SB 32-TIMBER SALES  1:27:43 PM CO-CHAIR TALERICO announced that the next order of business is CS FOR SENATE BILL NO. 32(RES), "An Act relating to the sale of timber on state land; and providing for an effective date." CO-CHAIR NAGEAK moved to adopt the proposed House committee substitute (HCS) for CSSB 32, Version 29-GS1022\N, Bullard, 3/29/16, as the working document. REPRESENTATIVE TARR objected for discussion purposes. JULIE MORRIS, Staff, Representative David Talerico, Alaska State Legislature, presented the proposed House CS to the committee. She explained that the only change made by Version N is the addition of the following language to Section 1: "Subject to appropriation, the commissioner shall provide 25 percent of the revenue from a sale of timber under this section to forestry programs operated by the department in the municipality, reserve, or community in which the timber was harvested or, if the timber was not harvested in a municipality, reserve, or community, the municipality, reserve, or community closest to the area where the timber was harvested." 1:29:28 PM REPRESENTATIVE TARR asked whether this is supposed to be a style of payment in lieu of taxes (PILT) for state forestry that is modeled after the federal program. CO-CHAIR TALERICO replied that his idea behind this change is to ensure that in those areas where there is active forestry programs there is a reinvestment in the community. He requested Mr. Chris Maisch to elaborate further. 1:30:19 PM JOHN "CHRIS" MAISCH, Director & State Forester, Division of Forestry (DOF), Department of Natural Resources (DNR), provided a refresher on the bill given it was a year ago that the committee last heard the bill. He explained that the Division of Forestry currently has five different authorities under which it can sell timber. The primary and preferred authority statewide of selling timber is through a competitive process under AS 38.05.120 (".120"). Another authority is under AS 38.05.117 (".117") where the division can offer salvage sales after fires, windstorms, disease, or other kinds of natural disasters where the timber will lose value quickly. This is an abbreviated process to allow the division to bring those sales to market quickly. This authority is not used very often, but an example is the windstorm in the Tok area where a lot of timber was lost. There are two negotiated sale authorities - small negotiated sales under AS 38.05.115 (".115") for timber under 500,000 board feet, and large negotiated sales under AS 38.05.118 (".118"), to which this bill makes changes. These authorities still require best interest findings, the exception being the .115 authority which represents about 40 acres in Interior Alaska. The division must still go through the other standard parts of the planning process, but for .115 sales the division does not have to do a best interest finding. Those sales are currently only good for one year in length. MR. MAISCH said the original bill also clarifies that the commissioner determine through the best interest finding process the best and most appropriate authority to use and the department must outline the conditions of why it chose a certain way to sell the timber. The bill also ensures the ability to use 25 years of sale length for the .118 authority, which is the current sale length. Because of the three conditions that the department is proposing to modify, the .118 authority cannot be used statewide. Those three conditions are: 1) must have under-utilized allowed cut in the area in which the timber will be sold; 2) a manufacturing facility must exist or will exist within two years that can use the timber that is going to be sold; and 3) a high level of unemployment, which is a condition the division has difficulty with. The statute reads a high level of unemployment and the regulation reads that it has to be 135 percent of the statewide average. The division cannot currently use the .118 authority in the Ketchikan Borough, the Matanuska-Susitna Borough, and the Fairbanks North Star Borough, so it prevents the division from doing these longer term sales under that authority. So, this would essentially even the playing field for all the operators in the state to remove those three criteria. More importantly it is very important for Southeast Alaska where the timber industry is in dire straits. Right now the division has three sales pending that it would negotiate in Southeast Alaska to Viking Sawmill in Klawock and represents 150 jobs on Prince of Wales Island. The federal government will not offer enough timber in the next two years to keep that mill running and without the proposed change in this statute the division will be unable to negotiate those sales; they would have to go competitive and in Southeast Alaska a competitive sale is pretty much guaranteed to go export because the export market can afford to pay more. So the division has long had a policy in Southeast Alaska where it tries to meet the needs of both segments of the industry and it has been the state policy to emphasize jobs and manufacturing and in today's environment manufacturing jobs in this state is a good thing to encourage and that is exactly what this will do. The only other change the bill would do is clarify that these sales can be done for wood fiber and biomass use and that is just updating some of the older language in the statute to use more modern terms in terms of the forestry application for those types of sales. 