Legislature(1995 - 1996)
04/03/1996 04:11 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HJR 64 - EXTENSION OF KETCHIKAN PULP CO. CONTRACT CO-CHAIRMAN WILLIAMS announced the meeting would be teleconferenced and the committee would take public testimony on Committee Substitute for HJR 64 which had been adopted by the committee the previous evening. He noted that public testimony would be limited to three minutes. Number 330 SANDRA MESKE, Vice President, Alaska Women in Timber, testified from Ketchikan that she represents 300+ members in their grassroots organization that supports communication, education and responsible legislation concerning natural resources. She said, "I'm here today on behalf of those 300+ members saying we want, we desire and we need a stable economical timber industry that Ketchikan Pulp (KPC) can provide for many of our members. Within the next five to eight years, KPC is willing to invest $200 million to remain competitive in the world's pulp market. Investments in environmental improvements are already underway, but to invest this huge amount of money, a resolution such as HJR 64, must move boldly forward to ensure that the mill is environmentally sound, economically competitive for the long term. I am here to fully support a 15-year extension. This issue is not whether or not Alaska can manage the vast forest lands that provide viable habitat for wildlife, recreation and forest industry. The experience over the past four years clearly confirms Alaska can manage (indisc.). Our streams are healthy, fishing is at its best and thousands of people like you and I have been able to build productive lives growing and producing useful products. Without KPC's extension, the facility will not be able to maintain a vigorous economically viable forest industry in Southeast. Representative Williams, we are not only requesting an extension, but we need a large enough timber supply that can meet the job level that the Tongass Timber Reform Act (TTRA) has. With the TTRA supply, we can renew the Wrangell and Sitka mills and restore economically our jobs and our well being. I thank you for the opportunity to speak before the House Resource Committee and once again confirm that Alaska Women in Timber supports the extension for Ketchikan Pulp Company." CO-CHAIRMAN WILLIAMS called on the next person in Ketchikan to testify. Number 484 DEBBIE GRAVEL testified from Ketchikan and stated, "A 15-year contract extension would be a short-term (indisc.) to KPC and a long-term disaster for the Tongass National Forest. KPC is once again orchestrating a propaganda effort to generate fear and antagonism to maintain a federally subsidized competitive advantage. A premise of the original 50-year contract was that the resource was renewable and by the contract's end KPC would be harvesting second growth. How I wish a 15-year extension of the contract would (indisc.) second growth. Areas that have already lost wildlife habitat and biological diversity of old growth. On Monday, Troy Rheinhart stated in a public commentary on KRBG Radio that KPC wants to be the leader of protecting the environment. Last year alone, KPC paid $6 million in fines for violating clean air and water standards. Fifteen more years is a long-term contract and we will not only have little left to cut, but we will have further impaired our air and water." Number 564 MS. GRAVEL continued, "I arrived in Ketchikan in 1976 and Ketchikan was rallying to defend the pulp mill, as they threatened closure due to their stated financial inability to fulfill the Environmental Protection Agency's (EPA) regulation for secondary treatment. The threatened closure and perceived impact on Ketchikan's economy threatened residents then as is occurring today. I would like to quote Malcom Doran (sp) who testified on May 12, 1976, at the EPA hearing. Quote `It's time Ketchikan united its positive thinking. Put KPC in the proper perspective and truly strive for economic freedom, self-respect and then once again citizens can become the type of rugged, self-reliant individuals that over the years have become synonymous with the term Alaska' end quote. If KPC had sat idle rather than purchase timber on an open market, perhaps some of the smaller timber firms who have attempted to operate in Southeast Alaska would have been able to compete with KPC for the necessary timber to step in and boost the lagging economy. This would also give existing local mills a chance to expand operations and to compete in lumber, shingle and wood product markets up North and down South." Number 625 MS. GRAVEL further stated, "If Ketchikan residents remain hostage to KPC's campaign of economic dependence, we lose our chance to have an independent and stable economy. A report entitled, Economic Well-Being and Environmental Protection of the Pacific Northwest, edited by T. M. Power, an economist with the University of Montana, has documented remarkable growth in the economic vigor in Idaho, Montana, Oregon and Washington in the last decade even as natural resource industries - timber, fishing, mining and agriculture - have experienced decline and have eliminated tens of thousands of jobs. Instead of devastating the economy of the region, others have stepped forward. High tech design and manufacturing industries, as well as diversification of the historical base as a secondary manufacturing has helped modernize and diversify the economy as a region. It is the conclusion of the 34 economists authoring this report that the two main factors to this economic growth are the region's quality of life, water and air quality and recreational opportunities, scenic beauty and the fish and wildlife and the increasing mobility of people's business. To quote the report, `A healthy environment is the major stimulus for healthy economy.' Thank you for this opportunity to comment." CO-CHAIRMAN WILLIAMS announced the committee would now hear testimony from Sitka. Number 707 DON MULLER testified via teleconference from Sitka that he has been a businessman in Sitka for 20 years. He said, "I am very much opposed to the 15-year contract. I want to make two points this afternoon. The first - a specific point in the bill - the third Whereas, it says `pulp mills protects forest health by using that significant portion of the Tongass National Forest that consists of dead, dying and over-mature timber.' That saddens me. It reminds me of the Viet Nam war when the military would go into a village and say we've got to destroy you to save you. It saddens me that some legislators in Alaska are going after the Tongass in the same way that we went after the Communists 30 years ago. It seems like we should have learned something by that. The second thing I want to talk about is one of the reasons that's generally given for this extension is the necessity for Southeast economy and Ketchikan economy and the examples often used is Sitka was devastated by the mill closure here. I want to read you some quotes from newspaper articles over the past two years, putting the big lie on that to rest. These are mostly statements from the city, itself. The first one is starting eight months after the APC mill closed, housing in Sitka was still tight. Quote, `Very little change in the local real estate market since the Alaska Pulp Corporation mill announced a year ago that it would close the Sitka mill. Prices of residential and commercial property are holding steady or climbing. The number of houses for sale is still limited and those that do go on the market are selling quickly.' Unquote. That's from a July 7 Sitka Sentinel article. `One year after the mill closed, the Sitka reserve fund was up. The balance sheet for the general fund as of September 30, 1994, reflects a reserve of $8.74 million, up from $7.45 million a year ago.' Unquote. That's from a December 21 Sitka Sentinel article. In December 1994, Sitka's electric and water rates are among the lowest in the state. Quote. `A state survey of 22 Alaskan cities shows Sitka has the lowest electrical rates and one of the lowest water rates.' Unquote. That's from a February 24, 1995, Sitka Sentinel article. In a report from Moody's Investor Services prepared by the city of Sitka, dated March 6, 1995, it was shown among other things that the average sale price for a single family home continued to rise from 1990 as single family housing starts for 1994 increased from approximately 25 in 1993 to approximately 40 in 1994 and that growth business sales continued to increase for every year from 1989 to 1994. This was from the presentations of Moody's Investor Services dated March 6, 1995. This report also indicated long-term growth in the health care, tourism and education industry in Sitka. I would like to say again that I'm very much against this contract and the economy of Sitka proves that we can do fine without pulp mills." CO-CHAIRMAN WILLIAMS asked if there was anyone in Sitka wishing to testify who was for the resolution. Inasmuch as there was no one to testify in support of the resolution, he called on William Miller to present his testimony. Number 956 WILLIAM MILLER testified from Sitka in opposition to CS HJR 64. He stated, "I further believe that Southeast Alaska communities would build (indisc.) economically if the KPC contracts were cancelled. I make that claim on three reasons. Number one, the small, locally-owned timber operations pay more for Tongass timber. Look at the difference between what Buhler pays and what KPC pays per foot. Today, the very presence of KPC is keeping timber prices lower than it should be. Number two, the 1993 Reeve Brothers lawsuit against KPC and APC never established the impact of the law of the 103 local timber operators on local communities, and it should have. Locally-owned timber businesses mean that more profits stay locally. In addition, more subcontract business is done locally. Number three, our Tongass, our trees, are like stock on Wall Street. As they grow in the forest, they yield up dividends. Those dividends are in the form of subsistence, tourism, fish and wildlife habitat. While the rest of the world are liquidating their trees, ours are growing in value. And because of it, our tourism is growing in value almost daily." Number 1036 MR. MILLER continued, "The heart of our forest has already been cut out. Two hundred year old second growth does not have the value of old growth; we'll never it back. So, let's not be in a rush to cut what is left, especially under the conditions of a long-term contract. We have a gold mine here - don't sell it until we really need to eat. Don't sell off our resources while our dividends are growing in value for the future. We should be seeking a wood product industry that will respect our lifestyle, based on local ownership of small maximum value-added businesses." Number 1069 MR. MILLER further