Legislature(1993 - 1994)

05/05/1994 01:30 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  SB 310    An  Act  relating to  the  management and  sale of                 
            state timber;  relating to  the classification  of                 
            state  land  that  would  preclude  harvesting  of                 
            timber  or would designate harvesting of timber as                 
            an    incompatible    use;    relating   to    the                 
            administration of forest land, proposals for state                 
            forest, and the determination  of sustained yield;                 
            and providing for an effective date.                               
            SB   310   was  placed   into   Subcommittee  with                 
            Representative  Therriault  as   Chair  and   with                 
            members   Representatives  MacLean,   Grussendorf,                 
            Foster, Brown and Parnell.                                         
  SENATE BILL 310                                                              
       "An  Act relating to  the management and  sale of state                 
       timber; relating to  the classification  of state  land                 
       that  would preclude  harvesting  of  timber  or  would                 
       designate harvesting of timber as an  incompatible use;                 
       relating  to   the  administration   of  forest   land,                 
       proposals for  state forest, and  the determination  of                 
       sustained yield; and providing for an effective date."                  
  Co-Chair  Larson  placed  SB  310   into  Subcommittee  with                 
  Representative   Therriault  as   Chair  and   with  members                 
  Representatives MacLean and Grussendorf.                                     
  testified in  opposition to  SB  310 which  would go  beyond                 
  establishing the  Forest Management  Agreements into  making                 
  substantial modifications to the State Forest Practices Act.                 
  The  bill  would  reduce  the  intent to  manage  state  and                 
  municipal  forest  for  multiple use  and  would  weaken the                 
  forest  planning  and  review process,  while  altering  the                 
  requirement  for   reforestation  on  private   land.    She                 
  emphasized  that  the changes  would  be substantial  to the                 
  State Forest Practices Act.                                                  
  Furthermore,  the practices  would come  at a time  when the                 
  Board of  Forestry, a  Board established  to resolve  issues                 
  relevant  to  the   forest  resources  in  the   State,  has                 
  acknowledged that the State Forest  Practices Act is working                 
  well and  through a  consensus negotiation  states that  the                 
  product does not need to be altered.                                         
  Ms. Troll strongly  recommended deleting all sections  of SB
  310 which alter the  Forest Practices Act pointing out  that                 
  UFA was a  key player in the two years  of negotiations that                 
  led to the State Forest Practices Act.                                       
  She advised an additional concern of UFA was the application                 
  of the "sustained  yield", Section #4,  which calls for  the                 
  continuation and  expansion of  business.   She pointed  out                 
  that  "sustained  yield"  has  been  defined in  statute  as                 
  "continuity of harvest  over annual periods".   The proposed                 
  legislation would redefine "sustained yield", to be not just                 
  "continuity", but also "expansion of business".                              
  LOBBY, JUNEAU, testified in opposition  to SB 310 explaining                 
  that   the   forest  management   agreements   will  benefit                 
  corporations more than  the State.  She  emphasized that the                 
  State should reconsider  loosing money to subsidize  removal                 
  of forest lands.                                                             
  SB 310 mandates long-term contracts for up to 20 years, with                 
  a renewal option for another 20 years.  Long-term contracts,                 
  also called  Forest Management Agreements (FMA's)  will make                 
  timber harvest the priority on state forest lands, elevating                 
  timber over  fisheries, wildlife,  subsistence, tourism  and                 
  recreation values.   Ms. Kirsch added that  long-term timber                 
  contracts are likely to have  a negative impact on  Alaska's                 
  economy and natural resources:                                               
       1.   Long-term  contracts  are  unhealthy for  Alaska's                 
            pocket book.                                                       
       2.   Long-term contracts lock out future knowledge.                     
       3.   Timber-supply problems  in order to  fulfill long-                 
            term contracts will occur.                                         
       4.   Long-term contracts and mills may endanger Alaskan                 
            communities economically and environmentally.                      
