Legislature(1995 - 1996)

03/21/1995 08:08 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 HSTA - 03/21/95                                                               
 HB 212 - TIMBER MANAGEMENT                                                  
                                                                               
 Number 046                                                                    
                                                                               
 JOE RYAN, Legislative Assistant to Representative Al Vezey,                   
 submitted the sponsor statement for HB 212, which he read into the            
 record.                                                                       
                                                                               
 "HB 212 was introduced by Representative James, at the request               
 of constituents from the timber industry in Fairbanks.  These                 
 people are operators of small lumber businesses in the local                  
 community.  Their livelihoods have been impacted by the overly                
 complicated procedures they must endure to secure timber from                 
 the state.  It was not the lack of the resource that has                      
 impacted them, it is the inability of the Department of                       
 Natural Resources to allow the harvesting of this resource.                   
 Current statutes are such that the five-year planning and                     
 three-year planning updates, as required by Title 38, are                     
 totally impractical for the continuation of an ongoing                        
 industry.                                                                     
                                                                               
 "For a number of years now, the Fairbanks Industrial                         
 Development Corporation has worked with and recruited timber                  
 companies to come to the Fairbanks area and set up shop.  So                  
 far, they have not been successful, because of the overly                     
 restrictive policies mandated by Title 38.  Without the                       
 ability to be guaranteed a supply of timber over the long                     
 term, no one will make the capital investment necessary to                    
 develop the industry.                                                         
                                                                               
 "This long-standing irritation has deprived the Fairbanks                    
 community and other communities across the state from                         
 developing the basic timber industries necessary for jobs and                 
 a healthy economic environment.                                               
                                                                               
 "I feel that this bill addresses the minimum changes necessary               
 to ensure the survival of the timber industry in Alaska."                     
                                                                               
 Number 094                                                                    
                                                                               
 CHAIR JAMES asked if Robert Valdatta was on line.                             
                                                                               
 ROBERT VALDATTA, on teleconference from Seward, asked questions               
 about HB 212 and made comments to support timber mills in Alaska.             
 He did not say if he was for or against HB 212.  Mr. Valdatta asked           
 how long it would be before they could start logging if this bill             
 passed, if it would be within 72 hours or 5 years.  He also queried           
 the section about 50,000 cubic yards, which he remarked refers to             
 gravel.  He wondered if a person was going in to log, move gravel             
 or build roads.                                                               
                                                                               
 Number 120                                                                    
                                                                               
 RICK SMERIGLIO, on teleconference from Seward, spoke against HB               
 212.  Section 4, he said, exempts sales under 500,000 board feet on           
 the listing in the 5 year sale.  In his view, that was bad public             
 policy.  The five year sale has been the only way the public had to           
 find out where logging would occur.  Personal experience taught him           
 that it takes considerable time for the public to pin down where              
 logging will occur.  The proposed 30-day period for the public                
 notification of a sale is too short, because weeks are often                  
 required to pass things back and forth in the mail.  He would ask             
 for at least 120 days.  Another point on Section 4 was about dead             
 and downed timber, which he believes gets confused with old stand.            
 Old stand means the trees have some rot in them.  Some people think           
 dead and downed timber means a few trees have beetles in the                  
 entire stand, so the entire stand will get logged.  Also, in                  
 Section 7, there is contradictory language.  Mr. Smeriglio stated             
 that it will emphasize logging, and that is not the purpose of                
 multiple use.  Currently, in Alaska Statute 41, it just says the              
 beneficial uses of the forests.  What this bill does is emphasize             
 logging in the underlying text, and that is not multiple use.                 
 Lastly, in Section 9, it says commercial logging may not be found             
 incompatible,  yet logging is clearly known to be highly                      
 detrimental if not incompatible with fishery production and back              
 country recreation.                                                           
                                                                               
 CHAIR JAMES advised Mr. Smeriglio that his two minutes were up and            
 to summarize his testimony.  He summarized by saying this bill is             
 bad public policy.  It says in the sponsor statement the bill was             
 requested by the logging industry and that industry has a special             
 financial interest.  It is contrary to the broader public interest.           
                                                                               
 ED DAVIS, on teleconference in Anchorage, suggested the committee             
 rethink the bill.  He pointed out assumptions on which HB 212 were            
 based:  The Forest Practices Act is creating discord for the                  
 timber industry, and the authorizing legislation from Title 41 is             
 also causing irritation to the timber industry concerning the state           
 forests.   The reality, in his opinion, was that these Acts are               
 consensus documents.  In 1990, a group gathered to represent                  
 tourism, timber, fishing, hunting, and also, state bureaucrats, and           
 they hammered out a consensus.  Each side made substantive                    
 sacrifices to do this, and they had a vision for the timber                   
 industry in which it would be welcome in the communities where it             
 was operating.  The proposed bill is the unilateral rewriting of              
 that consensus so the timber industry will have its way.  This will           
 create problems, and he is against it.  Mr. Davis suggested a                 
 consensus group be convened to take a look at it.                             
                                                                               
