Legislature(1993 - 1994)
04/15/1994 08:15 AM House RES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
April 15, 1994
8:15 a.m.
MEMBERS PRESENT
Representative Bill Williams, Chairman
Representative Bill Hudson, Vice Chairman
Representative Con Bunde
Representative Pat Carney
Representative John Davies
Representative David Finkelstein
Representative Joe Green
Representative Jeannette James
Representative Eldon Mulder
MEMBERS ABSENT
None
OTHER LEGISLATORS PRESENT
Senator Steve Frank
COMMITTEE CALENDAR
SB 310: "An Act relating to the management and sale of
state timber and relating to the administration of
forest land."
HEARD AND HELD FOR FURTHER CONSIDERATION
WITNESS REGISTER
SENATOR STEVE FRANK
Alaska State Legislature
State Capitol, Room 518
Juneau, Alaska 99801-1182
Phone: 465-3709
POSITION STATEMENT: Prime Sponsor SB 310
TOM BOUTIN, Director
Division of Forestry
Department of Natural Resources
400 Willoughby Ave.
Juneau, Alaska 99801-1724
Phone: 465-2491
POSITION STATEMENT: Supported SB 310 and answered questions
ELLEN FRITTS, Deputy Director
Division of Habitat and Restoration
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99802-5526
Phone: 465-4105
POSITION STATEMENT: Answered questions
GERON BRUCE, Legislative Liaison
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99802-5526
Phone: 465-6143
POSITION STATEMENT: Answered questions
ALBERT PAGH
Four Star Lumber Company
2849 Parks Highway
Fairbanks, Alaska 99709
Phone: 479-6643
POSITION STATEMENT: Supported concept of SB 310
MARICKE BARNES
517 Revilla
Ketchikan, Alaska 99901
Phone: 247-1275
POSITION STATEMENT: Supported SB 310
TROY REINHART, Executive Director
Alaska Forest Association
111 Stedman, #200
Ketchikan, Alaska 99901
Phone: 225-6114
POSITION STATEMENT: Supported SB 310
ROBERT DENNEY
Talkeetna, Alaska 99676
POSITION STATEMENT: Opposed SB 310
ROBERTA SHELDON
Talkeetna, Alaska 99676
POSITION STATEMENT: Opposed SB 310
ED SHARP
Lake Creek Lodge, Alaska
Phone: 733-2051
POSITION STATEMENT: Opposed SB 310
PREVIOUS ACTION
BILL: SB 310
SHORT TITLE: STATE/PRIVATE/MUNI TIMBER OPERATION/SALE
SPONSOR(S): SENATOR(S) FRANK,Taylor,Pearce,
Sharp,Miller,Kelly,Halford;
REPRESENTATIVE(S) Olberg
JRN-DATE JRN-PG ACTION
02/14/94 2829 (S) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2829 (S) RESOURCES
03/02/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/05/94 (H) MINUTE(ECO)
03/16/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/22/94 (S) RES AT 1:30 PM BUTROVICH RM 205
03/24/94 (S) RES AT 03:30 PM FAHRENKAMP
ROOM 203
03/28/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/30/94 3406 (S) RES RPT CS 4DP 1DNP NEW TITLE
03/30/94 3407 (S) ZERO FN TO SB & CS PUBLISHED
(DNR)
03/30/94 (S) RLS AT 11:35 AM FAHRENKAMP
ROOM 203
03/30/94 (S) MINUTE(RLS)
04/05/94 3448 (S) RULES RPT 3CAL 2NR 4/5/94
04/05/94 3449 (S) HELD TO 4/6/94
04/06/94 3476 (S) READ THE SECOND TIME
04/06/94 3477 (S) RES CS ADOPTED UNAN CONSENT
04/06/94 3477 (S) AM NO 1 MOVED BY LITTLE
04/06/94 3478 (S) AM NO 1 FAILED Y9 N11
04/06/94 3478 (S) AM NO 2 MOVED BY LITTLE
04/06/94 3479 (S) AM NO 2 FAILED Y9 N11
04/06/94 3479 (S) AM NO 3 NOT OFFERED
04/06/94 3479 (S) AM NO 4 MOVED BY LITTLE
04/06/94 3479 (S) AM NO 4 FAILED Y9 N11
04/06/94 3480 (S) AM NO 5 MOVED BY DUNCAN
04/06/94 3480 (S) AM NO 5 FAILED Y8 N12
04/06/94 3480 (S) AM NO 6 MOVED BY DUNCAN
04/06/94 3481 (S) AM NO 6 FAILED Y9 N11
04/06/94 3481 (S) AM NO 7 MOVED BY DUNCAN
04/06/94 3482 (S) AM NO 7 FAILED Y9 N11
04/06/94 3482 (S) AM NO 8 MOVED BY DUNCAN
04/06/94 3482 (S) AM NO 8 FAILED Y9 N11
04/06/94 3483 (S) AM NO 9 MOVED BY LINCOLN
04/06/94 3483 (S) AM NO 9 FAILED Y9 N11
04/06/94 3483 (S) AM NO 10 MOVED BY ZHAROFF
04/06/94 3484 (S) AM NO 10 FAILED Y9 N11
04/06/94 3484 (S) AM NO 11 MOVED BY ZHAROFF
04/06/94 3484 (S) AM NO 11 FAILED Y9 N11
04/06/94 3485 (S) AM NO 12 MOVED BY LINCOLN
04/06/94 3485 (S) AM NO 12 FAILED Y10 N10
04/06/94 3486 (S) AM NO 13 MOVED BY ZHAROFF
04/06/94 3486 (S) AM NO 13 FAILED Y9 N11
04/06/94 3486 (S) AM NO 14 MOVED BY ADAMS
04/06/94 3487 (S) AM NO 14 FAILED Y8 N12
04/06/94 3487 (S) ADVANCE TO THIRD READING FLD
Y11 N9
04/06/94 3487 (S) THIRD READING 4/7 CALENDAR
04/07/94 3506 (S) READ THE THIRD TIME
CSSB 310(RES)
04/07/94 3506 (S) PASSED Y11 N8 E1
04/07/94 3506 (S) Adams NOTICE OF RECONSIDERATION
04/08/94 3527 (S) RECON TAKEN UP/IN THIRD READING
04/08/94 3527 (S) PASSED ON RECONSIDERATION Y11
N7 E2
04/08/94 3531 (S) TRANSMITTED TO (H)
04/08/94 3212 (H) READ THE FIRST TIME/REFERRAL(S)
04/08/94 3212 (H) RESOURCES
04/08/94 3220 (H) CROSS SPONSOR(S): OLBERG
04/15/94 (H) RES AT 08:15 AM CAPITOL 124
ACTION NARRATIVE
TAPE 94-53, SIDE A
Number 000
The House Resources Committee was called to order by
Chairman Bill Williams at 8:25 a.m. Members present at the
call to order were Representatives Williams, Hudson, Bunde,
Davies, Green, and Mulder. Members absent were
Representatives Carney, Finkelstein, and James.
