Legislature(1993 - 1994)
04/22/1994 08:15 AM House RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
TAPE 94-62, SIDE B
Number 000
SB 310 - STATE/PRIVATE/MUNI TIMBER OPERATION/SALE
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 1, line 4:
Delete "AS 38.05.112(c)"
Insert "AS 38.05.112"
Page 1, following line 4:
Insert new material to read:
"Sec. 38.05.112. FOREST LAND USE PLANS. (a) The
department may not [SELL OR] harvest timber, except for
isolated sales of less than 50,000 board feet [PERSONAL
USE TIMBER HARVEST], until a site-specific forest land
use plan has been adopted. A forest land use plan is
required whether or not a regional or area land use
plan under AS 38.04.065(a) or a forest management plan
under AS 41.17.230 has been adopted.
(b) The commissioner shall base a forest land use
plan on the best available data, including information
provided by other agencies [DESCRIBING THE IMMEDIATE
AND LONG-TERM EFFECTS OF INDIVIDUAL AND COLLECTIVE
FOREST ACTIVITIES ON THE TIMBER BASE AND ON OTHER
RESOURCES AND USES]."
Page 2, following line 14:
Insert a new subsection to read:
"(d) A management plan prepared by the
commissioner under AS 41.17.230 or AS 38.04.065 must
consider and permit the uses described in (c) of this
section. If the commissioner finds that a permitted use is
incompatible with one or more other uses in a portion of a
state forest, the commissioner shall, consistent with AS
41.17.200, affirmatively state in the management plan that
finding of incompatibility for the specific area where the
incompatibility is anticipated to exist and the time period
when the incompatibility is anticipated to exist together
with the reasons for each finding. If the commissioner
finds that the use described in (c)(1) of this section is
incompatible, or otherwise restricts that use, the
commissioner must also document the finding with sound
scientific data that clearly proves the incompatibility and
the benefits of the restriction."
REPRESENTATIVE JAMES stated the amendment was requested by
the Interior Alaska Forest Association in Fairbanks and
contains the needed changes to provide options for the
"little guy" to be able to continue in the timber industry.
The first part of the amendment allows for sales of less
than 50,000 board feet. She said that size of timber sales
is not being done currently because the Division of Forestry
feels those size sales are more trouble than what they are
worth. The amendment will allow salvage sales and sale of
timber which has been stacked, without going through the
planning process.
REPRESENTATIVE JAMES explained the other portion of the
amendment provides that if the commissioner finds the
permitted use is incompatible with one or more uses in a
portion of a state forest, that there will be scientific
evidence proving the incompatibility and the benefits of the
restriction.
Number 062
REPRESENTATIVE GREEN asked if a person has a hunting lodge
with a vast panoramas, which is part of the reason the lodge
is in a certain location, and a clearcut is allowed by a
forest management agreement (FMA) affecting the lodge's
view, will the proposed amendment have any impact.
REPRESENTATIVE JAMES replied if trees have a direct relation
to the person's livelihood, cutting the trees down is
scientifically deteriorating to the business. She felt that
person would be protected. She stated the intent of the
language is to ensure that decisions are not made
subjectively or politically.
REPRESENTATIVE GREEN expressed concern about what is
determined to be scientific and what is determined to be
aesthetic.
REPRESENTATIVE JAMES reiterated the amendment says if a
permitted use is incompatible with one or more of the uses
in the state forest. She gave several examples.
Number 117
REPRESENTATIVE DAVIES made a MOTION to AMEND the AMENDMENT
to CSSB 310(RES) on page 2, line 5, after the word
"scientific" insert the words "or economic".
REPRESENTATIVE MULDER OBJECTED for the purpose of
discussion.
REPRESENTATIVE DAVIES, referring to Representative Green's
example of a hunting lodge, stated if the trees are cut down
it is a scientific fact the trees are gone, but it would not
be a scientific issue as to whether it impacted the value of
the lodge. Rather, it would be an economic issue.
REPRESENTATIVE JAMES stated she does not object to the
amendment to the amendment.
REPRESENTATIVE MULDER WITHDREW his OBJECTION.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
REPRESENTATIVE FINKELSTEIN clarified the amendment says if
the commissioner finds commercial logging to be incompatible
with any other use in the forest, or if any other use even
restricts commercial logging, the finding must be made with
scientific data clearly proving the incompatibility. He
felt that is a burden of proof which is nearly
insurmountable. He stressed the state forests were set up
not only for the timber value but also because of public
use. He said currently, the commissioner is able to sell
timber sales and only has to deal with local objections.
REPRESENTATIVE JAMES stated Representative Finkelstein is
assuming that FMAs are going to involve huge pieces of land,
which is not necessarily true. She said a forest management
plan could be a small parcel of timber land. The benefits
and advantages of a forest management plan is it is a
management plan as opposed to a timber sale, whereby
reforestation and all of the other identified conditions
needed to be maintained in that forest are the
responsibility of the person who has the forest management
plan. She felt there is a need to ensure that subjective
information does not stop every sale. She pointed out it
would be possible in a FMA to have a fishing or hunting
lodge within the agreement, thereby protecting that lodge.
Number 307
REPRESENTATIVE FINKELSTEIN stated the previous discussion
assumes the amendment is a provision which affects FMAs and
he felt it is not. He said the amendment is inserting a
provision in the complete overall process and he felt the
amendment is not restricted to FMAs.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES GREEN, MULDER,
BUNDE, JAMES, CARNEY, HUDSON, and WILLIAMS. Voting against
the amendment were REPRESENTATIVES DAVIES and FINKELSTEIN.
