HB 104-EXPEDITED TIMBER SALES  3:37:41 PM CO-CHAIR BISHOP announced the consideration of CS FOR HOUSE BILL NO. 104(RES) am "An Act relating to salvage sales of timber, negotiated timber sales for local manufacture of wood products, and expedited timber sales; and providing for an effective date." He invited Representative Mike Cronk to introduce the legislation. 3:38:04 PM REPRESENTATIVE MIKE CRONK, District 36, Alaska State Legislature, Juneau, Alaska, sponsor of HB 104, introduced the legislation speaking to the sponsor statement. House Bill- 104 is written to accomplish five main goals: 1. To increase public safety by reducing wildfire risks. 2. Provide timber resources in abundance for industry growth. 3. Reduce firefighting costs to the state. 4. Provide fuel for biomass energy production and expansion. 5. Increase local job opportunities. Alaska's timber resources are plentiful and sorely underutilized. In the Interior when a tree is harvested it is one less tree for Mother Nature to burn. When insect infestation occurs, timber dies by the millions of board feet. Even so much of this dying or dead timber is usable. We must aggressively make this fire ready, and beetle killed timber available before it deteriorates. This legislation directs our State Forester and the Division to focus on areas of commercial timber where fire dangers are high as well as areas under insect infestation as a priority. HB 104 has the support of: Governor Dunleavy, Commissioner of Natural Resources, Alaska Forestry Association, and other Industry users. 3:39:43 PM DAVID STANCLIFF, Staff, Representative Mike Cronk, Alaska State Legislature, Juneau, Alaska, stated that HB 104 is a culmination of efforts to develop a more viable and expansive approach to Alaska's timber industry. The bill addresses several challenges facing the timber industry. These include an inventory of timber to grow the industry and long-term sales to facilitate financing. The bill provides quicker access to timber that: threatens public safety, is diseased, is insect infested, is needed to support value added uses, negatively affects soil stability and the environment, and is degraded and will negatively affect wildlife populations. HB 104 streamlines existing processes the Division of Forestry uses. 3:42:36 PM MR. STANCLIFF reviewed the salient changes proposed in HB 104 that are designed to save time. similar AS 38.05.035 explains the requirement for a best interest finding. similar AS 38.05.112 explains the requirement for a forest land use plan (FLUP). similar Sales under AS 38.05.117 or AS 38.05.124 do not have to be included in the five year schedule of timber sales. similar Timber sold under .117 salvage does not require a best interest finding. similar Timber sold under .117 and .124 do not require a FLUP. similar HB 104 will save at least 100 days and up to two years in a .117 timber sale. similar HB 104 will save at least 50 days and up to two years in a .124 timber sale. 3:44:50 PM MR. STANCLIFF clarified that nothing in HB 104 would remove the requirement for public notice under art. VIII, sec. 10, Constitution of the State of Alaska. It says public notice is required for the disposition of any timber in the state. 3:45:37 PM CO-CHAIR BISHOP asked Mr. Stancliff to present the sectional analysis. 3:46:15 PM MR. STANCLIFF presented the sectional analysis for HB 104, version U.A. Section 1. Communicates the Legislative intent of the bill. Section 2. Removes the requirement for a written best interest finding requirement for salvage timber sale. This matches the current law applied to negotiated sales under AS 38.05.115. Note: public notice is still required per Article 8, Section 10 of Alaska's Constitution. Section 3. Expands the commissioner's discretion on type of sale to include new section AS 38.05.124 (section 10). Section 4. Places salvage and expedited sales under the same forest land use plan exemption as sales of less than 10 acres. Section 5. Allows Salvage and Expedited timber sales to include timber that was not in the five-year schedule. Section 6. Sets a 25-year time frame for sales subject to a forest use plan unless the purchaser requests a shorter time frame, or the commissioner makes a written finding that a shorter term is in the best interest of the state. Stumpage rates are to be renegotiated every five years to reflect changes in market conditions. Section 7. Amends the salvage sale statues for clarity between salvage and expedited sales. CO-CHAIR BISHOP asked if the intent of Section 7 is to monetize salvage timber before it rots. MR. STANCLIFF said yes. Beetle killed timber in particular is a fire hazard and matter of public safety, and it's virtually unusable after three or four years. He continued the sectional analysis. Section 8. Establishes the criteria the commissioner is to use to qualify sales as salvage. Section 9. Sets a minimum term of seven years when entering into a negotiated contract with a high-value-added manufacturer, unless purchaser requests less. The upper limit remains at 25 years to conform with section 6. This section also urges the commissioner to negotiate at least two of these contracts in each region of the state. Section 10. Lays out the criteria the commissioner must consider when negotiating an expedited timber sale. Section 11. Sets an immediate effective date. 3:50:30 PM CO-CHAIR BISHOP returned attention to Section 9, page 8, line 1. He asked if the stumpage rates for a 25-year contract under this section would be negotiated at least once every three years. MR. STANCLIFF said that's correct. 