02/14/2011 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| HB105 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 105 | TELECONFERENCED | |
| *+ | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 14, 2011
1:03 p.m.
MEMBERS PRESENT
Representative Eric Feige, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Peggy Wilson, Vice Chair
Representative Alan Dick
Representative Neal Foster
Representative Bob Herron
Representative Cathy Engstrom Munoz
Representative Berta Gardner
Representative Scott Kawasaki
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 123
"An Act relating to the Alaska clean water fund."
- HEARD & HELD
HOUSE BILL NO. 105
"An Act relating to the Southeast State Forest; and providing
for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 123
SHORT TITLE: CLEAN WATER FUND: LINKED DEPOSITS
SPONSOR(s): REPRESENTATIVE(s) SEATON
01/26/11 (H) READ THE FIRST TIME - REFERRALS
01/26/11 (H) RES, FIN
02/14/11 (H) RES AT 1:00 PM BARNES 124
BILL: HB 105
SHORT TITLE: SOUTHEAST STATE FOREST
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) RES, FIN
02/14/11 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
KATIE KOESTER, Staff
Representative Paul Seaton
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 123 on behalf of the sponsor,
Representative Seaton.
LYNN KENT, Director
Division of Water
Department of Environmental Conservation (DEC)
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 123, answered
questions.
DEVONY LEHNER
Homer, Alaska
POSITION STATEMENT: Supported HB 123.
JOHN "CHRIS" MAISCH, State Forester, Director
Division of Forestry
Department of Natural Resources (DNR)
Fairbanks, Alaska
POSITION STATEMENT: Supported HB 105.
RON WOLFE, Natural Resources Manager
Sealaska Corporation
Juneau, Alaska
POSITION STATEMENT: Supported HB 105.
SHELLY WRIGHT, Executive Director
Southeast Conference
Juneau, Alaska
POSITION STATEMENT: Supported HB 105.
JOHN SANDOR
Juneau, Alaska
POSITION STATEMENT: Supported HB 105.
WAYNE NICOLLS
Juneau, Alaska
POSITION STATEMENT: Supported HB 105.
CARL PORTMAN, Deputy Director
Resource Development Council (RDC)
Anchorage, Alaska
POSITION STATEMENT: Supported HB 105.
KIRK DAHLSTROM, Co-Owner and General Manager
Viking Lumber Company Inc.
Craig, Alaska
POSITION STATEMENT: Supported HB 105.
ERIC LEE
Petersburg, Alaska
POSITION STATEMENT: Opposed HB 105.
JOSEPH SEBASTIAN
Petersburg, Alaska
POSITION STATEMENT: During the hearing on HB 105, urged that
the bill be balanced by deleting some parcels from state forest
designation and instead designating them as state parks.
JEREMY MAXAND
Wrangell, Alaska
POSITION STATEMENT: During the hearing on HB 105, urged that
ways be found to process the timber within Alaska rather than
allowing it to be exported.
ACTION NARRATIVE
1:03:43 PM
CO-CHAIR PAUL SEATON called the House Resources Standing
Committee meeting to order at 1:03 p.m. Representatives Seaton,
Feige, P. Wilson, Herron, Dick, Kawasaki, Gardner, and Foster
were present at the call to order. Representative Munoz arrived
as the meeting was in progress.
HB 123-CLEAN WATER FUND: LINKED DEPOSITS
1:04:12 PM
CO-CHAIR SEATON announced that the first order of business is
HOUSE BILL NO. 123, "An Act relating to the Alaska clean water
fund."
1:04:57 PM
KATIE KOESTER, Staff, Representative Paul Seaton, Alaska State
Legislature, introduced HB 123 on behalf of Representative
Seaton, sponsor. She said the bill would expand access to the
Alaska Clean Water Fund, which is a revolving fund comprised of
mostly federal dollars for the purpose of improving the water
systems in the state. Currently, only municipalities and state
agencies have access to these clean water dollars and HB 123
would broaden the access to that fund. The Alaska Clean Water
Fund is used mostly by municipalities for point source
pollution, such as septic systems. Nonpoint source pollution
dollars are also in the fund and these are the type of programs
that are being talked about under HB 123. An example of what
would not fall under HB 123 is a private company borrowing Clean
Water Fund money for a giant private septic system. Those
systems are point source pollution and are only available to
municipalities and state agencies.
1:06:18 PM
MS. KOESTER explained that HB 123 would establish a "linked
deposit program" to access the Clean Water Fund dollars. A
linked deposit would allow the state agency to put Clean Water
Fund dollars into a bank and then the bank would loan that money
to the borrower. The relationship between the state and bank
would be a certificate of deposit: the state would basically be
investing those Clean Water Fund dollars in a bank and then the
bank's responsibility would be to vet an applicant or
prospective borrower, which is who is being referred to when
talking about expanding access to Clean Water Fund dollars. The
bank would also have the responsibility to collect payment and
follow up on any loan defaults.
MS. KOESTER related how the program would work. A non-profit
organization would bring a project to the Department of
Environmental Conservation (DEC) for approval. The department
would make sure it is an eligible project that falls under the
mission of the Clean Water Fund. Eligible projects would
include anything that would contribute to a healthy watershed,
such as green space development, on-site septic systems,
agricultural best practices, storm water management, and
brownfield remediation, to name a few. The definition for
eligible nonpoint source pollution projects is broad because
when talking about runoff, rainwater, and streams it is hard to
point a finger at it.
1:08:36 PM
MS. KOESTER pointed out that this program is used in many other
states. The committee packets include examples about some
agricultural, brownfield remediation, and on-site septic system
programs instituted in Ohio as a way to broaden access to Clean
Water Fund dollars. She drew attention to a booklet on members'
desks from the Homer Soil and Water Conservation District
[entitled Landscape Suitability Map] that is a manual on best
practices for development. The district received a grant to
develop a landscape suitability map of the entire Homer area and
identify projects that could be used for green development of
subdivisions and land use in the Homer area.
MS. KOESTER provided an example of how this linked deposit
program could be used under HB 123 for the bettering of Alaska's
water systems. The Homer Soil and Water Conservation District
would take these best management practices to DEC. The
department would determine and approve the eligibility of
projects for Clean Water Fund dollars, such as stormwater
management, leaving green space in a subdivision, and other
practices outlined in the booklet. Once approved by DEC, the
developer would go through a development accreditation process
with the Homer Soil and Water Conservation District. Then the
developer would go to a bank for a project loan using these
Clean Water Fund dollars that the state has put into the bank
and for which the bank is paying a below-market value rate to
the state. The bank would charge the developer an amount to
administer this loan.
1:11:39 PM
MS. KOESTER noted that broadening access to these Clean Water
Fund dollars has been successful in other states because it
provides a market driven incentive for healthy water systems,
rather than using enforcement. She directed attention to the
Alaska Clean Water Fund Intended Use Plan for Fiscal Year 2009
in the committee packet. She read from page 2, long term goal
5, which states: "Increase the pace at which available funds
are loaned by marketing to existing and potential new eligible
entities by expanding the overall funds usage. Potential new
entities may include lending to non-profit organizations for
water quality type of projects, and to homeowners through a
link-deposit program for on-site septic system improvements."
