Legislature(1993 - 1994)

04/25/1994 08:15 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  SB 310 - STATE/PRIVATE/MUNI TIMBER OPERATION/SALE                            
                                                                               
  REPRESENTATIVE MULDER 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."                                 
                                                                               
  Number 442                                                                   
                                                                               
  TOM BOUTIN, DIRECTOR, DIVISION OF FORESTRY, DNR, said this                   
  amendment will modify only the wording for sustained yield                   
  and reforestation on private land.  He stated last summer,                   
  the Sierra Club Legal Defense Fund (SCLDF) wrote a brief                     
  which said DNR should be requiring private landowners to                     
  comply with a continuous even flow harvest on their private                  
  land.  He felt the existing FPA does not require that and AS                 
  41.17.060 says that private land complies with sustained                     
  yield, so long as it is reforested.  However, private                        
  landowners were concerned upon reviewing the brief.                          
  Therefore, this amendment makes it even more clear that                      
  reforestation is required on private land, not an even flow                  
  harvest.                                                                     
                                                                               
  REPRESENTATIVE CARNEY asked what the definition of                           
  "economically fair price" is.                                                
                                                                               
  MR. BOUTIN stated the definition is in existing law, except                  
  it says in the state.  He said seedlings are purchased as                    
  needed.  Reforestation is required by law and DNR buys                       
  seedlings at the market price.                                               
                                                                               
  REPRESENTATIVE DAVID FINKELSTEIN wondered if Mr. Boutin had                  
  talked to anyone involved in the deliberations on the FPA to                 
  determine whether or not there was any discussion on the                     
  application of the sustained yield concept to private lands.                 
                                                                               
  MR. BOUTIN replied he has.  He said the part of the law                      
  which the SCLDF used to represent an even flow should be                     
  required on state land came from 1978.  He stated clearly                    
  sustained yield is reforestation and he cannot get some kind                 
  of an even flow requirement from that wording.  He noted the                 
  accepted gossip at that time was the SCLDF had written the                   
  brief to help the attorney general in his negotiations with                  
  a corporation.                                                               
                                                                               
                                                                               
  Number 557                                                                   
                                                                               
  REPRESENTATIVE HUDSON stated Section 8 repeals the (b)(4) of                 
  AS 41.17.060 and the new Section 4 takes out the "so as to                   
  result in a sustained yield of merchantable timber from the                  
  land;".  He clarified private land only is being talked                      
  about.                                                                       
                                                                               
  MR. BOUTIN said that is correct.                                             
                                                                               
  REPRESENTATIVE HUDSON asked why the private timber operators                 
  want this amendment.                                                         
                                                                               
  MR. BOUTIN said private landowners were nervous as a result                  
  of the SCLDF brief because the wording in existing law does                  
  not adequately define sustained yield, so as long as there                   
  is reforestation.  He noted the state is under a different                   
  test with the definition of sustained yield under Title 41                   
  and the stronger definition of sustained yield in Title 38.                  
  He felt in existing law, sustained yield is met on private                   
  land just by reforestation and that was understood until the                 
  brief.                                                                       
                                                                               
  REPRESENTATIVE DAVIES asked why this amendment is necessary                  
  in SB 310, which addresses forest management agreements                      
  (FMAs).                                                                      
                                                                               
  MR. BOUTIN replied the amendment is not related in any way                   
  whatsoever and has no impact on state land.  He said this                    
  amendment is a private land amendment and FMAs are a                         
  different method of sale for the sale of state timber.                       
                                                                               
  REPRESENTATIVE DAVIES felt the FPA was negotiated under a                    
  consensus environment.  He expressed concern that changes                    
  are being made to the FPA just because there is a convenient                 
  vehicle available to do so.  He thought if changes are going                 
  to be made to the FPA, they should be introduced as a                        
  separate bill package.  He opposed the amendment for that                    
  reason.                                                                      
                                                                               
  REPRESENTATIVE JAMES said she could envision an extension of                 
  the amendment into the availability of timber under a FMA,                   
  particularly when collaboration between landowners and the                   
  amount of timber which could be included from a private                      
  landowner is included.                                                       
                                                                               
