HB 105-SOUTHEAST STATE FOREST  2:50:47 PM CO-CHAIR FEIGE announced that the final order of business would be HOUSE BILL NO. 105, "An Act relating to the Southeast State Forest; and providing for an effective date." 2:51:31 PM RICK ROGERS, Forest Resource Program Manager, Central Office, Division of Forestry, Department of Natural Resources, recalled that at the last hearing there was concern regarding whether logs from the Southeast State Forest would go overseas in the round without any processing in the local sawmills. Upon review of the past six years, it was found that 87 percent of the logs from state timber sales remained in the state for manufacturing in Alaska while 13 percent were exported. Of that 13 percent, 3 percent were exported by sawmills because that percentage of logs had more value as exported in the round than if processed. To achieve the aforementioned, sawmills request a variance under their contract requirements to export a small percentage for their logs. In balance, the data demonstrates the state is doing a good job of encouraging instate manufacture of timber off state lands. Upon review of this statewide, it was found that only 5 percent of the logs are going out of state in the round. 2:55:20 PM REPRESENTATIVE KAWASAKI inquired as to the level of processing sawmills perform on the 87 percent of logs that remain in the state. MR. ROGERS answered that it varies by mill. Under the long-term forest contracts, the past practice was the production of cants, which was crude processing in which 8-12 inch cuttings were made and large cants were sent overseas for secondary manufacturing at mills. However, that has changed quite a bit. In fact, the Viking Sawmill, the state's largest sawmill, is producing finished products. He noted that some mills also provide secondary manufacturing such that they perform planing and have kilns. In the northern part of Alaska, much of the [logs] are being used for fuel in which case processing may be as simple as cutting and splitting firewood. Most importantly, for the state to see additional investment in manufacturing, there must be a reliable supply of timber. In Southeast, particularly with the dominance of federal land, there hasn't been new investment in manufacturing because there's too much risk involved when there isn't enough of a reliable supply to amortize the investment. 2:57:55 PM REPRESENTATIVE HERRON reminded the committee that his community is primarily situated in the tundra. He then asked if there are different harvest practices on state lands as opposed to the clear cuts in the Tongass National Forest in the past. MR. ROGERS related that the Alaska Forest Resources & Practices Act guides timber harvest on both state and private lands in Alaska. State land has a higher standard for riparian buffer retention. In Southeast Alaska, in particular, anadromous fish and salmon are another extremely valuable resource to Alaska. Timber harvest in or outside of the state forest requires a 100- foot no-cut buffer on each side of salmon bearing waters. The aforementioned includes a small Coho rearing stream that may be only a couple of feet wide. Additionally, there is a 100-300 foot zone beyond the aforementioned buffer where additional consideration is given to the water quality and impacts to the stream. Also, the land management plans for state land provide additional guidance. The land to which he is referring is guided under both the Prince of Wales Area Plan and the Central Southeast Area Plan, both of which generally have a 500 foot no- cut zone along the coast. The aforementioned no-cut zone provides for habitat as well as visual appeal and protection of eagle nests. Typically, there is a 330-foot radius around any known eagle tree. Mr. Rogers opined that the state has some very good protections and a credible program that balances the state's interest in managing timber along with other resources. 3:00:43 PM REPRESENTATIVE MUNOZ recalled that at the last meeting it was related that the target amount of allowable harvest in the state forest is 8.3 million board feet. She inquired as to the actual demand from the existing sawmills in terms of the target allowable harvest. MR. ROGERS explained that per the Alaska State Constitution the division is required to manage the timber in a sustainable fashion, and therefore the 8.3 million board feet is the result of the state's inventory and the calculation of growth and yield. Essentially, the 8.3 million board feet is a sustainable output of timber from the land base that can be harvested in perpetuity. However, that is nowhere near meeting the demand for Alaska's existing mills and certainly wouldn't allow for any growth and investment in new mills. Mr. Rogers said, "What's somewhat frustrating about this situation is given the state's land base, I think this bill represents the state doing what it can to help the situation on timber supply. And yet, it's not enough to really overcome the supply issues that industry faces, but that's really a function of what the land entitlement is for the State of Alaska." He reiterated that [HB 105] offers a good balance and package to support the industry. 