HB 155-AK MENTAL HEALTH TRUST LAND EXCHANGE  2:06:34 PM CO-CHAIR JOSEPHSON announced that the next order of business would be HOUSE BILL NO. 155, "An Act authorizing a land exchange in which certain Alaska mental health trust land is exchanged for certain national forest land and relating to the costs of the exchange; and providing for an effective date." 2:06:55 PM CO-CHAIR TARR moved to adopt the committee substitute (CS) for HB 155, Version 30-LS0335\U, Bullard, 3/8/17, [as the working document]. CO-CHAIR JOSEPHSON objected for discussion purposes. 2:07:24 PM REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, prime sponsor of HB 155, noted there have been no changes from the original bill that he presented to the committee on 3/27/17. 2:08:10 PM CO-CHAIR JOSEPHSON requested a summary of the changes from the original bill that are made by Version U. CAROLINE HAMP, Staff, Representative Dan Ortiz, Alaska State Legislature, on behalf of Representative Ortiz, sponsor, first provided a sectional analysis of HB 155, and then an overview of the changes in Version U. She explained that section 1 in Version U discusses the purposes of the Act. Section 2 details that the parties are subject to these provisions and not AS 38.05.801. Section 3 describes the lands included in the proposed trade, and she said maps depicting those lands accompany the bill. Section 4 provides a timeline for the proposed exchange and prioritizes which lands would be exchanged at what point in time. Section 5 provides the process that will occur should the final appraisal find the values of the exchange not to be equal. Section 6 provides circumstances that will need to occur in order to make the Act effective. Section 7 provides an effective date. MS. HAMP next discussed the changes between the original bill, Version 0, and the CS, Version U. She explained the original bill is dated 2/27/17, and Version U is dated 3/8/17. On 3/3/17, the sponsor received updated maps from the federal legislation. [To comport with federal legislation], Version U takes out parcel NB-2, which was a map in the original legislation, and changes the acreage. Pages 3, 4, and 5 [of Version U] detail the changes that are made in regard to the maps and the acreage. In response to Co-Chair Josephson, she noted that a summary of changes was provided in the committee packet. 2:10:37 PM REPRESENTATIVE RAUSCHER asked how much was the change in acreage. MS. HAMP replied that the total acreage changed from 18,274 acres to 18,313 acres exchanged for federal lands. For the Alaska Mental Health Trust, the acreage changed from 20,580 [acres] to 20,645 [acres]. REPRESENTATIVE RAUSCHER inquired whether the changes are in the state's favor. MS. HAMP responded the changes were made to accommodate the lands [the state] has so they were accurate to the maps that are now had. It does not necessarily mean the value the state incurred is more or less, it will be an equal value exchange. 2:11:42 PM REPRESENTATIVE DRUMMOND noted that committee members don't have the aforementioned maps before them. MS. HAMP answered the maps are on the Bill Action Status Inquiry System (BASIS). CO-CHAIR JOSEPHSON offered his understanding that these are the adjustments to the maps that [were previously] provided to committee members. MS. HAMP replied the new and most recent maps that go with Version U have written at the bottom, "Map Revision Date - 03- 03-2017". REPRESENTATIVE ORTIZ asked Representative Drummond whether she has the [3/3/17] maps. REPRESENTATIVE DRUMMOND responded that there are no maps in the supporting documentation for this meeting. MS. HAMP advised it should be titled "additional documents maps". 2:13:00 PM REPRESENTATIVE BIRCH noted the land exchange would be about 20,000 acres and inquired what an acre of forested land would be worth versus an acre of unforested land. MS. HAMP deferred to Mr. Wyn Menefee. REPRESENTATIVE BIRCH opined it is a shame that there is not a successful timber industry on the [Tongass National Forest]. He said he is curious as to what the economic value would be for the timber resource included within the exchange. WYN MENEFEE, deputy director, Alaska Mental Health Trust Land Office, Office of the Commissioner, Department of Natural Resources (DNR), responded the value of the timber depends on whether it is old growth or spruce or cedar - different values are associated with the different timber types. He offered to provide the committee with a chart showing these assessments, saying he doesn't have the chart with him and so cannot provide the exact amount per acre at this moment. REPRESENTATIVE BIRCH restated his question. MR. MENEFEE answered he doesn't have this information with him and doesn't want to provide an incorrect answer. 