Legislature(2021 - 2022)BARNES 124

04/14/2021 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 26 Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
           HB 98-FOREST LAND USE PLANS; TIMBER SALES                                                                        
1:24:17 PM                                                                                                                    
CHAIR PATKOTAK announced  that the final order  of business would                                                               
be HOUSE BILL  NO. 98 "An Act relating to  forest land use plans;                                                               
relating to forest land use  plan appeals; relating to negotiated                                                               
timber sales; and providing for an effective date."                                                                             
1:25:17 PM                                                                                                                    
TIM DABNEY,  Acting Director and Acting  State Forester, Division                                                               
of  Forestry  (DOF),  Department   of  Natural  Resources  (DNR),                                                               
referred  to the  questions  raised during  the  March 12,  2021,                                                               
hearing  on  HB 98  and  said  that  answers have  been  provided                                                               
directly to committee members.   He then said that flexibility is                                                               
needed to allow negotiation for  timber sales and exporting logs,                                                               
which HB 98 would allow.   He said HB 98 would modernize statutes                                                               
by simplifying what he described  as "confusing negotiated timber                                                               
sale  laws,"  increase  flexibility  in sales  to  meet  evolving                                                               
market   demands,  and   support  export   markets  while   still                                                               
protecting local markets.  He  reiterated the parameters proposed                                                               
in HB  98 for best interest  findings (BIFs) and Forest  Land Use                                                               
Plans (FLUPs), and summarized again  the benefits of the proposed                                                               
1:30:23 PM                                                                                                                    
REPRESENTATIVE  RAUSCHER  said  that it's  important  that  local                                                               
areas  and small  companies be  considered  when large  companies                                                               
enter into  sales contracts.   He then  referred to  a memorandum                                                               
("memo") he distributed titled "Intent  language HB 98" [included                                                               
in  the  committee  packet],  which  read  as  follows  [original                                                               
punctuation provided]:                                                                                                          
     It  is   the  intent  of  the   legislature  that  when                                                                    
     utilizing programs  in this act that  private companies                                                                    
     pay attention to, and should  encourage, local hire for                                                                    
     all  forestry  companies   and  contractors,  including                                                                    
     firefighting, timber sales of  any size, and all timber                                                                    
     related activities.                                                                                                        
     It is the  intent of the legislature that  the state of                                                                    
     Alaska  prioritizes timber  access  for  log homes  and                                                                    
     dimensional  lumber  for  local Alaska  residents,  and                                                                    
     Alaskan  companies  headquartered  in the  state,  when                                                                    
     conducting timber sales.                                                                                                   
     It is the  intent of the legislature that  the state of                                                                    
     Alaska  make  more  areas available  for  personal  use                                                                    
     firewood.   These  areas, determined  by the  Division,                                                                    
     should provide  equitable acreage  across the  state in                                                                    
     reasonable  proximity to  population areas,  and access                                                                    
     by road should be considered a priority.                                                                                   
1:34:33 PM                                                                                                                    
REPRESENTATIVE    FIELDS    expressed    his    agreement    with                                                               
Representative Rauscher and said  that it seems Chinese companies                                                               
are  harvesting timber  from  more  areas.   He  asked whether  a                                                               
Chinese company could bring in  its own workers to harvest timber                                                               
from Alaska.                                                                                                                    
1:35:49 PM                                                                                                                    
CHRISTOPHER ORMAN, Assistant  Attorney General, Natural Resources                                                               
Section, Civil  Division (Juneau), Department of  Law, noted that                                                               
there  are many  legal issues  surrounding hiring  that he  would                                                               
need time to research.                                                                                                          
1:37:01 PM                                                                                                                    
REPRESENTATIVE   FIELDS   described   China's   Belt   and   Road                                                               
Initiative,  through   which  China  has  invested   in  economic                                                               
development in  different countries.   He expressed  concern over                                                               
the   ramifications  of   this  initiative   and  suggested   the                                                               
possibility   of    limiting   timber   harvest    to   companies                                                               
headquartered in  Alaska.  He also  broached considering limiting                                                               
the geographic scope of HB 98 to the Alaskan Interior.                                                                          
1:39:40 PM                                                                                                                    
