HOUSE BILL NO. 98 "An Act relating to forest land use plans; relating to forest land use plan appeals; relating to negotiated timber sales; and providing for an effective date." 3:22:15 PM HELGE ENG, DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF NATURAL RESOURCES, introduced the PowerPoint Presentation: "HB 98 (CSHB 98) Forest Land Use Plans; Negotiated Timber Sales; Emergency Firefighters" (copy on file). He shared that there were a couple of trends that precipitated the bill. One of the trends was to halt any old growth timber sales from the Tongass National Forest, which had been catastrophic for the timber industry in Southeast Alaska. The administration had responded by increasing timber sales on state lands and the bill would make the timber sale process more flexible and more efficient. Mr. Eng turned to slide 4 and explained there were three major elements to the bill. The first issue was that the timber industry was struggling to survive. The solution was to change the negotiated timber sale statutes to allow a local industry to sell all the timber it harvested and export it if necessary. The next element was limiting appeals for forest land use plans. He explained that most timber was sold competitively, and therefore the sale went to the highest bidder. Logs from domestic sales could be used domestically or could be exported. Sometimes negotiated sales occurred, which were sales directly to a particular company. Under existing law, negotiated sales had to be processed domestically and could not be exported. The bill would permit timber from negotiated sales to be exported to allow for flexibility and a market driven solution in order to make timber sales nimbler. He explained that expanded flexibility would also help provide and protect jobs. Mr. Eng moved to slide 9 and relayed that the bill proposed that forest land use plans would no longer be appealable. The bill pertained to state lands only. The forest land use plans step was the last step in the sequence of opportunities for the public to comment on the timber sale process. The asterisk at the bottom of the slide indicated that a step was subject to appeal. He thought there were already sufficient opportunities for the public to comment and that limiting appeal on forest land use plans would streamline the process. He reported that appeals were rare and he had only seen six appeals in the last ten years and had received no lawsuits. The Department of Natural Resources (DNR) listened to public requests and comments and most of the issues were resolved and not elevated. He added that the bill was also a response to longer wildfire seasons that involved more intense fires that were more difficult to control. The Division of Forestry (DOF) needed to have an increased presence and more aggressive approach to address the change in wildfires. 3:30:42 PM Mr. Eng turned to slide 10 and relayed that fire prevention efforts were paramount to be proactive in addressing wildfire danger. An example of a prevention measure was fuel breaks, but in order to successfully implement such measures, firefighting crews needed to be robust. The bill would change existing law which did not allow firefighting crews to work in a non-emergency capacity using general funds. He thought the change would help prevent fires from spreading and from threatening subdivisions. Fuel breaks around communities in fire-prone areas could dramatically increase the chances of stopping a fire, saving human lives, and save millions of dollars. The cost of the bill was small when compared to the projected payoffs. He was happy to answer questions. Representative Carpenter wondered what the reason was for using firefighters to put in fuel breaks. He thought anyone trained to make fuel breaks could do the job. Mr. Eng responded that the department was willing to hire anyone who was properly trained. He explained that firefighting crews in the state were consistently diminishing in size and that it was an attrition in the workforce. Although anyone who was trained could do the job, he thought it made the most sense for firefighting crews to put in fuel breaks. Firefighters would normally separate from employment following the wildfire season, but the bill would allow firefighters to continue working year- round putting in fuel breaks. The state would then benefit from having a trained workforce that would not need to be retrained every wildfire season. He thought it was a win- win solution. 3:34:51 PM Representative Edgmon thought the bill was interesting. He mentioned that the bill focused on state land and thought the proposed solutions to help the timber industry were reasonable. He did not understand the thinking regarding the application of firefighting strategies. He thought the bill eliminated the best interest finding process for timber sales less than 500,000 board feet. He would like to learn more about the bill and the process. Mr. Eng responded that the bill did not propose changing any best interest findings. He indicated law already exempted timber sales of less than 500,000 board feet from best interest findings. It was a compromise for small purchasers to execute a timber sale more easily. Representative Edgmon asked if the bill would impact the Southcentral part of the state where there were many old- growth forests. He did not think the bill would have a major impact on Southeast Alaska. Mr. Eng relayed that the bill came out of concerns from the timber industry in Southeast Alaska. The bill would apply to all areas in the state. Representative Edgmon was trying to understand how the bill applied to the state as a whole when environments were very different across the state. Mr. Eng thought Representative Edgmon had a good question. The only changes from existing law proposed by HB 98 were the export provisions for negotiated sales and changes to the forest land use plan appeals. He did not see best interest findings or the public process being impacted. 