 JILLIANNE DE LA HUNT, Staff Attorney with Trustees For Alaska in              
 Anchorage, called to opposed HB 212.  She also submitted specific             
 comments in written testimony and would keep her oral comments                
 short.  It was her opinion this bill politically compromised public           
 process, and she asserted that to call this, as the sponsor                   
 statement says, a bill that will aid small timber operators, is               
 facetious in their opinion.  The bill is actually designed to allow           
 large timber sales with very little public comment.  Favoring                 
 logging over all other uses compromises multiple use and sustained            
 yield principles.  These things are presently constitutionally                
 protected, so this bill could very likely result in future                    
 litigation.                                                                   
                                                                               
 CLIFF EAMES, with the Alaska Center for the Environment, with                 
 offices in Anchorage and Wasilla, testified that they are opposed             
 to HB 212.  Mr. Eames expressed concern about what appears to be a            
 pattern of anti-forest bills that would raid Alaskas forests. They            
 are aware of four such bills being introduced this year and he                
 wondered where the support was coming from.  They believed it must            
 come, almost exclusively, from a relatively small portion of the              
 logging industry; also from people who would export logs in the               
 round, also chips and jobs, out of Alaska.  This has been the                 
 pattern of logging on state lands in recent years.  On the national           
 average, Alaska has twice the amount of recreation, and Alaskans              
 take pride in showing our state to visiting family and friends.               
 The Alaska economy depends on the tourism industry, yet nobody will           
 want to recreate in clear-cuts, and nobody will be able to fish in            
 heavily sedimented rivers.  Visitors do not come to Alaska to see             
 clear-cuts, and he argued further that the primary use of state               
 forests should not be commercial logging.  He wondered how many               
 Alaskans would think that commercial logging should be a higher use           
 than fish and wildlife in our forests.  He urged the committee to             
 vote no on HB 212.                                                            
                                                                               
 Number 277                                                                    
                                                                               
 BOB ZACHEL, owner of Alaska Birch Works in Fairbanks, testified in            
 favor of HB 212.  He claimed he had to turn down orders this last             
 year because he could not get logs.  Everything is being exported             
 and the local demand is not being met.  Mr. Zachel said he thinks             
 HB 212 will take care of some of the problems so small businesses             
 will have access to the state forests.  Without a supply of logs,             
 businesses like his cannot compete.  He supported HB 212, because             
 without it he could not see much hope for small, local industry.              
                                                                               
 Number 315                                                                    
                                                                               
 DAN RITZMAN, Northern Alaska Environmental Center, testified from             
 Fairbanks to oppose HB 212.  He thought too much emphasis was put             
 on logging in some sections of the bill, which would make logging             
 the primary interest of multiple use and he was opposed to that.              
 Another concern was that the fish and wildlife have equal                     
 consideration as far as planning, but logging interests would have            
 primary rights under management if HB 212 passes.                             
                                                                               
 TERRY HERMACH testified from Valdez against HB 212. In his opinion            
 it would be a shortsighted bill.  It would be harmful to tourism              
 and commercial fishing, which are our most renewable resources.               
 A forest will take 200 years to regenerate, and tourism and fishing           
 are renewable every year.  Mr. Hermach asserted that the best way             
 to manage our timber resource is value added only.  We should ban             
 any export of raw logs and materials from our forests.  He urged              
 the committee to vote against this bill.                                      
                                                                               
 Number 355                                                                    
                                                                               
 KEVIN HUFFORD, owner of PWF Express in Valdez, called to say that             
 they make their living from unspoiled forests and the wildlife it             
 produces.  HB 212 was a shocking bill that gives priority to the              
 logging industry.  Future businesses, such as his, are immediately            
 and directly threatened by it. It is a wholesale give-away of our             
 state forests, so he strenuously objected to the bill.                        
                                                                               
 Number 370                                                                    
                                                                               
 WILLIAM DUNNE testified by teleconference from Homer, disclosing              
 that he read the bill and thought it was very limiting.  He                   
 recommended the committee take time to review the written testimony           
 they receive.  Part of his concern was in reference to small scale            
 operators.  When speaking to someone about it, when he had referred           
 to small scale timber operators, the explanation he received was              
 that small meant an operation with fewer than 500 employees.  To              
 him that would be a very large operation.  For instance, in Homer             
 they have a number of timber operations with one, two and three               
 employees.  Mr. Dunne said he would encourage that type of free               
 enterprise, but giving away our state forests to large scale                  
 operators under the guise of them being small timber companies is             
 outrageous.  Also, he saw nothing in the HB 212 to reduce the                 
 export of round logs in ships.  In Homer, they have a daily problem           
 of exporting jobs, and resources, besides their heritage and                  
 habitat, overseas.  Some sections of the bill were acceptable,                
 which he could support, but he would ask for a consensus from                 
 commercial fishermen, sportsmen, conservation groups, and all user            
 groups of the state forest, before they start tearing down the                
 forests.                                                                      
                                                                               
