Legislature(2021 - 2022)BUTROVICH 205

01/26/2022 03:30 PM Senate RESOURCES

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**Streamed live on AKL.tv**
             SB  85-FOREST LAND USE PLANS; TIMBER SALES                                                                     
3:33:44 PM                                                                                                                    
CHAIR  REVAK   announced   the  consideration    of  SENATE   BILL  NO.  85                                                     
"An  Act  relating   to  forest   land  use  plans;   relating   to  forest                                                     
land  use  plan  appeals;   relating  to  negotiated   timber   sales;  and                                                     
providing for an effective date."                                                                                               
3:34:28 PM                                                                                                                    
SENATOR VON IMHOF joined the meeting.                                                                                           
3:34:41 PM                                                                                                                    
BRENT    GOODRUM,    Deputy   Commissioner,     Department    of   Natural                                                      
Resources, Anchorage, Alaska, introduced SB 85 as follows:                                                                      
      This  bill  seeks  to modernize   our  timber  sales  process.                                                            
      The  proposed  modifications    to these  statutes   will  help                                                           
      grow   predictability     and   jobs    in   Alaska's    timber                                                           
      industry,    an   industry    that   has   longed    for   more                                                           
      flexible  negotiated   timber   sales  necessary   to meet  the                                                           
      current  needs   of  their  intended   markets.  The  benefits                                                            
      of  enacting   SB 85  will  result   in  more  efficient   land                                                           
      use  planning    and  more   predictable    timber   harvests.                                                            
      Importantly,   SB  85  is  a  zero  fiscal   note.  Presenting                                                            
      SB  85   this   afternoon   will   be   Director   Helge   Eng,                                                           
      Alaska's  new  State  Forester.   Director   Eng has  42  years                                                           
      of  experience   practicing   forestry   and  fire  protection                                                            
      in  the  western   United   States,   British   Columbia,   and                                                           
      Scandinavia.    Director   Eng  worked   for   the  California                                                            
      Department   of  Forestry   and Fire   Protection   for  thirty                                                           
      years  in  a variety   of  capacities   within  both  forestry                                                            
      and  fire  protection    assignments.   He  retired   from  Cal                                                           
      Fire  as   Deputy   Director   for   Forestry   and   was  then                                                           
      appointed    as   the   director   of   Alaska    Division   of                                                           
      Forestry   (DOF)   after   Chris   Maisch  retired    in  early                                                           
      December   2021.  Director   Eng  is very  excited   about  the                                                           
      opportunity   to  lead  the  Division   of Forestry   during   a                                                          
      critical   time  as   our  landscape   faces   new  challenges                                                            
      from  increasing    wildfire   threats   and   tree  mortality                                                            
      from spruce beetle infestation.                                                                                           
3:36:35 PM                                                                                                                    
HELGE  ENG,   State  Forester   and  Director   of  Forestry,   Department                                                      
of  Natural   Resources,   Anchorage,   Alaska,   provided   testimony   on                                                     
SB  85.  He  indicated   that   this  bill  is  comprised    of  two  major                                                     
   1) The benefits of contractual certainty on forest land                                                                      
      use plans; and                                                                                                            
   2) A more efficient and flexible timber sale process to                                                                      
      assist the timber industry.                                                                                               
MR. ENG presented a slideshow entitled "Forest Land Use Plans,                                                                  
Negotiated Timber Sales.Slide 2, Contents:                                                                                      
      I.    SE   Alaska   timber    industry    is   struggling    to                                                           
      II. How to protect timber jobs?                                                                                           
         1. Change negotiated timber sale statutes to allow                                                                     
            local industry to sell all the timber it                                                                            
            harvests, as export if needed.                                                                                      
         2. Provide     contractual     certainty:     stable     and                                                           
            predictable supply of timber once a timber sale                                                                     
            has been purchased.                                                                                                 
MR. ENG stated contractual certainty is accomplished by                                                                         
implementing Forest Use Land Plans that are not appealable.                                                                     
      III. Sectional Analysis                                                                                                   
3:38:20 PM                                                                                                                    
MR. ENG advanced to slide 3, The Timber Industry in Alaska is                                                                   
Struggling to Survive:                                                                                                          
      A  dwindling    supply   of   timber   from   the   US   Forest                                                           
      Service   has  gutted   the  timber   industry   in  Southeast                                                            
MR.  ENG  stated   that  the  U.S.  Forest   Service   actively   seeks  to                                                     
repeal   the  exemption   for  the   Tongass  National    Forest  roadless                                                      
rule.   This  has  resulted   in  the   shutdown   of  old  growth   timber                                                     
sales  from   the  Tongass   National   Forest.   It  was  a  blow  to  the                                                     
timber  industry   in Southeast   Alaska  which   has grown  dependent   on                                                     
a  reliable  Tongass   timber   supply.  He  said  that,   in response   to                                                     
the  decline,  the  governor   introduced   this  bill  to streamline   the                                                     
