Legislature(2023 - 2024)BUTROVICH 205

05/08/2023 03:30 PM Senate RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 4:00 p.m. --
+= SB 137 REFINED FUEL SURCHARGE TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= HB 104 TIMBER SALE: EXPEDITED/SALVAGE/NEGOTIATED TELECONFERENCED
Heard & Held
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                          May 8, 2023                                                                                           
                           4:02 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Click Bishop, Co-Chair                                                                                                  
Senator Cathy Giessel, Co-Chair                                                                                                 
Senator Bill Wielechowski, Vice Chair                                                                                           
Senator Scott Kawasaki                                                                                                          
Senator Forrest Dunbar                                                                                                          
Senator Matt Claman                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator James Kaufman                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 137                                                                                                             
"An Act relating to the refined fuel surcharge; and providing                                                                   
for an effective date."                                                                                                         
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 104(RES) AM                                                                             
"An Act relating to salvage sales of timber, negotiated timber                                                                  
sales for local manufacture of wood products, and expedited                                                                     
timber sales; and providing for an effective date."                                                                             
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 137                                                                                                                  
SHORT TITLE: REFINED FUEL SURCHARGE                                                                                             
SPONSOR(s): SENATOR(s) GIESSEL                                                                                                  
                                                                                                                                
04/24/23       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/24/23       (S)       RES, FIN                                                                                               
05/05/23       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
05/05/23       (S)       Heard & Held                                                                                           
05/05/23       (S)       MINUTE(RES)                                                                                            
05/08/23       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HB 104                                                                                                                  
SHORT TITLE: TIMBER SALE: EXPEDITED/SALVAGE/NEGOTIATED                                                                          
SPONSOR(s): REPRESENTATIVE(s) CRONK                                                                                             
                                                                                                                                
03/08/23       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/08/23       (H)       RES                                                                                                    
03/20/23       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/20/23       (H)       Heard & Held                                                                                           
03/20/23       (H)       MINUTE(RES)                                                                                            
03/24/23       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/24/23       (H)       Heard & Held                                                                                           
03/24/23       (H)       MINUTE(RES)                                                                                            
04/03/23       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/03/23       (H)       -- MEETING CANCELED --                                                                                 
04/14/23       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/14/23       (H)       Moved CSHB 104(RES) Out of Committee                                                                   
04/14/23       (H)       MINUTE(RES)                                                                                            
04/17/23       (H)       RES RPT CS(RES) NEW TITLE 4DP 2NR                                                                      
04/17/23       (H)       DP: RAUSCHER, MCCABE, SADDLER, MCKAY                                                                   
04/17/23       (H)       NR: ARMSTRONG, PATKOTAK                                                                                
04/20/23       (H)       TRANSMITTED TO (S)                                                                                     
04/20/23       (H)       VERSION: CSHB 104(RES) AM                                                                              
04/21/23       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/21/23       (S)       RES                                                                                                    
04/24/23       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/24/23       (S)       Heard & Held                                                                                           
04/24/23       (S)       MINUTE(RES)                                                                                            
05/05/23       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
05/05/23       (S)       **Streamed live on AKL.tv**                                                                            
05/08/23       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
BRANDON SPANOS, Deputy Director                                                                                                 
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Responded to a question relating to                                                                       
Amendment 1 for SB 137.                                                                                                         
                                                                                                                                
REPRESENTATIVE MIKE CRONK, District 36                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of HB 104.                                                                                        
                                                                                                                                
DAVE STANCLIFF, Staff                                                                                                           
Representative Mike Cronk                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information and  answered questions                                                             
during the hearing on HB 104.                                                                                                   
                                                                                                                                
HELGE ENG, State Forester and Director                                                                                          
Division of Forestry and Fire Protection                                                                                        
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Responded to  questions during the hearing on                                                             
HB 104.                                                                                                                         
                                                                                                                                
ALPHEUS BULLARD, Legislative Counsel                                                                                            
Legal Services                                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Responded to  questions during the hearing on                                                             
HB 104.                                                                                                                         
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
4:02:21 PM                                                                                                                    
CO-CHAIR  CLICK  BISHOP  called  the  Senate  Resources  Standing                                                             
Committee meeting  to order at 4:02  p.m. Present at the  call to                                                               
order  were  Senators   Dunbar,  Wielechowski,  Claman,  Co-Chair                                                               
Giessel,   and   Co-Chair   Bishop.  Senator   Kawasaki   arrived                                                               
thereafter.                                                                                                                     
                                                                                                                                