1:12:55 PM
CO-CHAIR FEIGE understood the state would deposit money with the
bank, the bank would pay a lower-than-market interest rate to
the state for use of that money, and then the bank would loan
that money to people, entities, or non-profits. He asked what
interest rate the bank would charge.
MS. KOESTER replied the bank would charge an interest rate that
it feels acceptable for its risk in assuming that borrower. She
confirmed that Co-Chair Feige's understanding of the program is
correct.
CO-CHAIR FEIGE inquired what risk the bank would be taking since
it is the state's money.
MS. KOESTER responded there is still a risk that the borrower
might default. The real reason why the risk is on the bank is
so that the bank will do the proper vetting of that applicant.
The applicant would have to have collateral or a credit score or
go through any other type of process necessary to access a loan.
The difference is that someone might not be able to get a loan
for some of these projects because the capital does not exist
without being able to access the Clean Water Fund dollars.
1:14:25 PM
CO-CHAIR FEIGE asked how much of the current funding stream is
being utilized by the municipalities and other qualified
entities that are presently allowed to borrow from the fund.
MS. KOESTER deferred to DEC for the exact numbers. However,
based on her conversations with the U.S. Environmental
Protection Agency (EPA) about the goals that were established to
increase the access and increase the lending of the funds, it is
the sponsor's belief that there is room in that fund to expand
access.
1:15:19 PM
REPRESENTATIVE P. WILSON understood the state provides the
money, but she inquired whether the money comes directly from
the state or from the federal government. She further inquired
whether the state gets this money back when the bank is repaid.
MS. KOESTER answered that the Clean Water Fund is mostly federal
dollars, so it is a federal-state revolving loan fund that
exists in all the states for cleaning up water systems. The
state would get the money back from the banks along with a
lower-than-market interest. It would be just like the state is
investing funds in a bank instead of right now where all of
those loans are issued to municipalities or state agencies and
for which a lower-than-market value interest rate is applied.
The state gets those dollars back at a nominal interest rate and
that is why it is a revolving fund - it keeps growing and the
state is able to expand programs.
1:16:55 PM
REPRESENTATIVE KAWASAKI asked how much money is in the fund and
how much is encumbered.
MS. KOESTER understood that the fund is at around $45 million.
She deferred to DEC to answer the question in more detail.
REPRESENTATIVE KAWASAKI observed in paragraph 2 of the sponsor
statement that community organizations, developers, non-profits,
and individuals would have access to borrowing these funds. He
inquired whether a Native village corporation, a cooperative
that is regulated by "RCA", or a community supported
agricultural farm would be included as eligible borrowers.
MS. KOESTER understood that any type of organization would be
eligible and would not have to be a non-profit. The money just
has to be spent on projects that are eligible for Clean Water
Fund dollars.
REPRESENTATIVE KAWASAKI requested a broader definition of what
the Clean Water Fund currently spends money on.
1:18:55 PM
REPRESENTATIVE MUNOZ asked whether Ms. Koester's referral to
"state funds" means the funds that are in the Clean Water Fund
now.
MS. KOESTER replied correct, she is talking about the Alaska
Clean Water Revolving Loan Fund. She allowed it is confusing
because that fund is federal dollars, but the state has control
over those dollars.
1:19:22 PM
REPRESENTATIVE MUNOZ requested further explanation about what
would be linked under the bill.
MS. KOESTER explained that the Clean Water Fund is already
available to municipalities, so right now municipalities can
already apply to DEC for a loan under that fund. Under HB 123,
access to this fund would be expanded by saying that an
individual, through a bank, can have access to Clean Water Fund
dollars with an eligible project. The state's treasury would
put an amount of money in a bank as a certificate of deposit,
say $100. The bank would pay interest to the state, say 2
percent, over the life of the loan. The bank would then loan
that $100 to say, John, a developer in Homer, who is doing a
green development that will have a green space. The bank would
charge John an interest rate of 7 percent, of which 5 percent is
to cover the bank's risk of loaning to John and 2 percent is to
cover its administration fee to the state.
1:21:26 PM
CO-CHAIR SEATON interjected that the relation of this linked
deposit system is the developer can get cheaper capital, and can
have access to capital, when the interest rate might otherwise
prevent the development from going forward. At extremely low
interest rates this might not be beneficial, but when interest
rates go high developers have a hard time getting money
economically enough to do a development; thus the linked deposit
would allow for water systems to be improved, whether that is
catchment ponds or other water system improvements. Water
systems does not just mean water to the house, it means water
systems flowing down through a planned development.
REPRESENTATIVE MUNOZ inquired whether the fund grows as loans
are paid off with interest, or is the fund meant to stay at the
level of $45 million.
MS. KOESTER responded that the Alaska Clean Water Fund does grow
and the interest received is re-loaned to other qualified
projects. That is how it currently works and how it would
continue to work.
1:23:26 PM
REPRESENTATIVE GARDNER understood that HB 123 would expand the
entities that can borrow the money that is essentially federal
money that the state has control of. But rather than have DEC
or the state take the loan applications and provide
administration, it would be done through a bank and the bank is
willing to provide a lower interest rate because it has the
security of the state's certificate of deposit.
MS. KOESTER confirmed that this is correct.
REPRESENTATIVE GARDNER noted that the language that would be
added by HB 123 is "to persons, municipalities, or other
qualified entities...." She asked what that specifically really
means. For example, Kensington Mine has built settling pools
next to its roads so that the runoff does not go directly into
streams, which is clearly a water quality issue. She asked
whether Kensington Mine would be a qualified entity for a loan
for something like these settling ponds.
MS. KOESTER allowed that the sponsor has struggled with
"qualified entities" because if it is defined too tightly then
no one is really eligible. She said her understanding is that
Kensington Mine would be eligible by working through the
approval process that the project is eligible for.
REPRESENTATIVE GARDNER commented that if large industrial groups
such as those on the North Slope are eligible, there would need
to be a limitation on the scale so that one or two big groups
did not take all the funds and leave "John in Homer" without
access to the money.
MS. KOESTER agreed, saying limitations on the money would have
to be developed because there is a need for municipalities. She
deferred to DEC to speak to the current limitations.
1:26:15 PM
CO-CHAIR FEIGE observed that the first section of HB 123 defines
the projects, which is the existing law: public wastewater
collection, treatment, or discharge systems; nonpoint sources of
pollution; and estuary conservation and management programs. He
inquired why private persons would need to be added because it
seems to him that persons do not have the responsibility for any
of those particular projects.
MS. KOESTER answered that individual persons would not be added
for point source pollution projects, such as solid waste
management systems. There are two sections of the fund - point
source and nonpoint source. Individual borrowers would be
eligible for nonpoint source pollution because it is much more
difficult to point a finger at something like pesticide runoff
or a development that has issues with pavement and stormwater
management that are harder to mitigate. So, the bill would
really provide a market incentive for individuals to consider
those aspects when developing.
CO-CHAIR FEIGE asked whether the Alaska Clean Water Revolving
Loan Fund is just different terminology for the same thing or is
something different.
MS. KOESTER replied it is the Alaska Clean Water Revolving Loan
Fund and HB 123 would just expand the eligible borrowers to a
portion of that fund, which is the nonpoint source pollution
portion of that fund.
