Legislature(1993 - 1994)
04/20/1994 08:15 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 310 - State/Private/Muni Timber Operation/Sale GLEN JUDAY, FAIRBANKS, stated SB 310, as written, clearly violates some important principles of managing renewable resources for the long term public interest. He is not opposed to managing the state's forest lands for the production of forest products. He explained one of the principles violated in SB 310 is that the bill reflects more faith in the approaches of a command economy rather than a free market. SB 310 is inviting a monopoly. He felt it is not an acceptable principle to operate the program on. He said the state can continue to operate an annual timber sale program or even increase it without tying up all options through long term, single party agreements. MR. JUDAY said SB 310 incorporates a feature which has the effect of passing off the uncertainty of the future to the state, which he felt is unfair. He thought that should be a risk borne by a private profit making party. He stated amendments which would rectify these and other problems include a full and independent accounting of the costs, liabilities, and an honest statement of the benefits. Second, a provision is needed which will remove the incentive to renegotiate the contract as situations unfold in the future. Finally, referring to Section 3(b) of the bill which says forest management agreements (FMAs) shall be solicited each year, he felt there is no need to continue to add infinite items soliciting FMAs. Number 066 JAN DAWE, FAIRBANKS, stated she is a participant in the Alaska Boreal Forest Council (ABFC) and believes strongly in the public process. She stressed it is essential the public process be maintained. The legislature did well last year by providing funds for an inventory update in the Tanana Valley State Forest, which will be completed this year. She said the area regional management plan is currently being revised. She stated SB 310 will significantly alter the landscape both on the ground and the management practices conceived thus far and will also significantly weaken the process, which ABFC is against. She noted because FMAs will be put on a separate track from the timber sales on the current five year schedule, ABFC is concerned about the removal of both agency and public oversight. MS. DAWE pointed out that any forested lands let for timbering have to be over the 500,000 board foot limit and need to go though two editions of the harvest timber schedule. SB 310 will allow a significant proportion of the cut to go unexamined until contracts are being let for the FMA. ABFC feels it is not good to give the commissioner of the Department of Natural Resources (DNR), who will be negotiating and soliciting FMAs on an annual basis, so much decision making power. She noted one of the proposed amendments, which looks good, is that FMAs will need to be coordinated across land ownership lines, including private lands. She said if FMAs are to be negotiated across land ownership lines, ABFC implores the committee to insist that the agencies redo their fiscal notes because of the need for oversight on private land through the Forest Practices Act (FPA). MS. DAWE stated ABFC's positive vision is something other than the FMA model, which has not been successful in Canada or in Southeast Alaska. ABFC proposes community based forestry instead, with consensus building boards and local loggers being encouraged. Number 105 COLIN REED, FAIRBANKS, said he is both interested and concerned about the diversity of the economy in Alaska. The state's primary resource base, oil, is finite and drying up. He felt if the state's forests are managed improperly, the same thing will happen to them. He stated SB 310 does not properly define sustainability. He pointed out the entire forest can be cut down and harvested again in 125 years, so by some people's definition of sustainability, that may be adequate. However, his definition of sustainability requires an even flow of jobs in perpetuity for Alaskans. He felt the definition of sustainability in SB 310 needs to be looked at closely. MR. REED stated SB 310 proposes competition in a market which is already dominated by existing pulp and (indiscernible) board producers around the world, many of which are losing money with their existing infrastructures. He felt SB 310 proposes to do the same in Alaska--build new infrastructure and expect to compete, even though the state's transportation costs are somewhat higher. He pointed out that the forests in Southeast Asia and South America are being extracted at a loss, mainly to pay the debt to the International Monetary Fund and other world organizations. He did not think Alaska could compete in those markets very healthfully and may be forced to give away resources as a consequence. MR. REED said Japan is probably willing to buy the state's logs at good prices on the short term, although they will not allow the state to do value-added in the state, as they prefer to do that in their own country. He stated if experiences in other countries are any example, Japan will try to renegotiate the state's contracts 10-15 years down the road, once the state has already generated a dependency. He wondered what the real numbers on SB 310 are. There has not been any cost analysis done on the state forests. He asked how many jobs will be created on the long term. He felt such a study is needed before such sweeping legislation is passed. Number 144 CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED), said his job is to find responsible jobs and economic activity for the people of the state, especially in light of the realities of the future and the jobs being lost both in oil and the fishing industry. DCED views SB 310 as one tool to help counter the loss of jobs in the state-a tool which can be used correctly, or as many people think, used incorrectly. He said there is risk in any law or regulation passed. DCED feels SB 310 is an important tool for the state to use in creating jobs and economic activity with the state's forest industry. MR. GATES stated SB 310 will allow better management of the state forests by having hundreds of people with a vested interest seeing those forests produce money for their companies and giving those companies a vested interest in managing their assets correctly. DCED believes SB 310 provides a better opportunity for encouraging outside investment in the state. He said as mentioned earlier, there is currently a great incentive to export all of the logs and do the value-added elsewhere. DCED can use SB 310 to help encourage building those type of plants and making those things happen in Alaska. MR. GATES said SB 310 provides an opportunity to better manage the state's beetle infested forests, especially along the river systems where there is very little chance of seeing value-added industry so far away from population centers. He stressed if the state has FMAs, encouraging investment in the Interior, those logs will possibly have a market. He pointed out there is a better chance with SB 310 to have targeted management. Number 179 TABITHA GREGORY, REPRESENTATIVE, ALASKA CENTER FOR THE ENVIRONMENT, testified via teleconference and expressed opposition to SB 310. She said through institutionalizing FMAs or negotiated long term contracts, public oversight on large tracts of state forest land is reduced. FMAs favor a large scale timber industry, dominated by a single company over a (indiscernible) timber industry which is shared by numerous smaller companies. SB 310 does not reflect the changing conditions present in Alaska today. It makes the Alaska economy more vulnerable to the boom and bust cycle. FMAs reduce the public's ability to participate in management oversight. Once FMAs are final, Alaskans lose control and oversight of large tracts of public land for 20 years or longer. MS. GREGORY stated SB 310 disregards many other uses of forest land. She felt turning over management of public lands to private hands does not show good faith towards all of Alaska. Long term contracts (indiscernible) Alaska's timber industry (indiscernible) timber development for twenty years or longer. While these contracts may attract companies to establish mills in the state, she asked if that is really best for Alaska. She said the state has always relied on a single major industry--from the early days when salmon harvest was a single enterprise, to the present situation of relying on oil. She noted that Alaskans have worked hard recently to create a range of diversified industries which expand the state's economic base. She wondered why, at this point, are some individuals encouraging the state's timber industry to move backwards, away from that diversification into a single private market. MS. GREGORY said long term contracts present adaptation to a changing market (indiscernible) special conditions. She stated it is difficult for large mills to adapt. The state has never seen a long term contract which has been successful for the entire term of the contract and leaves people in a boom and bust situation. (Indiscernible) provides for three to five year timber sales and allows existing and future small businesses to build a diverse, stable product industry. Management of public resources remains in the public hands (indiscernible) oversight. She urged committee members to not pass SB 310 out of committee as it is currently written. Number 219 JUDY HARGIS, ANCHORAGE, testified via teleconference and expressed opposition to SB 310. She stressed the public has been against FMAs since 1987 and the heart of SB 310 is an attempt to force FMAs down people's throats. She said all of the fancy clarifications making the bill sound like it is not a FMA are a sham. She is glad SB 310 has been referred to the House Finance Committee. She hoped that committee will recognize the weaknesses and inadequacies of the bill. She expressed concern that the bill contains no requirement for the bonding of loggers. She stressed if SB 310 passes, the state will ultimately spend a large amount of money to clean up the mess left behind. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES HUDSON, FINKELSTEIN, GREEN, JAMES, AND MULDER had joined the committee. He noted that REPRESENTATIVE ULMER was also in the audience.) Number 243 DANE WAGNER, ANCHORAGE, testified via teleconference and expressed opposition to SB 310. He expressed displeasure with the meeting schedule and hearing process. He wondered why there is such a need to quickly pass SB 310, which he feels is a poorly thought idea. He also wondered what reforestation is taking place in previously large scale clearcuts in the state. He asked why committee members are so eager to destroy the forest, which many people make their living from, including almost every viable business in the state. MR. WAGNER asked committee members to prove to the Alaskan people that timber harvesting is more lucrative than existing tourism-based industries; prove to the Alaskan people that a single tree is worth more cut down and shipped out of state than it is left standing; prove to the Alaskan people that there are still renewable forests in the lower 48 and that the timber industry has a good track record; prove to the hard working Alaskans that they will be better off with large scale timber harvests than they are now; explain to the Alaskan people why the timber companies want to come to Alaska and set up cutting for their own masterpieces. He hoped the committee members would hold SB 310 until more public hearings can be held in Anchorage, Fairbanks, and many other potentially impacted communities. Number 271 JIM MINTON, REPRESENTATIVE, FLAT HORN LAKE PROPERTY ASSOCIATION, ANCHORAGE, testified via teleconference and expressed opposition to SB 310. He said the bill has many shortcomings. DNR is unable to handle the load of their existing oversight responsibilities for current timber sales volume, let alone properly monitor a large scale program, which SB 310 will implement. He stated SB 310 opens the door for a major financial drain to the state, judging from past performances on the majority of large scale projects. It is also felt the public process is put after the fact, when contracts have already been negotiated. He noted another factor leaving the state wide open to financial boondoggle is the lack of bonding required. He felt SB 310 is full of inequities to the public and public lands. The association urges the committee to kill the bill. MEREDITH MARSHALL, KETCHIKAN, testified via teleconference and expressed support of SB 310. She said utilizing Alaska's state forests to create industry and provide jobs is a positive step for the state. She stressed the concept of FMAs, as a way of supplying industry and ensuring environmental compliance from an operator who has a vested interest in the land management process, is an idea which is overdue. Long term contracts allow a producer to amortize a large investment in a reasonable period of time and is a benefit to the communities that will see increased employment. She stated streamlining the state timber management process will not put other resources at risk and will finally get a viable timber sale program on state lands. MS. MARSHALL also read a statement from Kathy Miller: " I am part owner of Miller, Inc. in Ketchikan. I am here today in support of SB 310 and the managed use of our forest resources. The forest products industry provides sound economic development and guarantees year-round jobs in the state of Alaska. We have provided for a family here, sent our children to school, and we plan to be here for the rest of our lives. However, federal decisions about the management of our lands could jeopardize all of that. This is why we must take steps to manage our state lands. Timber dependent communities rely on a stable, predictable supply of timber at market prices. FMAs make this possible, attract the investment necessary, and support our communities. We harvest at sustainable rates and have a healthy forest in Southeast Alaska. The Interior and Southcentral regions of our state promise further economic and social development on a sustainable basis. SB 310 provides for public comment, and FPA provisions. It is a healthy bill, good for the environment, and good for the people." Number 329 SANDRA MESKE, PRESIDENT, ALASKA WOMEN IN TIMBER, KETCHIKAN, testified via teleconference and expressed support for SB 310 which will allow FMAs for state lands. She represents and supports timber dependent communities and the forest products industry in their efforts to effectively manage and sustain the state's vast timber resources for the economic and social benefit of its residents. Timber is a commodity and is a renewable, reusable, recyclable material with no fabricated alternative to match its quality, value, and sustainability. Processing wood products requires less energy than any of its substitute products such as steel, concrete, plastic, etc., and using wood