timber  sale  process,   make  it  more  flexible,   and  more  efficient.                                                      
The   governor   also   increased   the   amount   of  purchasable    state                                                     
timber available to timber operators.                                                                                           
      SE  Alaska    supports   only   325   timber   industry    jobs                                                           
      today,  compared   to  4,000  jobs  in  the  1990s.  Now,  even                                                           
      those jobs are in danger.                                                                                                 
MR.  ENG   noted   that  the   Southeast   Alaska   timber   industry   job                                                     
situation   is  a  somber   statistic;   the  jobs   are  in  danger.   The                                                     
hope is that SB 85 will help support the industry.                                                                              
      Amending   statutes   to   support   the  local   industry   in                                                           
      Southeast Alaska will protect existing jobs.                                                                              
MR.  ENG   advanced   to  slide  4,   How  Can  We  provide   and  Protect                                                      
      Step   1.  Change   negotiated    timber   sale   statutes   to                                                           
      allow   local   industry    to   sell   all   the   timber   it                                                           
      harvests, as export if needed.                                                                                            
      Currently,   negotiated    timber  sales   must   be  sold  for                                                           
      local manufacture, not export.                                                                                            
         • A changing timber supply (more young growth)                                                                         
            means that some sizes of timber are not                                                                             
            marketable in Alaska.                                                                                               
         • Demand for certain species (e.g., hemlock) is                                                                        
            only overseas or in the Pacific Northwest.                                                                          
MR.   ENG   continued     with   Timber    Sale   Types:    Negotiated    &                                                     
Competitive, slide 5:                                                                                                           
         • Negotiated sales allow DOF to choose a timber                                                                        
            purchaser not only based on price, but also on                                                                      
            the number of local jobs the sale provides.                                                                       
         • Local SE Alaskan operators are not able to outbid                                                                    
            larger out-of-state companies for competitive                                                                       
      Without  a  consistent   timber  supply,  local   industry  and                                                           
      jobs will erode further.                                                                                                  
MR.   ENG   noted    that   multiple    bidders    generally    result   in                                                     
competitive   timber   sales  where   the  highest   bidder  is  selected.                                                      
The  competitive   bid  process   often  has  a  negative   effect  on  the                                                     
local industry.                                                                                                                 
3:41:49 PM                                                                                                                    
SENATOR   KAWASAKI   asked   whether   the  bill  is  only   pertinent   to                                                     
Southeast Alaska, or if it applies to forests statewide.                                                                        
MR. ENG answered the bill applies to forests statewide.                                                                         
MR.  ENG  continued   with  slide  6,  How  Can  We  Provide  and  Protect                                                      
      Step  2. Once  a  timber  sale  has  been  purchased,   provide                                                           
      a  stable   and   predictable    supply   of   timber   to  the                                                           
      operator by providing contractual certainty.                                                                              
MR.  ENG explained   that  once  a timber   sale  has been  purchased,   it                                                     
is  critical   the  operator   have  a  stable   and  predictable    timber                                                     
supply.   He added   that  a Forest   Land  Use  Plan  (FLUP)   appeal  can                                                     
be  ruinous   to  a logging   company   which  typically   does   not  have                                                     
the  capital  to  wait  for  an  appeal  to  be resolved.   He  elaborated                                                      
on this point in slide 7, Stable Timber Supply:                                                                                 
      An appeal   can  halt harvesting,    which  can be  disastrous                                                            
      to a logging company.                                                                                                     
      SB  85 ensures   that  once  the  decision  has  been  made  to                                                           
      sell  the  timber,  no  further  administrative    appeals  can                                                           
      Input   would    still    be   gathered    from   public    and                                                           
MR.  ENG  pointed   out  that  the  appeal   option   is  eliminated   once                                                     
the  decision   has   been  made   to  sell   the  timber,   however,   the                                                     
public   input  process   remains  intact.   He  said  that  public   input                                                     
on  FLUPs,  commonly  results   in  the modification    of harvest   units,                                                     
such   as   setbacks    for   the   visual    consideration     of   nearby                                                     
residential   areas.   DOF  endeavors   to  complete   timber  sales   with                                                     
community   support  and  acceptance,   and  in most  cases,   will act  on                                                     
and implement public requests prior to the appeals stage.                                                                       
3:44:26 PM                                                                                                                    
SENATOR   VON  IMHOF  referred   to  slide  3  and  quoted,  "A  dwindling                                                      
supply   of  timber   from   the  US   Forest   Service   has  gutted   the                                                     
timber   industry   in   Southeast   Alaska.She       asked   for  further                                                      
explanation about state land and the reference to federal land.                                                                 
MR.  ENG responded   that  SB  85 pertains   to state   land,  not federal                                                      
land.  The  reference   to the  U.S.  Forest  Service   timber  supply  was                                                     
to  set  the  stage,  to  describe   why  the  local  timber  industry   is                                                     
