CSHB 344(RES): "An Act authorizing the commissioner of natural resources to negotiate and enter into timber sale contracts that provide for local manufacture of high value-added wood products."
00CS FOR HOUSE BILL NO. 344(RES) 01 "An Act authorizing the commissioner of natural resources to negotiate and enter 02 into timber sale contracts that provide for local manufacture of high value-added 03 wood products." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. LEGISLATIVE FINDINGS AND PURPOSE. The legislature finds that it is 06 in the best interests of the people and economy of Alaska to encourage the establishment and 07 sustainable operation of local timber processing facilities in Alaska to produce high value- 08 added wood products and other value-added wood products from timber cut on state land. 09 One means of encouraging such facilities is through the use of an incentive by reducing the 10 stumpage price of timber offered through negotiated timber sale contracts. The value-added 11 use of timber harvested in Alaska is intended to foster a stable, small scale, locally run, 12 finished wood products industry by providing a steady reliable supply of timber at a reliable 13 rate over a period of time to a purchaser of the timber that will provide maximum 14 opportunities for jobs in Alaska without significantly adversely affecting fish and wildlife
01 habitat and the forest resources. 02 * Sec. 2. AS 38.05 is amended by adding a new section to article 4 to read: 03 Sec. 38.05.123. NEGOTIATED TIMBER SALES FOR LOCAL 04 MANUFACTURE OF WOOD PRODUCTS. (a) Notwithstanding the provisions of 05 AS 38.05.115 and 38.05.120, and upon a finding that the sale is in the best interest of 06 the state, the commissioner may negotiate a sale of timber for use in the local 07 manufacture of high value-added wood products. A timber sale contract entered into 08 under this section may provide for a harvest of up to 10,000,000 board feet of timber 09 each year, consistent with sustained yield principles, and may be for a term of up to 10 10 years. Initial stumpage rates for a contract under this section shall be determined 11 by negotiation but may not be less than the base price for the area as established under 12 regulations adopted by the commissioner. A contract under this section shall provide 13 that stumpage rates shall be redetermined by negotiation at least once every three years 14 during the term of the contract, to reflect changes in market conditions; the 15 redetermined rates may not be less than the base price for the area as established under 16 regulations adopted by the commissioner. The commissioner shall by regulation set 17 a maximum number of contracts, but not less than two, per region of state that may 18 be negotiated under this section. 19 (b) Notice of intent to negotiate a contract under this section shall be given in 20 accordance with AS 38.05.945. 21 (c) The commissioner may negotiate a sale of timber under this section if the 22 prospective purchaser agrees to use to the maximum extent commercially practicable 23 the timber subject to the sale for the local manufacture of high value-added wood 24 products. The commissioner shall determine the maximum amount of the timber being 25 sold that is commercially practicable to use for those purposes and make the use of 26 that percentage of the timber for those purposes a term of the contract. In evaluating 27 proposals, the commissioner shall take into account the proposed manufacture of other 28 value-added wood products to be produced under a negotiated contract. 29 (d) Before a sale may be negotiated under this section, 30 (1) the area of the sale must be designated for forestry purposes by a 31 valid, existing area plan adopted under AS 38.04; and
01 (2) the requirements of AS 38.05.112 and 38.05.113 must be met. 02 (e) In making the best interest finding required by AS 38.05.035(e) and this 03 section, the commissioner shall consider, in addition to other factors, 04 (1) the direct economic benefit from the local manufacture of high 05 value-added wood products as a result of the sale; 06 (2) the direct economic benefit from other local processing of the 07 timber to be undertaken by the purchaser as a result of the sale, including the 08 manufacture of other value-added wood products in addition to high value-added wood 09 products; 10 (3) the likelihood of commercial success of the locally manufactured 11 high value-added wood products and other value-added wood products; 12 (4) the extent to which the sale is likely to result in the creation and 13 maintenance of a stable local job base; 14 (5) the existence of adequate protection measures to ensure the 15 sustainability of fish and wildlife habitat and populations and continuation of other 16 uses of the area subject to the negotiated sale; 17 (6) the stumpage return to the state; and 18 (7) any other reasonably foreseeable benefits to the state and local 19 economies from the sale. 20 (f) As part of the timber sale negotiations authorized by this section, the 21 commissioner may require a prospective purchaser negotiating a timber sale contract 22 to submit financial and technical data that demonstrates that the requirements of this 23 section have been or will be met. Upon the prospective purchaser's request, the 24 commissioner shall keep data provided by the purchaser confidential in accordance 25 with the requirements of AS 38.05.035(a)(9). 26 (g) If the commissioner determines that additional analysis is necessary in 27 order to complete the best interest finding for a sale under this section, the 28 commissioner may require the prospective purchaser to retain and pay for the services 29 of a contractor to assist the commissioner in evaluating the proposed negotiated sale 30 and financial and technical data relating to the proposed sale. The contractor shall be 31 selected by the prospective purchaser from a list of consultants in forestry and timber
01 economics provided by the commissioner. If the commissioner requires a prospective 02 purchaser to retain the services of a contractor under this subsection, the commissioner 03 shall determine the scope of the work to be performed by the contractor. 04 (h) Under this section, a performance review shall be completed not more than 05 five years after a timber sale contract is entered into by the department to ensure that 06 the purchaser is performing in accordance with the terms of the contract, and to 07 determine if an updated forest land use plan under AS 38.05.112 is needed. If the 08 commissioner determines that the 09 (1) purchaser is not performing in accordance with the contract, the 10 commissioner may terminate the contract; 11 (2) contract conflicts with the current forest land use plan, the 12 commissioner may terminate the contract if the conflict cannot be resolved, provided 13 that the commissioner may not terminate a contract under this paragraph for lack of 14 timber until the commissioner has made a good faith effort to find suitable replacement 15 timber. 16 (i) A timber sale negotiated under this section does not affect other timber 17 harvest programs under AS 38.05.110 - 38.05.120. 18 (j) A purchaser may not be a party to more than one contract under this 19 section at any one time. 20 (k) In this section, 21 (1) "high value-added wood product" means kiln-dried or commercially 22 dried lumber, interior finish paneling, and trim, flooring, doors, and windows, cabinet 23 stock, furniture, musical instruments or parts of instruments, toys, tools and 24 implements, ready-to-assemble building kits, veneer, plywood, finger-jointed lumber, 25 house logs, and other similar finished wood products specified by the commissioner 26 by regulation and, for deciduous aspen, poplar, and high defect birch, includes 27 engineered wood products and paneled wood products; 28 (2) "other value-added wood product" means pulp, chips, waferboard, 29 chipboard, fiberboard, green lumber, cants, slabs, or planks intended for remanufacture, 30 and other similar wood products specified by the commissioner by regulation. 31 * Sec. 3. Notwithstanding AS 38.05.123(a), added by sec. 2 of this Act, the commissioner
01 may negotiate no more than two sales of timber for local manufacture of high value-added 02 timber products under AS 38.05.123 in each region of the state in calendar years 1996, 1997, 03 and 1998.