Legislature(1993 - 1994)

04/22/1994 08:15 AM RES

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

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