products does not jeopardize the earth's finite supply of nonrenewable resources. MS. MESKE felt opening forest lands in the Interior and Southcentral Alaska will provide jobs and economic growth. She said that concept is threatened in Southeast Alaska due to the recent Clinton Administration decision to cancel Alaska Pulp Corporation's contract. She stressed the state must manage its lands with its residents and sound economic growth in mind, since the federal government has proven it can but will not do it. FMAs are an important tool for managing state lands. SB 310 is good for Alaska's economic well being. She urged committee members to pass SB 310 for the good of the people who want to make a year-round living in the state. Number 353 MICHAEL MESKE, KETCHIKAN, testified via teleconference and stated he makes his living in the timber industry. He stressed the timber industry is proud of its stewardship with Alaska's timber resources. He said the Tongass National Forest is the only forest in the nation to require buffer zones on spawning streams. He pointed out there are no endangered species in Alaska. He noted only 10 percent of the national forest will ever be harvested and that is on a 100 year rotation. MR. MESKE said people's lives are still jeopardized by the federal policy makers who have never seen this land. He stressed it is important that does not happen in the Interior and the Southcentral regions of the state, where there is tremendous potential to expand the state's forest products industry and continue the stewardship on timbered land. He stated there is a focus on sustainable timber harvests wherever they may be. The state will still retain control of the land and the management practices therein. The FPA will provide protection for fish, wildlife, and public resources in the Tanana Valley, as it has on the Tongass. SB 310 is a practical means to encourage the development of Alaska's Interior forests, is healthy for the environment, and for the economy. He supports SB 310 and urged the committee to do the same. Number 386 JOSEPH SEBASTIAN, POINT BAKER, testified via teleconference and asked if anyone has studied the state of Washington's timber sale program. He wondered if anyone has compared SB 310 to something which is real, working and has been working for the past 50 years. He said although he is not aware of the complexities of Washington's program, he does know the state manages a lot of land. He felt their contracts would be worth reviewing, instead of blindly running forward and committing (indiscernible). MR. SEBASTIAN stated there is no teeth in SB 310. He felt it will be difficult to enact a FMA because there will be a line for variances. He said in British Columbia, the Mitsubishi Corporation is in the chopstick business. He stressed incredible wastes of the forest are occurring there, since there are so many (indiscernible) trees. These trees are left to rot because they are worthless and there is no other use for the material. He urged the committee to take another year and fine tooth comb SB 310. Number 427 SYD WRIGHT, PETERSBURG, testified via teleconference and expressed opposition to SB 310. He felt the FPA supplies adequate management of the state forests. He said SB 310 puts emphasis on timber production which will create temporary jobs, while jeopardizing other permanent jobs. He pointed out that state land is usually close to communities and many of those communities are becoming more and more dependent on an increase in tourism. He stated tourists are very sensitive to what is happening to the forests and most of those tourists tend to see both the state and federal forests. Tourists are not pleased with clearcutting. MR. WRIGHT stated SB 310 encourages loggers, who have run out of trees elsewhere, to come to Alaska to log until these trees are gone and then be out of work here. Since the national forest has been clear cut at a great rate for 30 years, the United States public realizes the rate is too fast. He asked why state residents should be any less sensitive with their trees. Number 456 BOB ELLIS, REPRESENTATIVE, SITKA CONSERVATION SOCIETY (SCS), testified via teleconference and stated his group has a long record of concern for state forest resources. SCS opposes SB 310. He said based on experiences in Sitka, SCS is especially against long term contracts. Such contracts make it impossible to adjust to changes in timber supply and to new knowledge relative to the effect of logging on other resources. He said the experience of the state with long term contracts attempted in Haines should give everyone thought. MR. ELLIS said SCS feels the emphasis on logging will result in the losses of subsistence resources--resources which are available to everyone, every year, at no cost to the state budget. SB 310 should, if passed, ensure that the logging companies finance DNR and the Alaska Department of Fish and Game (ADF&G) habitat staff sufficiently, so they can define the need for protection before logging, and monitor logging operations to ensure protection of all of the forest resources. He stated the emphasis in SB 310 seems to be on economics. There is little recognition of all of the forest resources including timber, which constitutes a form of permanent fund. He pointed out that all of the state's forest resources are paying dividends through subsistence users every year, with no cost to the state budget. MR. ELLIS stated the FPA has many good things in it but these good things (indiscernible) by DNR and by legislation which inadequately funds the habitat section of ADF&G. Number 508 KAREN MARTINSEN, REPRESENTATIVE, ALASKA WILDERNESS, RECREATION, AND TOURISM ASSOCIATION (AWRTA), SITKA, testified via teleconference and stated AWRTA is opposed to SB 310. She said SB 310 violates the principles of a free market, the ongoing review of the impact on resources and the opportunity for public participation in such a process. She expressed support of a community-based timber industry. She stressed SB 310 denies multiple use of the state forests. She pointed out that tourism relies almost solely on intact wilderness and wildlife, which is and will continue to be a very vital part of Alaska's economy. ELEANOR HUFFINES, PALMER, testified via teleconference and expressed opposition to SB 310. She said SB 310 will not solve the economic problems of the state. Once a FMA contract is issued, timber harvesting becomes the controlling land use. She stressed other forest values such as management of fish and wildlife habitat, recreation, tourism, and other forest dependent businesses, all become secondary to timber development. She stated getting the cut out for a mill has priority but without value-added to timber in Alaska, unprocessed timber exported from Alaska means Alaskan jobs are lost. She urged committee members to not pass SB 310 out of committee. Number 550 CHARLES BOOTH, SEWARD, testified via teleconference and read a petition. It said: "We, the undersigned want the following conditions implemented in whole to SB 310 to include: 1) All state log sales or leases are to be utilized in domestic industry or consumption; 2) at no time shall state timber be shipped overseas in the round; 3) that all state logs for overseas use will be: a) those logs that are lumber grade must be made into finished lumber in the state of Alaska; and b) logs of lower grade must be chipped or processed in the state of Alaska. He state approximately 75 people had signed the petition. Number 570 MARK LUTTRELL, SEWARD, testified via teleconference and expressed opposition to SB 310. He said he opposes SB 310 for three reasons. SB 310 provides too much power to the DNR commissioner, eliminates meaningful public participation, and requires no bonding for logging companies. He noted in SB 310, Section 5 says, "The primary purpose in the establishment of state forests is the development of commercial forest land..." He stressed that denies multiple use, which he very much favors. Number 587 AL SCHAFER, SEWARD, testified via teleconference and expressed support for SB 310. He said there is a major sawmill in Seward which has no timber. He felt anything which gets timber moving is good. He thought it is important to keep the timber industry in the state, because once it dies, it will be difficult to reinstate it. He stated the environmental movement has put too much study and not enough faith into people who are foresters and are trying to manage timber. He pointed out that the Seward mill currently has less than a week's supply of wood and not a sale in sight. He stressed anything which can be done to expedite sales will be appreciated in Seward. JOSEPH YOUNG, TOK, testified via teleconference and said the state of Alaska contains 365 million acres of land, with 215 million acres or 60 percent under federal ownership. He stated most of this land is dedicated to parks, habitat, and recreation for eco-tourism and other noncommodity uses. He pointed out there are 46 million acres of Native land in Alaska. There is 104 million acres of state land which is supposedly dedicated to the use of all citizens of the state, as directed by the state Constitution. He said most of this land is being used for habitat and recreation uses. MR. YOUNG said most of the state has been locked up and is being used as one big national park. He felt the preservationists, the vocal minority who the committee is hearing, wants to lock more land up. He did not feel that was in the best interest of all citizens of the state. He played an audio tape and told committee members the words they were about to hear fit the present situation in Alaska. Number 663 LARRY SMITH, CHAIR, FOREST RESOURCES WORKING GROUP, KACHEMAK RESOURCE INSTITUTE, testified via teleconference and stated more work needs to be done on SB 310. His fear is that the state is going to feed the export market again. He pointed out it has not been very many years since the export market, according to the legislative audit report in 1991, killed two sawmills--one on each end of the Kenai Peninsula. He said the 1991 legislative budget and audit committee report stated, "The state of Washington offers short term sales and most of their contracts are for two years. A consultant hired by the Department of Law recommended that the state consider limiting sales to less than three years. By offering timber sales for shorter periods, the state will avoid the problems that arise with the (indiscernible) stumpage price. The state has not had success on either renegotiating the price or on using an index to adjust the price. A short term sale eliminates the need for (indiscernible) price adjustment." KATHERINE SMITH, HOMER, testified via teleconference and stated 20 year contracts are not FMAs, but rather long term timber sales. FMA is a misleading misnomer. The purchaser of a FMA will not manage the forest but will harvest the timber in the most cost effective way. Logging companies who do not own the land they are cutting have no vested interest in its continued productivity whatsoever, and certainly not in fish, wildlife, recreation, scenic watershed, plants or ecological value. The burden of monitoring a harvest and forcing the reforestation standards will be borne by the state. She said in regard to reforestation, forest research and monitoring of the FPA are in danger of being cut from the capital budget. She wondered how the committee can justify SB 310 and the direct administrative costs of DNR and ADF&G. She wondered what the indirect costs will be for fishing, tourism, and recreation. The cost to Alaskans of large yield, long term logging cannot be justified by any amount of... TAPE 94-56, SIDE B Number 000 MS. SMITH stressed the people in the state have repeatedly (indiscernible) subsidizing the timber industry with state resources. She said the state's lands should not be handed over for 20-40 years and be locked in today's low returns on timber. Most of these (indiscernible). She felt the state should not (indiscernible) long term timber sales, which severely limit its management option. The state is now just learning that timber stands are critical for salmon, deer, bear, eagle, mink, otter and other wildlife. She stated it will be very difficult to back out of FMAs if public resources are threatened such as the salmon stocks in the Pacific Northwest and the big game populations in parts of Southeast Alaska. She stressed existing forest resources must be protected. The state cannot afford subsidized logging through FMAs. She urged the committee to conserve the state's natural and financial resources and not lock them into FMA's, which are too costly. Number 012 DOUG BOWERS, NENANA, testified via teleconference and stated his family's entire existence is provided by the Tanana River and the surrounding country. He said the chum runs in the Yukon/Tanana River drainage have been declining in the past years. The fishermen in the rivers, particularly the Tanana, have given up significant fishing time in an effort to rebuild those stocks. The damage to fish runs in Washington, Oregon, British Columbia and Southcoastal Alaska is well documented. He pointed out there has been much published about the effects of clearcutting on salmon streams and other areas but nothing on the rivers of the Interior of Alaska. Number 020 MR. BOWERS stated the Tanana and the upper Yukon river systems are the spawning grounds for salmon stocks for all of western Alaska. Some stocks are close to being placed on the endangered species list. He asked if the state can afford any damage to the spawning and rearing habitat of these stocks which are already in trouble. He pointed out that the entire Tanana Valley is in a flood plain, unlike the mountains of Southeast. The stands of forest shade the winter snow pack and allow for controlled run off in the spring, as well as absorb the cushion for heavy rainfall in the summer. He wondered what will become of the homes and fish runs as they are washed down the river by uncontrolled run off. He gave an example of the effect of clearcutting, as related to flooding, in the state of Washington. MR. BOWERS said 90 percent of the food chain in the river system occurs within a couple of hundred feet of the river. He stated the head forester from the Tanana Chiefs Conference has said that buffer strips mean nothing along the river corridors because the river will take it anyway. They have tried to leave buffer strips but they make no difference. He wondered how long have the buffer strips been tried. He asked what effect will buffer strips have ten years from now. With all of the new roads and previously unaccessed lands, he wondered who will pay for ADF&G's protection in regard to the increased hiking and fishing pressure. He wondered if the Department of Transportation will be asked to upgrade logging roads for year-round access. He also wondered who will eventually pay for this subsidy to the timber industry. Number 040 MR. BOWERS stated the Department of Conservation (DEC) will be required to monitor the water run off and other environmental concerns. He wondered if the timber companies will be subsidized (indiscernible). He said the Division of Habitat is going to be required to look at the effects of logging on habitat, which is something that cannot be summarized in one report, one time. It will take years of monitoring to properly evaluate. He noted the skilled loggers will come from other parts of the country. Local residents are going to be competing for unskilled labor in chipboard plants and the self-esteem of the people who want to provide for themselves is going to be reduced dramatically, requiring increased social services which are already stretched to the limit. Number 050 MR. BOWERS said Klukwan Native Corporation has less than one year's timber work remaining on its own lands. He wondered if the state's local Native corporations want to compete with outsiders for jobs and resources. The small loggers he has talked to oppose large clearcut logging practices, labeling them destructive and wasteful. They question the quality of the material available in the Interior now. They are all in favor of small selective sales which are easily managed and result in high grade logs. They question why there is a need to clearcut in the first place because the Interior trees are left down to rot. He felt FMAs are going to be the ultimate lock up. Number 064 PAT STANLEY, REPRESENTATIVE, (INDISCERNIBLE) TRIBAL GOVERNMENT, FORT YUKON, testified via teleconference and stated the increased hunting and fishing pressure, which will occur by opening up these areas for large scale timber harvesting, is going to put added pressure on people wanting to use these areas for subsistence. She wondered if all of the costs involved have been considered. She stressed there has been no cost analysis done in relation to people using the resources for subsistence. In terms of jobs, there are no statistics as to how many jobs SB 310 will bring from outside of the state as opposed to inside of the state. There is also a question of what SB 310 will do to the small scale, value-added timber industry which already exists in the Tanana Valley. BURL SHELDON, REPRESENTATIVE, LYNN CANAL CONSERVATION, INC., HAINES, testified via teleconference and stated SB 310 (indiscernible) oversight to small timber sales, which are most sales in the Haines State Forest. SB 310 weakens the flexibility by promoting long term contracts, which have proven to be unworkable and too costly in Haines and the Tongass. SB 310 eliminates multiple use as a priority on state lands, in favor of single use extraction and does not emphasize cost/benefit analysis. Further, SB 310 does not promote value-added such as fishing, tourism, recreation, and subsistence. MR. SHELDON stated Haines has seen a rather sad legacy in regard to FMAs and long term contracts. He said presently the derelict remains of Haines's one large mill are being dismantled and sold for scrap. He stressed the tragedy is amplified historically and prior to the long term contracts, which led to the establishment of the now defunct Pacific Forest Products mill. Haines has seven small scale local mills, providing jobs and lumber for the residents of the upper Lynn Canal. These businesses were self-sustaining and operated without subsidized timber access programs. Upon the creation of a long term contract in the Haines State Forest between 1980-1985, the Division of Forestry spent over $1 million on forest and timber programs in Haines. Adding to that, the $5.6 million the state loaned to the forest operator, including interest and even with the payments to the state from the timber operators, a very bleak picture is drawn. The state lost over $8 million in it's last FMA in Haines. MR. SHELDON said any and all contracts, long term or short term, should be subject to a cost/benefit analysis so the state does not squander more funds on subsidies to irresponsible timber operators. He observed DNR has never paid attention to the valid concerns regarding habitat impacts to fisheries from large scale clearcuts. He stated ADF&G has repeatedly raised concerns regarding impacts on local king salmon spawning habitat from logging bridges in the Kelsall River drainage with little or no response from DNR. FMAs will clearly place burdens on ADF&G personnel, with no guarantee that habitat concerns will be adequately addressed. Number 131 VIVIAN MENAKER, HAINES, testified via teleconference and stated at the first teleconference on SB 310, she listened to testimony from Fairbanks and heard many people speak against SB 310 with whom she agrees, especially Celia Hunter and Ginny Wood. She said SB 310 seems to be a single use approach to state forests. When loggers get through cutting down the trees, no other activity can take place. Tourists will not want it; fish streams become too cold in the winter and too hot in the summer; slash falls into the water clogging the flow and the fish die; moose have summer browse but will starve in the winter or die of exposure. Other wildlife will equally be displaced. MS. MENAKER stated Haines has another problem. In 1979, the Haines-Skagway Area Land Use Plan was developed and emphasized the multiple use concept. In 1984, the next five year plan was developed which also emphasized the multiple use concept. She stressed in 1989, there should have been another five year plan but the Forest Service did not produce one. Now a fourth five year plan should be prepared but the local forester has told her it is too expensive and says there is an annual plan done now. She is not aware of any local input for the annual plan. She pointed out that some people think there might be a shortage of timber but there is no way to know. MS. MENAKER said Haines had a long term timber sale for the Schnabel Timber Company but it cost the state about $6-8 million in loans by the time it finally closed. The state was able to sell the mill for about $1 million. She stressed there is a need for a small mill for local lumber. When Haines had two large mills running two shifts a day in the 1960s, people there could not buy a local two-by-four. All finished lumber had to be purchased from Seattle. She stated now when SB 310 comes along calling for large scale mills, long term contracts, no public review, it begins to look like a public resource giveaway. MS. MENAKER felt if SB 310 passes, Haines will be in a crisis situation. The first inventory of Haines Borough timber was done in 1965, which was written as a public report and all sales were based on it. In 1985, after considerable public pressure, another forest inventory was done but there has never been a public report, so the public has no idea whether or not a sustainable yield has been maintained. She said there have been nine years of delays and excuses as to why there has not yet been a report for the public. She called the Inventory Forester in Anchorage in March and he thought the report might be out in April. She called again in April and he thought it would be ready in May or June. She wondered if he will be allowed to finish the inventory or will he be given another assignment before the report is finished, which has happened previously. In the meantime, the local forester says he can read the numbers and says not to worry, all is fine. In view of all of the above, she opposes SB 310. Number 177 BILL FLIRIS, TANANA, testified via teleconference and stated he is a subsistence and commercial fisherman. He expressed opposition to SB 310 because the public process is being avoided. He felt there is inadequate information in Tanana regarding the possible results of the passage of SB 310. He said the previous planning program for the Tanana Valley State Forest (indiscernible) revised, the advisory committee was consulted, there was a lot of education involved in setting up the plan and the idea which came out of the input was for multiple use. MR. FLIRIS expressed concern about fish habitat (indiscernible) for Tanana. He noted there have been problems with the chum salmon runs on the Yukon and Tanana Rivers. He felt there has not been enough study to go in and give out large scale contracts, without knowing what the total impact is going to be. He thought there will be legal challenges if SB 310 passes. CHRISTINA SCHNEIDER, FAIRBANKS, testified via teleconference and expressed displeasure with the hearings on SB 310. She felt many voices will not be heard because of the short time allowed for testimony on SB 310. She asked committee members to consider why, after decades of noninterest, the forests of remote Alaska are suddenly interesting and potentially profitable to the timber technocrats. She said it is because the timber industry has destroyed the timber resource base everywhere else. She also asked committee members to consider that people are spending millions of dollars every year to visit Alaska. They come to the state because it has what they want and what they no longer have: intact wilderness, standing and never logged forests, and wild and healthy populations of endemic species. She stressed if the state destroys what it has, people will take their dollars elsewhere. MS. SCHNEIDER stated the price of Alaska will only rise as everyone else continues to live beyond the capacity of their homelands. She said people must not cave in to pressure to irrevocably develop and destroy the state forests. Alaskans must preserve what they have and manage it locally, sustainably, and on a small scale for modest gain. She told committee members they do not have the right to invite rude outside profiteers to her home as she does not want them. She stressed eventually the Tanana Valley and other intact forests of Alaska will be worth more than all the timber ever produced the world over. She urged committee members to oppose SB 310 and allow community councils to draft consensus forestry management proposals for consideration next legislative session. Number 333 SEAN MCGUIRE, FAIRBANKS, testified via teleconference and expressed displeasure with the hearing process on SB 310. He felt every citizen should not be heard. He said since SB 310 was introduced, it has received more and more opposition and continues to have massive opposition. He stated there is very little support for SB 310. He urged committee members to kill SB 310. ROBERT AMMICHT, FAIRBANKS, testified via teleconference and expressed opposition to SB 310. He urged committee members to vote no on SB 310. EVA SAULITIS, FAIRBANKS, testified via teleconference and encouraged committee members to hear all of the public testimony from around the state. She felt if everyone cannot be heard, another hearing should be scheduled. She expressed opposition to SB 310 and believed that all interested parties should discuss how local loggers can be helped. FMAs will not help local loggers. She stressed the community should not be divided any further but rather develop a bill that everyone can agree on--one that encourages and supports local industries, not outside corporations. Number 305 SARAH JAMES, ARCTIC VILLAGE, testified via teleconference and expressed opposition to SB 310. She is opposed to long term, large scale logging. She stressed Alaska is still rich in natural resources. Alaskans are (indiscernible) to the big companies. She said subsistence is very important. Fishing is very important to all Alaskans. She pointed out that clearcuts will destroy fish spawning. She travels to the lower 48 and British Columbia and it is cut in pieces. (Indiscernible)... She felt there should be more public input on SB 310. She said what has happened to the chum in the Tanana affect her area. OAKLEY COCHRAN, FAIRBANKS, testified via teleconference and stated she spoke against the earlier version of SB 310 because it eliminated public involvement. She said the bill was recently revised to be more inclusive of the public. Now she questions the sustainability of this enterprise in terms of people and their jobs and in terms of the forest. She stated clearcutting is systematic of a hyperactive culture like small children racing around in a sugar induced frenzy, when what is really needed is some hot milk and a long nap, so there is a capability of listening to the world around us. MS. COCHRAN pointed out that clearcutting does not concern the future of the forest but rather is an economic benefit here today and gone tomorrow at the cost of landscape. Although sustainable forestry will not produce a huge instantaneous yield, it will provide people with long term jobs and will be better for Alaska economically and environmentally. She asked committee members to consider the unsustainabilities of large scale, large industry controlled logging. She felt the state forests should not be a part of the boom and bust economy. She urged committee members to think long and hard about SB 310 and then consider the future. Number 373 RON RICKETTS, EXECUTIVE DIRECTOR, FAIRBANKS INDUSTRIAL DEVELOPMENT CORPORATION, testified via teleconference and expressed support of SB 310. He stated there has been a lot of misinformation regarding SB 310 and its implications. He said there are perceptions that a mega-project is being contemplated and there is a plan to decimate the Tanana hillside trees, which is not true. He said there still is a requirement for sustained yield, which means trees can be cut over a long period of time, yet also sustain them. He said there is also an inference that the state is going to subsidize any project. He pointed out SB 310 requires the commissioner to have provisions in the contract which address such issues as oversight by an agency. The intent of the bill is those costs will be borne by the operator. He stressed the goal is for any FMA to yield a net return to the state. Mr. Ricketts stated there is also an inference that the small operators will be shut out. He said the small operators he has talked to support SB 310. He urged committee members to pass SB 310. BETTY ROLLINS, FAIRBANKS, testified via teleconference and stated the Fairbanks Daily News Miner opposed SB 310. She asked where in SB 310 are Alaska jobs guaranteed. She also asked where in the bill is the economic (indiscernible) in the affected communities. She opposed SB 310. Number 429 RONALD WOLFE, CHIEF FORESTER, KLUKWAN FOREST PRODUCTS (KFP), testified via teleconference and expressed support for SB 310. He said KFP is a wholly-owned subsidiary of Klukwan Incorporated, a Southeast Alaska Native Corporation, and holds the unique distinction of harvesting its own timber as well as purchasing timber from a wide variety of Alaska timber owners. KFP has purchased timber from the federal government, the University of Alaska, other Native Corporations in Southeast and Southcentral Alaska, and it has even purchased a little timber from the state of Alaska, which heretofore has not been able to put up very much timber for sale. MR. WOLFE stressed SB 310 offers an alternative to the existing way the state sells timber, which really