CHAIRMAN BILL WILLIAMS announced there is a quorum present.
He said the meeting is on teleconference with Anchorage,
Cordova, Fairbanks, Homer, Kodiak, Ketchikan, Mat-Su,
Petersburg, Seward, Sitka, Kenai/Soldotna, Tok, Valdez,
Nenana, Haines, Port Protection, Talkeetna, and Lake Creek
Lodge.
(CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE
JAMES joined the committee at 8:26 a.m.)
SB 310 - STATE/PRIVATE/MUNI TIMBER OPERATION/SALE
CHAIRMAN WILLIAMS noted this is the first hearing in the
House for SB 310. He said today's goal is to provide the
committee with a general briefing and understanding of the
provisions of the bill, and then take public testimony.
SENATOR STEVE FRANK, PRIME SPONSOR, stated SB 310 is
designed to encourage investment and development in the
timber industry by allowing long term sales. He said a past
problem has been the state being unable to commit to a long
term sale with provisions giving preference for in-state
processing and a stable long term supply. When SB 310 was
introduced, there was a lot of public outcry about some of
the provisions in the bill. He explained the public's
comments were taken seriously, resulting in an exhaustive
public hearing process and a bill rewrite, including 33
amendments. He pointed out the Tanana Chiefs Conference
(TCC) was very involved in the process and offered many good
amendments, many of which were used.
SENATOR FRANK reviewed amendments which were made to make
the bill less objectionable. He noted there had been
concerns about the public process aspects of SB 310. The
public process was strengthened by adding an additional
public comment period before the commissioner makes a
tentative selection. In addition, after the commissioner
chooses a preferred operator, the second public comment
period was lengthened from 60 to 90 days. This change was
requested by TCC so they could have greater participation by
people from out of town. He stated another addition
includes a public notice provision so the public will be
aware of small timber sales, which are exempt from the five
year schedule.
Number 066
SENATOR FRANK stated the twenty year extension was changed
to a renewal type of process, so that after three quarters
of the term of the contract a renewal process will begin
allowing the public to comment again and the commissioner to
come out with another request for proposals (RFP), to
determine if the same or other operators should be granted
another term on the contract. He said the environmental
protection provisions were clarified. He pointed out there
have been mischaracterizations of SB 310. People have said
there will not be a requirement to comply with the Forest
Practices Act. He stressed that is untrue. He explained
under SB 310, there is a requirement that the forest
management agreement (FMA) be consistent with existing land
use plans.
SENATOR FRANK said a one million board foot cap on small
timber sales was put into SB 310. He stated most small
timber sales can work fine under the five year schedule.
However, under the current law, there is no flexibility.
For example, if a road was being built and there was timber
in the right-of-way, that timber could not be sold because
it was not on the five year schedule. This change gives the
Department of Natural Resources (DNR) the flexibility to
make a small sale, if that sale makes sense. He stated a
provision was also added which requires a biennial operating
plan, so the department is on top of the contract through
the length of the contract. This provision strengthens the
department's ability to monitor what the operator is doing
in regard to complying with the contract.
Number 098
SENATOR FRANK stated there are two different definitions of
sustained yield in the current law. He said the more
restrictive definition in Title 38 was used in SB 310, at
the suggestion of TCC. That definition provides further
protection for not cutting more than what can be sustained
on a long term basis. He explained there is also a
requirement for the FMA's to have deactivation and
termination provisions in the contract, in case there is not
compliance with the contract terms. Bonding can also be
included in the contract but is not required. According to
the department, the bonding market is unstable at times and
it is better not to put that requirement in law but rather
leave bonding up to the department.
SENATOR FRANK said protection for other forest uses has been
clarified. Existing forest uses have to be considered when
evaluating a FMA, including public access for existing
forest uses. The FMA's are required to have provisions for
existing public access and consider the interest of private
landowners when granting access. Removed from the bill were
some of the more controversial elements which were not
necessary, including the provision that the commissioner
could not close more than 640 acres to mineral entry.
Number 150
SENATOR FRANK stated the words "activities" and "lifestyles"
were retained. There had been confusion as to what those
words meant. The requirement that a timber sale be on a
five year sale plan for two years in advance was retained.