3:51:37 PM SENATOR KAWASAKI noted that Section 7, AS 38.05.117 relating to salvage sales removes the requirement for a written finding that the disposal will serve the best interests of the state. He asked what the written finding typically would look like and whether it's available to the public. CO-CHAIR BISHOP asked Dr. Eng to respond to the question. 3:52:38 PM HELGE ENG, Ph.D. State Forester and Director, Division of Forestry and Fire Protection, Anchorage, Alaska, stated that in this section the commissioner typically would make the determination that monetizing commercial timber before it rots would be in the best interests of the state. SENATOR KAWASAKI asked what metrics would be used for that finding. DR. ENG requested he clarify the question. SENATOR KAWASAKI said the previous language required the commissioner to make a written finding that the disposal will serve the best interests of the state. The amended language says the commissioner may make the sale without having made a written best interest finding. He wondered what would entail a finding under the best interests of the state. DR. ENG answered that what normally would entail a finding would be the fact that the timber would lose value quickly and represent a net loss of state resources. It therefore would be in the best interests of the state to expedite the commercialization of the timber. 3:55:34 PM SENATOR WIELECHOWSKI recounted the major changes in Section 7. The requirement for the commissioner to make written findings before offering a salvage timber sale has been removed. The provision that identifies the reason for the economic loss "because of insect or disease epidemics or fire," is also removed. He commented that it looks like the commissioner is being given carte blanche authority, without protection for people who might live in or use the area, to declare wide swaths of land as salvage timber. He asked if there were protections in place that he missed. CO-CHAIR BISHOP asked Dr. Eng to define salvage timber. DR. ENG explained that "salvage timber" is timber that is either already dead or dying or in imminent danger of being infected or threatened by wild fire. 3:57:20 PM SENATOR WIELECHOWSKI he didn't know that he agreed because the language doesn't say "salvage timber" it says "may...offer for salvage sale timber that has lost substantial economic value..." There is no requirement to make a written finding that the timber has lost economic value or will lose economic value. He asked if he missed the requirement. DR. ENG responded that the requirement that the timber has already lost value or will lose value in the future is a determination the commissioner will make based on his/her expertise and the staff of foresters qualified to make that determination. SENATOR WIELECHOWSKI asked why the bill removes the requirement for a written finding that it's in the best interest of the state to do that. He said he believes many people would agree that salvaging timber that was dying or already dead was a good idea, but he didn't understand the reason for removing the best interest provision. 3:59:26 PM DR. ENG said the explicit rationale for salvage is that time is of the essence. The logistics of setting up a logging operation, which may include constructing a road to get the timber before it rots on the stump, takes time. The bill seeks to save as much time as possible. 4:00:18 PM SENATOR DUNBAR joined the committee. CO-CHAIR GIESSEL directed Dr. Eng to Section 8 and suggested that may be part of the members' consternation. AS 30.05.117(b) is a new subsection that limits a sale to timber that has been (1) killed by fire, insect, disease, or an act of nature; (2) removed for conversion of land to a nonforest use; or (3) cleared as part of a fire prevention or suppression activity. She said you've discussed timber that's identified under paragraph (1) and you've mentioned timber that's identified under paragraph (3) but nothing's been said about the provision in paragraph (2). She asked for the intention of paragraph (2). DR. ENG replied the intent is to merchandise trees that have been removed as part of a conversion process to a nonforest land use. 4:01:49 PM SENATOR KAWASAKI asked what state forests in Alaska would be considered off limits under AS 38.05.110(c) in bill Section 3. DR. ENG replied that the general concept is that the commissioner will determine areas that are of extraordinary high risk of fire and destruction by wild fire. He deferred further explanation to the sponsor. 