3:40:31 PM Representative Wool asked about the implications of doubling the allowable acreage from 10 to 20 in forest land use plans. He thought this seemed like an additional change proposed by the bill. He asked if 20 acres was considered a small timber sale and what 500,000 board feet equated to in acres. Mr. Eng corrected himself and agreed that there was an additional change which was identified by Representative Wool. The existing language set a 10-acre limit but a 20- acre limit equated to 500,000 board feet. He thought the change mostly consisted of clean-up language and would make the provisions more consistent. Co-Chair Merrick indicated there was one invited testifier. 3:43:07 PM TESSA AXELSON, EXECUTIVE DIRECTOR, ALASKA FOREST ASSOCIATION, spoke in support of HB 98. The Alaska timber industry was reliant on a predictable timber supply from a variety of landowners. She thought legislation was needed to streamline processes and ensure efficient forest replanning. She saw the following three primary benefits of the bill: DNR would be provided the ability to negotiate timber sales with any timber resource, the state would be able to conduct timber sales more efficiently by limiting forest land use appeals, and environmental standards and public comment opportunities would be upheld. She was available for questions. Representative Wool asked for information on the size of a common small-lot timber sale. Ms. Axelson responded that it would depend on the operator. All operators needed roughly 500,000 board feet of timber every year in order to maintain operations. She would defer the definition of small-lot to Mr. Eng. Co-Chair Merrick asked Mr. Eng to review the fiscal note. Mr. Eng reported that the fiscal note from DNR with a control code of FZzrP was a zero fiscal impact note. 3:47:24 PM ALISON ARIANS, DIVISION OF FORESTRY, SPECIAL PROJECTS COORDINATOR (via teleconference), offered to speak further to the fiscal note. Co-Chair Merrick encouraged Ms. Arians to provide additional testimony. Ms. Arians relayed that the bill could not change any program and would therefore not have a fiscal impact. It also would not increase expenditures for firefighters because the general funds that would be used were already appropriated. She thought it was helpful to spend the general funds that had already been appropriated. Representative Wool asked for clarification around the number of acres that would be exempt from forest land use plans. Mr. Eng responded that there were requirements that the director or the commissioner could only sell up to 500,000 board feet to the same operator in one year. The intent was to avoid stacking timber sales. Representative Wool asked if Mr. Eng's comment about the director or commissioner only being able to sell 500,000 board feet to the same operator in one year was a requirement to remain exempt from forest use plans. Mr. Eng responded, "That's correct." 3:50:46 PM Representative Edgmon thought that although it might seem that there would be less work involved in the timber sale process if the bill passed, there would be more work because of an increase in smaller negotiated sales. He thought the process would become more time intensive. Mr. Eng replied, "Possibly." He added that for the state and the division, increasing small sales was more than a financial decision. He thought small sales would help small to medium companies better facilitate their businesses. It served a greater purpose to diversify the timber industry. Representative Edgmon thought that the department would have more work. He suggested that a primer on the topic would be helpful. He suggested more staff would be needed later. Mr. Eng understood and would be happy to give a presentation on the topic at a later date. 3:53:48 PM Vice-Chair Ortiz understood that Mr. Eng reported that HB 98 only applied to state-owned land. Mr. Eng responded that Vice-Chair Ortiz's understanding was correct for the forest management aspects of the bill. The firefighter aspect of the bill applied to the DNR's entire area of responsibility. Vice-Chair Ortiz asked what percent of the Tongass National Forest the state had access to. Mr. Eng replied that it was somewhat in flux. He understood that a very small percentage of the approximately 18 million acres of the Tongass would be available for timber production. 3:55:21 PM Ms. Axelson responded that it was very small but that she would provide the specifics to the committee. However, the industry was reliant on the small available acreage of the Tongass. Vice-Chair Ortiz noted that the reason why the operators in Southeast were becoming more reliant on the small available acreage was because over the years, the availability of federal lands had decreased. Ms. Axelson responded that Vice-Chair Ortiz was correct. She relayed that the United States Forest Service (USFS) controlled about 75 percent of available lands in the Tongass. There were currently no significant sales on the horizon, and she thought that operators would only become more reliant on available lands. It was also important to note that the industry was transitioning from being based on old growth forests to young growth forests. 3:56:45 PM Vice-Chair Ortiz thought the bill would be a way to support the few remaining jobs in the timber industry in Southeast and preserve the economic level of the industry. He asked if he was correct. Ms. Axelson replied in the affirmative and that it would also help support operators in the Fairbanks region and the Kenai Peninsula. Co-Chair Merrick thanked the presenters and reviewed the agenda for the following day. HB 98 was HEARD and HELD in committee for further consideration.