Legislature(2019 - 2020)BUTROVICH 205
03/20/2020 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB130 | |
| SB160 | |
| HB16 | |
| SB194 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 160 | TELECONFERENCED | |
| *+ | HB 16 | TELECONFERENCED | |
| + | SB 194 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 130 | TELECONFERENCED | |
SB 160-FOREST LAND USE PLANS; TIMBER SALES
3:44:50 PM
CHAIR MICCICHE announced that the next order of business would
be SENATE BILL NO. 160, "An Act relating to forest land use
plans; relating to forest land use plan appeals; relating to
negotiated timber sales; and providing for an effective date."
3:45:05 PM
CHRIS MAISCH, Director, Division of Forestry, Alaska Department
of Natural Resources, Fairbanks, Alaska, stated that the goal of
SB 160 is to provide better support to Alaska businesses and
communities that depend on State timber sales for economic
stability and growth. The legislation would remove barriers and
improve the timber sales process while allowing for public and
community input on proposed projects.
MR. MAISCH said he would walk through portions of the briefing
paper in the bill packets, focusing on the current timber sale
process and highlighting the changes the bill makes to that
process. The briefing paper read as follows:
Issue 1: Negotiated Timber Sales. Under current law,
negotiated timber sales are authorized under three
different statutes, which is unnecessarily complicated
and confusing. In addition, the Division lacks
authority to offer long-term negotiated sales for out-
of-state markets, and to offer more than one
negotiated sale per year to a purchaser, which the
industry currently requires.
Issue 2: Forest Land Use Plans & Appeals. For certain
timber sales, especially large acreage and long-term
sales, the Division of Forestry (DOF) may issue a Best
Interest Finding (BIF) and award the sale before all
the Forest Land Use Plans (FLUPs) for the sale area
are completed. In these cases, the BIF and FLUPs may
be appealed at different times, delaying the actual
sale and interrupting harvest operations. This creates
uncertainty in executing the sale.
Background: Negotiated Timber Sales.
Timber sale statutes currently provide for the
following types of sales. AS 38.05.115 authorizes
negotiated sales without advertisement of no more than
500 MBM per year to the same purchaser. These are
small-scale sales.
AS 38.05.118 authorizes negotiated sales of timber
- to a local manufacturer of wood products or a
user of wood fiber,
- for a period not to exceed 25 years,
- and requires that the appraised value of the
timber remaining to be harvested is
redetermined every five years.
AS 38.05.120 authorizes sales by sealed bids or public
auction. The commissioner determines conditions,
limitations, and terms of the sale are. This is the
Division of Forestry's basic timber sale authority.
AS 38.05.123 authorizes negotiated sales
- for use in the local manufacture of high
value-added wood products
- of up to 10 million board feet per year
- for a term of up to 10 years.
Background: Forest Land Use Plans & Appeals
Timber Sale Process: The state timber sale process is
governed by AS 38.05, AS 41.17, and 11 AAC 71. Four
steps are required before a timber sale may be
offered. Steps 3 and 4 may be done simultaneously for
certain sales.
Step 1: Regional planning. The Department of Natural
Resources (DNR) develops area plans (AS 38.04.065) and
state forest management plans (AS 41.17.230) to
designate appropriate uses for state land. These plans
determine where timber sales are an allowed use and
what other uses must be considered when designing and
implementing sales.
Step 2: Five-Year Schedule of Timber Sales (FYSTS) (AS
38.05.113). The DOF area offices prepare a FYSTS every
other year. The FYSTS identifies proposed sales,
including their location, volume, and main access
routes. The FYSTS are scoping documents that provide
an opportunity for the public, agencies, and industry
to identify potential issues and areas of interest for
further consideration in the BIF and FLUP. A proposed
timber sale must appear in at least one of the two
FYSTS preceding the sale. FYSTSs are not appealable.