                  SB 137-REFINED FUEL SURCHARGE                                                                             
                                                                                                                                
4:03:11 PM                                                                                                                    
CO-CHAIR BISHOP  announced the consideration  of SENATE  BILL NO.                                                               
137  "An  Act  relating  to   the  refined  fuel  surcharge;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
He  noted  that there  was  an  amendment  for the  committee  to                                                               
consider.                                                                                                                       
                                                                                                                                
4:03:26 PM                                                                                                                    
CO-CHAIR  GIESSEL moved  to  adopt Amendment  1,  work order  33-                                                               
LS0768\B.2, for SB 137.                                                                                                         
                                                                                                                                
                                                 33-LS0768\B.2                                                                  
                                                      Dunmire                                                                   
                                                      4/26/23                                                                   
                                                                                                                                
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE              BY SENATOR BISHOP                                                                       
          TO: SB 137                                                                                                            
                                                                                                                                
     Page 1, line 3:                                                                                                            
           Delete "AS 43.40.005(a)"                                                                                             
           Insert "AS 43.40.005"                                                                                                
     Page 1, following line 5:                                                                                                  
          Insert a new subsection to read:                                                                                      
               "(b) The following refined fuels are exempt                                                                      
               from the surcharge imposed under                                                                                 
          this section:                                                                                                         
                    (1) fuel sold to a federal or state                                                                         
                    government agency for official use;                                                                         
                    (2) fuel consigned to a foreign                                                                         
                   country [REFINED AND USED                                                                                
          OUTSIDE THE UNITED STATES];                                                                                           
                    (3) liquefied petroleum gas;                                                                                
                    (4) aviation fuel;                                                                                          
                    (5) fuel sold or transferred between                                                                        
                    qualified dealers."                                                                                         
                                                                                                                                
CO-CHAIR BISHOP objected for purposes of discussion.                                                                            
                                                                                                                                
CO-CHAIR  GIESSEL explained  the genesis  for Amendment  1. A  US                                                               
flagged tug  and barge company  transports fuel to  Skagway where                                                               
it is  loaded onto  a truck that  is owned and  operated by  a US                                                               
firm and trucked  to the Yukon Territory.  The amendment proposes                                                               
exempting  that company  from paying  the refined  fuel surcharge                                                               
because the fuel is not used in the US.                                                                                         
                                                                                                                                
4:04:22 PM                                                                                                                    
CO-CHAIR  BISHOP removed  his objection.  He  noted that  Brandon                                                               
Spanos was available to answer questions.                                                                                       
                                                                                                                                
CO-CHAIR  GIESSEL asked  Mr. Spanos  to articulate  the potential                                                               
financial impact of the amendment.                                                                                              
                                                                                                                                
4:04:57 PM                                                                                                                    
BRANDON  SPANOS, Deputy  Director,  Tax  Division, Department  of                                                               
Revenue, Anchorage, Alaska,  stated that he was  unable to answer                                                               
the question  because too few  taxpayers are affected to  be able                                                               
to aggregate the information. The  only available information was                                                               
confidential.                                                                                                                   
                                                                                                                                
4:05:31 PM                                                                                                                    
SENATOR DUNBAR asked if that means  that the fiscal note that the                                                               
Finance  Committee  considers won't  reflect  the  impact of  the                                                               
proposed amendment.                                                                                                             
                                                                                                                                
MR.  SPANOS responded  that the  division will  amend the  fiscal                                                               
note if the amendment passes. It  will state that there will be a                                                               
negative impact  on revenue but  the amount is  indeterminate due                                                               
to taxpayer confidentiality.                                                                                                    
                                                                                                                                
CO-CHAIR BISHOP said the members  will see the fiscal note before                                                               
the bill leaves the committee.                                                                                                  
                                                                                                                                
4:06:15 PM                                                                                                                    
SENATOR WIELECHOWSKI asked at what level the tax is paid.                                                                       
                                                                                                                                
MR. SPANOS  replied that the  tax is assessed on  the distributor                                                               
when the fuel is sold to the retailer.                                                                                          
                                                                                                                                
4:06:47 PM                                                                                                                    
CO-CHAIR BISHOP  found no further  objection and Amendment  1 was                                                               
adopted.                                                                                                                        
                                                                                                                                
4:06:56 PM                                                                                                                    
CO-CHAIR BISHOP held SB 137 in committee.                                                                                       
                                                                                                                                
        HB 104-TIMBER SALE: EXPEDITED/SALVAGE/NEGOTIATED                                                                    
                                                                                                                                
4:07:00 PM                                                                                                                    
CO-CHAIR BISHOP announced the consideration  of CS FOR HOUSE BILL                                                               
NO.  104(RES) am  "An Act  relating to  salvage sales  of timber,                                                               
negotiated timber  sales for local manufacture  of wood products,                                                               
and  expedited  timber  sales; and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
4:07:25 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
4:07:44 PM                                                                                                                    
CO-CHAIR BISHOP reconvened the meeting.                                                                                         
                                                                                                                                