1:28:32 PM
REPRESENTATIVE FOSTER inquired whether any pushback is expected
from state agencies or municipalities that fear the $45 million
might not grow and so more people would be fighting for this
piece of the pie that is not growing.
MS. KOESTER responded she believes municipalities have first
priority. It is the sponsor's understanding that Alaska could
be taking advantage of more clean water opportunities.
Municipalities are not using the fund at this point in time to a
level that would indicate there is an over-demand on the fund.
REPRESENTATIVE FOSTER asked how much of the fund is encumbered.
MS. KOESTER deferred to DEC.
REPRESENTATIVE P. WILSON inquired how many applications there
are per year and said she would like to hear from DEC.
CO-CHAIR SEATON confirmed that DEC would be speaking later.
1:30:28 PM
REPRESENTATIVE HERRON understood banks would like it because
they can make money, but more importantly if a bank can invest
in a project that enhances the bank's investment in a project or
collateral or neighbor projects it is in its best interest to
borrow this money from the state to lend out so that the bank
can protect those projects that may be surrounding a respective
project. He inquired whether this specific legislation has been
tried in a previous Alaska legislature.
MS. KOESTER answered that House Bill 200 was introduced last
year but was not heard.
1:31:37 PM
REPRESENTATIVE MUNOZ related that at a recent hearing before the
House Community and Regional Affairs Standing Committee, the
City of Unalaska testified that it is considering upgrades to
its water discharge system to go from a primary system to
secondary. She asked whether Unalaska would be eligible for
these funds and, if so, whether the fund large is enough to
support those new requirements that the EPA is bringing forward
for many of Alaska's coastal communities.
MS. KOESTER replied that the City of Unalaska is already
eligible for those funds. From her limited understanding of the
potential implications of that decision, she said it is much
larger than what many of the state's funds combined would be
able to handle.
1:32:27 PM
CO-CHAIR FEIGE surmised the upcoming requirements described by
Representative Munoz are beyond the current ability of the
[Alaska Clean Water Fund] to fund.
MS. KOESTER understood there is some potential coming from the
EPA for changes to its requirements that would have far-reaching
ramifications for many communities. However, she said she does
not know very much about this because it is very new and there
are a lot of assumptions as to which communities may or may not
be targeted, including some in the sponsor's district.
CO-CHAIR FEIGE, regarding page 2, line 14, of HB 123 that states
the department "shall" establish a linked deposit loan program,
asked whether it would be better to say "may" so as to give DEC
the option of doing this depending upon demand.
MS. KOESTER responded that that would be a policy call; the
differences between "shall" and "may" are very large. Either
way, statutory authority is needed to hold Clean Water dollars
somewhere besides the treasury.
1:34:59 PM
LYNN KENT, Director, Division of Water, Department of
Environmental Conservation (DEC), explained that DEC administers
two separate funds: the Drinking Water Revolving Loan Fund and
the Clean Water Revolving Loan Fund that is the subject of HB
123. The Drinking Water Revolving Loan Fund is tapped out right
now and no dollars are available beyond the annual appropriation
to the fund in the federal grant. The Clean Water Revolving
Loan Fund is about $390 million, of which a balance of about $42
million is currently available. While that may seem like a
large amount of money, there are some communities poised to seek
some very large loans from that fund, as was just heard, and
that has the potential to tap out the fund in a hurry.
Currently the loan fund is being used primarily for communities
for their wastewater collection, treatment, and disposal
systems. The department does fund some nonpoint projects
through solid waste projects and stormwater projects, again
through loans to communities.
MS. KENT, regarding the question of whether large industrial
businesses could get loans under HB 123, said the answer is yes
and no. She said she believes they would be prohibited from
getting a loan for an activity that is regulated under the point
source requirements of the Clean Water Act. The Kensington Mine
stormwater example that was cited earlier is actually a
permitted discharge at the mine, so the mine would likely not be
eligible for a nonpoint source loan through this linked deposit
program. She said she believes that under the way the bill is
currently set up, private industry could seek loans for
activities that are nonpoint source pollution oriented.
1:37:36 PM
MS. KENT, regarding the question about the source of the funds,
explained that the fund consists of the annual appropriation by
the EPA, the interest the state receives on the portions of the
fund that are loaned out, and the repayments of the previous
loans that have been issued. While the fund is growing from
that perspective, DEC is concerned that federal appropriations
that have been helping to capitalize the fund are proposed to
take some pretty severe hits this year.
REPRESENTATIVE GARDNER requested a definition of the difference
between point source and nonpoint source.
MS. KENT answered that a point source is a discharge from a
facility that comes from what EPA calls a discreet conveyance,
such as a pipe from a treatment plant that discharges to a
surface water. Nonpoint source discharge does not come from a
discreet conveyance; for example, pollution from dog droppings,
herbicides, or fertilizers that are from the lawn of a city park
and that through rainfall run off into a creek or surface water.
Another nonpoint example is rain falling onto parking lots that
then runs off, carrying oils and grease from cars into the
creek. The EPA does not have a regulatory program for nonpoint
source discharges.
1:39:36 PM
REPRESENTATIVE KAWASAKI inquired how DEC would define a person
or other qualified entity for purposes of the regulations.
MS. KENT replied that DEC would have to write regulations to
implement HB 123, but as the bill is currently written the
eligible entity would not preclude anyone who has a project that
would be eligible under the terms of the revolving loan fund.
So, eligible entity could include a private individual or a
private business so long as the person or entity had a nonpoint
source project that fell within the allowable projects under the
fund.
1:40:21 PM
REPRESENTATIVE P. WILSON, regarding Unalaska having to meet new
EPA requirements, noted that Unalaska goes through a huge amount
of water because of the number of processors located there. She
surmised that many municipalities may be faced with having to
meet these new EPA requirements. She asked how much money the
State of Alaska receives from the federal government and whether
the program would be able to provide funds to all qualified
entities if the program is kept as it is now.
MS. KENT responded that the municipalities are always requesting
money from DEC, not just for new facilities but also for
upgrading and replacing current facilities and to accommodate
growth in the community. Therefore, it is not always a new or
higher regulatory standard that causes municipalities to seek a
loan from the department. Right now the department is receiving
about $12 million annually in federal allocations for this fund
and the demand for the funds is going up and up. A few years
ago DEC had a much larger balance in this fund; the balance is
going down and DEC expects it to tap out very soon.
1:42:36 PM
REPRESENTATIVE P. WILSON inquired whether the fund would be able
to handle adding more eligible entities for these loans, given
that the state may be receiving less money from the federal
government in coming years and that municipalities will be
needing upgrades.
MS. KENT answered that it all comes down to prioritization on
use of the fund. When conducting its annual scoring process,
the department primarily looks at the immediate health needs
that would result from a given project. So, once the funds are
tapped out, what is likely to happen is that those projects that
meet an immediate health need would outscore projects that do
not provide such an immediate health benefit. In further
response to Representative P. Wilson, she said she does not
think DEC's eligibility criteria for the loan programs have
changed since the fund's inception.
1:44:35 PM
CO-CHAIR SEATON opened public testimony on HB 123.