       5.   Industry should not manage state lands.                            
  Ms. Kirsch enumerated a number  of alternatives to long-term                 
       1.   Maintain current timber  sale length  of three  to                 
            five  years   which  would  allow  DNR  to  update                 
            contracts as social  values, economic  situations,                 
            and biological information change.                                 
       2.   This   would   allow  reasonable   certainty  that                 
            interested purchasers will have a steady supply of                 
            timber to  bid on  at fair  market value,  without                 
            locking  up resources  for  20  years and  without                 
            locking out other interested timber purchasers.                    
       3.   Encourage   locally   owned,   value-added  forest                 
  REX   BLAZER,  REPRESENTING   SELF,   FAIRBANKS,  spoke   in                 
  opposition  to  SB  310  which  allows  the  state  forestry                 
  officials to sign long term contracts with timber companies.                 
  He  pointed out  that long  term contracts have  been proven                 
  unsustainable  everywhere they  are practiced.    Mr. Blazer                 
  emphasized that  the  proposed legislation  will weaken  the                 
  Forest Practices Act due to:                                                 
       1.   No requirement for bonding.                                        
       2.   No local hire guarantees.                                          
       3.   No guarantee for value added.                                      
       4.   No provision for biannual review.                                  
       5.   No provision for  requirements for operator paying                 
            cost of building.                                                  
  support  of  SB 310  which  would  amend Title  #38  and #41                 
  creating the  establishment of Forest  Management Agreements                 
  (FMA).   He added that SB  310 will allow the  Department of                 
  Natural Resources (DNR) to respond to forest health problems                 
  by  allowing  for  limited emergency  timber  sales  and the                 
  halting   of   serious    epidemics   before   they   become                 
  Mr.  Wolf  mentioned that  main  benefit of  the legislation                 
  would be a reliable supply of wood for  the industry to make                 
  capital investments.                                                         
  Mr.  Wolf  advised  that  the  legislation  would  allow  an                 
  entrance into  Forest  Management  Agreements  allowing  for                 
  careful management  of State  forest lands  and would  bring                 
  positive returns to  the state  treasury by managing  timber                 
  Representative Grussendorf advised  that he  had received  a                 
  memo  from  Board members  from  Mr. Wolf's  corporation who                 
  recommended that there be no changes in the Forest Practices                 
  Act.  Mr.  Wolf responded that  the amendments to Title  #41                 
  are largely  clerical and  the effect  would not change  the                 
  reforestation  obligation to a  landowner, although it would                 
  remove a confusing reference to sustained yield.                             
  (Tape Change, HFC 94-159, Side 2).                                           
  AUDREY  MAGOEN,  REPRESENTING  SELF,   FAIRBANKS,  spoke  in                 
  opposition  to  the  proposed legislation  and  provided the                 
  Committee with  a set  of "Flow  Charts" which  she drew  in                 
  order to illustrate procedures  between a regular commercial                 
  timber sale  (as mandated  by Alaska  law) and  the sale  of                 
  timber  through  a  Forest  Management  Agreement  (FMA)  as                 
  proposed by SB 310.  [Copy on file].                                         
  Ms.  Magoen  elaborated  on the  significant  points  of the                 
  handouts, the operational forced inventory plan,  the Forest                 
  Management  Plan, pointing  out  that  the volunteer  timber                 
  sales  would  occur  before the  first  opportunity  for the                 
  public to voice their opinion.  She emphasized the necessity                 
  for operational  ground rules and  management.  She  did not                 
  feel the proposed legislation would allow the public to know                 
  what  is  happening  since  they  would  not  be  given  the                 
  opportunity to  witness the ground rules and provide input.                  