2:15:04 PM REPRESENTATIVE RAUSCHER offered his understanding that the Alaska Mental Health Trust ("the Trust") has many different types of land. Some has mining on it and some can be developed with subdivisions. He asked whether any of the land included in the bill is for anything other than timber. MR. MENEFEE replied that when the Trust receives lands the lands do not have any restriction for the type of use. The Trust could use the lands for subdivisions, mining, or timber harvest. Trust [managers] maximize the revenue and try to use the highest and best use to produce the best revenue. REPRESENTATIVE RAUSCHER inquired whether all the aforementioned aspects are taken into account or just the timber aspect when trying to figure out the value of what is being traded. He presumed there are many ways to measure the economic value of one piece of property versus another piece and said he would like to know how this particular one is being done. MR. MENEFEE responded that two different values are in the federal legislation. The United States Appraisal Standards must be followed, he said, as well as another national appraisal standard. It takes into account the highest and best use that the appraiser feels the land can be used for and then values it accordingly. So, if the appraiser sees that timber is going to be the highest and best use, it will be valued for the timber. If the appraiser sees that subdivision development is the highest and best use, it will be valued for that. He explained that the reason Ms. Hamp said the acreage is not critical is because that is not representing what actually gets traded at the end. After the appraisals are done it will be seen what makes the equal value in land exchange and the acreages will be adjusted accordingly. REPRESENTATIVE RAUSCHER inquired whether this is done through an agency. MR. MENEFEE answered the U.S. Forest Service (USFS) has to contract, or write the appraisal instructions, and the Alaska Mental Health Trust Land Office pays for it. [The work] is done by people who are approved to do federal appraisals. 2:18:40 PM REPRESENTATIVE WESTLAKE offered his understanding that there is HB 155 and a similar federal concurrent resolution [in Congress], and that moving HB 155 is going to be contingent on the federal legislation passing. He offered his understanding that Version U is just topographical, and said that in his opinion [the change] in acreage is miniscule. He asked whether he is correct in understanding that passing HB 155 is part of a synergy that is going on. REPRESENTATIVE ORTIZ affirmed Representative Westlake's summary. 2:19:38 PM CO-CHAIR JOSEPHSON opened public testimony on HB 155. 2:19:53 PM DAVID LANDIS, mayor, Ketchikan Gateway Borough, testified that the Ketchikan Gateway Borough has repeatedly and consistently supported the land exchange legislation referenced in HB 155 because it is a win-win-win proposition. It is a win for the region's timber industry, he said, because it is important for Southeast Alaska's economy to provide a consistent supply of timber for those jobs that are directly involved in the industry as well as the affiliated businesses that are vendors to the timber industry. MAYOR LANDIS stated the exchange is also a win for the citizens of Ketchikan and the over one million tourists who will visit Ketchikan each year because there are Trust lands to be exchanged directly behind Ketchikan on Deer Mountain. There are also Trust lands to be exchanged on Gravina Island across Tongass Narrows, he pointed out. These are major viewsheds for the community and the Deer Mountain parcel also has very popular trails used by locals and visitors. There is very little support in Ketchikan to log these areas, he related, and the swap would protect these lands and provide other lands much more suitable for timber sales. MAYOR LANDIS further said the exchange is also a win for the Alaska Mental Health Trust because Ketchikan, like other communities, has citizens who suffer from mental illnesses, substance abuse, and other disorders. The Trust needs revenue to fund those efforts and this [proposed] land exchange would provide that revenue. This exchange, he said in conclusion, is as close as one can get to a win for everyone involved. 