stated, "Furthermore, look at the language of this bill. Are our legislators made of logic or pom-pom cheerleaders for a KPC logging effort. How many legislators know what the Forest Service definition of productive or commercial forest is? How many legislators know that high volume old growth forest is the name of the real productive or commercial forest in Southeast Alaska and that the majority of what the Forest Service calls productive forest is glorified shrubbery. Do legislators know that half of the real productive forest, the high volume old growth forest, has already been cut? Republican President Ike Eisenhower, warned us not to plunder for our own ease and convenience the precious resources of tomorrow and do not risk the loss of our children's political and spiritual heritage. What President Eisenhower was asking us to do is not easy, but then choosing another road rather than the path of ease and convenience rarely is easy. It requires both effort and strength. It (indisc.) sell off our resources for our own short-term comfort. It is wiser to use them conservatively. Begin doing so by urging Congress and the Administration to cancel the KPC contract." CO-CHAIRMAN WILLIAMS stated the committee would now hear testimony from Thorne Bay. Number 1165 DESIREE JANZEN testified via teleconference from Thorne Bay on behalf of H & L Salvage, Inc. She said, "We are a small business here in Southeast and I'm here in support of the extension of the contract. Our company buys red cedar logs from them and we depend on this log source as part of our overall operation. There is more than one business in our community that also depends on KPC for their logs. If they were to shut down their operations here, it could drive away small businesses like ours. Without KPC in our community, the residents will all suffer. Again, I offer our support for the extended continuation of the contract for KPC. Thank you for this opportunity to speak." Number 1213 KELLY L. GERRITS testified from Thorne Bay she is not anybody important; just a wife, mother and KPC employee. She said, "I'm trying desperately to hold on to something I truly believe in. I wouldn't be a fifth generation logger if our timber wasn't a renewable resource. I'm not going to give a lot of facts and figures; I'm just going to speak from the heart. I support the 15- year extension because I support my livelihood and my heritage. This has been an honest profession; one that many of my generation have supported themselves with and raised good American families. In my lifetime, I have witnessed many positive improvements in the timber industry. No matter what one may think, we do need the industry and I am only asking for KPC and others to be able to continue so we can continue to be honest, hard working timber employees in a renewable resource. Thank you." CO-CHAIRMAN WILLIAMS said the committee would next hear testimony from Petersburg. Number 1271 BECKY KNIGHT testified from Petersburg that she is a 21-year resident of Petersburg, a former forester for the U.S. Forest Service, a wife and a mother of two young sons. She said, "My family makes their living entirely from commercial fishing; a substantial portion of which is harvested in Southeast Alaska. I believe I have a good working knowledge of the land management decisions affecting the Tongass and my livelihood. I am adamantly opposed to any extension of KPC's 15-year long-term contract and I am outraged that such a proposal could even be considered. As you know, KPC is a convicted felon for intentionally dumping toxic sludge into Ketchikan's Ward Cove. The EPA has listed KPC one of the worst water polluters in the Pacific Northwest, yet KPC continues to operate despite the fact that it cannot meet safe air and water quality standards. In 1983, KPC was found guilty of anti-trust violations, including price fixing, collusive bidding and forcing independent timber operators out of business. And according to the Forest Service, cheated the American public out of $60 million to $80 million." MS. KNIGHT continued, "I believe that we need to begin now to plan for an orderly transition for KPC to convert to a high value-added, sustainable industry and not grant these corporate bad boys a hand out. Speaking of sustainable, as a good friend of mine said to me last night, `There will be no forest management if KPC is granted an extension.' This very fact is quite apparent in documents prepared for KPC contract offering. For instance, I had the opportunity recently to review a draft Environment Impact Statement (EIS) for local timber sales called the (indisc.) Cape Fanshaw timber sale. The (indisc.) area is important to local residents, including fishermen, crabbers, shrimpers, seiners, trollers, long- liners, as well as other charter boat operators in recreation. Also, the timber volume intended to be logged from areas intended to satisfy KPC's long-term contract. KPC's unsustainable logging practices have forced them to areas of the Tongass formerly off limits to the company including the (indisc.) areas. The Forest Service was forced to ignore the needs of these other users of the sale area and their relentless pursuit to satisfy the (indisc.) appetite of an out-of-control pulp mill. Although they could have offered less volume and made everyone happy, they ignored all the other users. As I reviewed the EIS, I was struck by the numerous references to federal and state laws and Forest Service agency directions that would be violated, and the Forest Service mad- scramble to satisfy KPC's contract. For instance, and these things are admitted in the draft EIS and are there for the reviewer to find, the main log dump at (indisc.) is located directly adjacent to an anadromous fish stream in direct violation of Alaska law of transfer facility siting guidelines. guidelines. Number 2, water quality standards are expected to be exceeded in the (indisc.) water shed and that's the main water shed in the (indisc.) area as a result of proposed road construction and logging in the water shed." CO-CHAIRMAN WILLIAMS advised Ms. Knight of the time limit for testimony. MS. KNIGHT continued, "They admit numerous violations of federal and state law. They arbitrarily expanded the sale area and sale volume to satisfy KPC's contract commitments and we urge the state and the federal government not to award these felons anymore volume. Thank you." Number 1474 JAY PRITCHETT testified from Petersburg that he is adamantly opposed to the extension of KPC's contract. He said, "First of all, the 50-year contracts were a mistake and I don't think we need to modify those and amplify our mistakes of the past. Second, they've been extremely, as Becky pointed out, extremely reluctant stewards of the environment which we all share here in Southeast Alaska. Third, we have a state and a federal government that is trying to scale back and not pay subsidies and I don't see this as anything but a subsidy for a huge corporation and as long as we're on that, the fourth reason is that the company theoretically needs more time to make more money to pay for health and environmental standards issue put through earlier when the parent corporation had made record profits that were virtually unheard of. In fact, unheard of in the industry. So, once again I'm adamantly opposed. I see no reason in the world to extend the contract at this time. Let's come back to earth and have everybody and all different types of users compete on an even basis. The Tongass isn't just timber and it isn't just a pulp mill in Ketchikan." CO-CHAIRMAN WILLIAMS thanked Mr. Pritchett for his testimony and said the committee would next hear testimony from Coffman Cove. Number 1568 PAT ROWLAND, President, Southeast Island School District School Board (SISD), testified via teleconference from Coffman Cove in support of CS HJR 64. She said, "When I was elected to the board in 1993, SISD had 17 schools in correspondence; this year we have 11 schools in correspondence. Next year we will lose another school. Our board has made difficult decisions due to the fact that the formula for funding rural education in our state depends on the number of school sites and the number of students. (Indisc.) all the revenue, the board's goal is to provide the best possible education for all of our students. The only glimmer of hope we've had the past few years is timber receipts. But now as we receive (indisc.) to balance our district's budget, half full school buildings due to relocation of logging operations have made it possible to bring technology to our classrooms. The amount we receive from timber receipts depends on the amount of logging in the national forest in our state. Our board is comprised of five elected members representing the various communities in our district. (Indisc.) communities dependent on the use of our natural resources. Our families earn their living by fishing, logging, government, construction and tourism. Our diverse group has found common ground from their common goal as trustees of the education of our children. We respect each others as individuals and have learned to value our diversity." Number 1660 MS. ROWLAND continued, "In listening to the testimony yesterday, I began to realize the evolution that has taken place in the last 21 years that I've lived in Southeast Alaska. The changes have (indisc.) changed industry, communities, communications and schools. In some cases the transition has been painful while in others the (indisc.) has been denied. The surviving timber industry has undergone a substantial transformation. Much of the testimony we have heard was about the past. Logging camps have evolved into second class cities, some first class cities have revenue problems after closure of their main industry and others are struggling not to follow. Communications have gone from marine radio to telephone and television program is available in almost every location. This teleconference is possible. Southeast Island School District schools have opened, educated children and (indisc.) as required from Forest Service directives. I refer you to the survey provided by South East Alaska Resource Center extension mentioned by John Antonen during his testimony yesterday. I accompanied John and Sitka's School District Superintendent on the trip to D.C. to deliver the survey to the Forest Service and our congressional delegation. Our request for accountability from the Forest Service for the cost incurred from expenses that removing schools as required by contract and funding for further educational opportunities for dislocated loggers fell on deaf ears. I hope you will take into consideration the testimony of the mayors of Southeast Alaska and all the others who testified for this resolution. This resolution after all is part of a process to show the federal government that backing