1:34:45 PM MR. MAISCH addressed Version P, saying it would put into statute what the division has long done by both policy and practice, because a large part of the division's timber sale staff are funded under timber sale receipts. A percentage of all state timber sales go into a timber sale receipts account and then that account pays for the actual foresters that do this work in the various parts of Alaska. For example, the Ketchikan office is the division's number one revenue producing office, getting about 39 percent of its revenue back in the salaries that actually support positions that are doing that work. The Fairbanks office is about 100 percent, so 100 percent of the staff are supported by that. Tok gets 529 percent back because the value of those timber sales are not that high as they are mostly fiber sales which are of fairly low value. 1:35:52 PM REPRESENTATIVE SEATON inquired whether the revenue from timber sales in the various areas of the state offsets the cost so that there is not a loss to the state, particularly if 25 percent of the gross revenue is given to the local municipality. MR. MAISCH responded that the funding would not actually go to the municipality, it is programs operated by the division. That means wages in most part, but it could be road or infrastructure improvements in that community. For example, there may not be as much money in road maintenance accounts as is wanted, so that 25 percent receipt might be used to do extra grading in that community, especially during hunting season. The division would still have discretion on how it uses those funds. 1:36:52 PM REPRESENTATIVE TARR, recalling that her earlier question was related to the PILT, asked how the division arrived at the figure of 25 percent and surmised it is based off an average of what the division has been doing in practice. MR. MAISCH answered yes, the division has done this in practice, but it is not necessarily modeled after the PILT. This is Co- Chair Talerico's suggested language and essentially what he has described does put in statute what the division has done in practice. As the division has taken budget cuts over the last four years, more and more of the division's general fund money for wages and salaries of its forest management staff have been shifted over to the timber sale receipts account. The division has lost about 42 percent of its general fund money for wages for the forest management part of the division, which has resulted in quite a few layoffs. The only way to continue to operate a forest management program is by using the timber sale receipts program to actually support those positions. Should revenues go down he will be confronted with how to pay for those positions or lay off additional people. On average the division collects roughly $600,000 annually over a 10-year period and wages are about $675,000 annually; but, he has some discretion based on other funding sources on how he manages that. 1:38:34 PM REPRESENTATIVE JOSEPHSON inquired whether the proposed new language is designed to act as sort of a designated general fund component to help the division when the legislature has reduced the division's undesignated general fund (UGF). MR. MAISCH replied he does not think necessarily that that was its primary intent because the division was already in practice doing that with the timber sale receipt account. That has been in place for many years, the division has used it, but has not depended on it as much as the division is now depending on it. The legislature has aggressively shifted the division out of general funds over to the timber sale receipt account to pay for the division's staff. This [proposed language] just ensures that the places that are generating the timber sales actually will see some benefit from those timber sales so that he does not take all the money and put it in a place that is not really having a timber sale program. It is not that he would do that, but this would just ensure that everybody gets a fair share of the timber revenue. REPRESENTATIVE JOSEPHSON said he has reviewed the minutes from the other body and surmises that the key component/heart of the bill is the reforming of .118 sales so that the threshold of the 135 percent of unemployment does not need to be met. MR. MAISCH agreed that is the heart of the bill, along with the other two pieces which are not as difficult to meet. There are three parts to that regulation: 1) the excess allowable cut so he cannot over-commit and fail to use sustained yield management to do a large negotiated sale, so he has to be within the allowable cut; 2) there has to be a facility there that has excess capacity and can process that cut; and 3) the 135 percent [unemployment]. All three of those would go away and it would make it a cleaner statute and much easier to administer. 