The MOTION PASSED 7-2.
CHAIRMAN WILLIAMS noted for the record that proposed
amendments X21 and X23 have been withdrawn.
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 2, line 31, following "land.":
Insert "The commissioner shall identify the forest land
included in the solicitation of proposals. The land
identified may include land covered by a cooperative
resource management or development agreement under AS
38.05.027, subject to the approval of the owner of any land
than state land."
Page 6, line 10, following "commissioner.":
Insert "If the forest management agreement covers non-
state land under an agreement authorized under AS 38.05.027,
the owner of the land must approve the agreement."
REPRESENTATIVE GREEN OBJECTED for discussion purposes.
REPRESENTATIVE JAMES stated this amendment allows a FMA to
include land owned by several other owners. The amendment
also provides that everyone will know what land is being
discussed through the commissioner identifying the forest
land in the solicitation of proposals. She said the sponsor
of SB 310 feels the amendment is fine.
REPRESENTATIVE HUDSON said the key language in the amendment
is "the owner of the land must approve the agreement."
REPRESENTATIVE GREEN WITHDREW his OBJECTION.
CHAIRMAN WILLIAMS stated no objections being heard, the
MOTION PASSED.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 8, following line 23:
Insert a new bill section to read:
"*Sec. 7. AS 41.17.230(a) is amended to read:
(a) The commissioner shall prepare a management
plan consistent with AS 38.04.005 and this chapter for each
state forest and for each unit of a state forest to assist
in meeting the requirements of this chapter. An operational
level forest inventory shall be completed before a
management plan for the state forest or the unit of a state
forest is adopted. The management plan shall be adopted,
implemented, and maintained within three years of the
establishment of a state forest by the legislature. The
management plan shall set a total amount of the harvestable
timber of the forest or unit, not to exceed 75 percent, that
may be the subject of forest management agreements under AS
38.05.122."
REPRESENTATIVE MULDER OBJECTED.
REPRESENTATIVE DAVIES stated the important part of the
amendment is the underlined portion at the bottom. He said
the amendment addresses one of the basic concerns people
have in regard to large FMAs, which is there is incomplete
information about the inventory. If there is an
overestimation on what is available and the state commits to
an offering based on that overestimate and is locked in for
20 years, there is no way to make an adjustment. He noted
the other concern is by allowing a large fraction of the
potential harvestable timber to go into an FMA, smaller
operators are being eliminated. He stressed there are
enough small operators in the Tanana Valley currently to
take care of all the spruce there and there is no need for
another plant in the Tanana Forest.
REPRESENTATIVE DAVIES stated he does not want to prescribe
for the entire state what the percentage of the allowable
cut for FMAs should be. Rather, he wants the allowable cut
to be set on a region by region basis in the management
plan, which is consistent with the way SB 310 sets up the
relationship between the FMA and the management plan--every
FMA has to be consistent with the existing management plan.
Number 330
REPRESENTATIVE JAMES felt the protections are already in the
bill but she asked the sponsor to speak on the amendment.
RICK SOLIE, AIDE, SENATOR STEVE FRANK, stated there is no
need to further restrict a FMA by requiring a certain
percentage of harvest because there is already a sustained
yield requirement in law and the Division of Forestry has to
maintain the requirement. He said there is no need to
rewrite all of the Alaska statutes in SB 310 as there is the
Forest Practices Act (FPA). The Division of Forestry is not
going to allow a FMA until there is a sufficient inventory
to determine that the sustained yield can be maintained. He
felt the amendment is inappropriate and will hurt the spirit
of giving the Department of Natural Resources (DNR)
flexibility to do good FMAs, allowing for responsible
sustained yield harvest.
REPRESENTATIVE JAMES added that one of the requirements for
a FMA is that existing operations be considered. She is not
comfortable with including certain amounts in the bill.
REPRESENTATIVE DAVIES stated it could be consistent with the
sustained yield philosophy to allocate the entire forest
under a FMA, because a FMA has to operate under sustained
yield. The sustained yield requirement in the FPA does not
restrict the percentage of the forest to be allocated to a
FMA. He felt it is a philosophical question as to whether
one wants to allow the entire forest to be harvested by one
large operator or to preserve some portion of the forest for
small operators. He agreed that SB 310 does protect
existing small operators but does not protect future small
operators.
REPRESENTATIVE DAVIES pointed out that testimony suggests
spruce are not even being discussed, but rather the
development of a new forest operation in the Tanana Valley
relating to low quality hardwoods. He stressed the issue is
the allocation between large FMAs and small operators. He
felt the management plan should address that issue.
Number 404
REPRESENTATIVE JAMES thought there could be a FMA which
includes some small operators. She said since existing
small operators are already protected in the bill, she would
like to leave that up to the decision of the FMA proposal
and the public can respond during the public comment period.
She did not feel there is a need for a further restriction.
REPRESENTATIVE DAVIES stated SB 310 only protects existing
small operators and does not preserve a niche for small
operators to bid on the forest in the future.
MR. SOLIE pointed out that the protection for existing
operators is located on page 4, line 22, subsection (1). He
said the bill does address consistency with management plans
both on page 2, line 26 and page 4, line 26, subsection (2).
He felt the amendment restricts more than necessary.
REPRESENTATIVE FINKELSTEIN reiterated the lines referred to
do not speak to any future base for the small operators and
their ability to run their small mills.
