Legislature(2015 - 2016)BUTROVICH 205
02/25/2015 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB32 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 32 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 32-TIMBER SALES
3:31:05 PM
CHAIR GIESSEL announced SB 32 to be up for consideration and
that public comment was still open.
3:31:11 PM
SENATOR MICCICHE joined the committee.
3:31:40 PM
SENATOR COSTELLO moved CSSB 32 ( ), version 29-GS1022\W, as the
working draft.
CHAIR GIESSEL objected for discussion purposes.
3:32:05 PM
CHRIS MAISCH, State Forester and Director, Division of Forestry,
Department of Natural Resources (DNR), Juneau, Alaska, said at
the last hearing the question came forward about the proposed
change in the committee substitute (CS) on line 6. It drops the
language: "consistent with the best interest of the state" at
the very end of the sentence in that section. He was asked if
that intended to mean a best interest finding or simply a lower
case best interest, and in consultation with the Department of
Law and the Governor's legislative director, they all concurred
that it would be appropriate to clear up the possible confusion.
3:33:09 PM
SENATOR WIELECHOWSKI joined the committee.
MR. MAISCH said "best interest" also occurred on line 9, but
there it requires a finding. That statement was moved forward to
ensure that a finding would be required for a timber sale that
was under this authority. He added that none of the public
process is changed with the CS.
CHAIR GIESSEL, finding no questions, removed her objection and
work draft W was adopted.
3:35:33 PM
SENATOR STOLTZE said he talked to the Mat-Su Borough mayor and
manager since the last meeting who indicated they had been
offering timber sales but didn't get much response. The feeling
is that there is a glut in the Mat-Su Valley market and the
state offering other sales would further restrict their economic
opportunities.
He said that the Alaska Outdoor Council has also had concerns,
because the Division of Forestry had failed to interact with
them over past timber regulations. He wanted to make sure there
had been the outreach that had been avoided in the past. He also
wanted to know more about Mr. Maisch's discussions with the
mayor and the manager.
3:37:28 PM
MR. MAISCH responded that he had shared an email with Mayor
DeVilbiss and Manager Moosey; the mayor said he will inform the
assembly of this proposed legislation and he hadn't any further
discussion with Mr. Moosey, but expected to hear back from him.
As for potentially glutting the timber market, they don't intend
to use this authority in the Mat-Su Valley unless there is a
need. Their preferred method of selling timber there will still
be through competitive auctions under their 120 authority.
He said an auction was offered in the Mat-Su Valley this fall;
four timber sales were available and there were no bidders. That
could mean they are satiated, so he doesn't intend to offer
other sales except under the 120 authority.
SENATOR STEDMAN said it's a large state that has big differences
in some of the forests. Southeast doesn't have municipal
forests; it has the Tongass and some small state forests and
forests on some Native lands. The response from this region is
that timber sales have been very well received and he liked the
language change. He thought that some of the public process in
this industry had actually been detrimental and had been used to
shut the industry down versus get a fair and balanced multi-use
forest moving. The pendulum has moved too far to the point where
there are objections to virtually every timber sale.
3:40:41 PM
SENATOR WIELECHOWSKI asked Mr. Maisch to address some concerns
in the Young's Timber letter in their folder; one was that this
could potentially lead to "cronyism."
MR. MAISCH responded that a number of safeguards are built into
the process; first is the one that he just mentioned, using
competitive bid under their 120 authority, their preferred
method of selling timber and what they do in 90 percent of their
timber sales. He also related that in Tok where Young's Timber
is located, Alaska Power and Telephone (APT) was interested in a
large long-term sale to support the development of a utility
that would use wood as the primary fuel source to produce
electricity. They started out with the 118 process in that
instance, and after the preliminary best interest finding (BIF)
was put out they had commenters including from Young's Timber
that indicated they potentially had competitive interests. At
that point, the division backed up and closed the preliminary
BIF out with no action and started a 120 process with a new
preliminary BIF that would basically offer that timber sale as a
competitive sale. Then both Young's Timber and APT could decide
whether they wanted to compete for that wood. So, by example the
issue the letter referenced was addressed. The department has
the best interest of the state at heart and there are specific
things they have to do in a BIF that address that question.
He said Subsection (1-(b) in 11AAC71.055 provided additional
things they can consider. This is part of their 123 sale
authority and it talks about financial backing, capability and
experience in the proposed activity and being able to meet the
bonding and insurance requirements of the timber sale. Part of
that BIF process is the department's due diligence as an agency
and as professionals to ensure that this is approached in a
business-like manner.
SENATOR WIELECHOWSKI said one of the other issues Young's Timber
raised was if an environmental group can be prevented from
purchasing the timber.
MR. MAISCH answered that a negotiated sale would be through the
RFP process where the objectives are enumerated like the
creation of local jobs and what kind of high value-added
products are going to be manufactured, and it is unlikely that
an environmental group could respond positively to those
criteria. He said the main area of the state that they use this
authority in is Southern Southeast Alaska.
3:46:56 PM
SENATOR STOLTZE said he appreciated the continuing follow-up and
that his overall concern is to support the Southeast economy.
