Legislature(2023 - 2024)BUTROVICH 205
05/12/2023 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SJR12 | |
| HB104 | |
| SB69 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 12 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 104 | TELECONFERENCED | |
| += | SB 69 | TELECONFERENCED | |
HB 104-TIMBER SALE: EXPEDITED/SALVAGE/NEGOTIATED
3:56:43 PM
CO-CHAIR BISHOP reconvened the meeting and announced the
consideration of CS FOR HOUSE BILL NO. 104(RES) am "An Act
relating to salvage sales of timber, negotiated timber sales for
local manufacture of wood products, and expedited timber sales;
and providing for an effective date."
He noted there was a Senate committee substitute for the
committee to consider.
3:56:52 PM
CO-CHAIR GIESSEL moved to adopt the Senate committee substitute
(SCS) for HB 104, work order 33-LS0474\D, as the working
document.
3:57:04 PM
CO-CHAIR BISHOP objected for purposes of discussion.
3:57:47 PM
ANNE RITTGERS, Staff, Co-Chair Click Bishop, Alaska State
Legislature, Juneau, Alaska, presented the explanation of
changes from U to D for HB 104.
SUMMARY
1. SRES CS \D simplifies and expedites the negotiated
timber sale process.
2. SRES CS \D retains the usual Department of Natural
Resources (DNR) public processes to meet the
constitutional requirement to give public notice for
disposals of natural resources:
Article VIII, Section 10. Public Notice. No
disposals or leases of state lands, or interests
therein, shall be made without prior public
notice and other safeguards of the public
interest as may be prescribed by law.
3. SRES CS \D retains the local manufacturing
requirement for negotiated sales; if logs are to be
sold as export (not manufactured locally), timber
sales must be sold competitively. This protects
local manufacturers' advantage to negotiate timber
sales, since they create local jobs and contribute
more to the local and state economy than a company
focusing on export sales.
4. SRES CS \D creates the requirement for a DNR report
to the Legislature during the 2024 session
describing each timber sale in detail and how long
they took to implement. It also requires DNR to
describe timber sales that did not occur because of
loss of value and asks for information that would
increase timber sales and improve timber sale
procedures.
CO-CHAIR BISHOP stated his intention to adopt the Senate CS,
hear from the commissioner, and hold the bill in committee over
the Interim.
3:59:00 PM
JOHN BOYLE, Commissioner, Department of Natural Resources,
Anchorage, Alaska, stated that DNR supports the intent of HB
104. He's talked to small harvesters and manufacturers of local
wood products to get a sense of how well DNR has been performing
in the area getting timber out to sale and whether the existing
statutes, regulations, and procedures are apposite to what the
industry needs. He said DNR recognizes it needs to take a hard
look at how it is managing and interacting with the industry
that is utilizing state forested land. He reminded the committee
that last year DNR brought in about $1.5 million from timber
sales statewide. Over that same time, the department spent $120
million putting out wildfires, which is indicative of an
imbalance. He said countries in similar latitudes that have
similar climates and similar forests have timber industries that
produce board feet of timber an order of magnitude larger than
Alaska, which suggests there is more that Alaska can do in this
space.
He opined that a small step is to streamline and simplify some
of the processes. HB 104 works to that end by lengthening the
terms of the lease sales for operators. This will make it easier
to access financing to produce more lumber and grow their
businesses. He talked about the unmet demand he's seen for local
lumber and the department's desire to make small changes to help
operators meet that demand.
COMMISSIONER BOYLE stated that he had already tasked the
Division of Forestry and Fire Protection to take a holistic look
at the existing framework of regulations and statutes to find
ways to better monetize state forests and grow the timber
industry in the state. This will take active forest management
which includes the carbon bill and more aggressive replanting
after wildfires with higher quality merchantable timber. The
idea is to close the current monetary imbalance between timber
sales and the cost of fighting wildfires.
COMMISSIONER BOYLE continued that HB 104 enables DNR to offer
timber at less than appraised value when it will benefit
communities, help grow the industry, and bring revenue to the
state. He said he looks forward to bringing a more comprehensive
package to the committee next session.
4:05:49 PM
SENATOR DUNBAR referenced Section 5 of the SCS that repeals the
section on base price and Section 4 that authorizes the sale of
timber at less than the appraised value; he expressed concern
about creating a monopsony, which is a market situation in which
there is only one buyer. He suggested that it would be easy for
some commissioner in the future to cut a sweetheart deal with a
manufacturer that is far below the appraised value. He asked the
commissioner for his thoughts and whether some sideboards or a
floor could be added to protect the state from that sort of
behavior.
