Legislature(2011 - 2012)BUTROVICH 205

02/07/2011 03:30 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 24 SPORT FISHING GUIDES: BOARD; LICENSES TELECONFERENCED
Heard & Held
Presentation by Bill Sponsor
(public comment at a later date)
*+ SB 44 SOUTHEAST STATE FOREST TELECONFERENCED
Heard & Held
Presentation and Public Comment
                 SB  44-SOUTHEAST STATE FOREST                                                                              
                                                                                                                                
4:14:28 PM                                                                                                                    
CO-CHAIR WAGONER announced  the consideration of SB  44 and asked                                                               
for a motion to bring the bill before the committee.                                                                            
                                                                                                                                
SENATOR STEDMAN  moved to  bring SB 44  before the  committee for                                                               
discussion purposes. There were no objections.                                                                                  
                                                                                                                                
4:15:34 PM                                                                                                                    
CHRIS MAISCH, State Forester and  Director, Division of Forestry,                                                               
Department of Natural Resources, supported  SB 44. He stated that                                                               
SB  44  is an  effort  to  ensure  that local  timber  processing                                                               
continues  to be  part of  the economy  in Southeast  Alaska. The                                                               
majority of timber in southern  Southeast is on federal land, but                                                               
because federal  timber sales  have declined  dramatically, local                                                               
mills now  depend heavily  on state  timber for  survival. Demand                                                               
for Southeast  timber to supply  wood energy is  also increasing,                                                               
further raising the importance of  securing a timber base in this                                                               
region. For  example, Sealaska  Corporation recently  installed a                                                               
wood pellet boiler at their headquarters in Juneau.                                                                             
                                                                                                                                
He  explained  that  last  year   the  legislature  passed  SCSHB                                                               
162(RES) that established the  25,291-acre Southeast State Forest                                                               
that  will be  managed as  an  integrated unit  and according  to                                                               
state  forest management  plans. SB  44 would  add an  additional                                                               
23,181 acres  of state lands  to the Southeast State  Forest from                                                               
state lands currently available  for timber harvest. The Division                                                               
of  Forestry  would  then  be  able to  manage  48,472  acres  of                                                               
Southeast State  Forest lands for  a long-term timber  supply and                                                               
retain  these lands  in state  ownership for  multiple uses.  The                                                               
2009 forest inventory supports this request.                                                                                    
                                                                                                                                
MR. MAISCH  said that the  Department of Natural  Resources (DNR)                                                               
manages  over 159,000  acres of  uplands  in southern  Southeast.                                                               
Timber management is allowed on  about one-third of this land and                                                               
it is  actively managed to  supply wood to local  processors. The                                                               
remaining  land   is  designated  primarily  for   other  uses  -                                                               
including land  sales, recreation, water resources,  and fish and                                                               
wildlife habitat.  Over 25,000 acres is  legislatively designated                                                               
as state parks, refuges, and public use areas.                                                                                  
                                                                                                                                
Much  of the  state-owned timber  in Southeast  is second  growth                                                               
timber that,  if actively  managed, can  provide more  volume per                                                               
acre  on  shorter  rotations  and can  result  in  improved  deer                                                               
browse. Thinning is a long-term  investment and is only justified                                                               
if the land  will continue to be available  for forest management                                                               
activities.                                                                                                                     
                                                                                                                                
The  proposed 23-parcel  addition  to the  State Forest  includes                                                               
general use  lands totaling approximately 23,100  acres on Prince                                                               
of  Wales,   Tuxekan,  Gravina,  Kosciusko,   Revilla,  Wrangell,                                                               
Suemez, Mitkof,  Kuiu, Dall,  and Zarembo  Islands. Six  of these                                                               
parcels are  adjacent to or  near existing state  forest parcels.                                                               
The  Division of  Forestry worked  with the  Division of  Mining,                                                               
Land, and  Water (DML&W) to  identify and exclude lands  that are                                                               
priorities for the state land disposal program.                                                                                 
                                                                                                                                
Consultation  was also  initiated with  the University  of Alaska                                                               
Office  of  Statewide  Land   Management  and  senior  University                                                               
officials. A  key difference between  a state  forest designation                                                               
and a  transfer of lands  as proposed by previous  legislation is                                                               
the  continued  long-term  public  ownership of  these  lands  as                                                               
opposed to other development uses.                                                                                              
                                                                                                                                
