HB313 Summary

• Amends Alabama's forest products privilege and severance tax code to define terms, provide alternative tax rates for timber types, and exclude wood residue used in manufacturing processes from taxation.

• Introduces new definitions including "processor" (chip mills or facilities that further process forest products before delivery to manufacturers) and clarifies existing definitions for forest products, producers, and manufacturers.

• Establishes tax exemptions for fuel chips produced in the woods at the site of severance, defined as woodchips from tree tops, limbs, logging slash, and non-commercial timber used as energy in manufacturing processes.

• Eliminates double taxation by preventing additional forest products severance tax on residual pulpwood chips produced from logs when the initial tax was already paid, with manufacturers able to obtain certificates proving tax payment by sellers.

• Becomes effective July 1, 2017, with provisions for retroactive application to open tax periods and a one-time rate adjustment mechanism if FY2018 collections fall below FY2017 levels.