 Number 409                                                                    
                                                                               
 STEVE GIBSON, small scale miller and logger in Homer, testified               
 against HB 212.  His complaint was that this bill may do more to              
 put him out of a source of timber than to help.  Exporting timber             
 posed a problem.  He said the market conditions are such that every           
 stick is rushing out of the area on a boat.  He worried that the              
 states available resources will be turned into stump farms just so            
 the exports can go at a faster pace.  It wont enhance his business            
 at all in the long run; contrarily, it threatens his business.                
 Whether or not insects threaten, he will not have anything left to            
 turn into boards for local uses.  Mr. Gibson reminded everyone that           
 the nature of the wood here in Alaska is very different than wood             
 from the Georgia Pine forests and the forests of Oregon.  Second              
 growth does not come back in 20, 30, or 40 years.  The rotation               
 time in his area is 100 to 170 years.  So, he would urge the                  
 committee to kill the bill.                                                   
                                                                               
 Number 443                                                                    
                                                                               
 JACK POLSTER testified from Homer in opposition of HB 212.  He                
 believed in the concept of value added and felt that the value                
 should be added by particular individuals as much as possible.  In            
 his view there was no concept that allows that principle better               
 than personal use.  HB 212 posed a threat to personal use, in his             
 opinion.  On the Kenai Peninsula they have high unemployment, and             
 high beetle kill.  They also have old stands, which creates a                 
 situation where personal use should come to the attention of the              
 legislators and state forestry.  It apparently has not.  The                  
 possibility of personal use would benefit their community and it              
 would help get people doing something productive.  He wanted to               
 urge the state to make personal use more available.  They have not            
 done that; instead, the state tells people that access is a                   
 problem.  Although he understood the phenomenon of short funds,               
 also the cost of building access, he said the state can allow                 
 access to future personal use areas while setting up commercial               
 sales.  Mr. Polster finalized his testimony by asking Chair James             
 to please consider passing the Fully Informed Jury Legislation,               
 that should be in her hands.                                                  
                                                                               
 Number 465                                                                    
                                                                               
 JESSE PAYNE testified from Delta Junction, saying that the general            
 policies now put a serious handicap on Interior Alaskas timber                
 industry.  Mr. Payne said he resents groups who call themselves               
 environmentalists, as if nobody else is interested in the state but           
 them.  His insinuation was that they would have us believe they               
 advocate what is best for everyone in Alaska, and what is best for            
 Alaskas resources.  Still, they are against the bill that                     
 advocates what the state needs.  Mr. Payne recommended HB 212 as              
 being the best way to re-establish the original intent of the law             
 and regulations that govern our forests.  He said if we do not use            
 the forests, nature will destroy them by insects or fire, or other            
 natural causes.  His opinion was that the state must address the              
 needs of the Alaskan people, and use this industry responsibly.               
                                                                               
 TYLER CONKEL testified from Delta Junction to offer his full                  
 support of HB 212.  He urged everyone to vote for the bill.  Mr.              
 Conkel represented three separate concerns:  He was testifying as             
 a private citizen of Delta, as a member of the timber industry, and           
 as a speaker for the Interior Alaska Forest Association.  As a                
 citizen of Delta Junction, he appreciated the Governors comments              
 during his visit of March 16, 1995.  To be specific, he appreciated           
 the statement Governor Knowles made about the possibility of                  
 raising the allowable cut for Delta Junction.  He said that without           
 the primary use statement contained in HB 212, however, that idea             
 would be unobtainable.  HB 212 is consistent with the rest of the             
 statutes concerning land classification and land use, he said.                
 Currently, the state forest is the only land use without a primary            
 use statement in the statutes.  Wildlife habitats, parks, and all             
 the others are protected, for instance, by primary use statements,            
 but not to the exclusion of the multiple use.  They stay consistent           
 with the primary use statements of those classifications. So, state           
 forests need that protection, and HB 212 provides it.                         
                                                                               
 Number 503                                                                    
                                                                               
 NICHOLAS OLSON, owner of a small, one man operation, testified via            
 teleconference from North Pole.   He is the owner of a small                  
 salvage scale, and he discovered a bad bug problem in his timber,             
 which he said was getting worse.  This bill, he said, will help him           
 to harvest this timber before it rots and falls down.  They need to           
 make more timber available to small operations.  Many operations do           
 not have any wood.  He had not gone over HB 212 thoroughly, but               
 from what he understood and what he had seen of it, he felt it was            
 a good step in the direction he wants to go.  Something new must be           
 done to help small, one, two, or three man operations.                        
                                                                               
 JEFF BENTZ testified from Anchorage in support of HB 212.  He urged           
 everybody to support the bill.  In his view this legislation would            
 remedy the bug kill problem they have, and also much of the timber            
 in Interior Alaska that has bug kill.  If the timber is not                   
 harvested, it will either rot and fall to the ground, or burn.                
 This bill provides the means to put people back to work.  It is not           
 a clear cut large scale bill; it puts back 14 uses that were once             
 there, in 1983.  Also, it reverses what happened in 1990, and it              
 will benefit people in the state of Alaska.                                   
                                                                               
