Legislature(2011 - 2012)BARNES 124

02/14/2011 01:00 PM House RESOURCES

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Heard & Held
Heard & Held
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                 HB 105-SOUTHEAST STATE FOREST                                                                              
1:56:14 PM                                                                                                                    
CO-CHAIR  SEATON announced  that the  next order  of business  is                                                               
HOUSE  BILL NO.  105, "An  Act  relating to  the Southeast  State                                                               
Forest; and providing for an effective date."                                                                                   
1:56:29 PM                                                                                                                    
JOHN  "CHRIS"  MAISCH,  State  Forester,  Director,  Division  of                                                               
Forestry, Department  of Natural Resources (DNR),  spoke in favor                                                               
of HB 105.   He paraphrased from the  following written statement                                                               
[some minor formatting changes]:                                                                                                
     This bill is part of  the state's effort to ensure that                                                                    
     local timber processing continues to  be a piece of the                                                                    
     economy in  Southeast Alaska.   The majority  of timber                                                                    
     in SSE [southern Southeast Alaska]  is on federal land,                                                                    
     but  federal timber  sales  have declined  drastically.                                                                    
     Local  mills now  depend heavily  on  state timber  for                                                                    
     survival.  Demand for southeast  timber for wood energy                                                                    
     is also  increasing, further raising the  importance of                                                                    
     securing a timber base in this region.                                                                                     
MR. MAISCH, as an example, noted that Sealaska Corporation                                                                      
recently installed a wood pellet boiler for heating its building                                                                
in Juneau.  He continued speaking from his written statement:                                                                   
     Pursuant  to  [Senate  Committee Substitute  for  House                                                                    
     Bill] 162(RES), the 25,291  acre Southeast State Forest                                                                    
     was  established in  June 2010.   HB  105 would  add an                                                                    
     additional  23,181   acres  of   state  lands   to  the                                                                    
     Southeast  State  Forest  from  state  lands  currently                                                                    
     available  for   timber  harvest.    The   Division  of                                                                    
     Forestry  would then  be able  to  manage the  combined                                                                    
     acreage  (48,472  acres)  for  a  long-term  supply  of                                                                    
     timber and  retain these lands  in state  ownership for                                                                    
     multiple uses.   These forest lands will  be managed as                                                                    
     an  integrated unit  and according  to  a state  forest                                                                    
     management  plan that  will be  developed via  a public                                                                    
     process within the next two years.                                                                                         
1:58:24 PM                                                                                                                    
     While the  lands were  previously available  for timber                                                                    
     harvest before  the State  Forest was  established, the                                                                    
     State  Forest  designation   ensures  these  productive                                                                    
     forest  lands  will  remain   in  state  ownership  and                                                                    
     contribute  to the  long term  viability of  the timber                                                                    
     based economy in southeast.                                                                                                
     In 2009, the previous  forest inventory was updated for                                                                    
     all  general use  lands managed  by  the Department  of                                                                    
     Natural Resources  (DNR) with forest  management intent                                                                    
     language  per  the  regions  Area  Plans.    This  data                                                                    
     provides the required  supporting information on timber                                                                    
     volume,   acreage  and   allowable  harvest   for  this                                                                    
     request.   The  allowable harvest  from these  lands is                                                                    
     approximately 8.3 million board  feet.  The DNR manages                                                                    
     over  159,000 acres  of uplands  in southern  southeast                                                                    
     Alaska.  Timber management  is allowed on approximately                                                                    
     one  third of  this  land; the  State actively  manages                                                                    
     this timber  base to supply  wood to  local processors.                                                                    
     The remaining  land is  designated primarily  for other                                                                    
     uses   including   land    sales,   recreation,   water                                                                    
     resources,  and fish  and  wildlife habitat,  including                                                                    
     over  65,073 acres  of  legislatively designated  state                                                                    
     marine parks and critical habitat areas.                                                                                   
     Adding lands to  the State Forest will  ensure that the                                                                    
     State's  most   suitable  lands  in   Southeast  remain                                                                    
     available to  contribute to  timber supply  through the                                                                    
     State's  ongoing  timber sale  program.    Much of  the                                                                    
     State  owned  timber  land   in  southeast  Alaska  was                                                                    
     inherited  from   the  U.S.   Forest  Service   and  is                                                                    
     comprised  of young,  second-growth stands.   Actively-                                                                    
     managed  second-growth   stands  provide   more  timber                                                                    
     volume per acre on shorter  rotations and can result in                                                                    
     improved deer browse than unmanaged stands.                                                                                
2:00:17 PM                                                                                                                    
     We  can increase  timber  yield  and associated  timber                                                                    
     supply  from  state  land  by  thinning  these  stands.                                                                    
     Thinning  is   a  long-term  investment  and   is  only                                                                    
     justified  if the  land will  continue to  be available                                                                    
     for forest management.                                                                                                     
     Timber  sales  from  these  lands  will  be  a  mix  of                                                                    
     domestic  and  export and  will  be  based on  economic                                                                    
     conditions and  locations.  As established  by the 1984                                                                    
     Supreme   Court   Case    of   South   Central   Timber                                                                    
     Development,  Inc  vs.  Esther  Wunnicke,  Commissioner                                                                    
     DNR, the state  may not restrict round  log exports due                                                                    
     to  the  interpretation   of  the  interstate  commerce                                                                    
     clause.   Instead, the state has  developed timber sale                                                                    
     methodologies   to   encourage  domestic   manufacture.                                                                    
     Currently, almost all sales sold are to local mills.                                                                       
     The proposed  additions to  the Southeast  State Forest                                                                    
     include 23  parcels (see chart in  the briefing paper).                                                                    
     Approximately 21  percent of these lands  are from five                                                                    
     parcels  that  had  previously  been  reserved  pending                                                                    
     legislative  transfer  to  the  University  of  Alaska.                                                                    