He felt there has been a lot of work done on SB 310,
including a large amount of public testimony. He said there
is still opposition to the bill but he feels he worked
honestly and straightforwardly with people who have
expressed concerns. He thought CSSB 310(RES) is quite
workable and one which is supported broadly. With the
provisions for public comment and participation, with the
strength of the existing Forest Practices Act, and with the
strength of the consistency requirement for local land use
plans, etc., he felt the bill is balanced and one that the
committee can support.
(CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE
FINKELSTEIN had joined the committee at 8:28 a.m.)
Number 175
REPRESENTATIVE BILL HUDSON stated several years ago, there
was a discussion with representatives from Finland who were
encouraging the state to adopt the standards used in that
country. He asked Senator Frank if he had access to that
information.
SENATOR FRANK responded he did not. He has looked at ways
to make this type of concept work in Alaska, consistent with
existing Alaska laws and processes. He mentioned there has
been criticism of the FMA concept. He stated he does not
have personal knowledge about whether FMA's do or do not
work. He has been frustrated with the Alaska Department of
Fish and Game (ADF&G) saying that just because this is the
way Canada structures a FMA, does not mean that is the way a
FMA will be structured in Alaska. He thought two different
types of systems or processes are being discussed, which do
not have to be anything like processes elsewhere.
REPRESENTATIVE JOE GREEN noted page 2, line 30 indicates "At
least once each calendar year, the commissioner shall
solicit proposals...", yet there is a zero fiscal note. He
wondered if this requirement will create more work for the
department.
SENATOR FRANK responded DNR does have a budget for public
notices and he expects the public notice provision for
solicitation will be nominal in cost and can be handled by
their existing budget.
REPRESENTATIVE GREEN noted page 2, line 16 indicates "Sales
under 500,000 board feet and emergency sales are exempt..."
and asked if the Forest Management Act precludes a series of
small sales requests being excluded.
SENATOR FRANK answered no. He said there is a one million
board foot limit per region, so that will be avoided. He
added that most timber sales will remain on the five year
schedule and an emergency sale provision for small timber
sales will not be utilized as a way to avoid being on the
five year schedule.
REPRESENTATIVE GREEN clarified there is no provision in SB
310 to allow an increase in timber sales in Southeast
Alaska.
SENATOR FRANK responded most of Southeast Alaska is the
Tongass National Forest and there is not much state land.
Number 259
REPRESENTATIVE JOHN DAVIES recalled that Senator Frank had
mentioned a biennial operating plan and a termination
provision. He asked Senator Frank to expand on what those
will entail.
SENATOR FRANK replied the operating plan is not any
different than an existing timber sale from the standpoint
of compliance with the Forest Practices Act, which ADF&G is
very involved in. He said the biennial operating plan will
give the department a formal process to control the FMA
through the life of the agreement. He added without an
annual operating plan, there would still be a need for
compliance with terms of the contract, the Forest Practices
Act, and the sustained yield principles. He explained the
requirement for a biennial operating plan was included to
provide additional protections for the public's concern.
REPRESENTATIVE DAVIES asked if the biennial supervision is a
review for compliance or does it involve an ongoing
negotiation for adjustments of the contract.
SENATOR FRANK replied it is not specified. He said the
critical point is that in order to attract investment, there
is a need to know that timber will be available and the
price will be firm.
Number 315
REPRESENTATIVE JEANNETTE JAMES stated she is excited about
the possibility of having FMAs because there is potential
for the long term use of soft and hard woods. She expressed
concern that the way the bill is written, public comment is
solicited after the commissioner solicits for proposals and
after industry makes an offer. Her concern is that if she
were an industry person, she would not want to make an offer
subject to public comment. She asked if it was possible to
get public comment prior to sending out the RFP, so the
specifics in the RFP would indicate the scope of what is
available and what the conditions might be. Therefore, when
industry makes an offer, they know they will not have to
deal with the public comment period and be required to make
their information public information.
SENATOR FRANK stated the public comment period was discussed
extensively and it was felt it will be best to have the
public comment period after the department has selected a
tentative proposal. For example, if there are five
proposals, it was felt the public should not be burdened
with learning and understanding all of the proposals if one
of the proposals did not meet the best interest findings of
the department, etc. He felt there needs to be confidence
shown that the department will pick the best proposal, one
which meets the public interest findings and then let the
public comment on the one chosen. However, there have been
comments that if a proposal is already a tentatively
selected agreement, the public will not really have a voice
and the process will not really involve the public.
Therefore, it was decided to allow the public to comment
before the commissioner makes a tentative selection.
SENATOR FRANK felt if a company is willing to submit a
proposal, it has to be public and the company has to have
public confidence to ultimately succeed. If a proposal does
not meet common sense, it does not appear it will protect
the environment, and provide benefits to the community and
the state, he did not feel it will go forward. He thought
there is a need to structure the proposal process in a way
which allows the public to comment and allows the facts to
be brought forward, enabling the community to make a
reasoned judgement about whether the FMA will be good for
the community.
Number 417
REPRESENTATIVE JAMES clarified that Senator Frank does not
believe a RFP could be specific enough to make it
meaningful.
SENATOR FRANK stated if a point is reached where the
department structures the agreement, the private sector's
creativity cannot be taken advantage of and the approach can
be very narrow. He said if there is an allowance for
multiple proposals to come in, there is a potential for a
better proposal rather than having the department anticipate
what a company's needs or desires may be. He thought it was
best to allow the department to solicit proposals, let the
public comment, let the commissioner make a selection, and
then let the public comment again. He felt an open market
type of approach is best.