Step 3: Best Interest Finding (AS 38.05.035(e)). A BIF
is the decision document that:
• Establishes the overall area within which the timber
sale may occur,
• Determines the amount of timber that may be offered
for sale, and the sale duration,
• Sets the overall harvest and reforestation strategy
for the sale area,
• Determines whether the sale proposal complies with
the Alaska Constitutional requirement to manage for
sustained yield by evaluating the amount of timber
in the sale and the annual allowable cut for the
affected area,
• Selects the appropriate method of sale (e.g.,
competitive or negotiated sale), and
• Determines the appraisal method that will be used to
determine the sale price.
A Preliminary Best Interest Finding (PBIF) is intended
to document that the best interest of the State will
be served by the proposed action and satisfies the
public notice requirement for disposals of state
resources in article VIII, section 10 of the Alaska
Constitution. After public and agency review of the
PBIF, DOF reviews comments, makes changes as
appropriate, and issues a final best interest finding.
DOF must adopt a final BIF before selling timber.
Final BIFs are decision documents and may be appealed
to the commissioner (if originally signed at the
director level) or superior court (if originally
signed by the commissioner).
Step 4: Forest Land Use Plans (AS 38.05.112). Prior to
authorizing harvest of timber on any area greater than
10 acres, DOF must adopt a site-specific FLUP for each
harvest unit within the sale area covered by the BIF.
A FLUP may be adopted before or after the timber is
sold, but it must be completed prior to harvest. A
FLUP specifies the site, size, timing, and harvest
methods for harvest units within the sale area, as
well as addressing site-specific requirements for
access construction and maintenance, reforestation,
and multiple use management. Draft FLUPs are based on
additional field work, agency and community
consultation, and site-specific analyses by DOF, and
are subject to public and agency review. FLUPs are
required by statute, but the format and contents of
the FLUP are subject to DNR's discretion.
Appeals:
Both the BIF and FLUP are subject to appeal under AS
38.05.035 and AS 44.37.011.
• For BIFs, which are signed by the commissioner, AS
38.05.035(e) and AS 44.37.011(c) allow an aggrieved
person to request a reconsideration of the
commissioner's decision. AS 38.095.035(i) details
the public notice and appeal process.
• FLUPs are signed by Area Foresters, and are decision
documents under 11 AAC 02.900(4), defined as "a
written discretionary or factual determination by
the department specifying the details of the action
to be allowed or taken." FLUPs therefore are
appealable to the commissioner under AS 44.37.011(b)
and 11 AAC 02.
• DOF provides public notice and a minimum 30-day
public comment period on proposed FLUPs because
doing so enables DOF to restrict eligibility to
appeal or request reconsideration to those who
submitted comments. See AS 38.05.035(i).
Current Situation: Forest Land Use Plans & Appeals.
Purchasers often desire large and/or long-term sales
to provide a steady supply of timber over several
years. However, DOF does not have sufficient staff to
do the in-depth fieldwork and research necessary to
prepare the multiple FLUPs required for large acreage
sales or sales lasting more than three years before
offering the entire sale. Long-term sales also require
intermediate recalculations of the total allowable
cut. As a result, timber harvest on a long-term sale
may be interrupted by administrative (and potentially
judicial) appeals of FLUPs that are prepared after
award of the contract.
Appeals of a BIF are limited in scope to decisions
made in the BIF (whether and how much timber will be
sold), while appeals of a FLUP are limited to the
scope of that document (site specific details of how
the harvest will be conducted). In practice, however,
appellants sometimes challenge aspects of the BIF in
the context of a FLUP appeal. While these appeals may
be dismissed on procedural grounds, processing them
diverts staff and interrupts timber harvest. Even when
the appropriate issues are identified in an appeal,
the fact that BIFs and FLUPs are often adopted at
separate times provides two opportunities for
administrative, and potentially, judicial, appeals to
interrupt sale execution.
Current Situation: Negotiated Timber Sales. Industry
interest recently has focused on long term, negotiated
sales for out-of-state markets. Current statutory
authorities reflect prior policy to encourage
development of in-state use of the state's timber
resources, and do not clearly authorize this type of
sale.