has not been very successful, so that long term benefits can be attained. He said this is particularly true for the boreal forests of the Interior and Southcentral, where the lack of infrastructure frustrates forest resource development. The main benefit of SB 310 is a reliable timber supply for industry to make capital investments, and if this is allowed to occur, Alaska's forest industry will be allowed to expand and improve. He pointed out that a reliable supply of raw materials is an absolute necessity for industry to obtain financing to build manufacturing facilities and necessary infrastructure, or invest capital corporate assets into such a venture. MR. WOLFE asked committee members to amend the Alaska Forest Resources and Practices Act by removing a confusing reference to sustained yield with respect to reforestation in section 41.17.060(b)(4). He noted that legal services has prepared language which will accomplish his request in amendment X10. He stressed this is something which should have been done when the FPA was amended several years ago. In considering the reforestation regulations in Section 5 of AAC 11, this change will be more housekeeping than substantive. Number 476 LILLER COTTER, NENANA, expressed her strong opposition to SB 310. She said for the past eighteen years, she has made her livelihood on or near the Tanana and Kantishna Rivers fishing, trapping, selective logging and dog racing. She stated this has been a chosen lifestyle and one which has financially supported her husband and her totally. She is pro-responsible resource development and feels SB 310 is irresponsible. She has witnessed the devastating results of clearcutting through personal witness, as well as through research. She felt everyone must learn from the mistakes of those who have made the sad choice and have lived to regret it. MS. COTTER stated clearcutting will greatly increase the threat of flooding and will also destroy the trail system by wiping out the natural wind buffer that trees provide. She felt clearcutting will lead to progressive clearcutting as a result of blowdown and from the blowdown will come the beetles. She said the promise of a lot of jobs is a fallacy. The truth is many people will lose their jobs. She remarked when it is so difficult for someone to get a permit for house logs and now there is a desire to mow the forest all down, it does not make sense. She noted there has been so much opposition to SB 310 and so much devastation as a result of other people's choice to clearcut. She stressed she does not want to lose her livelihood. She is sending up a red flag. There are people who live out there who work and support themselves and are not a burden to the state. The priority should be multiple use. She urged committee members to not pass SB 310 Number 512 GAYLE STEVENS, NENANA, expressed opposition to SB 310. She said her family participates in many activities within the forest including hunting, trapping, fishing, snow machining and dog mushing. She has seen the damage which is done by clearcut logging. She felt the damage from clearcutting can be widespread. The potential damage to spawning streams is not something to be gambled with, considering the declining salmon runs. With the small scale logging which is taking place in her area the last few years, she has seen the damage and waste. The amount of cut trees which are left in huge piles is unbelievable. She stated there have not been any local jobs or local hire except for one truck which was hired. MS. STEVENS said the interior forest does not grow fast enough to support this type of logging. The already threatened subsistence lifestyle will suffer. Flooding and erosion is a danger. She said as people now travel on the dog trails, the decline in wildlife is already apparent. They never know whether or not they will run into a three foot snow berm right across a traditional trail or if there will be a logging truck bearing down on them around a corner. She felt multiple use will be eliminated. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE SITTON had joined the committee.) Number 541 DUANE ANDERSON, SOLDOTNA, testified via teleconference and stated Senator Frank is famous for his "I don't knows" and Mr. Boutin is famous for the fact he has a cut deal with someone to put in a particle board plant. He said the Seward mill (indiscernible) has ten days of wood (indiscernible) and the same situation is occurring in Soldotna--none of the wood has been hauled out and there is a (indiscernible) sitting at the state university sale. The need for log product for that mill is entirely restricted. He conducted research just prior to the meeting to give committee members an idea of what value they will be giving away versus what might be received from the forest if they are determined to have a large scale or some value-added facility. He stressed there is no other world source for birch and hence, the forest in Alaska is a gold mine. He outlined current prices. Number 560 ED DAVIS, MEMBER, ALASKA WILDERNESS, RECREATION AND TOURISM ASSOCIATION (AWRTA), FAIRBANKS, testified via teleconference and urged committee members to hold another meeting on SB 310 to allow everyone to testify. He said Alaska's prime forest lands should rightfully sustain a small scale timber industry. However, SB 310 will manage the prime forest lands for the exclusive use of large scale, corporate clearcutting interests. He stressed these lands must also be managed to sustain the tourism and recreation industries. SB 310 fails to recognize that wholesale clearcutting of the state's publicly owned forests will unravel the fabric which binds the people to Alaska and brings tourists and vacation dollars to the state. MR. DAVIS told committee members to think of their constituents. He asked how many of their constituents chose to live in Alaska because it offers something in addition to economic opportunity. He asked how many of those constituents are in Alaska because of things which depend on healthy forest ecosystems, like salmon runs and pristine waters or perhaps abundant wildlife that is only a hike, float plane ride or boat ride away from the road. He said most people are unwilling to sacrifice something as close to their hearts as the attractions which first brought them to Alaska and which still bond them to their homeland. He stated most people are aware of the damage caused by unsustainable logging. He urged committee members to look at the clearcut near Yakutat, as it is shocking. MR. DAVIS stated FMAs proposed under SB 310 are the missing link which will bring the same type of forestry to the Tanana Valley. He said if the five year plan for the Tanana Valley State Forest is reviewed and the harvest rates to the timber available is compared, one will see that the economically viable forest lands will be depleted in 22-55 years, depending on the definition of sustainable forest land. Number 680 NANCY LETHCOE, PRESIDENT, AWRTA, VALDEZ, testified via teleconference and stated AWRTA opposes SB 310. She said she was a member of the Governor's committee which revised the state FPA. She noted that revision was done with representatives from state agencies, the forest products industry, environmental groups, the fishing industry, and other interests. She stressed it was a difficult process to reach consensus. Many gave up things they really wanted such as scenic values recognized and logging done in a way that minimized the impact on tourism. She pointed out none of that was included in the revision but what was received was limited buffer strips along streams which protect the salmon habitat for sport fishermen. MS. LETHCOE said SB 310 will change what was a consensus agreement and institute FMAs. She urged committee members to table SB 310, put together a new consensus group and attempt to work out the issues. She pointed out that the tourism industry is very like the timber industry. The tourism industry needs a reliable, long term access to the forest in order to obtain financing and make corporate investments in their companies. If the tourism industry does not have that access, it weakens the tourism industry and makes it difficult for people to enter into the tourism industry. She stressed that the tourism industry is a long term employer in the state, unlike the timber industry, which clearcuts and then moves on to another area. TAPE 94-57, SIDE A Number 000 MS. LETHCOE (cont.)...in order to further develop the economic stability of the state through jobs in tourism. BRIAN JOHNSON, KODIAK, testified via teleconference and expressed opposition to SB 310. He stated small businesses employ the majority of people in the country and looks out for the needs of the workers. He views SB 310 as a large corporate entity versus small business people. He thought there should be short term contracts and a lot more emphasis put on value-added wood, instead of long term, large scale contracts which do not consider the environmental and community needs. He felt present logging does not allow for a renewable resource. He said good wood takes hundreds of years. He pointed out when people can get a better price abroad and all of the logs get exported, rather than putting people in Alaska to work. He urged committee members not to give the state's timber away to large corporations but rather keep it for the people and let them make decisions on a small scale. Number 031 ED OPHIEM, KODIAK, testified via teleconference and stated he has worked with wood since he was a child. He said if he were to do any repairs to his boat, such as changing a plank, the cost would be $9 a board foot versus $3.50 a foot when he built the boat 21 years ago, although that wood is not available anymore. He stated much of the spruce in Alaska works fine for boat lumber if one could only get it. He felt SB 310 does not do much for boat builders. He urged committee members to keep timber and processing in the state, so people in the state can benefit from it. He added that the fishing industry in the state is a mess and two 20- year timber leases will eliminate that industry completely. He said the state's oil is just about dried up and the state is going to be left with a bunch of stumps and holes in the ground. RICK ERNST, TRAPPER CREEK, testified via teleconference and expressed opposition to SB 310. He said FMAs are not desirable because they tie up too much of the state's land, for too long to private interests. Once a FMA is signed, no matter what the state and legislature say, the state loses control. Big timber corporations and their money and lawyers will make it very difficult to change existing rules in changing economic circumstances. He envisions more state money and energy being tied up in litigation and enforcement. He felt SB 310 is an economic giveaway by the state to big timber companies. MR. ERNST said FMAs make timber harvesting and wood extraction the primary use and value of state forest lands and puts other forest values such as recreation, habitat, subsistence fishing and hunting, and tourism in a secondary position when making best use assessments of an area. He stated the first public input comes after bids for an area are received and the next public input comes after the contracts are let. The commissioner can still change and negotiate after all is done and said. Then everyone waits 15 years for additional public input. He felt public input in all cases seems to be only a rubber stamp for whatever DNR and the big timber companies want. MR. ERNST said the exemption for small lease sales should be dropped. He pointed out that 67 percent of the sales for the next five years are sales of less than 500,000 board feet and SB 310 exempts these sales. He stated tourism is the state's second or third most viable economy in the state. People do not come to Alaska to see logging trucks and cut forests. He felt it is shortsighted to concentrate on extraction industries that disrupt the state's landscape and scenery at the expense of a long term, stable tourism economy--an economy with a proven record. Number 087 NANCY HILLSTRAND, HOMER, testified via teleconference and wondered when committee members hear all of the voices speaking to them, that perhaps they might think there is a problem. She said SB 310 does have deep problems, which the people of Alaska are telling the committee. She asked committee members if they are listening to the people. She felt SB 310 should be tabled this year. She stated the FPA does not adequately protect fish or wildlife--wildlife is not even mentioned in the act. The riparian areas run on either side of the stream systems all the way up to the tributaries and they are not protected adequately. MS. HILLSTRAND stated there are 66 foot buffers on either side of the stream systems and Konkor, down in Afognak, is asking to have variances allowing them to go close to 20 feet from the river to take trees out. She wondered if these variances are being allowed, why does the state even have buffer strips in the first place. She stressed the state does not have adequate protection for its fisheries and wildlife, which bring money into the state. She said the state needs a new FPA before it allows any type of FMA. The land belongs to the people of the state, not to a company from outside or to any of the corporations which may want to take large scale timber from the state's land. She asked committee members if they are going to be responsible for damage which may be done to the state's fisheries or wildlife population. Number 116 REPRESENTATIVE JOHN DAVIES stated there are 50-60 people left to testify and suggested that the hearing be extended, enabling the committee to hear from everyone who wants to testify. MIKE MORTELL, PORT PROTECTION, testified via teleconference and stated it is unbelievable that with all of the public outcry on SB 310, the bill is still proceeding. If the bill is going to pass, he asked committee members to consider several amendments. He said the contractor should be made responsible for all of the costs to the state, related to administering, monitoring, and enforcing the FMA. The contractor should also be responsible for the scaling, road construction, and gravel costs. He felt DNR and ADF&G should be fully funded so they can adequately monitor the FMAs. He thought there should be a requirement that the timber not be sold at a loss to the state. Provisions should be included for penalties and fines for contract and regulatory violations. SB 310 should have a requirement that the FMAs conform and be consistent with the municipal and land use plans. MR. MORTELL felt SB 310 should include a local hire provision. Currently 40 percent of the workers in the timber industry are from out of state. He stressed timber jobs should go first to Alaskans. Most of these state lands are adjacent to little villages and employment should go to these rural people, instead of these big corporations. SB 310 should provide for adjustments to the FMA harvest plans if new