Legislature(1993 - 1994)
04/05/1994 01:40 PM Senate L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE
April 5, 1994
1:40 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chairman
Senator Steve Rieger, Vice-Chairman
Senator Bert Sharp
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Judy Salo
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 51
Expressing support for the development of a fiberboard plant in
Sitka; encouraging the Alaska Industrial Development and Export
Authority to continue its efforts to assist with that development;
and requesting the United States Forest Service to continue a
long-term timber purchase contract necessary to supply material to
the plant.
PREVIOUS SENATE COMMITTEE ACTION
SJR 51 - No previous action to record.
WITNESS REGISTER
Senator Robin Taylor, Chairman
Senate Judiciary Committee
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified in support of SJR 51
Andy Romanoff
Southeast Alaska Conservation Council
419 Sixth St., #328
Juneau, AK 99801
POSITION STATEMENT: Opposed to continuation of 50-year
timber contract
Ron Flinn
Southeast Regional Office
Department of Environmental Conservation
410 Willoughby Ave, Suite 105
Juneau, AK 99801-1795
POSITION STATEMENT: Testified in support of SJR 51
ACTION NARRATIVE
TAPE 94-24, SIDE A
Number 001
CHAIRMAN TIM KELLY called the Labor and Commerce Committee meeting g
to order at 1:40 p.m. He brought SJR 51 (SUPPORT FOR SITKA
FIBERBOARD PLANT) before the committee as the only order of
business.
SENATOR ROBIN TAYLOR, Chairman of the Senate Judiciary Committee
which sponsored SJR 51, testifying in support of the resolution,
explained that it encourages the federal government to proceed and
allow the development of a medium density fiberboard plant in
Sitka. That community seeking to recover from the recent closure
of their pulp mill in every way they can.
Alaska Pulp Corporation (APC) is proposing to develop a medium
density fiberboard plant (MDF) in lieu of the original facility.
Preliminary studies have shown that an MDF facility is feasible,
however, a further more exhaustive examination is necessary and is
taking place.
The Alaska Industrial Development and Export Authority (AIDEA) is
working with Alaska Pulp to fully examine this project. A portion
of the economics of the project involves the 50-year contract to
harvest timber in the Tongass National Forest. If this contract is
cancelled unilaterally by the Forest Service, there is a concern
that the fiberboard plant will not be economical.
The Chief of the U.S. Forest Service has set a deadline date of
April 15 for a decision as to whether to allow the contract to
continue or to cancel it. Support for Alaska Pulp's efforts is the
basis of SJR 51.
SJR 51 asks that the contract be continued to allow for the
completion of this study, and if proven feasible, to permit an MDF
pulping facility to operate in Sitka.
Senator Taylor urged the prompt consideration and passage of SJR
51.
Number 061
SENATOR KELLY asked it further legislation would be required if
AIDEA were to try to bond this project. SENATOR TAYLOR
acknowledged that it would if, in fact, AIDEA would need to have
more than $10 million of authority. He said he understands that if
the feasibility study that is currently being conducted proves to
show a very feasible economic operation, the banking institutions
of Japan have already indicated that they will finance the venture.
Number 090
ANDY ROMANOFF, representing the Southeast Alaska Conservation
Council (SEAC), expressed their frustration that there was no
teleconference capability for the hearing on SJR 51.
Mr. Romanoff directed attention to and described a U.S. Forest
Service map representing a portrayal of vegetation on the Tongass
in the year 2140. He said the APC contract was written to provide
5 billion board feet of timber to the mill. At present, there are
approximately 2.1 billion board feet left. He said in looking at
the map, it raises serious question as to what is going to be left
for any economic base in the future. The contract is designed, in
a sense, to liquidate the forest so quickly that once all of the
old growth of commercially viable forest land is gone, there will
be no timber available.
Mr. Romanoff related that U.S. Forest Service has determined that
an allowable sale quantity, which is how much timber can be cut
each year in a certain area, is around 64 million board feet per
year in the Chatham area. Presently, 90 million board feet are
being cut in the Chatham area.
Mr. Romanoff said the 375 jobs that were lost in Sitka by the
closing of the pulp mill were lost before there was any talk of
terminating the 50-year contract. He noted that Sitka received $1
million in federal assistance for retraining laid off workers and
to encourage a study of alternative economic ideas and options.
Mr. Romanoff stated that SEAC does not oppose the MDF plan, but
they do not believe it needs a long-term contract to make it a
viable option.
Number 230
RON FLINN, Southeast Regional Office, Department of Environmental
Conservation, said SJR 51 is primarily aimed at economic
consideration and doesn't really address environmental concerns
that DEC might have, but they have no objections to the continued
operation of the mill. However, there is not much information as
far as what the operation of a MDF facility would mean as far as
the statutes and regulations that DEC implements.
Number 259
SENATOR LINCOLN asked if DEC has looked at this in terms of
environmental concerns such as the fisheries, etc. RON FLINN
responded that DEC has worked with the mill for a long time on
water quality issues, solid waste issues and air quality issues.
However, they have not had an opportunity to evaluate the current
proposal to operate as a MDF facility because APC hasn't got that
far into the project and hasn't submitted any information for the
department to review.
Number 290
There being no further witnesses present to testify on SJR 51,
SENATOR KELLY asked for the will of the committee.
SENATOR SHARP moved that SJR 51 be passed out of committee with
individual recommendations. SENATOR LINCOLN objected, stating that
there was not an opportunity for interested people to testify on
the resolution via the teleconference network. The roll was taken
with the following result: Senators Sharp, Rieger and Kelly voted
"Yea" and Senator Lincoln voted "Nay." The Chairman stated the
motion to move SJR 51 out of committee had carried.
There being no further business to come before the committee, the
meeting was adjourned at 2:00 p.m.
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