     That legislation  did not pass freeing  these lands for                                                                    
     long-term forest  management in the State  Forest.  The                                                                    
     legislation  includes general  use lands  on Prince  of                                                                    
     Wales,  Tuxekan,   Gravina,  Kosciusko,  Revillagigedo,                                                                    
     Wrangell,  Suemez,  Mitkof,  Kuiu,  Dall,  and  Zarembo                                                                    
     Islands.   Six of  these parcels  are adjacent  or near                                                                    
     existing State Forest parcels.                                                                                             
2:01:53 PM                                                                                                                    
     The Division  of Forestry worked with  the [Division of                                                                    
     Mining, Land  and Water] to identify  and exclude lands                                                                    
     that  are  priorities  for   the  state  land  disposal                                                                    
     program.   A consultation  was also initiated  with the                                                                    
     University   of  Alaska   Statewide   Office  of   Land                                                                    
     Management  and University  senior  officials.   A  key                                                                    
     difference  between a  state forest  designation and  a                                                                    
     transfer of  lands as proposed by  previous legislation                                                                    
     is the  continued long-term  public ownership  of these                                                                    
     lands  as  opposed  to other  development  uses.    The                                                                    
     Division also  consulted with the Alaska  Department of                                                                    
     Fish and  Game to  ensure there was  internal alignment                                                                    
     on the list of proposed  parcels, and there is. Several                                                                    
     other parcels  were considered as part  of our internal                                                                    
     due diligence process, but  because of [known] concerns                                                                    
     and  or   potential  for  high  controversy   were  not                                                                    
     Fish habitat  and water quality  are key  components of                                                                    
     the  Forest Resources  and Practices  Act (FRPA)  which                                                                    
     have  a  series  of  regulations  that  will  apply  to                                                                    
     management of these parcels.   Stream buffers have a no                                                                    
     cut 100 foot minimum width  on both anadromous and high                                                                    
     value resident fish streams.   The next 100 to 300 foot                                                                    
     zone may  allow timber  harvest, but the  activity must                                                                    
     be  consistent for  both the  maintenance of  important                                                                    
     fish  and wildlife  habitat.   Area Plans  also provide                                                                    
     for coastal buffers of 300  to 500 feet with additional                                                                    
     recommendations  for  specific  parcels.    During  the                                                                    
     development  of  the  forest  management  plan,  a  key                                                                    
     consideration  for the  Neets  Bay parcel  will be  the                                                                    
     maintenance of water quality and  quantity for the fish                                                                    
     hatchery  operation at  the head  of the  bay.   Dialog                                                                    
     with  the   Southern  Southeast   Regional  Aquaculture                                                                    
     Association   (SSRAA)   is  ongoing   concerning   this                                                                    
2:03:52 PM                                                                                                                    
     The Southeast State Forest would  be managed as part of                                                                    
     the  State   Forest  System  under   AS  41.17.200-230.                                                                    
     Subsection (a) of Sec. 41.17.200 reads in part:                                                                            
     "The  primary purpose  in  the  establishment of  state                                                                    
     forests  is timber  management  that  provides for  the                                                                    
     production,  utilization, and  replenishment of  timber                                                                    
     resources  while  allowing  other  beneficial  uses  of                                                                    
     public land and resources".                                                                                                
     In  addition to  timber management,  State Forests  are                                                                    
     open for multiple uses,  including wildlife habitat and                                                                    
     harvest,   mining,   transportation,   recreation   and                                                                    
     tourism.     State  Forest   lands  would   be  managed                                                                    
     consistent  with   the  management  intent   under  the                                                                    
     current Prince  of Wales  Island and  Central Southeast                                                                    
     area  plans.    Changes   to  management  intent  would                                                                    
     require public and  interagency review through adoption                                                                    
     of a State Forest Management Plan under AS 41.17.230.                                                                      
     One of  the other demands  on state  land in SSE  is to                                                                    
     fulfill land  entitlements for new municipalities.   To                                                                    
     avoid conflicts with  the Wrangell Borough entitlement,                                                                    
     the Southeast State Forest bill  specifies that the new                                                                    
     Wrangell Borough  may select  State Forest  land within                                                                    
     the borough  boundary.   The Wrangell  borough boundary                                                                    
     encompasses three parcels in  the existing state forest                                                                    
     (Crittenden Creek  and Bradfield Canal East  and West),                                                                    
     and  four parcels  in the  proposed additions  (Eastern                                                                    
     Passage,  Pat Creek,  Pat Creek  uplands and  Earl West                                                                    
     If  additional municipalities  are incorporated  before                                                                    
     June 30, 2019, lands  that were vacant, unappropriated,                                                                    
     unreserved  land  before  establishment  of  the  State                                                                    
     Forest  would be  included in  the  calculation of  the                                                                    
     municipal   entitlement  acreage,   but   may  not   be                                                                    
2:05:33 PM                                                                                                                    
     DNR  has briefed  many  statewide  groups and  entities                                                                    
     across Southeast Alaska  about this proposal, including                                                                    
     the   Board   of   Forestry,   SE   Conference,   local                                                                    
     governments,  and the  diverse groups  participating in                                                                    
     the  Tongass  Futures  Roundtable.   These  discussions                                                                    
     will continue and  to date we have  received letters in                                                                    
     support from the following organizations:   the City of                                                                    
     Coffman  Cove, the  Resource  Development Council,  the                                                                    
     Alaska Forest  Association, The  Alaska Chapter  of the                                                                    
     Society  of  American Foresters  Southeast  Conference,                                                                    
     [and] ...  a letter of support from George Woodbury.                                                                       
2:06:16 PM                                                                                                                    
REPRESENTATIVE MUNOZ  inquired whether  the University  of Alaska                                                               
intends  to  move  forward   with  selecting  the  aforementioned                                                               
parcels of lands and legislation.                                                                                               
MR. MAISCH replied no.   Based on discussions, the university has                                                               