                                                                               
  Number 642                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND the                        
  AMENDMENT to CSSB 310(RES) as follows:                                       
                                                                               
  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 so as to                            
  result in a continuing yield of merchantable yield from                      
  that land.                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN said the idea is to leave the                     
  language as it is without the words "sustained yield" for                    
  private lands and leave it exactly as it is for state lands.                 
  The change will not undermine the concept of reforestation.                  
                                                                               
  CHAIRMAN WILLIAMS OBJECTED.                                                  
                                                                               
  REPRESENTATIVE FINKELSTEIN said sustained yield is defined                   
  in existing law.  He stated there has been an attempt to                     
  interpret sustained yield as not applying beyond                             
  reforestation to actual harvest limitations.  He explained                   
  continuing yield means continued regeneration.  He felt the                  
  main amendment goes beyond what is described because it                      
  takes the concept of reforestation and deletes it from the                   
  law.                                                                         
                                                                               
  TAPE 94-65, SIDE B                                                           
  Number 000                                                                   
                                                                               
  MR. BOUTIN stated existing law provides that a private                       
  landowner with 50,000 acres can log those acres, as long as                  
  reforestation occurs naturally or artificially.  Eighty                      
  years from now that private landowner could log those acres                  
  again.  He said the concern brought forth by the SCLDF brief                 
  is that the private landowner would have to take the 50,000                  
  acres, divide it by the 80 year rotation and log only                        
  1/100th of it each year.  He did not feel the law requires                   
  that, but he can understand the concern.                                     
                                                                               
  MR. BOUTIN stated Representative Finkelstein's words                         
  "continuing yield" in the amendment to the amendment might                   
  also give a private landowner the same concern.                              
                                                                               
  CHAIRMAN WILLIAMS noted continuing yield is not defined in                   
  law.                                                                         
                                                                               
  RON WOLFE, CHIEF FORESTER, KLUKWAN FOREST PRODUCTS (KFP),                    
  expressed support of SB 310.  He said in written and oral                    
  testimony, KFP has requested the amendment.  He noted the                    
  amendment says "harvested forest land shall be reforested."                  
  Existing regulation provides a very specific standard with                   
  respect to the number of seedlings per acre, per region that                 
  must exist in a well distributed manner.  The regulation                     
  also establishes a standard as to what is an acceptable                      
  seedling.  KFP feels it is very clear that the land has to                   
  be reforested.  KFP feels the reference to sustained yield                   
  is confusing and continual yield would be equally confusing.                 
                                                                               
                                                                               
  MR. WOLFE said the removal of sustained yield weakens what                   
  is viewed as a very specific standard in law.  He stressed                   
  the threat of lawsuit is what generates KFP's concern.  He                   
  stated his understanding of the FPA affords KFP, as a                        
  private landowner, certain protections against a third party                 
  lawsuit.  The threat of litigation would most likely go                      
  against the DNR commissioner rather than the private                         
  landowner, but the concept of the litigation would be such a                 
  threat to private landowners that they would have to be                      
  involved to protect their interests.                                         
                                                                               
  MR. WOLFE stated the amendment is more of a clerical matter,                 
  reducing some confusion.  He added that he participated                      
  extensively in the FPA review and he did not recall any                      
  reference to a sustained yield concept being applied to                      
  specific parcels of private land.                                            
                                                                               
  Number 068                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN felt "recurring yield" might be a                 
  better word and MODIFIED his AMENDMENT to the AMENDMENT to                   
  change the word "continual" to "recurring."                                  
                                                                               
  REPRESENTATIVE HUDSON said he looked up continue, sustain,                   
  and recur in the dictionary and all of the definitions are                   
  very similar.  He read the definitions of each.                              
                                                                               
  REPRESENTATIVE FINKELSTEIN noted there is a definition of                    
  sustained yield in law.  Legislative action was taken to                     
  change sustained yield to recurring, which ties to the                       
  concept in subsection (4) which is reforestation.                            
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote on the                          
  amendment to the amendment.  Voting in favor of the motion                   
  were REPRESENTATIVES DAVIES, CARNEY, and FINKELSTEIN.                        
  Voting against the motion were REPRESENTATIVES JAMES,                        
  HUDSON, BUNDE, MULDER, and WILLIAMS.  The MOTION FAILED 5-3.                 
                                                                               