 Number 533                                                                    
                                                                               
 SARAH HANNAN, Executive Director, Alaska Environmental Lobby, a               
 coalition of 20 groups across the state of Alaska, wanted to inform           
 the committee that these groups are not raging national                       
 environmental groups aimed at shutting down resource development in           
 Alaska.  They are Alaskans who work in a diversity of industries,             
 most of them in resource based industries, because that is what               
 Alaska has.  They oppose this legislation for a variety of reasons.           
 She spoke of the five-year plan saying that for timber to be sold             
 in Alaska it must be listed in two consecutive years, on a five-              
 year planning process.  In the course of 366 days the state can               
 sell a tree.  The state must list it one year, then the following             
 year, and after that they may sell it.  The process purposes to               
 give the people who use the resource an opportunity for feedback on           
 whether that sale, in detail, affects commercial hunting, trap-               
 lines, plus a variety of other uses.  She informed the committee              
 that there are two state forests in the state of Alaska and that we           
 are making policy about state forests, but we have much forested              
 land.  The two considerations must be separated, she said.  Two               
 state forests were created because there were state forests that              
 had a diversity of users.  Tanana Valley State Forest, for                    
 instance, encompasses the community of Fairbanks and all the other            
 communities along the Tanana Valley Basin.  Those communities have            
 said this is not just state land to give away to export companies.            
 She quoted the people in these communities as saying, This is our             
 back yard, where we fish, hunt and trap, and moose hunt, and we               
 have a lot of concerns about how these trees are cut and                      
 distributed.  Ms. Hannan claimed that the Alaska Environmental                
 Lobby supports Alaskan operations and value added timber                      
 processing, but currently the Supreme Court forbids the state of              
 Alaska from banning export.  They believe the thing to do is to               
 look at timber policy to encourage local users.  She pointed out              
 that some who testified gave support to the bill; some did not.               
 The reason is the bill states that anything under 500,000 board               
 feet of timber does not have to be listed for sale.  The reason is            
 that this represents a lot of trees in some areas but not in                  
 others.  In Southeast it is not a lot of trees.  In the Mat-Su                
 Valley it represents about 160 acres of trees, and she said, That             
 is a lot of back yard.  Ms. Hannan addressed Section 4, suggesting            
 they amend the bill by reducing the number to 100,000 foot sales.             
 She would also urge the state to be looking at small scale sales in           
 a diversity of locations, working with local mill operators who can           
 specify which areas are accessible.  She said we need less industry           
 development and, instead, support Alaskan for resource users and              
 small scale operators who are not exporting in the round.                     
                                                                               
 Number 583                                                                    
                                                                               
 KATHY LENNINGER, Wilderness Lodge Owner, testified from Nenana.               
 She had some concerns about HB 212, and about wildlife and bird               
 habitats.  Ms. Lenninger said she has seen clear-cuts down to the             
 rivers edge; also, supposed reforested areas with dead seedlings              
 after two years.  In her area it takes 180 years for a spruce tree            
 to grow to maturity.  Ms. Lenninger also expressed concern about              
 the watershed.  She lives on the river, as most of the villagers              
 do, and with big clear-cuts the watershed will be destroyed.  Ms.             
 Lenninger said she did not oppose reasonable small scale logging.             
 Small scale operators should have opportunities to get wood.  She             
 did not believe this bill is the right one to accomplish that.                
                                                                               
 Number 599                                                                    
                                                                               
 GORDON NORTON, small mill owner, testified from Fairbanks in favor            
 of HB 212.  It may not be perfect, he said, but it would help                 
 smaller businesses, which are the backbone of our economy in his              
 area.  Mr. Norton added that by small business he meant a business            
 with fewer than ten employees.  He has forest lands of his own and            
 has seen where bark beetles are destroying it, especially in old              
 stands.  If these old stands are not harvested, there can be more             
 destruction and a greater fire hazard.  He explained there can be             
 a greater loss of timber by not harvesting it.  He expressed that             
 he wanted to see it easier for people with small businesses to                
 obtain tracts they can handle.                                                
                                                                               
 Number 626                                                                    
                                                                               
 MR. RYAN returned to the table to offer other supportive comments             
 on this legislation.  He reported that, in the process of land use            
 planning, particularly under our constitutionally mandated multiple           
 use, nothing says you cannot take certain areas and delay the                 
 highest and best use of that area.  This makes the other uses                 
 auxiliary to the highest and best use, which is appropriate.  Last            
 year, Commissioner Glenn Olds, who served under the Hickel                    
 Administration, had a rewrite of Title 38, which he said would have           
 done specifically that:  Designate certain lands and give them                
 highest and best use.  Once they obtained highest and best use, the           
 land would be available for all of the other uses.  Nothing would             
 be restricted.  Mr. Ryan recounted some testimony heard from people           
 of the environmental community and addressed a comment made by a              
 person on teleconference.  The persons comment was that tourism is            
 a major support in the state of Alaska.  Mr. Ryan said he would               
 differ, for oil is and has been the major support.  He saw an                 
 urgency to  develop a secondary industry, because when the oil                
 goes, he said, we will be in a serious economic situation.  Mr.               
 Ryan repeated what the Governor had said:  Alaska is open for                 
 business.  He said this bill will implement the Governors plan.               
 Also, Mr. Ryan added that early photographs of Fairbanks and Dawson           
 City show the surrounding hills completely denuded.  There were no            
 trees growing at all; they were cut down for fire wood and to make            
 cabins.  Today, those same places are surrounded by large, mature             
 forests.  So, the country does regenerate, he said.  In addition,             
 Mr. Ryan noted that the Tanana and Yukon Rivers are glacial fed and           
 full of microscopic particles of silt.  It is difficult to                    
 contaminate glacial fed rivers and the turbidity levels more than             
 they already are.                                                             
                                                                               
