Legislature(2023 - 2024)ADAMS 519
04/14/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB93 | |
| HB26 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 93 | TELECONFERENCED | |
| + | HB 26 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 93
"An Act relating to a lumber grading training program
and lumber grading certificates; relating to use of
lumber graded and certified by a person holding a
lumber grading training program certificate; and
providing for an effective date."
1:37:03 PM
REPRESENTATIVE JESSE SUMNER, SPONSOR, thanked the committee
for hearing the bill. He read from a prepared statement.
Edit these verbatim minutes and SEND.
As a homebuilder I am very familiar with our inability
to utilize local lumber for construction. While there
is good quality lumber and skilled mills in the state,
residential construction often relies on products from
large box stores instead. This is due to the
requirement to use graded lumber, which must come from
outside. Rather than degrading the quality of new
construction by eliminating the requirements for
graded lumber, this bill would develop a grading
program here in the state to certify locally produced
high quality building lumber.
Fortunately, the Department of Natural Resources (DNR)
was already underway in developing such a program.
Stakeholders included sawmill owners, homebuilders,
housing authorities, economic development
associations, vocational educators, DNR, and the
United States (US) Forest Service.
There were several things that contributed to the need
for the bill. Lumber used in residential construction
must be graded and stamped to meet building code and
financing requirements. However, small Alaska sawmills
do not produce enough dimensional lumber to justify
the cost of hiring a grading agency to grade and stamp
the lumber. The cost of lumber and other construction
materials has risen dramatically over the last several
years making it harder for Alaskans to address housing
shortages affecting most of our state. Regions off the
road system experience even higher costs of
construction as materials have to be flown or barged
into areas that may already have abundant timber
growing nearby.
A local lumber grading program would allow local
sawmills operators to become certified to grade and
sell dimensional lumber they mill for residential
construction to a homeowner or a homeowners
contractor. This would provide Alaskans the option to
purchase a local product for use in construction of
their homes. It would create economic opportunities
that would result in permanent stable family wage jobs
in rural communities and villages and would strengthen
and diversify local economies.
In some parts of the state there would be cost savings
from locally produced dimensional lumber. According to
information from 2022, the average price of an 8 foot
2 inch by 4 inch [stud] was $9.44 the average total
price of barging the same piece of lumber to interior
communities was $12.00 and the average total cost of
air shipping was $21.00
The Kuskokwim Corporation had been working with the
Alaska Cold Climate Research Center on heat efficient
kit homes that uses timber harvested in their region
using locally produced graded dimensional lumber that
would be significantly cheaper than shipping in
dimensional lumber. It would help the corporation meet
more of the housing needs in this part of rural
Alaska. Many of the villages in the Tanana Chief
Conference had small sawmills and may be able to take
advantage of the local lumber grading program in the
future to help build housing in their communities.
In Southeast Alaska a coalition of tribal, public
sector, and private sector partners were interested in
transitioning away from old growth timber to a
sustainable industry manufacturing young growth wood
products. This would provide economic opportunity and
a local supply of wood products for consumers but the
limited opportunities for sales, sawmill operators not
able to grade their lumber is one of the hurdles for
its implementation. A local lumber grading program
would also lower the barrier to entry to create new
sawmills. The sawmills could serve as a catalyst to
increase investment in forest management and help
build the timber sector statewide. A large timber
sector could in turn, provide the additionality needed
for creating and selling forest carbon offset projects
adding further investment and revenues to the timber
sector.
The Division of Forestry and Fire Protection, DNR
would administer the program and ensure the training
necessary for certification was offered at least,
annually. Jeremy Doust, Northern Region Forester, was
online to provide a presentation, discuss lumber
grading, take a deeper dive into the need for a lumber
grading program, and offer an overview of the program
DNR would administer under the bill.
1:42:00 PM
Co-Chair Foster asked Mr. Douse to proceed with the
presentation.