3:03:07 PM REPRESENTATIVE DICK said he understands the idea of a no-cut zone along salmon streams, but in the Interior that's about the only location of trees. Therefore, that regulation basically means there would be no logging at all in the Interior. He opined that the provision would encourage poaching. MR. ROGERS clarified that the riparian standards he mentioned earlier are for coastal Alaska and there are different standards in the Interior as they are somewhat more permissive. Again, he stated that it's a balance between protecting important water quality and fisheries and managing the timber. In spite of the riparian protections, there is a significant amount of underutilized allowable cut in Interior Alaska. In further response to Representative Dick, Mr. Rogers agreed to talk with him further regarding this matter. 3:04:29 PM CO-CHAIR SEATON related his understanding that the lands specified in HB 105 are already available for cutting. Therefore, the purpose of HB 105 is to provide for pre- management of the lands on a rotation cycle, and the legislation doesn't place lands unavailable for cutting in an [allowable harvest zone]. MR. ROGERS said that's correct. He explained that under the area plan designation, these lands are in the category of general use, which allows for timber harvest. These are the lands for which the allowable harvest has been calculated. Furthermore, these are lands on which the state is already actively managing timber sales. However, one exception is a small parcel that is in selection status and is currently in the adjudication process with the U.S. Bureau of Land Management. This land, though, has already been planned for in the Prince of Wales area plan and has a general use designation. 3:05:46 PM REPRESENTATIVE KAWASAKI asked whether that 87 percent in state use will continue if the timber supply is increased or will the increase merely result in export. MR. ROGERS remarked that is doesn't really make any difference because these lands are already part of the timber base the state is managing. What could make a difference in the future is whether the state can maintain its existing sawmills to have the processing capacity to process the timber. One of the purposes of HB 105 is to provide certainty in the long-term tenure of the lands in order to perform more aggressive management. In fact, the state could actually increase the allowable harvest if the trees can be grown faster. If the lands will be managed as a state forest, it makes more sense to consider practices such as pre-commercial thinning, whereby the allowable cut of these lands could conceivably be more than doubled over the long term. 3:07:34 PM MR. ROGERS, in response to Representative Gardner, explained that if lands are designated general use under an area plan, as is the case today, the state in the future can sell the land or subdivide it or move into some other use. Therefore, HB 105 is deciding whether the state is committing to growing trees on these designated lands, subject to all the other multiple use considerations. This legislation provides a commitment and doesn't include lands that the Division of Mining, Lands and Water felt were better suited for subdivision or other purposes. 3:10:09 PM ROBERT CLAUS, Southeast Alaska Conservation Council, began by relating that SEACC supports small mills, micro sales, and the ability of folks to make a living from the state's forests through a value-added processing of timber products. However, SEACC believe that the public lands should remain multiple use lands and not be [managed] for timber as a first priority, as is the case in the state forest. Most of the parcels in the state forest aren't areas that SEACC finds controversial and they do support small mills, particularly in Thorne Bay. However, SEACC does object to the Rowan Bay parcel and Hook Arm parcel, which is on the west coast of Dall Island. As a resident of Prince of Wales Island, he related that he uses the west coast of Dall Island and all the outer islands of Prince of Wales for hunting, fishing, and recreation. Moreover, tourism businesses in the small town of Craig use the Hook Arm parcel for their business. Therefore, Mr. Claus opined that Hook Arm wouldn't be a good addition to the state forest rather it should remain a multiple use parcel and not be logged. 3:11:59 PM CO-CHAIR FEIGE, upon determining no one else wished to testify, closed public testimony. [HB 105 was held over.]