1:44:53 PM
DEVONY LEHNER, Private Developer, said HB 123 would allow
another group of potentially eligible recipients to come on
line, but that she sees no downside to passing the bill because
the state would still have the flexibility to determine where
the money is allocated. She noted that she is a private
developer and that individual private developers have profound
long-term effects that can either increase or minimize the
demands on municipal systems. She and her husband are strong
advocates of trying to minimize demands on municipal systems and
keeping environmental effects from transferring offsite.
1:46:57 PM
MS. LEHNER stated that she and her husband are developing an 80-
acre conservation subdivision, called Stream Hill Park. It is
located inside Homer city limits so there are many hoops that
must be jumped through. Over half of the subdivision has been
set aside in permanent green space that is primarily drainages,
not creeks which require a buffer anyway. These drainages are
for handling large amounts of water coming from within the
subdivision as well as from outside it. She noted that there
are many piecemeal developments uphill from Stream Hill Park, so
her subdivision represents a system between upslope and
downslope development that can handle lots of water. She and
her husband have tried to create many ways where water can be
flowed, infiltrated, and cleaned so that it will not become a
problem downslope. She pointed out that impervious surfaces are
created by development which causes much more runoff. So, if no
mechanisms are put in place for looking at these things long
term, the city will end up with more and more runoff and already
the city often has more than it can effectively handle.
1:48:49 PM
MS. LEHNER noted that there is a rippling effect of benefits
when developers, particularly those that control relatively
large parcels, are encouraged to look at ways of developing so
as to minimize the demands on municipal services. There are
currently no incentives to do what she and her husband are
trying to do in their development and they have had to work hard
with taxing entities to explain that these parks and open spaces
are set aside as non-developable lands for forever and so should
not be taxed as developable. A developer has lots of issues to
deal with when trying to pro-actively develop in ways that
maximize watershed and community benefits, so any kind of
incentive could be significant for encouraging developers to
look at approaches that have long-time benefits to the
municipality and the community. She and her husband have put a
trail in their open space system that is used by many Homer
residents. Thus, in addition to open space protecting water
quality, it provides outdoor activity, quality of life, and
health benefits.
MS. LEHNER added that the benefits are diverse, widespread, and
long term. She urged members to consider the value of allowing
developers to have access to these kinds of funds through this
linked deposit program because developers really shape the
communities in which they are developing. It is better to have
the developments designed in appropriate and long-term
environmentally conscious sustainable ways than to be giving
money to municipalities to deal after the fact with the problems
created by poorly designed developments.
1:51:33 PM
REPRESENTATIVE P. WILSON inquired whether the U.S. Army Corps of
Engineers would consider the 40 acres of land set aside in Ms.
Lehner's subdivision as wetlands.
MS. LEHNER replied that very little of the area set aside in her
subdivision is mapped as wetlands. Kenai Peninsula wetlands
were classified and mapped in 2005 at a scale of 1:25,000 and
those are the maps used by the corps. Virtually none of the
areas that she and her husband have set aside are mapped as
wetlands even though they convey water downhill. She and her
husband are setting aside much larger areas than what would be
required by the minimum regulatory standards.
1:52:44 PM
CO-CHAIR FEIGE commented that Ms. Lehner's subdivision sounds
like a very nice development that would be a good investment.
He asked whether Ms. Lehner could not go to a bank and borrow
money to do this same thing.
MS. LEHNER responded that she and her husband have a credit line
of over $2 million with a bank. However, she pointed out, when
developing within the city the developer is required to put in
sewer, water, and paved roads. The lots in her subdivision
range from one-quarter to one-half acre in size which is a more
expensive way to go than the more traditional way of having
roughly one-acre individual parcels with no green space and
where the buyer must put in an on-site septic and figure out how
to put in a well or have water delivered. Such a traditional
development would have required much less money up front for
infrastructure, but it would not have created a significant open
space system. She said her testimony today is talking about
folks in the future who would be able to get a lower interest
rate than she and her husband were able to get. That lower
interest rate would encourage and allow developers to use this
beneficial type of approach.
CO-CHAIR SEATON held over HB 123.
HB 105-SOUTHEAST STATE FOREST
1:56:14 PM
CO-CHAIR SEATON announced that the next order of business is
HOUSE BILL NO. 105, "An Act relating to the Southeast State
Forest; and providing for an effective date."
1:56:29 PM
JOHN "CHRIS" MAISCH, State Forester, Director, Division of
Forestry, Department of Natural Resources (DNR), spoke in favor
of HB 105. He paraphrased from the following written statement
[some minor formatting changes]:
This bill is part of the state's effort to ensure that
local timber processing continues to be a piece of the
economy in Southeast Alaska. The majority of timber
in SSE [southern Southeast Alaska] is on federal land,
but federal timber sales have declined drastically.
Local mills now depend heavily on state timber for
survival. Demand for southeast timber for wood energy
is also increasing, further raising the importance of
securing a timber base in this region.
MR. MAISCH, as an example, noted that Sealaska Corporation
recently installed a wood pellet boiler for heating its building
in Juneau. He continued speaking from his written statement:
Pursuant to [Senate Committee Substitute for House
Bill] 162(RES), the 25,291 acre Southeast State Forest
was established in June 2010. HB 105 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 the combined
acreage (48,472 acres) for a long-term supply of
timber and retain these lands in state ownership for
multiple uses. These forest lands will be managed as
an integrated unit and according to a state forest
management plan that will be developed via a public
process within the next two years.
1:58:24 PM
While the lands were previously available for timber
harvest before the State Forest was established, the
State Forest designation ensures these productive
forest lands will remain in state ownership and
contribute to the long term viability of the timber
based economy in southeast.
In 2009, the previous forest inventory was updated for
all general use lands managed by the Department of
Natural Resources (DNR) with forest management intent
language per the regions Area Plans. This data
provides the required supporting information on timber
volume, acreage and allowable harvest for this
request. The allowable harvest from these lands is
approximately 8.3 million board feet. The DNR manages
over 159,000 acres of uplands in southern southeast
Alaska. Timber management is allowed on approximately
one third of this land; the State actively manages
this timber base 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, including
over 65,073 acres of legislatively designated state
marine parks and critical habitat areas.
Adding lands to the State Forest will ensure that the
State's most suitable lands in Southeast remain
available to contribute to timber supply through the
State's ongoing timber sale program. Much of the
State owned timber land in southeast Alaska was
inherited from the U.S. Forest Service and is
comprised of young, second-growth stands. Actively-
managed second-growth stands provide more timber
volume per acre on shorter rotations and can result in
improved deer browse than unmanaged stands.
2:00:17 PM
We can increase timber yield and associated timber
supply from state land by thinning these stands.
Thinning is a long-term investment and is only
justified if the land will continue to be available
for forest management.
Timber sales from these lands will be a mix of
domestic and export and will be based on economic
conditions and locations. As established by the 1984
Supreme Court Case of South Central Timber
Development, Inc vs. Esther Wunnicke, Commissioner
DNR, the state may not restrict round log exports due
to the interpretation of the interstate commerce
clause. Instead, the state has developed timber sale
methodologies to encourage domestic manufacture.