of some of our state residents, legislators and Governor for an important part of Southeast Alaska's economy." CO-CHAIRMAN WILLIAMS asked Ms. Rowland to wrap up her testimony. MS. ROWLAND continued, "All the players have diversified and complied to all the directives, the staff have out-layed the time and dollars, our school district included. With the assurance of the continuance (indisc.) and continue to provide quality education to all of our students in rural areas, we will be able to provide them a technological expertise to meet the ever changing demands in this ever changing world. The students believe our schools are still necessary to seek future schooling or enter the work force in their community. They will not be faced with the problems facing the workers of Wrangell and Sitka, re-training after a lifetime of contributing to their jobs in their communities. Our first goal of implementing technology has just started. Extension of KPC's long- term contract will provide the needed security and the telephone services serving our communities to expand and install all necessary improvements to take advantage of the information highway. Our board's goal of implementing technology has just started. With the long-term contract, people can go to (indisc.) for expanded telecommunications is only one example." Number 1828 DAN HAYES, JR., testified from Coffman Cove that he has worked for KPC and indirectly worked for KPC for the last 20 years. He said, "I own property here on Prince of Wales Island and I am for this extension - the 15-year extension. There's lots of logs to be logged yet and I live here and if KPC doesn't get that, there's $200 million that they're putting in to the mill to clean the mill up even further than what's already happened. So yes, I am for the 15-year contract extension. Thank you." Number 1880 JEFF MEUCCI, Mayor, City of Petersburg, testified via teleconference from Craig that the City of Petersburg will be talking about a resolution supporting the contract extension for KPC at the next council meeting, April 15. He did not have an inclination as to which way the resolution would go. He said the rest of his comments would be based on his personal opinion and not a reflection of the city of Petersburg or the city council. He remarked, "As a commercial fisherman, I am not guaranteed a contract to harvest fish. I think it's very important that we make the industry as competitive as possible. I think it's important that the jobs generated by the timber industry are Alaska jobs and not jobs that are sent out to the Lower 48. I think it's important that the jobs in Alaska be the most efficient use of the timber in Alaska, making sure that the processing is done in Alaska, not in the Lower 48 or Japan." CO-CHAIRMAN WILLIAMS announced the committee would hear testimony from Juneau. Number 2005 IRENE ALEXAKOS informed people listening by teleconference of a display which listed KPC contributions to Southeast Alaska. She said, "In a nutshell it lists the payroll, direct jobs and taxes they pay. I've put before the committee here, another picture that represents a side that many have glossed over - some of the many laws that KPC has broken. In most cases, they are violations that have been knowing and repeated for years. Yesterday, the Vice Chair gave the impression that there need not be much concern for KPC breaking laws in the future because if someone breaks the law, they get caught and are taken to court. Surely this is grossly simplistic. We all know that only a fraction of criminal and civil violations are caught and somehow brought to justice." Number 2051 MS. ALEXAKOS continued, "One point in the resolution is that KPC faces an uncertain future, not of its own making, as a result of the continuing log shortage created by the failure of the Forest Service. This is a curious statement to me. It is the timber industry that cuts and has been cutting for decades in the Tongass. Logically, there is less available. Illinois was once forested, too. It must be recognized there are limits to everything. It is the Forest Service who has provided most of the timber base to KPC at prices far below those offered competitors. KPC has had the benefit of a situation that no other mill in the U.S. has had. Why do they deserve this unique treatment? Much of the emphasis, understandably, in this resolution is on jobs. Certainly, employment is crucial to individuals, communities and a healthy economy. But to go as far as to say there would be cataclysmic impact, as you say Mr. Chairman, is a gross exaggeration. I think it would be far more productive for politicians and individuals to see that everyone is capable of finding employment and working in other sectors. Indeed, when legislators leave each May, you often go to resume entirely different careers." Number 2107 MS. ALEXAKOS further stated, "As a last point, I'd like to call your attention to this report. At the beginning of each session, the Department of Environmental Conservation is required to submit a report to the legislature summarizing several aspects of the Oil & Hazardous Substance Release and Response Fund. This report includes dollars spent by the department, the amount and source of funding, monies recovered by personal services, contracts purchases, and summaries of response activities. At the end of the report is a list of sites in DEC's contaminated sites database and the priority classification of each. The primary tool used by ADEC for prioritizing contaminating sites is the Alaska Hazard Ranking Model. This model provides an indication of the relative threat to public health in the environmental by evaluating several exposure pathways. It's not an absolute measure, but it does provide a general assessment of the threats a site may pose. As such, DEC places sites into high, medium and low priorities." CO-CHAIRMAN WILLIAMS reminded Ms. Alexakos of the time limit for testimony. MS. ALEXAKOS commented, "Let me just say that of 2,761 sites in the state, KPC was ranked number 2. As of last week, DEC had 2,761 in this database. Sites with a score of greater than 40 are considered to be high priority. KPC has a score of 337. This is the second highest score computed of over 2,000 contaminated sites in the state. This is now and this is today. Before the legislature passes such a resolution, I believe this issue must not only be addressed, it must be resolved." Number 2213 KATHY COGHILL, Representative, Juneau Chapter, National Audabon Society, presented their position on the proposal to extend Ketchikan Pulp Company's long-term contract for another 15 years. She said, "Although we support the presence of a timber industry in Southeast Alaska, we are opposed to this proposal for the following reasons: 1) We are no longer living under the same conditions which led to signing the original contract in 1954. Our economy here is healthy now and growing as we head into the twenty-first century; 2) extending the contract is not a good way to create or preserve jobs. If more jobs are desired, the emphasis should be on creating a better environment for small timber contractors and fostering value-added operations. Extending special favors to KPC will only hinder any positive movement in this direction; 3) the Tongass National Forest will release its latest revision of the Tongass Land Management Plan within the next month. As a part of this process, a panel of fishery experts were asked to evaluate the impacts of the alternative plans on the health and productivity of salmon. Their consistent response was that roads are a serious cause of damage to fish habitat and that as more miles of road are constructed, the danger to fish increases. We didn't know this 40 years ago; we do know it now. How can we continue to operate as if roads are inherently good and award KPC credits for creating them. Over the last 40 years we have learned that logging roads are more of a burden than an asset. If anything, KPC should be paying a penalty for building roads that damage fishermen's livelihoods and cost the Forest Service millions of dollars to maintain; 4) the timber industry is heavily subsidized in Southeast Alaska and the federal government can no longer afford this expense, particularly when you consider that we are paying three times for the subsidy. First we pay with road credits, virtually giving away the trees in exchange for new roads. Then we pay in lost opportunity for tourism, fishing, subsistence and recreation. And finally, we pay for restoration when logging roads get old and begin to fail." MS. COGHILL continued, "KPC has not been a good corporate neighbor. In 1995, KPC plead guilty to 14 criminal violations for intentionally polluting the waters of Southeast. In closing, I want to re-emphasize that times have changed since 1954. The sweetheart deal that KPC has been enjoying since then is no longer appropriate. KPC has repeatedly proven itself irresponsible, negligent and unworthy of special favors. Extending the 50-year timber contract is not in the best interest of Alaskans and in fact, it would do them a great disservice. Thank you." CO-CHAIRMAN WILLIAMS remarked he would continue taking testimony from Ketchikan at this time. Number 2343 TROY OLIVADOTI testified via teleconference that he is a resident of Ketchikan and strongly supports the 15-year contract extension for KPC. He stated, "I have seen the devastation caused by the collapse of the wood products industry in Oregon and no one should wish to same thing to happen here in Southeast Alaska. KPC needs some security of a guaranteed fiber source so it can make major investments into ECF (indisc.) with confidence. I urge the state to get behind the contract extension soon so KPC can move forward and invest in the future. Thank you very much." Number 2381 FRED ATHORP testified via teleconference in opposition to CS HJR 64. He said, "For four years, I've been hearing that Ketchikan Pulp Company's timber resource is renewable on a 50-year renewable basis. My income comes from commercial fishing and the tourist industry; both negatively impacted by the timber industry as run by Louisiana Pacific who feels that a tree has no value unless it's cut down and they have been a very poor corporate citizen, in my opinion. It is anticipated by the Forest Service that 90 percent of the coho habitat will be destroyed by the timber industry by the year 2000. We are keeping going with our own resources - hatcheries. Thank you very much." CO-CHAIRMAN WILLIAMS said the committee would hear testimony from Sitka at this time. Number 2435 ROBERT ELLIS testified from Sitka that he is adamantly against the joint resolution asking for an extension of KPC's contract for many reasons, but would touch on just a couple. He said, "I would like to say that I do agree with the sponsor statement - that portion