no intention of moving forward with additional legislation.                                                                     
REPRESENTATIVE KAWASAKI asked how much  of the current acreage is                                                               
being utilized now.                                                                                                             
MR.  MAISCH  responded  that currently  about  50,000  acres  are                                                               
identified  in the  area plan  as  general use  land with  forest                                                               
management intent.  The combination  of the bill that passed last                                                               
year and HB 105  would put just about all of  the lands that were                                                               
classified  general   use  forestry  intent  into   state  forest                                                               
designation.  In  further response, he confirmed  that the 23,000                                                               
additional acres are currently managed  for forestry and are part                                                               
of the allowable cut in  southern Southeast Alaska.  Thus, adding                                                               
these lands to the state  forest would not increase the allowable                                                               
cut, but it would allow  the division to start making investments                                                               
in pre-commercial thinning.  Right  now the division is unwilling                                                               
to  do that  since a  municipality  could form  and select  those                                                               
2:08:19 PM                                                                                                                    
CO-CHAIR  FEIGE observed  that concern  has been  expressed by  a                                                               
group that the timber from Hook  Arm and Rowan Bay will likely be                                                               
exported because these two locations are  so far from a mill.  He                                                               
asked  whether Mr.  Maisch  had earlier  stated  that whole  logs                                                               
could not be exported from state land due to federal statute.                                                                   
MR.  MAISCH  answered that  the  state  used  to have  a  primary                                                               
processing rule,  which was essentially  a round log  export ban.                                                               
However,  because of  the interstate  commerce  clause, only  the                                                               
federal government  has the  ability to do  that and  the state's                                                               
statute was struck down by  the [U.S.] Supreme Court.  Therefore,                                                               
the state does not have the  ability to regulate round log export                                                               
by law.   So, by policy and  the type of sales  that the division                                                               
does, the state encourages domestic  manufacture of timber in the                                                               
CO-CHAIR FEIGE  inquired whether the  division has talked  to the                                                               
mill  in  [southern] Southeast  Alaska  as  to whether  it  could                                                               
receive timber from those parcels.                                                                                              
MR. MAISCH replied  that that particular mill,  Viking Lumber, is                                                               
the last mid-size mill in the  state.  The mill has benefitted by                                                               
state timber  sales and if not  for state volume it  would likely                                                               
have closed due to lack of federal volume.                                                                                      
2:10:04 PM                                                                                                                    
REPRESENTATIVE MUNOZ  offered her  support for  HB 105  and asked                                                               
whether the  timber base is stable  for the mill that  is located                                                               
in Hoonah.                                                                                                                      
MR. MAISCH  identified the  mill as Icy  Straits Lumber  Mill and                                                               
said this mill  does have some state volume under  contract.  The                                                               
one area  that the U.S.  Forest Service is  doing well in  is its                                                               
small timber sale  program and that program supplies  most of the                                                               
small mills on Prince of Wales  Island and is meeting most of the                                                               
needs of the small operators.                                                                                                   
2:11:10 PM                                                                                                                    
REPRESENTATIVE GARDNER  observed that page  2 of the  letter from                                                               
the Southeast Alaska Conservation  Council talks about the likely                                                               
export of  the timber  from Hook  Arm and Rowan  Bay.   She asked                                                               
whether it  makes economic  sense for the  timber from  these two                                                               
parcels to go to Viking Lumber for processing.                                                                                  
MR. MAISCH  answered that he did  not mean to imply  earlier that                                                               
Viking Lumber  would likely  be able to  process the  timber from                                                               
those locations.   Those  two locations  are fairly  isolated and                                                               
those logs would  likely go to the round log  export market.  The                                                               
way the industry functions right  now in Southeast Alaska is that                                                               
there  is  both  a  round   log  export  market  and  a  domestic                                                               
manufacturing  market.   It is  important  for the  cash flow  of                                                               
mills  to be  able to  export  a portion  of the  logs that  they                                                               
purchase because  of the price  that they  can get on  the export                                                               
market for sorts  that are not profitable for sawing  or for very                                                               
expensive  logs that  command  a  very high  price.   In  further                                                               
response, he concurred  that Viking Lumber would  likely not have                                                               
access to the  processing of timber from Hook Arm  and Rowan Bay,                                                               
although it  is difficult to  anticipate what the  economics will                                                               
be at the time that the sales come forward.                                                                                     
2:13:00 PM                                                                                                                    
REPRESENTATIVE KAWASAKI asked whether  there are any requirements                                                               
that trees  from state  forests must be  processed or  have value                                                               
added before they can be exported.                                                                                              
MR. MAISCH  replied no, that is  what the state tried  to do with                                                               
its primary  processing law that was  on the books in  the 1970s.                                                               
It went to court in 1984, so  the state does not have the ability                                                               
to  require   that  type  of  manufacture,   especially  under  a                                                               
competitive purchase  situation.  The state  has several statutes                                                               
for selling timber.   The statute used a lot  when selling timber                                                               
in Southeast Alaska is called  "118," which refers to the section                                                               
of  the  statute.   In  areas  of  high unemployment  and  under-                                                               
utilized  allowable cut,  this statute  allows for  a competitive                                                               
negotiated process and  one of the things that can  be taken into                                                               
consideration  is   either  value  added  or   high  value  added                                                               
products.   Statute "123,"  often referred to  as the  high value                                                               
added statute,  has more stringent requirements  but the division                                                               
is  currently unable  to use  that statute  in Southeast  Alaska.                                                               
Two other statutes under which  the division sells timber are the                                                               
regular  competitive bid  process and  the small  negotiated sale                                                               
process.   Right now  a purchaser can  choose to  manufacture and                                                               
most  of the  logs purchased  are  being used  for local  sawing.                                                               
Separate appraisals are  done on any logs that  will be exported,                                                               
which  the purchaser  must  identify, and  the  state receives  a                                                               
higher price for these.                                                                                                         
