forest products harvest taxes authorized by lawmakers. It draws no money from the tax-supported general fund.

By a 32-27 vote Tuesday, June 8, the House voted to divert two-thirds of the institute's tax collections into other accounts for forest practices and family forest lands under the Oregon Department of Forestry. Democrats accounted for all 32 votes for it, but five Democrats joined 22 Republicans to oppose it.

The bill went to the Senate.

Advocates of change said House Bill 2357 was prompted by a 2020 investigative series by The Oregonian/OregonLive and Oregon Public Broadcasting, which concluded that the institute improperly lobbied legislators, inaccurately described Oregon forest practices in media advertising and educational materials, and inappropriately interfered with Oregon State University researchers whose work differed from industry viewpoints.

The institute, and the fund, were created in 1991 when the Legislature rewrote the Oregon Forest Practices Act, which regulates logging on the one-third of Oregon's 30 million acres of forest lands that are privately owned. The law does not regulate federal forests, which account for about 16 million acres — although the forest products harvest tax also applies to timber cut on those lands.

What the bill does

The original bill by Rep. Andrea Salinas, D-Lake Oswego, proposed to abolish the institute and the fund altogether. She said its defenders inaccurately described it as a commodity commission, akin to the 22 commissions under the Oregon Department of Agriculture that promote products and assess farmers.

"The institute does little to market Oregon wood products. Instead it spends a great deal of its budgets on misleading advertising and educational materials," she said. "The institute has none of this executive oversight and clearly no legislative or lobbying oversight. This bill takes the first steps to fix these shortcomings."

Unlike the commodity commissions, whose members are named by the state agriculture director, all 11 board members of the Forest Resources Institute are appointed by the state forester from various categories of timber producers. There are two non-voting members: A public member is appointed jointly by the House speaker and Senate president, and the dean of the OSU College of Forestry.

The bill would add two more members, one representing environmental groups and the other with experience in fisheries and wildlife issues, both named by legislative leaders. The current public member could not be affiliated with any interest.

The bill also would divert an estimated $4.2 million from the institute's forest products harvest taxes, about two-thirds of its current total, from the institute in the state's next two-year budget cycle. About $3.1 million would go into a fund for sound forest practices, and $1.1 million for family forest lands managed by small woodland owners, in the Department of Forestry budget. The rest would go to the institute.

It is not known what the institute's new forest products harvest tax rate will be. The 2020 rate was $1.12 per thousand board-feet; other rates were $1.39 for enforcement of forest practices, 90 cents for Oregon State University forest research, and 62.5 cents for forest fire protection. The Legislature sets all those rates.

Critics on both sides

Rep. Paul Holvey, D-Eugene, voted for the bill. But he said he would have gone further to curb the institute's ability to levy a tax.

"What I heard was how great we are doing with our forest practices at the exact same time our forests were in crisis and burning down," he said. "I said to myself those priorities were wrong."

Republican lawmakers from rural counties said the bill amounted to a gutting of the institute — and worse.

"It is not lost on us that this is an attack on the timber industry when they came together to oppose what would have been a disastrous cap-and-trade bill," Rep. David Brock Smith of Port Orford, a former Curry County commissioner, said. "Media investigations have caused this bill to move forward. Multiple individuals have testified to that."

Republican walkouts in 2019 and 2020 over proposed climate-change legislation deprived Democrats of the two-thirds majorities required to conduct legislative business.

"We are allowing journalists, maybe activist journalists, to dictate what we should do," Rep. Mark Owens, a farmer from Crane, said.

They said lawmakers should await the results of an audit requested by Gov. Kate Brown last August and pending with Secretary of State Shemia Fagan. The audit was underway before Fagan took office Jan. 4.

But Salinas said the audit is likely to include materials already reviewed in the investigative report, which won the Bruce Baer Award for best public affairs reporting in Oregon during 2020.

"Based on detailed reporting — and not just reporting, but troves of public records and emails on violations of statutory prohibitions on lobbying and efforts to influence representatives who are still in this body today — they are enough evidence for me to vote in support," she said.

Bridging the divide

Rep. Brian Clem is a Democrat whose district covers central and east Salem. But he grew up in Coos Bay, where his grandfather and father worked in mills. He said more has to be done — but hasn't been done — to help timber-dependent towns and regions in economic decline.

According to state figures, timber production was at 7.7 billion board-feet in 1979, 4.1 billion of it on federal lands and 3.2 billion on private lands. In 2019, the total was 3.54 billion board-feet, 2.7 billion on private lands and 486 million on federal lands.

Clem said urban and rural lawmakers — and Democrats and Republicans — have to keep trying to understand each others' views. Clem has led or co-led the Agriculture and Natural Resources Committee four times, and this session, he led the House's special committee on recovery from the 2020 Labor Day wildfires.

"I will be at the table trying to get improvements that would really result in a bipartisan compromise," he said.

"This is a touchy issue for a lot of members. Timber is still a cultural and iconic part of many of us who grew up, and our families made a living, in the woods and still love the forests. There is still an opportunity for Oregon to come out a winner."

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NOTE: Corrects some errors in the body of the story that describe the taxation process and the institute's tax collections. Statements at the top of the story are correct.


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