of it that says that we have a healthy environment in Southeast. So I question the science of the statement made in the third Whereas in the resolution which states that `a significant portion of the Tongass consists of a dead, dying and over-mature.... TAPE 96-50, SIDE B Number 011 MR. ELLIS continued... "many problems with the resolution, my major one is that the long-term contracts, as we have seen them, have made it impossible for the Forest Service to use good science in managing the Tongass. We have been told again and again by the Forest Service that the contracts are forcing the Forest Service to ignore good multiple use management. And what this resolution is doing is re-enforcing this poor management on the Forest Service. I would like to comment that this year in Sitka, our herring fishery has been able to fish in Silver Bay in an area that has been closed to them by the pollution from the pulp mill since the pulp mill started. This year the herring fishery is taking millions of dollars worth of fish from an area that the pulp mill had precluded from their use. I think this is just one more aspect of how Sitka is escaping from the illness of being a pulp mill town. Again, I would like to say that I am against this resolution. Thank you." Number 071 FLORIAN SEVER testified from Sitka in opposition to CS HJR 64. He said, "I'm just simply against any extension because just like Alaska Pulp Corporation here in Sitka, KPC broke its union and now there's an open shop there. Both of these pulp mills have a history of holding not only their workers but their home communities as economic hostages. KPC is a proven violator of just about every law or regulation that ever applied to them. They pleaded guilty to criminal violations of the Clean Water Act and then almost at the same time they fired and violated the constitutional rights of one of their own workers for cooperating with the U.S. Department of Justice and the U.S. EPA investigations of the same violations. And as I said earlier, they broke their union at the KPC mill many years ago and there's an open shop there now and they have been holding their workers as economic hostages." MR. SEVER continued, "KPC's request for a contract extension is just a move to set up the federal government for a lawsuit similar to the one APC has filed for $1 million. That suit was filed because there was not enough timber available to support the APC pulp mill and I think it's a proven fact that there is not enough timber -- there's a big worry in the offices in the U.S. Forest Service as to whether they'll be able to even fulfill the terms of KPC's 50-year contract, so a 15-year extension would be just not viable. The Tongass can't sustain and support and subsidize this mill in Ketchikan any longer. Instead of an extension, it should be shut down. Thank you." CO-CHAIRMAN WILLIAMS asked if there was anyone else in Craig wishing to testify on CS HJR 64. Number 168 MICHAEL KEMPNICH testified via teleconference that he is an employee of the city of Craig. He said, "Some of the comments I've heard in the last few minutes, to me appear to be (indisc.). I'm not for or against KPC, but what I'm finding from watching this from the outside, is that there's a lot of (indisc.) on both sides and it isn't getting anybody anywhere. I heard one comment that a guy made a couple minutes ago that by the year 2000, 90 percent of the coho habitat in Southeast would be wiped out. That means that over the last 40 years a good percentage of the coho habitat has already been wiped out, but yet two years ago we had a record run. I agree that there's some problems with KPC and the way they do some things but to me to believe the comment about the cohos is obviously not true. And I have a hard time accepting the environmentalists' views when they state figures and facts like that that are just obviously not true. I would just wish that both sides would work together and make their positions based on facts and work together rather than throwing (indisc.) around. I'm not for or against it, I just hope that everybody can work together and come up with the best solutions for the whole timber industry. Thank you." CO-CHAIRMAN WILLIAMS announced he would again take testimony from Ketchikan. Number 243 BARRY HOGARTY, Employee, Ketchikan Pulp Company, testified from Ketchikan that she works in the environmental department. She said, "I've been regulator of the industry up until just recently so I have kind of a unique perspective, I think, on some of the things that have been said here today. I really object when I hear Ketchikan Pulp Company being referred to as convicted felons. (Indisc.) civil and criminal complaints, yes, but I know for a fact that I'm not working with convicted felons. Regarding the contaminated sites ranking - that was in part based on our own forthrightness with residents in the area around the mill, placing protection on their drinking water systems even though there had been no demonstrated effect from any of the emissions from the mill directly in the drinking water. So we're going ahead and installing protections for people there based on perception and the chance that there might be some contamination in their drinking water. It's not based on any actual science and there weren't many numbers used in that ranking relative to that. And I really object to that. That was just basically a DEC in-house ranking that really bears no weight when it comes to overall compliance." Number 321 MS. HOGARTY continued, "The mill has made improvements over the last 40 years that have made for cleaner air and cleaner water around the mill. I think the mill is a good neighbor. Improvements in logging practices in the Tongass National Forest have been tremendous over the last 40 years and KPC is a major player in the economy here in Ketchikan. And I personally believe that without KPC -- an industry like KPC here in the economic base, we're going to have a poorer environment in many ways because there's not going to be the tax base to support what I believe is really the problem here and with lack of proper sewage and lack of proper drinking water, treatment and we also have solid waste problems. Without the 15-year extension, I don't believe we can amortize the environmental improvements that need to be made at the mill. Thank you." Number 369 MARGARET CLABBY testified via teleconference from Ketchikan that, "Yesterday, when I listened to the committee, there seemed to be some misunderstanding about the seriousness of the toxic and hazardous air and water discharges at KPC. Someone said if there were a problem wouldn't EPA or DEC be saying so. They've said so repeatedly; it's not just (indisc.). Local people have started going through the records of what's going on at KPC and it's daily violations consistently throughout the year here, right up to current." She read from the September 15, 1995, the United States District Court, Department of Justice Attorney, "The United States recognizes that KPC pulp mill operation has seriously degraded water quality in the vicinity of Ward Cove and that KPC has a checkered compliance history. Precisely for those reasons that (indisc.) requires KPC to pay a civil penalty of $3.11 million to settle claims regarding test violations." She remarked, "This is the largest civil penalty ever imposed on any of the operating (indisc.). KPC has consistently been one of the major violators and one of the major polluters. Part of it is not their fault in that the kind of mill that they have is very problematic for both air and water pollution. Part of it is repeatedly (indisc.) knowing violation of federal water for (indisc.) seriously inefficient monitoring. Serious violations of worker safety laws again and again and again and this is documented things that we see in the record. (Indisc.) hemlock mill that's being cited for violations of air quality tests is a real problem." Number 454 MS. CLABBY further stated, "One of my concerns is that if KPC wants a contract extension that they could really request it and the (indisc.) could clearly see what it is they're asking for it. It's really the terms that are important. I'm not necessarily against or for a contract extension for KPC. If the terms were right, I could easily be supporting it. But I need to see what the terms are. Exclusive rights to harvest over three billion board feet of timber (indisc.) the year 2005 (indisc.) is extremely valuable. This is the same amount as APC harvested during their entire operation. The terms are important because we want a mandate for a certain number of jobs for the people in this community, compliance with the law, that sort of thing. It's very, very important. What's really going on is that KPC wants to change its current contract and I talked to Troy Rheinhart and Ralph Lewis and (indisc.) and that's the reality and that's what we should be talking about. They want to get rid of the onerous termination clause in this current contract. Why do they want to get rid of that? Because it says that the Forest Service can terminate their contract if operations would cause serious environmental damage. They saw a real problem here and they want to get rid of that clause. KPC wants many other contract changes. They want to do away with the comparability (indisc.). All the things that give the public security for some of the environmental things that do make okay for KPC to be here." CO-CHAIRMAN WILLIAMS commented he would now hear testimony from Juneau. Number 553 DICK MYREN testified in opposition to CS HJR 64. He said, "I am a retired fisheries resource biologist. I object to the third Whereas in the resolution regarding the old growth dying and over- mature timber. I have submitted a paper I wrote to Governor Knowles. It's 17 pages long and his letter of response is on the last page. On page 3 or 4, there's a description of why old growth dying and dead timber is valuable along streams because it protects fish habitat. Frank Murkowski recently stated -- gave a figure in the paper that the amount of forest cut per year was .008; a very tiny fraction. Now that's the amount of timber of the forest cut per year. Well that .008 fraction may be small, but if you consider an astronaut for example, looking down on the earth from afar and noting the thin (indisc.) of the atmosphere and humans and the other life, and seeing that that is a tiny fraction of the total mass of the earth, I suspect that tiny fraction would be even smaller than .008 of the ratio of earth to the habitat. The idea that because we're only logging a small fraction of the forest along the stream that we have no affects, is really wrong. I'd like you people to consider we do have a serious adverse logging effect coming out of this because of our past logging activities and they will increase intensively. The