MR.  MAISCH said  the  division also  consulted  with the  Alaska                                                               
Department of Fish and Game  (ADF&G) to ensure there was internal                                                               
alignment on the list of proposed parcels - and there is.                                                                       
                                                                                                                                
Fish habitat and  water quality are key components  of the Forest                                                               
Resources and Practices  Act (FRPA), he said, which  have a suite                                                               
of regulations that would apply  to managements of these parcels.                                                               
There is a  no-cut 100-foot minimum width on  both anadromous and                                                               
high-value  resident fish  streams.  The next  100-300 foot  zone                                                               
allows  timber  harvest  if  it   maintains  important  fish  and                                                               
wildlife habitat. In  addition, area plans also  provide for 300-                                                               
500  foot coastal  buffers  with  additional recommendations  for                                                               
specific parcels.                                                                                                               
                                                                                                                                
When  the  Forest  Management  Plan  was  developed,  Mr.  Maisch                                                               
explained, a  key consideration for  the Neets Bay parcel  was to                                                               
maintain water quality and quantity  for the fish hatchery at the                                                               
head  of the  bay. Dialog  with the  Southern Southeast  Regional                                                               
Aquaculture Association (SSRAA) is ongoing concerning this bill.                                                                
                                                                                                                                
The Southeast State Forest would be  managed as part of the State                                                               
Forest  System   set  forth  in  AS   41.17.200-.230.  Subsection                                                               
41.17.200(a) reads in part:                                                                                                     
                                                                                                                                
     The  primary  purpose  in the  establishment  of  state                                                                    
     forests  is timber  management  that  provides for  the                                                                    
     production,  utilization, and  replenishment of  timber                                                                    
     resources while  allowing for other beneficial  uses of                                                                    
     public land and resources.                                                                                                 
                                                                                                                                
MR. MAISCH said  in addition to timber  management, State Forests                                                               
are  open  to  multiple  uses   including  wildlife  habitat  and                                                               
harvest, mining,  transportation, recreation, and  tourism. State                                                               
Forest  lands would  be managed  consistent  with the  management                                                               
intent  under the  current  Prince of  Wales  Island and  Central                                                               
Southeast  area plans,  which have  both  been recently  updated.                                                               
Changes   in  management   intent   would   require  public   and                                                               
interagency review through adoption  of a state forest management                                                               
plan under AS 41.17.230.                                                                                                        
                                                                                                                                
He  said one  of  the other  demands on  state  land in  southern                                                               
Southeast   is    to   fulfill   land   entitlements    for   new                                                               
municipalities.  To  avoid  conflict with  the  Wrangell  Borough                                                               
entitlement,  the bill  specifies that  the new  Wrangell Borough                                                               
may select  state forest land  from within the  borough boundary.                                                               
This  boundary encompasses  three parcels  in the  existing state                                                               
forest -  Crittenden Creek,  Bradfield Canal  East and  West, and                                                               
four parcels  in the  proposed additions  - the  Eastern Passage,                                                               
Pat Creek, Pat Creek Uplands and Earl West Cove.                                                                                
                                                                                                                                
If  additional municipalities  are incorporated  before June  30,                                                               
2019, land that was vacant,  unappropriated, or unreserved before                                                               
the  state  forest  was  established would  be  included  in  the                                                               
calculation of the municipal entitlement  acreage, but may not be                                                               
selected. So,  there is one  key difference between  the Wrangell                                                               
exception and others:  Wrangell can select from  lands within the                                                               
State  Forest and  others cannot,  but it  wouldn't affect  their                                                               
total calculation for entitlement.                                                                                              
                                                                                                                                
MR. MAISCH said  DNR has briefed many  statewide groups including                                                               
the Board  of Forestry,  Southeast Conference,  local governments                                                               
and  the  diverse groups  participating  in  the Tongass  Futures                                                               
Round  Table process,  and these  discussions  will continue.  To                                                               
date the City of Coffman  Cove, the Resource Development Council,                                                               
the  Alaska Forest  Association, and  the Alaska  Chapter of  the                                                               
Society of American  Foresters have sent letters  of support, and                                                               
the Southeast Conference passed a supporting resolution.                                                                        
                                                                                                                                
4:25:06 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if he foresees additional requests.                                                                  
                                                                                                                                
MR. MAISCH  replied that  he believes this  23,000 acres  will be                                                               
the last  increment, mainly because  this would add-in  the lands                                                               
that have  been identified through  the area planning  process as                                                               
"GUNs" and have forest management intent as their key purpose.                                                                  
                                                                                                                                