in trouble.                                                                                                                     
SENATOR   VON   IMHOF   asked   how   many   acres   of  state   land   are                                                     
available for timber harvesting.                                                                                                
MR.  ENG  responded   that  he  will   get  back  to  the  committee   with                                                     
the exact number.                                                                                                               
3:45:30 PM                                                                                                                    
CHAIR  REVAK   requested   the  data  be  sent  to  the  Senate  Resources                                                      
Office for distribution to the committee.                                                                                       
SENATOR VON IMHOF requested a map.                                                                                              
MR. ENG responded, absolutely.                                                                                                  
3:45:45 PM                                                                                                                    
SENATOR   MICCICHE  qualified   the  following   two  questions,   stating                                                      
he  is  pro-timber   and  supports   the  timber  industry.   He  asked  if                                                     
timber   sale   sites   will  occur   in   remote   areas,   so  that   the                                                     
potential   for  negative   community   impact   is  alleviated.   If  not,                                                     
in   the  absence    of   an  appeal    process,   how   will   issues   be                                                     
MR.  ENG   directed   attention   to   slides  8  and   9  to  answer   the                                                     
question.   He said  that  there  are  five  steps  to  complete  a  timber                                                     
sale.  This   bill  restructures    the  timber   sale  process,   so  that                                                     
appeals   may  occur   in  three  of  the   five  steps.   He  highlighted                                                      
that   SB  85   proposes   step   five,   Forest   Land   Use   Plans,   be                                                     
unappealable. Mr. Eng reviewed slide 8, Steps in a Timber Sale:                                                                 
      Public and agency comment gathered at each step.                                                                          
      1. Area Plans*                                                                                                            
      2. State Forest Plans*                                                                                                    
      3. Five-Year Schedule of Timber Sales                                                                                     
      4. Best Interest Finding*                                                                                                 
         • Timber may be sold after adopted.                                                                                    
      5. Forest Land Use Plans*                                                                                                 
         • Not all Forest Land Use Plans must be issued                                                                         
            before timber is offered for sale.                                                                                  
         • For large sales, prepare Forest Land Use Plans in                                                                    
            phases, as access is developed.                                                                                     
      *Subject to appeal.                                                                                                       
3:47:27 PM                                                                                                                    
MR.  ENG  continued   with  slide  9,  Best  Interest  Finding   vs  Forest                                                     
Land Use Plan:                                                                                                                  
   Best Interest Finding          Forest Land Use Plan                                                                          
   Decisional document:           On the ground Implementation:                                                             
-Should we sell this timber?   -How will the sold timber be harvested?                                                          
MR.  ENG  explained   that  the  majority  of  input  and  public  opinion                                                      
occurs  during  the  Best  Interest   Finding;  the  focus  is  whether  or                                                     
not timber should be sold.                                                                                                      
MR.   ENG  explained    that   Forest   Land   Use   Plans   are  used   to                                                     
engineer      road     layouts,      culvert      sizes,      and     other                                                     
development/plans      requiring    engineering     calculations,     which                                                     
arguably, do not require public input.                                                                                          
MR.  ENG  explained   that  SB  85  proposes   the  appeal  process   occur                                                     
prior   to  the  Forest   Land  Use   Plan  step   of  a  timber   sale  to                                                     
ensure   the  operator   contractual    certainty.    He  added   that  the                                                     
elimination   of  appeals  in  the  final  step  also avoids   redundancy;                                                      
rehashing   appeals  resolved   in  earlier   steps.  He  emphasized   that                                                     
plenty  of  public   opportunity   will  be  available  for  public   input                                                     
and appeal in the first four steps.                                                                                             
MR.  ENG  reiterated   that  appeals   are  not  common  on  state   lands.                                                     
The  department   takes  pride  in  the  resolution   of  public  concerns                                                      
before   the   appeal    stage.   He   referenced    Senator    Micciche's                                                      
previous   question   and  said  that   visual  quality   concerns,   in  a                                                     
majority of cases, are resolved with additional buffers.                                                                        
3:50:00 PM                                                                                                                    
MR.  ENG  continued   with   slides  10  and  11,  Safeguards    on  Timber                                                     
          Timber harvests must adhere to the Alaska Forest                                                                      
      Resources and Practices Act (FRPA, AS 41.17), which:                                                                      
         • protects fish habitat and water quality, and                                                                         
         • ensures prompt reforestation.                                                                                        
         • DOF enforces FRPA through inspections, directives,                                                                   
            stop work orders, and civil fines.                                                                                  
         • On state-administered sales, the operator is held to                                                                 
            the timber sale contract. Every contract includes a                                                                 
MR.  ENG  stated  that   every  operator   must  put  down  a  performance                                                      