4:03:40 PM MR. STANCLIFF said it's a matter of trusting the judgement of the commissioner and state forester. Around Tok, for example, there's a lot of timber that presents a real threat to the community if it's not harvested. He described the type of discretion that the bill envisions. The forester might look at the mature timber in the Tok area and determine it is valuable to the timber industry and that for public safety it's in the best interest of the state and community to take down a perimeter around the community. To the question about whether this would apply statewide, he said it boils down to how you feel about the discretion of the commissioner and state forester. SENATOR KAWASAKI highlighted the major changes in Section 10 that talk about expedited sales. He said the new Sec. 30.05.124(c) talks about timber that has been burned by fire, infected by insects or disease, or is threatened by these things. He noted that a best interest finding addresses four causes including affecting soil stability and destruction of habitat for wildlife populations. He said he appreciates those considerations, but wonders whether somebody who owns a cabin in a fire prone area would have any say if the area around their cabin was included in an expedited timber sale. If not, he asked if there was another avenue to protest an expedited sale around one's cabin. 4:06:40 PM REPRESENTATIVE CRONK said part of the consideration is whether the timber is commercially viable, so location is a factor. SENATOR WIELECHOWSKI asked whether the bill would apply to all land that the state owns. MR. STANCLIFF said the discretion of the commissioner and state forester would apply statewide on state land. If they determine there's danger, they can offer a sale to reduce that danger. He said they might look at a number of areas in the Tanana Valley State Forest, but in other locations throughout the state the access and terrain might make a timber sale unworkable for the timber industry. 4:09:52 PM SENATOR WIELECHOWSKI asked whether HB 104 would apply to the forest in the Chugach State [Park] near Anchorage. MR. STANCLIFF said yes if the timber met all the requirements laid out in the bill. SENATOR WIELECHOWSKI posed a hypothetical scenario in the Hillside area in Anchorage. Section 7 would authorize the commissioner to determine there was substantial fire danger and to propose a clear cut of the entire Hillside area to protect public safety, and then Section 8 would authorize an expedited sale. He asked if that could happen. MR. STANCLIFF deferred the question to State Forester Eng. 4:11:33 PM DR. ENG said there are several tools to address fire risk in urban areas like the Hillside in Anchorage. Foremost is to clear fuel from around homes. His opinion was that a clear cut or other kind of silviculture in that area would not be feasible. The logistics would be too difficult. His belief was that sales contemplated in HB 104 were for rural areas. SENATOR WIELECHOWSKI clarified that he was asking whether the bill authorized a commissioner to offer such a sale, because his reading was that the commissioner could do that without as much as a written finding. Then Section 10 allows for an expedited sale if the commissioner determines there is a fire risk. He asked if that could happen. DR. ENG said in theory it could happen, but he thought it was a relatively theoretical and unlikely event. 4:13:15 PM CO-CHAIR BISHOP pointed out that at the end of the day it comes back to public notice that's required in the state constitution. He posited that there would not be enough data storage at DNR to handle all the negative comments if such a sale were proposed. CO-CHAIR BISHOP returned attention to Section 8. The language on page 7 in subsection (b)(2) says: (b) A sale under this section is limited to timber that has been (2) removed for conversion of land to a nonforest use; or CO-CHAIR BISHOP said paragraph (2) reminded him of Delta Junction in 1984 when thousands of acres of timber were dozed into windrows and burned to make way for an agriculture project. He asked if paragraph (2) would allow that to happen again such that the state wouldn't get the highest and best use for that timber. 4:15:22 PM DR. ENG replied that .117 regarding salvage sales is in existing statute. The concept is to commercialize the timber before it rots. SENATOR WIELECHOWSKI directed attention to Section 10 on page 8. Subsection (c) says "the commissioner shall find that the timber has been burned by fire, infected by insects or disease, or is in an area threatened by fire, insect, or disease...". He asked what the temporal relationship is between the best interest finding and the threat of fire, insect, or disease. Is the threat imminent, within a month, within a year, or within five years? 