REPRESENTATIVE JAMES, coming from the position of the
environmental community who will probably be the most vocal,
commented if the public comment period is prior to the RFP
as opposed to after a tentative selection is made, they
might feel they are more a part of the process and not feel
like their public comment is just an exercise and not very
meaningful.
SENATOR FRANK pointed out there are land use plans, and
current law requires that any forest management plan be
consistent with the land use plan. The public is involved
with land use plans throughout the state and have a
tremendous effect on how land use plans emerge. He said if
one were to look at the entire picture, there are at least
three opportunities for public involvement--one in the
overall land use plan, and two opportunities contained in SB
310.
Number 498
REPRESENTATIVE DAVID FINKELSTEIN stated the land use plans
were completed in the past. When those plans were developed
and public input occurred, no one was envisioning FMAs.
SENATOR FRANK responded in the Fairbanks area, a five year
timber plan is being developed and in the latter years, the
plan calls for an increase in the timber sales plan, which
the public is commenting on. He said Representative
Finkelstein may have a point but Senator Frank knows that in
the Tanana Valley Forest, that debate has occurred. He felt
there are adequate opportunities for public comment.
REPRESENTATIVE FINKELSTEIN noted that Section 1 says the
forest land use plan only has to consider the land use
planning requirements where even a regional plan has been
done. He said in many parts of the state, the regional
plan, which is the land use plan under AS 38.04.065(a), has
been completed. He stated in those cases, the forest land
use plan would not even need to consider the land use
planning requirements.
SENATOR FRANK said Section 1 applies only to the small sale
aspect.
Number 556
REPRESENTATIVE FINKELSTEIN said the state forests were
established because of the high public interest in the
various types of uses, especially as compared to other
public lands. He felt the decision to commit the state
forests to the primary purpose of commercial forest
development gives people concern. He asked Senator Frank if
he would consider removing Section 5.
SENATOR FRANK replied Section 5 is a slight change. He said
managing a state forest and creating jobs from the forest is
the primary purpose. Many people liked establishing state
forests because it prevented land disposals and ensured that
other uses of the forest were maintained. He felt the
primary reason for establishing forest uses is to manage
them over the long term in a manner which will allow
commercial forestry. He said the change in Section 5 to
include the primary purpose, while at the same time
perpetuating the personal, commercial, and other beneficial
uses through multiple use management is a slight change. He
felt the change is an important part of SB 310.
REPRESENTATIVE FINKELSTEIN pointed out the old purpose of
the state forest was the personal, commercial, and other
beneficial uses of resources through multiple-use
management.
Number 633
REPRESENTATIVE GREEN asked if owners of adjacent property
have been involved in the discussion of SB 310.
SENATOR FRANK replied not to his knowledge. He said there
are not too many big land owners in the state. He noted
there is specific language in the bill which requires the
commissioner to not authorize a FMA if it will jeopardize an
existing timber operator. The desire is to protect existing
operators and strengthen the ability of the state to offer
sales which will be responsive to needs.
REPRESENTATIVE GREEN said in the past few years, there have
been large areas of the state with beetle kills. He asked
if SB 310 will help utilize some of that dead timber.
SENATOR FRANK replied it may. He stated he is more
interested in a long term situation. He does not want
temporary jobs which will create a problem when they are
eliminated. He felt the beetle kill situation is not
something which is focused on in SB 310.
TAPE 94-53, SIDE A
Number 000
REPRESENTATIVE DAVIES asked Senator Frank if he would
support an addition to SB 310 which would limit the
percentage of the allowable cut to be included in FMAs. He
supports the idea of long term contracts but is concerned if
the entire allowable cut is tied up in long term contracts,
the small operators will be eliminated.
SENATOR FRANK said he will consider it. He does not want to
constrain the department from doing what makes common sense.
He felt specific language in SB 310 protects existing
operations. He expressed concern about unduly restricting
the department. The timber operators' lives depend on being
able to have timber available for sale and will do their
best to maintain their operations. He is not concerned that
the department will sell an amount of timber or create a FMA
which will jeopardize small operators.
REPRESENTATIVE DAVIES asked Senator Frank to point out the
provisions in SB 310 which protect the ongoing operators.
SENATOR FRANK responded page 4, lines 22-25.
Number 045
REPRESENTATIVE HUDSON felt SB 310 covers the compensation to
the state to administer the agreement in a manner subject to
the commissioner's determination. He noted the ADF&G zero
fiscal note states in the accompanying pages it will cost
$109,000 per agreement. He thought it is important for the
state and SB 310 to articulate the need for those who are
going to get involved in the forests, to also be responsible
for these kind of necessary provisions. Page 5, lines 15
and 16 state "provisions regarding compensation, if required
by the department, for state services provided to administer
the agreement;". He asked if it would be wise, as public
policy, to eliminate the words "if required by the
department" and therefore say a final proposed agreement
must contain provisions regarding compensation. He felt it
will be a stronger statement that in the final agreement, it
will not leave it up to the commissioner but make it a part
of the actual agreement.
SENATOR FRANK responded that change is not a problem but he
felt the committee should work with the department. He
stated many people believe SB 310 is a giveaway. He
stressed SB 310 is not a giveaway but rather a management
tool for the utilization of the state's resources. He said
benefits will be derived through money going to the general
fund and noted that revenue will exceed costs. He hoped
that the committee does not put anything into the bill which
people can litigate over. He noted that eliminating the
words probably will not do any damage but added the words
are contained in the bill because the department wants
flexibility on how the agreements are structured.
