SB 85-FOREST LAND USE PLANS; TIMBER SALES  4:01:28 PM VICE CHAIR MICCICHE 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." He stated that this was the second hearing this session and the intent was to hear a refresher from the department, answer any questions, consider amendments, and look to the will of the committee. 4:01:57 PM HELGE ENG, Director, Division of Forestry, Department of Natural Resources (DNR), Anchorage, Alaska, stated that the motivation for SB 85 is to support a viable timber industry in the state by increasing the availability of timber from state lands and making the timber sale process more flexible. MR. ENG stated that SB 85 has two major elements. The first, which is in Section 4, is to provide contractual certainty to timber operators by prohibiting administrative appeals once a forest land use plan (FLUP) has been approved. An appeal at that point in the process can be disastrous to a small logging company. The four opportunities for appeal during the process remain and the public and agencies could still provide input after the plan is approved. It's just that the appeal option would be eliminated after the FLUP is approved. 4:05:40 PM MR. ENG stated that the second element of SB 85 is to allow export of timber harvested in a negotiated sale. The export of timber harvested in a competitive sale is already allowed. He reminded the committee that the two types of timber sales are competitive and negotiated. In a competitive sale the timber is sold in either an open or sealed bid process to the highest bidder. In a negotiated sale, the division chooses the purchaser based on the highest bid and the number of local jobs the sale provides. He said the fact that Southeast Alaska timber operators typically are unable to outbid out-of-state operators in a competitive sale emphasizes the importance of providing a consistent negotiated timber sale process. MR. ENG stated that SB 85 will amend the negotiated timber sale statutes to allow the local industry to sell the timber it harvests as export, as needed. The current supply of timber is constantly changing and there is more young growth, which is less marketable in Alaska. Furthermore, the demand for species such as hemlock is primarily overseas or the Pacific Northwest. MR. ENG summarized that SB 85 changes the timber sale statutes by eliminating administrative appeals once the forest land use plan (FLUP) has been approved and the timber sold, and it allows exports of timber harvested in a negotiated sale. 4:08:48 PM SENATOR STEVENS asked how the division makes the decision about whether a timber sale will be competitive or negotiated. MR. ENG answered the division considers the number of bidders, the type of timber sale, and the need for timber sales by various timber operators to remain in business. Section 2 outlines the six criteria the commissioner will consider in addition to the considerations of local economic stability and the best interest of the Alaska timber industry. VICE CHAIR MICCICHE noted that there were amendments for the committee to consider. 4:11:00 PM SENATOR KIEHL moved Amendment 1, work order 32-GS1607\A.1, on behalf of Senator Kawasaki. 32-GS1607\A.1 Bullard 2/2/22 AMENDMENT 1 OFFERED IN THE SENATE BY SENATOR KAWASAKI TO: SB 85 Page 1, line 2, following "sales;": Insert "relating to disposal procedures for  selling timber;" Page 7, following line 13: Insert a new bill section to read: "*Sec. 6. AS 38.05.115 is amended by adding a new subsection to read: (d) In making the best interest finding required by AS 38.05.035(e) for a disposal of timber under AS 38.05.110 - 38.05.123, the commissioner shall consider, in addition to other factors, whether the bidder or buyer, to the maximum extent permitted by law, commits to (1) hire qualified residents from throughout the state; (2) contract with businesses located in the state; (3) establish hiring facilities or use existing hiring facilities in the state; and (4) use, as far as is practicable, the job centers and associated services operated by the Department of Labor and Workforce Development and an Internet-based labor exchange system operated by the state." Renumber the following bill sections accordingly. SENATOR MICCICHE objected for purposes of discussion. SENATOR KIEHL explained that Amendment 1 would require additional factors to be considered in a best interest finding (BIF) in sales that are subject to a BIF. In addition to the existing requirements, the department would also consider whether the bidder or buyer, to the maximum extent permitted by law, commits to hire qualified residents throughout the state; to contract with Alaska businesses; to establish hiring facilities or use existing hiring facilities in the state; and to use, to the extent possible, job centers and other services the Department of Labor offers to promote Alaska hire. 4:12:19 PM SENATOR MICCICHE asked Mr. Eng how Amendment 1 would impact the timber sale process. MR. ENG answered that the process could accommodate Amendment 1, but arguably it's not needed because the existing statute allows the commissioner to consider those elements. He also pointed out that the best interest finding is made to determine the type of sale to offer. No decision about the buyer has been made at that the BIF stage of the process, so it would be difficult to determine whether buyers in a competitive sale would meet that additional criteria. 4:14:10 PM SENATOR MICCICHE noted that the language in the amendment says the commissioner shall consider" which does not constrain the department. He offered his reading that the amendment suggests that it is important to the extent possible to put Alaskans first in the best interest findings considerations. He asked Senator Kiehl if that was his understanding. 4:14:38 PM SENATOR KIEHL responded that was well said. The amendment does not change the constitution to require Alaska hire for every contract for every sale. It simply urges a hard look at whether Alaska hire and the other Alaska-centered elements can be included in the sales to come. 4:15:08 PM SENATOR MICCICHE withdrew his objection to Amendment 1 to SB 85. Finding no further objection, Amendment 1 was adopted. 4:15:30 PM SENATOR STEVENS moved Amendment 2, work order 32-GS1607\A.2, on behalf of the committee. 32-GS1607\A.2 Bullard 2/4/22 AMENDMENT 2 OFFERED IN THE SENATE TO: SB 85 Page 5, line 31, through page 6, line 10: Delete all material. Renumber the following bill sections accordingly. VICE CHAIR MICCICHE objected for purposes of discussion. 4:15:52 PM INTIMAYO HARBISON, Staff, Senator Josh Revak, Juneau, Alaska, explained that Amendment 2 removes Section 2 of the bill. He relayed his understanding that Section 2 was moot because DNR had amended the section of regulation that bill Section 2 addresses. SENATOR VON IMHOF asked why Section 2 was being deleted when Mr. Eng just said it was that section that helped the division determine whether to hold a competitive or negotiated sale. MR. HARBISON said that's correct, but his understanding was that the department changed the regulations so bill Section 2 was redundant and unnecessary. VICE CHAIR MICCICHE asked Mr. Eng to comment on Mr. Harbison's statement. MR. ENG explained that [AS 38.05.110] already allows the commissioner to consider any and all factors considered relevant in determining which type of sale to offer. The logic deleting Section 2 is that it is preferable to allow flexibility in the considerations, because prescriptive requirements may in fact serve as springboard for challenges to a timber sale. 4:18:32 PM SENATOR MICCICHE withdrew his objection; finding no further objection, Amendment 2 was adopted. SENATOR KIEHL said he understands that the bill is moving from committee today and he believes that some parts of the bill are good. However, he wanted the record to reflect that he had significant concerns about delaying when a forest land use plan (FLUP) has to be in place relative to a sale and prohibiting an appeal once the FLUP is adopted and/or there is a sale. He acknowledged that hypothetically there were four opportunities to comment, but the land use plans for his area of the state haven't changed for 20 years, so the analysis isn't exactly sale-by-sale and that limits the public's ability to provide meaningful comments. VICE CHAIR MICCICHE solicited a motion. 4:20:31 PM SENATOR STEVENS moved to report SB 85, work order 32-GS1607\A, as amended, from committee with individual recommendations and attached fiscal notes. VICE CHAIR MICCICHE found no objection, and CSSB 85(RES) was reported from the Senate Resources Standing Committee.