SENATOR WIELECHOWSKI  noted that  AS 41.17.210 says  the governor                                                               
"must include  a report and  recommendations that  include, among                                                               
other things, an  estimate of the full cost  of implementation of                                                               
an  operational forest  inventory and  management plan."  He said                                                               
none of  this was  in the legislation  creating the  State Forest                                                               
last year. The Governor's transmittal  letter said that this will                                                               
enable  management  to  "increase  long-term  timber  supply...to                                                               
provide  near-term  jobs  and  pre-commercial  thinning."  So  it                                                               
sounds like  there will  be some  need for  money and  the fiscal                                                               
note doesn't say that.                                                                                                          
                                                                                                                                
MR. MAISCH  replied because of  the area planning  process, these                                                               
lands have been identified for  forest management for many years,                                                               
so the  division has already  been managing these lands  for that                                                               
purpose.  They   updated  the  forest  inventory   in  2009  that                                                               
establishes the  allowable cut for  these lands and  actually had                                                               
to  reduce  it  based  on   better  inventory  information.  That                                                               
particular inventory  was funded  with a CIP  to the  Division of                                                               
Forestry.  The  fiscal  note  is zero,  he  said,  because  their                                                               
ongoing work is  already funded to do  forest management planning                                                               
activities; the division  already has a forest  planner and staff                                                               
that would do  the work. They already have funding  for some pre-                                                               
commercial  thinning   activity  and   for  running   the  timber                                                               
management programs they already have  in place in Southeast. The                                                               
key difference is this bill allows them to do aggressive pre-                                                                   
commercial  thinning on  young growth  stands so  that production                                                               
will be doubled on the same  acreage of land in the future. Right                                                               
now the allowable cut is 8.5 million board feet.                                                                                
                                                                                                                                
4:28:35 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if the plan  is to work on  the young                                                               
growth,  why are  52 percent  of  the selected  acres old  growth                                                               
forest. Will you harvest that?                                                                                                  
                                                                                                                                
MR. MAISCH  answered yes; the  old growth will be  harvested over                                                               
time as part of the allowable calculation.                                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI asked how much  of the old growth is planned                                                               
to be harvested.                                                                                                                
                                                                                                                                
MR. MAISCH answered that some will  depend on the location of the                                                               
stands and  economic conditions.  Their current  8.5-million foot                                                               
allowable cut is managed on a  "decadal" basis. In any given year                                                               
they can be below or above  that 10-year average, but over the 10                                                               
year period  they have to  be at the  same level of  harvest. For                                                               
example, when  USFS sales were  cut drastically a few  years ago,                                                               
he started  a "bridge  timber program"  consisting of  trees that                                                               
hadn't been  cut to the  maximum each year. Klawock's  Viking Saw                                                               
Mill  continued to  operate  on  this basis.  Over  time, a  good                                                               
percentage  of the  old growth  timber will  be harvested  on the                                                               
State Forest land.                                                                                                              
                                                                                                                                
4:30:48 PM                                                                                                                    
SENATOR WIELECHOWSKI  said Hook  Arm is 595  acres, 590  of which                                                               
are old  growth; and Rowan  Bay has 402  acres, 390 of  which are                                                               
old  growth and  12 are  muskeg. It  looks like  that is  all old                                                               
growth that will be harvested.                                                                                                  
                                                                                                                                
MR.  MAISCH replied  yes;  but  they won't  know  what the  final                                                               
harvest  acreage will  be  until a  site-specific  plan is  done.                                                               
Their  planning  process requires  having  sales  on a  five-year                                                               
schedule, which is reviewed by  both the industry and the public.                                                               
Then they  have to write  a forest land use  plan that is  a site                                                               
specific plan  for the  timber sale.  That is  when they  look at                                                               
economics, roading,  and access in  a much more  detailed manner.                                                               
So,  he  didn't know  for  sure  if  the  full acreage  would  be                                                               
harvested of  those two, but  more than likely a  full percentage                                                               
will be.                                                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI asked  if he knew what mill  this old growth                                                               
timber on  Hook Arm  and Rowan  Bay would be  going to.  Does DNR                                                               
anticipate selling this old growth  only as a negotiated sale for                                                               
local manufacture or  could it be sold to the  highest bidder and                                                               
exported in the round?                                                                                                          
                                                                                                                                