 MR. RYAN quoted from the Bible: By their works you shall know                 
 them.  With that, he referred to comments made by environmental               
 leaders and those who developed the philosophy of environmentalism.           
 Directing the committee to backup information in the committee                
 packets, he read an excerpt from Dixie Lee Rays book,                         
 Environmental Overkill, Whatever happened to Common Sense?  One               
 comment was by David Brower, founder of the Friends of the Earth,             
 and former executive director of the Sierra Club.  Mr. Brower said,           
 While the death of young men in war is unfortunate, it is no more             
 serious than the touching of mountains and wilderness areas by                
 mankind.  Mr. Brower was also quoted as saying to a travel group              
 in Whistler, British Columbia, September 23, 1992: Loggers losing             
 their jobs because of spotted owl legislation is, in my eyes, no              
 different than people being out of work after the furnaces of                 
 Dachau shut down.  Also, Mr. Ryan quoted Christopher Manes from a             
 book entitled Green Rage.  Christopher Manes had outlined a                   
 program for ecological reform, and its main features included:  De-           
 industrialization of the West; Reduction of human population;                 
 elimination of all use of fossil fuel, including automobiles, coal-           
 fired plants, and manufacturing processes using petrochemicals;               
 ending of all monocultural and cattle production; end of all                  
 commercial logging; restoration of wilderness on developed land;              
 and reintroduction of large predators, such as grizzly bears and              
 wolves.  Mr. Ryan concluded that by their own words it was clear              
 what their agenda is.  He could see them objecting to any kind of             
 legislation that would provide an opportunity for people to make a            
 living.  With that, he urged everyone to seriously consider passing           
 HB 212.                                                                       
                                                                               
 CHAIR JAMES asked if there were any questions.  When there were               
 none, she informed the committee that Mr. Tom Boutin was there to             
 answer questions.   Mr. Boutin was there representing the Division            
 of Forestry, which is under the Department of Natural Resources.              
                                                                               
 REPRESENTATIVE CAREN ROBINSON said she wanted to hear the                     
 Departments opinion of this bill.  She noticed a whole series of              
 amendments, and assumed they were recommending some changes.                  
                                                                               
 CHAIR JAMES wished to reiterate that the committee received these             
 amendments late the previous evening, around 7:00 p.m., and since             
 nobody had a chance to review them she did not think they would be            
 able to deal with them at this meeting.                                       
                                                                               
 Number 675                                                                    
                                                                               
 REPRESENTATIVE ROBINSON asked if Representative James planned to              
 hold the bill over until they could go through the amendments.                
                                                                               
 CHAIR JAMES said it was up to the committee to decide, but they               
 could hold it or pass the bill out to the next referral, which was            
 Resources.  They could hold it over in order to go through the                
 amendments.  Meanwhile, Mr. Boutin was there to answer some                   
 questions and Chair James asked if he was familiar with all the               
 amendments.                                                                   
                                                                               
 Number 685                                                                    
                                                                               
 TOM BOUTIN, Alaska State Forester, Division of Forestry, Department           
 of Natural Resources, approached the table saying he was familiar             
 with the amendments.  He thought it would be a better bill with the           
 amendments; however, he said the Administration did not support the           
 bill with or without the amendments.                                          
                                                                               
 Number 690                                                                    
                                                                               
 CHAIR JAMES said she had a copy of AS 41.17.230, which is the                 
 Forest Practices Act of 1983.  It shows that, in 1990, the primary            
 use of the forest was deleted.  She asked if Mr. Boutin was around            
 in 1990.                                                                      
                                                                               
 MR. BOUTIN said he was around, but he was not involved in the                 
 process that lead to the 1990 updated Forest Practices Act.                   
                                                                               
 CHAIR JAMES said what bothered her most was that the largest amount           
 of testimony at that meeting was from the environmentalist                    
 community.  It told her they have a Forest forced Practices Act               
 based on consensus.  If this was based on consensus in 1983, that             
 commercial timber harvest and related activities should be number             
 one on the list, then came back in 1990 and turned around by                  
 consensus, it was heavily weighted by the environmentalist                    
 community.                                                                    
                                                                               
 TAPE 95-32, SIDE B                                                            
 Number 000                                                                    
                                                                               
 MR. BOUTIN claimed that he has heard comments from many people in             
 the two years since he has had this job, and many Interior saw-               
 millers complained that they were not represented at all.  Mr.                
 Boutin did not know the history of why they were not represented.             
                                                                               