JEREMY DOUSE, NORTHERN REGION FORESTER, DIVISION OF
FORESTRY AND FIRE PROTECTION, DEPARTMENT OF NATURAL
RESOURCES, provided a PowerPoint presentation titled "HB
93: Local Lumber Grading," dated April 14, 2023 (copy on
file). He introduced himself and began on slide 2 titled
"Grade Stamped Lumber:
• Grade Stamped lumber allows the purchaser to know the
wood meets a quality standard.
• Grading agencies such as Western Wood Products
Association (WWPA) publishes the Western Lumber
Grading Rules for appearance grading.
• Grading rules are accredited by the American Lumber
Standards Committee (ALSC)
• Members of WWPA receive mill training, quality
assurance (QA), market analysis, and professional
development.
• Small mill operators find it economically challenging
to become a member of these types of associations.
1:44:53 PM
Mr. Douse turned to slide 3 titled "Cost of Grading Agency
Membership in Alaska:"
•Membership Dues + Monthly Site Inspections +
Inspector Travel Costs ˜$2200/month•Membership options
for small mill operators:-Only pay for membership fees
during active periods.
•Membership options for small mill operators:
-Only pay for membership fees during active
Periods.
-Stockpile milled material and bring in an
Inspector when there is enough to justify the
travel costs.
•Difficult for small mills to produce enough volume to
justify these costs and remain profitable.
1:46:07 PM
Mr. Douse advanced to slide 4 titled What is a Local Use
Lumber Program:
• It is state law/regulation in seven states
allowing non graded/stamped locally produced
dimensional lumber in some construction
applications.
• It is often an exemption to a building code that
requires grade stamped lumber.
• It is focused on small mill operators providing
opportunities for them to enter home construction
markets explained what grading agencies were, //
allowed non-graded stamped locally produced
dimensional lumber in some construction
applications.
Mr. Douse moved to slide 5 titled "What is a Local Use
Lumber Program?" (continued):
• It includes a training program for small mill
operators on grading their own lumber and
includes a recertification schedule.
• Because of the code exemption, it allows for
traditional home construction financing.
• Gives building inspectors an opportunity to
inspect and reject the wood if necessary.
Mr. Douse discussed slide 6 titled "What is a Local Use
Lumber Program?" (continued):
• Local use lumber must be sold to the end user or
the contractor building the home.
• Most states only allow residential (1 3 family
home) construction as well as outbuildings.
• Mill operator must take and pass a grading
course.
• Certification only lasts for 5 years.
• Mill operator provides a certificate with the
local lumber.
• Only applies to softwood.
1:48:42 PM
Mr. Douse examined slide 7 titled Why is This Program
Needed in Alaska:
- Wood prices have increased dramatically for home
construction
- National Association of Home Builders notes wood
prices add $36k to new single family home construction
• Alaska Housing Finance Corporation cites high
cost of construction as a reason new building
permits fell 15%
- Canadian import tariffs on softwood were raised to
17.99% in early 2022
• Alaska imports ~$20 million annually in wood
products from Canada (Canadian Trade
Commission)
• Forest Management
Salvage harvest of beetle-killed trees less
than 4 years past mortality.
Increase forest management opportunities for
private landowners.
• Increase economic activity in rural
communities.
• Increase milling capacity.
Mr. Douse addressed slide 8 titled Mill Capacity and
Production in Alaska. He communicated that the graph
depicted the dimensional lumber production capacity in
Alaska, measured in Thousand Board Feet (MBF) over 20 years
from 2000 to 2020. He noted that the majority of the
states wood products were from Southeast Alaska and had an
impact statewide. He delineated that in 2020 the states
capacity was 500,000 MBF and the production was 87 MBF. The
amount of production had decreased significantly by 2020
to 15.5 MBF. Alaska imported about 200 MBF annually in wood
products from Canada not including the amount of wood
products coming into the state from the lower 48 states.