REPRESENTATIVE DAVIES agreed SB 310 does provide for
protection of existing operators and does require that a FMA
operate under existing land use plans but his concerns are
still not addressed. First, there is a possibility of an
error in the inventory. Second, the bill does not protect
the niche for small operators. Finally, the land use plans
are not required to consider the percentage of forest to be
allocated to FMAs.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES DAVIES, CARNEY,
and FINKELSTEIN. Voting against the amendment were
REPRESENTATIVES MULDER, JAMES, GREEN, BUNDE, HUDSON, and
WILLIAMS. The MOTION was DEFEATED 6-3.
Number 525
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 2, line 29, following "yield.":
Insert "The commissioner may only enter into one forest
management agreement that covers land within each state
forest in a three-year period. The commissioner may only
enter into one forest management agreement in a three-year
period in each region of the state for which a regional land
use plan has been adopted or is to be adopted for land
outside of state forests. In this subsection, "state
forest" has the meaning given in AS 41.17.950."
REPRESENTATIVE MULDER OBJECTED for purposes of discussion.
REPRESENTATIVE DAVIES stated this amendment addresses the
concern regarding the forest being tied up in a series of
large agreements and being renewed for a long period of
time, with no possibility of responding to changing
circumstances in the forest. He said this amendment limits
the number of FMAs entered into in any three year period.
He pointed out that because the prior amendment was not
passed, there is still a possibility of having the entire
forest tied up in FMAs but with this amendment, every three
years, there would be an opportunity to revisit at least one
agreement.
REPRESENTATIVE JAMES stated this amendment also assumes the
FMAs are going to be large. She pointed out that the bill
provides for an annual solicitation. She did not feel
comfortable binding the department. She felt it should not
be assumed that because a solicitation is put out, there
will be response. She added there may also be unsolicited
FMAs. She commented just because the state is ready to sell
timber, does not mean there will be a buyer and to put
restrictions on the commissioner, may close the door to some
opportunities. Based on that, she objected to the
amendment.
REPRESENTATIVE MULDER felt there will be two adverse affects
in adopting the proposed amendment. He stated a bind will
be put on the small companies as the amendment will not just
involve big companies being bound to one contract, but also
the small companies. He said there may be a niche requiring
several small companies for different needs. He also felt
the amendment puts further restraint on the economic
feasibility. He stressed the purpose of SB 310 is to
promote economic diversity and opportunity and the amendment
hinders that opportunity.
MR. SOLIE stated the amendment will limit the time of the
certainty of a FMA to three years. He stressed it is
fundamental to have some certainty in order for a company to
be able to get financing to construct the value-added
facilities, which will create long-term stable jobs. The
sponsor opposes the amendment.
REPRESENTATIVE DAVIES said he is not proposing limiting the
length of a FMA. The amendment only says a FMA can be
entered into every three years. The purpose is to stagger
the FMAs in time and serves as a management tool for the
department. He stated no one is going to go through the
process to establish a FMA for a small sale. The purpose of
a FMA is to capitalize a new plant and a new plant is not
going to be built based on a small sale. Rather, the sale
will involve a large portion of the forest, guaranteeing a
large resource in the future in order to get financing for a
value-added plant. He said there is a need to preserve some
operations for small operators and preserve the ability for
DNR to manage the forest in the best way possible. He
stressed whether or not SB 310 is passed, there will
continue to be small lease sales and small plants. He
reiterated that FMAs are not directed at small operations.
REPRESENTATIVE GREEN asked if the amendment precludes the
Native associations.
TAPE 94-63, SIDE A
Number 000
REPRESENTATIVE DAVIES replied the amendment does not apply
to private land, but to state land only.
REPRESENTATIVE GREEN noted the amendment says "land outside
of state forests."
REPRESENTATIVE DAVIES said the regional land use plan may
cover portions of state land that are not classified as
state forests. Timber sales can be offered on land which is
not classified as state forests.
REPRESENTATIVE HUDSON stated the earlier amendment by
Representative James which was adopted does include private
land within the forest (indiscernible). He said whatever is
done with the proposed amendment will couple with the
private operator.
REPRESENTATIVE DAVIES noted the previous amendment addressed
FMAs and cooperative land sales. The portions under the
state forests would satisfy the requirement that it was a
sale on state land within a regional land use area. He
pointed out that what is being discussed is a regional land
use plan not under the FMA.
Number 030
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES FINKELSTEIN,
DAVIES, and CARNEY. Voting against the amendment were
REPRESENTATIVES JAMES, BUNDE, MULDER, HUDSON, and WILLIAMS.
The MOTION was DEFEATED 5-3.
Number 039
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 4, following line 11:
Insert a new paragraph to read:
"(7) extent to which the proposed agreement
provides for processing in the state of the timber
harvested, to the extent permitted by law;"
Renumber the following paragraphs accordingly.
Page 5, following line 19:
Insert a new subparagraph to read:
"(F) provisions requiring the processing of the
timber in the state if that is the highest and best use of
the timber as determined by the commissioner and if
permitted by law;"
Reletter the following subparagraphs accordingly.
Page 8, following line 23:
Insert a new bill section to read:
"*Sec. 7. SEVERABILITY. Under AS 01.10.030, if
AS 38.05.122(d)(7) or (g)(2)(F), or the application of those
provisions to any person or circumstance, is held invalid,
the remainder of this Act and its application to other
persons or circumstances shall not be affected."