bond   which   acts  as   a  guarantee   that   legal   requirements    are                                                     
         • If DOF, the landowner, or a member of the public sees                                                                
            a problem, DOF can issue a notice of violation, and if                                                              
            necessary, shut down the timber operation until the                                                                 
            problem is remedied.                                                                                                
3:51:27 PM                                                                                                                    
SENATOR   STEVENS  commented   that  he  appreciates   FRPA  requires   the                                                     
protection   of  fish  habitat.   He  said  that  cutting   timber  to  the                                                     
edge  of  rivers  and  streams   will  destroy   a  fishing  industry.   He                                                     
asked  how  DOF  will  manage   timber  harvests,   so  that  the  fishing                                                      
industry and timber industry are both healthy.                                                                                  
MR.  ENG  answered   that  the Alaska   Forest  Resources   and  Practices                                                      
Act  have   the  most  rigorous   rules   and  regulations    on  the  West                                                     
Coast,   including   hydrology    and  riparian    protection.   FRPA   has                                                     
rigorous   buffer   zones   around   all   streams   and  operations    are                                                     
restricted    in  those   zones.   The  sustained    yield   mandate   also                                                     
protects   against  overharvesting,    limiting  harvests   to  the  amount                                                     
grown   to  ensure   forests   will  regenerate    after   harvest.   Young                                                     
forests   will   grow   back,    protecting   soil   and   water   quality                                                      
against   erosion.  The  Act  and  rules  focus  on  protection   of  water                                                     
courses in riparian areas.                                                                                                      
SENATOR   STEVENS  requested   assurance   that  it  is possible   to  have                                                     
both   a  healthy   timber  industry    as  well  as  a  healthy   fishing                                                      
MR. ENG responded that absolutely, it is possible.                                                                              
3:53:55 PM                                                                                                                    
SENATOR   VON  IMHOF  asked   whether  there   are  post-harvest   replant                                                      
requirements, and if so, what species must be planted.                                                                          
MR.   ENG   answered    that   reforestation    is   required.    The   Act                                                     
requires   harvested  land  be  restocked   with  a natural  species   mix.                                                     
In  Southeast   Alaska,  trees   regrow  quite   readily,  so  it  may  not                                                     
be necessary to replant.                                                                                                        
MR.  ENG  advanced  to  slide  12,  SB  85 Focuses   Appeals  at  the  Best                                                     
Interest Finding Stage, Before Timber is Sold:                                                                                  
        • Provides stable and predictable supply of timber                                                                      
         once sold                                                                                                              
       • No interruptions of harvest at a subsequent Forest                                                                     
         Land Use Plan stage                                                                                                    
      • Includes specific criteria the DNR commissioner must                                                                    
         consider when deciding whether to offer a negotiated                                                                   
         timber sale                                                                                                            
      • Costs nothing: Zero fiscal note                                                                                         
3:54:55 PM                                                                                                                    
SENATOR   VON  IMHOF  commented    on  slide  12,  "Costs   nothing:   Zero                                                     
fiscal  note.    She said  that  sometimes   zero  fiscal  notes  generate                                                      
revenue   and  asked  whether   this   bill  will  generate   revenue   for                                                     
the state.                                                                                                                      
MR.  ENG   answered   the   bill  allows   the   timber   industry   to  be                                                     
nimbler   and   more  effective    in  implementing    timber   sales.   He                                                     
expressed   his  belief   that  this   bill  would  have   a  quantifiable                                                      
revenue impact, but it is unknown at this point.                                                                                
SENATOR   VON  IMHOF  asked   whether   a per   log  tax,  even  if  it  is                                                     
just  pennies,   makes  sense   to  generate  revenue.   She  suggested   a                                                     
tax similar to the fish tax.                                                                                                    
MR.  ENG said  that  he  needed  to  ponder  the  question  before  he  had                                                     
an opinion about whether it would be viable.                                                                                    
3:56:29 PM                                                                                                                    
SENATOR   MICCICHE   asked   how  the   timber   sale  process   works   to                                                     
generate state revenue for timber sales purchased by the acre.                                                                  
MR.  ENG  answered   that  every  timber   sale  on  state  land  provides                                                      
revenue   to the  state.  He  explained   that  timber  sales   are  either                                                     
competitive,   which   means  they  are  advertised   and  awarded  to  the                                                     
highest   responsible   bidder,   or  they   are  negotiated.   In   either                                                     
case,  it  is  a transaction   which   allows  the  purchaser   to harvest                                                      
timber in exchange for money.                                                                                                   
SENATOR   MICCICHE    interpreted    the  answer    to  mean   the   bill's                                                     
streamlined    sales    process,    coupled    with   an   expanded    FLUP                                                     
exemption,   is  expected   to  attract   a  greater   number  of  bidders                                                      
and  sales.   He   noted  that   this   bill  increases    the  amount   of                                                     
harvestable   acreage   eligible   for  the  FLUP  exemption   from  10  to                                                     
20  acres.  He  agreed  that   until  the  bill  is  enacted,   the  amount                                                     