REPRESENTATIVE HUDSON stated he will not suggest any action
until the department is heard from. He hoped that any final
agreement not only provides for the tax coffers of the state
but also provides for any costs which the state must incur
in order to administer the agreement.
Number 106
THOMAS BOUTIN, DIRECTOR, DIVISION OF FORESTRY, DNR, stated
Section 1 removes a redundancy, and will not apply to the
FMAs proposed in Section 3 but instead will apply to the
existing timber sale program. The redundancy is where there
is an existing land use plan or a forest management plan,
the requirements in AS 38.04.065(b) do not have to be
accommodated in a forest land use plan. He said the
Division of Forestry has to comply with two separate and
distinct processes for every timber sale, each of which has
public and agency comment. He stated one of the processes
is the AS 38.05.113 five year plan, which says that each
sale has to be in a five year plan for at least the two
prior years in order for that sale to go forward. There is
a public and agency process for that five year plan each
year. Therefore, every single timber sale is examined twice
in that five year plan process. He noted that separately,
AS 38.05.112 requires a forest land use plan for every
single timber sale. Section 1 will change the
considerations required under those forest land use plans in
the instance where there is an existing forest management or
land use plan. He stressed Section 1 only modifies the
forest land use plans for the existing timber sale program.
Number 138
MR. BOUTIN said Section 2 allows an exemption for sales
under 500,000 board feet from the five year plan process and
also puts a cap of one million board feet for each region,
which can be exempt from the five year plans. He stated
the Division of Forestry will continue to put every timber
sale in the five year plans but occasionally there is an
instance, such as a land use conversion to agriculture being
proposed, where timber could not be brought to market
because it had not been in the five year plan for the two
prior years.
MR. BOUTIN stated Section 3 provides for the FMAs. He said
there is nothing in Section 3 exempting FMAs from the
protections of the Forest Practices Act. He noted those
protections are stronger for state land than they are for
any other kind of ownership. FMAs will have to comply with
those protections. He said Section 5 is the prerogative of
the legislature to define the uses and purposes for the
state forests. Section 6 adds an entailment in the
management of the state forest.
MR. BOUTIN said DNR, ADF&G and the Department of Commerce
addressed concerns in regard to the original version of SB
310 and the committee substitute answers all of the
concerns. He stated DNR supports CSSB 310(RES). He
explained that FMAs are a tool which DNR does not now have.
He noted that FMAs will not allow the harvest of timber
which now cannot be harvested. He said the constraint on
harvest is sustained yield. FMAs will not open up any
acreage or stand of timber which is not available currently.
If timber the department will now be selling would instead
be sold under an FMA, it would be more cost effective to do
so. FMAs will allow pushing some of the costs, which the
state now incurs, on to the contractor. DNR will only use
FMAs when they are cost effective on an existing timber
sale. Otherwise, the existing timber sale routes will be
used.
Number 230
MR. BOUTIN stated he has never seen such detail in a fiscal
note as the fiscal note submitted for SB 310. He has also
never seen cost accounting done by the state. He said the
state uses cash accounting and calls it the modified accrual
method. He commented whenever he sees cost accounting he is
somewhat skeptical.
Number 245
CHAIRMAN WILLIAMS clarified the reason there is a zero
fiscal note is because the department will be receiving more
money from the timber sales than costs incurred and the
department is already geared up to do this type of work.
MR. BOUTIN responded there is no timber which can be sold
under an FMA that cannot be sold currently. For example,
the timber in the Interior is in the state's five year plan
presently, beginning in fiscal year 1997. He said DNR is
currently updating the Tanana Valley State Forest plan and
it is not possible to prejudge that process or any other
process. He stated if this was fiscal year 1997 and the
public processes, which will have taken place up to that
time had occurred, and those timber sales were still in the
five year plan, they would be offered, even absent FMAs.
The difference is that a FMA will allow in-state processing
in the best interest finding. Currently, DNR does not have
the ability to get up next to in-state processing in its
timber sale program.
Number 289
REPRESENTATIVE FINKELSTEIN agreed many of these areas could
have been sold previously under existing laws, but the main
reason they have not been is because of a lack of
appropriation to fund the timber sales. He said just
because it was allowed in the past is not an argument that
it does not need a fiscal note. It would cost more money in
the past to put them up for sale. He stated he did not
understand Mr. Boutin's logic.
MR. BOUTIN responded FMAs will not allow the sale of timber
that cannot already be sold presently. FMAs will be used in
instances where it will be more cost effective to sell the
timber through an FMA than through the existing timber sale
program. He stated the only area which has been identified
to have a potential for a material increase in ongoing
timber sales is the Interior timber--the 60 million feet of
low-value hard wood--which can be offered for sale beginning
in fiscal year 1997, since it is in the five year plan. He
said that timber could be offered for sale now. It would
cost more money to put a sale up which is going to be 60
million feet. He did not think FMAs come into the equation.
FMAs would be a more cost effective way to put the 60
million feet up for sale.
Number 348
REPRESENTATIVE DAVIES stated he does not understand why FMAs
are more cost effective than the existing timber sale
program.
MR. BOUTIN said if FMAs were overwhelmingly cost effective,
the fiscal note would have reflected the savings in FMAs,
Section 1, and Section 2. He stated many of the timber sale
lay out responsibilities which DNR currently has, could be
passed on to the contractor, particularly in the instances
of the aspen stands.
REPRESENTATIVE HUDSON clarified the difference involves
giving DNR the opportunity to create a greater value from
the same trees, as opposed to simply making a stand of trees
available for cutting and shipping out. SB 310 will give
DNR the ability to make the terms and conditions more than
just a matter of price per log, but rather a price on an
overall basis to the economy of the region and the state, by
virtue of inducing someone to invest because of the long
term commitment of trees.