COMMISSIONER BOYLE replied that he didn't see that as a great
risk to the state given that the current revenue from timber
sales is less than $1.5 million per year. He relayed his belief
that the more DNR can promote and incent local operators, the
better it will be for the state even if it isn't getting top
dollar for its timber in all instances. The offsetting benefit
is the potential for such sales to increase investment and
employment opportunities and lower the cost of building supplies
in small rural communities that are off the main Railbelt. He
added that the intent is to ultimately grow the revenue share
and have high quality trees to sell in the quantities needed to
attract significant investors who will produce more commercial
amounts of lumber in the state.
4:10:04 PM
SENATOR KAUFMAN commented that the total value calculation of
the timber will include the reduction in fire risk once the dead
and standing fuels are removed. The timber is worth nothing left
in situ but it is a liability if it ignites in a wildfire.
4:10:53 PM
CO-CHAIR BISHOP commented that if the state is only receiving
$1.5 million/year in timber revenue, there was a lot of room to
grow the industry to provide revenue for the treasury. He
described the vibrant timber-based economies in Southeast
communities when he was growing up and noted that in the 1960s,
Ketchikan was the third largest city in the state. He thanked
the sponsor for raising the bar to grow the timber industry.
Making it possible for DNR to process sales faster and have more
flexibility to evaluate the kinds of sales will provide untold
opportunities. He described the requirement in the bill for DNR
to provide an annual report to the legislature as valuable.
4:13:04 PM
CO-CHAIR GIESSEL said she and her husband burn beetle-killed
wood and it's not unusual to find live beetles in the house. She
asked Mr. Eng how the people who harvest and burn this wood can
keep from spreading the infestation.
4:13:55 PM
SENATOR CLAMAN joined the committee.
4:14:03 PM
HELGE ENG, State Forester and Director, Division of Forestry and
Fire Protection, Department of Natural Resources (DNR),
Anchorage, Alaska, stated that spreading beetle infestations is
always a concern but it's important to understand that the
beetle is endemic so background levels are always present.
Avoiding the spread of the beetle is best done by maintaining
healthy forests that are able to resist beetle epidemics. He
also advocated for burning firewood as close to the source as
possible.
4:15:12 PM
SENATOR DUNBAR pointed out that as currently drafted, the report
to the legislature that is outlined in Section 6 of the Senate
CS is not ongoing. He said some of his concern relating to the
lack of a floor on these sales would be alleviated if the report
were recurring. Acknowledging that ongoing reports are time
consuming and costly, he asked about the possibility of a
revenue-based trigger provision for the report.
COMMISSIONER BOYLE said he didn't believe DNR would object to a
revenue-based trigger provision for the reports.
CO-CHAIR BISHOP opined that Section 6 needed work in several
areas.
4:17:54 PM
SENATOR KAUFMAN suggested the drafters add an inflation
adjustment measure to the reporting requirement. He also asked
whether kiln dried lumber produced by this process would be
better at attenuating the beetle infestation than transporting
the timber as firewood.
COMMISSIONER BOYLE deferred the question to Mr. Eng.
4:18:55 PM
MR. ENG stated that kiln drying isn't required to kill the
beetles; the beetles also die when the wood is air dried.
4:19:22 PM
CO-CHAIR BISHOP removed his objection; finding no further
objection, the Senate CS for HB 104 was adopted.
He invited Mr. Stancliff to provide closing comments.
4:19:40 PM
DAVE STANCLIFF, Staff, Representative Mike Cronk, Alaska State
Legislature, Juneau, Alaska, stated that the sponsor views the
Senate CS as a negotiated compromise with the administration and
the committee. The goal is to turn a withering timber industry
into a vibrant industry. The administration has assured the
sponsor that the division will perform more quickly and
efficiently as outlined in the report to the legislature.
4:21:20 PM
CO-CHAIR BISHOP held HB 104 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR 12 Sponsor Statement v A 05.12.23.pdf |
SRES 5/12/2023 3:30:00 PM |
SJR 12 |
| SJR 12 Support Document - DEC 404 FAQ.pdf |
SRES 5/12/2023 3:30:00 PM |
SJR 12 |
| SJR 12 Support Document - DEC 404 Assumption Cheat Sheet.pdf |
SRES 5/12/2023 3:30:00 PM |
SJR 12 |
| SJR 12 Fiscal Note 05.12.23.pdf |
SRES 5/12/2023 3:30:00 PM |
SJR 12 |
| HB 104 CS WORKDRAFT Version D 05.12.23.pdf |
SRES 5/12/2023 3:30:00 PM |
HB 104 |
| SJR 12 Amendment #1.pdf |
SRES 5/12/2023 3:30:00 PM |
SJR 12 |
| HB 104 Explanation of Changes Ver. U.A to Ver. D 05.12.23.pdf |
SRES 5/12/2023 3:30:00 PM |
HB 104 |