MR.  MAISCH replied  that  more than  likely it  would  go to  an                                                               
exporter because of the location  of the sales. He explained that                                                               
the southern  Southeast timber industry  has two  components; one                                                               
is local  manufacture with  mills both  mid-size and  very small,                                                               
and  the other  is round-log  export. He  explained that  the two                                                               
work together. The export log is  two to three times the value of                                                               
a domestic log.                                                                                                                 
                                                                                                                                
He said  it has long  been the policy of  the State of  Alaska to                                                               
try and  support domestic manufacture. The  state cannot actually                                                               
restrict round log  export or have a  primary-manufacture rule on                                                               
the books (which was  tried in the late 70s and  went all the way                                                               
to  the Supreme  Court resulting  in  a decision  that the  state                                                               
cannot regulate interstate trade).  Instead, policies were put in                                                               
place  that  encourage  high value-added  manufacturing  whenever                                                               
possible. But when  the purchaser purchases these  logs for these                                                               
small businesses, it  helps their cash flow to be  able to market                                                               
the log  to its highest and  best use. So, sometimes  some of the                                                               
logs  they purchase  will be  sold as  round logs  and go  to the                                                               
marketplace which  could be  the US West  Coast, China  or Japan.                                                               
They get  charged for an  export price if  they do that,  but the                                                               
domestic price is  much lower. He said  another Southeast company                                                               
primarily does  round log  export, but they  trade some  of their                                                               
logs to domestic manufacturers, so  "there's very much a give and                                                               
take going on in the log market."                                                                                               
                                                                                                                                
4:34:55 PM                                                                                                                    
CO-CHAIR  PASKVAN  noted the  letter  from  the Southeast  Alaska                                                               
Conservation  Council (SEACC)  expressing concern  with the  bill                                                               
and offering what they think is a more balanced approach.                                                                       
                                                                                                                                
MR. MAISCH responded that he had  seen the letter and is aware of                                                               
most of the  issues it raises. He tried to  address some of those                                                               
in his  testimony. He explained  that the  state is a  very small                                                               
land  owner   in  Southeast  Alaska;  it's   98  percent  federal                                                               
ownership. The federal government has  set aside large amounts of                                                               
land in  wilderness areas,  parks and  other reserves  that allow                                                               
very   little  other   types  of   multiple  uses   for  resource                                                               
development.  The state  is trying  to keep  the timber  industry                                                               
alive in Southeast with a limited amount of resources.                                                                          
                                                                                                                                
CO-CHAIR WAGONER  asked how  many acres  the US  government holds                                                               
title to in Southeast Alaska that is harvestable forest lands.                                                                  
                                                                                                                                
MR. MAISCH replied  the 2009 Tongass Land  Management Plan allows                                                               
commercial development  to take  place on under  1-million acres.                                                               
The  Tongass  is  98  percent   of  southern  Southeast  and  the                                                               
allowable cut  is 260  million feet. The  plan has  three phases;                                                               
the state  is in  phase 1 now,  and that should  allow up  to 100                                                               
million feet  to be  harvested annually. The  feds sold  under 12                                                               
million  feet in  their worst  year. He  remarked that  the state                                                               
sold more than  they did off of  less than 2 percent  of the land                                                               
base.                                                                                                                           
                                                                                                                                
SENATOR WAGONER  asked how old  most of the second  growth timber                                                               
is.                                                                                                                             
                                                                                                                                
MR. MAISCH replied it varies, 25-30  years, which is still a ways                                                               
from being mature enough to  harvest. Pre-commercial activity can                                                               
be done by the time timber  reaches 15-20 years old. The rotation                                                               
ages  for the  timber right  now are  100 years  and that  can be                                                               
shortened  to 60  years  on  very good  sites,  but  80 years  is                                                               
probably a more  accurate number to use for second  growth in the                                                               
future.                                                                                                                         
                                                                                                                                
CO-CHAIR WAGONER asked  if anyone is putting in a  pellet mill in                                                               
Southeast.                                                                                                                      
                                                                                                                                
MR. MAISCH answered  no; some people have  discussed the concept,                                                               
but the  biggest issue is a  stable timber supply and  until that                                                               
changes,  it's unlikely  anyone  would make  the investment  that                                                               
would need to be made to  build a new wood production facility in                                                               
Southeast.                                                                                                                      
                                                                                                                                
4:39:27 PM                                                                                                                    
SENATOR  STEDMAN stated  that  in Southeast  it's  also a  demand                                                               
issue,  and  the  transportation  corridor  is  rather  difficult                                                               
because  of the  water  and  mountains. He  asked  Mr. Maisch  to                                                               
explain the allowable cut going into perpetuity.                                                                                
                                                                                                                                
