LIMBER Timber Act of 2026

Bill Number

H.R. 7245

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-01-27: Referred to the House Committee on Ways and Means.

Last Updated

2026-02-10T00:32:02Z

AI-Generated Summary

Purpose of the Legislation

The LIMBER Timber Act of 2026 aims to encourage the growth of the mass timber industry—a sector focused on using engineered wood products for building structures—by providing tax incentives. These incentives promote investment in manufacturing facilities, workforce training, and construction projects that use sustainable mass timber, potentially supporting environmental goals like reducing reliance on carbon-intensive materials such as steel and concrete.

Key Provisions

The bill amends the Internal Revenue Code of 1986 (the U.S. tax law) to create three new tax credits, all of which expire for taxable years beginning after December 31, 2030. The credits apply to activities after the bill's enactment.

• Mass Timber Plant Investment Credit (New Section 48F):
• Provides a 30% tax credit on the cost (basis) of eligible property placed in service at a "qualifying mass timber plant," which is a facility for manufacturing mass timber.
• Mass timber refers to strong, engineered wood products (e.g., cross-laminated timber, glue-laminated timber, or similar items listed in building codes) used for load-bearing structures.
• Eligible property includes depreciable (wear-and-tear deductible) tangible items like machinery necessary for producing, expanding, or re-equipping mass timber plants (excluding buildings themselves).
• Rules for progress payments on construction are similar to existing tax code provisions for large projects.

• Mass Timber Workforce Development Credit (New Section 45U):
• Offers a 50% tax credit on qualified expenses for "eligible taxpayers," which are businesses involved in manufacturing mass timber, constructing or installing mass timber structures, or designing them (e.g., architects or engineers).
• Qualified expenses cover hiring and recruitment costs, training programs, and wages for workers in registered apprenticeships, state training programs, or industry-recognized programs (capped at $8,000 per employee per year).
• Projects must use at least 70% sustainably sourced mass timber (certified by groups like the Forest Stewardship Council or from managed U.S. forests) and, for built structures, at least 50% mass timber for load-bearing components.

• Mass Timber Construction Credit (New Section 45V):
• Gives $5 per square foot of floor space for structures placed in service by a business, if they meet the same sustainability rules as the workforce credit (70% certified mass timber and 50% for load-bearing parts).
• Applies to commercial or trade-related construction projects.

These credits integrate into existing general business credits (under Sections 38 and 46) and include conforming updates to rules on basis reductions and special depreciation.

Significant Changes to Existing Law

• Introduces entirely new tax credit sections (48F, 45U, and 45V) to the Internal Revenue Code, expanding incentives similar to those for clean energy or manufacturing but tailored to wood-based building materials.
• Adds mass timber-related property to lists of assets ineligible for certain investment tax credits (under Section 49) and adjusts rules for rapid depreciation (under Section 50).
• No changes to overall tax rates or broad deductions; these are targeted additions that sunset in 2030, providing temporary relief without permanent alterations.

Potential Impacts

• Government Agencies: The Internal Revenue Service (IRS) will need to administer and verify these credits, potentially increasing short-term workload for audits on sustainability certifications and project qualifications. The U.S. Departments of Treasury, Agriculture, and Energy may consult on definitions, indirectly supporting federal forest management goals.
• Citizens: Could create jobs in manufacturing, construction, and training, especially in rural or timber-dependent areas, while promoting greener buildings that store carbon (as wood sequesters it). Homeowners or renters might indirectly benefit from more affordable, sustainable structures, though tax savings go mainly to businesses.
• International Relations: Boosts U.S. competitiveness in global sustainable construction markets by favoring domestically sourced timber; may encourage trade in certified wood products but could face scrutiny if seen as subsidizing U.S. forests over imports.

Main Stakeholders Affected

• Timber Industry Businesses: Manufacturers investing in plants, construction firms building with mass timber, and design professionals (e.g., engineers) who qualify for credits.
• Workers and Trainees: Employees in apprenticeships or training programs, gaining from wage subsidies and job opportunities.
• Environmental and Certification Groups: Organizations like the Forest Stewardship Council, which provide sustainability certifications required for credits.
• General Taxpayers: Bear the cost through reduced federal revenue (estimated forgone taxes offset by economic growth), with broader society benefiting from potential climate-friendly building practices.
• Federal Agencies: IRS for enforcement; Departments of Agriculture and Energy for guidance on mass timber standards.

Notable Legal, Constitutional, or Political Implications

• Legal: Aligns with existing tax code frameworks for industry-specific incentives (e.g., like credits for solar or electric vehicles), but introduces novel sustainability thresholds that may lead to disputes over certifications or "load-bearing" definitions—potentially requiring IRS regulations or court clarifications. The 2030 sunset provides a trial period without long-term commitments.
• Constitutional: Standard congressional power to levy and spend taxes (under Article I); no apparent free speech, property rights, or equal protection issues, as credits are voluntary and business-focused.
• Political: Supports bipartisan interests in job creation, rural economies, and climate action (mass timber as a renewable alternative to fossil-fuel-based materials), but could spark debate over subsidizing one industry amid budget concerns or forest management controversies (e.g., logging vs. conservation).

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Bynum, Janelle S. [D-OR-5]

Recent Actions

• 2026-01-27: Referred to the House Committee on Ways and Means.
• 2026-01-27: Introduced in House
• 2026-01-27: Introduced in House

Bill Versions

• Leveraging Investment in Mass Building and Employment with Renewable Timber Act of 2026 — issued 2026-01-27 — PDF (10 pages)