HOUSE FINANCE COMMITTEE May 8, 1994 10:35 a.m. TAPE HFC 94-165, Side 2, #000 - end. TAPE HFC 94-166, Side 1, #000 - end. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 10:35 a.m. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf ALSO PRESENT Senator Steve Frank; Representative John Davies; Rick Solie, Staff, Senator Frank; McKie Campbell, Deputy Commissioner, Department of Fish and Game; Tom Boutin, Division of Forestry, Department of Natural Resources. SUMMARY INFORMATION SB 310 "An Act relating to the management and sale of state timber; relating to the classification of state land that would preclude harvesting of timber or would designate harvesting of timber as an incompatible use; relating to the administration of forest land, proposals for state forest, and the determination of sustained yield; and providing for an effective date." HCS CSSB 310 (FIN) was reported out of Committee with "no recommendation" and with a fiscal impact note by the Department of Fish and Game and with a zero fiscal note by the Department of Natural Resources, dated 3/30/94. SENATE BILL NO. 310 "An Act relating to the management and sale of state timber; relating to the classification of state land that would preclude harvesting of timber or would designate harvesting of timber as an incompatible use; 1 relating to the administration of forest land, proposals for state forest, and the determination of sustained yield; and providing for an effective date." Representative Brown questioned whether the 24 hour public notice had been met on SB 310. Representative Brown provided members with AMENDMENT 47 (copy on file). She explained that the amendment would insert "multiple" on page 10, line 29. RICK Solie, STAFF, SENATOR FRANK stated that Senator Frank did not object to Amendment 47. Representative Brown MOVED to ADOPT AMENDMENT 47. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 48 (copy on file). She explained that the amendment would add a new requirement that "provisions guaranteeing necessary public access for uses described in (d)(1) of this section" would have to be included in a Forestry Management Act agreement (FMA). Mr. Solie emphasized that page 7, line 29 contains language that covers provisions for existing public access. He suggested that language on page 7, line 29 be deleted if the amendment is adopted, to prevent redundancy. Representative Brown MOVED to AMEND Amendment 48 to delete subsection (n) page 7, line 29. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to ADOPT AMENDMENT 48 as amended. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 49 (copy on file). She explained that the amendment would delete "at the discretion of the state." She expressed concern that the language would not provide for fair market value of the dispositions of FMA's. Mr. Solie pointed out that the amendment was added by the subcommittee at the request of Co-Chair MacLean. TOM BOUTIN, DIVISION OF FORESTRY, DEPARTMENT OF NATURAL RESOURCES described possible discretionary uses by the state. Representative Brown MOVED to ADOPT AMENDMENT 49. Representative Therriault OBJECTED. A roll call vote was taken on the MOTION. 2 IN FAVOR: Hoffman, Brown, OPPOSED: Grussendorf, Navarre, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (2-9). Representative Brown provided members with AMENDMENT 50 (copy on file). She explained that amendment 50 would delete "or another provision of this chapter" on page 3, line 19. She MOVED to AMEND Amendment 50, delete "section" and insert "chapter" on page 3, line 20. She explained that the purpose of the amendment is to clarify that the Forest Practices Act is not removed from the provisions of AS 38.05. This statute addresses best interest findings and public notice requirements for land disposal and other management actions. Mr. Solie spoke in opposition to the amendment. Mr. Boutin expressed concern that the amendment would create confusion. He maintained that the amendment was unnecessary. He explained that AS 38.05.112 substantiates AS 38.05.945 which provides for public notice. He emphasized that section 3 (d)(1) contains language provided for under AS 38.05.112. He asserted that section 3 (d)(1) has been strengthened and is better, in regards to timber, than current statutory language. There being NO OBJECTION, AMENDMENT 50 was amended to delete "section" and insert "chapter" on page 3, line 20. Representative Brown MOVED to ADOPT AMENDMENT 50 as amended. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Hoffman, Navarre, MacLean OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Grussendorf, Larson The MOTION FAILED (4-7). Representative Navarre MOVED to ADOPT AMENDMENT 51 (copy on file). Representative Therriault OBJECTED. He explained that Amendment 51 would insert, "(4) determine the allowable harvest of the forest unit to be managed under an agreement authorized by AS 38.05.122 which shall not exceed 70 percent." He stressed that 30 percent of the allowable harvest would be reserved for other multiple uses or smaller operators. Mr. Boutin noted that allowable harvest is calculated by resource. He stated that there might be a FMA which utilizes the entire allowable harvest. 