2:22:02 PM CHERYL FECKO testified in opposition to HB 155. She said she has worked, recreated, and harvested local foods from Prince of Wales Island and feels strongly about maintaining her quality of life. While she understands why Ketchikan and Petersburg are opposed to logging by the Trust in the areas that are important to them, she said she doesn't understand why people feel there would be no opposition to exchanging that land for parcels on Prince of Wales Island near the communities of Naukati, Hollis, and other places on the island. She said the Trust's recent [timber] sale in the Control Lake area, a popular recreation site in central Prince of Wales Island, is a perfect example of the in-your-face clear-cut logging that would concern the people of Ketchikan and Petersburg if it were done in their backyard. MS. FECKO noted that Prince of Wales Island has experienced extensive logging over the last 50-plus years and now the challenge is to retain a quality of life and a healthy island ecosystem as the public land on Prince of Wales Island continues to be carved into private- and state-owned lots. She is not opposed to the timber industry or to the needs of the Alaska Mental Health Trust, she added, and hopes a way can be found to do things a bit differently. She said she would like the bill's sponsor, the House Resources Standing Committee, and the people of Ketchikan and Petersburg to know that she, too, cares about the place where she lives. 2:24:08 PM DENNIS WATSON, mayor, City of Craig, testified in support of HB 155. He said it is important for Prince of Wales Island, the timber industry, and the island's largest sawmill. Many jobs are tied up with this and this [land] exchange has been on the table for years. There has been plenty of time for working on the parcels that were finally selected for the exchange, he continued, and it is time to move forward with getting this issue settled. MAYOR WATSON said Viking Lumber's sawmill in Klawock is huge because it has a year-round payroll in an area where jobs are really scarce. Contracts with the sawmill provide millions of dollars. He noted he has lived in Craig for 42 years and worked at the sawmill during his first two years. The sawmill is an important part of the economy, he said, and passing HB 155 is very important to the mill's existence. Actions by the last federal administration cut back on the amount of available federal timber and right now the exchange is a stopgap measure to keep the sawmill and the island's economy going. 2:26:31 PM REPRESENTATIVE BIRCH stated he shares Mayor Watson's interest and conviction regarding the importance of the timber industry in Southeast Alaska and the Craig community. He asked whether there are other avenues or venues in which the legislature can be supportive of an expanded timber industry in the state. MAYOR WATSON replied that a state forest is needed and said the infinite litigation and ridiculousness of trying to get anything done has been an impediment. He allowed that in the beginning he thought a state forest concept was foolish, but now he thinks it is the only way and he hopes the state legislature and administration will follow up on it because it is unknown what will happen with federal administrations. REPRESENTATIVE BIRCH said he supports the [proposed] land trade. 2:27:40 PM CO-CHAIR JOSEPHSON offered his understanding that there are multiple state forests in southern Southeast Alaska. He asked whether Mayor Watson wants a larger state forest. MAYOR WATSON responded yes, it is a large selection that is being talked about so there would be an ample supply of timber. Most of the people following this issue, he continued, believe the transition that the last federal administration wanted to do immediately is about a 20-year process. A miniscule amount of timber is being taken today as compared to the days when 600 million [board feet] was being cut. It should be spread around a lot more than it presently is, he said, but the current focus is on what can happen right now and hopefully this exchange is the bridge to the future. State forests are available right now, he said, but they are a small, patchwork quilt. 2:28:48 PM REPRESENTATIVE DRUMMOND noted she has been to the area where Mayor Watson lives and said it is a spectacular place. Drawing attention to the maps provided by the sponsor, she observed that the two [proposed] areas on Prince of Wales Island are the Naukati and Hollis areas. She inquired whether these two areas would benefit the sawmill. MAYOR WATSON replied he doesn't know if anybody from Naukati works at that, but the answer is yes that both areas are very important to making this happen. Both areas are very high-value timber selections, he continued, and both are places that have had timber harvest off and on through several years. Hollis is one of the original spots where the long-term [timber] contracts started some 50 years ago. 2:29:35 PM REBECCA KNIGHT testified that her opposition to HB 155 is based on a variety of grounds. A far better alternative, she said, is a federal buyout of the Alaska Mental Health Trust's lands included in the proposed exchange. Such a buyout would satisfy the Trust's mission to improve the lives of beneficiaries as well as impacts to Petersburg and Ketchikan area landowners, and a buyout would also avoid long-term and massive landscape level impacts elsewhere if the exchange is enacted. MS. KNIGHT pointed out that the Alaska Forest Resources and Practices Act governs logging on the Trust's lands. This antiquated law is far weaker than federal regulations, she said. For instance, it has no limit on the size of clear-cuts. She related that in August [2016], Paul Slenkamp of the Trust stated that the Trust was "in final negotiations with Viking Lumber for all the Prince of Wales land it would get under the exchange legislation." She urged there be a clarification of just what these "final negotiations" entail. MS. KNIGHT posited that changing the action from an exchange to a federal buyout would lend support on a congressional level and would greatly improve its chances of passage by reducing or even eliminating opposition, and would result in no environmental harm. Given a fair chance of passage, she said, the Trust could finalize the action much sooner and with less expense for survey and appraisal since only about half the lands would be involved. It also makes fiscal sense because it would cost the Trust about half the $6 million in cost cited by the Trust for the exchange. A federal buyout of the Trust's problematic lands is a reasonable solution, she posited, because Congress created the Trust and endowed it with lands to support itself, leading to problems due in part to the controversial nature of the lands selected. She further noted that the Petersburg Borough Assembly supports the buyout option if the exchange legislation fails to pass Congress by 1/15/17. In response to Co-Chair Josephson, she agreed to provide a copy of the borough assembly resolution. 2:32:22 PM LARRY EDWARDS testified in opposition to HB 155. He said the bill is unacceptable as written because it trades one very bad problem for an equally bad problem. The problem the bill would create is explained in three of the [written] comments on record from the [3/27/17] hearing that were submitted by Doug Rhodes, by Rebecca Knight, and by the Greater Southeast Alaska Conservation Community (GSACC) [under document named, "HB 155 Public Comments. pdf"]. He urged the committee to amend HB 155 to authorize a federal buyout of the problematic Trust lands instead of a land exchange. He pointed out that Congress established the Trust and its land endowment, which has led to the current dilemma. Buying out these 18,000 acres - 1.8 percent of the original million-acre endowment - is a reasonable and sellable solution, he posited. The legislature's passage of a bill amended accordingly would direct Alaska's congressional delegation to secure a buyout act. MR. EDWARDS addressed testimony on the bill that was provided by the Alaska Mental Health Trust Land Office [3/27/17]. He offered his belief that the Trust's testimony blatantly misinformed the committee in several ways, the details of which he has submitted to the committee in writing. For example, he explained, the "brown" map on page 10 of the Trust's written testimony either demonstrates utter incompetence on Southeast Alaska's land management issues, or is an outright lie. The brown color is labeled, "Natural settings with old-growth harvest land use designations," and is mostly overlain with cross-hatching to indicate that this supposed old-growth cannot be logged because of the Roadless Rule. However, he pointed out, most of the brown is not old-growth forest, or even forest, at all. Another example on the same map is the big brown block near Juneau, which is almost entirely the Juneau Ice Field and high alpine areas - very, very little of that brown is old- growth forest. This same thing occurs in the brown area shown on the Chilkat Peninsula across Lynn Canal, he continued, and again in the brown area shown for the unforested high mountain spines of Chichagof and Baranof islands. This deception repeats itself throughout much of the brown-colored areas on the map, he said, and also in the tan Wilderness areas. He further noted that these same errors or deceptions also carry through to the table on that map page. 2:36:04 PM REPRESENTATIVE DRUMMOND recalled Mr. Edwards referring to a document provided by GSACC that is three pages long with one map and which can be found on BASIS. She further recalled Mr. Edwards referring to page 10 of a similar document and asked Mr. Edwards to provide that document or tell the committee how to identify it. MR. EDWARDS replied that the document is in the record for the committees [3/27/17 hearing of HB 155] and is provided as two different documents one a PowerPoint and one a PDF file. Both are Alaska Mental Health Trust documents, he said, and are the presentation provided on screen by Mr. Wyn Menefee. 