1:40:34 PM REPRESENTATIVE SEATON asked whether, with the sustainable cut language going away, the division has other regulations or statute that require sustainable harvest. MR. MAISCH responded that the state constitution requires the division to do [sustained yield cutting], as do other provisions of statute and the division's forest management plan. The bill would not do away with the need to manage sustainably, it would just delete the wording that there must be excess allowable cut for [the .118] sale methodology]. It would not somehow "back door" that he can exceed sustained yield principles. 1:41:12 PM REPRESENTATIVE JOSEPHSON inquired whether the reason for why the .123 authority for negotiated sales is unsatisfactory is because of the required value-added feature. MR. MAISCH answered that that is not necessarily the main reason. The main reason is that those sales are limited to 10 years in length, and sometimes for these industries, especially the biomass side, it will take longer than 10 years to capitalize the investment that was made in the plant and facility. The division is also limited to two value-added sales per forest practices region in any given time. 1:42:00 PM CO-CHAIR TALERICO opened public testimony on the bill. REBECCA KNIGHT testified in opposition to the bill. She spoke as follows: I previously provided testimony in opposition to the proposed SB 32 and its companion HB 87 and continue to oppose the legislation based on those concerns with expanded testimony today. One can only conclude that based on review of impacts resulting from drastic budget cuts, the state is unable to adequately fund administration of its current timber sale program. Consequently, whether adequate funding for administration of new long-term timber contracts can be secured is highly questionable given that the state's budgetary crisis remains in near freefall, this despite optimistic assurances from DOF personnel and the bill's zero fiscal note. For instance, as noted during the recent Board of Forestry meeting, "In 2015 due to budget reductions and travel restrictions, DEC participated in only one trip with three compliance inspections." According to the state forester, most of the 2015 decline in the number of inspections is due to reduced staffing and is an impact of the budget cuts. I would note that one annual statewide inspection does not equate to satisfactory oversight. It is also questionable whether SB 32 can actually generate significant positive revenue to the state. According to DOF's 2013 annual report, the statewide timber program costs $5.9 million, but generated a mere $293,000 in receipts for the 2013 fiscal year. The report anticipated $851,000 in 2014 receipts from a projected 2014 budget of $6.9 million. Overall, statewide average revenues for the five-year period from 2009-2013 were only $600,000 per year with the majority of the volume offered coming from outside Southeast Alaska. The report does not provide enough information to assess the contributions of state forests in Southeast Alaska, but it appears that the amount of revenue generated relative to the administrative cost is very small per million board feet, meaning that the program likely operates at a net public loss. In fact, according to the latest [Board of Forestry (DOF)] meeting minutes, shortfalls to DOF's budgets are so severe that tourism head tax was suggested as well as a raid on the proceeds of fishing industry licensing fees to "help protect fisheries habitat." This obtuse logic is especially troubling when these industries contribute significantly without harm to regional economies, especially in Southeast Alaska. Overall, SB 32 and HB 87 represent a considerable expansion of the timber sale program in a period of declining budgets and an irresponsible abdication of oversight to the industry. Quite simply, there are inadequate funds to do otherwise. I respectfully request that you disallow this bill from advancing further. 1:46:03 PM REPRESENTATIVE JOSEPHSON requested Ms. Knight to clarify her statement in regard to using tourism or fisheries money to regulate the forestry industry. MS. KNIGHT answered that was in the March 2016 Board of Forestry draft meeting minutes; she believed it was on page 12. She said she will provide written testimony to the committee that has footnotes that cite those sources. REPRESENTATIVE TARR requested Ms. Knight to submit her comments in writing and noted that she is particularly interested in Ms. Knight's testimony about overall cost versus the amount brought in in receipts and what is being included in the overall cost. MS. KNIGHT replied she is uncertain exactly what all that includes, but it is from the [Division] of Forestry's 2013 annual report. 