 CHAIR JAMES spoke on the market as the driving force behind sales.            
 It has been her opinion that when you have something to sell, it is           
 only available to sell when you have a specific market, so the                
 market drives the sales.  Formerly, if someone had a product that             
 people use, they could fix it and make it available for people to             
 buy.  It seems we have moved into an era where if someone is not              
 buying specifically what we have, we eliminate the industry.                  
 Consequently, the buy and sell arrangement is eliminated.  She                
 asked if Mr. Boutin could relate what he thought about that, and if           
 he thought it applied to the timber industry.                                 
                                                                               
 MR. BOUTIN wasnt sure if he understood the question, but he said              
 that virtually all the states timber is sold by competitive                   
 auction, either by oral bid or sealed bid.                                    
                                                                               
 CHAIR JAMES said he answered from the states position of selling              
 timber as being the market.  Her understanding was that the timber            
 has no market unless there is someplace else for it to go.  An                
 industry comes in and only buys because they can process and sell             
 to a market; then the market would determine what the timber                  
 requirement would be.                                                         
                                                                               
 Number 045                                                                    
                                                                               
 MR. BOUTIN said that was true, and if the market goes away nobody             
 will bid.  Each year the state has some timber sales for which                
 nobody is willing to pay the minimum bid.  Their appraisals are               
 based on past sales, so if they get a steep downturn in the market            
 their appraisals become too high.  Also, some of the sales are not            
 economic.  So, they do have sales that do not sell.  He said most             
 of the sales have great competition interest, however, and are                
 sometimes bid to a multiple of the minimum price.                             
                                                                               
 REPRESENTATIVE ROBINSON requested from Mr. Boutin an overview of              
 why the department has problems with this bill.                               
                                                                               
 Number 068                                                                    
                                                                               
 MR. BOUTIN explained that it is a long and complex bill.  To                  
 capsulate it, he said it destroys public process.  The Division of            
 Forestry thinks it understands the public process; it also thinks             
 it knows how to use the process.  The process is not cheap, but it            
 is the sale of public resources, so it has to be done through a               
 process.  The department thinks it is becoming more cost effective            
 at doing the process and is becoming better at the process.  They             
 had 12 court cases, which they won, he said, and each judge told              
 them to proceed with the sale.  They were also informed that they             
 have done a good job crossing Ts and dotting Is.  He felt this                
 was proof that the public process works.                                      
                                                                               
 REPRESENTATIVE BRIAN PORTER expressed that he had no doubt the                
 department has a good grasp of the process, but he questioned if              
 they have a good grasp of the other side of the equation.  That is            
 what Chair Jamess question related to.  He asked if it would not              
 be appropriate to consider that the length of time the process                
 takes now has an adverse effect on the ability to meet a market at            
 a time that it exists.                                                        
                                                                               
 Number 100                                                                    
                                                                               
 MR. BOUTIN explained that the process takes all of two years. In              
 theory, perhaps, under AS 38.05.113, they could be there at a year            
 and a day, but, realistically, it takes two years.  He listed the             
 steps taken:  Each sale goes through the public comment period for            
 the five year harvest schedule at least twice; then each sale has             
 to have a forest land use plan; and afterward, a 30-day agency and            
 municipal comment period and a 30-day public comment period.  Each            
 sale has a minimum of three public comment periods, plus a public             
 meeting.  The public relies on this extended examination and people           
 do not want to see that extended process reduced.   As for not                
 meeting the market, timber sales are driven by the resources they             
 have in their budget, and currently, the rate of timber sales is              
 twice what the five year average was leading up to 1993.  He said             
 it is bound to be reduced in the future, because the Division of              
 Forestry is required by law to fight fires and to enforce the                 
 Forest Practices Act.  That is a private land enforcement action.             
 As those things in Forest Practices enforcement expand, the timber            
 sales program is cut back.  This fiscal year there is no forestry             
 in Tok, so in FY 96, there will feasibly be a cutback of a timber             
 sale in another part of the state because that is all they have to            
 give.                                                                         
                                                                               
 Number 194                                                                    
                                                                               
 REPRESENTATIVE JOE GREEN wondered, since the market is so                     
 fluctuant, if they could review the state resources for a sale on             
 a much broader scale.  That way they could have everything                    
 prearranged and in place to meet the market demands when they come.           
 He said he was unsure about how long the review lasted, or if it              
 expired in so many years.                                                     
                                                                               
 MR. BOUTIN remarked that he never saw the two year process as being           
 responsible for not meeting the market demands.  There is                     
 competitive interest throughout the state for anything a landowner            
 can put up for sale.  The public process does not prevent the                 
 Division of Forestry from having more timber to put up for sale.              
 If AS 38.05.113 were no longer in effect, the Division of Forestry            
 would not be able to put up more timber for sale more quickly.  Mr.           
 Boutin did not consider the public process an impediment to putting           
 timber up for sale, and he would not recommend eliminating the                
 public process.  He defended it, saying if they did not have the              
 public process they would be losing in court, and they would also             
 be putting up less timber for sale.                                           
                                                                               
 Number 194                                                                    
                                                                               
 REPRESENTATIVE GREEN said that was not quite his question.  He                
 wanted to know, if they continued with the two year process, if               
 they could expand the review areas, or have groups of areas                   
 prepared for the market demands.  He pointed out that although Mr.            
 Boutin did not think the two year process was a problem, the                  
 testimony indicated that it was a problem.  Representative Green              
 wanted to find a way they could have the process working in advance           
 so they could have timber available when the market demanded it.              
                                                                               