3 Mr. Solie spoke in opposition to the amendment. He felt that the amendment would restrict the practice of sustained yield as the criteria. He noted that page 6, line 3 requires that land or timber necessary to sustain a saw mill or wood processing facility is not taken. Co-Chair MacLean spoke in support of amendment 51. Representative Navarre stated that the language on page 6 did not adequately address his concerns. A roll call vote was taken on the MOTION to adopt AMENDMENT 51. IN FAVOR: Brown, Hoffman, Grussendorf, Navarre, MacLean OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson The MOTION FAILED (5-6). Representative Navarre MOVED to ADOPT AMENDMENT 52 (copy on file). He noted that the amendment would insert "economically viable" after "encouraging" on page 10 line 24. He clarified that for the purpose of AS 41 there would be "economically viable" development of commercial forest lands. Representative Therriault OBJECTED. Representative Therriault maintained that the legislation only highlights commercial use. He stressed that the amendment would tip the balance that has been maintained. Representative Navarre suggested that it makes sense that the FMA be economically viable. A roll call vote was taken on the MOTION to adopt AMENDMENT 52. IN FAVOR: Brown, Hoffman, Navarre, MacLean, Larson OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Grussendorf The MOTION FAILED (5-6). Representative Navarre MOVED to ADOPT AMENDMENT 53 (copy on file). He explained that amendment 53 would add a sunset clause to allow the legislature to come back and exercise its oversight authority, to make sure that FMA's are in the best interest of the state. Co-Chair MacLean spoke in support of amendment 53. Representative Therriault spoke in opposition to amendment 53. 4 Representative Navarre clarified that the contract provisions in effect would be valid and enforceable. He stressed that the amendment would allow the issue to be revisited in order to determine if FMA's should be continued. Mr. Solie relayed that legal counsel advised that the amendment would "muddy the waters" since it is unclear if an existing contract would be impaired. He emphasized that the legislature can always revisit the issue. Representative Navarre disagreed that existing FMA's would be effected. Representative Therriault reiterated that the legislature can revisit the issue at its discretion. Representative Brown noted that if the annual requirement for solicitation resulted in one FMA a year, that by 1999 the state will have exhausted the amount of available land. SENATOR STEVE FRANK spoke in opposition to the amendment. He emphasized that the commissioner is not required to enter into a FMA. Representative Therriault referred to page 3, section 3 (b). He noted that the commissioner may provide a written finding to the governor that the market or other conditions make it unlikely that such a solicitation will be accepted. Representative Navarre pointed out that the commissioner would still maintain discretion without legislative approval or disapproval. A roll call vote was taken on the MOTION to adopt AMENDMENT 53. IN FAVOR: Brown, Hoffman, Grussendorf, Navarre, MacLean OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson The MOTION FAILED (5-6). Representative Brown MOVED to ADOPT AMENDMENT 54 (copy on file). She explained that the amendment would remove all changes to the Forest Practices Act. Provisions establishing FMA's would be retained. She provided members with a letter from the Board of Forestry stating that the Forest Practices Act is accomplishing its intended purpose of perpetuating and protecting Alaska's forest resources. The Board did not recommend any changes to the Forest Practices Act. She stressed that the Forest Practices Act was the result of years of negotiations among affected 5 groups. She maintained that a delicate balance exists between different competing uses that are trying to coexist and make multiple use of the state's forests. She maintained that a comprehensive public process is needed before changes should be made. She contended that the amendment would allay some of the public's concerns. Mr. Boutin pointed out that the Board of Forestry did not discuss the impact of SB 310 on the Forest Practices Act. He maintained that the bulk of SB 310 does not modify the Forest Practices Act. Representative Grussendorf noted that his concerns in regards to the Forest Practices Act have been addressed. Representative Brown referred to testimony by the United Fishermen of Alaska (UFA). She noted that UFA testified that the legislation's changes to the Forest Practices Act reduces the intent to manage state and municipal forest for multiple uses, weakens the forest planning and review process, and alters the requirement for reforestation on private land. (Tape Change, HFC 94-166, Side 1) Mr. Boutin acknowledged that the Board of Forestry has not specifically addressed the ramifications of SB 310. A roll call vote was taken on the MOTION to adopt AMENDMENT 54. IN FAVOR: Brown, Hoffman, Navarre, MacLean OPPOSED: Grussendorf, Foster, Hanley, Martin, Parnell, Therriault, Larson The MOTION FAILED (4-7). Representative Brown MOVED to ADOPT AMENDMENT 55 (copy on file). She explained that the amendment would delete changes made in subsection (d). She noted that subsection (d) limits requirements only to designated state forest. She recommended that the changes in subsection (d) are unnecessary and not be adopted. Mr. Boutin noted that subsection (d) has been modified to contain language supplied by the Department of Fish and Game and the Department of Natural Resources. Representative Brown agreed that subsection (d) was improved. She questioned why subsection (d) should be limited to designated state forests. Mr. Boutin did not interpret subsection (d) to be limited to 6 timber. A roll call vote was taken on the MOTION to adopt AMENDMENT 55. IN FAVOR: Brown, Hoffman, Navarre OPPOSED: Grussendorf, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (3-8). Representative Brown MOVED to ADOPT AMENDMENT 56 (copy on file). She explained that the amendment would clarify that standards only apply to state and