SB 180: "An Act authorizing the commissioner of the Department of Natural Resources to negotiate and enter into timber sale contracts that provide for local manufacture of high value-added wood products; and establishing an Alaska Forest Products Research and Marketing Program within the Department of Commerce and Economic Development."
00SENATE BILL NO. 180 01 "An Act authorizing the commissioner of the Department of Natural Resources 02 to negotiate and enter into timber sale contracts that provide for local 03 manufacture of high value-added wood products; and establishing an Alaska Forest 04 Products Research and Marketing Program within the Department of Commerce 05 and Economic Development." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. LEGISLATIVE FINDINGS AND PURPOSE. The legislature 08 finds that it is in the best interests of the people and economy of Alaska to 09 encourage the establishment and sustainable operation of local timber processing 10 facilities in Alaska to produce high value-added wood products and other value-added 11 wood products from timber cut on state lands. One means of encouraging such 12 facilities is through the use of incentives offered through negotiated timber sale 13 contracts. The value-added use of timber harvested in Alaska is intended to foster 14 a stable, small-scale, locally run, finished wood products industry that will provide
01 maximum opportunities for Alaskan jobs without significantly adversely impacting fish 02 and wildlife habitat. 03 * Sec. 2. AS 38.05 is amended by adding a new section to article 4 to 04 read: 05 Sec. 38.05.123. NEGOTIATED TIMBER SALES FOR LOCAL 06 MANUFACTURE OF WOOD PRODUCTS. (a) Notwithstanding the provisions 07 of AS 38.05.115 and 38.05.120, and upon a finding that the sale is in the 08 best interest of the state, the commissioner may negotiate a sale of timber 09 for use in the local manufacture of high value-added wood products. A 10 timber sale contract entered into under this section may provide for a harvest 11 of up to five million board feet of timber each year, consistent with 12 sustained yield principles, and may be for a term of up to 10 years. Initial 13 stumpage rates for a contract under this section shall be determined by 14 negotiation but may not be less than the base price for the area as 15 established under regulations adopted by the commissioner. A contract under 16 this section shall provide that stumpage rates shall be redetermined by 17 negotiation at least once every three years during the term of the contract, 18 to reflect changes in market conditions; the redetermined rates may not be 19 less than the base price for the area as established under regulations adopted 20 by the commissioner. 21 (b) Notice of intent to negotiate a contract under this section shall 22 be given in accordance with AS 38.05.945. 23 (c) The commissioner may negotiate a sale of timber under this 24 section if the prospective purchaser agrees to use at least 50 percent of the 25 timber subject to the sale for the local manufacture of high value-added wood 26 products. 27 (d) Before a sale may be negotiated under this section, 28 (1) the area of the sale must be designated for forestry 29 purposes by a valid, existing area plan adopted under AS 38.04; and 30 (2) the requirements of AS 38.05.112 and 38.05.113 must be 31 met.
01 (e) In making the best interest finding required by AS 38.05.035(e) 02 and this section, the commissioner shall consider, in addition to other factors, 03 (1) the direct economic benefit from the local manufacture of 04 high value-added wood products as a result of the sale; 05 (2) the direct economic benefit from other local processing of 06 the timber to be undertaken by the purchaser as a result of the sale, 07 including the manufacture of value-added wood products other than high 08 value-added wood products; 09 (3) the likelihood of commercial success of the locally 10 manufactured high value-added wood products and other value-added wood 11 products; 12 (4) the extent to which the sale is likely to result in the 13 creation and 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 16 other 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 19 local economies from the sale. 20 (f) As part of the timber sale negotiations authorized by this section, 21 the commissioner may require a prospective purchaser negotiating a timber 22 sale contract to submit financial and technical data that demonstrates that the 23 requirements of this section have been or will be met. Upon the prospective 24 purchaser's request, the commissioner shall keep data provided by the 25 purchaser confidential in accordance with the requirements of 26 AS 38.05.035(a)(9). 27 (g) If the commissioner determines that additional analysis is necessary 28 in order to complete the best interest finding for a sale under this section, 29 the commissioner may require the prospective purchaser to retain and pay for 30 the services of a contractor to assist the commissioner in evaluating the 31 proposed negotiated sale and financial and technical data relating to the
01 proposed sale. The contractor shall be selected by the prospective purchaser 02 from a list of consultants in forestry and timber economics provided by the 03 commissioner. If the commissioner requires a prospective purchaser to retain 04 the services of a contractor under this subsection, the commissioner shall 05 determine the scope of the work to be performed by the contractor. 06 (h) No more than five years after a timber sale contract is entered 07 into under this section, a performance review shall be completed by the 08 department to ensure that the purchaser is performing in accordance with the 09 terms of the contract. If the commissioner determines that the purchaser is 10 not performing in accordance with the contract, the commissioner may 11 terminate the contract. 12 (i) A timber sale negotiated under this section does not affect other 13 timber harvest programs under AS 38.05.110 - 38.05.120. 14 (j) A purchaser may not be a party to more than one contract under 15 this section at any one time. 16 (k) In this section, "high value-added wood product" means kiln-dried 17 or commercially dried lumber, interior finish paneling and trim, flooring, doors 18 and windows, cabinet stock, furniture, musical instruments or parts of 19 instruments, toys, tools and implements, ready-to-assemble building kits, and 20 other similar finished wood products specified by the commissioner by 21 regulation and, for deciduous aspen, poplar, and high defect birch, includes 22 engineered wood products and paneled wood products. Except as otherwise 23 provided in this subsection, "high value-added wood product" does not include 24 plywood, pulp, chips, waferboard, chipboard, fiberboard, green lumber, cants, 25 slabs, or planks intended for remanufacture, and other similar wood products 26 specified by the commissioner by regulation. 27 * Sec. 3. AS 44.33 is amended by adding a new section to read: 28 ARTICLE 10. ALASKA FOREST PRODUCTS 29 RESEARCH AND MARKETING PROGRAM. 30 Sec. 44.33.900. ALASKA FOREST PRODUCTS RESEARCH AND 31 MARKETING PROGRAM. (a) The Alaska Forest Products Research and
01 Marketing Program is established in the Department of Commerce and 02 Economic Development. 03 (b) The program is established to provide a statewide information 04 clearinghouse and coordinator to gather and disseminate information relating 05 to research and development, including technical, logistical, financing, marketing 06 and other relevant information regarding the manufacture of specific value-added wood products and the 07 establishment of new high value-added 08 manufacturing facilities in Alaska, and to assist in coordinating existing 09 research and development efforts by state and federal agencies and other 10 public and private entities. 11 (c) The program coordinator shall identify unfilled needs and problems 12 impeding the development of a high value-added wood products industry in 13 Alaska, gather information and conduct analyses, and propose solutions by 14 exploring successful models in other states and nations.