4:07:53 PM                                                                                                                    
REPRESENTATIVE   MIKE   CRONK,    District   36,   Alaska   State                                                               
Legislature,  Juneau,  Alaska,  sponsor  of  HB  104,  introduced                                                               
himself.                                                                                                                        
                                                                                                                                
CO-CHAIR BISHOP  stated that this  was the second hearing  of the                                                               
bill and public was open.  After discerning that nobody wished to                                                               
testify, he closed public testimony on HB 104.                                                                                  
                                                                                                                                
4:08:14 PM                                                                                                                    
CO-CHAIR BISHOP closed public testimony on HB 104.                                                                              
                                                                                                                                
He asked for a brief summary of the section on expedited sales.                                                                 
                                                                                                                                
4:08:44 PM                                                                                                                    
DAVE STANCLIFF,  Staff, Representative  Mike Cronk,  Alaska State                                                               
Legislature,  Juneau,  Alaska,   responded  by  articulating  the                                                               
following questions that have been asked with some frequency.                                                                   
                                                                                                                                
   I.        What are the current types of timber sales?                                                                        
  II.        What does HB 104 do?                                                                                               
 III.        What is the current salvage sale process?                                                                          
  IV.        How does this bill propose to change the                                                                           
             salvage sale process?                                                                                              
   V.        Do these changes to the salvage sale allow the                                                                     
            commissioner to give "sweetheart deals"?                                                                            
  VI.        Do these changes to the salvage sale process                                                                       
             deny the public the right to object to a                                                                           
             salvage sale?                                                                                                      
 VII.        Are expedited timber sales in current law?                                                                         
VIII.        How does the bill change expedited timber                                                                          
             sales?                                                                                                             
  IX.        Why is this new process necessary?                                                                                 
   X.        Is the authority provided in this bill too                                                                         
             broad, as the entire state is at risk of fire                                                                      
             or insect infestation?                                                                                             
  XI.        Does the phrase "the commissioner is not                                                                           
             required to notice an expedited timber sale                                                                        
             under this section?" violate the constitution?                                                                     
                                                                                                                                
4:10:15 PM                                                                                                                    
MR.  STANCLIFF  said he  was  also  asked  to research  the  best                                                               
interest  finding  and  the  constitutionality  regarding  public                                                               
notice.  What legislators  and local  assemblies  in rural  areas                                                               
have to  ask is whether  there is sufficient opportunity  for the                                                               
public to weigh in on an expedited sale.                                                                                        
                                                                                                                                
He stated  that HB 104 seeks  to streamline the process  to allow                                                               
the commissioner  to move rapidly,  but while  following criteria                                                               
to ensure  the public interest is  served. He opined that  it's a                                                               
policy  question as  to whether  this will  be beneficial  to the                                                               
state. What  the sponsor is pointing  out is that this  bill will                                                               
provide  an opportunity  to  utilize timber  that  has been  fire                                                               
damaged or infested with beetles before it has no value.                                                                        
                                                                                                                                
4:13:58 PM                                                                                                                    
CO-CHAIR BISHOP noted  that the bill packet includes  a memo from                                                               
Legal Services  regarding whether the bill  raises constitutional                                                               
issues, an  FAQ sheet  from the  sponsor, and  additional support                                                               
letters.                                                                                                                        
                                                                                                                                
4:14:34 PM                                                                                                                    
SENATOR KAWASAKI joined the committee.                                                                                          
                                                                                                                                
4:14:42 PM                                                                                                                    
SENATOR CLAMAN  asked whether there  had been problems  under the                                                               
current structure  on salvage  sales in  getting a  best interest                                                               
finding timely,  as required under  AS 38.05.035(e), so  the sale                                                               
can be held before the timber loses its merchantable value.                                                                     
                                                                                                                                
CO-CHAIR BISHOP noted who was available to respond to questions.                                                                
                                                                                                                                
MR. STANCLIFF deferred the question to the state forester.                                                                      
                                                                                                                                
4:15:52 PM                                                                                                                    
HELGE ENG, State Forester and  Director, Division of Forestry and                                                               
Fire   Protection,  Department   of   Natural  Resources   (DNR),                                                               
Anchorage, Alaska,  said he believes  the division is  capable of                                                               
producing  a best  interest finding  fairly  quickly for  salvage                                                               
timber sales, get public input,  and salvage the timber before it                                                               
rots on the stump.                                                                                                              
                                                                                                                                
SENATOR CLAMAN  asked if  that's also true  for salvage  sales of                                                               
timber that's  been killed by  beetles and other insects  but not                                                               
subject to fire.                                                                                                                
                                                                                                                                
