TIMBERCHECK™

The Timber Asset Protection Act goes into effect on September 1, 2023 in Texas. It was sponsored by six Republicans and petitioned for by the Texas Forestry Association. The law changed the documentation requirements for the purchase of timber products and created a criminal offense for non-compliance. This new timber sale requirement will support due diligence efforts on timber originating from Texas timber harvests.

Why was the Timber Asset Protection Act passed?

The law was passed due to a rising occurrence of timber theft cases in the state (Source: Texas Forestry Association).

The past few years we have seen an increase in Timber Fraud cases. Most of these cases started off with a legitimate contract, but then the landowner only receives partial payment, or no payment at all.

Josh Mizrany, Texas A&M Forest Service Law Enforcement as reported by Dendro Resource Management

The bill is intended to deter timber theft by providing transparency and accountability in timber transactions.

As reported by the Association:

While investigating timber theft cases, we frequently noticed inconsistencies in Chain-of-Custody documentation, or lack thereof, …

Jarred Lemmon, Texas A&M Forest Service Assistant Chief of Law Enforcement

By adding a few additional statutory requirements to the timber sale process, the Timber Asset Protection Act intends to make Texas timber supply chains more transparent.

What are the new timber sale documentation requirements under the Act?

The Timber Asset Protection Act revised Texas’ forestry bill-of-sale laws, added delivery receipt requirements, and made penalties for timber fraud the same as unauthorized timber harvest.

Bill of Sale

The bill of sale must now include the following location data:

• the name of the county containing the tract of land;
• a legal survey, abstract, and tract number of that tract of land; or
• property address or GPS coordinates.

The timber buyer must now retain the bill of sale for five years, instead of two.

Documentation of Delivery (Delivery Receipt)

The buyer of standing timber for harvest, who purchases timber on a pay-per-unit sale, has to provide documentation to the seller of the standing timber that proves delivery for any product delivered to a mill, wood yard, transfer yard, or storage yard within 45 days of delivery. This documentation must include the following data:

• a description of the delivered product
• the name and location of the mill, wood yard, transfer yard, or storage yard to which the product was delivered
• the site identification number or scale ticket number for the delivered product;
• the net weight of the delivered product;
• the name of the person delivering the product; and
• the name of the person or entity receiving payment for the product, if different from the person delivering the product;

Penalties

The penalties for knowingly providing false information to the mill or failing to provide proper and timely documentation to the forest landowner are now the same as harvesting timber without permission.

If a timber buyer knowingly fails to provide the delivery receipt, they are guilty of a misdemeanor and face. afine of $500. If they knowingly provided false information to conceal an offense then they face the following penalties:

• state jail felony (if timber purchased valued at more than $500, but less than $20,000);
• 3rd-degree felony ($20,000 = timber purchase < $100,000);
• 2nd-degree felony ($100,000 = timber purchase <$200,000); and,
• 1st degree felony (timber purchase = $200,000 or more).

The same schedule applies to sellers who knowingly provide false information in the bill-of-sale in an attempt to conceal an offense.

Timber production and forest resources in Texas

Texas lost 0.68% of its natural forest in 2022 (Source: Global Forest Watch). While on the lower end of natural forest loss in the U.S. southeast, it’s more than the “deforestation hotspots” of Brazil (0.66%), Cameroon (0.48%), and Indonesia (0.25%).

There are 59,938,183 acres of forest land in Texas, of which 89% is non-industrial private forest land. There are 285,614 non-industrial private forest landowners. This means that the average size of a forest land real estate property in Texas is 188 acres. The primary Texas forest types include Longleaf Pine, Loblolly Pine, Shortleaf Pine, Oak-Hickory, and Bottomland.

Texas produced 631,132 thousand cubic feet (MCF) of timber products (roundwood) in 2021. That’s equivalent to roughly 157,783 truckloads (assuming 4 MCF/truckload). The large majority of this was softwood. Of this total roundwood production, about 12% was exported from the state. However, slightly more was imported into the state, making Texas a net importer. Saw logs made up most of the timber products (47%) followed by pulpwood (25%), composite panel (16%), veneer logs (8%), fuelwood (3%) and poles (1%). There are about 79 primary processing mills in the state.

How can the Timber Asset Protection Act help buyers of wood products originating from Texas timber harvests?

One of the ways in which timber can enter supply chains illegally from legal harvest sites is if the landowner is not paid. This is often referred to as timber fraud. Texas timber fraud cases have reportedly increased in recent years.

In the U.S., it’s illegal under the Lacey Act to trade wood products across state lines that have been “taken, possessed, transported, or sold in violation of any law or regulation” that regulates the theft of plants (including trees). Likewise, the new EU Deforestation Regulation bans the import into the EU of illegal wood products. Going a step further, the EUDR bans wood products from land that has been deforested or from forest degradation.

When buying wood products originating from Texas timber harvests, data required by the Timber Asset Protection Act in the bill-of-sale and delivery receipt could be collected and analyzed as part of buyer due diligence processes.

TimberCheck – Forest product supply chain data for timber due diligence. Contact.

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Footnotes: (1) These statistics were calculated from 2022 Global Forest Watch data. (2) The total natural forest area used by GFW is based on 2010 data.