documents I submitted to you will show that, I believe. Thank you very much." Number 659 KARLA HART, Vice President, Alaska Wilderness Recreation & Tourism Association, testified this organization represents over 300 members; the majority of which are small Alaska owned tourism businesses. She said, "To give you an example, I just pulled from my office brochures some of the many businesses which we represent. These are businesses ranging from small bed and breakfasts all the way through fairly large operations which employ upwards of 60 or 100 people. So it's a wide range of businesses. They operate throughout Alaska; we have an extensive membership throughout Southeast Alaska. The nature based recreation and tourism industry in Southeast Alaska does not have any good economic figures on the impact of our industry. The industry is new, relatively speaking, and very rapidly changing in dynamic. It's one of the fastest growing industries in Alaska now. Decisions that are made with respect to the timber industry have long-term consequences for the growth of our industry. Our industry consists of small businesses, family owned businesses unlike a large organization such as Ketchikan Pulp Company. You can go out and buy a charter boat and get into the wilderness based tourism business whether it's a sport fishing business or a small hunting business or a wildlife watching business. It offers people a lifestyle choice; it offers people an easy entry into a business that gives them a high quality of life. Maybe not measured only in dollars, but also in lifestyle; the way that Alaskans like to live. Work hard for part of the year and then have time to go out and do your subsistence hunting and fishing, to recreate, to just enjoy chopping wood and living at home in the winter. It's a type of business that more and more Alaskans are getting into from all different industries, changing into tourism." MS. HART continued, "We strongly oppose the 15-year contract extension resolution because in 15 years it's inconceivable what our industry might be like if we're given the opportunity to compete on a level playing field. That contract would preclude some of the growth of our industry. Thank you." Number 764 CO-CHAIRMAN WILLIAMS asked Ms. Hart how much land they needed to recreate on? He commented there are 17 million acres of land in Southeast Alaska and most of it is tied up now. The amount of land available for logging companies to log on is 1.7 million acres. MS. HART responded, "I think it's obvious that you can only cut trees on forested lands and as we all know the majority of the Tongass lands are not forested. So, the bays and coves that our businesses depend on to provide the forest related activities are really quite limited. We have done a study of the tourism bays and coastlines since most of our activity takes place along the coast, and in Alaska, a recent study showed that on Prince of Wales Island of 114 of 187 of the anchorages that (indisc.) could use have been impaired." CO-CHAIRMAN WILLIAMS said we're talking about 15 million acres that are open for recreation and tourism. Number 823 MICHAEL SALLEE testified from Sitka that he is a deck hand on a long line boat, (indisc.) commercially and operate a one-man sawmill. He said, "I'm not adamantly for or against renewing the long-term contract. I do think such an action would require a radical change in timber harvest practices. Such a change is not evident at all in HJR 64. HJR 64 does not address the lack of diversity within the Southeast Alaska timber industry. The whole industry is very rigid and based mainly upon large scale operations. The U.S. Forest Service lays out sales requiring roads to be built over miles of roads, loggers move in with chain saws and steel power yarders, the timber is clearcut, hustled off to the pulp mills, sawmills or round log export traders and is gone; quickly liquidated. This is not industrial diversity. (Indisc.) diversity gets exported in round logs and cants for someone else to process. The problem is the scale of the operations, I think most clearly pointed out by the mayor of Wrangell yesterday. Wrangell workers are proud of their production of 45,000 board feet per day. The Ketchikan sawmill at Ward Cove (indisc.) 25,000 board feet per ship; 25,000 board feet is 6 months or more of production for my one-man operation. From my perspective a mill that turns out 25,000 board feet per day and employs 60 people is going through their annual share in about a month. You cannot keep adding to the mechanization or the number of players without changing the whole game. (Note: This portion of testimony is indiscernible). MR. SALLEE continued, "As for the abundance of deer and fish, the deer are only abundant because so much land on Prince of Wales is presently in a clearcut state and the recent winter snows have not been deep. The U.S. Forest Service environmental impact statements all warn that subsistence hunting will be (indisc.). HJR 64 does not speed up (indisc.) or add any timber to the timber base or show me any new innovative value-added techniques. It just prolongs an already egregious situation in which the status quo timber processing in the Tongass falls far behind timber extraction to the detriment of other resources. I'm also a part of the timber users coalition in Ketchikan and that coalition wants to see the relatively untouched (indisc.) does not want to see it turned into a (indisc.) tree plantation." Number 975 HELEN DRURY testified via teleconference from Sitka and wondered how any legislator can face his/her constituents and support the renewal of the Ketchikan Pulp Company contract. She said, "For years this company has been responsible for breaking laws through their toxic water pollution, which has been extremely harmful for (indisc.) number of citizens. In addition, they were found guilty of monopolistic practices such as price fixing, collusive bidding, putting timber companies out of business. The Forest Service has found that anti-trust practices of KPC and the Alaska Pulp Corporation have cheated the government out of $60 to $80 million. With these questionable logging practices, I once again ask, how can the legislature even consider extending this contract. The enlightened thing to do is to replace KPC with those honest Alaskan entrepreneurs and independent timber companies who will provide a variety of value-added jobs which will support the idea of a sustainable future for our Tongass forest." CO-CHAIRMAN WILLIAMS noted he would again take testimony from the Ketchikan teleconference site. Number 1047 ELIZABETH WEST testified that she is a fairly new resident to Ketchikan. She said, "I've spent most of my life in the Pacific Northwest where in the last several years there has been a down turn in the timber industry. I fully support the extension for KPC because I saw what happened in Hoquiam and Aberdeen, Washington which used to be a mill town. This community is on a beach, it's in a highly recreated area, tourism did not replace those timber dollars. The community of Aberdeen is approximately the same size as Ketchikan. It has a few advantages in that they can drive to Seattle, which is about an hour and 45 minute ride in order to get to other work, unlike Ketchikan where residents here would have to fly. When the mill in Aberdeen closed down, the community died. There is still a community there, but I heard a recent speech by the high school class valedictorian and she said more than 75 percent of her classmates are now on (indisc.) lunches; a government supported effort in order to make sure that students have at least one meal a day. And they often clear out the baskets of crackers and bread in order to make sure they have a snack in the afternoon. That's very sad. I don't want to see that happen in Ketchikan. I moved here; my family's moved here; we want our lives to be here. We would like to see KPC extended so that the community is supported by the infrastructure that it brings and I hope that this resolution is passed favorably and that Governor Knowles will sign it. Thank you." Number 1139 JUDY BEAR testified via teleconference from Ketchikan and said, "Louisiana Pacific is in Ketchikan to make money. If the contract had only been 20 years, Louisiana Pacific would have made millions of dollars. If the contract lasts 100 years, Louisiana Pacific will make billions of dollars. Louisiana Pacific is in Ketchikan to make money. If it didn't, it would leave. The Tongass Forest has been in Southeast for hundreds of thousands of years. The Tongass Forest has been in Southeast long before we were a nation. The Tongass was healthy long before mankind showed up in Southeast. Louisiana Pacific wants more of the Tongass National Forest. Louisiana Pacific wants more money. People want to breathe clean air; people want to drink clean water. Time for a pop quiz. Why did the Exxon Valdez have a single hull and single screw? It was cheaper. Why doesn't LPK comply with EPA standards? It's cheaper not to. When will super tankers have twin hulls and twin screws? When people demand it. When will LPK clean up its act? When people demand it. Our legislators can act in the best interest of both LPK and the people of Alaska. Don't give a 15-year extension until LPK makes good on all its past promises to give the people what they have promised to their stockholders. Clean air, clean water and quality of life at a reasonable profit. This would be a win for both the investors and our Southeast community. Thank you." CO-CHAIRMAN WILLIAMS stated the committee would next hear testimony from Juneau. Number 1250 KAREN BRICKEN testified that she is opposed to the extension of the contract. She said, "I really don't understand why we're even considering it. I think that there have been so many violations committed by this company. I think that a company that is not following their guidelines, that is not following environmental policy should not even be considered for an extension of a contract. They are damaging the water and air quality. The Tongass National Forest does not exist for a pulp mill. It is for all creatures. I don't feel that the forest is even ours to throw away - to destroy. And the impact of this company has been so strong that it should, I really think that it should be shut down. I think we've done enough damage that we need to stop now." Number 1330 MIKE BETHERS, Owner, Fishing Charter Business, in Juneau requested that his testimony be read into the record as follows: "Dear Legislator, I was very disheartened to hear that the Legislative Majority supported extending the KPC contract. This is one of the two original contracts which did more damage to local public resources, public land and future use of the land for public use than any other deal ever cut by Congress. Furthermore, U.S. taxpayers