municipal forest lands, by the insertion of new language on page 9, line 30. She observed that the legislation deletes the requirement to look at immediate and long term individual and collective effects. Mr. Boutin stressed that the Department of Natural Resources has to meet the requirements of the Forest Practices Act. He observed that the amendment would impact the coastal consistency review of the Tongass National Forest. A roll call vote was taken on the MOTION to adopt AMENDMENT 56. IN FAVOR: Brown, Grussendorf, Hoffman OPPOSED: Navarre, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (3-7). Representative Brown MOVED to ADOPT AMENDMENT 57 (copy on file). She observed that the amendment was proposed at the request of the Boreal Forest Association. She explained that the amendment would assure that acceptable seedlings would be of a variety native to Alaska. She observed that the amendment would discourage "tree farms" and provide for variety of habitat. Representative Grussendorf spoke in opposition to amendment 56. A roll call vote was taken on the MOTION to AMENDMENT 57. IN FAVOR: Brown, Navarre OPPOSED: Hoffman, Grussendorf, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (2-9). 7 Representative Brown WITHDREW AMENDMENT 58. Representative Navarre MOVED, on behalf of Representative Davies, to ADOPT AMENDMENT 59 (copy on file). Amendment 59 would delete "sales of less than 50,000 board feet" and insert "personal use timber harvest" on page 1, line 8. Representative Davies spoke in support of amendment 59. A roll call vote was taken on the MOTION to adopt AMENDMENT 59. IN FAVOR: Brown, Hoffman, Grussendorf, Navarre, MacLean OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson The MOTION FAILED (5-6). Representative Navarre MOVED to ADOPT AMENDMENT 60 (copy on file). He explained that the amendment would make sure a proposed agreement is consistent with municipal land use plans. REPRESENTATIVE JOHN DAVIES spoke in support of amendment 60. He emphasized the need for municipal consultation early in the process of adopting a FMA. Representative Therriault OBJECTED. A roll call vote was taken on the MOTION to adopt AMENDMENT 60. IN FAVOR: Brown, Hoffman, Grussendorf, Navarre, MacLean, Larson OPPOSED: Foster, Hanley, Martin, Parnell, Therriault The MOTION PASSED (6-5). Representative Brown MOVED to ADOPT AMENDMENT 61 (copy on file). Representative Davies noted that his constituents are concerned with the size of potential FMA's. He explained that the amendment would limit the size of FMA's in the Tanana Valley. The amendment would limit timber harvests to no more than 6,000 acres of land or 1,000 acres of white spruce in the Tanana Valley drainage area. Mr. Solie spoke against adoption of amendment 61. He noted that the subcommittee held open amendment 5. He recommended that amendment 5 would be less constraining to the Department of Natural Resources. Amendment 5 would insert a new paragraph to read: "(2) the tentatively successful proposed agreement covers no more land or timber than is necessary to make the proposed agreement economically 8 sustainable over the life of the proposed agreement." Representative Davies expressed concern with the discretion given to the commissioner of Department of Natural Resources. Mr. Boutin maintained that limits on acreage would encourage clear cutting. A roll call vote was taken on the MOTION to adopt AMENDMENT 61. IN FAVOR: Brown, Hoffman, Grussendorf, Navarre, MacLean OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson The MOTION FAILED (5-6). Representative Therriault MOVED to ADOPT AMENDMENT 5. There being NO OBJECTION, it was so ordered. Representative Therriault discussed section 8, page 11, lines 4 - 7. He discussed sections granting separate severability. He noted that by highlighting these sections for severability the courts could construe that other sections are not severable. He MOVED to delete section 8. There being NO OBJECTION, it was so ordered. Representative Brown questioned the assumptions used by the Department of Natural Resources in determining that there will be no fiscal impact associated with the legislation. Mr. Boutin maintained that FMA's will only be entered into if they are cost effective. Representative Brown noted that page 9 requires that the commissioner strictly enforce the provisions of the final agreement and review operator's performance under the agreement. MCKIE CAMPBELL, DEPUTY COMMISSIONER, DEPARTMENT OF FISH AND GAME estimated that the Department's fiscal note would be zero for the first two years. For any FMA that occurs the Department would expect a financial cost of $102.9 thousand dollars. Representative Navarre asked if there are current negotiations for a FMA. Mr. Boutin replied that FMA's in the Interior, Delta Junction, Tok and Fairbanks has been discussed. He stressed that the timber would be offered for sale through long term negotiated contracts if FMA legislation is not enacted. 9 Representative Brown further questioned the Department's assertion that there would be no fiscal impact as a result of the legislation. Representative Therriault MOVED to report HCS CSSB 310 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Brown OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, Grussendorf, Larson OPPOSED: Brown Representatives Hoffman, and Navarre were not present for the vote. The MOTION PASSED (7-1). HCS CSSB 310 (FIN) was reported out of Committee with "no recommendation" and with a fiscal impact note by the Department of Fish and Game and with a zero fiscal note by the Department of Natural Resources, dated 3/30/94. ADJOURNMENT The meeting adjourned at 12:00 p.m. order at 10:35 a.m. 10