MR. ENG  said yes, it applies  to salvage sales of  timber that's                                                               
been killed by both fire and insects.                                                                                           
                                                                                                                                
SENATOR CLAMAN asked  if it was fair to say  that the division is                                                               
able to work under the  current statutory definition of a salvage                                                               
sale to identify timber that needs  to be harvested in a two-year                                                               
window to maintain value, do  the best interest findings, and get                                                               
the sale processed in time to  sell the timber for the value such                                                               
timber has.                                                                                                                     
                                                                                                                                
MR. ENG said that's correct;  the limitation typically is not the                                                               
process but access and other logistical limitations.                                                                            
                                                                                                                                
SENATOR CLAMAN asked him to elaborate.                                                                                          
                                                                                                                                
MR.  ENG responded  that access  refers to  whether the  area has                                                               
roads to haul the timber to  a processing facility. He added that                                                               
there's generally not a lot of demand for salvage timber.                                                                       
                                                                                                                                
4:18:26 PM                                                                                                                    
SENATOR KAWASAKI  paraphrased the second  paragraph on page  2 of                                                               
the   May   8,   2023   Legal   Services   memo   regarding   the                                                               
constitutionality of HB 104 and  asked for an explanation of that                                                               
process for HB 104 if it were to pass. The paragraph read:                                                                      
                                                                                                                                
     If, under the  bill, the commissioner elects  to hold a                                                                    
     salvage sale  under AS 30.05.117,  the sale  will still                                                                    
     have to address  constitutional notice public interest,                                                                    
     and  public  trust  concerns.  It will  be  up  to  the                                                                    
     commissioner to ensure that a  salvage sale meets these                                                                    
     constitutional   requirements.  The   commissioner  has                                                                    
     broad  authority under  AS 30.05.020(b)(1)  and (4)  to                                                                    
     adopt  regulations, or  ensure by  other means,  that a                                                                    
     salvage sale of timber meets these requirements.                                                                           
                                                                                                                                
MR. STANCLIFF deferred the question to Alpheus Bullard.                                                                         
                                                                                                                                
SENATOR KAWASAKI repeated the question.                                                                                         
                                                                                                                                
4:19:31 PM                                                                                                                    
ALPHEUS  BULLARD,  Legislative  Counsel, Legal  Services,  Alaska                                                               
State  Legislature, Juneau,  Alaska, explained  that the  process                                                               
would be that  the commissioner could adopt  regulations and show                                                               
constitutional requirements  are met  in regard to  salvage sales                                                               
under AS 38.05.117.                                                                                                             
                                                                                                                                
SENATOR KAWASAKI asked  1) what the safety valve would  be or how                                                               
somebody  would protest  a salvage  sale if  the new  regulations                                                               
don't  meet those  constitutional requirements  and 2)  what laws                                                               
govern the adoption of new regulations.                                                                                         
                                                                                                                                
MR.  BULLARD   responded  that  if   the  bill  passes   and  the                                                               
commissioner  of the  Department of  Natural Resources  effects a                                                               
salvage  timber   sale,  DNR  has   to  comply   with  applicable                                                               
constitutional  requirements. If  the sale  does not  comply with                                                               
the applicable requirements, the  safety valve is that litigation                                                               
will likely commence.                                                                                                           
                                                                                                                                
4:22:18 PM                                                                                                                    
SENATOR DUNBAR  observed that the  fact that salvage  timber will                                                               
lose economic  value is important in  the legal memo. He  said he                                                               
didn't think  it would  be very controversial  to have  burned or                                                               
beetle killed  timber removed  quickly in  a salvage  sale within                                                               
two years. He likes the  retrospective nature to the salvage, but                                                               
it's a concern  that these sales also seem to  have a prospective                                                               
nature.  He directed  attention  to  Section 8  of  the bill  and                                                               
paraphrased  paragraphs  (1)-(3)  in   subsection  (b).  He  said                                                               
paragraphs (1)  and (2) aren't  a concern but paragraph  (3) says                                                               
that a salvage sale may include  timber cleared as part of a fire                                                               
prevention or suppression activity, and that is a concern.                                                                      
                                                                                                                                
He asked  Mr. Eng how  large a swath  of land could  be justified                                                               
under the  salvage timber  provision. The worry  is that  if it's                                                               
subjective, a creeping  economic interest may start  to color the                                                               
fire suppression  interest, and  the swaths  could get  wider. He                                                               
asked Mr. Eng if that was possible.                                                                                             
                                                                                                                                
