HB 344: "An Act authorizing the commissioner of the Department of Natural Resources to negotiate and enter into timber sale contracts that provide for local manufacture of high value-added wood products; and establishing an Alaska Forest Products Research and Marketing Program within the Department of Commerce and Economic Development."
00HOUSE BILL NO. 344 01 "An Act authorizing the commissioner of the Department of Natural Resources 02 to negotiate and enter into timber sale contracts that provide for local 03 manufacture of high value-added wood products; and establishing an Alaska Forest 04 Products Research and Marketing Program within the Department of Commerce 05 and Economic Development." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. LEGISLATIVE FINDINGS AND PURPOSE. The legislature finds that it is 08 in the best interests of the people and economy of Alaska to encourage the establishment and 09 sustainable operation of local timber processing facilities in Alaska to produce high value-added wood products and 10 other value-added wood products from timber cut on state lands. 11 One means of encouraging such facilities is through the use of incentives offered through 12 negotiated timber sale contracts. The value-added use of timber harvested in Alaska is 13 intended to foster a stable, small-scale, locally run, finished wood products industry that will 14 provide maximum opportunities for Alaskan jobs without significantly adversely impacting
01 fish and wildlife habitat. 02 * Sec. 2. AS 38.05 is amended by adding a new section to article 4 to read: 03 Sec. 38.05.123. NEGOTIATED TIMBER SALES FOR LOCAL 04 MANUFACTURE OF WOOD PRODUCTS. (a) Notwithstanding the provisions of 05 AS 38.05.115 and 38.05.120, and upon a finding that the sale is in the best interest of 06 the state, the commissioner may negotiate a sale of timber for use in the local 07 manufacture of high value-added wood products. A timber sale contract entered into 08 under this section may provide for a harvest of up to five million board feet of timber 09 each year, consistent with sustained yield principles, and may be for a term of up to 10 10 years. Initial stumpage rates for a contract under this section shall be determined 11 by negotiation but may not be less than the base price for the area as established under 12 regulations adopted by the commissioner. A contract under this section shall provide 13 that stumpage rates shall be redetermined by negotiation at least once every three years 14 during the term of the contract, to reflect changes in market conditions; the 15 redetermined rates may not be less than the base price for the area as established under 16 regulations adopted by the commissioner. 17 (b) Notice of intent to negotiate a contract under this section shall be given in 18 accordance with AS 38.05.945. 19 (c) The commissioner may negotiate a sale of timber under this section if the 20 prospective purchaser agrees to use at least 50 percent of the timber subject to the sale 21 for the local manufacture of high value-added wood products. 22 (d) Before a sale may be negotiated under this section, 23 (1) the area of the sale must be designated for forestry purposes by a 24 valid, existing area plan adopted under AS 38.04; and 25 (2) the requirements of AS 38.05.112 and 38.05.113 must be met. 26 (e) In making the best interest finding required by AS 38.05.035(e) and this 27 section, the commissioner shall consider, in addition to other factors, 28 (1) the direct economic benefit from the local manufacture of high 29 value-added wood products as a result of the sale; 30 (2) the direct economic benefit from other local processing of the 31 timber to be undertaken by the purchaser as a result of the sale, including the
01 manufacture of value-added wood products other than high value-added wood 02 products; 03 (3) the likelihood of commercial success of the locally manufactured 04 high value-added wood products and other value-added wood products; 05 (4) the extent to which the sale is likely to result in the creation and 06 maintenance of a stable local job base; 07 (5) the existence of adequate protection measures to ensure the 08 sustainability of fish and wildlife habitat and populations and continuation of other 09 uses of the area subject to the negotiated sale; 10 (6) the stumpage return to the state; and 11 (7) any other reasonably foreseeable benefits to the state and local 12 economies from the sale. 13 (f) As part of the timber sale negotiations authorized by this section, the 14 commissioner may require a prospective purchaser negotiating a timber sale contract 15 to submit financial and technical data that demonstrates that the requirements of this 16 section have been or will be met. Upon the prospective purchaser's request, the 17 commissioner shall keep data provided by the purchaser confidential in accordance 18 with the requirements of AS 38.05.035(a)(9). 19 (g) If the commissioner determines that additional analysis is necessary in 20 order to complete the best interest finding for a sale under this section, the 21 commissioner may require the prospective purchaser to retain and pay for the services 22 of a contractor to assist the commissioner in evaluating the proposed negotiated sale 23 and financial and technical data relating to the proposed sale. The contractor shall be 24 selected by the prospective purchaser from a list of consultants in forestry and timber 25 economics provided by the commissioner. If the commissioner requires a prospective 26 purchaser to retain the services of a contractor under this subsection, the commissioner 27 shall determine the scope of the work to be performed by the contractor. 28 (h) No more than five years after a timber sale contract is entered into under 29 this section, a performance review shall be completed by the department to ensure that 30 the purchaser is performing in accordance with the terms of the contract. If the 31 commissioner determines that the purchaser is not performing in accordance with the
01 contract, the commissioner may terminate the contract. 02 (i) A timber sale negotiated under this section does not affect other timber 03 harvest programs under AS 38.05.110 - 38.05.120. 04 (j) A purchaser may not be a party to more than one contract under this 05 section at any one time. 06 (k) In this section, "high value-added wood product" means kiln-dried or 07 commercially dried lumber, interior finish paneling and trim, flooring, doors and 08 windows, cabinet stock, furniture, musical instruments or parts of instruments, toys, 09 tools and implements, ready-to-assemble building kits, and other similar finished wood 10 products specified by the commissioner by regulation and, for deciduous aspen, poplar, 11 and high defect birch, includes engineered wood products and paneled wood products. 12 Except as otherwise provided in this subsection, "high value-added wood product" does 13 not include plywood, pulp, chips, waferboard, chipboard, fiberboard, green lumber, 14 cants, slabs, or planks intended for remanufacture, and other similar wood products 15 specified by the commissioner by regulation. 16 * Sec. 3. AS 44.33 is amended by adding a new section to read: 17 ARTICLE 10. ALASKA FOREST PRODUCTS 18 RESEARCH AND MARKETING PROGRAM. 19 Sec. 44.33.900. ALASKA FOREST PRODUCTS RESEARCH AND 20 MARKETING PROGRAM. (a) The Alaska Forest Products Research and Marketing 21 Program is established in the Department of Commerce and Economic Development. 22 (b) The program is established to provide a statewide information clearinghouse 23 and coordinator to gather and disseminate information relating to research and 24 development, including technical, logistical, financing, marketing and other relevant 25 information regarding the manufacture of specific value-added wood products and the 26 establishment of new high value-added manufacturing facilities in Alaska, and to assist 27 in coordinating existing research and development efforts by state and federal agencies 28 and other public and private entities. 29 (c) The program coordinator shall identify unfilled needs and problems 30 impeding the development of a high value-added wood products industry in Alaska, 31 gather information and conduct analyses, and propose solutions by exploring successful
01 models in other states and nations.