of revenue expected to be generated is difficult to quantify.                                                                   
MR.  ENG  answered  yes,  it  is  hard  to  quantify.  He  recalled   slide                                                     
3 which   described  a  beleaguered   timber  industry.   He ruminated   on                                                     
the  difficulty   to  quantify   the  risk  of  bankruptcy,   the  loss  of                                                     
revenue   and  jobs  versus   the  ability   for  a  company  to  carry-on                                                      
and  keep   going.   He  stated   that  SB  85  is   expected   to  have  a                                                     
positive effect on the timber industry.                                                                                         
3:59:47 PM                                                                                                                    
SENATOR   KAWASAKI    dove   tailed   off  a   previous   question    which                                                     
pertained   to reforestation    requirements.   He  referred  to  slide  8,                                                     
"Steps   in a  Timber   Sale"  and  asked  in  what  step   of  the  timber                                                     
sale process is reforestation required.                                                                                         
MR.  ENG  answered  that  the  reforestation   requirements    occur  after                                                     
the  Forest  Land  Use  Plan  and  after  the  completion   of  the  timber                                                     
SENATOR   KAWASAKI  stated   a major  part  of  this  bill  addresses   the                                                     
appeals   process.   It   seems  important    that  the   public   be  made                                                     
aware  of  reforestation   policies   up front  before   a timber  harvest                                                      
begins.    He   asked   would   it   not   be   better    to   know   about                                                     
reforestation    requirements   before  the  Forest   Land  Use  Plan  goes                                                     
into effect.                                                                                                                    
MR.  ENG  answered  absolutely   the  public   has a  right  to  know.  The                                                     
Act  requires    adequate   reforestation    be  achieved   at  a  certain                                                      
point   in  time   after   harvest,   if   not,  DOF   has   authority   to                                                     
require   it.  At  some  point   you  have  to  approve   a  timber   sale,                                                     
then  reforestation,    by  necessity,   takes   place  after  the   timber                                                     
is harvested.                                                                                                                   
4:02:18 PM                                                                                                                    
CHRISTOPHER   ORMAN,  Assistant   Attorney   General,   Alaska  Department                                                      
of  Law,  Juneau,  Alaska,  invited   testimony  on  SB  85. He  described                                                      
a  few   differences   between   the   Best  Interest    Finding   and  the                                                     
Forest  Land  Use  Plan.  He  said  that  the  Best  Interest   Finding  is                                                     
a  decisional   document   that  determines   whether   or  not  timber  is                                                     
sold;   built  into   it  are  compliance    and  standard    requirements                                                      
pursuant   to the  harvest  of  timber;  and  the  Best  Interest  Finding                                                      
is  appealable.    In  contrast,    the  Forest   Land   Use  Plan   is  an                                                     
operational    document;    it   decides    how   the   timber    will   be                                                     
harvested; and it is not appealable.                                                                                            
4:03:47 PM                                                                                                                    
SENATOR   KAWASAKI   said   that  answer   clarified   the  reforestation                                                       
SENATOR   KAWASAKI   followed-up   with   a Forest   Land  Use   Plan  site                                                     
prep  question   and   asked  whether   the  public   has  access   to  the                                                     
engineering    particulars    prior   to  the   construction    of   roads,                                                     
bridges,   culverts,   etc...  He  asked  if  engineering   documents   are                                                     
available   for  public   review   at  any  point   during  one   of  these                                                     
three   appealable   steps:   Area  Plan,   State   Forest  Plan   or  Best                                                     
Interest Findings.                                                                                                              
MR.  ENG answered   yes.  He  said that  it  is  a useful  distinction   to                                                     
differentiate   between   the  two planning   documents,   but  it is  also                                                     
an  oversimplification     to  narrowly   categorize   the  Best  Interest                                                      
Finding  as  the  "whether  to  harvest   step  and  the  Forest  Land  Use                                                     
Plan as the how to harvest" step.                                                                                               
MR.  ENG  referred   back  to  the   five  steps  in  a  timber   sale.  He                                                     
said  that   how  to harvest"   is embedded   in  each step  of  the  sale,                                                     
ranging   from  the  Area   Plans  to  the  State   Forest   Plans  to  the                                                     
Five-Year Schedule and the Best Interest Finding.                                                                               
4:05:45 PM                                                                                                                    
SENATOR    KIEHL   stated   that   the   missing    key,   which   creates                                                      
uncertainty    about   this   bill,   is   a  lack   of    Best   Interest                                                      
Finding    and   Forest  Land   Use  Plan   data.  He  reflected   on  past                                                     
experience   to  illustrate    the  point.  A  constituent    with  a  long                                                     
driveway,   may   initially   be  fine   with   the  construction    of  an                                                     
uphill   bypass   road.  However,   if   a  36"  culvert   ends   up  right                                                     
above  their  home,   the  constituent   might  be  deeply  concerned   and                                                     
want  to  comment.  This  concern   parallels  Senator   Steven    earlier                                                      
comments related to fish habitat hazards.                                                                                       
SENATOR  KIEHL   asked  which  details  contained   in  the Best  Interest                                                      
Finding and Forest Land Use Plan might rouse public comment.                                                                    
MR.  ENG   stated   the  Best   Interest   Finding   is   focused   on  the                                                     
general   consequences    of  an  areawide   timber  sale.   The  question                                                      
associated   with  the  Best  Interest   Finding   is  whether  or  not  to                                                     