CHAIR PATKOTAK noted the importance of the intent language.                                                                     
1:40:15 PM                                                                                                                    
REPRESENTATIVE  HANNAN commented  on the  intent language  in the                                                               
memo  from Representative  Rauscher, which  she characterized  as                                                               
the "lifting,  in the  bill, of the  provisions that  ban exports                                                               
under negotiated  sales."  She  said that in a  follow-up meeting                                                               
with  Mr. Dabney,  he  described the  exports  as originating  in                                                               
southeast Alaska,  which, she said, is  an area of concern.   She                                                               
opined that a  negotiated sale benefits a  company, but requiring                                                               
the  work to  be kept  in  state is  a way  to operating  without                                                               
having legal questions regarding only  hiring locally.  She asked                                                               
Mr. Dabney  to talk about why  it's desirable to lift  the export                                                               
bank with regard to negotiated sales.                                                                                           
1:42:22 PM                                                                                                                    
MR. DABNEY said  that being able to negotiate  for timber exports                                                               
would benefit the state in both revenue and jobs.                                                                               
REPRESENTATIVE HANNAN asked Mr. Dabney for further explanation.                                                                 
MR. DABNEY explained that there  are various ways to sell timber;                                                               
the DNR  commissioner would  consider the  best type  of contract                                                               
for the local  timber market, the domestic market,  and the local                                                               
economy.   He  said  that it's  the stance  of  DOF that  "taking                                                               
advantage of negotiated timber sales  that would allow for export                                                               
could actually have a benefit to the local economy."                                                                            
1:44:02 PM                                                                                                                    
REPRESENTATIVE  HOPKINS  referred  to  Representative  Rauscher's                                                               
memo  and  asked  about the  intention  of  keeping  firefighting                                                               
REPRESENTATIVE  RAUSCHER  said  that firebreaks  are  often  done                                                               
without a contract.                                                                                                             
1:44:54 PM                                                                                                                    
REPRESENTATIVE CRONK said that local  firefighting crews are used                                                               
"less  and less,"  and spoke  of  the intent  to amend  HB 98  to                                                               
include language regarding the use of local labor resources.                                                                    
1:45:43 PM                                                                                                                    
REPRESENTATIVE  HOPKINS  noted  that planned  firebreaks  are  in                                                               
strategic  locations and  asked  whether they  are handled  along                                                               
with a timber sale.                                                                                                             
MR. DABNEY replied that there  are situations in which firebreaks                                                               
are  included in  the commercial  harvest and  used the  Tok area                                                               
harvests of white spruce as an example.                                                                                         
REPRESENTATIVE  HOPKINS  asked  whether  DOF  takes  bids  for  a                                                               
specific firebreak to be cut down  or the felled timber is simply                                                               
collected or planning  and creation of the firebreak  is added to                                                               
the timber harvest.                                                                                                             
MR.  DABNEY  responded  that  any   of  those  actions  would  be                                                               
1:49:18 PM                                                                                                                    
REPRESENTATIVE FIELDS asked  Mr. Dabney to compare  the amount of                                                               
state land versus private land affected by HB 98.                                                                               
MR. DABNEY replied  that HB 98 is applicable only  to lands under                                                               
the jurisdiction of DOF.                                                                                                        
REPRESENTATIVE FIELDS  noted that it's legal  to require in-state                                                               
hiring for  work activities on state  land, and there is  a long-                                                               
standing precedent for  doing so.  He discussed  his intention to                                                               
work on an amendment requiring in-state hiring.                                                                                 
1:50:38 PM                                                                                                                    
REPRESENTATIVE CRONK said that local  vendors in his district are                                                               
concerned about  the lack of  protections for local needs.   They                                                               
would like  to have  domestic markets  take priority  over export                                                               
markets, as well as giving  preference in contracts to businesses                                                               
that  have  established  value-added wood  product  manufacturing                                                               
facilities  in the  state.   He  said,  "All long-term  contracts                                                               
authorized   by  the   Division  [of   Forestry]  shall   have  a                                                               
requirement  to  begin  full-scale   utilization  of  the  timber                                                               
resource  by the  contract holder  within two  years." He  added,                                                               
"Hopefully,  we're  not having  people  just  lock up  tracts  of                                                               
land."   Considering long-term contracts, he  said, businesses in                                                               