4:16:58 PM MR. STANCLIFF offered his understanding that the commissioner and state forester would take the four qualifiers in subsection (c) into consideration. DR. ENG said the timing is unknown because a wildfire could occur tomorrow or in two years. He described it as a probability informed professional opinion and expertise of foresters and their experience with the local system, fire weather, and pattern. SENATOR WIELECHOWSKI commented on the applicability of paragraphs (1)-(4) and asked if he could name any state land that would not be eligible for an expedited timber sale. DR. ENG said the public safety issue typically applies to areas close to population centers. The destruction of habitat or decrease in wildlife population is based on the professional opinions of biologists and foresters. He acknowledged that in the extreme, any area could theoretically be deemed to be at risk but he believes the professionals would single out the areas that are at extreme risk and judiciously apply the criteria. SENATOR WIELECHOWSKI asked if he would support an amendment that says, "area is at extreme risk of fire, insect, or disease." 4:20:57 PM REPRESENTATIVE CRONK responded that he didn't believe it would be a problem. 4:21:12 PM SENATOR DUNBAR said he'd welcome that kind of amendment because he couldn't think of any area in the state that wouldn't apply. He asked for examples when existing law prevented the department from going forward with a timber sale. REPRESENTATIVE CRONK said part of the impetus for the bill is that state forests haven't been managed. The bill seeks to give the Division of Forestry the tools to do so. 4:23:59 PM SENATOR DUNBAR questioned whether current statute actually prevented the Division of Forestry from managing state forests. He asked if the division could put in a firebreak or make a commercial sale if it was in the best interest of the state. MR. STANCLIFF responded by highlighting that it takes about five years to identify suitable timber and get it to a mill. He said the timber industry is hamstrung by a maze of bureaucratic red tape. He described timeframes of up to six years. SENATOR KAWASAKI noted that the typical sale schedule would require sufficient information for the public and forest industry before a sale is held, but Section 5 exempts both salvage sales and the amended expedited timber sales from that requirement. He asked if that was accurate. 4:29:06 PM DR. ENG offered his belief that Section 5 provides an exemption from the five-year schedule. SENATOR KAWASAKI asked if he agreed that there was no limitation on the size of a salvage or expedited timber sale. DR. ENG replied that he believes that's correct. SENATOR KAWASAKI expressed concern that the specific conditions in AS 38.05.123 relating to direct economic benefit are not requirements under salvage sales or expedited sales. He asked if his reading was accurate that salvage sales could be used under many conditions. DR. ENG said yes, but it's a matter of trading one public benefit with another. Being able to commercialize the public's timber before it rots is deemed sufficient to offset other requirements. It would become the new standard practice. 4:31:59 PM SENATOR DUNBAR asked if he thought anyone would use the traditional process again if this this legislation were to pass. MR. STANCLIFF said he would hope the professionals would make sure that happens. The bill seeks to address the highest and best use for this timber. SENATOR KAWASAKI referenced salvage sales under .117 and asked if there's a similar best interest finding for negotiated timber sales under .123. He said he didn't see that requirement. MR. STANCLIFF responded that the public notice of a sale will attract attention and people can articulate their views, but there also has to be a little trust that the commissioner and state forester are going to represent the best interest of the state. SENATOR KAWASAKI said he recognizes the need to find an easier way to get commercial logging done and address the needs of manufacturers of timber, but at the very least there needs to be a process to ensure the state receives the best value under the public lands in the Alaska Lands Act. He said he needs assurance that folks won't lose their traditional hunting grounds to logging. He reminded members that they heard there is zero accountability for the acreage in a land sale under both the salvage and expedited timber sales. 4:37:25 PM CO-CHAIR BISHOP opened public testimony on HB 104. 