put  acreage  up  for  sale.  However,   the  transition   between  a  Best                                                     
Interest   Finding  and  a  Forest   Land  Use  Plan  is  gradational.   In                                                     
the   gray   area,   a   Forest   Land   Use   Plan   is   more   than   an                                                     
engineering document.                                                                                                           
MR.  ENG  gave  an  example   to  illustrate   the  point.  Environmental                                                       
and  other  factors   were  considered   in a  watershed   where  three  or                                                     
four   timber   sales  occurred    in  the  last   few  years.   Once   the                                                     
public   had  commented   on  the   wisdom  of   a  timber  sale   in  that                                                     
watershed,   consideration    was  given  to  the  appropriate   view-shed                                                      
buffers   and  options   for   mitigating   ecological   concerns.    Then,                                                     
DOF's   attention   focuses   on  engineering    calculations   like   road                                                     
location    and   appropriate    size   culverts    to   handle   100-year                                                      
storms.   These  calculations    are  not   subject  to   appeal,  because                                                      
the public previously had the opportunity to appeal.                                                                            
MR.  ENG  emphasized   that  it is  unusual   to receive   an appeal   on a                                                     
timber  sale.   In a  timber  sale  near  Thorne   Bay,  viewshed  buffers                                                      
were  installed    to  address   and  mitigate   public   concerns,   which                                                     
resulted in public satisfaction.                                                                                                
4:09:21 PM                                                                                                                    
CHAIR  REVAK  asked   whether  each  step  in  the  timber  sale  process,                                                      
must be approved before the sale is advanced to the next step.                                                                  
MR.  ENG answered   not  necessarily.   He  said that  in  a lot  of  cases                                                     
the  Best   Interest   Finding   and  the  Forest   Land  Use  Plan   occur                                                     
simultaneously.    On  large  sales,  the  FLUP  materializes    after  the                                                     
MR.  ENG  expounded   on  large   sales.  A  large  sale  BIF   applies  to                                                     
the   entire   timber   sale.   FLUPS  occur   after   the   purchase   and                                                     
harvest   units  are   developed   sequentially    as  needed.  Roads   are                                                     
built   to  harvest    the  first   units   and  are   used   to  leverage                                                      
subsequent   forest  land  use  plans  and  harvest  units.  He  said  that                                                     
it  would  be  too  time   consuming   and  expensive   to  develop   large                                                     
sale  FLUPS  on  all harvest   units  at one  time.  The  purchaser   would                                                     
have to wait too long.                                                                                                          
4:10:49 PM                                                                                                                    
SENATOR  MICCICHE   switched   gears  to speak  on  behalf  of  the  timber                                                     
operator.   He  stepped   back  to  slide  8,  Steps   in a  Timber   Sale,                                                     
Forest Land Use Plans:                                                                                                          
        Not all Forest Land Use Plans must be issued before                                                                     
      timber is offered for sale.                                                                                               
SENATOR   MICCICHE   stated  that  it  is  essential   operators   be  able                                                     
to   estimate   operation    costs   prior   to  submitting    a  bid.   He                                                     
hypothesized    that  it  might  cost   $30,000   for  a  20-acre  parcel,                                                      
only  to  discover   after  the   sale,  that  the  cost  to  reforest   is                                                     
$15,000.   He  expressed   concern  that  this   seems  out  of  order  and                                                     
asked for clarification on the process.                                                                                         
MR.  ENG  explained  this  statement   means  that  some  Forest  Land  Use                                                     
Plans  can  be  developed   over  time.   He  said  that  the  bid  on  the                                                     
sale  is  done  with  a  high  degree  of  certainty.   For  example,   the                                                     
reforestation   requirements    are  already  known,  and  an  experienced                                                      
operator   will  know  the  estimated   cost  to  reforest.   Forest   Land                                                     
Use  Plans   serve   both  the  purchaser   and   DOF  well  in   terms  of                                                     
flexibility and implementation.                                                                                                 
MR.  ENG  asked  whether   the  committee   would  like  to  proceed   with                                                     
the sectional analysis.                                                                                                         
CHAIR    REVAK    responded     that   an    abbreviated     overview    is                                                     
4:13:34 PM                                                                                                                    
SENATOR    STEVENS   asked   how   it   came   to   be   that   the   state                                                     
prohibited timber exports.                                                                                                      
MR.  ENG  answered   that   the  prohibition    on  exports   is  a  fairly                                                     
common   requirement.    It  protects   the  domestic   timber   industry,                                                      
encouraging    local    jobs,   domestic    processing    facilities    and                                                     
value-added   products,   as opposed   to exports   which  result  in  only                                                     
one  sale.  He  said  that  the  question   of  whether  to  use  domestic                                                      
sales  or  export   sales  is  a notorious   financial   question;   SB  85                                                     
proposes   both.   Historically,    the  overwhelming    majority   of  DOF                                                     
sales   have   been  domestic,    competitive    sales.   However,   SB  85                                                     
proposes   the  state  take  advantage   of  market  signals  and  respond                                                      
to the constant change of supply and demand factors.                                                                            
SENATOR   STEVENS   asked   how   this   bill  ensures   both   local   and                                                     
export  timber   sales  or if  it  may  deny  locals  access  to  a  timber                                                     
MR.  ENG  answered   that  this  bill  is  intended   to supply   both  the                                                     