Currently, almost all sales sold are to local mills.
The proposed additions to the Southeast State Forest
include 23 parcels (see chart in the briefing paper).
Approximately 21 percent of these lands are from five
parcels that had previously been reserved pending
legislative transfer to the University of Alaska.
That legislation did not pass freeing these lands for
long-term forest management in the State Forest. The
legislation includes general use lands on Prince of
Wales, Tuxekan, Gravina, Kosciusko, Revillagigedo,
Wrangell, Suemez, Mitkof, Kuiu, Dall, and Zarembo
Islands. Six of these parcels are adjacent or near
existing State Forest parcels.
2:01:53 PM
The Division of Forestry worked with the [Division of
Mining, Land and Water] to identify and exclude lands
that are priorities for the state land disposal
program. A consultation was also initiated with the
University of Alaska Statewide Office of Land
Management and University senior 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. The
Division also consulted with the Alaska Department of
Fish and Game to ensure there was internal alignment
on the list of proposed parcels, and there is. Several
other parcels were considered as part of our internal
due diligence process, but because of [known] concerns
and or potential for high controversy were not
included.
Fish habitat and water quality are key components of
the Forest Resources and Practices Act (FRPA) which
have a series of regulations that will apply to
management of these parcels. Stream buffers have a no
cut 100 foot minimum width on both anadromous and high
value resident fish streams. The next 100 to 300 foot
zone may allow timber harvest, but the activity must
be consistent for both the maintenance of important
fish and wildlife habitat. Area Plans also provide
for coastal buffers of 300 to 500 feet with additional
recommendations for specific parcels. During the
development of the forest management plan, a key
consideration for the Neets Bay parcel will be the
maintenance of water quality and quantity for the fish
hatchery operation at the head of the bay. Dialog
with the Southern Southeast Regional Aquaculture
Association (SSRAA) is ongoing concerning this
legislation.
2:03:52 PM
The Southeast State Forest would be managed as part of
the State Forest System under AS 41.17.200-230.
Subsection (a) of Sec. 41.17.200 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 other beneficial uses of
public land and resources".
In addition to timber management, State Forests are
open for 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. Changes to management intent would
require public and interagency review through adoption
of a State Forest Management Plan under AS 41.17.230.
One of the other demands on state land in SSE is to
fulfill land entitlements for new municipalities. To
avoid conflicts with the Wrangell Borough entitlement,
the Southeast State Forest bill specifies that the new
Wrangell Borough may select State Forest land within
the borough boundary. The Wrangell borough boundary
encompasses three parcels in the existing state forest
(Crittenden Creek and Bradfield Canal East and West),
and four parcels in the proposed additions (Eastern
Passage, Pat Creek, Pat Creek uplands and Earl West
Cove).
If additional municipalities are incorporated before
June 30, 2019, lands that were vacant, unappropriated,
unreserved land before establishment of the State
Forest would be included in the calculation of the
municipal entitlement acreage, but may not be
selected.
2:05:33 PM
DNR has briefed many statewide groups and entities
across Southeast Alaska about this proposal, including
the Board of Forestry, SE Conference, local
governments, and the diverse groups participating in
the Tongass Futures Roundtable. These discussions
will continue and to date we have received letters in
support from the following organizations: the City of
Coffman Cove, the Resource Development Council, the
Alaska Forest Association, The Alaska Chapter of the
Society of American Foresters Southeast Conference,
[and] ... a letter of support from George Woodbury.
2:06:16 PM
REPRESENTATIVE MUNOZ inquired whether the University of Alaska
intends to move forward with selecting the aforementioned
parcels of lands and legislation.
MR. MAISCH replied no. Based on discussions, the university has
no intention of moving forward with additional legislation.
REPRESENTATIVE KAWASAKI asked how much of the current acreage is
being utilized now.
MR. MAISCH responded that currently about 50,000 acres are
identified in the area plan as general use land with forest
management intent. The combination of the bill that passed last
year and HB 105 would put just about all of the lands that were
classified general use forestry intent into state forest
designation. In further response, he confirmed that the 23,000
additional acres are currently managed for forestry and are part
of the allowable cut in southern Southeast Alaska. Thus, adding
these lands to the state forest would not increase the allowable
cut, but it would allow the division to start making investments
in pre-commercial thinning. Right now the division is unwilling
to do that since a municipality could form and select those
acres.
2:08:19 PM
CO-CHAIR FEIGE observed that concern has been expressed by a
group that the timber from Hook Arm and Rowan Bay will likely be
exported because these two locations are so far from a mill. He
asked whether Mr. Maisch had earlier stated that whole logs
could not be exported from state land due to federal statute.
MR. MAISCH answered that the state used to have a primary
processing rule, which was essentially a round log export ban.
However, because of the interstate commerce clause, only the
federal government has the ability to do that and the state's
statute was struck down by the [U.S.] Supreme Court. Therefore,
the state does not have the ability to regulate round log export
by law. So, by policy and the type of sales that the division
does, the state encourages domestic manufacture of timber in the
state.
CO-CHAIR FEIGE inquired whether the division has talked to the
mill in [southern] Southeast Alaska as to whether it could
receive timber from those parcels.
MR. MAISCH replied that that particular mill, Viking Lumber, is
the last mid-size mill in the state. The mill has benefitted by
state timber sales and if not for state volume it would likely
have closed due to lack of federal volume.
2:10:04 PM
REPRESENTATIVE MUNOZ offered her support for HB 105 and asked
whether the timber base is stable for the mill that is located
in Hoonah.
MR. MAISCH identified the mill as Icy Straits Lumber Mill and
said this mill does have some state volume under contract. The
one area that the U.S. Forest Service is doing well in is its
small timber sale program and that program supplies most of the
small mills on Prince of Wales Island and is meeting most of the
needs of the small operators.
2:11:10 PM
REPRESENTATIVE GARDNER observed that page 2 of the letter from
the Southeast Alaska Conservation Council talks about the likely
export of the timber from Hook Arm and Rowan Bay. She asked
whether it makes economic sense for the timber from these two
parcels to go to Viking Lumber for processing.
MR. MAISCH answered that he did not mean to imply earlier that
Viking Lumber would likely be able to process the timber from
those locations. Those two locations are fairly isolated and
those logs would likely go to the round log export market. The
way the industry functions right now in Southeast Alaska is that
there is both a round log export market and a domestic
manufacturing market. It is important for the cash flow of
mills to be able to export a portion of the logs that they
purchase because of the price that they can get on the export
market for sorts that are not profitable for sawing or for very
expensive logs that command a very high price. In further
response, he concurred that Viking Lumber would likely not have
access to the processing of timber from Hook Arm and Rowan Bay,
although it is difficult to anticipate what the economics will
be at the time that the sales come forward.
2:13:00 PM
REPRESENTATIVE KAWASAKI asked whether there are any requirements
that trees from state forests must be processed or have value
added before they can be exported.
MR. MAISCH replied no, that is what the state tried to do with
its primary processing law that was on the books in the 1970s.