 Number 205                                                                    
                                                                               
 MR. BOUTIN said that AS 38.05.113 requires the Division of Forestry           
 to do a five-year harvest schedule.  Nothing is keeping the state             
 from doing just one five-year harvest schedule for the entire                 
 state, yet there are reasons they do not do that.  One problem is             
 people or groups of people such as the Trustees for Alaska who                
 file complaints in Superior Court.  These groups have not stopped             
 the sales, but they have filed for emergency stays on each auction.           
 They failed to obtain the stay; but the five year harvest is the              
 subject of this complaint against the Division of Forestry.  If               
 they are going to run into potential snags like that, they would              
 prefer not to have all the state sales at that risk.                          
                                                                               
 MR. BOUTIN said there are ten forestry areas.  These areas know               
 best which sales to put up and what access is likely to run into              
 problems in the public process.  Those things would argue against             
 putting all sales into one combined five-year harvest schedule, yet           
 the law does not prevent them from doing that.  He explained also             
 that one thing that prevents them from doing many timber sales in             
 preparation to have a full pipeline is laying out the timber ahead            
 of time, in order to do the Forest Land Use Plan under AS                     
 38.05.112.  That is necessary so they have a bullet proof best                
 interest finding when they go to court.  He stated that laying out            
 timber in advance takes lots of resources, and they have limited              
 resources.   They lack the people to lay out five years worth of              
 timber, to get it in the pipeline and hold it there for the                   
 possibility of a market.                                                      
                                                                               
 Number 251                                                                    
                                                                               
 CHAIR JAMES said the Department of Forestry has a greater interest            
 in the industry than anything else.  It was also apparent that when           
 he spoke of timber sales and the market, he was speaking about                
 sales of timber to a market, which to her was the industry.  He had           
 not considered what the five year schedule ought to be, but then              
 Chair James pointed out that they could not possibly consider what            
 a five year schedule ought to be unless they knew what the market             
 would be.  In her view, their prime interest was obviously in the             
 industry.  She asked if he were an industry if he would be willing            
 to come into this state and depend on the five year schedule to               
 give him enough product to put his industry into operation.                   
                                                                               
 MR. BOUTIN answered, no.  In the present environment, in public               
 land management, he said, anyone making an investment would surely            
 want more of an assurance of supply than our good intentions over             
 a five year period.  He said an investment would require an assured           
 supply.                                                                       
                                                                               
 Number 269                                                                    
                                                                               
 CHAIR JAMES confronted Mr. Boutin with our dilemma, which is a $500           
 million deficit this year in our budget.  There is an urgency to              
 reduce it, and it is urgent enough that the legislature must resort           
 to reducing funds to education and other important programs.  The             
 problem is how they can get the budget down by $500 million, and              
 finding ways to develop the economy.  Chair James wondered if Mr.             
 Boutin believed the only way to salvage the economy is by resource            
 development, other than what we are presently doing.  She asked if            
 he would agree that timber would be a good way to do that.                    
                                                                               
 Number 275                                                                    
                                                                               
 MR. BOUTIN said the states timber sale program is cost effective.             
 Despite new documentation and one public meeting, they estimate               
 doing for each of the one million board feet of timber, they still            
 expect a positive return to the general fund for every board foot             
 sold.  We should promote value added processing, he said, and also            
 get a federal law passed to allow the state to limit log exports.             
 It should have been done long ago, and he thought it would be a               
 good time for value added processing to come from state lands.                
 Moreover, resource jobs can be part of the solution to the Prudhoe            
 curve problem, and timber should be making a contribution.                    
                                                                               
 Number 299                                                                    
                                                                               
 CHAIR JAMES brought up the condition of the timber, particularly in           
 the Tanana Valley.  People on the environmental side seem to                  
 believe the timber is healthy, but to her it looked unhealthy.                
 Small spruce stands and birch stands look like hair on a dogs                 
 back.  Her idea was if they had a management process aimed at                 
 growing healthier forests, it would surely increase the available             
 amount of timber for processing.  She wondered if Mr. Boutin                  
 agreed, and also if he thought it would shorten the recycling                 
 period if they could improve the management process.                          
                                                                               
 Number 310                                                                    
                                                                               
 MR. BOUTIN said they are bumping up against the allowable cut on              
 Haines State Forest, which is 6.9 million board feet a year.  In              
 that area, thinning, which increases the record of growth does                
 incrementally increase the allowable cut.  In the Interior the                
 allowable cut, as calculated using conventional science, would be             
 approximately ten times what the state is harvesting there in the             
 Interior.  He would have a hard time arguing for general funds to             
 be used for the thinning of timber to increase the growth, and to             
 increase the cut, when the harvest is such a small percentage of              
 what the allowable cut would calculate out to be.  The public needs           
 assurance, he said, that they know what they are doing before they            
 can do anything more.                                                         
                                                                               