REPRESENTATIVE MULDER OBJECTED for discussion purposes.
REPRESENTATIVE JAMES said the amendment adds a paragraph
which will provide instructions to the FMA that in-state
processing is desired if possible. She stated the next part
of the amendment provides for the highest and best use of
the timber. She noted the third part of the amendment
ensures, that in case either of the first parts of the
amendment are unconstitutional, the rest of the bill will
stand.
REPRESENTATIVE CARNEY agreed with the intent of the
amendment but would like to see an effective date.
REPRESENTATIVE MULDER agreed. He said there have been
numerous discussions about promoting the work force in the
state and value-added products in Alaska and while there are
restrictions on what can be done, this amendment makes a
strong statement about the desire for this type of economic
development to occur in Alaska.
REPRESENTATIVE JAMES stated the effective date will be a
given because the bill will probably be challenged.
REPRESENTATIVE DAVIES said the way to make this amendment
happen is to petition the state's Congressional delegation
to exempt the state of Alaska from the interstate commerce
restriction.
Number 084
REPRESENTATIVE JAMES felt that is a separate issue. She
felt if SB 310 has not done anything else, it has made
Alaskans rally behind that thought and idea. In the
meantime, she is not willing to hold up the process until
that happens. She said passing this amendment will give the
DNR commissioner the ability to choose a proposal which
includes in-state processing.
CHAIRMAN WILLIAMS agreed.
REPRESENTATIVE CARNEY made a MOTION to AMEND the AMENDMENT
to CSSB 310(RES) on page 6, line 7, insert a new paragraph
which says, "The commissioner may not enter into a final
agreement until the state receives from the federal
government an exemption from federal law so that the state
may require that timber harvested under the agreement be
processed within the state."
REPRESENTATIVES MULDER AND JAMES OBJECTED.
REPRESENTATIVE DAVIES said he attempted to get an opinion
from the Attorney General about this issue without success,
but it is his understanding that the state cannot put a
requirement in the bill for in-state processing unless the
exemption is received from the federal government. He noted
the state of Oregon has received an exemption.
Number 123
CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT,
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED),
stated there is not much faith that the federal law can be
changed. However, he encouraged committee members to allow
this tool (the amendment) to exist while there is an attempt
to change the federal law. He said the ability to choose,
out of several competing proposals, the one which has in-
state processing and a provision to hire Alaskans, allows
the department to do things contractually which they could
never do if it were mandated by law. He pointed out that
Alaska hire and in-state processing cannot be mandated but
it can be done contractually.
REPRESENTATIVE JAMES stated FMAs may not include white
spruce going to Japan but in fact might involve hardwoods.
She said to hold up the entire FMA process until a federal
exemption can be received will be taking a step backward.
REPRESENTATIVE DAVIES reminded everyone SB 310 applies
statewide, not just in the Tanana Valley. He stated if a
process is set up and bids are evaluated with a selection
made based on the in-state processing requirement, that
process would be unconstitutional and could be challenged.
He said a change in federal law is not required, as the
federal law allows for these exemptions currently, the state
just needs to ask for the exemption and get it.
REPRESENTATIVE CARNEY asked if there is any way to stipulate
that the contract contain the requirement for in-state
processing.
MR. GATES replied the state cannot mandate primary
manufacture but it can be accomplished contractually.
REPRESENTATIVE DAVIES agreed as long as the price remains
the same, but as soon as someone offers one cent less for
the materials and the contract is not granted because of in-
state processing, the state will lose in court.
REPRESENTATIVE JAMES speaking against the amendment to the
amendment, said subsection (F) in the amendment says ..."the
processing of the timber if that is the highest and best use
of the timber" and she felt decisions can be made on what
benefits the state the best. She stated the price itself
may not necessarily be the determining factor.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the motion were REPRESENTATIVES FINKELSTEIN,
DAVIES, and CARNEY. Voting against the motion were
REPRESENTATIVES MULDER, HUDSON, JAMES, and WILLIAMS. The
MOTION was DEFEATED 4-3.
Number 209
REPRESENTATIVE DAVIES made a MOTION to AMEND the AMENDMENT
to CSSB 310(RES) deleting the severability clause. He
stated the clause is redundant with existing statutes.
REPRESENTATIVES HUDSON and WILLIAMS OBJECTED.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the motion were REPRESENTATIVES DAVIES, CARNEY, and
FINKELSTEIN. Voting against the motion were REPRESENTATIVES
MULDER, JAMES, GREEN, HUDSON and WILLIAMS. The MOTION was
DEFEATED 5-3.
CHAIRMAN WILLIAMS asked for a roll call vote on the motion
to amend. Voting in favor of the motion were
REPRESENTATIVES DAVIES, HUDSON, JAMES, MULDER, FINKELSTEIN,
GREEN, CARNEY, and WILLIAMS. The MOTION PASSED 8-0.
Number 235
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 2, line 30:
Delete "shall"
Insert "may"
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 8, line 6, following "industry;":
Delete "and"
Insert "[AND]"
Page 8, line 7, following "habitat":
Insert new material to read:
"; and
(8) to the fullest extent practicable,
harvested forest land shall be reforested, naturally or
artificially, so as to result in a sustained yield of
merchantable timber from that land; if artificial planting
is required, silviculturally acceptable seedlings must first
be available for planting at an economically fair price"
Page 8, following line 7:
Insert a new bill section to read:
"*Sec. 5. AS 41.17.060 is amended by adding a new
subsection to read:
(d) With respect to private forest land only,
to the fullest extent practicable, harvested forest
land shall be reforested, naturally or artificially. If
artificial planting is required,silviculturally acceptable
seedlings must first be available for planting at an
economically fair price."