1:47:32 PM DAVID BEEBE, City of Kupreanof, testified in opposition to the bill. He spoke as follows: [CSSB 32(RES) authorizes] the commissioner to bestow ownership of a 25-year supply of state forest to create regional state-sanctioned timber plantations for the purposes of timber export and large-scale conversion of forests to biomass energy. Gordon Harrison reminds us in his book, [Alaska's] Constitution: A Citizen's Guide, that delegate Bob Bartlett and others urged constitutional defenses against freewheeling disposals of public resources and colonial-style exploitation that would contribute nothing to the growth and betterment of Alaska. Timber monopolies have a bad track record here in Southeast. The United States Supreme Court found that 50-year, long-term pulp contract holders colluded through price fixing and other illegal means to destroy the existing small loggers in Southeast. These repercussions of long-term contracts continue to span the social, economic, and environmental landscapes across most of Southeast and the wildlife on some islands may never fully recover from that. The management of old-growth-dependent deer populations also has a bad track record in Southeast. The Alaska Board of Fisheries and Board of Game are on record on several occasions requesting the Forest Resources and Practices Act be amended to include for the protection and management of wildlife on state forests to provide for constitutionally mandated sustainable yield principles. This has not been accomplished, nor has the Alaska Department of Fish & Game as co-managers of fish and wildlife on federal forest lands been successful at preventing severe crashes in deer populations in Game Management Unit 3 and wolf populations in Unit 2. Both the briefing paper and the fiscal note analysis of SB 32 prepared by the director of the Division of Forestry [have] overlooked the full environmental and fiscal consequences of the bill in the realms of environmental impacts on rural communities and human health consequences. The briefing paper states, "All timber sales, including negotiated sales, must comply with the constitutional requirement to manage timber for sustained yield." But, characteristically, avoids mentioning that Article VIII, Section 4, titled Sustained Yield, includes fish, forests, and wildlife. The health consequences of large-scale conversion to biomass combustion is a serious concern for healthcare professionals of the American Lung Association, which emphasizes pollution from the consequences of combustion of wood and other biomass sources. Language providing 25 percent of the revenue from the timber sale to the nearest municipality notwithstanding an absent and adequate fiscal, social, and environmental analysis of SB 32, the City of Kupreanof requests state legislators to table this legislation in committee. 1:51:14 PM REPRESENTATIVE JOSEPHSON inquired whether he is correct that there are no state forests near Kupreanof or Petersburg and the closest one is northeast of Wrangell. MR. BEEBE responded that that is not quite correct. Game Management Unit 3 involves a number of state parcels that are within 10 miles of the City of Kupreanof. The Wrangell Narrows separates Kupreanof Island from Mitkof Island and Frederick Point in particular has an area that is one of the last refuges of a very heavily hit island of winter deer range. The south end of the island, only about 20 miles away from Kupreanof, is also a very important deer winter refuge that is pretty much not going to be regarded for the qualities that it represents to maintain winter populations of deer. 1:53:12 PM OWEN GRAHAM, Executive Director, Alaska Forest Association, stated he supported this bill last year and still supports it. The bill gives the Department of Natural Resources (DNR) the flexibility it needs to better manage its timber lands in Southeast. It would get used from time to time in Southeast Alaska. The other regions do not have the same issues that Southeast has, such as remote sites and high mobilization costs for small parcels, the competition from outside Alaska from speculators that end up mostly not performing their contracts. There is an inadequate supply of timber for the existing operators. Those conditions are pretty much unique to Southeast Alaska. This flexibility will not get used a lot, but when it is used it would be very helpful. A number of times conflicts have arisen because of two different operators trying to use the same remote log transfer facilities, rafting grounds, storage areas, and roads. A number of times speculators have put in a sky-high bid on what few timber sales are out there and then defaulted, and the state had to go back. The same thing has happened with the U.S. Forest Service, which usually delays that timber sale for an entire year during a time of being critically low on timber. He said Alaska has a good forest practices act that is designed specifically to protect water quality. Fish populations in areas on Prince of Wales Island that he is familiar with have more than doubled in the last 60 years, particularly in the most heavily logged areas. The Alaska Department of Fish & Game gave him some records that show the fish populations have more than doubled all over Southeast Alaska in the last 60 years. Logging at much higher levels than what DNR will be