4:25:07 PM                                                                                                                    
MR. ENG responded that there  is a meaningful distinction between                                                               
fire prevention,  which includes  proactively making  fuel breaks                                                               
around communities, and  fire suppression, which is  what is done                                                               
when a  fire is actively  moving across the landscape  and you're                                                               
trying to put it out.                                                                                                           
                                                                                                                                
In the  first case where  there is no fire,  he said Tok  has 300                                                               
foot wide fuel breaks around parts  of the town, which are fairly                                                               
sizeable fuel  breaks. He continued  that the  department prefers                                                               
to  sell such  trees as  timber  sales rather  than using  public                                                               
funds to  pay people to remove  them. He said it's  a win-win and                                                               
he  didn't think  DNR would  ever be  a situation  where monetary                                                               
considerations would result in a wider fuel break.                                                                              
                                                                                                                                
In the  case of fire  suppression, he said the  existing statutes                                                               
allow the division  to remove fuel between an  advancing fire and                                                               
a  community.  So the  question  is  really  one of  getting  the                                                               
equipment to the location at the right time.                                                                                    
                                                                                                                                
SENATOR  DUNBAR asked  what the  bill changes  in regard  to fire                                                               
prevention  activities   when  the   division  already   puts  in                                                               
firebreaks and sells the timber when it makes a community safer.                                                                
                                                                                                                                
MR. ENG deferred the question to the sponsor.                                                                                   
                                                                                                                                
SENATOR DUNBAR emphasized  that he wanted to hear  from the state                                                               
forester  and  the people  who  do  the  fire  work in  order  to                                                               
understand how the bill will change their activities.                                                                           
                                                                                                                                
CO-CHAIR BISHOP asked Mr. Eng if  he wanted to think about it and                                                               
provide an answer when the bill is heard next.                                                                                  
                                                                                                                                
MR. ENG said he'd appreciate some time to consider his response.                                                                
                                                                                                                                
4:28:38 PM                                                                                                                    
SENATOR CLAMAN  asked Mr. Eng to  expand on the response  he gave                                                               
earlier  about access  and distance  because it  goes to  Senator                                                               
Dunbar's question  about how this  legislation would  change what                                                               
the division  is doing today.  He asked whether the  division was                                                               
prevented from doing  these sales today as opposed  to sales that                                                               
might  be interesting  but because  of access  and distance,  the                                                               
reality is that nobody will bid on them.                                                                                        
                                                                                                                                
4:30:15 PM                                                                                                                    
CO-CHAIR BISHOP dovetailed onto  Senator Claman's question, which                                                               
gets  into stumpage  value.  He posited  that  in some  instances                                                               
there  may be  no stumpage  value  but the  bill would  encourage                                                               
someone  to harvest  the timber  and hopefully  pass the  savings                                                               
along to a homeowner for the saw logs.                                                                                          
                                                                                                                                
MR. ENG  responded that the  division already does  salvage sales                                                               
under  existing  statute.  To   the  question  about  access  and                                                               
distance,  he said  the triple  curse  of Alaska  forestry is  1)                                                               
finding high quality, green saw  timber, 2) finding timber within                                                               
an economical hauling  distance to a sawmilling  facility, and 3)                                                               
finding access to  the timber in the first place.  He said Alaska                                                               
has by far the largest timberland  base in the nation, but access                                                               
to the  timber is difficult.  It's also  a broader issue  than HB
104 because it  gets to the governor's effort to  grow the timber                                                               
sector in Alaska.  It's not something that's  done overnight, but                                                               
a  combination of  strategic  investment  and opportunities  will                                                               
probably pay  off over time  by turning unmanaged  remote forests                                                               
into managed forests with road access.                                                                                          
                                                                                                                                
4:32:46 PM                                                                                                                    
SENATOR  WIELECHOWSKI referenced  the  last paragraph  on page  1                                                               
that says  that a  disposal of state  resources must  be noticed,                                                               
and paragraphs (d)(1)  and (2) on the last page  of the bill that                                                               
say that the commissioner is  not required to notice an expedited                                                               
timber sale. He  asked how that provision comports  with the memo                                                               
that  says  notice   is  required  for  the   disposal  of  state                                                               
resources.                                                                                                                      
                                                                                                                                
MR.  BULLARD  replied  that   AS  38.05.113(d)(1)  qualifies  the                                                               
exemption from  the notice  requirements. The  provision provides                                                               
for certain notice  of regular timber sales every two  years on a                                                               
five-year schedule.                                                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI asked what sort  of notice would be required                                                               
in an expedited timber sale.                                                                                                    
                                                                                                                                