MR. BOUTIN said that is correct. He stated because of the
Southcentral Timber Development v. The State of Alaska, the
state does not now have a way to offer a timber sale, for
example, on the Haines State Forest, requiring in-state
processing. He explained the Haines State Forest goes to
the highest bidder and that bidder exports the logs. FMAs
will enable in-state processing.
REPRESENTATIVE HUDSON clarified SB 310 is sort of the Alaska
hire provision of the state's timber operations.
REPRESENTATIVE DAVIES thought the requirement for in-state
processing violates interstate commerce law and the only way
that requirement can be avoided is through an exemption from
Congress to the interstate commerce provisions.
MR. BOUTIN said the Department of Law advised that the best
interest finding accommodating the FMAs can include a clear
finding that there will be an in-state processing facility
constructed. That finding would not run afoul of
Southcentral Timber Development v. The State of Alaska. He
felt no one will take the risk of not building that plant
when the finding said the plant would be built. Clearly,
the state would have a way to back out of the agreement if
the finding had included in-state processing and the
contractor called it off and exported the logs.
Number 442
ELLEN FRITTS, DEPUTY DIRECTOR, DIVISION OF HABITAT AND
RESTORATION, ADF&G, stated she is available for questions.
CHAIRMAN WILLIAMS reminded everyone that the long term
timber contract in the Tongass had been cancelled. He said
the ADF&G fiscal note on SB 310 indicates a need for more
people. He wondered what effect that cancellation will have
on ADF&G and asked whether or not the Division of Habitat is
ready to cut their staff in half because of that
cancellation.
MS. FRITTS responded that possibility has not been
discussed. She felt the important point to realize is that
in the current fiscal year, the Southeast Regional office
took a substantial cut and there has been a struggle to
complete all of the work needing to be done. She thought
there may be a lot of work remaining.
CHAIRMAN WILLIAMS said much of that work will be eliminated
because of the timber contract cancellation.
MS. FRITTS replied ADF&G has not had the opportunity to
discuss the impact of the cancellation. She reiterated
ADF&G has made many staff cuts in Southeast Alaska,
including the biologist position in Petersburg. Therefore,
much of the work being done there for things other than
forest service planning, such as fish habitat permits for
stream crossings, working with communities, etc., have been
cut back. She does not expect moving biologists from
Southeast to another area because of the cancellation.
Number 522
GERON BRUCE, LEGISLATIVE LIAISON, ADF&G, said ADF&G did work
with DNR and the Department of Commerce on SB 310.
Significant changes have been made to SB 310 which the
department appreciates including making the FMAs consistent
with state land use plans and the improvements in the public
process. He stated there have been concerns expressed about
the approach taken on the ADF&G fiscal note. He said the
department looked at the existing FMAs in North America and
the fiscal note was based on those agreements.
MR. BRUCE stated earlier comments indicated the possibility
that FMAs, which will take place under SB 310, will not
resemble those other North America agreements. He stressed
looking at what has occurred to date is the best information
available on what a FMA will look like. The fiscal note was
constructed to accurately reflect what the department has
seen happen. He stressed if there was a different kind of
an arrangement, such as smaller sales, etc., the fiscal note
would be impacted. He pointed out that until a FMA is
signed and is in place, the department will not know what
the size and scope is and the department's work load will
vary.
Number 560
REPRESENTATIVE FINKELSTEIN clarified both ADF&G and DNR
conclude that for any of the activities in SB 310 or even
activities under existing law, there will be a need for more
biologists and foresters. The ADF&G fiscal note assumes
there will be some activity as a result of SB 310 and the
DNR fiscal note assumes there will not be.
MS. FRITTS responded that is a fair assessment.
REPRESENTATIVE DAVIES stated ADF&G has a zero fiscal note
but on the front page there are several asterisks and the
analysis shows a $103,000 cost per agreement. He wondered
why those numbers do not appear on the front of the fiscal
note. He also pointed out that a similar fiscal note
prepared in 1989 for HB 205 stated HB 205 would allow state
forest lands, which are currently required to be managed for
multiple use and classified under the state land planning
process to be administratively designated for forestry as a
primary use by the commissioner of DNR and transferred to a
timber company for long term management. He felt that bill
was very similar to SB 310, yet ADF&G submitted a $205,000
figure at that time and the amount appeared on the front of
the fiscal note.
MR. BRUCE responded ADF&G does not know what the actual
costs will be for a FMA in Alaska. The costs estimated on
the fiscal note are based on similar agreements which have
occurred in other places. He agreed FMAs in Alaska may be
different but the costs have to be speculative until a FMA
is in place.
REPRESENTATIVE DAVIES asked if there would have been the
same uncertainty in 1989.
MR. BRUCE replied he cannot speak to the assumptions which
went into the fiscal note in 1989 but that was probably the
best estimate at that time. Since then, ADF&G's assumptions
and numbers have changed. He felt that reflects the
uncertainty when the department is attempting to look ahead
and forecast what the costs might be for a project which
does not exist yet. ADF&G does feel that if there is
activity under SB 310, there will be a need for an increase
in staffing to accommodate and fulfill the department's
statutory requirements. Again, ADF&G will not know what
that amount will be until the size and scope of the
agreement is known.
REPRESENTATIVE HUDSON requested Ms. Fritts to submit a
profile of the Division of Habitat and Restoration to
committee members at some point. He also asked her to
submit comments on what the impact of the Tongass
cancellation will be to the division.