  BARBARA  KELLY,  REPRESENTING  SELF,  JUNEAU, spoke  against                 
  multi-national corporations having control over large  areas                 
  of forest for a  twenty year period.  She requested that the                 
  bill be  held until  further deliberation  and consensus  is                 
  reached.   If the  bill is not held  in Committee, Ms. Kelly                 
  recommended consideration of amendments such as:                             
       1.   A provision  to place a limit on the allowable cut                 
            placed into FMA';                                                  
       2.   Provisions making the  contractor responsible  for                 
            all   the  costs   to   the   State   related   to                 
            administering and enforcing the FMA;                               
       3.   Requiring a  cost benefit analysis  be provided on                 
            the long term timber contracts  to see if benefits                 
            do exist;                                                          
       4.   A  requirement  for  full   funding  of  DNR   and                 
            Department of  Fish and  Game in  order that  they                 
            adequately monitor the FMA's;                                      
       5.   Allowance for  adjustments to  be made  to harvest                 
            plans to reflect inventories conducted;                            
       6.   Suggested  amendments  implemented  in  the  House                 
            Resources  Committee which would  make the sale of                 
            the timber for  fair market  value which would  be                 
            adjusted annually by the Commissioner; and                         
       7.   Limit the amount of timber in the FMA's.                           
  that the Constitution  of the  State of  Alaska compels  the                 
  proper and responsible development of our renewable forests.                 
  Additionally,   the  Legislature   and  the   current  State                 
  administration have  seen fit  to take  concrete actions  to                 
  encourage the creation of new  jobs and economic activity in                 
  the State.                                                                   
  Mr. Gates  recommended that the  Committee adopt SB  310 for                 
  the following reasons:                                                       
       1.   The legislation provides better management of  the                 
            set of resources found in the State forests;                       
       2.   Provides better management of the forest  products                 
       3.   Provides a  better  chance  to  encourage  outside                 
            investment  in  value-added  timber processing  in                 
       4.   Provides a  better  chance  to  reduce  whole  log                 
            exports from Alaska;                                               
       5.   Better chance to provide more effective management                 
            of spruce bark beetle infested forests;                            
       6.   Better chance to allow  Alaskans to take advantage                 
            of increased  demand for  forest  products in  the                 
            Pacific Rim; and                                                   
       7.   Allows the State  to set  aside secure, long  term                 
            house log, firewood, harvest  or other small scale                 
            harvest areas to allow the capitalization of value                 
            added processing facilities.                                       
  TOBY  WHEELER,  REPRESENTING   SELF,  JUNEAU,  testified  in                 
  opposition to  the legislation  pointing out  the amount  of                 
  controversy surrounding the bill.  He thought that  a better                 
  bill  could  be  constructed with  "more  time"  which could                 
  address  the  twenty  year  contracts.   Mr.  Wheeler  urged                 
  Committee  members  to  consider creating  a  Task  Force to                 
  further consider the legislation.                                            
  GAME,  reiterated   the  Administration's  support   of  the                 
  legislation.   Deputy  Commissioner  Campbell  spoke to  the                 
  fiscal obligation of  the Department of  Fish and Game.   Mr                 
  Campbell reported that  in preparation  of the fiscal  note,                 
  the Department analyzed FMA's in North America.   The fiscal                 
  note would  include salaries  for one  biologist, one  fish-                 
  technician and a clerk typist per  FMA.  The House Resources                 
  Committee  has added  amendments which would  create greater                 
  fiscal concern.                                                              
  (Tape Change, HFC 94-160, Side 1).                                           
  Representative  Grussendorf  commented  on  the  amount   of                 
  authority and  responsibility placed on the  Commissioner of                 
  the Department  of Natural Resources.  He  felt there should                 
  be greater scrutiny  of the contents  of the contract.   Mr.                 
  McKie replied that from a fish and wildlife perspective, the                 
  Department would prefer greater involvement in  the process.                 
  Representative  Brown  questioned   the  zero  fiscal   note                 
  provided by the Department of Natural Resources.                             
  Co-Chair  Larson   noted  that  the  Subcommittee  would  be                 
  expanded  to include Representative  Therriault as Chair and                 
  with  members  Representatives  Brown, Grussendorf,  Foster,                 
  Parnell and MacLean.                                                         
  SB 310 was HELD in Committee for further consideration.                      

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