MR. BULLARD opined  that every circumstance is  different and the                                                               
bill  leaves the  details of  the notice  to the  commissioner to                                                               
decide.                                                                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI  asked him to discuss  the seeming disparity                                                               
between the  language at the  end of  the first paragraph  in the                                                               
legal memo that says that the  sale will serve the best interests                                                               
of the  state, and  the language  in the  first sentence  of bill                                                               
Section  7 that  says, "the  commissioner may,  without making  a                                                               
written finding that  the disposal will serve  the best interests                                                               
of the state, offer for salvage sale timber...".                                                                                
                                                                                                                                
MR.  BULLARD replied  that the  lines in  the memo  were selected                                                               
from bill  Section 2 that  amends AS 38.05.035(e),  which removes                                                               
the written  best interest finding.  That section of  the statute                                                               
has procedural rules for the  disposal of state resources and the                                                               
bill exempts these sales from that procedural process.                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI said he needed a better explanation.                                                                       
                                                                                                                                
MR. BULLARD responded that, in  this instance, nothing that is or                                                               
is  not  put   in  statute  relieves  the   commissioner  of  the                                                               
constitutional obligation  to notice these sales,  make sure they                                                               
are  in the  best  interest of  the state,  and  ensure they  are                                                               
consistent with the  public trust doctrine. He  continued that he                                                               
believes  that the  constitutional notice  provision will  be met                                                               
even if the written best  interest finding process provided by AS                                                               
38.05.035(e) isn't used.                                                                                                        
                                                                                                                                
4:38:13 PM                                                                                                                    
CO-CHAIR  BISHOP agreed  with an  earlier statement  that nothing                                                               
precludes somebody  from filing  a lawsuit if  they think  such a                                                               
sale is unconstitutional.                                                                                                       
                                                                                                                                
SENATOR  KAWASAKI asked  what  the notice  process  would be  for                                                               
people who have  a trapping cabin or undeveloped land  in an area                                                               
close to a proposed salvage sale.                                                                                               
                                                                                                                                
MR. BULLARD  replied that the  bill provides a process  to notify                                                               
people  by  a  written  best interest  finding,  but  it  doesn't                                                               
provide  a  specific  process  for that  type  of  notice.  Those                                                               
decisions  are  left to  the  commissioner  to determine  how  it                                                               
should occur.  He reiterated  that the  final agency  decision is                                                               
subject to a challenge in superior court.                                                                                       
                                                                                                                                
SENATOR KAWASAKI commented  that it's this sort  of decision that                                                               
falls  under the  broad  authority  that the  bill  gives to  the                                                               
commissioner.                                                                                                                   
                                                                                                                                
MR. BULLARD said  yes, but it's important to  remember that these                                                               
timber   sales   are  bounded   by   AS   38.05.035(e)  and   the                                                               
commissioner's discretion to hold these  sales is limited to fire                                                               
and  insect killed  wood that  needs to  be harvested  within two                                                               
years  if  it's  to  maintain  its  economic  value.  That's  the                                                               
legislative discretion the bill provides.                                                                                       
                                                                                                                                
4:41:35 PM                                                                                                                    
SENATOR  DUNBAR  asked  if  the sponsor's  vision  was  that  the                                                               
commissioner would  make a best  interest finding but not  put it                                                               
in  writing  or that  the  commissioner  would  not make  a  best                                                               
interest finding at all.                                                                                                        
                                                                                                                                
4:42:26 PM                                                                                                                    
MR. STANCLIFF responded that the  commissioner has indicated that                                                               
he will make a best interest finding in writing.                                                                                
                                                                                                                                
CO-CHAIR   BISHOP   added   that  this   doesn't   preclude   the                                                               
commissioner from putting the finding  in a regulation package as                                                               
well.                                                                                                                           
                                                                                                                                
MR. STANCLIFF agreed.                                                                                                           
                                                                                                                                
4:43:03 PM                                                                                                                    
SENATOR  WIELECHOWSKI questioned  the  reason  for the  provision                                                               
saying  the commissioner  doesn't have  to make  a best  interest                                                               
finding  if this  commissioner plans  to do  so. He  asked if  it                                                               
wouldn't solve a lot of concerns to leave the statute as is.                                                                    
                                                                                                                                
MR.  STANCLIFF said  the obligation  is in  the constitution  and                                                               
that's not escapable.                                                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI asked  why the statute should  be changed to                                                               
say the  commissioner doesn't  have to make  a written  notice if                                                               
it's a constitutional obligation.                                                                                               
                                                                                                                                
MR. STANCLIFF  responded that the  salvage sale  process provides                                                               
that the commissioner  will look at the dead  timber, timber that                                                               
will  lose  economic  value,  and  timber  that  is  cleared  for                                                               
conversion the same  way as under current law, but  the weight of                                                               
public notice isn't the same.                                                                                                   
                                                                                                                                