2:37:03 PM MIKE SALLEE testified in opposition to HB 155. He stated that for three and a half decades he has been a self-employed owner- operator of a small sawmill, as well as a commercial fisherman and harvest diver. Today he is representing himself and his lumber customers in opposition to HB 155, he said. He is a logger by virtue of needing logs for his sawmill operation. He does not fell trees; he takes only dead and down trees carried to tidelands. His brother was a lifelong logger and a mentor to him. MR. SALLEE said he has resided on Gravina Island since 1956 when his mother began a homestead there. Since 1956 he has enjoyed dozens of hunting expeditions on the island for deer and grouse, as well as just hiking. Therefore, he has seen a lot of what went on when the Alaska Mental Health Trust began logging on Gravina Island and, he noted, it has not been pretty. Way too much wood is wasted, he reported, and a high percentage of felled commercially viable timber is left to rot. The sawlogs that are removed are primarily exported in the round, leaving no opportunity for local processing. As a local sawmiller, he continued, he gets numerous calls for yellow cedar lumber, but yellow cedar lumber does not commonly get carried to tidelands where he gets most of his logs from blowdowns and landslides. Furthermore, he recounted, the tops, cull trees, and other logging slash are neither removed from the woods nor cut up into smaller pieces so as to more quickly break down. MR. SALLEE stated that while HB 155 takes some critical timberlands off the chopping block, for example Deer Mountain plus other lands near Petersburg and communities, it does little more than kick the can down the road. It does nothing to clean up the current logging methods. It does nothing to keep local timber for processors near Ketchikan. The best option instead of a land trade, he urged, would be an outright cash payment to Alaska Mental Health Trust to buy off Trust lands with timber interest. He offered his understanding that such a buyout could be accomplished through the U.S. Forest Service. 2:39:29 PM EMILY FERRY, deputy director, Southeast Alaska Conservation Council (SEACC), testified that SEACC's concern is less about the specific content of HB 155 and more about the overall intent. Specifically, she explained, a handout provided by the Alaska Mental Health Trust mentions that a main goal is to promote the timber industry in Southeast Alaska. But, she said, the bill sets up a "Catch 22". The Trust is mandated to generate revenue to benefit its beneficiaries. However, she advised, selling timber locally tends to not produce the most revenue. This was seen last year when the legislature passed a bill that allowed the state to offer timber at a reduced cost if it was sold to instate processors because they couldn't compete with export markets. So, she continued, if one seeks to increase the benefits to the Trust, one would export that timber because in the current market that would generate the most revenue. To promote the timber industry the Trust would have to sell the timber at a reduced cost and therefore it's a Catch 22. MS. FERRY addressed the earlier statement that HB 155 would be a win-win-win situation. She said it would be a win for some - the folks who SEACC has worked with for years to ensure that the hillsides in Ketchikan and Petersburg don't get logged. However, she continued, it is certainly not a win for the folks on Prince of Wales Island where whole areas would be logged. And, it is questionably a win for the Trust's beneficiaries. She said SEACC believes that other avenues could be looked at for resolving this issue and maximizing the benefits to the Trust, whether that is the federal buyout mentioned earlier or working with conservation buyers. 