export and domestic markets.                                                                                                    
SENATOR    STEVENS    asked    whether    the   Department    of   Natural                                                      
Resources   has   the  authority    to  ensure   a  balance,   so   that  a                                                     
sufficient supply of timber is available locally.                                                                               
MR.  ENG   answered   yes.   The  commissioner    has  the   authority   to                                                     
decide  the  particulars   of  a timber  sale.  He  noted  that  Section  2                                                     
of  the  bill  contains  specific   criteria   the  commissioner   uses  to                                                     
make timber sale decisions.                                                                                                     
4:17:24 PM                                                                                                                    
SENATOR   VON  IMHOF  expanded   on  the  idea  of  in-state  versus   out-                                                     
of-state   timber   sales.  She   asked  whether   the  commissioner    has                                                     
the latitude to choose a lower in-state bid over a higher out-                                                                  
of-state bid.                                                                                                                   
MR. ENG answered yes.                                                                                                           
SENATOR   VON IMHOF   stated  that  the  nationwide   shortage   of  timber                                                     
products   coupled   with  lumber   price   increases   have  resulted   in                                                     
both   housing   shortages   and  affordable    housing   in  Alaska.   She                                                     
surmised   that  this   bill  could   revitalize   the  timber   industry.                                                      
She    envisioned,     "Grow    Alaska,self-sufficiency           in    the                                                     
production   of  timber   and  lumber.   Alaskan  grown,   harvested,   and                                                     
processed   timber   could  potentially    alleviate   housing   pressures                                                      
in Alaska.                                                                                                                      
MR.  ENG  said  that  highlights   an  excellent  point   that  the  forest                                                     
industry   has  grappled   with   for  the  last   50  years.  Supply   and                                                     
demand   change  rapidly.   He  explained   that  supply  and   demand  can                                                     
be  influenced  from  anything   like  a glut  of  blown-down   trees  from                                                     
a  southeastern    state's    windstorm   to   Canadian   lumber   tariffs                                                      
which   can  shift  the   market  equation.   He   said  that  the   timber                                                     
market  is  fluid  and  is  not  a fixed  target.   That  being  said,  the                                                     
division   wants  to  incentivize   the  domestic   industry,   especially                                                      
in  Southeast   Alaska.   While  it  is  important    to  incentivize   new                                                     
investments,    it  is  also  important   to  maintain   and  keep   afloat                                                     
existing timber enterprises.                                                                                                    
CHAIR  REVAK   commented   that  Senator   von  Imhof's   "Alaskan   Grown                                                      
point was well taken.                                                                                                           
4:22:10 PM                                                                                                                    
CHAIR  REVAK  commented   that  one  of the  main  stipulations   of  SB 85                                                     
is  contractual   certainty.   He  asked  what  the  expected   effects  of                                                     
this bill are whether it passes or fails.                                                                                       
MR.   ENG  answered    that  the   outcome   of  this   bill   is  largely                                                      
unknown.   It  was  proposed   to  resolve   an  appeals   problem,   which                                                     
occurs  after   the purchase   of  a timber   sale  when  the  operator  is                                                     
primed   and  ready   to  roll.   He  explained   that   an  appeal   which                                                     
occurs  after  a  purchase,   can stop  a  small  to medium-sized    timber                                                     
company in its tracks; it can put a company out of business.                                                                    
CHAIR  REVAK  asked   whether  the  current   system  of  appeals  is  used                                                     
frivolously    as  a  tool   against   the  process   to  prevent    timber                                                     
MR.  ENG   responded   that  the   public  has   a  right  to  comment   on                                                     
timber  sales.   The five-step   process   illustrates   that  the process                                                      
could  be  nimbler  and  more  efficient.   Not every   timber  sale  needs                                                     
five levels of public go-around and comments.                                                                                   
CHAIR   REVAK    summarized    his   understanding     of   the   previous                                                      
MR.  ENG  clarified  that  the  five-step   process  includes   the  Forest                                                     
Land Use Plan.                                                                                                                  
CHAIR REVAK set SB 85 aside.                                                                                                    
             SB  85-FOREST LAND USE PLANS; TIMBER SALES                                                                       
4:41:40 PM                                                                                                                    
CHAIR   REVAK   returned   attention    to   SB  85   and  opened    public                                                     
4:42:12 PM                                                                                                                    
KARI   NORE,  Project    Manager,   Resource   Development    Council   for                                                     
Alaska,  Anchorage,   Alaska,   testified  in  support  of  SB  85 and  the                                                     
Council    submitted    written    comments.    Ms.   Nore   offered    the                                                     
following testimony:                                                                                                            
      The  Resource  Development   Council   for  Alaska  (RDC)  is  a                                                          
      statewide   trade   association   comprised    of  individuals                                                            
      and  companies  from  Alaska's   fishing,   forestry,   mining,                                                           
      oil  and  gas,  and  tourism   industries.   RDC's  membership                                                            
      includes      Alaska      Native      corporations,       local                                                           
      communities,    organized    labor,   and   industry    support                                                           
      firms.   RDC's    purpose    is   to   encourage    a   strong,                                                           