harvesting has had no impact on the fish. Wildlife is also doing very well; deer populations are sky-high on Prince of Wales Island. People say the wolf populations are down right now, and they might be down, but it is not because they do not have enough deer to eat in Game Management Unit 2. The Division of Forestry can manage its timber sale program without harming fish and wildlife. Providing the division with this additional flexibility to operate will provide a much needed timber supply and help the economy of scale and maybe keep one or two sawmills open that would otherwise be closed. Frequently the Forest Service or the state sells a sale where a portion of it goes export, but the other portion will end up going to the mills. Sometimes, because of extreme high costs in these remote areas, that higher value from a portion of the wood going export gets enough value out of the timber sale so that the mill can afford to saw the rest of the logs. 1:56:57 PM REPRESENTATIVE TARR recalled the testimony that according to the 2013 annual report it cost $5.9 million to manage the forestry program and only brought in about $300,000 in receipts, which means the program is about 2,000 times more costly than the receipts that are brought in. She asked how Mr. Graham thinks members should evaluate that in the context of the state's overall budget problem. MR. GRAHAM answered that whoever made that remark probably did not understand the budget. The Division of Forestry gave him a chart that shows the division makes a good profit on the timber sales. There is a lot more in the division's budget besides preparing timber sales and managing the young growth stands that come up behind the sales. He offered to provide a graph showing this if requested. Responding further to Representative Tarr, he agreed to provide this information. 1:58:30 PM CARL PORTMAN, Deputy Director, Resource Development Council of Alaska (RDC), spoke in support of CSSB 32(RES). He paraphrased from the following written statement [original punctuation provided]: RDC is a statewide business association representing forestry, oil and gas, mining, tourism, and fishing industries. Our mission is to grow Alaska through responsible resource development. RDC supports policies aimed at ensuring a reliable and economical long-term State and federal timber supply. In the decades since the State's timber sale authorizing statutes were last amended, the demand for wood fiber from State lands for energy purposes has increased significantly in response to escalating fuel oil costs and State capital investment through the renewable energy capital grant program. As a result wood fiber for biomass energy has grown into an important component of forest products from State timber sales. What has also changed over the past decades is the dependence of our remaining Southeast Alaska mills on timber sales from State lands. In some circumstances negotiated State timber sales are essential in keeping what is left of our remaining manufacturing capacity operating. RDC agrees with the administration, as articulated in Governor Walker's transmittal letter, that competitive timber sales are the preferred means of selling timber under most conditions. However some circumstances warrant the flexibility of offering negotiated sales at appraised fair market value in order to ensure a reliable supply of raw material to mills. The Department of Natural Resources (DNR) has a good track record of limiting its negotiated sales to those circumstances where it is clearly in the State's best interest, and the added flexibility afforded to the DNR Commissioner by this surgical statutory revision will provide needed flexibility required by today's realities of timber supply and markets. By giving the DNR Commissioner added flexibility in offering negotiated sales and clarifying that users of wood fiber are also eligible for negotiated sales, the State will have tools appropriate to conditions that frankly were not part of the timber supply landscape when State's timber sale statutes were last revised. These amendments support recommendations of the 2012 Alaska Timber Jobs Task Force. The task force recommendations were developed with input from leaders in the timber industry and have been endorsed by the Alaska Board of Forestry. MR. PORTMAN concluded by stating that the basic premise of the bill is to remove the constraints on negotiated timber sales and to allow longer term timber sales where appropriate. Passage of this bill will help keep RDC's members in the forest products industry in business. The current restrictions limit DNR to negotiating only with certain sawmills. He urged the committee to pass the proposed House CS for CSSB 32(RES). 