2:15:28 PM                                                                                                                    
REPRESENTATIVE P.  WILSON pointed out  that a parcel  included in                                                               
HB  105,   Cleveland  Peninsula,  was  under   consideration  for                                                               
selection by the university and at  that time a group in Wrangell                                                               
had identified this parcel as being  an area that it used for its                                                               
children's wilderness  program.   She asked whether  the division                                                               
has talked with this group.                                                                                                     
MR. MAISCH  responded no, he  is not aware of  that organization,                                                               
but that  the division would talk  to them if the  name and phone                                                               
number are  provided.   He said  he does not  believe any  of the                                                               
parcels  are actually  on the  Cleveland Peninsula,  but that  he                                                               
will check and get back to the committee.                                                                                       
2:17:03 PM                                                                                                                    
RON  WOLFE,  Natural  Resources  Manager,  Sealaska  Corporation,                                                               
testifying  in support  of  HB 105,  stated  that communities  in                                                               
Southeast  Alaska  are  experiencing  either  reduced  population                                                               
demand or continued population loss.   This is important for such                                                               
things as schools,  property values, and businesses.   The timber                                                               
industry, while struggling, is one that  is needed, as are all of                                                               
the industries in Southeast Alaska.   The Southeast Alaska timber                                                               
industry is  basically supported by  three legs:   federal timber                                                               
sales, private  timber harvest, and  state timber sales,  and all                                                               
three  of these  landowners  are necessary  for  a viable  timber                                                               
industry in  this region.  Sealaska  Corporation is predominantly                                                               
in the  round log export  business and uses the  same contractors                                                               
as does Viking  Lumber.  It is these same  contractors that would                                                               
purportedly  operate  on  state  timber sales.    The  same  fuel                                                               
distributors and air  taxi companies are also used.   Thus, he is                                                               
describing a critical mass that  is important for the survival of                                                               
the Southeast  Alaska region.   If any one  of these legs  of the                                                               
stool  falls away,  Southeast  Alaska could  be  in very  serious                                                               
trouble.  The long term commitment  of the state, as described by                                                               
Mr. Maisch, is important for  the long term management and health                                                               
of the timber industry.                                                                                                         
2:20:14 PM                                                                                                                    
MR.  WOLFE,  regarding the  concerns  expressed  about round  log                                                               
export, said it  is important to note that a  strong component of                                                               
timber sales on the Tongass  National Forest is round log export.                                                               
This  is  necessary to  make  the  timber  economics work.    The                                                               
premium price  attained from round  log export is  basically what                                                               
makes a timber  sale economical to operate.  He  urged members to                                                               
look at  Sealaska's website to  read the McDowell Group  study on                                                               
timber industry  employment, which  found that  on a  per million                                                               
board foot basis the round  log export industry generates just as                                                               
many jobs as the domestic  manufacturing industry.  These jobs in                                                               
the  round log  export arena  are frequently  in rural  Southeast                                                               
Alaska villages where there are  no other forms of employment and                                                               
this  source  of  cash  is  crucial  in  a  subsistence  economy.                                                               
Favoring  a solely  domestic manufacture  would mean  that people                                                               
would have to move to a village  that has a sawmill.  He said the                                                               
Alaska Forest Resources  and Practices Act works  well to protect                                                               
fish and wildlife habitat resources on state and private land.                                                                  
2:22:18 PM                                                                                                                    
REPRESENTATIVE  KAWASAKI  said  it  seems that  the  value  added                                                               
industry would provide more jobs than would round log export.                                                                   
MR. WOLFE  appreciated how that seems  counterintuitive, but said                                                               
a look  at how Sealaska  manufactures round logs into  a customer                                                               
specification will  show the extra  jobs that are created  in the                                                               
sort yard  when the scale rollout  is done.  More  importantly is                                                               
the ship loading  or stevedoring jobs that go with  the export of                                                               
the  round logs.   So,  the combination  of these  jobs basically                                                               
equivocates to the mills.                                                                                                       
MR. WOLFE, in response to  Co-Chair Seaton, agreed to provide the                                                               
committee with a  copy of the aforementioned McDowell  study.  He                                                               
further offered to  provide committee members with a  tour of the                                                               
Sealaska wood pellet boiler system.                                                                                             
2:24:50 PM                                                                                                                    
SHELLY  WRIGHT, Executive  Director,  Southeast Conference,  said                                                               
she  is testifying  on  behalf of  the  communities of  Southeast                                                               
Alaska  that rely  on  resource development  for  survival.   She                                                               
testified as follows:                                                                                                           
     The communities  of Southeast Alaska are  struggling to                                                                    
     survive.   Part  of the  struggle  is a  lack of  jobs.                                                                    
     There used to  be a timber industry in  our region that                                                                    
     supported  our communities.   People  had wage  earning                                                                    
     jobs and financial support for  their schools and their                                                                    
     infrastructure.   We depended on this  for security and                                                                    
     for our  future.  Now our  industry is almost gone.   I                                                                    
     have been  told the timber  industry is a thing  of the                                                                    
     past.  However, I opened  the Juneau Empire last Friday                                                                  
     and read on  the front page that the  State of Alaska's                                                                    
     retirement fund  officials are looking at  investing in                                                                    
     a timber industry in the Lower  48.  To make the Alaska                                                                    
     state retirement  fund more  secure they  are investing                                                                    
     in timber in the southeastern  states from Texas to the                                                                    
     Carolinas while we  sit on 17 million  acres of Tongass                                                                    
     National  Forest.   That tells  me we  are missing  the                                                                    
     mark here in  our region.  This state forest  will be a                                                                    
     small way  to stabilize  our investments in  the future                                                                    
     of  our  communities.    Allowing  the  state  to  have                                                                    
     designated  lands to  manage  for  timber harvest  will                                                                    