Action Needed: The Division of Forestry proposes
statute changes (primarily to AS 38.05) that:
1. Consolidate small-scale negotiated sales (now under
AS 38.05.115) into the large-scale negotiated timber
sales statute (AS 38.05.118) and delete the
requirements that negotiated sales must be for local
manufacture, and that only one per year may be
offered to a purchaser. These revisions will provide
the commissioner of the Department of Natural
Resources with the flexibility to negotiate timber
sales that balance the evolving economics of the
timber industry with the Alaska Constitution's
mandate for resource development in the public
interest; and
2. Protect forest land use plans from being subject to
appeal or reconsideration, while keeping a best
interest finding concerning a timber sale appealable
under the same statute. This will result in more
efficient forest management planning and more
predictable timber harvests, while retaining robust
public and agency participation in the process.
The proposed statute changes:
1. Make forest land use plans non-appealable or
subject to reconsideration under AS 44.37.011(B),
while leaving intact other significant public
process protections, including:
• the right to appeal a commissioner's best
interest finding concerning a timber sale under
AS 44.37.011(B);
• the public notice and written best interest
finding requirements in as 38.05.035(E)(6)(a);
• public notice requirements for negotiated sales
of 500,000 board feet of timber or less in
38.05.945; and
• the requirement for public notice of disposal
of state interests in Article VIII, Section 10
of the Alaska Constitution.
2. Clarify the steps of a timber sale, stating
clearly that a timber sale contract may be awarded
before a forest land use plan is prepared, but
harvest of timber may not occur before a site-
specific forest land use plan is adopted.
3. Clarify the factors that must be considered before
deciding under which provision a timber sale will
be offered (e.g., competitive or negotiated sale).
4. Consolidate small-scale negotiated sale
authorities from AS 38.05.115 into AS 38.05.118
and remove the limitation of only one negotiated
sale per year to the same purchaser.
5. Preserve the exemption for negotiated sales of
less than 500,000 board feet of timber from the
written best interest finding requirement under AS
38.05.035(e)(6)(A).
6. Leave intact AS 38.05.123, which deals with
negotiated timber sales for local manufacture of
wood products, to assure domestic manufacturers
that they have an authority tailored to their
specific needs.
These proposed statute changes would also require
adopting updated forest management regulations for
negotiated sales, including 11 AAC 71.010, .015,
.020(d), .035, .045, .050, .055, .070, .092, .094,
.096, .098, and .910.
MR. MAISCH explained that there are four steps that the State
must complete to sell timber.
He said Step 1 is the regional planning process. There must be a
regional plan in place and if it is in a state forest, the State
Forest Management Plan is also in place before the State can
offer timber on lands that classified for timber purposes.
He explained that Step 2 is the Five-Year Schedule of Timber
Sales (FYSTS). The schedule is a document that provides notice
to operators, communities, and the public about planned timber
sale activities over a five-year time horizon. The division
publishes FYSTS documents every two years. Sales listed in year
one are typically the sales that will be up next. However, sales
may move up; FYSTS is not a linear document.
3:47:26 PM
MR. MAISCH said Step 3 is a Best Interest Finding (BIF)
requirement for the disposal of any State asset, including
timber. The BIF process includes a preliminary BIF that has
public and affected agency comments. The division publishes the
final BIF after making any needed adjustments. The BIF is a
decision document that is appealable by potentially aggrieved
parties.
MR. MAISCH explained that in Step 4 the division completes a
site-specific forest land use plan (FLUP that addresses site-
specific actions in the sale. The FLUP is an appealable
document, but a key change in the bill is to change the FLUP to
an unappealable document.
He explained that the division has five different timber sales
authorities under AS 38.05. He detailed that AS 38.05.120 is the
competitive sale authority that can be carried out by sealed bid
or oral outcry. The division awards the signed contracted sale
to the high bidder.
MR. MAISCH explained that the other suite of authorities the
division has are various forms of negotiated sale authorities.
The first authority is under AS 38.05.117 for timber salvage.
This is meant for timber damaged by bark beetles, insects, and
fire that requires prompt salvage. The timber salvage authority
abbreviates some divisional processes that includes not having
to list the sales in the Five-Year Schedule of Timber Sales
(FYSTS).