2:01:41 PM CO-CHAIR TALERICO closed public testimony after ascertaining that no one else wished to testify. REPRESENTATIVE TARR requested that Mr. Maisch be able to respond to the testimony about the overall cost relative to receipts. MR. MAISCH confirmed that Ms. Knight's figures are correct regarding the overall budget, but said Mr. Graham was correct that that budget does many more things than just fund the timber sale program. He said a significant amount of federal money comes into the division that runs a suite co-op programs around the state, such as forest health programs, community forestry programs, and forest stewardship programs that provide technical assistance to private land owners to help them better manage their forests. The [2013 Alaska Forest Resources and Practices Act] was mentioned and many more inspections than one have been accomplished. Three agencies are involved in that effort, with the Division of Forestry being the lead agency. The key things are to protect water quality and fish habitat, so ADF&G is one of the division's partners and the Department of Environmental Conservation (DEC) is the other partner. It is correct that DEC's budget has put DEC in the situation where it is unable to participate in field inspections as much as it was once able. Because DEC only participated in one inspection does not mean that only one inspection was done. He offered his belief that over 40 or 50 inspections were done last year and ADF&G was a partner on those inspection. MR. MAISCH continued, reporting that about $2.1 million remains in the division's budget for general funds for forestry as a whole. The division collects about $600,000-$700,000 annually in timber sale receipts that are directly invested back into that budget. Statewide that money provides 300-350 full-time jobs in the forest products sector and creates infrastructure. Roads and bridges that are built for these timber sales are written against the timber sales in most cases, so that infrastructure is paid for as part of the value of the timber that comes out of the woods and then the division picks up the maintenance of that infrastructure over the long run and that infrastructure provides access for a variety of uses. Perhaps the most important thing it provides the division is access for wildland fire protection around communities. The management of that forest reduces fuel loads around communities, making them safer to live in and enjoy, and this is a hard one to put a price tag on. During the Willow fire last year the division protected $360 million in value just in the areas that were evacuated. The fire two years ago on the Kenai Peninsula was about $260 million in value. A large-scale landscape fuel break was done and that allowed the division to save that community that was evacuated. So, there is a big other benefit from this forest management that the division does not usually get credit for and it may be more important than the revenue generated by the division. He pointed out that many of the division's [staff] positions have feet in the division's fire program as well as the resources program. Thus, a position lost on the resources side is also a position lost on the fire side. 2:05:52 PM REPRESENTATIVE TARR understood that in a typical fiscal year the division is not staffed up for the kind of fire event like the Willow fire. She surmised that most of those additional funds would come through the supplemental budget. MR. MAISCH replied correct, a base budget funds the division just like a fire department ready to fight fire - the fire engine is ready, staff trained and ready, helicopters and retardant aircraft - and that is about $19 million. Then there is the suppression account which is funded at the 10-year average. This 10-year average has not been updated for almost 20 years and only comes in at $6 million in the budget process; the division must supplement this throughout the process. An updated 10-year average would be about $52 million. Last year's fire season was the division's second largest at 5.1 million acres. The division is not staffed for that and so relies on other states and on Canadian provinces through international agreements. Last year help came from 37 states and 2 Canadian provinces with 3,700 firefighters at the height of the season. 2:07:34 PM REPRESENTATIVE JOSEPHSON understood that the Southeast State Forest includes about a dozen locations. MR. MAISCH replied correct. It is a lot of dispersed locations and is about 50,000 acres in total, which is relatively small compared to the Interior state forests. REPRESENTATIVE JOSEPHSON asked whether those aforementioned locations are all south of Petersburg so that they are between Petersburg and Ketchikan. MR. MAISCH answered he would have to look at a map, but he believes yes. The Southeast State Forest is primarily located in southern Southeast Alaska, and the Haines State Forest is in northern [Southeast Alaska]. REPRESENTATIVE JOSEPHSON posed a scenario of boating past Coffman Cove or Edna Bay and inquired whether he would see management such that he would see second growth coming back or a complete denuding of the landscape. MR. MAISCH replied it depends on the site as it is all site specific. A mosaic of different age classes is represented across that landscape. A lot of young growth has come in in Coffman Cove and Edna Bay, primarily on federal sales as the state has not been in the timber sales business as long as has the federal government. But, the state does have a significant amount of young growth that is in a variety of age classes. When looking across a landscape like that it depends on whether there are a lot of mountains or relief, because harvest units will be seen in those areas high above the waterline. There will be harvested and unharvested units. On federal and state ground there are buffers along the shorelines and fish streams, so it will be a mosaic landscape, not a devastated landscape. However, he allowed, it depends on the eye of the beholder. 