SENATOR DUNBAR  asked if there  was a  way to amend  the statute,                                                               
without being too  prescriptive, to make sure there  is a written                                                               
best interest finding.                                                                                                          
                                                                                                                                
MR. STANCLIFF deferred the question to Mr. Bullard.                                                                             
                                                                                                                                
CO-CHAIR  BISHOP  asked  Senator  Dunbar whether  he  wanted  Mr.                                                               
Bullard to  comment or if  he wanted to  pose the question  in an                                                               
email.                                                                                                                          
                                                                                                                                
SENATOR DUNBAR asked Mr. Bullard  if the statute was prescriptive                                                               
with respect to what a best interest finding has to look like.                                                                  
                                                                                                                                
4:46:31 PM                                                                                                                    
MR.  BULLARD  replied that  the  existing  written best  interest                                                               
finding  process is  detailed in  AS  38.05.035(e). It  discusses                                                               
process, timing, and has links  to public notice requirements. To                                                               
the question about whether the  statute could be amended, he said                                                               
the Legal  Services attorneys  would be  happy to  draft whatever                                                               
the committee members would like.                                                                                               
                                                                                                                                
SENATOR  DUNBAR   commented  that   the  committee   was  getting                                                               
somewhere now.                                                                                                                  
                                                                                                                                
4:47:21 PM                                                                                                                    
CO-CHAIR GIESSEL commented that  the committee should be crafting                                                               
policy regardless of  who is commissioner, and if  the feeling is                                                               
that it should be written down then it should be written down.                                                                  
                                                                                                                                
SENATOR  WIELECHOWSKI said  he'd like  to associate  himself with                                                               
those remarks.                                                                                                                  
                                                                                                                                
4:48:13 PM                                                                                                                    
SENATOR  DUNBAR asked  for  more description  about  the way  the                                                               
expedited timber sales differ from  the salvage timber sales when                                                               
they both  talk about an area  that is creating or  will create a                                                               
public safety issue.  He asked how the  commissioner would decide                                                               
which of the two processes to use.                                                                                              
                                                                                                                                
4:48:59 PM                                                                                                                    
MR.  STANCLIFF responded  that one  difference is  that the  bill                                                               
brings all  dead timber  into the salvage  sale category.  If the                                                               
timber no  longer has value as  a standing tree and  arguably has                                                               
negative value  as a fire  hazard, receiving any  compensation is                                                               
in the state's  best interest. For this reason  the bill proposes                                                               
to  exempt salvage  sales  from the  prescriptive  finding in  AS                                                               
38.05.                                                                                                                          
                                                                                                                                
He  said the  rationale is  that  the timber  is a  threat and  a                                                               
negative economic value to the  state, so the question is whether                                                               
the  whole timber  sale process  have to  be followed  before the                                                               
timber can be  harvested. HB 104 attempts to say  that in certain                                                               
instances and at the commissioner's  discretion, the full process                                                               
would not  need to be  followed. He  continued to talk  about the                                                               
time  that could  be saved  if  expedited sales  were allowed  in                                                               
specific  circumstances  and  when   it's  in  the  state's  best                                                               
interest.                                                                                                                       
                                                                                                                                
CO-CHAIR  BISHOP summarized  that  the  goal of  the  bill is  to                                                               
harvest  timber in  half the  usual time  to get  value from  the                                                               
damaged and dead timber.                                                                                                        
                                                                                                                                
MR. STANCLIFF  added that  another important  aspect is  that the                                                               
timeframe for  the entire  sale is increased  from three  to five                                                               
years.                                                                                                                          
                                                                                                                                
4:53:21 PM                                                                                                                    
REPRESENTATIVE   CRONK  pointed   out   that   there's  also   an                                                               
opportunity to manage those forests.  He cited the example of the                                                               
300  foot buffer  around  part  of the  community  of  Tok as  an                                                               
example of  removing the  timber preemptively  when it  still had                                                               
full value. He  also spoke about how  Sweden's managed forestland                                                               
had  doubled  in  the  last  100 years.  Last  year  the  country                                                               
exported timber  valued at  $17.4 billion. He  opined that  in 30                                                               
years Alaska  could replace  oil with timber  exports. HB  104 is                                                               
the first step.                                                                                                                 
                                                                                                                                
4:55:22 PM                                                                                                                    
SENATOR WIELECHOWSKI  commented that  nobody on the  committee is                                                               
necessarily  opposed  to what  the  sponsor  is saying,  but  the                                                               
concern with the  expedited timber sales is  the broad discretion                                                               
the bill  gives the commissioner  and with limited notice  to the                                                               
public. He said he was trying to find a balance.                                                                                
                                                                                                                                