  REPRESENTATIVE DAVIES asked if the FPA was in fact                           
  negotiated in a consensus format over a period of time.                      
                                                                               
  MR. WOLFE replied over a period of time it was primarily                     
  consensus.                                                                   
                                                                               
  REPRESENTATIVE DAVIES asked if there has been any instance                   
  where a private landowner has been sued under this section                   
  of the law.                                                                  
                                                                               
  MR. WOLFE replied not to his knowledge.  He said part of the                 
  FPA has a third party protection, meaning a private                          
  landowner cannot be sued.                                                    
                                                                               
                                                                               
  Number 150                                                                   
                                                                               
  REPRESENTATIVE DAVIES asked Mr. Wolfe's view on the effect                   
  of the words "fullest extent practicable" in Section (4).                    
  He felt when that type of phrase is used in law, it makes it                 
  difficult for someone to lose in court.                                      
                                                                               
  MR. WOLFE responded if an area is going to be artificially                   
  replanted, there is an attempt to use seed which is from an                  
  acceptable source.  He said a popular concept in forest                      
  management is using a seed which is of the same species and                  
  same geographic origin.  He stated for spruce, seed crops                    
  are not on a regular basis.  There is a periodicity of one                   
  in seven or one in five years where there is a bumper crop.                  
  He stressed the seed desirable is not always available.                      
  From a forester's perspective, if he is unable to get                        
  acceptable seed to grow seedlings, that would mean it is not                 
  practicable for him to be able to reforest.  Mr. Wolfe said                  
  KFP has invested, wherever they have harvested, efforts in                   
  trying to collect seed.                                                      
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES JAMES, CARNEY,                   
  MULDER, HUDSON, BUNDE, and WILLIAMS.  Voting against the                     
  amendment were REPRESENTATIVES DAVIES and FINKELSTEIN.  The                  
  MOTION PASSED 6-2.                                                           
                                                                               
  Number 188                                                                   
                                                                               
  REPRESENTATIVE MULDER made a MOTION to RESCIND the                           
  committee's action in adopting the following amendment to                    
  CSSB 310(RES):                                                               
                                                                               
  Page 2, line 30:                                                             
                                                                               
       Delete "shall"                                                          
                                                                               
       Insert "may"                                                            
                                                                               
  REPRESENTATIVE FINKELSTEIN OBJECTED.  He felt there was a                    
  persuasive case as to why this amendment was a good idea.                    
  He asked why the committee should change their action.                       
                                                                               
  REPRESENTATIVE MULDER stated after reviewing the amendment                   
  and visiting with the sponsor of SB 310, it was felt the                     
  amendment weakens the intent of the legislation.  He said                    
  there is no requirement there has to be FMAs but the                         
  commissioner will at least have to look at a FMA by                          
  retaining the word "shall".  He stressed if the committee is                 
  serious about the legislation and economic development and                   
  diversity, they should force the commissioner to look at the                 
  possibility of these agreements in the future.                               
                                                                               
  REPRESENTATIVE DAVIES recalled there has been a huge amount                  
  of testimony about allowing a certain amount of discretion                   
  on the commissioner's part.  He felt to force the                            
  commissioner to make a solicitation when in the                              
  commissioner's best judgment it would be a waste of the                      
  state's effort is inconsistent with the other debate on the                  
  bill.  He described several instances in the future where                    
  there is no way possible that a FMA could be granted.  He                    
  stated giving the commissioner discretion to offer a FMA in                  
  one part of the state and not necessarily in the other part                  
  of the state makes sense.                                                    
                                                                               
  REPRESENTATIVE DAVIES stated the Division of Forestry is                     
  going to offer FMAs wherever it makes sense.  With the                       
  interest in diversifying the economy, the division is going                  
  to offer FMAs whenever they can.  He felt to force them to                   
  do that, when in their judgment it does not make sense, is a                 
  waste.                                                                       
                                                                               
  REPRESENTATIVE FINKELSTEIN agreed with Representative                        
  Davies.                                                                      
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the motion were REPRESENTATIVES BUNDE, MULDER,                      
  HUDSON, JAMES, and WILLIAMS.  Voting against the motion were                 
  REPRESENTATIVES DAVIES, CARNEY, and FINKELSTEIN.  The MOTION                 
  FAILED 5-3.                                                                  
                                                                               