Renumber the following bill sections accordingly.
Page 8, following line 23:
Insert a new bill section to read:
"*Sec. 8 AS 41.17.060(b)(4) is repealed."
REPRESENTATIVE HUDSON OBJECTED for discussion purposes.
MR. SOLIE stated this amendment will amend the reforestation
statute in the FPA and clarify what was intended when the
statute was drafted. He said existing law pertains to state
and municipal forest lands and this new Section 5 pertains
to private lands. The section clarifies that private land
harvest is not on a sustained yield basis as required by
law. He noted that private landowners wanted this
clarification in statute.
REPRESENTATIVE MULDER asked what is the definition of
silviculturally.
CHAIRMAN WILLIAMS stated it means tree planting.
Number 282
REPRESENTATIVE GREEN wondered if "economically fair price"
is an understood term or is it subject to conflict.
MR. SOLIE replied he did not think so. He said the
amendment is existing law except for the deletion of the
words "sustained yield".
REPRESENTATIVE DAVIES asked where the words "sustained
yield" appear in the amendment.
CHAIRMAN WILLIAMS said the wording is in the FPA and was put
in inadvertently. He indicated that attached to the
amendment is a copy of current law.
MR. SOLIE said the underlined portion of the amendment is a
repeat of existing law and the words "so as to result in a
sustained yield" was deleted from the section below. He
noted at the end of the sentence in existing law, the words
"in the state" was deleted in the new law that only applies
to private forest land. He stated there was concern it
might require the purchase of trees. He explained existing
law stands for state and municipal and this change is only
to private lands.
Number 334
REPRESENTATIVE FINKELSTEIN stated he does not fully
understand the impact of repealing (b)(4). He clarified the
end result is eliminating the application of sustained yield
to private timber lands.
MR. SOLIE said that is incorrect. He explained currently
there is no state requirement for sustained yield harvest on
private forest lands. The amendment makes existing law
consistent with that and the reforestation part of the FPA.
REPRESENTATIVE FINKELSTEIN felt he must be missing something
because the wording is exactly the same as existing law.
REPRESENTATIVE JAMES said on page 8, line 7, after the word
"habitat", the new material is to be inserted. (8) is
added which is precisely the language in existing (4). She
explained (4) is being moved to (8).
REPRESENTATIVE FINKELSTEIN stated the impact of moving the
language is to say it does not apply to private lands which
is what it applies to now. He felt this amendment is a
major change. He said if there is an existing sustained
yield requirement on private lands and that is going to be
removed, he is concerned there has been no testimony
regarding the change.
MR. SOLIE said existing law relates to sustained yield
harvest for state and municipal. He stressed reforestation
is different than harvesting. Reforestation is something
done after the trees are cut down. He stated sustained
yield does not relate to reforestation. In this change, the
language will remain the same for state and municipal land.
For private land, the language is kept as it should apply,
which does not require any sustained yield harvest. He
pointed out this amendment clarifies existing law.
Number 430
REPRESENTATIVE FINKELSTEIN felt he is getting different
answers. He stated now it sounds like the reforestation
requirement for private lands is being removed.
REPRESENTATIVE JAMES pointed out that the new Section 5
contains the word "reforested".
REPRESENTATIVE FINKELSTEIN said the point of the amendment
is to eliminate any inference of sustained yield on private
lands.
REPRESENTATIVE JAMES responded that is correct.
REPRESENTATIVE FINKELSTEIN stated he will have to oppose the
amendment because there has been no discussion or public
testimony regarding this change. He said perhaps sustained
yield on private lands was the intent of the FPA and has
been an issue in the past.
REPRESENTATIVE DAVIES agreed with Representative
Finkelstein's comments and added that the Division of
Forestry has not commented on this amendment. He also noted
that existing law says "to the fullest extent practicable",
so if someone has private land and wants to use it for
agriculture purposes, reforestation is not practicable. He
said the law is only saying that if someone has private land
and is managing it as a forest, to the extent practicable,
the sustained yield principle should be followed. He did
not understand why a change is needed.
Number 473
REPRESENTATIVE JAMES did not feel the state should be
telling private landowners what they should do with their
land. She will support the amendment because the Tanana
Chiefs Conference wants this amendment and should be
supported.
REPRESENTATIVE DAVIES pointed out the FPA was enacted after
a huge amount of public involvement and consensus debate.
He felt this amendment is not a trivial aspect of the
debate. He also felt that making this change without having
an adequate amount of debate is bad public policy.
CHAIRMAN WILLIAMS stated during the negotiations on the FPA,
it was determined that nothing would be done with the FPA
unless everyone agreed. He said he is willing to hold this
amendment and amendment X38 until the Alaska Forest
Association and DNR can testify.
REPRESENTATIVE DAVIES stated the amendment is amending the
FPA and is not required by SB 310. He said if the amendment
is such a good idea, it should be introduced as a bill by
itself.
REPRESENTATIVE JAMES WITHDREW her MOTION.
Number 605
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 7, line 4, after "(1)":
Insert "The commissioner shall conduct biennial
performance reviews of the agreement throughout the term of
the agreement."