his district would like DOF  to give preference to businesses who                                                               
provide  value-added  timber  like logs,  lumber,  and  chipping;                                                               
preference should be given to  businesses located in the area and                                                               
have limited options for sustainable resources.                                                                                 
1:53:50 PM                                                                                                                    
REPRESENTATIVE  FIELDS related  observations during  his previous                                                               
role  at  the Department  of  Labor  & Workforce  Development  of                                                               
"fairly  horrific  labor  abuses   on  federal  lands"  in  which                                                               
multinational  companies would  bring in  illegal immigrants  who                                                               
were  then  subjected  to  workplace   safety  issues.    In  one                                                               
instance,  he said,  a crew  of workers  on Chichagof  Island was                                                               
"effectively abandoned by their company"  and took a skiff to the                                                               
mainland, where  one was  attacked by a  bear.   He characterized                                                               
local  businesses as  having strong  interest in  the welfare  of                                                               
their community.                                                                                                                
1:55:01 PM                                                                                                                    
REPRESENTATIVE  HANNAN asked  whether  there is  a definition  of                                                               
"value-added" that DOF is required to use.                                                                                      
MR.  DABNEY explained  that "value-added"  includes  most of  the                                                               
wood products in the state.                                                                                                     
REPRESENTATIVE HANNAN noted  the use of the term  "local use" and                                                               
asked  whether  DOF  considers   firewood  to  be  a  value-added                                                               
product,  or whether  language on  "local use"  would need  to be                                                               
MR. DABNEY said firewood would  be included in "other value-added                                                           
wood products.", as stated in  Section 9, subsection (a), on page                                                           
8, line 6, of HB 98.                                                                                                            
REPRESENTATIVE HANNAN said:                                                                                                     
     I want  to confirm  that you are  on the  record saying                                                                    
     that  on  Section 9,  line  6,  other value-added  wood                                                                    
     products you  would determine  that that  would include                                                                    
     firewood  for  a local  user,  even  if they  were  not                                                                    
     commercially selling  it; but say  Representative Cronk                                                                    
     is going to  go clear railway access and  heat his home                                                                    
     with 10  cords of wood  for the next two  winters, that                                                                    
     that is a value-added product.                                                                                             
MR. DABNEY replied, "Correct."                                                                                                  
REPRESENTATIVE HANNAN  referred to  the part  of HB  98 repealing                                                               
subsection  AS 38.05.123(g),  a  statute which  she described  as                                                               
allowing  the  commissioner  to   require  a  purchaser  of  wood                                                               
products  to  fund economic  analysis  to  ensure that  the  sale                                                               
conforms to  the BIF.  She  said Mr. Dabney had  expressed to her                                                               
that  the provision  has never  been  used, which  she asked  Mr.                                                               
Dabney to  confirm.   She opined  that if  the statute  has never                                                               
been used,  it's not a hinderance  to the process, and  she would                                                               
like to keep it in statute.                                                                                                     
MR. DABNEY  confirmed that the  provisions under  AS 38.05.123(g)                                                               
have never been  utilized, and that he doesn't expect  them to be                                                               
used in  the future.  He  said that if DNR  needs the information                                                               
which would  be gleaned from  the provisions under  that statute,                                                               
the  service  would be  sought  from  an  entity other  than  the                                                               
REPRESENTATIVE  HANNAN expressed  that the  statute requires  the                                                               
purchaser to  pay for the analysis,  as opposed to carry  it out.                                                               
She  opined that  if more  negotiated sales  are expected  in the                                                               
future, and  appeals are  being reduced,  then it's  necessary to                                                               
ensure that the best interest  findings are accurate with regards                                                               
to  local uses  and potential  development.   She said  that with                                                               
budget  cuts  to DNR,  it's  important  to  have the  ability  to                                                               
require a  contractor to  pay for  economic analysis  rather than                                                               
delaying the sale or expecting  the expertise to come from within                                                               
MR. DABNEY said  that part of the reason for  adding the language                                                               
repealing AS 38.05.123(g) was to streamline the statutes.                                                                       
2:01:32 PM                                                                                                                    
MR.  ORMAN explained  that AS  38.05.123 is  only for  negotiated                                                               
sales for local manufacture of wood products.                                                                                   
2:03:26 PM                                                                                                                    
