Archive for the ‘ June 2012 ’ Category

How The Lacey Act Affects Home Builders

All around the United States, builders of all trades  are in limbo awaiting the final judgement.   The Lacey Act, first passed in 1900, was amended in 2008 to bar importing wood that is illegally exported under another country’s laws.  Lawmakers are now discussing revisions to the Lacey Act, while the buyers of such materials are on both sides of the fence.

The National Association of Home Builders (NAHB) has called on Congress to amend the Lacey Act so that individuals and businesses that unknowingly purchase illegal wood products from overseas do not have their property seized and are not exposed to civil and criminal liability.

Barry Rutenberg of the National Association of Home-builders said that the provisions of the Lacey Act that allow for the forfeiture of improperly sourced woods would have devastating consequences for the housing market. He stated that if innocent owners, builders, and resellers of wood products used in housing were not immune to prosecution and forfeiture, banks would be reluctant to provide construction loans or mortgages.  Testifying before the House Natural Resources  Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs, Barry Rutenberg, chairman of NAHB and a home builder from Gainesville, Fla., said that NAHB supports the goals of the Lacey Act and the prevention of trade in illegally harvested plant and wood products.

“Unequivocally, we do not support illegal logging in any place at any time,” Rutenberg added. “However, honest business owners, including home builders who exercise due care and had no knowledge that a seized product contains illegal wood, should have the right to seek the return of those goods.”

Under the current statute, innocent companies are left without legal standing to challenge a government taking in court. As a result, both builders and consumers who buy products that encompass the entire supply chain dealing with imported wood products (lumber, cabinets, guitars, etc.) are held personally liable to certify that the timber product did not come from plant material that was taken, transported, possessed or sold in violation of any foreign law.

The environmental impact of revising the act has many concerned.  ”  Eileen Sobeck, deputy assistant secretary for fish and wildlife and parks at the Interior Department, said the RELIEF Act would weaken environmental protections.

“Limiting prosecutions to only those who knowingly violate the law would provide an incentive for importers to be ignorant or claim ignorance of the contents of his or her shipments and undermine the administration’s efforts to combat the trafficking of protected wildlife,” said Sobeck.

A prominent group of scientists have published a report that claims the Lacey Act legislation curbs deforestation and enhances the competitiveness of US logging and wood processing industries. The new report urges Congress to leave the law alone and provide enough money to enforce it.

A report was released on April 16, by the Union of Concerned Scientists (UCS), it is titled “Logging and the Law: How the U.S. Lacey Act Helps Reduce Illegal Logging in the Tropics. ” The report outlines how illegal logging poses a significant threat to the US economy and endangers tropical ecosystems around the world.

U.S. Rep. Jim Cooper testified before the  House subcommittee  about his bill to clarify a broad federal law so that musicians, instrument retailers and resellers would no longer be subject to penalties for unknowingly possessing illegal woods. Cooper introduced the Retailers and Entertainers Lacey Implementation and Enforcement Fairness (RELIEF) Act in Oct. 2011 with Reps. Marsha Blackburn (TN-07) and Mary Bono Mack (CA-45) to clarify the Lacey Act. The RELIEF Act (H.R. 3210) has drawn support from music, hardwood, business, retail and environmental groups; a full list of supporters.

In addition to protecting innocent people from the government’s confiscation of their property, the RELIEF Act also requires the federal government to create an Internet database of forbidden wood sources, thus providing a fair warning that currently does not exist.

Another bill discussed at the hearing, introduced by Sen. Rand Paul of Kentucky and Rep. Paul Broun of Georgia, both Republicans, would repeal the requirement that U.S. companies comply with foreign environmental laws. Paul said forcing U.S. companies to comply with foreign laws is “absurd on its face” and may not be constitutional.

So no matter the side you are on this is going to take some time to resolve itself.   They have made some amendments to the Lacey Act in February http://www.aphis.usda.gov/plant_health/lacey_act/downloads/faq.pdf. 

It’s unfortunate that some builders have had property  seized by the Lacey Act. Perhaps the industry should consider paying more attention to the NAHB’s concerns and consider following its lead in supporting the RELIEF Act.

The information in this article provided by: NAHB , USA Today , and Mortgage Orb.com

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