MR. MAISCH said the rest of the authorities the division has are
all negotiated sale authorities. AS 38.05.115 authorizes small
sales under 500,000 board feet that can be up to 2 years in
length. AS 38.05.118 authorizes larger sales over 500,000 board
feet that can be up to 25 years in time. AS 38.05.123 authorizes
high value-added sales up to 10 million board feet per year that
can be up to 10 years.
3:50:53 PM
CHAIR MICCICHE asked him to go through the changes SB 160 makes
to the process.
MR. MAISCH explained that the first change is to [AS
38.05.035(e)(6)(A)]. It is conforming language that changes a
reference to a sale type from AS 38.05.115 to AS 38.05.118. This
change is not substantive.
He continued to detail the changes in the CS as follows:
• Page 6, Section 2
o First major change to the BIF process.
o The criteria under the current BIF process for timber
sales was relatively undefined.
o The CS proposes to add five specific criteria to the
section to make a BIF more defensible when challenged
by an aggrieved party.
o The change specifies departmental and divisional
conditions for choosing an authority to sell timber by
addressing:
square4 Local timber markets for materials
square4 Foreign or domestic market development
square4 Economic constraints for the intended timber
market
square4 Any reasonable or foreseeable benefit to the
State and local economies from the sale
square4 Presence of underutilized timber
o Underutilized timber means the division is not
offering the full allowable cut in an area and excess
timber is available for offer.
3:53:21 PM
MR. MAISCH said one example of how adding more flexibility to
the BIF process would be beneficial is the young growth logs
coming online in Southeast Alaska. These logs only have a market
in China, but the division's current authority under AS
38.05.118 does not allow the division to negotiate an export
sale for that type of timber. By adding the proposed criteria to
the BIF, the division would be able to make the analysis,
address the market and economic issues, and offer a sale through
a negotiated authority.
CHAIR MICCICHE noted that Mr. Maisch was discussing the CS for
SB 160 and asked for a motion to adopt the CS as the working
document.
3:54:32 PM
SENATOR REVAK moved to adopt the CS for SB 160, work order 31-
GS2170\M, as a working document.
3:54:47 PM
CHAIR MICCICHE objected for discussion purposes and asked Mr.
Maisch to continue.
MR. MAISCH described the following changes in the CS for SB 160:
• Section 3, Page 6, Line 3
o Increases the threshold from 10 acres to 20 acres.
o Does not allow timber harvest permit until site-
specific Forest Land Use Plan is in place.
o The best interest finding allows the division to offer
a timber sale, but the FLUP must be completed before
the timber harvest can occur.
• Section 5, Page 7
o Deleted language that would not apply with the
proposed changes for negotiated sales.
• Section 6
o Conforming language changes to the references of where
the new, small sales occur.
• Section 7
o Addresses the notice of intent to negotiate for sales
greater than 500,000 board feet or equivalent.
o Mid-size sales are high value-added.
o AS 38.05.123 targets sales of 10 years and 10 million
board feet per year.
o Large sales over 500,000 board feet per year can be up
to 25 years.
• Section 9
o High value-added authority section.
o Line 3 adds conforming language.
o Line 6 adds a definition of other value-added wood
products, a term already defined in regulation.
square4 Lists products and materials categories that a
mill must produce to qualify for a sale under AS
38.05.123.
• Section 10
o Deletes language currently in AS 38.05.123 to make the
authority more efficient.
o The division proposes to remove seven criteria in the
AS 38.05.123 authority that is cumbersome.
• Section 11
o Conforming language
• Page 9
o Effective date
3:56:20 PM
SENATOR COGHILL joined the committee meeting.
3:58:20 PM
MR. MAISCH summarized that the legislation would provide a
consistent and flexible timber sale program to support the
entire range of domestic mills. The bill encourages further
development of offshore markets for logs as well as
manufacturing opportunities for forest products in the state.
He highlighted that the key change makes the FLUP a non-
appealable document. He explained that the FLUP appeals impact
longer term sales under AS 38.05.118 and AS 38.05.120. The
division only writes a FLUP in 5-year increments which means a
25-year timber sale could have 5 appeals. As proposed, just the
best interest finding would be an appealable document, but not
the FLUP.