2:42:13 PM CO-CHAIR JOSEPHSON inquired whether SEACC's thesis is that if the Alaska Mental Health Trust must maximize its assets then it would need to export [the timber] because that is more valuable. MS. FERRY replied yes, under the current economics. CO-CHAIR JOSEPHSON offered his understanding that export is not the plan. MS. FERRY concurred that export is not the plan; the bill doesn't necessarily achieve that win-win-win scenario that is being looked for. CO-CHAIR JOSEPHSON surmised that in terms of conservation there would be some net gain in that existing Trust holdings, such as Deer Mountain, are vulnerable to harvest now, as are the parcels to be obtained, although there is the Roadless Rule and a significant slowdown. [Under HB 155, Deer Mountain and some places] would be conserved in an easement while other places would not. He asked whether he is correct in understanding that there is a net protection of timber, but noted he is saying this without having walked this land and knowing what it looks like. MS. FERRY responded that in his testimony, Mr. Edwards spoke to other areas of land that were going to be exchanged that didn't have high timber values so weren't likely to be logged. She agreed there is an element to what Co-Chair Josephson spoke to, but said it could also be looked at other ways and looking at a different solution altogether might be the way to go. 2:44:07 PM REPRESENTATIVE BIRCH stated that the carrots in his garden are vulnerable to harvest every fall when they finish growing. He inquired whether Ms. Ferry sees any potential for a sustainable harvest and management of timber resources in Southeast Alaska for the benefit of the region's people and economy, recognizing that there are a number of years between reforestation. He said the Trust obviously sees it as a significant economic plus. MS. FERRY answered she does see that, but said it is going to be much different than was seen 20-30 years ago. It is going to be small-scale artisan-type work, she said, and old growth logs are needed for that, which is something Alaska can produce but Oregon and other states cannot produce. If the old growth resource is liquidated now, and whether it is sold to Viking Lumber for a reduced cost or exported for more money, that [old growth] wood resource is going to be gone; it is not infinite. The forest will grow back, she continued, but it will take 300 years to get to the state of high-value old growth timber that can be used for such things as guitar tops and totem poles. She related that SEACC already sees it much smaller; for example, the current number of timber jobs in Southeast Alaska represents about one-half of 1 percent of the region's jobs. People are still operating from 20 or 30 years ago when it was a much bigger part of the economy, she said, but the reality is that it is less than 1 percent of the current economy, and while that could change a little it would not be significantly. 2:46:21 PM VICTORIA MCDONALD testified she has hiked Deer Mountain many times and considers it a memorable landmark and does not want to see Deer Mountain logged for Alaska Mental Health Trust funding. Nor, she continued, does she want the land trade to shift the cutting to Prince of Wales Island, which has already been heavily impacted, as has Revillagigedo Island. If the focus of the Trust is to make money, she encourages state and federal officials to think and act creatively and find another means for providing money for mental health. She offered her belief that the men and women who set aside these mental health lands could not have imagined the massive clearcuts in southern Southeast Alaska. This issue has been debated for many years and needs to be solved using collaboration and compromise. As for a viable timber industry in Southeast Alaska, she said, that is a myth that is repeated over and over. While there are trees still on the mountains, the best and viable timber has already been cut for the pulp mills or shipped overseas. The timber industry contributes very little to the area's economy; rather, it is fishing and tourism. 2:48:00 PM BOB WEINSTEIN, spokesperson, Save Deer Mountain, testified in support of HB 155. The purpose of the bill, he noted, is to authorize the Alaska Mental Health Trust to exchange some of its landholdings with the U.S. Forest Service. The exchange would involve Deer Mountain, the iconic backdrop of the community of Ketchikan. He related that last August and thereafter the Trust's committees and its board of directors voted to log Deer Mountain as well as a sensitive parcel in Petersburg unless pending federal legislation to exchange the parcels with U.S. Forest Service land was passed by the end of 2016. The Ketchikan public vehemently objected to the board's decision to harvest the trees on Deer Mountain and the city, borough, and local tribal governments also all opposed the plan. MR. WEINSTEIN continued, noting that ultimately