                                                                               
  REPRESENTATIVE MULDER made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 5, line 13:                                                             
                                                                               
       Delete "regarding"                                                      
                                                                               
       Insert "requiring"                                                      
                                                                               
  Page 5, lines 15-16:                                                         
                                                                               
       Delete "regarding compensation, if required by the                      
       department,"                                                            
                                                                               
       Insert "requiring compensation"                                         
                                                                               
  Page 5, line 23:                                                             
                                                                               
       Delete "regarding responsibilities"                                     
                                                                               
       Insert "requiring the proposer to be responsible"                       
                                                                               
  Page 5, line 28:                                                             
                                                                               
       Delete "for"                                                            
                                                                               
       Insert "requiring"                                                      
                                                                               
  Page 6, lines 5-7:                                                           
                                                                               
       Delete all material and insert:                                         
                                                                               
            "(N) provisions requiring the proposer to                          
  reforest, stabilize, monitor, and meet other residual                        
  obligations upon deactivation or termination; these                          
  provisions may include bonding;"                                             
                                                                               
  RICK SOLIE, AIDE, SENATOR STEVE FRANK, said this amendment                   
  incorporates suggestions made by the former attorney                         
  general, Charles Cole, in a letter to the House Resources                    
  Committee.  Mr. Cole suggested the language in the FMAs was                  
  permissive.                                                                  
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
                                                                               
  Number 282                                                                   
                                                                               
  REPRESENTATIVE MULDER made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 4, line 7:                                                              
                                                                               
       Delete "proposed agreement"                                             
                                                                               
       Insert "proposal"                                                       
                                                                               
  REPRESENTATIVE DAVIES OBJECTED.                                              
                                                                               
  MR. SOLIE stated this amendment is also in response to                       
  Charles Cole's concerns that the bill was not clear on                       
  financial feasibility.                                                       
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 4, lines 10-13:                                                         
                                                                               
       Delete all material and insert new subsections (6) and                  
       (7) to read:                                                            
                                                                               
            (6) economic benefits and liabilities from the                     
  proposed agreement to the region in which the land that                      
  is to be covered by the agreement is located;"                               
                                                                               
            (7) economic benefits and liabilities to the State                 
       and to the state forest land under the proposed                         
  agreement;"                                                                  
                                                                               
  REPRESENTATIVE FINKELSTEIN said when the Division of                         
  Forestry is considering factors in evaluating proposals, not                 
  only will they consider the economic benefits but as                         
  provided with this amendment, consider the liabilities as                    
  well.                                                                        
                                                                               
  REPRESENTATIVE MULDER OBJECTED.  He felt the amendment is                    
  redundant as the financial feasibility is already being                      
  considered.                                                                  
                                                                               
  REPRESENTATIVE FINKELSTEIN stated that argument would say                    
  get rid of subsections (6) and (7) completely.  He said                      
  there are risks to the state involved and gave an example.                   
  He stated this amendment is a suggestion of Charles Cole.                    
  He pointed out the state has been sued before and had to                     
  settle for millions of dollars.  Therefore, the liabilities                  
  the state might face should be considered.                                   
                                                                               
  REPRESENTATIVE DAVIES felt the financial feasibility is a                    
  much narrower factor because it addresses the agreement                      
  itself.  Economic benefits and liabilities are much broader                  
  terms and apply to other considerations.                                     
                                                                               
  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 HUDSON, MULDER, JAMES, BUNDE, and WILLIAMS.                  
  The MOTION FAILED 5-3.                                                       
                                                                               
  Number 369                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  10(RES) as follows:                                                          
                                                                               
  Page 3, lines 10-11:                                                         
                                                                               
       Delete:  "unless the evaluation under (d) indicates it                  
  is unlikely that the proposed agreement will be selected as                  
  a tentatively successful proposed agreement"                                 
                                                                               
  Page 3, line 12:                                                             
                                                                               
       Delete "30"                                                             
                                                                               
       Insert "60"                                                             
       Delete "60"                                                             
                                                                               