1:52:00 PM
Mr. Douse highlighted slide 9 titled Grading Agency Lumber
Standards." He explained that a lumber grader was a career.
He pointed to the table on the chart that showed the
categories and the types of grades for a number of
different use categories. He indicated that the grading
system was fairly complex, and the bill was not replacing
the graded lumber system. The legislation was a way for
small mill operators to sell their products for residential
framed construction. He turned attention to the boxed in
area on the table in darker font and pointed to the grades
that the division was currently working on substituting for
the state's proposed lumber grading program. The states
grading would be fairly straight forward and conservative
relative to the national grading equivalents.
1:54:15 PM
Mr. Douse moved to slide 10 titled Alaska Local Use Lumber
Substitute Equivalent Grades:
Number 2 and Better:
Substitute equivalent to Number 2 Grade of Structural
Light Framing, Joists and Planks and Standard Grade of
the Light Framing use categories.
Stud:
Substitute equivalent to Stud Grade used in
residential construction.
Number 3
Substitute equivalent to Number 3 Grade of Structural
Light Framing, Joists and Planks and Utility Grade of
the Light Framing use categories.
Mr. Douse commented that the Alaska standards were related
to the industry standards of the Western Wood Products
Association.
1:54:54 PM
Mr. Douse presented slide 11 titled Alaska Training and
Certification:
• One day free class focusing on visually grading
lumber to the three Alaska grades.
O Issuance of Alaska Local Use Lumber handbook
O Issuance of Air-Drying Best Practices document
Offered at least annually in Southeast, Southcentral
and Interior
• Recertification required every five years
• Certification issued to the person, not the mill
Mr. Douse reported that by offering the class for free
people would take the class more often than every 5 years.
He reviewed slide 12 titled Selling the Lumber (special
conditions):
• Mill owner/operator sells the lumber directly to the
end user or to the contractor building the home.
• Lumber sale must include documentation that describes
the 5 designations (grade, species, moisture content,
surface condition, size).
• Lumber sale must include a copy of the mill owner's
certification with the Alaska Local Use Lumber
program.
• Building inspector may refuse the lumber.
Co-Chair Foster OPENED public testimony.
JOE YOUNG, OWNER, YOUNG'S TIMBER INC., TOK (via
teleconference), strongly supported the legislation. He
thanked the sponsors and committee for providing the
opportunity to testify. He discussed his business, Young's
Timber Inc. that had been in operation since 1993. The
operation had 4 different types of sawmills that produced a
range of value added products working with a staff of 12
employees. He noted that quality white spruce lumber was a
value added product and customers commented on its superior
quality when compared to imported lumber. However, his
lumber is not graded or certified due to the high cost. He
delineated that Alaska Spruce compared to Douglas Fir in
test loads, compression strength, and elasticity according
to Alaska labs. He believed that the bill would increase
sawmill sales, create timber jobs, and help build
affordable housing. He asked the committee to support the
bill.
Representative Cronk thanked Mr. Young for testifying.
2:00:51 PM
RODNEY DIAL, MAYOR, KETCHIKAN GATEWAY BOROUGH, KETCHIKAN
(via teleconference), spoke in support of the legislation.
He shared that the community was experiencing a housing
crisis with affordability and availability the leading
causes. The crisis was impacting the citys economic
growth. The assembly and city staff were looking for
opportunities to encourage new housing. He believed that
the legislation provided the ability to increase the lumber
supply. Increasing lumber prices added $30 thousand to the
cost of a home in Ketchikan that began during the pandemic,
when the lumber supply was constrained. He recalled that
historically Southeast Alaska had a long history of small
sawmills and older homes were built from local timber. He
viewed the bill as a means to facilitate local access to
locally produced lumber, support affordable housing, and
provide jobs. He encouraged the committee to support the
bill.
2:02:46 PM
ANDREW TRAXLER, PAPOOSE MILLING, BIG LAKE (via
teleconference), supported HB 93. He stressed the need to
also pass HB 104 (Timber Sale:
Expedited/Salvage/Negotiated) due to the need for increased
timber availability. He believed that the bill was perfect.
