Legislature(2015 - 2016)

2015-01-30 House Journal

Full Journal pdf

2015-01-30                     House Journal                      Page 0108
HB 87                                                                                                                         
HOUSE BILL NO. 87 by the House Rules Committee by request of                                                                    
the Governor, entitled:                                                                                                         
    "An Act relating to the sale of timber on state land; and providing                                                         
    for an effective date."                                                                                                     

2015-01-30                     House Journal                      Page 0109
was read the first time and referred to the Resources Committee.                                                                
The following fiscal note(s) apply:                                                                                             
1.  Zero, Dept. of Natural Resources                                                                                            
The Governor's transmittal letter dated January 28, 2015, follows:                                                              
"Dear Speaker Chenault:                                                                                                         
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to the sale of timber on                                                        
State land.  The bill would amend AS 38.05.110 and 38.05.118 to                                                                 
expand the authority of the Commissioner of Natural Resources to                                                                
negotiate the sale of timber at appraised value.                                                                                
The Department of Natural Resources (DNR) may offer timber sales                                                                
either through competitive bid or through negotiation.  Currently under                                                         
AS 38.05.118, the Commissioner of Natural Resources may negotiate                                                               
the sale of timber to a local manufacturer at appraised value.                                                                  
However, negotiated sales larger than 500,000 board feet may only be                                                            
offered in areas of high unemployment, excess manufacturing                                                                     
capacity, and an underutilized allowable cut of timber.  These criteria                                                         
prohibit larger negotiated timber sales in many areas of the state that                                                         
are actively managed for forestry, and where there is high demand for                                                           
wood for timber products and biomass energy.  The proposed bill                                                                 
would provide that, in addition to sales to local manufacturers of wood                                                         
products, sales may also be negotiated with users of wood fiber.  This                                                          
change clarifies that negotiated sales may be used to support wood                                                              
energy production as well as traditional products.  In addition, the bill                                                       
would eliminate the current limitations that negotiated timber sales be                                                         
based on a finding that in the area of the sale there is a high level of                                                        
unemployment, an underutilized manufacturing capacity, and an                                                                   
underutilized supply of timber that will lose value if not cut.  The                                                            
requirement that all three conditions be met substantially limits the                                                           
Commissioner of Natural Resources' authority and flexibility to                                                                 
approve negotiated sales that would be in the best interest of the State.                                                       
Competitively bid timber sales are the preferred sale method under                                                              
most conditions.  However, negotiated sales provide the ability to                                                              

2015-01-30                     House Journal                      Page 0110
tailor some sales to the needs of local processors in areas that lack                                                           
competitive interest or where there is competition from round log                                                               
export markets in a region with a constrained timber supply.  The                                                               
latter situation exists in Southern Southeast Alaska where the State of                                                         
Alaska is a small landowner compared to the Tongass National Forest,                                                            
and the State of Alaska's full allowable cut is a critical source of logs                                                       
for the remaining sawmills.                                                                                                     
The provisions in the bill would enable the Commissioner of Natural                                                             
Resources to better respond to the economic and geographic realities                                                            
of the forest products sector in our state's economy.  All timber sales,                                                        
including negotiated sales, must comply with the constitutional                                                                 
requirement to manage State timber for sustained yield.                                                                         
I urge prompt and favorable action on this measure.                                                                             
Bill Walker