     give  our  local  mills  a  little  more  security  and                                                                    
     therefore maybe  be able  to employ  a few  more folks.                                                                    
     We  are down  to one  medium  sized mill  in Prince  of                                                                    
     Wales  Island   and  nine  or  ten   mom-and-pop  mills                                                                    
     throughout the region that rely  on the bigger mills to                                                                    
     stay in  business.   Supply is  the obstacle  for every                                                                    
     one of these mills.   We are encouraged by the progress                                                                    
     the  state department  of forestry  has  made with  its                                                                    
     industry  development  and  with the  partnership  they                                                                    
     have  with  the  federal government.    However,  these                                                                    
     efforts are  almost unfortunately too little  too late.                                                                    
     Our  region is  in emergency  mode now.   We  need this                                                                    
     forest designation in order to survive.                                                                                    
2:27:26 PM                                                                                                                    
CO-CHAIR SEATON interjected that the  committee has a copy of the                                                               
Southeast Conference  Resolution 11-11 as  well as a copy  of the                                                               
February 14,  2011, letter from  the Southeast  Conference Timber                                                               
Committee chairperson.                                                                                                          
MS. WRIGHT continued her testimony:                                                                                             
     The existence of a timber  industry in Southeast Alaska                                                                    
     depends  on immediate  action to  provide  a supply  of                                                                    
     economically  viable  sales.     There  has  been  some                                                                    
     concerted  effort by  the state  working with  the U.S.                                                                    
     Forest Service  to improve the quality  and quantity of                                                                    
     the  Forest   Service  timber   sales.     This  effort                                                                    
     continues,  but has  not  resulted  in the  improvement                                                                    
     needed.   There  are 17  million acres  in the  Tongass                                                                    
     National Forest.   This bill  will secure  48,472 acres                                                                    
     for  timber  harvest  management  by  the  Division  of                                                                    
     Forestry.  It is a very  small amount of land in a very                                                                    
     big picture, but it could  go a long way in maintaining                                                                    
     the stability for  our people in Southeast  Alaska.  As                                                                    
     a   representative  of   the  logging   communities  in                                                                    
     Southeast Alaska,  I urge you to  support the expansion                                                                    
     of  the Alaska  State  Forest.   This designation  will                                                                    
     enable the Department of  Natural Resources Division of                                                                    
     Forest  to sustainably  manage  the timber,  fisheries,                                                                    
     wildlife,  waters,   recreation,  and   other  multiple                                                                    
     benefits  that  will   strengthen  the  local  economy,                                                                    
     provide  jobs,  and  improve quality  of  life  of  all                                                                    
     Southeast Alaska communities.                                                                                              
2:29:55 PM                                                                                                                    
JOHN SANDOR spoke in favor of HB 105 from the following written                                                                 
statement [original punctuation provided]:                                                                                      
     I first came  to Alaska on an assignment  with the U.S.                                                                    
     Forest  Service  in 1953  and  served  as the  Regional                                                                    
     Forester  of   the  Alaska  Region  from   1976  to  my                                                                    
     retirement from that agency in  1984.  I also served as                                                                    
     Commissioner of the  Alaska Department of Environmental                                                                    
     Conservation  from 1990-1994.    I  am submitting  this                                                                    
     testimony as  an individual - a  Certified Forester and                                                                    
     life-time member of the Society of American Foresters.                                                                     
     I  support HB  105 -  which  will add  23,181 Acres  of                                                                    
     State lands  to the  25,291 acre existing  State Forest                                                                    
     which was  established last year.   This expanded State                                                                    
     Forest of  48,472 acres will  enable the  Department of                                                                    
     [Natural]   Resources    Division   of    Forestry   to                                                                    
     sustainably [manage]  the timber,  fisheries, wildlife,                                                                    
     waters,  recreation, and  other multiple  benefits that                                                                    
     will strengthen  the local  economy, provide  jobs, and                                                                    
     improve the  quality of life of  the communities living                                                                    
     in the vicinity of these existing state lands.                                                                             
     Since  the closure  of the  two  Southeast Alaska  pulp                                                                    
     mills during the  1990's and the loss  of an integrated                                                                    
     forest product  industry in the region,  employment and                                                                    
     population levels have significantly declined.                                                                             
MR. SANDOR called the committee's  attention to the Department of                                                               
Labor & Workforce Development's  projections for populations from                                                               
2010  to 2034.   The  population of  Southeast Alaska  is roughly                                                               
69,000 and by  the year 2034 the population will  decline by 14.5                                                               
percent.  This is astonishing  because the total state population                                                               
is  projected to  increase  by 24  percent.   He  noted that  the                                                               
Department of  Natural Resources has  had an exemplary  record of                                                               
working with  local communities in protecting  and managing local                                                               
forests.   The  new  Southeast State  Forest  will provide  local                                                               
communities with  new opportunities to improve  their economy and                                                               
quality  of life.    He  directed attention  to  a Juneau  Empire                                                             
article in  the committee  packet written  by Tlingit  leader Dr.                                                               
Walter Soboleff.                                                                                                                
2:33:49 PM                                                                                                                    
REPRESENTATIVE  HERRON inquired  whether  more  acreage could  be                                                               
added to the state forest.                                                                                                      
MR.  SANDOR replied  that this  is about  one-third of  the total                                                               
state forest land in Southeast Alaska,  but it is about the ideal                                                               
amount in that  state forest.  He deferred to  the state forester                                                               
as to whether any additional land should be added.                                                                              
2:34:53 PM                                                                                                                    
WAYNE NICOLLS urged passage of HB 105, paraphrasing from the                                                                    
following written statement [original punctuation provided]:                                                                    
     I  am  retired  after  37  years  with  the  US  Forest                                                                    
     Service.   I  am a  50-year  member of  the Society  of                                                                    