He discussed the cost of lumber from his sawmill versus a
box store. He exemplified the cost of a rafter board
measuring 2 inches by 12 inches by 20 feet long that he
charged $53.20 (throughout the COVID 19 pandemic as well)
that cost $93.00 from a box store in the prior year and was
currently $63.60. He concluded that there was a large cost
savings when being able to buy wood locally.
Co-Chair Foster noted it was not his intent to move the
bill from committee during the current meeting. He provided
members the opportunity to ask questions.
Representative Hannan stated her support of the bill. She
shared that in her district lots of cabins were built via
ungraded lumber from local mills but building inspector
prohibited its use for housing. She wondered about the
jurisdiction of the state and whether the bill would
supersede local laws to allow for unstamped lumber, since
the state lacked a statewide building code. Representative
Sumner replied that the bill allowed the local building
inspector to reject lumber. He guessed that Representative
Hannan was asking if a municipality could reject the
program entirely. He believed the answer was yes, but he
would follow up.
Representative Hannan cited the following from the fiscal
note: Contractual costs through an RSA with the University
will be incurred. A Wood Utilization Specialist faculty
position will be created to manage the Local Lumber program
by training regional instructors She wondered about the
dialogue with the University and if they were in process.
She wondered where the position would be located.
2:07:25 PM
Representative Sumner answered that the position would be
housed at the University of Alaska, Fairbanks (UAF).
JESSE LOGAN, STAFF, REPRESENTATIVE JESSE SUMNER, deferred
the question to Mr. Douse.
Mr. Douse responded that the Cooperative Extension Service
(CES) resided at UAF. However, there were UAF extension
service employees at other campuses around the state
(Juneau, Ketchikan, and Anchorage.) He explained that the
reason the position would be part of CES was that a program
to help natural resource based industries was already
established. He added that if the Division of Forestry took
on the program it would be starting from scratch. The
faculty position would be the only need for CES to carry
out the program.
2:09:15 PM
Representative Hannan looked for more specificity on
whether the University was on board with the bill. She
noted that the person who implemented the program needed to
be highly degreed. She wondered if the UAF was ready to
roll out the program. Mr. Douse replied that the division
had been working with the University throughout the process
and they were completely on board.
Representative Josephson referenced testimony that the bill
could be a catalyst for road construction in state forest
for further access. He asked how it would happen. Mr. Douse
responded that when the state released a timber sale, if
there was no road access the timber sale was used to back
out some of the cost of road construction. He furthered
that it was not directly related to the bill, and he was
merely pointing out how the division operated timber sales.
He ascertained that if the bill passed it could lead to
increased demand for White Spruce or other softwood timber,
which would lead to more road construction via increased
timber sales.
Representative Tomaszewski thanked the sponsor for bringing
the bill forward. He thanked the sponsor for giving
accountability to the municipal inspector through the
ability to reject lumber. He referred to slide 9, the
grading agency lumber standards, and noted that it did not
include timbers or special dimension lumber. He asked if
they would be added in the future. Mr. Douse responded that
there was a bit more nuance in grading timber than lumber.
He acknowledged that there was much interest in including
timbers in the program. The bill attempted to build up
success in the proposed program and then include timber in
the future. He thought it would likely be a separate class
because grading timber was more nuanced than dimensional
lumber.
2:14:26 PM
Representative Tomaszewski referenced slide 12, the first
bullet point and read: Mill owner/operator sells the
lumber directly to the end user or to the contractor
building the home. He asked if there would be any
provision allowing a lumber mill to sell to a box store.
Representative Sumner answered that the concept was not
contemplated in the current bill because there was not a
stamp on the lumber, the proposal was certificated program.
Co-Chair Edgmon strongly supported the bill. He asked
whether the bill was an entirely new program. Mr. Logan
replied affirmatively.