would have to spend tens of millions annually to subsidize further destruction of our public lands in the Tongass. Earlier logging done under contract has left many areas of southern Southeast Alaska unsuitable for any other use. Subsistence capability to the land is diminished as the U.S. Forest Service reports that deer numbers are dropping due to logging impacts. Also, it has been said by the U.S. Forest Service that Prince of Wales Island will be closed to sport hunting about the year 2000 because of low deer numbers due to logging. This is a direct loss of public use of a public resource on public lands. Many fish streams in heavily logged areas no longer contain enough water in mid-summer to provide access for spawning salmon or provide much wet area for juvenile fish rearing. As for tourism, you've obviously never tried to sell visitors a trip to an area that has been logged. The most common question asked by potential visitors is: Is the area natural or has it been logged? Visitors don't come to see Southeast Alaska to see logging. They come to see wild natural country. The can see miles of logged off country in the Lower 48. That's why they like to come to Southeast because in some areas it still has tall trees standing. My employment depends on wild natural landscapes and strong dependable fish runs. I am totally opposed to the extension of the KPC timber contract and urge you to do the same. It's time for the logging industry to scale back to a fraction of historical levels. That way a well balanced multiple resource management approach to the public resources on the Tongass will provide for all user groups. Once again, I urge you to oppose the extension of any federal contract on any public resources. Thank you." CO-CHAIRMAN WILLIAMS noted there were two additional people in Thorne Bay wishing to testify. Number 1450 KATHY LIETZ testified from Thorne Bay and said, "I've been listening quite closely to all the testimony and I'd just like to say for those who didn't hear yesterday that Black Bear Cedar employs approximately eight people. Our annual payroll is about a quarter of a million dollars, our annual impact to the local economy is a half million dollars per year. That may seem insignificant to some of you in Sitka and Juneau where your economies are so much greater than ours, but on Prince of Wales Island that is a tremendous impact. If KPC leaves, we leave. All of our employees, their spouses, their children; our community will not exist. We support -- I heard the fishermen say that the logging has been detrimental to their fishing, yet they have record salmon runs in glut. The U.S.D.A. is currently buying up their excess salmon. If the government can subsidize the fishermen because they can't sell their fish, how about subsidizing the loggers for not cutting our trees. Thanks." Number 1559 SUSAN THOMPSON testified via teleconference from Thorne Bay that she is a teacher in Thorne Bay and was representing herself and her husband. She said, "Both my job and my husband's job are impacted by a stable timber supply and by a stable community and I see the effects every day of uncertain employment on families through their children's behavior, through the children's inability to focus on their work. And in my opinion, a stable income leads to family stability and that can only benefit Thorne Bay and only benefit the state in the long run. In my opinion also, Louisiana Pacific has been a good neighbor in Thorne Bay and I don't have any reason to believe this won't continue. They lend support to us in the form of dollars and equipment and labor for community projects. They have spent millions of dollars to upgrade their environmental equipment to meet environmental standards. I think that needs to be recognized and encouraged through contract extension and by community commitment to the timber industry. And in my opinion, Thorne Bay cannot survive without KPC except as the smallest entity. We need to diversify the community and we are aware of that. But we also need a stable, major employer here when we're learning how to do it. And yes, I agree, LP is a profit making company and I want to know when profit became a dirty word because profit buys my groceries locally, profit has bought land for me in Craig which is on Prince of Wales Island, it's bought a condo for me in Ketchikan, it supports my family and a profit keeps my neighbors in business. The timber industry dollars help support Southeast. Timber is a sustainable and renewable resource and it's my hope that this contract will be extended. Thank you." CO-CHAIRMAN WILLIAMS announced the committee would hear testimony from the Sitka teleconference site. Number 1662 CLARICE JOHNSON testified from Sitka that she is strongly opposed to the resolution to extend the KPC contract. She said, "Extending a contract to a company with such a poor environmental record is not in the best interest of most Alaskans. It is time to quit subsidizing an industry which has been detrimental to other uses of the forest. I have fished commercially for over 20 years and I realize that my livelihood is dependent upon a healthy fish habitat. Members of the legislature have supported slashing the budget of the Habitat Division in Fish and Game. It is time for you to recognize the importance of the many industries, recreation and subsistence users who depend upon the remaining old growth stands. The Forest Service is attempting to balance the needs of these various groups in the Tongass Land Management Plan. It seems wiser to wait for the alternatives to be released before writing a resolution which includes a recommendation for an artificially high volume of timber." MS. JOHNSON continued, "And one more point. The record salmon runs are a result of favorable ocean conditions and record hatchery production. As the study by the Forest Service points out, when the ocean conditions change, the health of the habitat become more critical. Thank you." Number 1755 PAGE ELSE testified from Sitka and stated, "I think the legislature has a responsibility to assess and protect the resources of this state for the best economic future for everyone. I think that this resolution is sponsored out of sympathy for the timber industry without an adequate understanding of the resources that are really there. We've heard this lock up of the total acreage of the Tongass - the 15 million acres, but what we have to understand is that the money is made off only the old growth, the high volume stands. There's very, very little of that left in the Tongass. The historical harvest levels were well over the 35 million or thousand board feet an acre figure (indisc.). And so much of that is gone today (indisc.) that supports the wildlife habitat and the fisheries that our future economy depends upon. You wouldn't give a contract to a gold company to harvest 20 tons of gold if you knew there were only 3 tons of gold in the ground and you needed it for medical equipment. And these are numbers that you can get from the Forest Service. Ask them how much of the total acreage of the Tongass is rock and ice. Ask them how much volume six and seven is left and then you need to make a decision about the best use of that remaining resource." MS. ELSE further stated, "What we need for KPC is not a contract extension because that would build up false economic hope. You'd have people moving into Ketchikan thinking they'd have a long-term future in the timber industry and then it would run out. There just isn't enough timber left that can economically be harvested. So what we need is a transition plan to move to a smaller scale of logging that's value added, that keeps the jobs and the profits in Southeast Alaska. Furthermore, I think the people that do that industry should be citizens that don't pollute, that don't degrade the environment. KPC has a long history of environmental violations of putting out toxic compounds into the water that are going to cut into the value of our fisheries and our tourism and as citizens of Alaska, we're going to be paying for the cost of that for a long time into the future. Thank you." CO-CHAIRMAN WILLIAMS said that because of the number of people signed up to testify in Ketchikan, he would continue to take testimony from there. Number 1947 HEATHER MUENCH testified from Ketchikan stating, "I have lived in Ketchikan for 17 years and my children are fed on timber dollars. The strong, viable timber industry is very crucial to the Ketchikan area. Part of keeping the timber industry strong is having a pulp mill here. Over 2,900 direct and indirect jobs are created by the timber industry in the Ketchikan area. Without KPC's presence, about one-third of all jobs in Ketchikan will disappear. That's teachers, doctors, grocery store clerks, everyone in town. Everyone in the community will suffer negatively from the pulp mill closure and I strongly urge the extension of the pulp mill contract for the benefit of Ketchikan's economy and so that my children can continue to live here. Thank you very much." Number 2029 TOM FOUTS testified via teleconference from Ketchikan said his testimony was in the form of a letter to Governor Knowles and President Clinton as follows: "Dear President Clinton and Governor Knowles. Enclosed please find a copy of Alaska HJR 64 as presented the Alaska Legislature on March 25 and a greatly expanded work draft presented to me during yesterday's invitational Resource Committee hearing. It was impossible for anyone who had not seen the revised work draft to comment on it intelligently and thoughtfully. The amended resolution is extremely convoluted and inflammatory like the 50-year agreement between LPK and the national Forest Service, it no longer provides peace and harmony. This irresponsible revised HJR 64 exacerbates the polarization clause of the 50-year contract to the point where its (indisc.) by LPK supporters may become real. We must make HJR 64 livable for all U.S. citizens while bringing the LPK contract into the twenty- first century. We all know that KPU has a dismal environmental record, not just in Ketchikan but worldwide. The environmental buck must stop here. We're here to consider a 15-year extension to KPC presumably as an incentive for them to clean up the mess they've been making for 40 years. KPC hasn't complied for 40 years. What guarantee does another 15-year extension provide? More procrastination? More fines? More whining? Business as usual? I actually have no problem with a 15-year extension to KPC's contract provided there are guarantees on both sides of the contract. KPC must ensure fair compensation for the loss to the U.S. KPC must stay current with the environmental law. KPC must provide at least the current number of jobs and a dignified pay raise that will support family values. KPC must be in harmony with the community providing