       Insert "120                                                             
                                                                               
  Page 5, line 1:                                                              
                                                                               
       After "government agencies"                                             
                                                                               
       Insert "and hold public hearings"                                       
                                                                               
  Page 5, line 5:                                                              
                                                                               
       After "Section,"                                                        
                                                                               
       Insert "and determining that the tentatively proposed                   
  agreement is in the best interests of the State,"                            
                                                                               
  Page 6, line 8:                                                              
                                                                               
       Delete "The"                                                            
                                                                               
       Insert "After soliciting public comment, holding public                 
  hearings, and determining that the proposed final agreement                  
  is in the best interests of the State, the"                                  
                                                                               
  Page 7, line 5:                                                              
                                                                               
       After "shall"                                                           
                                                                               
       Insert "solicit public comment, hold public hearings,"                  
                                                                               
  REPRESENTATIVE FINKELSTEIN said this amendment increases the                 
  time period for public comment.                                              
                                                                               
  REPRESENTATIVE DAVIES stated the single issue which aroused                  
  the most concern about SB 310 was the perceived attack on                    
  the ability of the public to comment.  He felt this                          
  amendment would help alleviate those concerns.                               
                                                                               
  MR. SOLIE expressed opposition to the amendment.  It is felt                 
  the amendments made in the Senate Resources Committee, which                 
  added an additional public comment period to the one                         
  initially contained in the bill, will allow for sufficient                   
  public involvement.  He said this amendment goes further                     
  than what is necessary to protect the public interest.                       
                                                                               
  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, BUNDE, MULDER, and WILLIAMS.                  
  The MOTION FAILED 5-3.                                                       
                                                                               
                                                                               
  Number 399                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 5, line 2, following "agreement.":                                      
                                                                               
       Insert "If a tentatively successful proposed agreement                  
  includes land within a municipality, the commissioner shall                  
  submit the tentatively successful proposed agreement to the                  
  municipality to determine if the agreement is consistent                     
  with municipal land use plans.  The municipality shall make                  
  a consistency determination within 60 days of receipt of the                 
  tentatively successful proposed agreement and, if the                        
  agreement is not consistent with municipal land use plans,                   
  specifically set forth the provisions of the agreement that                  
  are not consistent."                                                         
                                                                               
  Page 5, following line 8:                                                    
                                                                               
       Insert a new paragraph to read:                                         
                                                                               
            "(2) must be consistent to the maximum extent                      
  practicable with municipal land use plans if the agreement                   
  includes land within a municipality;"                                        
                                                                               
  Renumber the following paragraph accordingly.                                
                                                                               
  REPRESENTATIVE FINKELSTEIN said this amendment requires FMAs                 
  to be consistent with municipal land use plans.  He stated                   
  this is another issue which was brought forward in public                    
  testimony.                                                                   
                                                                               
  REPRESENTATIVE MULDER OBJECTED                                               
                                                                               
  REPRESENTATIVE DAVIES expressed support for the amendment.                   
  He recently went through an extremely unnecessary set of                     
  objections to proposed actions in his area which resulted                    
  from the state taking action without consideration for local                 
  laws first.  He felt this type of consistency check will                     
  smooth the process and keep the state from local hearings                    
  that get at odds with what the state action is.                              
                                                                               
  MR. SOLIE expressed opposition to the amendment.                             
                                                                               
  MR. BOUTIN expressed two concerns with the amendment.  He                    
  felt sooner or later the land use plan process would become                  
  a referendum on the FMA and would be the overriding feature                  
  in consideration.  Second, he said the Kenai Peninsula                       
  Borough has no timber sale program but recently by ordinance                 
  did require 300 foot buffer strips on streams on timber                      
  sales based on no scientific evidence.  He expressed concern                 
  that a FMA might be constrained by some similar requirement.                 
                                                                               
  REPRESENTATIVE FINKELSTEIN stated there is nothing which                     
  would prevent a municipality from putting a buffer strip in                  
  place anytime they wanted, regardless of this amendment.  He                 
  said a municipality can restrict activities within its land.                 
                                                                               