2:10:19 PM CO-CHAIR NAGEAK moved to report the proposed House committee substitute (CS) for CSSB 32(RES), Version 29-GS1022\N, Bullard, 3/29/16, out of committee with individual recommendations and the accompanying fiscal notes. 2:10:36 PM REPRESENTATIVE TARR objected in order to state that she would like for more time to be put into looking at the overall cost and value. When the legislature talks about the overall sustainability of programs, she said, a look must be taken at the other economic opportunities in communities if these timber programs cannot be afforded. She then removed her objection. REPRESENTATIVE CHENAULT objected in order to state that a look must be taken at both sides of the coin. He concerns himself with the cost of managing the state's forests, he said, but he also concerns himself with the cost to communities when the forests are not managed. The fire on the Kenai Peninsula could easily have devastated a number of communities and some of the programs spoken to by Mr. Maisch definitely saved houses and probably some lives. Regarding wildlife, it was found on the Kenai Peninsula that after a fire goes through the moose population normally rebounds to be considerably better than before the fire. So, while he is concerned about the price, sometimes money is not everything in communities. 2:14:09 PM REPRESENTATIVE JOHNSON thanked Carl Portman and Owen Graham for identifying who they actually work for and what their mission was here. Saying he "googled" a couple of the other testifiers, he maintained that they represent the greater Southeast Alaska conservation community, which is people that probably would not want any timber cut. REPRESENTATIVE JOSEPHSON thanked and applauded Mr. Beebe and Ms. Knight for their testimony and said they are doing great work. In one of the great remaining rainforests he can see the need to remove some through the sales that are identified as .115 sales, which are small sales. However, a corner was turned in the 1990s and, yes, jobs were lost, but the economic benefit is greater to tourism, commercial fishing, ecotourism, sport fishing, and related industries to say that a few hundred jobs do not need to be subsidized. They are great jobs and he particularly likes the finished work products that are reflected in the .123 sales. He applauds folks who do not want to look at denuded landscapes; they want to see something sustained in its natural state and would never naysay them. 2:16:30 PM CO-CHAIR NAGEAK said he spent four years in Southeast Alaska and has seen the benefits of the industry. That was before oil. He recalled how the students who spent the summer working in the timber, fishing, or mining industries came back to school with a bunch of money. While his community had government jobs, such as federal programs for kids after school, those jobs were not as lucrative. The discovery of oil made a whole lot of difference. He knows how important those industries are to the people in those communities. Alaska is blessed with all these resources. Trees regrow and there are fisheries programs to ensure the resources are enjoyed by all. REPRESENTATIVE OLSON said it has been a long time since he has heard mutual aid brought up in any kind of a meeting. He related that within two days of the start of the Funny River fire there were about 600 firefighters from approximately 10 states, smoke jumpers from the Interior, and Canadian skimmers and a pilot plane. The cooperation was extremely impressive. REPRESENTATIVE TARR noted she is a botanist and these are issues that she has worked on for about 20 years. She said her comments were not about fire suppression or the need or lack of need for those services. While those are certainly important, she was referring to the actual management for timber harvest. This has been a longstanding problem in national forests and that is why she brought up the PILT - there has been a lot of tension between local communities and the federal government because those areas that cannot be developed cannot have a tax base and she wanted to highlight some of the issues she thinks are worth consideration. In areas where there are not a lot of other economic opportunities it has been shown time and time again that ample lead time is needed so people do not experience severe economic hardship as a result of some of the projects or jobs going away. 2:21:29 PM REPRESENTATIVE CHENAULT removed his objection. There being no further objection, HCS CSSB 32(RES) was reported from the House Resources Standing Committee.