quality timber to the region so the local lumber yards aren't supplying timber from Canada, Idaho, etc. The Forest Service must adhere to industry standards scaling methods for both (indisc.) and pulp logs. This would relieve most of the tension regarding quotas. KPC must help to diversify our economy so that our wood (indisc.) are thrown into a panic when the mill groans. Most of all, a good contract must stimulate competition so that Southeastern Alaskans have the tools necessary to remain competitive and financially solvent. Governor Knowles, thank you for reserving judgment on HJR 64. Without modification it is truly divisive and draconian. President Clinton, I urge you to sustain the forest to protect the Tongass and its citizens. Deal with Louisiana Pacific eye-to-eye. Southeast Alaska's economic basis is changing. We have more people and less timber dependence. As every job (indisc.), our population has been increasing. Property values have increased dramatically. I am concerned with personal safety and welfare of those Alaskans who oppose free rein for Louisiana Pacific. Do we have to have a federal marshall here to ensure the laws are applied evenly? It is ironic that I may be forced to use my permanent fund provided by the legislature to protect our country's resources from that legislature. Thank you." Number 2274 ERIC MUENCH testified from Ketchikan in support of CS HJR 64. He said, "We need that pulp mill here and I would like to emphasize that the 40 years of logging we've had in Southeast has not hurt the wildlife or the fish down here. Prince of Wales Island, for example, where some of the most intense logging has taken place in the last 40 years and right now there's more population there and more hunter access than there was 34 years ago when I came to Alaska and yet the bag limits on deer are the same as they were then. As far as fish is concerned in the last ten years, most of those years have been record or near record catches of pink and chum salmon. Those are the fish that are both in contact with the timber harvest because they more than any other fish occupy the smaller streams found by the island system in Southeast. And those are also the fish that are not produced by the hatcheries. As far as the wages are concerned or as far as -- when it comes to pollution, I notice that salmon still swim to Ward Cove to get up Ward Creek to spawn and I notice that lichens which are very pollution sensitive plants are still to be found in the trees right across the highway from the pulp mill." MR. MUENCH further stated, "When it comes to wages, we cannot sacrifice the wages of the logging industry which depends on a mere 10 percent of the Tongass National Forest to try to build up the forest industry which already has over 90 percent of the Tongass and over 92 percent of Southeast to recreate in. The 8 to 12 months a year of good wages provided by the logging operations and the mills are such as to maintain families at a good living standard. The tourism industry, for the most part, provides three to four months per year, mostly at minimum wage jobs. As far as utilization goes, I work in timber management and when it comes to the logging of domestic.... TAPE 96-51, SIDE A Number 001 MR. MUENCH continued..."if we were forced to leave pulp logs in the woods, they would be an additional barrier to deer to using the clearcut and it is better to get full utilization while you're in there." Number 053 DALE ROGERS testified via teleconference from Ketchikan. He said, "As a lifelong, born and raised in Ketchikan resident, I stand opposed to the 15-year extension on logging in Southeastern Alaska by Ketchikan Pulp Company. KPC has been a poor corporate neighbor with the amount of pollution they've been causing and now they've been paying for it and have to clean up their act, so to speak. KPC knew when they started they had only 50 years on the timber contracts and should have been planning for the end. Now they're trying to get along and pay more into their system by cleaning up their act. A lot of these employees at KPC and the timber industry in this area came from other areas like Washington, Oregon and California when their timber cutting slowed down, knowing all along that Southeast Alaska had a limited amount of time in timber left in the Southeast Alaska and KPC contracts. Those employees should now start thinking about what they want to do or where they want to go when and should the pulp mill close in 2004." MR. ROGERS further stated, "I worked in the tourism industry the last year and people coming here as tourists were horrified by the clearcutting and pollution that's been going on in Southeast Alaska. They've been led to believe that our area is pristine and natural because of what their so-called "view corridor" where the ships travel through Southeastern Alaska. But upon taking an airplane flight - flightseeing - they're aghast to see what has really happened. The sport fishing and tourism industries cannot continue to grow if we cannot provide these people with the experience they have come here for. Most areas in Southeastern Alaska are now affected by the timber cutting and the coastlines of most islands are within the view of clearcuts from the water. It's not a pretty sight and tourists then again are aghast and I am too. Let's try to leave it with a little more pristine looks and nature. I believe that the timber industry can continue in Southeastern but on a smaller scale with value-added timber jobs (indisc.) in favor of giving KPC 15 years more in contracts. Thank you very much." Number 243 CLIFF TARO, President, Southeast Stevedoring Corporation, testified via teleconference from Ketchikan. He stated, "Having lived in Ketchikan for over 44 years, we know what Ketchikan was like before Ketchikan Pulp Company was built and operating. It was a small fishing village with limited supplies, schools, transportation and so forth. The promise of the contract for a 50-year timber supply has not been maintained due to litigation, politics and so forth. Thus Ketchikan Pulp Company should receive an extension of their contract to fulfill their anticipated volume not provided in their 50 years of operation. Millions of dollars, above the $54 million to build the mill, has been expended for environmental reasons without any added benefits to the production of pulp or the income to the stockholders with that amount expended. An extension will give them some compensation. The Ketchikan community and area needs the continuation of Ketchikan Pulp Company. It is the backbone of Ketchikan's economic existence. And from a business standpoint, to invest the necessary dollars for such a short time, the return does not make fiscal sense without a 15-year extension of the contract. Thank you." Number 350 ROYCE RANNIGER testified from Ketchikan that he has listened to the testimony regarding the pollution from the pulp mill and said, "I worked at the mill from 1959 to 1977 and saw an awful lot of changes (indisc.). You don't operate a pulp mill without a certain amount of pollution just due to the situation. I'm in favor of the extension from the standpoint that they're entering into a system now of chlorine free operation and they're not even really positive that it's going to work 100 percent, but they're putting up the money. And when you put up the money, you've got to go to your banker and the bankers say, `Well, where are you going to get the timber?' You got to give them the timber so they can pay the bill off. And these people talk about the pollution and stuff - they should have been around in `55 when the mill started. Due to the technology, it's changed and they changed with the laws and they changed with the technology. I saw millions of dollars invested in that mill - I was involved in a lot of it. I get awfully tired of these `Johnny come lately' carpetbaggers telling us what in the hell we're doing around here. That mill is a good neighbor." MR. RANNIGER continued, "The last four years, I've been commercial fishing. I own a business here in Ketchikan that relies on tourism, that relies on the timber industry and it relies on commercial fishing because they all do business with me. And this community can live very well with every one of them. You know, with regards to the fishing, look at my nephew (indisc.) again this year, they're getting less money than last year per pound because there's so damn much fish and I don't understand their game. If people want to worry about the fishery, let's go out there and talk to the trawlers out on the ocean that are causing some problems. There's where a lot of your ecological problems come from." Number 519 CO-CHAIRMAN WILLIAMS announced that because some of the committee members would have to leave, he would continue to take testimony from Ketchikan until 6:00 p.m. and then from the remaining two people wishing to testify in Juneau. Number 536 PHIL MCELROY testified from Ketchikan that he has been an employee of the Ketchikan Pulp Company since 1970 with the exception of a couple years. He said his grandparents came to Ketchikan in the early `50s and his grandfather helped build the mill. Since that time, three of his uncles, his father and brother and several cousins worked for KPC. His father retired from there and his daughter worked at the mill as a summer hire student. Ketchikan Pulp Company is his life and has supported most of his family as well as many of the hard working men and women of Ketchikan for many years. He said KPC needs the 15-year extension to the timber contract in order to survive. He thinks their legislators have tried hard to get timber to the mill, but they need help. He asked committee members to support the 15-year contract extension. Number 677 KEITH STUMP, Attorney and Owner of a sailboat chartering business, testified from Ketchikan that he is a 47-year resident of Alaska; born and raised in Ketchikan. He said, "I think the amount of false and misleading statements by some of the opponents of HJR 64 is really unfortunate. One particular example that galls me were the false statements that lady claimed the fisheries have been suffering by logging and road building. (Indisc.) filed on his reports concluding there had been an adverse impact on fisheries, I would refer to his qualitative impact not the quantitative. Quantitative studies - studies that quantify any adverse impact of logging on salmon production simply don't support a conclusion that timber harvesting and road building has had any significant or measurable impact on the natural fish production in Southeast Alaska. If timber harvesting and road construction had an adverse impact, you'd expect to see smaller fish returns in streams of heavily logged areas. This is simply not so. You can see for yourself if you go out and view these salmon returns in the Harris River in the (indisc.) Valley on Prince of Wales Island, one of the most heavily logged (indisc.) systems on that island and in all of Southeast Alaska. The fish returns there do not support a conclusion that there's an adverse impact. You can learn more for yourself if you go by and check out the fish return statistics throughout the whole Southeast Alaska - there is not a significant or measurable reduction in areas that have been harvested." MR. STUMP further stated, "Another fellow was saying that logging dried up the stream. This issue was studied extensively by multi- agency, multi-disciplinary groups, including the fisheries industry and environmental groups and after extensive study and debate, it was conclusively determined that if there was any adverse qualitative impact - and I say qualitative impact - on stream temperature that it is so insignificant here in Southeast Alaska that there's no measurable quantitative impact. The biological timber production capability in the Tongass National Forest is 1.2 billion board feet per year into perpetuity - forever - and that's what could be done. To ask for just one-third of that, I think is not too much and I fully support HJR 64 in hopes that it can provide the ability for the pulp mill here to put in the additional money for the environmental protection and to go (indisc.)