MR. MAISCH replied that currently  the allowable cut is about 8.5                                                               
million  feet. Prior  to the  inventory update,  it was  about 13                                                               
million feet. As  they convert over to a  young growth management                                                               
on these  lands, the volume  will approximately double  or triple                                                               
depending on the site. At some  point in the future the allowable                                                               
cut will be 60 million feet  off the same acreage. That timeframe                                                               
is 30-40  years out, and will  depend on how fast  the old growth                                                               
is converted to young growth.                                                                                                   
                                                                                                                                
SENATOR STEDMAN  recalled that Viking  is about 35  million board                                                               
feet a year.                                                                                                                    
                                                                                                                                
MR.  MAISCH replied  that  Viking Lumber  runs  about 20  million                                                               
board feet  a ship, so  they can run up  to a 3-ship  basis. They                                                               
haven't done  that for  many years because  of supply.  Viking is                                                               
the mill they helped supply bridge timber to.                                                                                   
                                                                                                                                
4:41:04 PM                                                                                                                    
SENATOR STEDMAN said that's the only mill left in Southeast.                                                                    
                                                                                                                                
MR. MAISCH agreed.                                                                                                              
                                                                                                                                
SENATOR STEDMAN  stated in the scheme  of things, this is  a very                                                               
small  land  expansion  and  the  amount of  fiber  that  can  be                                                               
produced off it  is miniscule. And in particular,  if the federal                                                               
forest continues to  be shut down, this amount of  volume off the                                                               
State Forest will keep extremely  small mills running, but that's                                                               
all.                                                                                                                            
                                                                                                                                
4:42:26 PM                                                                                                                    
MR. MAISCH agreed;  it would be difficult to support  a mill like                                                               
Viking just off of state land.                                                                                                  
                                                                                                                                
SENATOR  STEDMAN asked  him to  expand  on the  impact to  really                                                               
small mills if they decide to enlarge the state forest.                                                                         
                                                                                                                                
4:43:26 PM                                                                                                                    
MR. MAISCH  answered that right  now small mills can  be supplied                                                               
volumes  in various  places in  southern  and northern  Southeast                                                               
Alaska. Some of the small mills  don't need a lot, maybe a couple                                                               
dozen trees. The US Forest Service  actually has a good small log                                                               
program where they  can actually provide small  amounts of volume                                                               
to  small  saw mills,  too.  Some  of  these are  very  specially                                                               
oriented  mills that  use high-grade  spruce or  cedar for  other                                                               
value-added  products like  sound  boards for  pianos and  guitar                                                               
stock.  Small  mills  produce   locally-used  products  that  are                                                               
typically  not exported.  The best  example is  Icy Straits  that                                                               
produces very high-quality  log cabins out of cedar.  The cost of                                                               
transportation is the largest impediment.                                                                                       
                                                                                                                                
4:46:29 PM                                                                                                                    
CO-CHAIR  WAGONER  announced   that  SB  44  would   be  held  in                                                               
committee. There  being no  further business  to come  before the                                                               
committee, Co-Chair Wagoner adjourned the meeting at 4:46 p.m.                                                                  

Document Name Date/Time Subjects
SB 24_Sponsor Statement.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Bill_Version A.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Sectional Analysis Version A.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_ Back-Up_Guide Requirements - Compare Sheet.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Back-Up_Sportfish Program Summary.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Letter of Support_KRSA.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Letter of Support_Kenai River Professional Guides.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB44_Hearing Request SRES.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Stevens SESF Transmittal.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Bill_Version A.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Back-Up_Public Briefing by Div of Forestry.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Back-Up_Parcel Maps SESF.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Back-Up_Vicinity Map SE State Forest.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_AFA.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_RDC.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter_SEACC.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_SAF.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_Coffman Cove.pdf SRES 2/7/2011 3:30:00 PM
SB 44
NEW 2-6-11_SB44_Fiscal Note DNR.pdf SRES 2/7/2011 3:30:00 PM
SB 44
NEW_2-7-2011_SB 24_Back-Up_Leg Research Report Licenses and Occupations.pdf SRES 2/7/2011 3:30:00 PM
SB 24
NEW_2-7-11_SB 24 Fiscal Note_ADF&G.pdf SRES 2/7/2011 3:30:00 PM
SB 24