It went to court in 1984, so the state does not have the ability
to require that type of manufacture, especially under a
competitive purchase situation. The state has several statutes
for selling timber. The statute used a lot when selling timber
in Southeast Alaska is called "118," which refers to the section
of the statute. In areas of high unemployment and under-
utilized allowable cut, this statute allows for a competitive
negotiated process and one of the things that can be taken into
consideration is either value added or high value added
products. Statute "123," often referred to as the high value
added statute, has more stringent requirements but the division
is currently unable to use that statute in Southeast Alaska.
Two other statutes under which the division sells timber are the
regular competitive bid process and the small negotiated sale
process. Right now a purchaser can choose to manufacture and
most of the logs purchased are being used for local sawing.
Separate appraisals are done on any logs that will be exported,
which the purchaser must identify, and the state receives a
higher price for these.
2:15:28 PM
REPRESENTATIVE P. WILSON pointed out that a parcel included in
HB 105, Cleveland Peninsula, was under consideration for
selection by the university and at that time a group in Wrangell
had identified this parcel as being an area that it used for its
children's wilderness program. She asked whether the division
has talked with this group.
MR. MAISCH responded no, he is not aware of that organization,
but that the division would talk to them if the name and phone
number are provided. He said he does not believe any of the
parcels are actually on the Cleveland Peninsula, but that he
will check and get back to the committee.
2:17:03 PM
RON WOLFE, Natural Resources Manager, Sealaska Corporation,
testifying in support of HB 105, stated that communities in
Southeast Alaska are experiencing either reduced population
demand or continued population loss. This is important for such
things as schools, property values, and businesses. The timber
industry, while struggling, is one that is needed, as are all of
the industries in Southeast Alaska. The Southeast Alaska timber
industry is basically supported by three legs: federal timber
sales, private timber harvest, and state timber sales, and all
three of these landowners are necessary for a viable timber
industry in this region. Sealaska Corporation is predominantly
in the round log export business and uses the same contractors
as does Viking Lumber. It is these same contractors that would
purportedly operate on state timber sales. The same fuel
distributors and air taxi companies are also used. Thus, he is
describing a critical mass that is important for the survival of
the Southeast Alaska region. If any one of these legs of the
stool falls away, Southeast Alaska could be in very serious
trouble. The long term commitment of the state, as described by
Mr. Maisch, is important for the long term management and health
of the timber industry.
2:20:14 PM
MR. WOLFE, regarding the concerns expressed about round log
export, said it is important to note that a strong component of
timber sales on the Tongass National Forest is round log export.
This is necessary to make the timber economics work. The
premium price attained from round log export is basically what
makes a timber sale economical to operate. He urged members to
look at Sealaska's website to read the McDowell Group study on
timber industry employment, which found that on a per million
board foot basis the round log export industry generates just as
many jobs as the domestic manufacturing industry. These jobs in
the round log export arena are frequently in rural Southeast
Alaska villages where there are no other forms of employment and
this source of cash is crucial in a subsistence economy.
Favoring a solely domestic manufacture would mean that people
would have to move to a village that has a sawmill. He said the
Alaska Forest Resources and Practices Act works well to protect
fish and wildlife habitat resources on state and private land.
2:22:18 PM
REPRESENTATIVE KAWASAKI said it seems that the value added
industry would provide more jobs than would round log export.
MR. WOLFE appreciated how that seems counterintuitive, but said
a look at how Sealaska manufactures round logs into a customer
specification will show the extra jobs that are created in the
sort yard when the scale rollout is done. More importantly is
the ship loading or stevedoring jobs that go with the export of
the round logs. So, the combination of these jobs basically
equivocates to the mills.
MR. WOLFE, in response to Co-Chair Seaton, agreed to provide the
committee with a copy of the aforementioned McDowell study. He
further offered to provide committee members with a tour of the
Sealaska wood pellet boiler system.
2:24:50 PM
SHELLY WRIGHT, Executive Director, Southeast Conference, said
she is testifying on behalf of the communities of Southeast
Alaska that rely on resource development for survival. She
testified as follows:
The communities of Southeast Alaska are struggling to
survive. Part of the struggle is a lack of jobs.
There used to be a timber industry in our region that
supported our communities. People had wage earning
jobs and financial support for their schools and their
infrastructure. We depended on this for security and
for our future. Now our industry is almost gone. I
have been told the timber industry is a thing of the
past. However, I opened the Juneau Empire last Friday
and read on the front page that the State of Alaska's
retirement fund officials are looking at investing in
a timber industry in the Lower 48. To make the Alaska
state retirement fund more secure they are investing
in timber in the southeastern states from Texas to the
Carolinas while we sit on 17 million acres of Tongass
National Forest. That tells me we are missing the
mark here in our region. This state forest will be a
small way to stabilize our investments in the future
of our communities. Allowing the state to have
designated lands to manage for timber harvest will
give our local mills a little more security and
therefore maybe be able to employ a few more folks.
We are down to one medium sized mill in Prince of
Wales Island and nine or ten mom-and-pop mills
throughout the region that rely on the bigger mills to
stay in business. Supply is the obstacle for every
one of these mills. We are encouraged by the progress
the state department of forestry has made with its
industry development and with the partnership they
have with the federal government. However, these
efforts are almost unfortunately too little too late.
Our region is in emergency mode now. We need this
forest designation in order to survive.
2:27:26 PM
CO-CHAIR SEATON interjected that the committee has a copy of the
Southeast Conference Resolution 11-11 as well as a copy of the
February 14, 2011, letter from the Southeast Conference Timber
Committee chairperson.
MS. WRIGHT continued her testimony:
The existence of a timber industry in Southeast Alaska
depends on immediate action to provide a supply of
economically viable sales. There has been some
concerted effort by the state working with the U.S.
Forest Service to improve the quality and quantity of
the Forest Service timber sales. This effort
continues, but has not resulted in the improvement
needed. There are 17 million acres in the Tongass
National Forest. This bill will secure 48,472 acres
for timber harvest management by the Division of
Forestry. It is a very small amount of land in a very
big picture, but it could go a long way in maintaining
the stability for our people in Southeast Alaska. As
a representative of the logging communities in
Southeast Alaska, I urge you to support the expansion
of the Alaska State Forest. This designation will
enable the Department of Natural Resources Division of
Forest to sustainably manage the timber, fisheries,
wildlife, waters, recreation, and other multiple
benefits that will strengthen the local economy,
provide jobs, and improve quality of life of all
Southeast Alaska communities.
2:29:55 PM
JOHN SANDOR spoke in favor of HB 105 from the following written
statement [original punctuation provided]:
I first came to Alaska on an assignment with the U.S.
Forest Service in 1953 and served as the Regional
Forester of the Alaska Region from 1976 to my
retirement from that agency in 1984. I also served as
Commissioner of the Alaska Department of Environmental
Conservation from 1990-1994. I am submitting this
testimony as an individual - a Certified Forester and
life-time member of the Society of American Foresters.
I support HB 105 - which will add 23,181 Acres of
State lands to the 25,291 acre existing State Forest
which was established last year. This expanded State
Forest of 48,472 acres will enable the Department of
[Natural] Resources Division of Forestry to
sustainably [manage] the timber, fisheries, wildlife,
waters, recreation, and other multiple benefits that
will strengthen the local economy, provide jobs, and
improve the quality of life of the communities living
in the vicinity of these existing state lands.