3:48:28 PM
JOE YOUNG, owner, Young's Timber, Inc., Tok, Alaska, opposed SB
32 as written, especially Section 3 that states "AS 38.05.11(c)
is repealed." He said the intent of that section was to help
Alaskans with high levels of unemployment, underutilized
manufacturing capacity, underutilized allowable cut/damaged
trees (Tok has thousands of acres of fire killed and wind-blown
trees) or land being converted to non-forest use for long term
negotiated timber sales.
He said SB 32 needs to be at least delayed until public hearings
and explanations of the sectional analysis are held in Tok and
other rural areas, so it can rewritten to reflect their
concerns.
MR. YOUNG explained that the Tok area has four different
operators that have 10 timber sales executed under AS
38.05.11(h)(c). The effect of these sales has spurred investment
of over $3 million by the private sector and $4 million by the
state for wood fiber heating systems to reduce the cost of
energy in the Tok area. Young's Timber, alone, has invested $5
million in value-added equipment because of the 118(c) timber
sales it was able to acquire.
He said the 118(c) timber sales in rural areas can be
administered with smaller staff. They can be used to
economically reduce hazardous fuels in rural communities feeding
the energy heating systems. It can spur timber industry
development, help reduce energy costs and create new jobs.
3:50:56 PM
His other concern was the immediate effective date in Section 5.
"What's the rush?" he asked. It sure looked suspicious.
3:51:39 PM
ERIN MCLARNON, Executive Director, Working Forest Group,
Anchorage, Alaska, supported SB 32. She is also a Board of
Forestry member. She said SB 32 would allow the DNR commissioner
to better respond to the economic and geographic realities of
the forest product industry. "Who would have guessed that a
primary demand for our state's timber would be for bio-mass
energy purposes?" she asked.
She explained that SB 32 would allow the DNR to offer negotiated
timber sales for up to 25 years, which is crucial for medium to
large bio-mass energy products to get off the ground. This bill
would also give DNR the flexibility to determine which sale
method is in the best interest of the state for each timber
sale.
CHAIR GIESSEL, finding no further questions, closed public
testimony.
SENATOR WIELECHOWSKI said an RFP made him feel a little bit
better and asked if it was a requirement for a manufacturer.
MR. MAISCH replied that is the language that is in the 123
authority. It is not in the 118 authority, but the same process
is used: they can choose to do an RFP, but they don't have to do
one. As a practice in their RFP they make an initial cut at who
might be appropriate to negotiate with. It's part of the best
interest finding process.
SENATOR WIELECHOWSKI said he sees a lot of merit and with a good
commissioner this is a great bill, but his concern was that the
maybe the commissioner's uncle is a local manufacturer and he
gives him a sweetheart deal but they would have got a lot more
money by putting it out to bid. With an RFP anyone could respond
and the commissioner would have to negotiate the best deal.
MR. MAISCH answered that was right. Through the BIF process, the
commissioner would most likely be the final signatory. He,
himself, has been delegated authority for a timber sale of
$50,000 or less. For example, the current 123 sale in Fairbanks
has a $400,000 value and that will be signed by the
commissioner. The BIF is in the light of day; the public comment
is on it. The process is well designed to prevent Senator
Wielechowski's concern from occurring.
SENATOR STOLTZE said he worked with Mr. Stancliff on the bio-
mass project and he wanted to hear from him whether this will
diminish or enhance the viability of those types of projects.
3:56:48 PM
SENATOR WIELECHOWSKI asked if removing language in section 1
that requires consistency with the best interest of the state
implies that it has to be in the best interest of the state.
MR. MAISCH explained that a question on lines 6 and 9 was
specifically asked at the last hearing. The question pertaining
to line 6 was would the lower case best interest be confused
with an actual finding that would be a best interest finding.
He concurred that that language was potentially confusing to
especially the lay public and the purpose of the CS is to drop
the generic best interest reference and avoid the confusion.
3:58:00 PM
DAVE STANCLIFF, representing himself, Tok, Alaska, said he
hadn't the time to go through the bill to speak intelligently on
all sections, but he would give him a deeper assessment next
week when he was in Juneau.
3:59:11 PM
SENATOR COSTELLO moved to report CSSB 32(RES), version 29-
LS1022\W, from committee with individual recommendations and
attached fiscal note(s). There were no objections and it was so
ordered.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SRES Agenda Feb 25 2015.pdf |
SRES 2/25/2015 3:30:00 PM |
|
| SB 32-W.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SB32-W-Explanation of Changes.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-SB 32-02-13-2015.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-SB 32-Sectional Analysis-02-13-2015.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-Response from Division of Forestry .pdf |
SRES 2/25/2015 3:30:00 PM |
|
| SB 32 Memorandum.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-SB 32 Governor Transmittal Letter-02-13-2015.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-SB 32-Fiscal Note-DNR-DOF-02-13-2015.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-SB 32-Letter of Support-(TVSFCAC)-2-13-2015.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |
| SRES-SB 32- Letter of Support-RDC-02-06-2015.pdf |
SRES 2/25/2015 3:30:00 PM |
SB 32 |