     American Foresters and I  continue my education efforts                                                                    
     to  qualify as  a  Certified  Forester.   I  am also  a                                                                    
     member of the Alaska Board of Forestry.                                                                                    
     This statement  in support  of HB 105  is in  behalf of                                                                    
     myself as  an individual,  not as  a spokesman  for any                                                                    
     The  addition of  some 23,000  acres  to the  Southeast                                                                    
     State  Forest  will total  nearly  50,000  acres.   The                                                                    
     legislature and  administration are to  be complimented                                                                    
     for  their  foresight  in  establishing  the  Southeast                                                                    
     State Forest  and I urge  that they exercise  that same                                                                    
     foresight in enlarging it.                                                                                                 
     As I indicated last  year during deliberations that led                                                                    
     to the  establishment of the [Southeast]  State Forest,                                                                    
     designation  of lands  as  such  elevates their  status                                                                    
     above  mere  state  ownership.   It  justifies  prudent                                                                    
     investments  via  cultural   treatment  of  the  forest                                                                    
     stands   and   establishment   of   infrastructure   to                                                                    
     facilitate their management and multiple public use.                                                                       
     While  much  current  focus is  on  logging,  resultant                                                                    
     employment,  and  current  economic  results  of  state                                                                    
     management,  the  real  benefit is  long  term  through                                                                    
     subsequent  management  and   use  over  many  decades,                                                                    
     possibly a century  or more.  These  long term benefits                                                                    
     far outweigh short term wood harvest benefits.                                                                             
     I have only heard one  argument for deletion of certain                                                                    
     tracts on the basis  that they contain considerable old                                                                    
     growth.   Thus should remain outside  the state forest.                                                                    
     This is  some sort of  reverse logic.  The  argument is                                                                    
     without merit because  as the land is  already owned by                                                                    
     the  state  it  can  be  harvested.   It  just  is  not                                                                    
     feasible  to  invest  management  effort  subsequently.                                                                    
     Not including  it in the  state forest does  nothing to                                                                    
     protect it from logging if that is the objective.                                                                          
     Contrary to some popular belief,  old growth is not the                                                                    
     epitome of wildlife habitat.   Carefully managed forest                                                                    
     land  through   vegetation  manipulation   can  improve                                                                    
     habitat.   It can  increase carrying capacity  for deer                                                                    
     and other  species.  It  can even improve  fish habitat                                                                    
     as has  been proven by  research in the past  decade or                                                                    
     two.   Preaching that old  growth must be  preserved to                                                                    
     benefit  wildlife   is  shallow  logic.     The  effort                                                                    
     opposing  inclusion  in  state  forest  would  best  be                                                                    
     devoted to  acquiring current scientific  knowledge and                                                                    
     advocating conservation through forest management.                                                                         
2:38:59 PM                                                                                                                    
CARL PORTMAN, Deputy Director, Resource Development Council                                                                     
(RDC), spoke in favor of HB 105 as follows:                                                                                     
     RDC  supports  HB 105  given  expansion  of the  forest                                                                    
     would help  sustain the forest products  industry, save                                                                    
     jobs, and help the economy.   The state land identified                                                                    
     for  inclusion  into  the new  state  forest  has  been                                                                    
     consistently  managed  for  timber harvest.    A  state                                                                    
     forest designation  over these lands would  ensure they                                                                    
     would remain  in state ownership and  contribute to the                                                                    
     long-term viability of the  forest products industry in                                                                    
     Southeast Alaska.                                                                                                          
     RDC  supported  the  creation of  the  Southeast  State                                                                    
     Forest because  demand for state timber  exceeds supply                                                                    
     and local  mills are dependent  on a  consistent supply                                                                    
     to stay  in business.   The majority  of the  timber in                                                                    
     Southeast  Alaska  is  on  federal  land,  but  federal                                                                    
     timber sales have declined  sharply.  Subsequently, the                                                                    
     demand for state timber from  local mills has increased                                                                    
     Much  of the  new state  forest contains  young second-                                                                    
     growth  stands.   There is  broad support  for shifting                                                                    
     timber harvesting  in Southeast Alaska from  old growth                                                                    
     to  second  growth.    The new  state  forest  and  the                                                                    
     proposed additional parcels to  it would help provide a                                                                    
     sustainable   timber   supply   to  local   mills   and                                                                    
     accelerate   the  harvest   of  second-growth   timber.                                                                    
     Actively  managed  second-growth  stands  will  provide                                                                    
     more timber volume per acre on shorter rotations.                                                                          
     The   shift   to   second-growth  harvesting   can   be                                                                    
     accelerated and  timber volume increased on  state land                                                                    
     by  thinning  these stands.    However,  thinning is  a                                                                    
     long-term investment and is only  justified if the land                                                                    
     will be available for timber harvesting.                                                                                   
     In  our  view  the   Southeast  State  Forest  and  the                                                                    
     proposed  additions to  it are  needed to  help restore                                                                    
     some balance  in Southeast Alaska,  given approximately                                                                    
     95 percent of the Tongass  National Forest is closed to                                                                    
     logging.    The  Tongass   itself  comprises  about  94                                                                    
     percent of  the land  base in Southeast.   As  a result                                                                    
     land  management  in  Southeast is  extremely  weighted                                                                    
     toward conservation  and non-development uses.   Of the                                                                    
     17  million acres  in the  Tongass, only  663,000 acres                                                                    
     are scheduled  for harvesting over  the next  100 years                                                                    
     and half  of that acreage  is second growth  timber cut                                                                    
     decades  ago.   The  annual  harvest  ceiling has  been                                                                    
     reduced  to  267  million board  feet,  down  from  520                                                                    
     million  board feet  under previous  federal plans  and                                                                    
     mandates.   Only 30  million board  feet of  timber has                                                                    