Since the closure of the two Southeast Alaska pulp
mills during the 1990's and the loss of an integrated
forest product industry in the region, employment and
population levels have significantly declined.
MR. SANDOR called the committee's attention to the Department of
Labor & Workforce Development's projections for populations from
2010 to 2034. The population of Southeast Alaska is roughly
69,000 and by the year 2034 the population will decline by 14.5
percent. This is astonishing because the total state population
is projected to increase by 24 percent. He noted that the
Department of Natural Resources has had an exemplary record of
working with local communities in protecting and managing local
forests. The new Southeast State Forest will provide local
communities with new opportunities to improve their economy and
quality of life. He directed attention to a Juneau Empire
article in the committee packet written by Tlingit leader Dr.
Walter Soboleff.
2:33:49 PM
REPRESENTATIVE HERRON inquired whether more acreage could be
added to the state forest.
MR. SANDOR replied that this is about one-third of the total
state forest land in Southeast Alaska, but it is about the ideal
amount in that state forest. He deferred to the state forester
as to whether any additional land should be added.
2:34:53 PM
WAYNE NICOLLS urged passage of HB 105, paraphrasing from the
following written statement [original punctuation provided]:
I am retired after 37 years with the US Forest
Service. I am a 50-year member of the Society of
American Foresters and I continue my education efforts
to qualify as a Certified Forester. I am also a
member of the Alaska Board of Forestry.
This statement in support of HB 105 is in behalf of
myself as an individual, not as a spokesman for any
organization.
The addition of some 23,000 acres to the Southeast
State Forest will total nearly 50,000 acres. The
legislature and administration are to be complimented
for their foresight in establishing the Southeast
State Forest and I urge that they exercise that same
foresight in enlarging it.
As I indicated last year during deliberations that led
to the establishment of the [Southeast] State Forest,
designation of lands as such elevates their status
above mere state ownership. It justifies prudent
investments via cultural treatment of the forest
stands and establishment of infrastructure to
facilitate their management and multiple public use.
While much current focus is on logging, resultant
employment, and current economic results of state
management, the real benefit is long term through
subsequent management and use over many decades,
possibly a century or more. These long term benefits
far outweigh short term wood harvest benefits.
I have only heard one argument for deletion of certain
tracts on the basis that they contain considerable old
growth. Thus should remain outside the state forest.
This is some sort of reverse logic. The argument is
without merit because as the land is already owned by
the state it can be harvested. It just is not
feasible to invest management effort subsequently.
Not including it in the state forest does nothing to
protect it from logging if that is the objective.
Contrary to some popular belief, old growth is not the
epitome of wildlife habitat. Carefully managed forest
land through vegetation manipulation can improve
habitat. It can increase carrying capacity for deer
and other species. It can even improve fish habitat
as has been proven by research in the past decade or
two. Preaching that old growth must be preserved to
benefit wildlife is shallow logic. The effort
opposing inclusion in state forest would best be
devoted to acquiring current scientific knowledge and
advocating conservation through forest management.
2:38:59 PM
CARL PORTMAN, Deputy Director, Resource Development Council
(RDC), spoke in favor of HB 105 as follows:
RDC supports HB 105 given expansion of the forest
would help sustain the forest products industry, save
jobs, and help the economy. The state land identified
for inclusion into the new state forest has been
consistently managed for timber harvest. A state
forest designation over these lands would ensure they
would remain in state ownership and contribute to the
long-term viability of the forest products industry in
Southeast Alaska.
RDC supported the creation of the Southeast State
Forest because demand for state timber exceeds supply
and local mills are dependent on a consistent supply
to stay in business. The majority of the timber in
Southeast Alaska is on federal land, but federal
timber sales have declined sharply. Subsequently, the
demand for state timber from local mills has increased
significantly.
Much of the new state forest contains young second-
growth stands. There is broad support for shifting
timber harvesting in Southeast Alaska from old growth
to second growth. The new state forest and the
proposed additional parcels to it would help provide a
sustainable timber supply to local mills and
accelerate the harvest of second-growth timber.
Actively managed second-growth stands will provide
more timber volume per acre on shorter rotations.
The shift to second-growth harvesting can be
accelerated and timber volume increased on state land
by thinning these stands. However, thinning is a
long-term investment and is only justified if the land
will be available for timber harvesting.
In our view the Southeast State Forest and the
proposed additions to it are needed to help restore
some balance in Southeast Alaska, given approximately
95 percent of the Tongass National Forest is closed to
logging. The Tongass itself comprises about 94
percent of the land base in Southeast. As a result
land management in Southeast is extremely weighted
toward conservation and non-development uses. Of the
17 million acres in the Tongass, only 663,000 acres
are scheduled for harvesting over the next 100 years
and half of that acreage is second growth timber cut
decades ago. The annual harvest ceiling has been
reduced to 267 million board feet, down from 520
million board feet under previous federal plans and
mandates. Only 30 million board feet of timber has
been harvested annually in recent years, less than 15
percent of the allowable cut. Timber harvests in
these federal lands are likely to be constrained due
to litigation and other federal issues.
2:41:39 PM
With regard to state lands, DNR manages over 159,000
acres of uplands in southern Southeast Alaska. Of
these, approximately 48,472 acres would be included in
the new expanded state forest. The remaining land is
designated for other uses, including recreation, water
resources, land sales, and fish and wildlife habitat,
including 25,000 acres of legislatively designated
state parks, refuges, and public use areas. These
statistics in our view speak to the need, the urgent
need, of a productive state forest in Southeast. With
the Forest Service unable to provide timber sales and
the industry need to keep operating and with most
federal land in the region now closed to development,
the proposed additions to the Southeast State Forest
are needed and would help sustain the forest products,
industry, save jobs, and benefit the economy.
2:43:40 PM
KIRK DAHLSTROM, Co-Owner and General Manager, Viking Lumber
Company Inc., specified that 17 years ago he and his brothers
bought a bankrupt sawmill located on Prince of Wales Island,
intending to run the mill on Forest Service timber. However,
the federal government has let them down. Over the past 10
years almost one-third of the mill's volume has come from state
timber sales and is what has kept the mill alive. The mill has
over 100 employees and contributes about $17 million annually to
the local Prince of Wales Island economy. Over the years he has
had some very tough times with timber supply, but the state
timber sale program and [House Bill 162], which established the
state forest last year, have given him great confidence to
continue going. He supports passage of HB 105 because it will
provide more confidence to keep going in the face of the
horrible market conditions and timber supply that he has had.
CO-CHAIR SEATON inquired whether Viking Lumber would be
interested in the two remote parcels [Hook Arm and Rowan Bay].
MR. DAHLSTROM replied that over the years Viking Lumber has
reached out over 200 water miles to get timber. Rowan Bay is
not too far, but it may take a little more of the wood being
exported from there to cover the extra costs of transportation.
About 30-40 percent of the logs would go to the sawmill and the
rest would need to be exported to make it economical.