Page 7, line 9, after "operator.":
Insert "The operator shall pay the reasonable cost of
all reviews conducted under this subsection."
REPRESENTATIVE JAMES OBJECTED.
REPRESENTATIVE DAVIES said this amendment will require the
commissioner to perform biennial performance reviews and
determine whether or not the contract is being followed. He
stated one of the criticisms of the FPA is it is difficult
to catch up to violations. One of the major justifications
for the FPA is the state does not have the resources to
plan, design, lay out, and monitor a lease sale. Much of
the costs will be shifted from the state to the person who
has the FMA with the state. He pointed out that if the
agreement is not audited regularly, there will be no way to
know whether or not the terms of the agreement are being
followed.
REPRESENTATIVE JAMES agreed there is a need to review but
felt "conduct biennial performance reviews" does not
necessarily have any definition. She hoped there will be
monitoring but that does not necessarily mean every two
years. She expected there will be some method by which the
FMAs will be monitored. She stressed ongoing monitoring is
needed.
REPRESENTATIVE DAVIES felt uncomfortable discussing
amendments when no representatives from the department are
present.
CHAIRMAN WILLIAMS asked for a roll call vote on the motion.
Voting in favor of the amendment were REPRESENTATIVES
FINKELSTEIN, DAVIES, and CARNEY. Voting against the
amendment were REPRESENTATIVES HUDSON, JAMES, MULDER, and
WILLIAMS. The MOTION was DEFEATED 4-3.
Number 713
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 5, line 6, after "agreement":
Insert "and the final agreement"
Page 5, line 12, after "timber":
Insert ", which may not be less than fair market value
and shall be adjusted annually by the commissioner using a
nationally recognized index that is suitable for measuring
inflation or deflation in the cost of comparable stumpage"
Page 5, line 19, after "agreement;":
Insert "the cost of construction and maintenance of
necessary access roads and other necessary infrastructure
shall be paid by the operator;"
Page 6, line 5:
Delete "may"
Insert "must"
REPRESENTATIVES WILLIAMS and JAMES OBJECTED.
TAPE 94-63, SIDE B
Number 000
REPRESENTATIVE DAVIES stated there is nothing in SB 310
requiring any resemblance between the final agreement and
the proposed final agreement. He pointed out former
Attorney General Charlie Cole's principal concern is too
much power is being given to the DNR commissioner. He said
the first part of the amendment provides that the final
agreement contain the elements which have been said should
be in the proposed final agreement.
REPRESENTATIVE DAVIES explained the second part of the
amendment is an attempt to address a concern regarding long-
term FMAs--throughout the years of the agreement, inflation
goes up, and at the end of the time period, timber is being
sold at a low rate. He stated this amendment says the
initial sale should be at fair market value and there should
be some type of index, so inflation can be taken into
consideration. He said the third part of the amendment
provides that the cost and maintenance of roads and other
infrastructure be paid by the operator. He felt any
agreement should be self sustaining. Representative Davies
stated the final part of the amendment provides for a
requirement of bonding.
MR. GATES said most FMAs do anticipate a consumer price
index (CPI) (indiscernible). The issue is whether or not
that should be mandatory. He stated there is a small
argument for having the flexibility to not require a CPI
escalator as a tool of negotiating. He cannot envision
entering into a FMA without a CPI escalator. However, the
question becomes why compel a CPI escalator as a tool for
every FMA. He was not sure it is valid for every agreement.
MR. GATES said in regard to the last part of the amendment,
there can be small and customized FMAs. He felt it might be
wise not to mandate bonding in those situations and to limit
the flexibility. He stated for large agreements, it is
anticipated there will be bonding.
REPRESENTATIVE CARNEY asked Mr. Gates to speak to the costs
of roads.
MR. GATES replied normally, the cost of road construction
will always be included in the operator's costs. However,
if a new part of the state is being accessed and it is
important to provide access, the market cannot tolerate the
costs of access to a big region. He said the state may want
to put the road in as an economic development effort. The
individual roads would then be paid for by the operator. He
pointed out the amendment provides that even the major roads
would have to be paid for by the FMA operator.
Number 093
REPRESENTATIVE JAMES said although she agrees with all that
is contained in the amendment, she is not willing to support
it. She stated in regard to the cost of construction and
maintenance of necessary access roads, part of the provision
is that the proposed final agreement must include provisions
regarding the responsibilities for construction and
maintenance of the access road. She has always had a
problem with the term fair market value. She felt it means
the biggest price anyone is willing to pay and she was not
sure there is any place to get a nationally recognized index
suitable for measuring inflation or deflation in the cost of
comparable stumpage. She pointed out the determining factor
of whether or not something is financially feasible depends
on the end product. In many cases where there is bidding on
federal forest timber, there will be a minimum bid and she
supports including a minimum bid in the bill.
REPRESENTATIVE JAMES stressed a FMA is being discussed and
that presumably there is some best interest in the state
which is going to be devised out of the agreement. She
expected the operator will pay full price for the timber.
REPRESENTATIVE DAVIES made a MOTION to DIVIDE the QUESTION
and offer the first part of the amendment (Page 5, line 6,
after "agreement":) and the second part would be the rest of
the amendment (Page 5, line 12, after "timber":).
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION TO DIVIDE PASSED.
Number 156
MR. SOLIE expressed support for the first amendment.
CHAIRMAN WILLIAMS asked if there were any objections to the
first part of the amendment. Hearing none, the MOTION
PASSED.
REPRESENTATIVE MULDER OBJECTED to the second part of the
amendment.