      diversified   private   sector   in  Alaska   and  expand   the                                                           
      states     economic     base    through     the    responsible                                                            
      development of our natural resources.                                                                                     
      Senate  Bill   85  offers  small   volume  timber   sales  with                                                           
      greater  operator   efficiency.   It  allows   the  ability  to                                                           
      negotiate   sales   with   any   use  of   timber   resources.                                                            
      Senate   Bill  85   allows   the  State   to   conduct   timber                                                           
      sales  more   efficiently,   without   compromising   required                                                            
      environmental     review,    public   comment    and    process                                                           
      requirements,    by  eliminating   the  ability   to  appeal   a                                                          
      Forest Land Use Plan (FLUP).                                                                                              
      RDC  supports    Senate   Bill   85  which   creates    greater                                                           
      efficiency   when  it comes  to  responsible   development   of                                                           
      our natural resources.                                                                                                    
4:43:45 PM                                                                                                                    
TESSA   AXELSON,   Executive   Director,    Alaska   Forest   Association,                                                      
Ketchikan,   Alaska,   testified  in  support   of SB  85.  She  said  that                                                     
the  Alaska  Forest   Association   (AFA)  is  the  forest  product   trade                                                     
association   that  represents   an  array  of members   with  an interest                                                      
in  the  forest   products   industry   in   Alaska.  Membership    in  AFA                                                     
includes,   but  is  not  limited  to,  timber   operators,   contractors,                                                      
equipment    suppliers,   fuel   distributors,    tribal   organizations,                                                       
forest   product  vendors,   sawmills   and  other   affiliated   industry                                                      
associations and private citizens.                                                                                              
MS.  AXELSON  stated  that  less  than  four  percent  of  land  in  Alaska                                                     
is  privately    owned  which   leaves   the  timber   industry    and  the                                                     
forest   products   industry   heavily   reliant   on  other   landowners,                                                      
primarily,    the   state   of   Alaska   and   the  federal    government                                                      
Department    of    Agriculture/Forest     Service    (USDA/USFS).     Most                                                     
important   to   the  industry    is  a  reliable,    predictable    timber                                                     
supply.   She   said   that  limitations    on   sales  as   a  result   of                                                     
decisions    and    policies    by   federal    landowners,     USDA/USFS;                                                      
Secretary    Vilsack      July   2021   announcement    to  substantially                                                       
reduce   old  growth  harvest   and  transition   to  young  growth;   USFS                                                     
Tongass   2016  Land  Management   Plan  statements;   prevailing    market                                                     
conditions    that    were   discussed    earlier,    necessitate     state                                                     
legislation    that    streamlines    agency    processes    and   ensures                                                      
efficient forestry planning.                                                                                                    
MS. AXELSON gave three reasons the AFA supports SB 85:                                                                          
First,  the  bill   enables  DOF  to  negotiate   sales  with  any  use  of                                                     
timber resources.                                                                                                               
Second,   the  bill  does   away  with  inefficiencies    in  the  appeals                                                      
process   that   have   existed   with   Forest   Land  Use   Plans   while                                                     
simultaneously     ensuring    that    required    public   environmental                                                       
review and public comment processes are not compromised.                                                                        
Third,   the  bill  provides   the  state  the   ability  to  offer   small                                                     
timber sales with greater efficiency.                                                                                           
MS.  AXELSON  said   that  these  changes  holistically    help  to  ensure                                                     
the  struggling   industry   is  able   to  operate   efficiently   and  is                                                     
able   to  support   community   jobs.   Above   all,   it  will   help  to                                                     
ensure  small  business   operators   have  the supply   that  allows  them                                                     
to continue to operate in various markets.                                                                                      
4:47:17 PM                                                                                                                    
ED  MARTIN   JR.,  representing    self,  Kenai,   Alaska,   testified   in                                                     
support   of SB  85.  He  stated  that  since   the  1990s  the  state  has                                                     
struggled   with  the  Spruce   bark  beetle,  not  to  mention   the  shut                                                     
down  of  the Tongass   National  Forest   when many  people   lost  timber                                                     
industry   jobs.  He recommended   the  state  prioritize   reforestation                                                       
after  forest   fires.  He  recommended   that  the  timber  industry   get                                                     
going in Alaska; this bill will help.                                                                                           
4:50:22 PM                                                                                                                    
CHAIR REVAK closed public testimony on SB 85.                                                                                   
4:50:45 PM                                                                                                                    
SENATOR   STEVENS   jumped  back  to  HB  79.  See   final  comment   after                                                     
Mr. Martin's public testimony.                                                                                                  
4:51:40 PM                                                                                                                    
CHAIR REVAK held SB 85 in committee.                                                                                            

Document Name Date/Time Subjects
SB 85 DNR Presentation 1.26.22.pdf SRES 1/26/2022 3:30:00 PM
SB 85
SB 85 Fiscal Note DNR 1.6.2022.pdf SRES 1/26/2022 3:30:00 PM
SB 85
HB79 Sectional Analysis ver. I 5.13.21.pdf SRES 1/26/2022 3:30:00 PM
HB 79
HB79 Explanation of Changes ver. A to I 5.13.21.pdf SRES 1/26/2022 3:30:00 PM
HB 79
HB 79 Fiscal Note 1.21.2022.pdf SRES 1/26/2022 3:30:00 PM
HB 79