4:37:55 PM KAITE ROOKS, representing self, Prince of Wales, Alaska, testified in opposition to HB 104. She stated that she has a forestry degree and was a timber industry advocate 20 years ago when she moved to Prince of Wales. She's been a wildland firefighter, she can cruise timber, do plot surveys, and she understands the state process for timber sales. She still doesn't oppose all logging, but there was a lot she did not like about the way the state logged and sold the timber in Southeast. MS. ROOKS said the Division of Forestry is poised to kill the small community of Whale Pass. That relates to HB 104 when you talk about trusting the commissioner and state forester but having no stopgaps or public process. The people of Whale Pass spoke up in opposition to this timber sale under the current timber program and it's not working. The sale is planned within the city limits of Whale Pass so why think somebody's cabin in the middle of the woods will be treated differently. HB 104 will make it even easier for the DNR commissioner to authorize a timber sale. She agreed with Senator Kawasaki that timber sales could go forward with no best interest finding, no acreage limitation, no threshold, or any other stopgap measure. She suggested the committee ask the people on Prince of Wales how bad it can get. 4:40:48 PM JOE YOUNG, Owner, Young's Timber Inc., Tok, Alaska, testified in support of HB 104. He reported that Young's Timber Inc. has been in business since 1993, it has 12 employees, and the business produces a wide range of value-added products. He talked about the three forest regions in Alaska that have over mature, dead, and dying stands of trees, some of which are under attack by insects and disease. He said these forests are stressed and they're producing a hormone that attracts the insects. MR. YOUNG stated that the current timber sale process is not working. There hasn't been a sawlog timber sale in the Tok area since 2019. Young's Timber Inc. typically harvested 40 acres per year but he's now harvesting 100-150 acres per year because of the Willow and the Manh Choh projects. He has one year's supply of timber left and he doesn't know where or when he'll get another timber sale. He opined that the expedited timber sale will cure many value- added producers' needs for a long-term, stable supply of timber. He urged the committee to pass HB 104. 4:42:50 PM CO-CHAIR BISHOP asked how many board feet Young's Timber Inc. cuts in a year and the maximum output of the mill. MR. YOUNG said he cuts about 500,000 board feet/year and he could handle twice that amount. SENATOR KAWASAKI asked if Young's Timber uses the negotiated timber sale process. MR. YOUNG said yes; he's had two negotiated timber sales. The first he leveraged into about $600,000 worth of value-added equipment, and the second he leveraged into about $400,000 worth of value-added equipment. The timber industry in Tok is booming and he'd like to expand but it's been five years since there was a timber sale in the area. SENATOR KAWASAKI asked if he'd taken advantage of any salvage sales under AS 30.05.117. MR. YOUNG said yes, after the 1990 Tok River fire. SENATOR KAWASAKI read the new Sec. 38.05.124 Expedited timber sales in Section 10. He asked Mr. Young if he agreed that timber that has burned or has been infected by insects or disease may not have value but the adjacent timber would. MR. YOUNG said the value doesn't leave burned timber for about 15 years, but beetle killed trees that are standing will rot in about three years. 4:46:18 PM SENATOR WIELECHOWSKI asked if the industry standard in Alaska is to plant new trees to replace the harvested ones. MR. YOUNG responded that the problem in the boreal forest is there are too many stems per acre and that suppresses growth. 4:47:17 PM CHERYL FECKO, representing self, Craig, Alaska, testified that she opposed HB 104 when it was in House Resources and the bill today has several major changes that may have serious negative impacts. She opined that the public deserves to have time to read through the bill and internalize the changes that may affect places like Prince of Wales Island and Whale Pass. She expressed hope that there would be additional opportunity to comment on the bill. CO-CHAIR BISHOP said the bill isn't leaving the committee today. He suggested she email the committee her thoughts after she'd had time to review the bill. 4:48:46 PM ANDREW TRAXLER, Owner, Papoose Milling, Big Lake, Alaska, testified in support of HB 104. Responding to an earlier question, he confirmed that he would continue to use the existing five-year timber sale schedule. He relayed that he's currently using green spruce logs from Nenana to produce good lumber and he uses the fire and beetle killed timber in the return loads because people in Nenana need dry firewood. He continued that Papoose Milling currently uses the expedited timber sale process through the MatSu borough that is similar to the process proposed in HB 104. Forests at risk of fire are being harvested near populations and the logging companies are paying the borough for the salvage harvest. He compared that to the state paying loggers to harvest timber to provide essentially the same protection. 4:50:41 PM CO-CHAIR BISHOP held HB 104 in committee with public testimony open.