SENATOR KAWASAKI asked if the items added in Section 2 to the
best interest finding are equally weighted.
MR. MAISCH answered that the section provides broad discretion
in how the division addresses the BIF. He explained that the
added items to the BIF are not equally weighted because the
division may only address one or two items. For example, the
young growth timber is market-driven, so the division would only
address the market components.
SENATOR KAWASAKI noted that criteria (6) says "any other
reasonably foreseeable benefit to the state or local economy
resulting from the sale." He remarked that that is a big and
open statement that could include something not in the BIF.
MR. MAISCH agreed that the statement is very broad and flexible
and deferred further response to Mr. Orman with the Department
of Law. He said DOL looked carefully at the criteria and made
some of the specific recommendations.
4:02:05 PM
CHRISTOPHER ORMAN, Assistant Attorney General, Civil Division,
Natural Resources Division, Alaska Department of Law (DOL),
Juneau, Alaska, explained that the [sixth] criteria in Section 2
was taken from what is currently, AS 38.05.123[(e)](7), which
reads: "any other reasonably foreseeable benefits to the state
and local economies from the sale." He said preserving that
language in AS 38.05.123 along with the other factors in AS
38.05.110 makes it clear that the commissioner is not
arbitrarily choosing a means or type of sale. Certain factors
and flexibility is needed when considering the best interest of
the State within the BIF context. The public can still challenge
the BIF through the appeal process.
4:04:31 PM
SENATOR KAWASAKI noted that Section 2 says the sale can be
offered under multiple provisions by considering the best
interest of the State in addition to the five other criteria. He
asked if a timber sale may be offered exclusively under one of
the criteria, but not in the best interest of the State, which
is the first criteria.
MR. ORMAN answered that there is the BIF requirement for all
timber sales. He said current language under AS 38.05.110 says
the commissioner shall determine the applicable provisions under
which to offer the timber sale there is no real analysis of the
factors to consider for determining the means of sale. Section 2
is intended to remove some of the arbitrariness that currently
exists in that statute.
4:06:51 PM
SENATOR KIEHL said he did not understand the interplay between
sections 7 and 8. Section 7 suggests that notice is only
required for quantities greater than 500,000 board feet, but
Section 8 seems to allow up to an additional 500,000 board feet
within a year. He asked if the legislation allows up to one
million board feet.
MR. MASCH explained that the new language in section 7 specifies
that the division must give notice for all sales greater than
500,000 board feet. He read the language in section 8 and said
he did not fully understand the question, but the idea is that
the division cannot offer a sale for more than 500,000 feet
without notice. He added that there are also notice requirements
for smaller sales.
CHAIR MICCICHE asked for clarification of Mr. Maisch's answer to
Senator Kiehl.
4:10:08 PM
MR. ORMAN concurred that Section 7 does not require public
notice for small timber sales. Currently under AS 38.05.115
there is a provision that says, "without advertisement."
However, the Alaska Constitution has notice requirements. He
said Mr. Maisch may have been referring to small timber sales
not requiring public notice to the level of AS 38.05.945.
He explained that subsection (d) om section 8 would allow for
more negotiated sales within a year. AS 38.05.118(b) is
discussing notice and AS 38.05.118(d) is discussing negotiated
and pursuant to the amount of board feet at issue.
SENATOR KIEHL remarked that sections 7 and 8 seem to allow a
499,000 board foot sale to become a 1 million board foot sale
within a year without additional notice. He said he did not
understand what keeps that from occurring.
4:12:13 PM
MR. ORMAN reiterated that regardless of the size of the sale,
public notice must happen. AS 38.05.945 has additional notice
requirements, but notice can happen through other avenues.
Notice needs to reach the appropriate affected people, pursuant
to the Alaska Constitution.
CHAIR MICCICHE summarized that Section 7 states that an amount
greater than 500,000 board feet requires the AS 38.05.945
notice. Section 8 allows for additional negotiated timber sales
within the year for an amount less than 500,000 board feet, but
there is the lesser notification requirement.