     been harvested  annually in recent years,  less than 15                                                                    
     percent  of  the allowable  cut.    Timber harvests  in                                                                    
     these federal  lands are likely  to be  constrained due                                                                    
     to litigation and other federal issues.                                                                                    
2:41:39 PM                                                                                                                    
     With regard  to state  lands, DNR manages  over 159,000                                                                    
     acres  of uplands  in southern  Southeast  Alaska.   Of                                                                    
     these, approximately 48,472 acres  would be included in                                                                    
     the new expanded  state forest.  The  remaining land is                                                                    
     designated for other  uses, including recreation, water                                                                    
     resources, land  sales, and fish and  wildlife habitat,                                                                    
     including  25,000  acres  of  legislatively  designated                                                                    
     state  parks, refuges,  and public  use  areas.   These                                                                    
     statistics in  our view speak  to the need,  the urgent                                                                    
     need, of a productive state  forest in Southeast.  With                                                                    
     the Forest  Service unable to provide  timber sales and                                                                    
     the  industry  need to  keep  operating  and with  most                                                                    
     federal land  in the region now  closed to development,                                                                    
     the proposed  additions to  the Southeast  State Forest                                                                    
     are needed and would  help sustain the forest products,                                                                    
     industry, save jobs, and benefit the economy.                                                                              
2:43:40 PM                                                                                                                    
KIRK  DAHLSTROM,  Co-Owner  and General  Manager,  Viking  Lumber                                                               
Company Inc.,  specified that  17 years ago  he and  his brothers                                                               
bought  a bankrupt  sawmill located  on Prince  of Wales  Island,                                                               
intending to  run the  mill on Forest  Service timber.   However,                                                               
the  federal government  has let  them down.   Over  the past  10                                                               
years almost one-third  of the mill's volume has  come from state                                                               
timber sales and is  what has kept the mill alive.   The mill has                                                               
over 100 employees and contributes  about $17 million annually to                                                               
the local Prince of Wales Island  economy.  Over the years he has                                                               
had  some very  tough times  with  timber supply,  but the  state                                                               
timber sale program  and [House Bill 162],  which established the                                                               
state  forest  last year,  have  given  him great  confidence  to                                                               
continue going.   He supports passage  of HB 105 because  it will                                                               
provide  more  confidence  to  keep  going in  the  face  of  the                                                               
horrible market conditions and timber supply that he has had.                                                                   
CO-CHAIR  SEATON   inquired  whether   Viking  Lumber   would  be                                                               
interested in the two remote parcels [Hook Arm and Rowan Bay].                                                                  
MR.  DAHLSTROM replied  that  over the  years  Viking Lumber  has                                                               
reached out  over 200 water  miles to get  timber.  Rowan  Bay is                                                               
not too  far, but  it may take  a little more  of the  wood being                                                               
exported from there  to cover the extra  costs of transportation.                                                               
About 30-40 percent  of the logs would go to  the sawmill and the                                                               
rest would need to be exported to make it economical.                                                                           
2:46:55 PM                                                                                                                    
ERIC LEE noted that all of  the comment heard by the committee so                                                               
far has been from big timber  interests.  The reason for this, he                                                               
maintained,  is that  the small  operators can  have an  entirely                                                               
different opinion about  HB 105.  Born in Petersburg  in 1951, he                                                               
said  he has  been a  subsistence hunter  on Mitkof  Island every                                                               
year since he was  a boy until the season was  closed in 1975 due                                                               
to the  drastic decline of  deer after the extensive  logging and                                                               
two hard  winters.   Before logging deforested  much of  the best                                                               
deer winter habitat, game was plentiful  on the island.  Deer and                                                               
wolf populations  rose and  fell in the  same natural  cycle they                                                               
had always followed  for thousands of years.  During  the time he                                                               
grew up  the deer season was  open for five months  of each year,                                                               
from  August  through December,  and  the  limit was  four  deer.                                                               
Following  the closure  in 1975  the deer  made only  a slow  and                                                               
partial recovery and  the season remained closed  entirely for 16                                                               
years.  In  1991 it was re-opened  for two weeks with  a limit of                                                               
one buck,  and except for  a small  archery season it  remains at                                                               
just two  weeks and a  limit of  one very-hard-to-find buck.   In                                                               
spite of  this very restrictive  management, the  deer population                                                               
has never recovered.  This  dramatic reduction in Mitkof Island's                                                               
deer   carrying  capacity   is  directly   attributable  to   the                                                               
deforestation of  deer winter range  and the extensive  system of                                                               
logging roads  that allow poachers  to access most of  the island                                                               
and that also provide easy travelling for wolves.                                                                               
MR.  LEE also  recalled  his days  of coho  salmon  fishing in  a                                                               
stream in the Falls Creek  watershed on Mitkof Island before that                                                               
area was logged.  He said  the streambed and sandbars were clean,                                                               
but  during and  after  logging  of the  watershed  the sand  and                                                               
gravel bars were periodically covered by  an inch or more of fine                                                               
mud and silt  even though the logging took place  a long distance                                                               
from the creek.   Over the next  four or five years  the coho run                                                               
dropped to a fraction of its  former strength and has never fully                                                               
MR. LEE  said he is  using these firsthand observations  from his                                                               
life to  show why  he is concerned  about the  additional logging                                                               
that would  take place on  Mitkof Island  if the four  parcels on                                                               
the island  are selected.   There are  already over 150  miles of                                                               
logging roads on this small  island, he noted.  Both ecologically                                                               
and   economically,  logging   has  not   been  conducted   in  a                                                               
sustainable way despite the claims to  the contrary.  Most of the                                                               
valuable  timber from  these state  lands  will be  cut down  and                                                               
shipped overseas  as fast as  possible, rather  than sustainably,                                                               
with no regard for added processing to bring economic benefit.                                                                  
2:50:54 PM                                                                                                                    
MR.  LEE urged  that no  state  lands be  designated for  logging                                                               
until the  timber can be processed  in Alaska for the  benefit of                                                               