REPRESENTATIVE GREEN made a MOTION to AMEND the AMENDMENT,
on the first line, changing the word "shall" to "may".
REPRESENTATIVE HUDSON said he is not convinced there should
be a requirement in the law to annually adjust the stumpage
prices in the contract because if the desire is to lure
corporations into investing in a factory, there may be a
need to have flexibility.
MR. GATES expressed concern about the fair market value part
of the amendment because there may be a desire to encourage
people to put in plants and give lower rates for 2-3 years
while they are building their plant or getting financing.
He felt a major tool is being taken away through this
amendment by compelling the fair market value on trees
always. He said it is a tremendous amount of flexibility to
encourage investment if a period of time of forgiveness can
be given or 50 percent of fair market value rate of stumpage
as an inducement.
REPRESENTATIVE HUDSON mentioned it is not an unknown tool
which has been used in the state. He pointed out the state
would never have had the oil industry on the Kenai Peninsula
if there had been no flexibility to encourage those kinds of
investments into that area.
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
CHAIRMAN WILLIAMS asked for a roll call vote on the
amendment (2nd part). Voting in favor of the motion were
REPRESENTATIVES CARNEY, DAVIES, and FINKELSTEIN. Voting
against the motion were REPRESENTATIVES MULDER, HUDSON,
JAMES, GREEN, and WILLIAMS. The MOTION FAILED 5-3.
REPRESENTATIVE GREEN made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 5, line 19, after "agreement;":
Insert "the cost of construction and maintenance of
necessary access roads and other necessary infrastructure
shall be paid by the operator;"
CHAIRMAN WILLIAMS OBJECTED.
MR. GATES stated roads must be considered in the FMA plan
but this amendment will require the operator to pay costs
for all roads, which may not give the flexibility desired.
CHAIRMAN WILLIAMS ruled the MOTION OUT OF ORDER. He said
the amendment has already been discussed and voted on.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 5, line 19, after "agreement;":
Insert "the cost of construction and maintenance of
necessary temporary access roads and other necessary
infrastructure shall be paid by the operator;"
REPRESENTATIVE WILLIAMS OBJECTED.
REPRESENTATIVE DAVIES said this amendment will eliminate the
concerns expressed by Mr. Gates. This amendment will allow
the state to construct the permanent roads and the FMA will
only be required to incur the costs of the temporary roads.
MR. GATES stated the amendment is still limiting the
commissioner's flexibility to do the best job possible to
craft a good FMA.
REPRESENTATIVE JAMES stated amendments such as this are
detrimental to the process because it identifies what the
operator is going to pay for. She hoped the operator will
pay for all the roads. She stressed if the word "temporary"
is used, it could be assumed the operator only has to pay
for the temporary roads, when in fact there may be
sufficient value in the timber to pay for all of the roads.
Number 354
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES CARNEY, DAVIES,
and FINKELSTEIN. Voting against the amendment were
REPRESENTATIVES JAMES, HUDSON, MULDER, and WILLIAMS. The
MOTION FAILED 4-3.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 7, after line 12:
Insert a new subsection to read:
"(n) Notwithstanding any other provision of this
section, the operator under an agreement that includes
timber harvesting on land within the Tanana Valley
drainage may not harvest timber on that land under the
agreement if the harvest would result, during a calendar
year, in timber harvest operations
(1) on more than 6,000 acres of land, public
and private, in the Tanana Valley drainage; or
(2) that harvested more than 1,000 acres of
white spruce in the Tanana Valley drainage."
Reletter the following subsection accordingly.
CHAIRMAN WILLIAMS OBJECTED.
REPRESENTATIVE DAVIES said this amendment will apply
specifically to the Tanana Valley drainage and not
statewide. The amendment will limit the total amount of
acreage of land contained in a single FMA.
REPRESENTATIVE JAMES clarified the limit is being put on not
necessarily a single FMA but any FMA in the Tanana Valley
drainage.
Number 383
REPRESENTATIVE DAVIES noted the amendment says "the operator
under an agreement" and "a calendar year."
REPRESENTATIVE JAMES recalled in Mr. Pagh's testimony, he
had indicated in regard to spruce, there is the capability
of harvesting 5,000 acres a year and currently 1,000 acres a
year is being harvested. She said this amendment does not
make any provision for hardwoods. She felt uncomfortable
including any kind of limits in the bill. However, she
would like to send a message that there is a desire not to
have all of the timber gone in a year but she is not
comfortable with the numbers contained in the amendment.
REPRESENTATIVE DAVIES noted the amendment says a single
agreement and pointed out there are two distinctions: a
total of 6,000 acres and a subtotal of acres in white
spruce.
REPRESENTATIVE HUDSON asked how much general timber land is
available in the Tanana Valley drainage.
REPRESENTATIVE DAVIES replied approximately 1.5 million
acres.
REPRESENTATIVE HUDSON asked how may acres of white spruce
are available.
REPRESENTATIVE DAVIES replied there are approximately 5,000
acres of white spruce available per year and this amendment
would limit a single agreement to one-fifth of that total.
Number 443
MR. GATES stated DCED tried to advance the concepts of
sustained yield, multiple use, good scientific evidence and
a balancing of values as controlling the amount of acreage
in a given area and the types of things which could be done.
He felt to set truly arbitrary limits goes away from those
types of principles and takes away the flexibility.