information about forest (indiscernible) and forest productivity, fish and wildlife habitat, and other concerns indicate that the original harvest level is too high. He thought SB 310 should require that value be added to the timber in Alaska. Unprocessed timber exports from Alaska means Alaskan jobs are lost. He pointed out that it is currently more profitable to sell unprocessed timber overseas, than it is to mill it in the state. Number 175 KEN JESSEN, FAIRBANKS, testified via teleconference and stated tourists come to the state because it is so special. He felt that uniqueness should be preserved because the state can make so much more money through tourism than cutting down trees and shipping them out of the state. He grew up in the Pacific Northwest which has been plundered and he is very familiar with all of the big timber companies. He wondered who will want to recreate in a sea of stumps. He told committee members if they want the state to make big money and create jobs, they should keep the state's landscape intact. He opposed SB 310. HOWARD LUKE, FAIRBANKS, testified via teleconference and wondered how he is going to teach young people about his traditional ways. He stated he does not like all of the promises being made. He uses the trees, fish and other resources. He stressed those resources are his livelihood. He said the legislature does not know anything about his culture. Number 238 DAVE LACEY, MANAGER, YUKON RIVER TOURS, FAIRBANKS, testified via teleconference and stated his customers come to the state because of wilderness and Native culture. Both of those (indiscernible) to identify the intact ecosystem and unblemished (indiscernible) in Alaska. Native culture (indiscernible) subsistence and without the subsistence economy the Native culture cannot exist. He felt SB 310 may mess up the road system in the Interior and will lead to more depletion of fish and game resources around the urban areas. The road system will put more and more hunters and fishermen out into the village hunting areas. He did not think the proposed amendments help. He also felt the costs involved should be looked at again. He asked committee members to not damage jobs in the rural areas in order to create jobs for someone coming in from out of state. ROGER SIGLIN, FAIRBANKS, testified via teleconference and stated supporters of SB 310 act as if the forest, as it exists, has no value. They ignore those who already make (indiscernible) or make their living off of the forest. They ignore those who value the visual beauty the forest adds to their lives and ignore those who value its subsistence and recreational consumptive uses such as hunting, fishing, and trapping. He stated all of those values are to be sacrificed for one goal--maximum monetary gain for the commercial forest industry. He said supporters have asked people to trust industry and the regulators who watch over the industry. He noted the forestry staff members are probably intelligent but unfortunately, the tendency is for all regulatory agencies to become the promoters of the industry they are suppose to regulate. MR. SIGLIN stated industry consistently demonstrates the tendency to abuse the public's air, water, and other resources in its efforts to maximize profit and will not sit at the (indiscernible). The only anecdote to these tendencies is full public involvement in every step of the resource management process. He felt SB 310 gives too much power to (indiscernible) and the end result will be the general public paying the bill. He said committee members' efforts should be (indiscernible) on forest management practices and fairly balance the needs for jobs in wood products, wildlife habitat, scenic, recreational and subsistence activities and invest it all into one that is sustainable and ecologically viable. MR. SIGLIN stated the committee should not sell out for the relatively small (indiscernible) or take the position that the public does not have the intelligence to sort out (indiscernible) and develop a sensible solution. He urged the committee to let the public decide how this forest should be managed and reject SB 310. Number 292 CONNIE STRICKS, FAIRBANKS, testified via teleconference and stated after considering the issues and ramifications of SB 310, she feels it is ill-conceived, panders to special interests, and attempts to support a bloated budget. She felt as written, this bill's passage will demonstrate to the people of the state both negligence and irresponsibility on the part of the legislature. She said Alaska is still a very special place in terms of its wilderness areas and natural resources and the heritage the state can offer children. She stressed it is incumbent on everyone to develop and nurture a proper relationship with the environment, and that it not be plundered for potential short term gain. She felt SB 310 violates that trust. DOUG YATES, ESTER, testified via teleconference and stated if committee members can assure him that in 20-30 years SB 310 will not create the same set of conditions in the Tanana basin which now are present in Sitka, Ketchikan and Wrangell, he would not be opposing SB 310. He said unfortunately, economic falldown on the forest based economies of these Southeast communities is the result of the same set of assumptions driving SB 310. The situation in Southeast Alaska offers a textbook example of why the reliance on a single resource base, like the Tongass, inevitably leads to large spread economic and environmental degradation. He stated in the Tanana basin, people can learn from the mistakes of the past and prevent the crippling problems of poverty, job loss, habitat destruction, and federal intervention. A series of interrelated legal, social and economic concerns need to be addressed. MR. YATES stated the cost/benefit and range of economic threshold (indiscernible) as proposed by Dr. Colin Reed is the place to start learning from the state's mistakes in the Tongass. The apparent cavalier assumption on the part of the bill's sponsor that opponents of SB 310 are green fringe and that if so-called environmentalists oppose SB 310, then it must be doing good, is a twist of logic which belongs in a four year old's sandbox. He stressed that opponents of SB 310, if they had a chance to speak in a comprehensive fashion, would tell committee members they are doctors, lawyers, truck drivers, teachers, housewives, small tourism operators, and small mill operators. They are people up and down the Railbelt and along the coasts who fear a repeat of the same old tired economic prescriptions of the past. He felt putting all of these people under a quick label shortcuts the committee's opportunity for a careful analysis. MR. YATES stated 90 percent of the available forests in Alberta, Canada, where FMAs have the widest application, are now under contract. The details of these management plans between government officials and multinationals were so sweeping, a lack of respect for the resource so profound, that all meetings were held in secret. He said only after the deals were signed, were the details made public. Number 348 PUTT CLARK, FAIRBANKS, testified via teleconference and stated she does not choose to live in Alaska because of a promise of a job but rather because she wants to. She is disappointed and personally offended that SB 310 has come this far. There has been a vocal majority in the Interior voicing either concerns or opposition to SB 310, yet the bill has been fast tracked with ease. She wondered if the people in the Interior are not being listened to. She stated the bill, in its written attempt to flush the voice of the public, is indicative of the treatment the public has so far received in regard to SB 310. She harbors contempt for legislators and their blatant disrespect of the public. MS. CLARK stated the Tanana Valley boreal forest contract has become a (indiscernible) which the makers of SB 310 say the legislation will provide jobs. She stressed jobs already exist within the forest and provide for a much more stable, local financial base than the proposed SB 310 ever could. As seen before, the contractors will undoubtedly hire out of state and the corporate profits will be (indiscernible) locally. The current uses of the forests are all sustainable, with many different people benefiting from it's riches. SB 310 will devastate the forest. She supports the current small scale logging procedures. MS. CLARK said as always, the cost of a creation such as SB 310 will be more than what is foreseen. She wondered who will pay for the roads that will provide access to the logging areas--the state. Who will pay for the long term monitoring of the environmental impact--the state. She asked how SB 310 will impact the game on which many people subsist hunt or fish. She stated SB 310 is the most unwise creation, whose sponsor will be paying for this backlash in the next election. Number 378 LARRY PAQUIN, FAIRBANKS, testified via teleconference and expressed opposition to SB 310. He felt some of the (indiscernible) made in the FMAs such as the attempt to keep in-state processing of timber is not realistic. He said there is a U.S. timber export law which allows the export of Alaskan timber except when it is not shown to endanger the local supply. (Indiscernible) finding the best interest (indiscernible) to allow in-state processing. He stated there will be logging by litigation with each FMA (indiscernible) SB 310, because the state will have to prove there is endangerment of a shortage of timber supply locally to stop export of timber. MR. PAQUIN said he knows a woodcutter who says he can make 10-30 times as much value on (indiscernible) a cord of wood. If that is extrapolated out, one would see there is much more potential in value-added than there is in exporting timber. He stated FMAs do not turn out the value of Alaska's resources. He stressed there is life after FMAs. He urged committee members to get rid of FMAs and consider value-added amendments to SB 310 and existing laws. He opposed SB 310. Number 436 BYRON HALEY, FAIRBANKS, testified via teleconference and expressed opposition to SB 310. He said DNR has a very bad track record for in-house regulations (indiscernible). Number 445 LANE THOMPSON, FAIRBANKS, testified via teleconference and stated the lead sponsors of SB 310 refuse to allow much of the public to testify, thereby dismissing the public's testimony as unimportant. He said as the Greeks knew, hubris is followed by Nemesis. He commented since the bill's powerful backers make it unlikely that SB 310 will be postponed or defeated, he sent the committee a proposed amendment which will put a limit on the annual timber harvest in the Tanana Valley. Since other logging will be taking place outside state FMAs, the limit proposed is larger than desirable for a sustainable forest industry. However, in order to avoid having no limits at all, the proposed limit has been set deliberately at a level believed to be acceptable to the proponents of SB 310. He outlined his proposed amendment and urged committee members to take the time to study the amendment before SB 310 is passed out of committee. MR. THOMPSON reminded committee members that each mature spruce in the Tanana Valley takes over 1 million hours to grow (indiscernible) to improve SB 310. He stated if the committee cannot take the time, please postpone SB 310. Number 494 RICHARD HAYDEN, FAIRBANKS, testified via teleconference and expressed opposition to SB 310. He said although he is normally an easygoing person, Senator Frank's persistence toward a bill which nobody wants is beginning to make him an unhappy man. He felt SB 310 and FMAs are not management agreements at all. They are butchering. ...(indiscernible). He stated SB 310 is an idiotic and suicidal attempt to make a few people who read paper (indiscernible) dollar. He cannot believe (indiscernible) the money flow into Alaska are proposing to put a "rip out the stuffing" leaving a (indiscernible). MR. HAYDEN stated the backbone of Alaska is naturally grown forests which support the wildlife. He pointed out that tourism brings in millions of dollars annually and will be around for a lot longer than large scale logging. Tourism in Alaska is not limited to the national population--it is international. People from all over the world come to see this flat, natural land. He stressed Alaska has been holding its own in the economy world very well. He said if SB 310 is passed, the economy might escalate slightly, then it would drop significantly. He urged committee members to not pass SB 310. Number 553 BIRCH PAVELSKY, FAIRBANKS, testified via teleconference and stated he has read SB 310 and does not understand its (indiscernible) foundation. FMAs have failed to create locally hired, long term, secure jobs in Alberta and British Columbia. Those areas have a worsening poverty economy. (Indiscernible) not be based (indiscernible) multiple use (indiscernible) inventory has yet to be completed. FMAs cannot be based on sound economics because no cost/benefit exists. He said visions of community and state benefits which are implied in SB 310 are pies in the sky. He stated SB 310 seems to be based on greed and arrogance. MR. PAVELSKY stated a few years ago, he approached the small local sawmill to buy some house logs and the owner told him he had no house logs to offer because they were all being sold to Japan. House logs cost about $5.15 per foot. He wondered how much those logs will cost in a few years under SB 310 or if they will even be available. He urged committee members to rewrite or kill SB 310. Number 586 IRV LIPSCOMB, FAIRBANKS, testified via teleconference and stated he represents three generations of Alaskans. He expressed opposition to SB 310. FMAs are bad and even worse politics for its sponsors. He said there are no jobs for Alaskans. He stressed that multiple use in state forests works fine. A sustainable forest use management program can be developed. He said there is no data which supports sustainable forest use (indiscernible). He urged committee members to listen to the people. TARIKA LEA, FAIRBANKS, testified via teleconference and expressed opposition to SB 310. She stated she was the Earth Day coordinator for Fairbanks in 1990-91 and one in ten people came to the event, which points out that people are in Alaska because they love the wilderness. She felt tourism is the state's future industry and she does not believe in giving the forest away to foreign special interests groups. She said in listening to the testimony, there are over 50 people opposed to SB 310 and only eight people in support of SB 310. She stressed people do depend on small businesses. MS. LEA stated when observing a clearcut, it is dead land. She said there is so much information and studies on what can be done for the sustainable harvest of trees. She echoes the common voice. There needs to be more study and more considerations. The forests belong to the public. She urged committee members to not pass SB 310. TAPE 94-57, SIDE