                                                                               
  REPRESENTATIVE DAVIES agreed and said municipalities have                    
  the ability to zone.  He felt it makes more sense to have                    
  the state coordinating with municipalities rather than                       
  getting into positions where a state agency is suggesting                    
  one thing and the municipality is suggesting another.                        
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES HUDSON, DAVIES,                  
  CARNEY, and FINKELSTEIN.  Voting against the amendment were                  
  REPRESENTATIVES MULDER, JAMES, BUNDE, and WILLIAMS.  The                     
  MOTION FAILED 4-4.                                                           
                                                                               
                                                                               
  Number 490                                                                   
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 4, line 31:                                                             
                                                                               
       After "agreement."                                                      
                                                                               
       Insert "The commissioner shall conduct a competitive                    
  bidding procedure in order to determine the highest                          
  qualified bidder for the proposed agreement; in addition to                  
  the bid price, the commissioner shall consider the value of                  
  the area for the long-term production of timber, the extent                  
  that local hire will be increased, the intent of the bidder                  
  to process a value added product within the State of Alaska,                 
  and the experience of the bidder in the forest products                      
  industry.                                                                    
                                                                               
  REPRESENTATIVE FINKELSTEIN said the amendment sets up a                      
  procedure that once a FMA proposal is submitted, bidding                     
  will not involve just the price, but also a variety of other                 
  considerations including the bidders intent to process                       
  within the state.                                                            
                                                                               
  REPRESENTATIVE MULDER OBJECTED.  He asked the sponsor's                      
  representative to speak to the value of competitive bidding.                 
  He thought the value of local hire and value-added were                      
  included in amendments adopted previously.                                   
                                                                               
  MR. SOLIE expressed opposition to the amendment.  He said                    
  in-state processing language was adopted previously.  He                     
  stated this amendment goes in a different direction.  It is                  
  felt that a negotiated agreement with a FMA is the best way                  
  to achieve the in-state processing and local hire.                           
                                                                               
  REPRESENTATIVE HUDSON felt there is considerable value in                    
  setting up intent language and he thought someone                            
  representing the state's interest was going to come back                     
  with that language.  He said if the committee does not like                  
  the competitive bidding procedure, then the committee should                 
  consider adopting the second sentence of the amendment.                      
                                                                               
  REPRESENTATIVE JAMES felt this amendment, as written, would                  
  set the state up for a challenge on constitutionality.  She                  
  did not think the state can enter into a competitive bidding                 
  process containing these stipulations.  She said the value                   
  of the area for long-term production of timber is included                   
  in the economic and feasibility considerations.  She                         
  stressed this amendment will make all FMAs unconstitutional.                 
                                                                               
  REPRESENTATIVE HUDSON made a MOTION to AMEND the AMENDMENT                   
  to CSSB 310(RES) as follows:                                                 
                                                                               
       Delete "The commissioner shall conduct a competitive                    
  bidding procedure in order to determine the highest                          
  qualified bidder for the proposed agreement; in addition to                  
  the bid price,                                                               
                                                                               
       The amendment would then read:                                          
                                                                               
  Page 4, line 31, after "agreement." insert:                                  
                                                                               
       "The commissioner shall consider the value of the area                  
  for the long-term production of timber, the extent that                      
  local hire will be increased, the intent of the bidder to                    
  process a value-added product within the State of Alaska,                    
  and the experience of the bidder in the forest products                      
  industry."                                                                   
                                                                               
  REPRESENTATIVE HUDSON stated this amendment to the amendment                 
  enhances the bill by setting up intent language but does not                 
  force the state to go into a competitive bidding process.                    
                                                                               
  MR. GATES expressed support to the amendment to the                          
  amendment.  He said the intent language would help focus                     
  FMAs on items of long-standing interest to the state in                      
  terms of value-added production of the state's timber                        
  resources and in-state local hire.                                           
                                                                               
                                                                               
  REPRESENTATIVE FINKELSTEIN said although he prefers the                      
  entire amendment, he will consider the amendment to the                      
  amendment as a friendly amendment.                                           
                                                                               
  REPRESENTATIVE MULDER questioned whether this is the                         
  appropriate location in the bill for the amendment.                          
                                                                               
