HOUSE BILL NO. 162 "An Act establishing the Southeast State Forest and relating to the Southeast State Forest; and providing for an effective date." MELANIE LESH, LEGISLATIVE LIAISON, DEPARTMENT OF NATURAL RESOURCES (DNR), introduced HB 162, which would establish a new Southeast State Forest (SESF). The bill is the state's effort to ensure that timber processing continues to be part of the economy in Southeast Alaska. She noted a zero fiscal note by DNR. There was a very thorough hearing of the bill previously in the House Resources Committee and in the Senate Community and Regional Affairs Committee. Ms. Lesh reported that the majority of timber in southern Southeast is on federal land, but federal timber sales have been in decline. Local mills now depend heavily on state timber for survival. Demand for Southeast timber for wood energy is also increasing, further raising the need for securing a timber base for this region. Ms. Lesh explained that the proposed bill consists of 20 parcels that are currently classified as general use state land. She referred to maps of those parcels contained in the members' packets. Regarding this proposal, DNR has briefed many statewide groups. Letters of support are also included in the packet. 9:01:55 AM Co-Chair Stoltze inquired about the major harvesting and processing forestry projects. Ms. Lesh deferred to Mr. Maisch. CHRIS MAISCH, DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF NATURAL RESOURCES, testified via teleconference, and reported that about 50,000 acres of forestry land in Southeast are currently managed by the state. This proposal would designate about 25,000 acres as state forest. There are three midsize or larger mills in Southeast, as well as numerous small mills. Mr. Maisch shared that the legislation is part of a multi- faceted strategy. He related the process used to discuss the proposal. He explained communities' concerns about municipal entitlement. The bill will grandfather in any communities for municipal entitlement selection. He pointed out that Wrangell was currently going through the selection process. He noted a zero fiscal note accompanying the bill. Mr. Maisch emphasized the importance of transferring from old growth to second growth management in Southeast. He discussed pre-commercial thinning. 9:07:33 AM Vice-Chair Thomas asked why all the state land was not included in the proposed state forest. Mr. Maisch discussed how the land was assigned to become state forest. Vice-Chair Thomas pointed out that recently a bill giving up 41,000 acres of state land was passed. He wondered why university lands were not included. Mr. Maisch thought it was due to a recent Supreme Court ruling and lack of time. He suggested that lands could be added in the future. Vice-Chair Thomas asked what the sustained yield would be. Mr. Maisch thought there would be 13 million board feet per year. Mr. Maisch added that all 50,000 acres would be managed, including the 25,000 not within the state forest. 9:10:17 AM Vice-Chair Thomas pointed out that a lot of land was left out. He suggested that all lands should be included now, in order to prevent future battles. Representative Kelly asked if the land is still open to mining once it goes into the state forest category. Mr. Maisch said it was. Representative Kelly asked what would happen if this bill does not pass. Mr. Maisch explained that the bill allows for the start of commercial thinning. A percentage of timber receipts are prioritized for reforestation work. It would allow DNR to be able to harvest the trees in the future. Representative Kelly asked what happens if the state wants to do a remote cabin release. He wondered if the bill would prevent that. Mr. Maisch believed it would. It would take legislative change. He pointed out that many other lands are set aside for that purpose. Representative Kelly commented on problems with access to those areas. 9:15:26 AM Co-Chair Stoltze echoed those sentiments. Representative Gara asked about a parcel near Thorne Bay. He wondered if it was in the Thorne River drainage. Mr. Maisch said it does not appear to be. Representative Gara pointed out that the Thorne River is a Steelhead and Salmon drainage. He wondered if the 70-foot clear-cut buffer was in place. Mr. Maisch reported that all regulations would apply. 9:17:43 AM Representative Gara asked about rules that say other options have to be looked at before cutting the old growth. Mr. Maisch reported on regulations relating to managing old growth. The Alaska Department of Fish and Game looked at water quality issues and supports this legislation. Representative Gara asked about replanting requirements. Mr. Maisch shared the restoration regulations. He commented that in Southeast, forests reforest well on their own. Representative Gara voiced concern about care needed in dealing with drainage. Co-Chair Stoltze noted who was in support of the bill. Mr. Maisch listed others who have endorsed the bill. 9:21:00 AM Co-Chair Stoltze noted a zero fiscal note by the Department of Natural Resources. He requested assurance that more money would not be requested in the future. Mr. Maisch reviewed the funding sources, which require no additional funding. 9:21:53 AM Vice-Chair Thomas MOVED to report HB 162 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 162 was REPORTED out of Committee with "no recommendation" and with zero fiscal note #1 by the Department of Natural Resources. HB 212 was scheduled but not heard.