the Trust's board rescinded its action, regrouped, and is now working with the Alaska congressional delegation on federal exchange legislation, which was reintroduced in the new Congress. He offered his understanding that a bill by Senator [Lisa] Murkowski is scheduled for mark-up [3/30/17] and will be reported out of committee. For this reason, he said, the House Resources Standing Committee needs to move state-authorizing legislation through the committee process and onward to final consideration by the House of Representatives so that when the federal legislation passes the exchange can be implemented in an orderly and timely fashion. MR. WEINSTEIN addressed the earlier question about the value of some of the parcels. He reported that the Alaska Mental Health Trust Land Office has estimated it would get revenues of up to about $3 million from the Petersburg parcel and about $2 million from the 898 acres on Deer Mountain. He offered his belief that if a value-for-value trade was done, the Trust would expect to get the same kind of revenue from the U.S. Forest Service land and other parcels that are being considered for exchange. 2:50:56 PM CHARLES WOOD, spokesperson, Mitkof Highway Homeowners Association (MHHA), testified in favor of HB 155. He said MHHA is a group of 95 Petersburg homeowners living below and commuting along State Highway 7, the Mitkof Highway, which lies at the foot of the Trust's demonstrably steep unstable hillside parcels. Soils across a majority of the Trust's parcels are of concern to MHHA, he reported, because U.S. Forest Service (USFS) orthophotographic maps show them as being landslide hazard soils. The majority of these parcels exceed the USFS standards pertaining to logging. Mr. Wood further pointed out that the Mitkof Highway corridor below the Trust parcels in question have also been analyzed and mapped as a landslide hazard zone by the state's Division of Forestry's Landslide Science and Technical Committee. He said the Division of Forestry has no criteria for best management practices specific to logging steep unstable slopes within inhabited landslide hazard areas. If the Trust were to log these slopes it would do so under the guidance of the Alaska Forest Resources and Practices Act. MR. WOOD stated that logging within an inhabited landslide hazard area is unwise as well as inconsistent with the public interest and the maximum benefit to people. The sole focus of MHHA over the past 11 years has been entirely on public safety, he related. Never once has MHHA mentioned viewshed, community backdrop, local recreation opportunities, wildlife corridor, or tourism, though each of these issues present reasonable arguments in favor of the land exchange. Nor, he continued, has MHHA offered commentary on the Trust lands next to other communities or the USFS lands involved in the exchange. MR. WOOD said logging the slopes above the homes of MHHA members runs the risk of accelerated landslide activity, and the MHHA has absolutely no confidence that the Division of Forestry's best management practices and guidelines will provide sufficient safeguards to protect homes and property from unwise timber harvest. Conversely, he continued, MHHA does expect that USFS management of the hillside will entail other criteria, which will ensure that public safety will not be impacted by logging. The committee may also wish to consider that the majority of the population in Southeast Alaska resides in close proximity to the Trust lands involved with this land exchange, he added. As such, for any number of reasons the parcels are clearly more beneficial to be left in their natural state for multiple-use by the public, which is more likely to occur under USFS guidelines and standards. He urged the committee to support HB 155. 2:53:53 PM CYNTHIA LAGOUDAKIS, vice-mayor, Petersburg Borough, testified in favor of HB 155. She said the bill represents a 10-year effort by the residents of Petersburg and Ketchikan, the U.S. Forest Service, and the Alaska Mental Health Trust to affect a land exchange within the Petersburg Borough and elsewhere in Southeast Alaska. The Petersburg Borough seeks to protect the natural resources within the borough's boundaries, she continued, and especially the lives, property, and peace of mind of those borough residents who live in close proximity to the current Trust lands that are under consideration. The borough has concerns for the downstream and downslope effects of any potential timber harvest in this area given the credible scientific information regarding landslides and other hazards. VICE-MAYOR Lagoudakis noted that especially in this current fiscal climate the Alaska Mental Health Trust must manage its resources for financial efficiencies to best achieve its mission. Expediting the land exchange outlined in HB 155 would help significantly in realizing those efficiencies, she said. An exchange of Trust lands for USFS lands identified in HB 155 would meet those objectives to the satisfaction of the Petersburg Borough and its residents, as well as other parties affected by this agreement. To that end, she concluded, the borough concurs with and encourages passage of HB 155. 