B Number 000 CINDY GEAR, FAIRBANKS, testified via teleconference and stated she does not believe the committee understands the ramifications of SB 310. She said a prayer for the trees. CHAIRMAN WILLIAMS announced the meeting will be recessed until 3:30 p.m., at which time the committee will take one- half hour of testimony on SB 310 and then discuss whatever amendments committee members care to offer on SB 310. THE COMMITTEE RECESSED UNTIL 3:30 p.m. TAPE 94-58, SIDE A Number 000 CHAIRMAN WILLIAMS called the meeting back to order at 3:35 p.m. He stated the committee members present are REPRESENTATIVES HUDSON, CARNEY, GREEN, and DAVIES. CHAIRMAN WILLIAMS stated the committee will take additional testimony on SB 310 and then hear SB 46. SB 310 - State/Private/Muni Timber Operation/Sale Number 065 DANIEL LUM, FAIRBANKS, testified via teleconference and acknowledged his elders Sarah James and Howard Luke. He said opposition to SB 310 needs to organize against the representatives who support SB 310. He felt large industry cannot dominate, control, and manipulate resources in Alaska and legislators need to realize that. He stated if the representatives do not represent the public's positions, the public must do whatever possible to extract them so these situations do not reoccur. MR. LUM said after a conversation with Senator Frank's office he deduced the following. Senator Frank is not receptive to the public at large and input thereof, which is a statement in itself about the lack of true concern Senator Frank has for the people he represents. He wondered what a person is to do when the people elected do not listen. He suggested those people be voted out. He also wondered why an Interior representative would fight so hard for out of state industry. He stated SB 310 will not employ a huge work force. He encouraged the legislative process to investigate Senator Frank and his team to determine what is driving him so hard for out of state industry. MR. LUM stated the continuing consensus that Alaska is one large resource is now conveyed in the political arena by the current representatives. He reminded everyone that this land was once all Native land and Natives balanced their lifestyle with the land without gobbling up the resources. He said this is Alaska, the last frontier. When people come to this state and see northern Washington's vast type clearcuts, their hearts will drop as soon as they realize that Alaska is no longer a frontier. He thanked Senator Frank for taking away the state's beauty and for trying to mute the public's objections. Number 104 SYLVIA WARD, REPRESENTATIVE, CITIZENS ADVISORY COMMITTEE, TANANA VALLEY STATE FOREST, FAIRBANKS, testified via teleconference and stated she is not speaking on behalf of the committee. She said the original version of SB 310 had specific effects on the responsibilities of the Citizens Advisory Committee. She stated the current version still contains a section which has direct implications on the state forest in the Tanana Valley. She referred to page 8, lines 9-15, pertaining to the purposes of the state forests. She noted the eleven member Citizens Advisory Committee which is supposed to advise the state on the state forest (indiscernible) to be established for totally different purposes other than what it was originally established for. She stressed the language in SB 310 changes the establishment of the state forest from being the perpetuation of multiple use to one use above all uses and that is commercial timber development. Ms. Ward stated the proponents of SB 310 should not bother (indiscernible) relative bill to the committee which has a lead role in the community for the users of the state forest. MS. WARD said one of her concerns in regard to SB 310 is an economic issue. SB 310 cannot require local hire. She felt timber jobs should go to Alaskans first but the state, as the signer of a contract, cannot require that. He stated SB 310 cannot do what the proponents supporting the bill say it can do. She commented her second concern is the value-added processing, which is purported to come from SB 310. That cannot take place until an act of Congress allows the state to restrict exporting of raw logs. If the committee is genuine about being interested in value-added processing and using a mechanism like SB 310 to require it, they should ensure that Congress will agree to that requirement. She noted SB 310 gives tremendous authority to the commissioner of DNR and that person will be able to negotiate and sign a contract, locking up the state's timber for up to 20 years. She stressed her biggest concern is the state's white spruce being exported directly to Japan. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES BUNDE, FINKELSTEIN, AND MULDER had joined the committee. He said REPRESENTATIVE NICHOLIA had also joined the committee.) Number 158 LARRY MAYO, FAIRBANKS, testified via teleconference and stated SB 310 attempts to provide economic improvements for Alaskans through intensive cutting of the state's forests. He felt SB 310 will more than likely harm the state more than it will help it. He pointed out that forests on state lands already provide many benefits ranging from fisheries to hunting, trapping, wildness, subsistence, a nice place to live, tourism, clean air and water, house logs, fire wood research, recreation, and peace of mind. He stressed all of these benefits provide economic and other values to most residents. He said the concept driving SB 310 is the woods do not contribute satisfactorily to the economy. He stated that is false. MR. MAYO stated SB 310 is not the state's salvation after oil. He pointed out experience elsewhere is that long term FMAs lead to increased subsidies and much smaller timber revenues compared with competitive bidding. FMAs help multinational corporations, not local governments. He is surprised and distressed with the Republicans who are pushing SB 310. For years, these same people have been saying that outside interests should not control Alaska. He stated SB 310 is tailored for multi-national timber companies. He said if these companies come into the state, the public will lose access into their contract areas, few Alaskans have the education to run their types of operations, they will need generous state subsidies to survive, and their primary purpose will be to ship the wood out with the least possible work involved in Alaska. Countries like Japan can survive economically only when they can import cheap resources for their own workers and industries. Number 183 MR. MAYO said by contrast, economic benefit is already being realized by a number of small, hometown wood industries that provide local employment for those who work with wood, make lumber, build log cabins, harvest fuel wood, and make birch syrup. He noted to the state's greater benefit, these industries do not need to cut huge amounts from the state's wild forests, which leaves extensive forests for all the other benefits mentioned earlier. He stressed it is most important for the committee to understand that as the earth becomes more damaged, people come from around the world in increasing numbers to Alaska to witness a fully functional natural ecosystem. He said it makes sense that in less time than a 20 year FMA will run out, the wildness of the forest will emerge as the state's most important economic and ecological value. He felt SB 310 is history. MR. MAYO stated he has put together seven suggestions if there is to be an improvement in FMAs. 1) The Division of Forestry should establish an independent group to conduct ecological research, inventories, and monitoring. 2) Provide wild forest reserves that act as natural seed banks for biodiversity and as reservoirs of intrinsic values. 3) Develop strategic plans for dealing with forest declines caused by clearing, accidents, fires, insects, game management, storms, climate shifts, etc. 4) Replace large- scale clearcutting with something less damaging. 5) Create incentives for sustainable management on privately-owned forests. 6) Provide flexibility so that any new economic activity of greater benefit can replace an established activity. 7) Ensure, forever, that public forests are managed principally for public benefits as current law clearly provides. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE JAMES had joined the committee.) Number 214 RONNIE ROSENBERG, REPRESENTATIVE, GREEN PARTY, testified via teleconference and stated there is overwhelming opposition to SB 310 in Fairbanks. She expressed concern about FMAs which have been tried in Alberta, Scandinavia, and Southeast Alaska and have not been successful. She said there is nothing leading her to believe that FMAs will be any more successful if tried in Interior Alaska. She stated there is great concern about the state getting involved in long term, long-range 20 year plans when an insufficient inventory of all resources has not been conducted. The state is going to bind itself to a 20 year plan and she wondered what happens if five years down the road the plan is not working. MS. ROSENBERG reviewed the committee substitute on SB 310 and felt there are many loopholes. She said there is no bonding requirement in SB 310. She noted there is also no legislative oversight over any contracts that the commissioner chooses to enter into, which will assure the public that adequate protection will happen if one of the companies goes bankrupt, leaves or does not fulfill its responsibilities. She pointed out that these large lumber companies do have a history of not fulfilling their responsibilities. She is also concerned that the work on the FPA is being gutted through SB 310, although in the CS, the commissioner has to consider a number of criteria. However, the bottom line is that the primary use of the forest is commercial development in SB 310. MS. ROSENBERG stated she is not much of a user of the state forest. However, many people in Fairbanks are dependent on the forest and many who are not dependent on the forest for resources, live in Fairbanks because of the forest. She said the forest is one of the prime reasons she chose to move to Fairbanks. She stressed SB 310 is so bad that it cannot be amended but rather it should be killed. She urged committee members to listen to those who have testified. Number 278 JIM SYKES, TALKEETNA, testified via teleconference and told committee members they are heading for dangerous legal territory with SB 310, and he did not feel there is a need for it. He pointed out that the state does comprehensive plans, coastal zone management plans, and community plans to prioritize likely uses. He chaired a long community planning process for the 300 square miles of the Chase Comp Plan. He said the state forest is one of multiple uses, like most forests. SB 310 creates an unnecessary conflict with the already established planning process and prioritizes trees for commercial timber harvest. He felt the proposed amendment to Section 5 should be stricken. MR. SYKES felt committee members should be aware that where plans are in conflict, a higher level of review is triggered before industry can proceed. For example, if the federal government wants to do something that goes along with a management plan, only an environmental assessment may be required. If the project is in conflict with a plan, the National Environmental Policy Act kicks in and a full environmental impact statement is required. He stressed SB 310 could create that kind of conflict. MR. SYKES said what is even worse is that SB 310 gives the DNR commissioner almost god-like authority to develop whatever long term FMAs she or he feels like. He stated SB 310 definitely shuts out the public process, where there is already not enough citizen participation. He felt if the committee does not have an example of what an FMA is going to look like, they should not pass legislation giving full authority to the DNR commissioner to figure it out in the absence of the public process. He differs with the sponsor's impression that FMAs have become a desirable tool. He thought the experience of people elsewhere should be investigated. He recalled the sponsor testified that the FMAs in Alaska will not be the same as those which failed outside. He thought the committee needs to make sure that failure will not take place before SB 310 is passed. Number 313 MR. SYKES stated the worst part of this proposed system is the state will be paying people to cut down its trees and cart them off. The state loses in two ways--getting only ten cents in return for every dollar spent, and the resource is gone. He recalled former state forester, Ted Smith, testified before the Chase Comp Plan committee that the Susitna Forest could not be profitable without subsidies for roads and bridges. He said it is time for the state to wise up and quit being the sucker for anything that sounds like economic development. The question of who benefits, while the state pays, needs to be considered. MR. SYKES said Section 2(c) of SB 310 is one of those "one size fits all" kinds of laws that will not work. He stressed exempting a sale of a half million board feet in Southeast Alaska might be 20 acres, and in his forest it might be 200 acres. He felt timber sales lasting up to five years should be made on an as needed permit basis. All timber sales should have extensive public input from the communities most affected before they are considered. MR. SYKES stated several years ago, the values of tourism, recreation, and remote uses were figured to have a yearly financial benefit greater than cutting down and selling the entire Susitna Forest. The people there have a multiple use forest where recreation is the primary benefit along with local loggers who historically cut from 500-1,500 acres a year. He stressed there is no need for SB 310. He urged committee members not to pass SB 310. He noted if he was Governor, he would veto it. If the bill becomes law and he becomes Governor, he will work to repeal it in the next session. Number 347 CARLY BOEHNERT, ANCHORAGE, testified via teleconference and stated she, like others, has invested a lot of time, money, and effort in SB 310. She said the hundreds of people involved and testifying on SB 310 should mean something to the committee. Most people are saying that SB 310 is a terrible bill and one of the clearest examples of a giveaway to a specific industry seen in a long time. She felt SB 310 is biased against the tourism industry, the fishing industry, subsistence, and the general public and their recreational use of the forest. MS. BOEHNERT stated when timber harvest is set as the number one priority of the forest, subsistence users, hunters, fishers, and tourism are getting a kick in the pants. She stressed tourists do react to the appearance of clearcuts and do not pay money to look at clearcuts. She felt tourism has a big financial stake when considering SB 310, as does subsistence users and fishing. She pointed out that FMAs do not work. She was bothered that Senator