TAPE 94-54, SIDE A
Number 000
CHAIRMAN WILLIAMS stated there will not be enough time to
take much of the public testimony but added SB 310 will be
scheduled again on Wednesday, April 20 and public testimony
will be taken at that time.
Number 030
ALBERT PAGH, FOUR STAR LUMBER COMPANY, FAIRBANKS, stated he
and his son have owned and operated a sawmill and logging
operation for 24 years. He has worked in the timber
industry for 53 years. He expressed support of the concept
of FMAs with some reservations. He hoped the wording in SB
310 will require FMAs to be in predominantly hardwood
stands. Currently, there are sawmills in the Fairbanks area
that can process all of the spruce which can be sold from
the Tanana Valley State Forest and keep it on an even flow
sustained yield basis. If the FMAs were on hardwoods, they
would have to be processed in-state, since the hardwoods are
of too low a quality to export as raw logs.
MR. PAGH said there were two truckloads of birch logs hand
picked and shipped to Washington State to be processed. He
followed one load to Northwest Hardwoods and talked to the
manager. He went out into the plant and watched the
processing of logs into lumber and then watched the grading
of lumber. Out of those hand picked logs, 16 percent made
furniture grade lumber. The rest of it was pallet material.
He stressed had those logs been cut into lumber in Alaska,
the shipping of the pallet material would have cost more
than the lumber was worth.
MR. PAGH pointed out there are a few small operations in
Fairbanks using a very small amount of hardwoods, but they
have to be very selective in choosing the trees they can
use. It is impossible to tell if a standing tree is sound
enough to use, so usually many trees have to be cut before
finding one which can be used. He explained that most of
the birch cut is used for firewood. He stressed aspen
cannot even be given away.
Number 051
MR. PAGH stated if there was a pulp mill or chipboard plant,
the small operators could sort out what they could use and
sell the rest to the pulp or chipwood plant. It would also
give the sawmills in the area a place to dispose of tops and
all other cull logs. He said if FMAs were for spruce, there
is no doubt the high grade logs would be exported. The
Seward mill is shutting down because they can make 50
percent more selling the logs for export than they can
milling them. The Seward mill is a very modern state of the
art sawmill. It was built a few years ago at the cost of
$20 million. He pointed out that a pulp or chipboard plant
would cost as much or more, so there is a need to have a
long enough contract to amortize the investment.
MR. PAGH said the Tanana Valley State Forest is about 1.8
million acres and if an average of 14,400 acres per year
were cut, it would take 125 years to cut the 1.8 million
acres. The second crop would then be ready to cut. He
noted when mentioning 125 years, he is talking about spruce,
as the hardwoods should be cut at 60 to 80 years or less.
He stressed at the present time, less than 1,000 acres a
year are being cut.
Number 066
MR. PAGH stated there are many young people who have dropped
out of school and it is very hard for them to find a job
they can make a living at. Many of them turn to crime. He
said working at logging does not take a college degree, so
many of these young people could be taken off the streets
and given good paying jobs. He noted that jobs in logging
would be 11 months a year and jobs in the processing plants
would be year-round. Much has been said about tourists not
wanting to come to Alaska and see clearcuts. He pointed out
that most tourists are his age or older and they come from a
generation that either had to work or go hungry. Therefore,
he did not think those people would begrudge Alaska the
opportunity to make a living.
MR. PAGH told committee members that most clearcuts grow up
with grass and brush in a couple of years and the most
telltale marks are the boundaries which are relatively
straight. Clearcuts generate good browse for animals. Fish
and game managers like to see fires left to burn to create
browse but he felt that is a terrible waste of the state's
natural resources.
MR. PAGH stated logging requires access, so road systems are
funded by an allowance from timber sales. The roads are
then used by all for recreation, firewood gathering, and in
some cases, fire fighting. He pointed out there are
hundreds of lightening fires a year. Unaccessible fires
usually are left to burn if they do not endanger someone's
home. The timber is usually left to rot. He said the Rosie
Creek burn was salvaged because it had access. Over 20
million board feet was salvaged. He stressed under today's
regulations written by environmentalists, the salvage of
such timber before it spoils is impossible, even if it does
have access. He mentioned the Kenai Peninsula bug killed
timber and said if fire destroys the timber,
environmentalists feel it is mother nature's way but if that
same timber is logged and used to build homes, they think it
is terrible.
Number 089
MR. PAGH said Alaska is a rich state in natural resources,
if the citizens are allowed to use the resources wisely as
was intended under the Statehood Act. He stated 8/10 of 1
percent of the 1.8 million acres per year is all that is
required to support a viable forest industry in the
Interior. He stressed there are things in SB 310 which need
to be changed if there is to be any timber industry at all.
There are millions of acres in the state that cannot be
logged. He felt 1.8 million acres is very little to ask
for. He noted the amount of land not available for timber
cutting: 52 million acres of National Parks; 77 million
acres of National Wildlife Refuge; 22 million acres of
National Forests; 56 million acres of National Wilderness.
He added the state has 116 state parks. He thought the
environmentalists and the people who want to recreate have
enough places to go.
REPRESENTATIVE CON BUNDE clarified Mr. Pagh would like to
have the FMAs limited to hardwoods, which can be processed
locally.
MR. PAGH responded that is correct. He stated because
hardwood logs are of such low quality, they cannot be
exported raw.
REPRESENTATIVE BUNDE clarified the processing will include a
small amount of furniture and lumber, and the rest will be
chips.
MR. PAGH said no. He stated it is not feasible to have a
furniture factory.
REPRESENTATIVE BUNDE asked what the local processing will
consist of.