  REPRESENTATIVE FINKELSTEIN MODIFIED his AMENDMENT to add:                    
  Location of the amendment is uncertain and is left to the                    
  bill drafter.                                                                
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  amended amendment.  Hearing none, the AMENDED AMENDMENT was                  
  ADOPTED.                                                                     
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 7, line 4, after "(1)":                                                 
                                                                               
       Insert "The commissioner shall strictly enforce the                     
  provisions of the final agreement.  The commissioner shall                   
  perform an annual review of the operator's performance under                 
  the agreement."                                                              
                                                                               
  REPRESENTATIVE FINKELSTEIN stated this amendment comes from                  
  his experience in watching the bigger projects which states                  
  have had problems with.  He said one of the ways to avoid                    
  problems is to ensure there are strict enforcement                           
  provisions and annual reviews so the problems get addressed.                 
                                                                               
                                                                               
  REPRESENTATIVE MULDER OBJECTED.  He felt the amendment was                   
  redundant because a similar amendment was defeated                           
  previously.                                                                  
                                                                               
  REPRESENTATIVE JAMES made a MOTION to AMEND the AMENDMENT to                 
  CSSB 310(RES) deleting the entire second sentence.                           
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  amended amendment.  Hearing none, the AMENDED AMENDMENT was                  
  ADOPTED.                                                                     
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 5, line 13:                                                             
                                                                               
       Delete "regarding compensation from the proposer"                       
       Insert "requiring the proposer to compensate the state                  
  for full costs incurred"                                                     
                                                                               
  Page 5, lines 15-16:                                                         
                                                                               
       Delete all material and                                                 
                                                                               
       Insert "(D) provisions requiring the proposer to pay                    
  the state's cost of administering, monitoring, and enforcing                 
  the terms and conditions of the agreement and other                          
  requirements of state law;"                                                  
                                                                               
  Page 5, line 17:                                                             
                                                                               
       Delete "regarding responsibilities for"                                 
                                                                               
       Insert "making the proposer responsible for all costs                   
  of"                                                                          
                                                                               
  Page 5, line 22, following "agreement;":                                     
                                                                               
       Insert "provisions under this paragraph must provide                    
  that the proposer shall pay fair market value for all                        
  material purchased from the state;"                                          
                                                                               
  REPRESENTATIVE FINKELSTEIN said there has been discussion                    
  about the costs the FMA operator should be responsible for.                  
  He stressed at a minimum, the costs to the state should be                   
  paid so the state cannot be accused of engaging in something                 
  which is actually losing money from the state.                               
                                                                               
  REPRESENTATIVE MULDER OBJECTED.  He said total costs are                     
  very ill-defined.                                                            
                                                                               
  REPRESENTATIVE FINKELSTEIN disagreed.  He pointed out that                   
  later in the amendment those costs are outlined.                             
                                                                               
  REPRESENTATIVE HUDSON felt this issue has been addressed by                  
  the adoption of amendment X39 and the last amendment.                        
                                                                               
  TAPE 94-66, SIDE A                                                           
  Number 000                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN said this amendment goes a little                 
  further and says the state's full costs.                                     
                                                                               
  REPRESENTATIVE JAMES stated she has no problem with the                      
  second and fourth parts of the amendment.                                    
                                                                               
  REPRESENTATIVE JAMES made a MOTION to AMEND the AMENDMENT as                 
  follows:                                                                     
                                                                               
       Delete:                                                                 
                                                                               
            Page, 5, line 13:                                                  
                                                                               
                 Delete "regarding compensation from the                       
                 proposer"                                                     
                                                                               
                 Insert "requiring the proposer to compensate                  
                 the state for full costs incurred"                            
                                                                               
            Page 5, line 17:                                                   
                 Delete "regarding responsibilities for"                       
                                                                               
                 Insert "making the proposer responsible for                   
                 all costs of"                                                 
                                                                               
  REPRESENTATIVE WILLIAMS OBJECTED.                                            
                                                                               
  MR. SOLIE stated the sponsor opposes the amended amendment                   
  because there has been no review of it.                                      
                                                                               
  REPRESENTATIVE FINKELSTEIN stated the proposed amended                       
  amendment only accomplishes two things.  It says for the                     
  materials purchased, the fair market value has to be paid                    
  and second, those direct costs which come from                               
  administering, monitoring, and enforcing the terms and                       
  conditions of the agreement... must be paid.                                 
                                                                               