Co-Chair Edgmon asked if there was any wisdom to make the
program more comprehensive defining things like local and
sawmill size and types, etc. under the current bill so it
would not require additional legislation in the future. He
did not want to slow progress on the bill but thought it
would be more advantageous. Mr. Logan responded that he
agreed with Representative Edgmon and supported including
more definitions. Co-Chair Edgmon thought more definitions
would strengthen the bill.
2:18:36 PM
Representative Stapp wondered how the wood would be graded
via the states regulatory process. He looked at slide 12
and read the second bullet point, Lumber sale must include
documentation that describes the 5 designations (grade,
species, moisture content, surface condition, size). He
asked for a description of the regulatory process.
Representative Sumner replied that currently grading stamps
were done by private organizations and grades were adopted
in code. Currently, there were not statutory definitions
for grading due to the lack of a statewide building code.
He did not know whether it would be appropriate to get too
down into the weeds by defining grades in statute when they
were regulatory issues.
Representative Ortiz supported the legislation. He
referenced testimony by the first testifier who advocated
for more timber to be made available for harvest. He asked
if the bill created more competition for the timber
resources currently being made available. He asked if there
was any pushback that the bill would create more problems
related to a lack of supply. Representative Sumner replied
in the negative.
2:22:32 PM
Representative Ortiz clarified that he wondered if he had
heard pushback that the bill would create an even greater
demand for Alaska timber that was already in limited
supply. Mr. Logan replied they had not heard any pushback.
He shared there were numerous letters of support in
members' packets. Many were from local sawmills that wanted
their products to be available to residential builders.
Representative Cronk thanked the sponsors for the bill. He
believed that the local lumber supply was limited, and the
sawmills were being squeezed. He thought the bill was
beneficial especially for local operators in rural Alaska.
Representative Coulombe asked if the sponsor was confident
banks would provide loans for the certified lumber.
Representative Sumner answered in the affirmative and added
that he did not anticipate any issues with financing.
Representative Coulombe thanked the sponsor for bringing
the bill forward.
2:26:23 PM
Representative Galvin was supportive of the bill. She
looked at slide 6, page 2 of the bill, lines 20 to 22 that
referred to one, two, and three family dwellings. She
pointed to the second bullet point on slide 6: Most states
only allow residential (1 3 family home) construction as
well as outbuildings. She assumed the 3 unit limit was
included for a reason but wondered how that would affect a
4-plex residential structure. She reasoned that there were
many 4-plex units in Alaska. Representative Sumner deferred
the question to Mr. Douse.
Mr. Douse replied that the state program dovetailed the
current code. He understood that any residential dwelling
larger than 3 units required an engineers stamp besides
building inspectors' approval. Representative Galvin
ascertained that it was not related to the product itself
but would add an extra layer that was not included in the
bill. Mr. Douse responded in the affirmative.
Representative Sumner interjected that commercial occupancy
dwellings were entirely different from residential. Tri-
plexes fell under the national residential code and
anything larger fell under commercial construction codes.
Co-Chair Foster CLOSED public testimony.
Co-Chair Foster recognized Senator Jesse Bjorkman in the
room.
Representative Sumner thanked the committee for hearing the
bill.
HB 93 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB026 Additional Documents-Alaska 23 Indigenous Languages 03.27.23.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 26 |
| HB026 Additional Documents-ANLPAC 2022 Summary of Recommendations 03.27.23.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 26 |
| HB026 Sectional Analysis 03.27.23.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 26 |
| HB026 Sponsor Statement 03.21.23.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 26 |
| HB026 Summary of Changes 03.27.23.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 26 |
| HB 93 DOF Lumber Grading Presentation 4.13.23.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 93 |
| HB 93 Sectional Analysis Version A.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 93 |
| HB 93 Letters of Support bundle.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 93 |
| HB 93 Sponsor Statement.pdf |
HFIN 4/14/2023 1:30:00 PM |
HB 93 |