Alaskans.   He  read from  Article 8,  Section 4,  of the  Alaska                                                               
State Constitution which states  that resources shall be utilized                                                               
and managed  sustainably, and said  that the proposal  for Mitkof                                                               
Island is not even remotely close to sustainable.                                                                               
MR. LEE,  regarding round log  export, pointed out that  the best                                                               
trees are  shipped overseas  and these  trees are  centuries old,                                                               
irreplaceable,  and extremely  valuable.   Once  those trees  are                                                               
gone  they are  gone for  good.   The big  timber interests  make                                                               
their   quick   money,   but   sustainable   long-term   business                                                               
opportunities  for the  mom-and-pop operators  are gone  with the                                                               
exported timber and it is  the mom-and-pop operators that provide                                                               
economic opportunities for communities like Petersburg.                                                                         
2:53:28 PM                                                                                                                    
JOSEPH SEBASTIAN warned  that like the federal  forest program on                                                               
the Tongass National Forest, this  state forest land program will                                                               
be a  deficit-receipt program to  the State  of Alaska.   It will                                                               
require more state  investment than there will be  profits to the                                                               
state  or communities.   Much  of this  land is  already marginal                                                               
timber or old clear cuts and  marginal second growth.  There will                                                               
be  tens of  thousands of  dollars of  survey costs,  monitoring,                                                               
accounting, and  trying to  keep the users  honest that  will add                                                               
further costs.  Additionally, the  far-flung nature of these land                                                               
parcels will make them impossibly  expensive to administer by the                                                               
state forester  and his  staff.  This  program amounts  to little                                                               
more than corporate welfare for  a couple of timber operators and                                                               
the round log export amounts to round job exports.                                                                              
2:55:50 PM                                                                                                                    
MR.  SEBASTIAN  said  the  state   cannot  clearcut  its  way  to                                                               
prosperity  in the  Tongass and  will be  doubly impoverished  by                                                               
exporting its forest resources under  the premise of further jobs                                                               
from exporting.  Sealaska has  completely stripped the trees from                                                               
over  half of  Dall Island,  he charged,  so the  island will  be                                                               
clearcuts on top  of clearcuts.  He urged that  the state program                                                               
be more  responsible than has Sealaska.   The Hook Arm  and Rowan                                                               
Bay parcels  should be dropped.   The parcel  in Rowan Bay  has a                                                               
lot of coastline  and sensitive beach fringe.   North Kuiu Island                                                               
is one  of the  most heavily logged  places in  Southeast Alaska.                                                               
The  Sumdum, Cleveland  Peninsula, Mite  Cove, Lynn  Canal, Rowan                                                               
Bay, and Hook  Arm parcels should be deleted from  HB 105 and the                                                               
bill balanced by designating these parcels as state parks.                                                                      
2:58:19 PM                                                                                                                    
JEREMY MAXAND noted that he and  his parents were born and raised                                                               
in Wrangell  and his father was  a longshoreman.  He  is proud to                                                               
say that  in 1992 he  was the  first Wrangell student  to receive                                                               
the Alaska  Pulp Corporation's  academic scholarship  of $10,000,                                                               
which helped put  him through college.  He said  his comments are                                                               
not necessarily in  support or opposition to HB  105; rather, his                                                               
primary concern is  with the potential scale of  round log export                                                               
and,  in  essence, the  exporting  of  jobs from  his  community.                                                               
Wrangell  used to  have a  very large  mill that  processed 60-70                                                               
million board  feet a  year, but  this mill is  now in  the final                                                               
stages  of complete  dismantlement.   The Wrangell  community has                                                               
gone through a  tumultuous economic time to  re-create itself and                                                               
identify ways to  diversify and stabilize its  economy.  Wrangell                                                               
has two micro-operators that  process about 250,000-500,000 board                                                               
feet of timber a year into  amazing wood products and he supports                                                               
their efforts 100 percent.                                                                                                      
MR. MAXAND said  his concern about HB 105 is  that Wrangell is in                                                               
the  unique  position  of  determining how  it  will  go  forward                                                               
economically and what  role the timber industry is  going to play                                                               
in that.   He believes most people have moved  beyond the idea of                                                               
a  large timber  industry in  Wrangell, but  they have  not moved                                                               
beyond  the idea  that Wrangell  could have  some very  important                                                               
value  added wood  manufacturing  operations in  addition to  the                                                               
ones  the community  currently has.   Even  though comments  have                                                               
been   made   that  there   are   efforts   to  encourage   local                                                               
manufacturing of that fiber, his concern  is that he does not see                                                               
how genuine or real those efforts  are.  If HB 105 moves forward,                                                               
he urges  that the state look  very hard at ways  to innovatively                                                               
support communities like Wrangell  that have worked toward having                                                               
a long-term  sustainable mill industry.   The state must  look at                                                               
ways to ensure that the  timber harvested from Wrangell Island is                                                               
kept on the  island for manufacturing and value  adding by small,                                                               
sustainable mill operations in Wrangell.   Alaska's timber should                                                               
not be shipped out of the  country while the communities are left                                                               
with clearcuts and  no remaining timber.  He  urged the committee                                                               
to do the right thing for the people in Wrangell.                                                                               
3:02:31 PM                                                                                                                    
CO-CHAIR SEATON held over HB 105.                                                                                               

Document Name Date/Time Subjects
01-HB0123A.pdf HRES 2/14/2011 1:00:00 PM
02-Sponsor Statement HB123.pdf HRES 2/14/2011 1:00:00 PM
04-Innovative use of CWF.pdf HRES 2/14/2011 1:00:00 PM
05.Funding decentralized watewater systems.pdf HRES 2/14/2011 1:00:00 PM
06-Wet Weather.pdf HRES 2/14/2011 1:00:00 PM
07-Green Infrastructure.pdf HRES 2/14/2011 1:00:00 PM
08-Ohio brownfield.pdf HRES 2/14/2011 1:00:00 PM
09-the Ohio example.pdf HRES 2/14/2011 1:00:00 PM
10-Homer Soil and Water Landscape Suitability Map.pdf HRES 2/14/2011 1:00:00 PM
HB0105A.pdf HRES 2/14/2011 1:00:00 PM
Coffman Cove Support HB105-SB44.pdf HRES 2/14/2011 1:00:00 PM
1 14 11 Chenault SESF Transmittal.pdf HRES 2/14/2011 1:00:00 PM
Public Briefing HB105-SB44 1-24-2011.pdf HRES 2/14/2011 1:00:00 PM
RDC Support 1-5-11.pdf HRES 2/14/2011 1:00:00 PM
HB 105
AFA support SESF additions 1-12-11.pdf HRES 2/14/2011 1:00:00 PM
HB 105
Vicinity Map SSE State Forest 12-20-10.pdf HRES 2/14/2011 1:00:00 PM
Parcel Maps SESF 12.20.2010.pdf HRES 2/14/2011 1:00:00 PM
SEACC_SESF_h_02_11.pdf HRES 2/14/2011 1:00:00 PM
HB 105
SAF Letter of Support.pdf HRES 2/14/2011 1:00:00 PM
HB 105
HB0105-1-2-011811-DNR-N.pdf HRES 2/14/2011 1:00:00 PM
HB123-DEC-FC-02-11-11.pdf HRES 2/14/2011 1:00:00 PM
Testimony and Resolution - Southeast Conference.pdf HRES 2/14/2011 1:00:00 PM
HB 105
Testimony - Wayne R. Nicolls.pdf HRES 2/14/2011 1:00:00 PM
HB 105
Testimony - John A. Sandor.pdf HRES 2/14/2011 1:00:00 PM
HB 105
DOF Testimony HB105 2-14-11.pdf HRES 2/14/2011 1:00:00 PM
HB 105
SEAALASKA McDowell Group studies.pdf HRES 2/14/2011 1:00:00 PM
SFIN 4/14/2011 9:00:00 AM
HB 105