Frank had not done his basic economic homework in looking at the finances from either the previous timber sales where long term contracts were tried or looking at the losses on the Tongass. When the losses to the state incurred with SB 310 are reviewed, one will understand why everyone is calling the bill a giveaway. Number 397 MS. BOEHNERT recalled that most testimony has been against SB 310, which is a signal that the people benefitting are those in the timber industry or the large timber operators, not the average people. She felt SB 310 should be killed and cannot be amended. She made a few suggestions. The state needs to make industry responsible for paying costs for roads, etc. Timber cannot be sold at a loss to the state. ADF&G needs to be fully funded for monitoring. However, she recommends the committee kill SB 310. Number 415 JIM MINTON, testified via teleconference and stated members of the property association are strongly opposed to SB 310. He stated extensive oversight by ADF&G and DNR is going to be necessary. He noted that both agencies are currently underfunded to properly monitor existing levels of activity. He pointed out that underfunding of similar projects in the past has cost a lot in wasted state revenues and in most cases, a blight on the landscape which is a future reminder. He said if FMAs are such a great system, then why does British Columbia look like it took a nuclear hit as a result of FMAs. He cannot believe that SB 310 is still alive when the vast majority of the committee's constituents have opposed it. He felt SB 310 should be killed as it cannot be amended. Number 449 STEPHEN BODNAR, CORDOVA, testified via teleconference and stated as a citizen of Alaska, he owns the trees and feels the forest should be managed for all uses, not one single purpose. He said another objection he has to SB 310 is that it applies statewide. Many people are not aware of that fact. He noted his area is one of the last areas where a Native corporation is settling their land claims and there are many parcels which will become state land, meaning they will be subject to SB 310. He pointed out that if one were to look at the way the Natives are treating their lands there, they are destroying a very important mountain goat habitat and fish spawning habitat. He felt if such private land practices continue, the only habitat which will remain will be on state and federal land. MR. BODNAR said he has been working on a scientific study in Prince William Sound on forest regeneration after disturbance and can assure committee members that sustainability, as defined in state law, is unrealistic. He stated if an 80 year old tree is cut down, it does not mean it will take 80 years for it to grow back...if one wants to make a timber farm, maybe, but if the desire is for a forest that can support habitat, it takes 300-400 years. He hoped that the scientific studies mentioned in SB 310 are not just an internal administration scientific study on sustainability or viability of the cut and is open for comments by other scientific parties. He urged committee members to kill SB 310. Number 509 NANCY LETHCOE, testified via teleconference and stated since testifying at this morning's earlier hearing, she has reviewed the proposed amendments. She expressed appreciation for the amendment which will include the words "tourism" and "recreation" in Section 1, on page 2. She expressed concern about the proposed amendment by Representative James for page 1, following line 4. If this amendment is introduced, looking at accumulative effects, she pointed out there is no agency currently having statutory authority for describing the effects of timber harvest on tourism. Therefore, the amendment is asking for something which is impossible to attain. As a result, tourism will be left out of the equation. MS. LETHCOE stated the same problem occurs also in the proposed amendment on page 2, following line 14, "insert a new subsection to read..." If read carefully, particularly the last underlined sentence--again tourism has no state organization doing any type of scientific study to determine the effects of clearcutting on the tourism industry. She pointed out that everyone knows, through informal surveys, that clearcutting is incompatible with the type of tourism Alaska specializes in--the nature tours and adventure travel. She stressed although there may be a slight creation of jobs in the timber industry, there will be an accompanying loss of jobs in the tourism industry. Number 560 MS. LETHCOE said she is also concerned about amendment number 21 which Representative James has proposed and whether or not proposed agreements are public record. She felt it is important to have proposed agreements as a part of the public record. She stated if the committee does not pass Representative James's amendments, the AWRTA remains opposed to SB 310. AWRTA feels SB 310 is not the appropriate way to go about changing the FPA, which was reached through a consensus agreement. She urged committee members to table SB 310 and set up a consensus group to again look at SB 310 and other issues facing the forests. She described ways of cutting which will help an area recover much faster and reduce the impact on the tourism industry. She thought the fishing industry would probably also like to look at ways to reduce the adverse effects of logging on that industry. She noted what is most important is that an analysis be done which really shows that SB 310 is going to not only produce jobs in the timber industry, but also will not cause a reduction in jobs in other industries, resulting in a net loss. Number 628 MARY SHIELDS, FAIRBANKS, testified via teleconference and stated every day in the summer, visitors tell her how precious Alaska's natural beauty is. They tell her to be sure that the state does not make the same mistakes other places have made outside. She mentioned that many people in Fairbanks contributed in raising money for air fares to send three of Fairbanks' finest and most creative minds down to the committee: Dr. Jan Dawe, Dr. Glen Juday, and Dr. Colin Reed. She urged the committee members to talk to them and learn from their expertise. MS. SHIELDS asked committee members to not make foolish mistakes in their weariness as people will have to live with those mistakes forever. She stated the people in the Tanana Valley did not ask for large scale timber development and they do not want it. She stressed it is alarming that the committee is proceeding with SB 310 after the overwhelming testimony across the state in the morning. She urged committee members to oppose SB 310 for the following reasons. First, the people living in the Tanana Valley have told the committee they do not want SB 310. Second, there is no local hire provision in SB 310. She said Fairbanks will have a hard time supporting new families who move to town from other depressed logging communities out of state. She felt SB 310 should be held until a waiver can be included which will protect against out of state migration to take the jobs. MS. SHIELDS continued with her reasons for opposition. Third, FMAs have been disastrous everywhere else they have been tried with only one or two exceptions. The Department of Forestry cannot even manage the present 1,000 acre harvest without wasting a lot of the trees. Fourth, the state does not have the economic or biological data to know the risk. A cost/benefits analysis is needed before the state gives the forests away with all future options. Fifth, some of the best foresters in North America recently visited Fairbanks (Jerry Franklin, Gray Jones, Chad Oliver). They all said the management must start from the people up. SB 310 is coming from a few at the top down, and is headed for disaster. She pointed out that last Friday, Senator Frank admitted he did not have a personal knowledge of how FMAs work or do not work but he thought there were people who thought they worked. She felt that is not good enough and expects more homework on the part of the legislators. She asked why Senator Frank is pushing so hard for SB 310, when his district is so opposed to it. MS. SHIELDS said her sixth reason is that real value-added processing would provide lots of jobs, using few trees. Small local businesses will be squeezed out if the jumbotron, international industries are attracted by cheap raw material. Competitive bids would bring much higher stumpage prices than the FMA system. She felt the state cannot afford to give its resources away and she holds the committee responsible for this protection. MS. SHIELDS stressed that change is coming, but there is a need to work together to invite change which will make lives better. She acknowledged that people need jobs but the people are not willing to pay the price of locking up their forests for the next 20 years. She urged committee members to slow down, use common sense, and hold off on SB 310 until the costs and benefits are known in terms of all jobs using the forest, of clean air and water, and healthy habitat for people and wildlife. She stated people want to have community control of their forest. The five year plans and guidelines, like the Susitna Valley has, are better ways to go. MS. SHIELDS stated the public process must be respected. Public comments are not just to be given, they are to be listened to and worked with. She stressed that communities cannot be divided even more than SB 310 has already done. Fairbanks is a small town and the people need to live together and work together to assure the best future. TAPE 94-58, SIDE B Number 000 CHARLES SIMMONS, FAIRBANKS, testified via teleconference and expressed opposition to SB 310. He felt SB 310 amounts to a potential giveaway of state resources under the philosophy of (indiscernible). He stated Senator Frank should not be surprised at the public reaction to SB 310. He wondered why the public would cheer when citizen input is eliminated and the DNR commissioner is being given far too much power. He is a local wood worker and furniture builder and uses local products. He supports sustainable levels of forest use and supports intelligent use of the state's resources. He felt SB 310 does not come anywhere near that standard. He urged committee members to not be in such a rush to make Alaska like all of the places which people have moved to Alaska from. He said SB 310 should be killed. Number 025 TED SWEM, FAIRBANKS, testified via teleconference and said since Senator Frank introduced SB 310, there has been overwhelming opposition to the bill voiced in the Interior. He said the citizens voicing opposition are not a bunch of radical environmentalists or animal rights activists from out of state, but rather are the people who live in the Interior who understand the bill. He described the letters to the editor in the Fairbanks Daily News-Miner and a recent editorial. MR. SWEM noted that Senator Frank expressed bewilderment to the opposition to SB 310. He said there is nothing bewildering about this opposition--it has been articulately expressed, people understand the bill--the only thing that is bewildering is that Senator Frank continues to ignore his constituents who are telling him to withdraw SB 310. He stated the reasons FMAs are a bad idea have been identified. He recalled that people have said they are not opposed to the development of timber resources in the Interior but that FMAs are not the way to approach it. He stressed the resource has not been adequately inventoried and the economics on how to best utilize the resource has not been studied. He said if the state develops a resource, it needs to maximize the benefits. He felt FMAs are not the way to do it. MR. SWEM said the people in the Interior know what the trees provide and it is more than just short term dollars for a quick timber sale. He stated that when legislators run for office, they imply or state they want to represent the people. After watching Senator Frank, he was a little concerned that there is a misunderstanding of the definition of "represent." He noted the dictionary says "represent" means to act on a person's behalf. He stressed that people are telling the committee what they should do with SB 310 and they should do it--kill SB 310. FRED BROWN, FAIRBANKS, testified via teleconference and expressed support for SB 310. He felt there are advantages especially in respect to the use of the spruce beetle kill resource. He stated FMAs provide a tool to the Division of Forestry to use and is not a requirement. He said the terms of the agreement can be written in a way that tourism and other interest groups are protected. He noted his family is involved with a corporation based in Homer which is working on removing beetle kill timber and the people in that area are satisfied with the FMA there. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE MOSES had joined the committee.) JIM SEALY, VICE PRESIDENT, SUSITNA VALLEY ASSOCIATION, ANCHORAGE, testified via teleconference and expressed displeasure with the hearing process on SB 310. He requested another hearing be scheduled on SB 310. He recalled that last week it was stated that bonding will be waived in SB 310 because of price fluctuation. He felt the real reason bonding is being waived is because bond pricing is too high because logging has a reputation of being very expensive due to nonperformance or poor performance on contracts. In light of past failures, the state has paid millions of dollars to bail these projects out. He felt bonding should not be waived in SB 310, but rather be mandatory. MR. SEALY expressed concern in regard to the absence of ADF&G in SB 310. He felt it is important that ADF&G be involved, working with the Division of Forestry. He said ADF&G's involvement is the public's check and balance to ensure that habitat is being monitored. He stated he has been a registered Republican since he was 18 years old. He commented that when this type of legislation is shoved down people's throats, he has little choice but to look for a Democratic governor who will appoint a commissioner who will not abuse or use this type of legislation. Number 138 JOHN REEDER, ANCHORAGE, testified via teleconference and stated the development of the forest resources in the state requires mechanisms which can resolve conflicts between competing uses and balance the financial benefits of the forest development with the financial benefits of recreation, tourism, and fishing. The problem with SB 310 is that it strips away the public process which brings about this balance, which is unfair to the public and the timber industry. The burden of resolving these conflicts is being shifted away from the government and being put on the industry's shoulder. He said the industry is not equipped to handle it. He felt what is going to happen is that the public, who has tools and weapons to fight this kind of development, will be able to fight even more effectively under this circumstance. MR. REEDER stated he is not aware of any natural resources development in the state which has been successful and carried out when a large segment of the public is opposed to it. He urged committee members to hold SB 310 until next session, look into the public process question, and try to develop a mechanism to ensure that if the state decides to go forward with a timber development plan, that the plan is economically feasible, that large segments of the public support it and it does not sacrifice existing industries such as tourism or recreation. Number 173 KATYA KIRSCH, EXECUTIVE ASSISTANT, ALASKA ENVIRONMENTAL LOBBY (AEL), stated FMAs are more likely to benefit corporations than the state. The state should not lose money subsidizing the removal of the state's forest. She said in Haines, the state lost more than $8 million between 1979-1985 and noted that was a long term, 15 year contract with an option to renew. The state lost more than $8 million in road credits, subsidies, infrastructure, and management costs. She stated after the mill went belly up there several times, the state cancelled the contract in 1985. MS. KIRSCH stated contrary to the DNR's briefing paper on long term timber sales, statistics show the state spent more than $1 million for the Haines forestry office related to five years of that sale. At the time of bankruptcy, DNR owed the contractor more than $388,000 in purchaser credits due to road construction. The state spent more than $7 million in mill related investments via the Alaska Resource Corporation. She said in Haines, long term contracts look like a very bad idea. MS. KIRSCH said primary manufacture is a problem with SB 310. She noted the Supreme Court has ruled that state timber does not need manufacture--it can be shipped out in the round. She wondered why that provision would not be challenged in court again when an FMA is contracted. She felt the state legislature should work to gain federal Congressional authorization banning export of state round logs. The state of Oregon did that in 1990 via federal legislation, in large part to create more jobs. FMAs will only be a guarantee of value-added jobs in Alaska, if round log exports are banned through Congressional authorization. Number 202 MS. KIRSCH stated inventories which seem scientifically correct have been found to be in error years later, with less timber available than originally calculated. She noted that has been the case in the Tongass and Haines. A contract based on misinformation may have to be honored, even if that means harvesting above sustainable yield levels, possibly harming important fish and wildlife habitat or recreation areas. She stressed the state needs to put a higher priority on timber inventory data, which by law is needed to harvest areas. In Haines, people are still awaiting final inventory data ten years after the raw data was taken. Ms. Kirsch said SB 310 still contains public policy problems. Agency and public comment and oversight will only be 120 days for the FMAs as opposed to the normal two year scheduling process. MS. KIRSCH said the state should retain its current policy which provides for 3-5 year timber sales. If DNR does accurate inventories and takes into account other important values like fish, subsistence, tourism, recreation, etc., if there are accurate field data inventories, and if all multiple uses are taken into account, then a reliable sustained yield can be ascertained and there can be some certainty that interested purchasers can have a steady supply of timber to bid on, at fair market value. The state will not be locking up resources for 20 years, will not be locking out other interested timber purchasers, and there will not be a giveaway of multiple public resources. Number 224 MS. KIRSCH explained other areas of SB 310 which AEL believes are bad policy. Eliminating public and agency oversight of emergency sales and the one million board feet in each region, each year is a bad public policy. She said one million board feet in individual sales could mean 50 acres or more near Fairbanks, 333 acres in the Mat-Su area, and about one-eighth of the allowable cut in Haines. She felt a 30-day notice on these amounts of timber is inadequate and feels these sales should go through the normal two year planning process. Referring to Section 5, she stressed the primary purpose of state forests should not become commercial development. Other values like fisheries, subsistence, wildlife, and personal firewood are just as important. She urged the committee to allow SB 310 to die as it contains bad public policy and is likely to cost the state money. Number 240 BARBARA KELLY, JUNEAU, expressed concern regarding the effects of SB 310 on the Tanana Valley region. She opposes SB 310. The original version was written with disregard for the public process and it clearly promotes the interests of timber companies at the expense of the public's interest. She acknowledged that in the face of overwhelming negative public testimony, SB 310 has been revised, which she appreciates. Provisions have been made for more public comment. Many of the sections in SB 310 which were criticized have been eliminated and important considerations left out in the original version have been put in. She felt the original intent and the heart of SB 310 still remains which bothers her. MS. KELLY said the intent and philosophy of SB 310 is expressed in Section 5, where the purpose of the state forests is redefined. She does not agree that the primary purpose of the state forests should be the development of commercial forest land. That statement is in direct conflict with the idea of multiple use management and puts every other use as a secondary use and of secondary importance. She pointed out the heart of SB 310 is the section on FMAs. She felt it is not in the best interest of the people of the state to enter into such long term contracts as the FMAs will allow. Allowing 20 year and up to 40 year contracts, which SB 310 still allows, takes away all the flexibility the state has to negotiate on anything when conditions change. She does not see any reason to eliminate that flexibility, when shorter contracts can work much more to the benefit of the state. She stated long term contracts can only benefit those who are involved in the timber industry. MS. KELLY voiced other concerns about SB 310. SB 310 will allow the export of higher quality logs to foreign markets, with a resultant loss of value-added products, which could more directly benefit local economies and communities. She does not understand how the costs outlined in the fiscal note provided by ADF&G can be one-half of a similar fiscal note done by DNR in 1989 regarding a similar bill. It does not make sense that the costs in 1994, five years later, can be one-half. She said Fibreform Wood Products's corporate proposal, as indicated in the ADF&G fiscal note, is a clear indication of what large corporations have in mind for the Interior. That company had a corporate proposal requesting up to 115 million board feet annually of mixed species. She pointed out the total allowable sustainable cut is 60 million board feet. Therefore, if one company wants 115 million board feet, she wondered how monopolies will be avoided. MS. KELLY stated there were concerns expressed in the ADF&G fiscal note about the difficulty government has in monitoring FMAs and detecting violations. She said if DNR and ADF&G are not funded currently to do the jobs they are supposed to do, she asked how are they going to possibly adequately monitor these FMAs and detect violations before too much damage has been done. She does not like the idea of placing control and management of large areas of land in the hands of large corporations who do not have any local concerns or interests. Their primary interest is making a profit. She felt local interests should be of primary importance. MS. KELLY wondered if the committee ever steps back to take a long term perspective look at how long human beings have been on the earth and how much detrimental affect on the earth there has been in the last 100-200 years. She felt if that continues, the remaining habitat will be destroyed. She pointed out that FMAs continue that kind of destruction. Number 342 CHRIS GATES, stated SB 310 allows the state to have a tool not now available. He pointed out that many places have found that FMAs do a lot of good. He said representatives of the city of Prince George, British Columbia, attribute their entire basis of their economy on properly managed long term contracts to manage their forests, primarily beetle kill. He noted one valley there produces 19,000 jobs--7,500 value-added jobs, 2,000 harvest jobs, 9,000 support jobs-- jobs they say are caused because of the long term contracts which allow people to invest money in their city. He pointed out those jobs are out of 40,000 total jobs. Prince George has 16 sawmills, three pulp plants, one newsprint plant, and 15-20 value-added facilities, including furniture, window making, boxes, molding, doorjambs, etc. Those representatives said they could not possibly think of having a viable forest products industry without secure fiber for those mills MR. GATES said while spending time in Prince George, he noticed the access to the forest which allowing properly managed development gives. There were campers everywhere. That access does not happen in Alaska because the state has not managed its resource to allow people access to the forests. He stated there are two million seedlings going strong in the Prince George area because of their desire to stay in front of the beetle kill and keep some economic value in their timber before it is wasted. MR. GATES pointed out there is a good case study in this area with regard to a long term contract and what it can mean to a community. He noted there is a team in Ketchikan putting together the plan to handle the "nuclear bomb" when the long term contract stops in Ketchikan in the year 2004. That team is saying 1,158 direct jobs are associated in Ketchikan with having that contract and the manufacturing facility which that long term contract allowed to occur; $40 million in payroll; population decreases of 15 percent are expected; $40 million in gross business sales lost; $160 million of property tax base lost; population base revenues from the state lost; fees from the state lost; over $1 million of direct city revenues gone if there is no viable forest products industry. MR. GATES pointed out the Fibreform project wanted 62 acres in downtown Seward for their plant. He stressed the Fibreform people and the Fibreform project was never real. He regrets that the Fibreform project is being talked about in regard to SB 310. He stated SB 310 allows the state to have a tool that will create proper and responsible jobs and economic activity in the state. Number 415 REPRESENTATIVE PAT CARNEY asked if the committee has an option of mandating in-state processing of the resource in SB 310. MR. GATES replied the state does not have to accept any contractual long term FMAs if they are not in the best interest of the state or do not call for value-added manufacturing in the state. REPRESENTATIVE CARNEY asked if that language can be inserted in SB 310. MR. GATES stated it cannot be mandated under law. He said FMAs can be structured in a way that every single agreement provides value-added as opposed to the exporting of logs from state property. Number 437 REPRESENTATIVE JEANNETTE JAMES said she does have concerns with SB 310 and asked what the difference might be with passing SB 310 this session versus next session. MR. GATES responded there will be no problems. He said it is a philosophy of having tools to try and make things happen. The state is in a very competitive world. Alaska is usually the last in and the first out of the world forest products market. Alaska has the opportunity to put lots of Alaskans to work in a proper manner with good controls and excellent monitoring, if the tools are available to do it. He stressed the only difference is opportunity. Number 461 REPRESENTATIVE DAVID FINKELSTEIN stated he agrees with Representative Carney on the idea of looking at some way to do in-state processing. However, he felt Mr. Gates's proposal is too simplistic--one cannot say it is against the law and if a restriction on primary manufacture is not allowed, a deal will be made and proposals will not be accepted unless in-state processing is included. He said that cannot be done. MR. GATES responded there is no compulsion to do something which is not in the best interest of the state of Alaska and if it is determined that it is not in the best interest to export Alaska's logs, that will be the end of any discussion on a proposal which does that. REPRESENTATIVE JOHN DAVIES wondered if that is the case, then why is there truckload after truckload of round logs going out of his valley to Japan. MR. GATES said if the logs are coming off of private lands, there is no interference as to what private landowners do with their property except for FMAs which are required if any forest management is allowed. He stated the tools available to protect disturbances on private and public property will exist with FMAs. Number 496 REPRESENTATIVE BILL HUDSON asked if the ban on the export of round logs is still in effect in Oregon. MR. GATES thought it is. REPRESENTATIVE HUDSON wondered if the same ban in Alaska has been discussed. MR. GATES said DCED has been talking about a ban a lot and feels a ban will be a good idea. REPRESENTATIVE HUDSON asked if DCED has any indication showing the inducement of corporate investments might generate the types of jobs which Prince George has. MR. GATES stated there is a situation in Seward, where professional marketers of plywood from Oregon have taken over the plant there and would love to build a plywood plant for an additional $10 million investment. They cannot induce any investment without some assurance of enough fiber going through that plant to amortize the investment, cover their costs, and hopefully produce a profit. REPRESENTATIVE HUDSON said people have testified that unless it can be shown there is a scale of economy which would absolutely require the long term leasing option...he felt it would help the committee understand better the correlation. Number 561 REPRESENTATIVE IRENE NICHOLIA asked if Mr. Gates had thought about the serious implications SB 310 may have on the fisheries. MR. GATES replied his team has received $100,000 from the Economic Development Administration to try and address those concerns. He said one of the problems seen in Ketchikan leading to the desire to have investments in the forest product industry was reliance upon feast and famine and the stability that the long term contract gave to Ketchikan. It is felt the positive effects of that stability might be enjoyed elsewhere as well, including the rural areas and the river system. He pointed out that ADF&G has signed off on SB 310 as meeting their concerns. REPRESENTATIVE NICHOLIA commented that $100,000 will not do the job.