2:46:55 PM
ERIC LEE noted that all of the comment heard by the committee so
far has been from big timber interests. The reason for this, he
maintained, is that the small operators can have an entirely
different opinion about HB 105. Born in Petersburg in 1951, he
said he has been a subsistence hunter on Mitkof Island every
year since he was a boy until the season was closed in 1975 due
to the drastic decline of deer after the extensive logging and
two hard winters. Before logging deforested much of the best
deer winter habitat, game was plentiful on the island. Deer and
wolf populations rose and fell in the same natural cycle they
had always followed for thousands of years. During the time he
grew up the deer season was open for five months of each year,
from August through December, and the limit was four deer.
Following the closure in 1975 the deer made only a slow and
partial recovery and the season remained closed entirely for 16
years. In 1991 it was re-opened for two weeks with a limit of
one buck, and except for a small archery season it remains at
just two weeks and a limit of one very-hard-to-find buck. In
spite of this very restrictive management, the deer population
has never recovered. This dramatic reduction in Mitkof Island's
deer carrying capacity is directly attributable to the
deforestation of deer winter range and the extensive system of
logging roads that allow poachers to access most of the island
and that also provide easy travelling for wolves.
MR. LEE also recalled his days of coho salmon fishing in a
stream in the Falls Creek watershed on Mitkof Island before that
area was logged. He said the streambed and sandbars were clean,
but during and after logging of the watershed the sand and
gravel bars were periodically covered by an inch or more of fine
mud and silt even though the logging took place a long distance
from the creek. Over the next four or five years the coho run
dropped to a fraction of its former strength and has never fully
covered.
MR. LEE said he is using these firsthand observations from his
life to show why he is concerned about the additional logging
that would take place on Mitkof Island if the four parcels on
the island are selected. There are already over 150 miles of
logging roads on this small island, he noted. Both ecologically
and economically, logging has not been conducted in a
sustainable way despite the claims to the contrary. Most of the
valuable timber from these state lands will be cut down and
shipped overseas as fast as possible, rather than sustainably,
with no regard for added processing to bring economic benefit.
2:50:54 PM
MR. LEE urged that no state lands be designated for logging
until the timber can be processed in Alaska for the benefit of
Alaskans. He read from Article 8, Section 4, of the Alaska
State Constitution which states that resources shall be utilized
and managed sustainably, and said that the proposal for Mitkof
Island is not even remotely close to sustainable.
MR. LEE, regarding round log export, pointed out that the best
trees are shipped overseas and these trees are centuries old,
irreplaceable, and extremely valuable. Once those trees are
gone they are gone for good. The big timber interests make
their quick money, but sustainable long-term business
opportunities for the mom-and-pop operators are gone with the
exported timber and it is the mom-and-pop operators that provide
economic opportunities for communities like Petersburg.
2:53:28 PM
JOSEPH SEBASTIAN warned that like the federal forest program on
the Tongass National Forest, this state forest land program will
be a deficit-receipt program to the State of Alaska. It will
require more state investment than there will be profits to the
state or communities. Much of this land is already marginal
timber or old clear cuts and marginal second growth. There will
be tens of thousands of dollars of survey costs, monitoring,
accounting, and trying to keep the users honest that will add
further costs. Additionally, the far-flung nature of these land
parcels will make them impossibly expensive to administer by the
state forester and his staff. This program amounts to little
more than corporate welfare for a couple of timber operators and
the round log export amounts to round job exports.
2:55:50 PM
MR. SEBASTIAN said the state cannot clearcut its way to
prosperity in the Tongass and will be doubly impoverished by
exporting its forest resources under the premise of further jobs
from exporting. Sealaska has completely stripped the trees from
over half of Dall Island, he charged, so the island will be
clearcuts on top of clearcuts. He urged that the state program
be more responsible than has Sealaska. The Hook Arm and Rowan
Bay parcels should be dropped. The parcel in Rowan Bay has a
lot of coastline and sensitive beach fringe. North Kuiu Island
is one of the most heavily logged places in Southeast Alaska.
The Sumdum, Cleveland Peninsula, Mite Cove, Lynn Canal, Rowan
Bay, and Hook Arm parcels should be deleted from HB 105 and the
bill balanced by designating these parcels as state parks.
2:58:19 PM
JEREMY MAXAND noted that he and his parents were born and raised
in Wrangell and his father was a longshoreman. He is proud to
say that in 1992 he was the first Wrangell student to receive
the Alaska Pulp Corporation's academic scholarship of $10,000,
which helped put him through college. He said his comments are
not necessarily in support or opposition to HB 105; rather, his
primary concern is with the potential scale of round log export
and, in essence, the exporting of jobs from his community.
Wrangell used to have a very large mill that processed 60-70
million board feet a year, but this mill is now in the final
stages of complete dismantlement. The Wrangell community has
gone through a tumultuous economic time to re-create itself and
identify ways to diversify and stabilize its economy. Wrangell
has two micro-operators that process about 250,000-500,000 board
feet of timber a year into amazing wood products and he supports
their efforts 100 percent.
MR. MAXAND said his concern about HB 105 is that Wrangell is in
the unique position of determining how it will go forward
economically and what role the timber industry is going to play
in that. He believes most people have moved beyond the idea of
a large timber industry in Wrangell, but they have not moved
beyond the idea that Wrangell could have some very important
value added wood manufacturing operations in addition to the
ones the community currently has. Even though comments have
been made that there are efforts to encourage local
manufacturing of that fiber, his concern is that he does not see
how genuine or real those efforts are. If HB 105 moves forward,
he urges that the state look very hard at ways to innovatively
support communities like Wrangell that have worked toward having
a long-term sustainable mill industry. The state must look at
ways to ensure that the timber harvested from Wrangell Island is
kept on the island for manufacturing and value adding by small,
sustainable mill operations in Wrangell. Alaska's timber should
not be shipped out of the country while the communities are left
with clearcuts and no remaining timber. He urged the committee
to do the right thing for the people in Wrangell.
3:02:31 PM
CO-CHAIR SEATON held over HB 105.
3:02:45 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 3:03 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01-HB0123A.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 02-Sponsor Statement HB123.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 04-Innovative use of CWF.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 05.Funding decentralized watewater systems.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 06-Wet Weather.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 07-Green Infrastructure.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 08-Ohio brownfield.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 09-the Ohio example.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 10-Homer Soil and Water Landscape Suitability Map.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| HB0105A.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| Coffman Cove Support HB105-SB44.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| 1 14 11 Chenault SESF Transmittal.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| Public Briefing HB105-SB44 1-24-2011.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| RDC Support 1-5-11.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| AFA support SESF additions 1-12-11.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| Vicinity Map SSE State Forest 12-20-10.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| Parcel Maps SESF 12.20.2010.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| SEACC_SESF_h_02_11.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| SAF Letter of Support.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| HB0105-1-2-011811-DNR-N.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| HB123-DEC-FC-02-11-11.pdf |
HRES 2/14/2011 1:00:00 PM |
|
| Testimony and Resolution - Southeast Conference.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| Testimony - Wayne R. Nicolls.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| Testimony - John A. Sandor.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| DOF Testimony HB105 2-14-11.pdf |
HRES 2/14/2011 1:00:00 PM |
HB 105 |
| SEAALASKA McDowell Group studies.pdf |
HRES 2/14/2011 1:00:00 PM SFIN 4/14/2011 9:00:00 AM |
HB 105 |