." Number 843 MATT HEMMINGWAY testified from Ketchikan saying, "I don't have any studies to cite or anything, I'm just an industrial painter on one of the crews. If you guys don't get this extension, then you're going to put five more painters out of work. All this thing about tourism (indisc.), you may not have been here during the summer when they all leave on the boat and we've got to wade through the trash that they leave laying everywhere. I hope you do extend it and I do support it. Thank you." Number 898 BRUCE ROMINE, Pipefitter, testified from Ketchikan that he has worked at the Ketchikan Pulp Company for nine and one-half years. He said, "I'm an officer of Local 783, WPPW, the largest union at KPC. I was born and raised here in Ketchikan and I've lived here most of my life. I like living in this community and I'm raising my family here. I like the way the community has grown over the years. It's kind of developed into what it is today because there were individuals in this state that had the foresight to bring industry in that use our renewable resources of which we have an abundance. This town is built around the economy that the pulp mill has brought to us folks and without it this town will change just like many in Oregon, Washington and Montana - people without work, families without the money to pay for homes and necessities. I'm sick and tired of hearing and reading about how the environmentalists are going to take everything we want. What do they want? They want Ketchikan Pulp Company out of here - that's for sure. The excuse they use is the pollution of water and air and use of all of our natural resources. Basically what they're saying is that they don't believe that we, the working people at the pulp mill, will police the mill and keep pollution at a minimum. Remember this - we all live here too and I, for one, don't want to live in a pollution dirty community." MR. ROMINE continued, "We have the union working with the pulp mill management and governmental agencies to bring our pulp mill into compliance with all the standards that have been set forth. The pulp mill is spending millions of dollars in construction on a new chlorine free facility and intends to spend up to $200 million more to make this pulp mill as pollution free as possible and Local 783 will be there to help make this a reality. In order for a company like KPC to make (indisc.) an expenditure like $200 million, they need to know what they in the future are going to be able to recoup that money and make some profits along with it. If not, it would be only prudent to the stockholders for them to close the plant down. The solution is simple - KPC is asking for a 15-year extension on the contract. Personally, I don't think that that is a long enough extension but that is what they've asked for so like I say, give it to them and then see how KPC, under the direction of the new CEO treats our environment and our community. We will be there to monitor whatever happens. I say that it is time to fight for your community, your homes and your jobs. Sitka's pulp mill is now history and if the environmentalists have their way here, our timber industry will be history also. I've watched many people come to KPC for work - looking for a stable job." Number 1095 ROBERT BUCKNELL testified from Ketchikan that he was born in Ketchikan 38 years ago and has lived there his whole life. He stated, "I've been employed at the Ketchikan Pulp Company for the last 19 years and that's afforded me the opportunity to live a very nice lifestyle and to start raising a family here in Ketchikan and buy a home. I fully support this 15-year extension because I'd like to continue to live here in Ketchikan and raise my family in the manner that I was raised. Everybody talks about tourism and it being a viable alternative to the timber industry and I do not see that as most tourism jobs are minimum wage or $6.00 an hour jobs (indisc.) $20.00 an hour jobs that the timber industry supplies. As far as the environment goes, Ketchikan Pulp Company has spent hundreds of millions of dollars and is spending hundreds of millions of dollars to upgrade and comply with all environmental laws. I'd like to see the contract extended for 15 years so that I can continue to live and work and raise my family in Ketchikan. Thank you." Number 1161 CO-CHAIRMAN WILLIAMS remarked that he was losing committee members, but he would like to give the two remaining individuals in Juneau an opportunity to testify. Number 1178 AMY SKILBRED urged committee members to vote against CS HJR 64. She said, "The 50-year contract was signed in a different era. Knowledge about effects on fish and wildlife were minimal. Tourism was not even a fledgling industry. Times have changed and we now know that logging activities are harmful for fish and wildlife and tourism and subsistence. We must change the way we conduct timber harvesting to preserve the small portion of old growth forest that are left in the Tongass National Forest. Now is a transition opportunity. Southeast Alaska has nine years to work on a smooth transition from dependence on one multi-national corporation, which receives a huge federal subsidy in order to operate, to a multi- faceted economy built on fishing, tourism, hunting, subsistence activities and small scale, independent logging operations. The legislature should not sign off on a resolution that will result in long-term harm to one group of Alaskans for short-term benefit to the pulp mill and a small group of Alaskans." MS. SKILBRED further stated, "Much has been heard about the acres in the Tongass National Forest. Less than 700,000 acres of Tongass National Forest are high volume old growth forest. So the argument here on forests is always over that limited 700,000 acres, not the rock and ice which tourists don't often go to. It's over the acres that are necessary to deer, wildlife, fishing, tourism, subsistence and they are the most valuable acres to the timber companies. We all recognize that and in the paper there's always this 17 million acres, 15 million acres for tourism and a bitty 2 million acres left for logging. But we all have to recognize that we are talking about the same areas that are important for fish, wildlife, tourism, subsistence and the timber companies. It's time for KPC to install the environmental protection equipment it needs to clean up its act now and if it can't compete in the future, at the end of the 50-year contract, KPC should work now on transition plans to help all of Southeast Alaska. Thank you very much." Number 1316 KURT BODENBENDER testified that, "I think my side of this has been well stated and I'm not going to reiterate that. Excuse me, but government and committees are new to me and I'm just curious about your whole process and if these are the other people in the committee, I'm curious about where they are and what their commitments are right now. I'm also curious about - I know that it's been a long couple of hours for you and you've listened to a lot of different people, but I feel like some people haven't been heard well enough. So, I'm curious about answers to those questions and whether or not there are people here who should be here and that's my main issue." Number 1380 BILL THOMAS testified that he was born and raised in Alaska 49 years ago. He'd been a commercial fisherman for 27 years and participated in the logging industry about the same amount of time of which five or six years of that was actual logging. He lost a brother in the timber industry in 1972. He stated, "I'm on the Haines Borough Assembly and the school board and that's what I'm going to speak about in my concerns, even though they are not formal positions of the borough or the school board. The concern is that we are looking at declining revenues from the state as far as revenue sharing and if you tie that in with the Tongass Forest receipts losses, a poor year in the fishing industry as far as prices, that will add to the cost of running our local governments. We get about $400,000 a year from the Tongass; about $350,000 from the raw fish tax. Without those, we'll have to add additional mill rates to the local people or a sales tax to make up the difference. This is not a formal position of the Haines Borough, but mine alone because I am concerned and I support the extension of the contract, provided they have Alaska local contractors doing the work down there. Thank you." Number 1463 CO-CHAIRMAN WILLIAMS noted for the record the following individuals from Ketchikan were in support of HJR 64 but were unable to testify due to the committee running out of time: Henry Metcalf; Marty Gillet; David Martin; Henry Keene; Jerry Collins; Mike Speelman; Steve Hemminger; Maxine Doyle; Katy French; Bill Elberson; and Shawn Richardson. Co-Chairman Williams thanked everyone for their testimony and closed the meeting to public testimony. CO-CHAIRMAN WILLIAMS announced he would like to move CS HJR 64 out of committee if possible and inquired as to the wishes of the committee. Number 1494 REPRESENTATIVE SCOTT OGAN made a motion to move CS HJR 64(RES) out of committee with individual recommendations. Representative Davies objected. CO-CHAIRMAN WILLIAMS asked for a roll call vote. Voting in favor of the motion were Representatives Austerman, Kott, Long, Ogan, Green and Williams. Voting against the motion was Representative Davies. He announced that CS HJR 64(RES) was moved from the House Resources Committee with individual recommendations.