CHAIR PATKOTAK  spoke of extending  the deadline  for amendments,                                                               
the several amendment propositions  that have been discussed, and                                                               
the importance of working the amendments in good faith.                                                                         
2:04:15 PM                                                                                                                    
REPRESENTATIVE  FIELDS said  that  he has  enough information  to                                                               
move forward in writing amendments.                                                                                             
2:04:34 PM                                                                                                                    
REPRESENTATIVE HANNAN asked  Mr. Orman to explain  the reason for                                                               
including the repeal of AS 38.05.123(e).                                                                                        
MR. ORMAN noted  that he can explain the legal  aspect, but would                                                               
defer to Mr.  Dabney to explain the policy aspect.   He explained                                                               
that AS 38.05.123(e) cites seven  factors to consider in making a                                                               
best  interest finding;  HB  98 would  amend  AS 38.05.110(c)  to                                                               
include  six factors  that, while  not identical  to the  factors                                                               
currently  listed in  AS 38.05.123(e),  would provide  guides for                                                               
considering applicable  provisions of  a timber sale.   Appealing                                                               
AS  38.05.123(e)   and  amending  AS  38.05.123(c)   would  avoid                                                               
redundancy in determining appropriate contract provisions.                                                                      
REPRESENTATIVE  HANNAN  asked  Mr.  Dabney  to  explain  how  the                                                               
factors  specified  in AS  38.05.123(e)  would  translate to  the                                                               
proposed amended AS 38.05.123(c).                                                                                               
MR. DABNEY  explained that  for HB  98, the  seven factors  in AS                                                               
38.05.123(e) were  reworded into  six items.   He  clarified that                                                               
subparagraph  AS  38.05.123(e)(7  is  identical  to  the  amended                                                               
subparagraph AS 38.05.123(c)(6) proposed under HB 98.                                                                           
2:09:28 PM                                                                                                                    
CHAIR   PATKOTAK  invited   Representative  Hopkins   to  discuss                                                               
documents included in the committee packet.                                                                                     
2:09:32 PM                                                                                                                    
REPRESENTATIVE HOPKINS noted that  the documents in question were                                                               
provided by DNR and explained  that the briefing paper covers the                                                               
size of a timber sale which would  be exempt from a FLUP; he also                                                               
referred to  a document listing  all timber sales under  10 acres                                                               
for both personal and commercial uses.   He noted that he did not                                                               
ask how many  timber sales would fall under the  new guideline of                                                               
20 acres  and asked DNR to  supply a list of  harvests of between                                                               
10 and 20  acres from fiscal year  2016 (FY 16) through  FY 20 to                                                               
get a  clearer picture of  what the  impact would have  been over                                                               
the past  five years under  HB 98.  Representative  Hopkins asked                                                               
Mr.  Dabney, "In  terms of  the difference  between a  management                                                               
plan and  a forest land use  plan, would anything in  HB 98 allow                                                               
the  timber harvest  sale to  not adhere  to a  forest management                                                               
MR.  DABNEY replied,  "All forest  land use  plans would  have to                                                               
adhere to a management plan."                                                                                                   
REPRESENTATIVE HOPKINS  followed up to  ask if there  is anything                                                               
in  FLUPs that  would  allow a  timber harvest  to  clear cut  or                                                               
otherwise ignore sustainable harvest principles.                                                                                
MR. DABNEY responded that DOF is constitutionally required to                                                                   
main sustained yield principles.                                                                                                
REPRESENTATIVE HOPKINS said, "'It's in the Constitution,' those                                                                 
are the words I wanted to hear."                                                                                                
2:12:18 PM                                                                                                                    
CHAIR PATKOTAK said that HB 98 was held over.                                                                                   

Document Name Date/Time Subjects
HB 98 Support DNR Timber Sales Briefing Paper 2.11.2021.pdf HRES 3/12/2021 1:00:00 PM
HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Sponsor Statement 2.11.2021.pdf HRES 3/12/2021 1:00:00 PM
HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Sectional Analysis Version A 2.23.2021.pdf HRES 3/12/2021 1:00:00 PM
HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Presentation to HRES 3.12.2021.pdf HRES 3/12/2021 1:00:00 PM
HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Letter of Support Northland Wood Products 3.12.2021.pdf HRES 3/12/2021 1:00:00 PM
HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 HRES DNR Follow-Up from 3.12.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Support DOF Timber Sales and Appeals and Outcomes 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Support DNR Summary of Appeals 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Support DNR Timber Sales Briefing Paper 2.11.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Support One-Pager Timber Sales FLUPS 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Letter of Support Aurora Energy Solutions 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 26 Letter AK Outdoor Council 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 26
HB 98 Draft Intent Language Rep. Rauscher 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98
HB 98 Commercial and Personal Use Timber Sales FY 16 to FY 20 Rep. Hopkins 4.14.2021.pdf HRES 4/14/2021 1:00:00 PM
HB 98