  REPRESENTATIVE FINKELSTEIN WITHDREW his MOTION on the                        
  original amendment.                                                          
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES DAVIES,                          
  FINKELSTEIN, HUDSON, and CARNEY.  Voting against the                         
  amendment were REPRESENTATIVES MULDER, JAMES, BUNDE, and                     
  WILLIAMS.  The MOTION FAILED 4-4.                                            
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 1, line 4, through page 2, line 21:                                     
                                                                               
       Delete all material                                                     
                                                                               
  Page 2, line 22:                                                             
                                                                               
       Delete "*Sec. 3."                                                       
                                                                               
       Insert "*Section 1."                                                    
                                                                               
  Page 7, line 18, through page 8, line 23:                                    
                                                                               
       Delete all material.                                                    
                                                                               
  REPRESENTATIVE FINKELSTEIN stated this amendment deletes the                 
  portions of the bill which do not relate to FMAs.                            
                                                                               
  REPRESENTATIVE MULDER OBJECTED.                                              
                                                                               
  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, BUNDE, JAMES, HUDSON, and WILLIAMS.                  
  The MOTION FAILED 5-3.                                                       
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  310(RES) as follows:                                                         
                                                                               
  Page 8, lines 8-15:                                                          
                                                                               
       Delete all material.                                                    
                                                                               
  Renumber the following bill section accordingly.                             
  REPRESENTATIVE FINKELSTEIN felt this section has not                         
  received the attention it deserves.  He did not think it is                  
  appropriate to change the purpose of state forests                           
  retroactively since there were discussions each time the                     
  state forests were established as to what their purpose was.                 
                                                                               
                                                                               
  REPRESENTATIVE MULDER OBJECTED.                                              
                                                                               
  REPRESENTATIVE DAVIES expressed support for the amendment.                   
  He felt changing the state forest purposes is not necessary                  
  for FMAs.                                                                    
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES DAVIES,                          
  FINKELSTEIN, and CARNEY.  Voting against the amendment were                  
  REPRESENTATIVES HUDSON, BUNDE, MULDER, JAMES, and WILLIAMS.                  
  The MOTION FAILED 5-3.                                                       
                                                                               
  Number 073                                                                   
                                                                               
  REPRESENTATIVE MULDER made a MOTION to MOVE CSSB 310(RES),                   
  as amended, with accompanying fiscal notes, out of committee                 
  with INDIVIDUAL RECOMMENDATIONS.                                             
                                                                               
  REPRESENTATIVE DAVIES OBJECTED.  He stated he has another                    
  motion to offer.                                                             
                                                                               
  REPRESENTATIVE MULDER WITHDREW his MOTION.                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to RESCIND the                           
  committee's action in failing to adopt amendment X35.                        
                                                                               
  REPRESENTATIVE DAVIES said he has a series of petitions from                 
  around the state saying the amendment should be adopted.                     
                                                                               
  REPRESENTATIVE MULDER OBJECTED.                                              
                                                                               
  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 BUNDE, MULDER, JAMES, HUDSON, and WILLIAMS.                  
  The MOTION FAILED 5-3.                                                       
                                                                               
  REPRESENTATIVE MULDER made a MOTION to MOVE CSSB 310(RES),                   
  as amended, with accompanying fiscal notes, out of committee                 
  with INDIVIDUAL RECOMMENDATIONS.                                             
                                                                               
  REPRESENTATIVES FINKELSTEIN and DAVIES OBJECTED.                             
                                                                               
  REPRESENTATIVE FINKELSTEIN felt there is a way to do FMAs                    
  and to get public and legislative support but with the time                  
  available, that support cannot occur.                                        
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the motion were REPRESENTATIVE JAMES, HUDSON,                       
  BUNDE, MULDER, and WILLIAMS.  Voting against the motion were                 
  REPRESENTATIVES CARNEY, DAVIES, and FINKELSTEIN.  The MOTION                 
  PASSED 5-3.                                                                  
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  There being no further business to come before the House                     
  Resources Committee, Chairman Williams adjourned the meeting                 
  at 10:20 a.m.                                                                
                                                                               

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