MR. MAISCH added that the division would have to go back and do
a BIF to negotiate additional board footage. Most timber sales
go through a competitive process using the AS 38.05.120
authority and rarely does the division add another 500,000 board
feet to a prior negotiated sale. The reason the division usually
negotiates sales is to help support local sawmills and
manufacturing that is already occurring in the state. Negotiated
authorities are not a common way for the division to sell
timber, but the process is a way that the division can sell
timber.
4:14:57 PM
SENATOR KIEHL referenced page 8, line 1 and asked if citing AS
34.15.150 was a typo. He noted that AS 34.15.150 references the
execution of conveyances.
MR. ORMAN replied that he believes citing AS 34.15.150 is
correct. He said he will get back to the committee to confirm if
referencing the statute is a typo.
CHAIR MICCICHE said he would like the questions regarding
sections 7 and 8 addressed. He noted that the committee will
hold SB 160 in committee.
SENATOR KIEHL said the heart of the bill was the notion that the
FLUP would no longer be appealable. The argument of not wanting
to give somebody four or five bites-of-the-apple over the course
of a sale was understandable. However, the FLUP does different
things than a BIF. The FLUP addresses things that Alaskans
generally want input on like the site, size, timing, harvest
methods, access requirements, and reforestation. He remarked
that seeing Alaskans having confidence in a FLUP without appeal
would be hard for him to see.
4:17:35 PM
MR. MAISCH explained that the best interest finding (BIF)
addresses many of the same topics as the Forest Land Use Plans,
but the FLUP has more detail. He reminded the committee that the
areas have also been addressed by an area plan and potentially a
State Forest Management Plan, which has a lot of public process.
Those documents provide strategic guidelines for reforestation
and road building. The division must meet minimum standards of
the State's Forest Resources and Practices Act (FRPA), which
provides guidelines and best practices for the variety of forest
practices that the FLUP addresses.
He emphasized that the division is just proposing to change the
appeal piece of the Forest Land Use Plans. They will still
circulate a FLUP to affected agencies that typically include the
Alaska Department of Environmental Conservation (DEC) for water
quality, and the Alaska Department of Fish and Game (ADF&G) for
fish habitat. And they will continue to take public comment and
consider that commentary when crafting the final FLUP.
4:19:02 PM
SENATOR KIEHL pointed out that for years Alaskans have asked for
the opportunity to comment on fish habitat permits, but they are
not subject to public comment or appeal. He said one reason
ADF&G has given for not taking public comment on those permits,
especially regarding timber sales, is that the FLUP can address
habitat concerns when it is subject to comment. He expressed
concern about Alaskans' role in the process and questioned the
reason for doing the Forest Land Use Plan when there is an area
plan and a BIF that covers everything Alaskans are worried
about.
MR. MAISCH explained that in places of the state where there are
no higher-level planning documents, the FLUP can serve as the
guiding plan. For example, the division did a sale in Galena to
support the community's biomass project for a woodchip boiler.
For the state to hold a timber sale on state land, a planning-
level document is required and the FLUP fulfilled that
requirement.
4:21:01 PM
TESSA AXELSON, Executive Director, Alaska Forest Association,
Ketchikan, Alaska, testified in support of SB 160. She said she
would cover the three primary benefits of SB 160 and why they
are important to AFA members and the industry. First, SB 160
provides DNR with the ability to negotiate sales with any user
of timber resources. Second, it eliminates the ability to appeal
the FLUP, which increases the efficiency of conducting timber
sales without compromising environmental review and public
comment requirements that exist through other planning
components. Third, SB 160 provides DNR the ability to offer
small volume timber sales with greater efficiency. She
summarized that the bill provides the opportunity to address
current challenges with timber sale processes and authorities.
This legislation is of particular interest to AFA and its
members to ensure a predictable timber supply.
4:23:33 PM
CHAIR MICCICHE opened public testimony. He said seeing no
requests to testify, public testimony remains open for SB 160.
4:23:54 PM
CHAIR MICCICHE removed his objection and the CS for SB 160 was
adopted.
4:24:02 PM
CHAIR MICCICHE held SB 160 in committee.