2:55:26 PM The committee took a brief at ease. 2:55:54 PM CO-CHAIR JOSEPHSON removed his objection to the adoption of the CS [for HB 155], Version U, as the working document. CO-CHAIR JOSEPHSON closed public testimony. There being no further objection, Version U was before the committee. 2:56:25 PM REPRESENTATIVE BIRCH stated that as a resource-inclined person he is thrilled to see this initiative by the Alaska Mental Health Trust and the federal [agency] working to make this a reality. He estimated that at $2 million for almost 1,000 acres [in Ketchikan] and $3 million for 3,000 acres in Petersburg, the average is between $1,000 and $2,000 per acre in realized revenues from the harvest. As a sustainable industry, where the wood product can be harvested and then the regrowth harvested, this is a great effort, he continued. The mapping is detailed and helpful, and it sounds like a win-win from the standpoints of the communities, the public, and the Alaska Mental Health Trust. 2:57:43 PM REPRESENTATIVE PARISH recognized the conflict brought up by Ms. Ferry and asked what could be done to assure that the citizens of Southeast Alaska gain the maximum benefit possible through local processing. He requested Mr. Menefee to respond to this as well as to the assertion about a high degree of wastage. MR. MENEFEE replied that there are different standards between state harvest and federal harvest; the certain number of logs gotten out of a tree varies from state to federal [regulations]. But, he continued, all state laws are followed. The Trust believes it does receive fair revenue [from the exchange]. He acknowledged every single log does not get cut to every satisfaction. Something could potentially be worked out where somebody comes in and can cut more in certain situations. In regard to the issue that the Trust will ship the logs overseas versus cut locally, he said it is in the best interest of the Trust to ensure it has customers that will purchase its timber because the Trust will make revenue off of it. State laws guide how the Trust can sell the timber, both commercially and negotiated. The Trust will take into full consideration the issue that it needs its market purchasers along with the revenue that the Trust needs. So, he added, it is a balancing thing, and the Trust will design its timber sales accordingly to take that into account. 3:00:09 PM REPRESENTATIVE RAUSCHER opined that there is a certain amount of economic value to be gained in keeping jobs local and selling things local, rather than selling overseas. He said other things must be taken into account besides the price tag of what a board is worth, and that has a bearing on how to value the weight of this as far as an economic value for the local people. 3:01:05 PM REPRESENTATIVE TALERICO said he has no doubt the sponsor is doing this in the best interest of his community. He noted the backup documentation from local government organizations composed of elected officials, and said these resolutions and letters are important to him because he is a big believer in local government and local control. He stated he personally has an issue with any land sales to the federal government because over 150 million acres in Alaska are in parks, monuments, and preserves, plus another 50 million acres are controlled by the U.S. Bureau of Land Management and the U.S. Forest Service. Therefore, he continued, the federal government controls 200 million acres of the 363 million acres available in the state of Alaska. State ownership and keeping land in [the state's] hands are important, he opined. The Alaska Mental Health Trust looks at health overall and that could also be the health of a community. A reasonable economy in a community provides local jobs and makes things better and healthier for everyone in the community. 3:03:14 PM CO-CHAIR TARR moved to report CS for HB 155, Version 30- LS0335\U, Bullard, 3/8/17, out of committee with individual recommendations and the accompanying fiscal note. There being no objection, CSHB 155(RES) was reported from the House Resources Standing Committee.