REPRESENTATIVE CRONK  acknowledged the validity of  the concerns,                                                               
and posited that  the lack of managing forests  has brought about                                                               
this situation. He  cited the Tok fire and the  fire potential in                                                               
the  Hillside district  in Anchorage  as examples.  He emphasized                                                               
the importance of refocusing efforts  to manage state forests for                                                               
fire and to use those resources to generate revenue.                                                                            
                                                                                                                                
CO-CHAIR  BISHOP commented  on the  efforts in  1991 to  keep the                                                               
community of Tok from burning to the ground.                                                                                    
                                                                                                                                
SENATOR  GIESSEL  said  she  agreed  that  the  committee  wasn't                                                               
against the concept  of HB 104; it meshes with  the carbon offset                                                               
bill  and it  addresses  public safety.  However,  it needs  some                                                               
adjustments.                                                                                                                    
                                                                                                                                
4:58:20 PM                                                                                                                    
SENATOR  DUNBAR commented  that any  effort to  harvest a  lot of                                                               
timber from the  Anchorage Hillside district would  elicit a very                                                               
interesting reaction  from the  public. He  asked 1)  whether the                                                               
division manages the  Interior forests and the  boreal forests in                                                               
appreciably different ways, 2) if  different portions of the bill                                                               
were more  applicable to one  region than  another, and 3)  if it                                                               
was the  case that the entire  state is either high  fire danger,                                                               
high beetle kill, or both.                                                                                                      
                                                                                                                                
MR. ENG responded  that there was no chance of  a 100-acre clear-                                                               
cut on the Anchorage Hillside, but  it's an example of needing to                                                               
address the problem  because it's areas where the  wild and urban                                                               
interface  that  will  bear  the  brunt  of  the  damage  from  a                                                               
wildfire. He  continued that  the Division  of Forestry  and Fire                                                               
Protection works  closely with the  Anchorage Fire  Department to                                                               
reestablish and  maintain the  firebreaks that  were put  in that                                                               
area years ago.                                                                                                                 
                                                                                                                                
To the  question about different management  styles for different                                                               
forest types, he  confirmed that the fire  regimes were different                                                               
depending on the area. He cited  the example of the 200-acre fuel                                                               
break around  Tok but  not Ketchikan.  Nevertheless, he  said the                                                               
principles of  forest management are fairly  universal throughout                                                               
the state.                                                                                                                      
                                                                                                                                
5:01:36 PM                                                                                                                    
SENATOR KAWASAKI asked why the forest  land use plan (FLUP) for a                                                               
state forest couldn't include salvage and expedited sales.                                                                      
                                                                                                                                
CO-CHAIR  BISHOP  added to  the  question  by asking  whether  an                                                               
expedited or salvage sale could already be inside a FLUP.                                                                       
                                                                                                                                
MR. ENG  responded that the FLUP  is the step following  the best                                                               
interest finding.  It specifically  describes how to  implement a                                                               
particular timber  sale. He asked  Co-Chair Bishop to  repeat the                                                               
second question.                                                                                                                
                                                                                                                                
CO-CHAIR  BISHOP  asked  about the  hypothetical  possibility  of                                                               
having a  salvage sale on  a section of  land that already  had a                                                               
best interest finding and a FLUP.                                                                                               
                                                                                                                                
MR. ENG said he'd follow up with a response.                                                                                    
                                                                                                                                
5:04:35 PM                                                                                                                    
CO-CHAIR BISHOP held HB 104 in committee.                                                                                       
                                                                                                                                
5:04:57 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Co-Chair   Bishop  adjourned   the   Senate  Resources   Standing                                                               
Committee meeting at 5:04 p.m.                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
SB 137 DEC Response to Committee Questions 05.05.23.pdf SRES 5/8/2023 3:30:00 PM
SB 137
SB 137 DOR Response to Committee Questions 05.05.23.pdf SRES 5/8/2023 3:30:00 PM
SB 137
HB 104 Public Testimony rec'd by 05.08.23.pdf SRES 5/8/2023 3:30:00 PM
HB 104
HB 104 Support Letters Fairbanks Chamber, AK Forest Association 04.25.23.pdf SRES 5/8/2023 3:30:00 PM
HB 104
HB 104 Support Document Public Hearing Opportunities 05.08.23.pdf SRES 5/8/2023 3:30:00 PM
HB 104
HB 104 Support Document FAQ 05.08.23.pdf SRES 5/8/2023 3:30:00 PM
HB 104
HB 104 Support Document Legal Memo 05.08.23.pdf SRES 5/8/2023 3:30:00 PM
HB 104
SB 137 Amendment #1.pdf SRES 5/8/2023 3:30:00 PM
SB 137
HB 104 Division of Forestry Responses to SRES Questions 05 08 2023.pdf SRES 5/8/2023 3:30:00 PM
HB 104