REPRESENTATIVE DAVIES stressed the numbers are not arbitrary
but were based on an estimate of the total amount of acreage
available and what was considered to be a reasonable maximum
for the total acreage to be allowed in a FMA. He stated he
has received 275 public opinion messages on SB 310 and they
are running 4-1 opposed to SB 310. One of the fundamental
reasons why people are opposed to the bill is size. Most
people want the scale of a FMA to be limited. He noted most
people are not opposed to a long-term contract. Most people
are opposed to having a big operation requiring huge amounts
of acreage every year to be clearcut. He stressed this
amendment attempts to look at a reasonable amount of the
forest, which could be set aside for long-term agreements,
yet is big enough to enable some small plants to be
capitalized but not so big that it will allow the
capitalization of big plants.
Number 503
REPRESENTATIVE JAMES said she shares the concerns which
Representative Davies mentioned. She also expressed concern
that when restrictions are put in statute, the hands of a
solicited bid from someone are being tied. She stated when
a proposal goes out to the public, there is an opportunity
for the public to determine that an amount is more than what
they are willing to support. She felt the public will be
listened to. She noted there are 30 million acres in the
Tanana Valley basin and she is not comfortable with the
numbers in the amendment, even though she does understand
the concerns.
MR. GATES stated all concerns mentioned are valid. However,
this amendment is eliminating the possibility that an
operator could propose something that is acceptable to the
public and contains more acres. He felt the operator should
be given the chance to convince the public, through the
public hearing process, that a cut is appropriate at a
higher level.
CHAIRMAN WILLIAMS recalled someone had asked how long it
would take to cut 6,000 acres. He said the cut could be
done in a season.
Number 557
MR. SOLIE stated since DNR is not represented, he will offer
some statistics they provided. There are approximately 30
million acres of land in the Tanana basin, with about 3.4
million acres classified as forest land or is in the Tanana
Valley State Forest, and the sustained yield estimate
harvests are between 16,000-20,000 acres a year. He pointed
out this amendment is proposing 6,000 acres which is 25-33
percent of the sustained yield harvest as a cap. He said
there are approximately 95,000 acres (indiscernible).
REPRESENTATIVE FINKELSTEIN said this amendment does not
place a cap. This amendment only specifies the amount of
acres which can be put in each agreement.
REPRESENTATIVE JAMES expressed concern that if this
amendment is not intended to put a cap on the cut but rather
a cap on each single FMA, this amendment is limiting a FMA
on what kinds of operations it could have. She felt the
amendment might eliminate a large FMA. She pointed out that
the whole purpose of SB 310 is to encourage FMAs for future
development and in-state processing. She stressed it would
be defeating if an amendment is passed which discourages
FMAs.
Number 612
REPRESENTATIVE DAVIES stated that is exactly what the
amendment does. It would eliminate large FMAs in the Tanana
Valley. He pointed out that overwhelming testimony has
indicated there is a desire to not limit the use of the
forest as long as it is used in an appropriate scale.
People fear clearcuts in their backyards.
CHAIRMAN WILLIAMS stated view sheds are important. However,
one of the things happening in the Tongass is the timber
industry is continually being told in a critical manner that
they are being subsidized. He said a lot of money is
involved in determining view sheds.
TAPE 94-64, SIDE A
Number 000
CHAIRMAN WILLIAMS stated the people asking for the view
sheds are also speaking against the timber industry because
of the industry being subsidized.
MR. GATES said there has been a lot of limited thinking in
regard to what a FMA is. He stated there is a concept of a
FMA which may or may not be true. FMAs may come with a
package of incentives from a company to a community saying
there is an understanding of the impact and the possible
negative things and offer a package of good things such as
restoration to streams, building bridges, and community
centers. This amendment keeps the operator from attempting
to convince the public that a larger scale FMA might be in
the community's best interest.
REPRESENTATIVE DAVIES said the only experience people have
had in this state similar to a FMA is the Haines Forest
experience. People were upset, a lot of money was lost, an
inventory still is not in hand, etc. The track record
leaves room for skepticism. He felt small FMAs should be
tried first and then later consider larger FMAs. He
stressed there are a lot of people concerned statewide. He
reiterated people in Fairbanks do not oppose the timber
industry but are concerned about a large scale timber
industry.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES FINKELSTEIN,
DAVIES, and CARNEY. Voting against the amendment were
REPRESENTATIVES JAMES, HUDSON, MULDER, and WILLIAMS. The
MOTION FAILED 4-3.
Number 058
REPRESENTATIVE HUDSON felt the last proposed amendment was
an attempt to address the concern expressed by the public.
He thought perhaps another approach is language such as, "To
the extent practicable, the commissioner shall seek
agreements that include timber harvesting in the Tanana
Valley drainage that do not exceed..." He stated some
reasonable limitations would be placed at the end. He
thought that approach would be constructive and not tie the
hands of the commissioner in regard to FMAs but rather would
guide the commissioner.
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 4, following line 13:
Insert "(8) timber inventory;"
Renumber the following text accordingly.
REPRESENTATIVE JAMES said the amendment provides for an
addition of "timber inventory" to the list of what the
commissioner considers when reviewing and evaluating a
proposed agreements.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
ANNOUNCEMENTS
CHAIRMAN WILLIAMS announced the committee will meet on
Monday, April 25 at 8:15 a.m. to hear SB 306 and SB 374.
ADJOURNMENT
There being no further business to come before the House
Resources Committee, Chairman Williams adjourned the meeting
at 7:35 p.m.
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