MR. PAGH responded chips or something of that nature.
REPRESENTATIVE HUDSON requested a copy of Mr. Pagh's
presentation. He felt that Mr. Pagh had determined some
practical, astute and common sense approaches to the problem
being confronted.
Number 153
MARICKE BARNES, KETCHIKAN, testified via teleconference and
expressed support of SB 310. She said (indiscernible)
decision by the Clinton Administration to terminate the
Alaska Pulp Corporation's long term contract. She stressed
long term forest management on the Tongass has provided
stable, year-round family wage jobs. Now, hundreds of
families' jobs and their welfare are at stake. She felt the
decision clearly exhibits why the state must intensively
manage those lands of which it has control. The state
cannot count on the federal government to act in the best
interest of Alaskans.
MS. BARNES stated she just graduated from college and feels
lucky to be able to come home to establish her career in
Alaska. However, unless the state passes legislation such
as SB 310, there will not be stable economic development in
her community and people like her will not be able to return
home to find work. SB 310 is good public policy, good
forest management and provides jobs as well as economic
growth. She urged the committee to pass SB 310 for the
young people of the state who want to work at home.
Number 174
TROY REINHART, ALASKA FOREST ASSOCIATION, INC. (AFA),
KETCHIKAN, testified via teleconference and expressed
support of SB 310. He stressed SB 310 is an important piece
of legislation which will allow: public participation;
organized job, industry, and economic growth; full
protection of the Forest Practices Act for all resources
including important stream buffers; and protection of forest
health values from insect and disease epidemics. He stated
SB 310 is good public policy which deserves the committee's
support.
MR. REINHART said AFA was pleased that ADF&G gave SB 310 a
zero fiscal note and felt it was a proper, prudent, and
professional decision. However, the additional three pages
of dialogue associated with the fiscal note are misleading,
not productive to the debate nor the proper role of the
agency. He pointed out the document is full of buzz words
intended to invoke misconceptions in the minds of the
general public. AFA feels the words such as "...the promise
of cheap, long-term timber supplies", "...very large
companies...", and "...large scale and rapidity of
cutting..." should not be in a fiscal note and are
unacceptable.
MR. REINHART stated no one in the forest industry or those
supporting SB 310 are asking for a hand out or harvesting
beyond sustainable levels. All that is requested and needed
is a reliable, stable, certain and economically feasible
supply of timber. AFA is very concerned about
unsubstantiated accusations to the contrary. He stressed
that the timber contract cancellation in Sitka only proves
again that the state of Alaska needs to manage its land for
people and communities and not rely on the federal
government to do so. AFA fully supports SB 310 and
respectfully requests the committee's support.
Number 212
ROBERT DENNEY, TALKEETNA, testified via teleconference and
expressed opposition to SB 310.
ROBERTA SHELDON, TALKEETNA, testified via teleconference and
stated she is a lifelong Alaskan and a 30 year resident of
Talkeetna. She said Talkeetna's economy is dependent on the
tourist and recreational industry. Wild and scenic viewings
of the state's natural resources in their natural state are
the big drawing card there. She noted her business is
dependent on those values and natural resources. She urged
committee members to see SB 310 for what it is--an
egocentric and greedy effort by a special interest group to
dominate and profit from a resource which belongs to all of
the people of Alaska. She felt timber is a public resource,
not one to be monopolized by a special interest group.
MS. SHELDON said when SB 310 went through the Senate, there
was overwhelming public opposition to it. This bill
provides for FMAs which guarantee long term, locked in
contracts that provide for timber harvesting as the primary
use, with other vital uses being secondary. She felt those
priorities are outrageous. She stated her business depends
on the wilderness and recreational values present in the
Susitna River valley. She pointed out Alaska is the last
wild land in America and people are coming to the state by
the thousands because there is nothing wild left outside and
because the environment and natural resources have been
altered so much outside. She urged committee members not to
make the same mistakes. She noted times have changed and
more jobs are developing from natural resources in their
natural state.
MS. SHELDON requested committee members to not allow the
special interest timber industry have a special privilege
with a resource that belongs to all of the people in the
state. She urged committee members to oppose SB 310.
Number 259
ED SHARP, LAKE CREEK LODGE, testified via teleconference and
stated he is in the tourism business and has almost
everything he owns invested in the business. He expressed
opposition to SB 310. He said the state cannot allow forest
logging companies to totally dominate the land. There is
lots of small scale logging occurring in his area. He
stressed large scale logging is not compatible with the uses
of the Susitna River Valley that most people see as the
primary use. He noted there are tourists coming from all
over the world to see what is left in the state. Alaska is
the last place in the country that people can come and have
a little bit of the real outdoors to experience. He urged
committee members to oppose SB 310.
MR. SHARP stressed timber is a renewable resource which will
go on forever if it is left totally unmolested. He said for
the past ten years he has been in business, the public has
been trying to get that point across. He stressed there has
been a lot of testimony confirming what he is saying. He
felt the legislature wants to create a few high paying jobs.
He stated there is a need to realize that there are hundreds
of smaller operations, which account for many times more
revenue to the state, than what will be created with the
logging jobs. On the long term, the tourism industry is
going to be dead if logging is allowed as the primary use of
the land.
ANNOUNCEMENTS
CHAIRMAN WILLIAMS announced SB 310 will be heard again on
Wednesday, April 20. He said the committee will meet at
8:15 a.m. on Monday, April 18 to hear SB 293.
ADJOURNMENT
There being no further business to come before the House
Resources Committee, Chairman Williams adjourned the meeting
at 10:18 a.m.
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