 Number 336                                                                    
                                                                               
 REPRESENTATIVE GREEN said at a Resource Committee meeting a month             
 ago, in Southeast, they were subjected to some pretty horrible                
 situations, such as mills closing.  The gist was that those mills             
 are currently in jeopardy because bureaucratic red tape does not              
 permit them to have the fiber for a value added process.  He                  
 wondered if bureaucrats could take a more appropriate, innovative             
 stand in doing something in a more expeditious manner; also, in a             
 more compatible manner with market demands.  That would drive and             
 proliferate a value added type of investment for some sort of a               
 plant.  Representative Green said Mr. Boutin made a good case                 
 against going statewide, yet he maintained there must be a way to             
 take broader sections and multiplicities in a unit package, allow             
 what is necessary to keep the public happy with the process, and              
 still get advance approval for when the market demands come.  This            
 would allow the state to compete on the open market.  The present             
 method of waiting for five years is a laughingstock.  Instead of              
 hiding behind bureaucracy he suggested a more proactive approach.             
                                                                               
 Number 380                                                                    
                                                                               
 MR. BOUTIN answered that some kind of instate processing has to be            
 part of the equation.  For instance, in Southeast, the only place             
 where the state can help out with these downed mills is in the                
 Haines Forest.  That allowable cut of 6.97 million board feet a               
 year is very small and is not a solution to a Wrangell Sawmill that           
 needs 60 to 80 million feet of saw logs.  They have had sales, and            
 the general fund does fine, but the timber has been exported.                 
                                                                               
 Number 409                                                                    
                                                                               
 CHAIR JAMES asked if we have enough pulp logs to reopen the pulp              
 mill that is closed.                                                          
                                                                               
 MR. BOUTIN said that pulp is not just one commodity.  The state has           
 60 million feet of allowable cut not being used, of low value                 
 hardwood in the Interior.  It is the same mix that a new mill in              
 Northern Alberta is using.  There is not enough Sitka Spruce and              
 hemlock to come close to providing enough wood for the closed                 
 mills.  They are 600 tons per day mills and would use 450 thousand            
 cords, which is 225 million feet a year.  The state doesnt have               
 that supply in Sitka Spruce and hemlock.  There is white spruce               
 being logged off the Kenai, which is a high value product for                 
 newsprint pulp mills.  The chips from the Kenai are going to                  
 newsprint mills overseas.                                                     
                                                                               
 CHAIR JAMES brought up the economic picture, saying if the market             
 does not drive the process, we as a state should be in tune to what           
 the market is and respond accordingly.  We have to turn the market,           
 she said, and shorten the time frame.  We have to create jobs also.           
 We do that with everything else except timber.                                
                                                                               
 MR. BOUTIN said there is a development stage.  It is different with           
 oil and gas.  The wood industry is accustomed to a longer time                
 horizon than with fish.  The public process is not an impediment;             
 timber is a resource, but we cannot chase the market, he said.                
                                                                               
 Number 501                                                                    
                                                                               
 REPRESENTATIVE SCOTT OGAN asked Mr. Boutin about the 500 thousand             
 board feet sales, wondering how many acres that would be around the           
 Tanana Forest.                                                                
                                                                               
 MR. BOUTIN said that 10,000 feet to the acre is a pretty good                 
 average for that area.  That would amount to 50 acres.                        
                                                                               
 REPRESENTATIVE OGAN wanted to know how many acres are in the Tanana           
 Forest.  Fifty acres would be a very small sale.                              
                                                                               
 MR. BOUTIN said that the Tanana State Forest itself has 1.3 million           
 acres.  The Tanana Basin has much more state forest lands.                    
                                                                               
 REPRESENTATIVE OGAN asked if he would say that the people who go              
 consistently to the public hearings are pretty much the same crowd.           
 He wondered if they reflect the sentiments of the general public.             
                                                                               
 MR. BOUTIN said he was surely speaking of environmentalists, and              
 those who come to public meetings do want to see timber jobs.  The            
 extent to which they represent the public at large, he did not                
 know.                                                                         
                                                                               
 CHAIR JAMES said she read the input on the Yakutat plan, and from             
 what she gathered it was that they liked value added, but what they           
 wanted to see was one man and one tree, and to make the tree into             
 something and sell it.  Different people have different measures of           
 concern, and the people who testified on the teleconference said              
 they support the small logger.  She said that HB 212 is a bill that           
 supports the small logger, but those people are opposed to it.                
 They have not proved to her by anything they have done that they              
 support small operators.                                                      
                                                                               
 MR. BOUTIN said that certainly everyone agrees with jobs, but the             
 best that the bureaucrats at the Division of Forestry can do is               
 understand the public process, and to have a genuine and legitimate           
 process where they bring the public in early to let them know they            
 are considering their comments.  They are also responding to their            
 comments, so if they end up in court each judge will tell them to             
 sell the timber.                                                              
                                                                               
 HSTA - 03/21/95                                                               
 Number 596                                                                    
                                                                               
 REPRESENTATIVE ROBINSON expressed that she did not know Mr. Boutin            
 was involved in HB 121, which related to the salvage sales, but she           
 heard people say it was that part of the forest they wanted to get            
 their hands on.  She was curious about how the two bills meshed               
 together, and if HB 121 would assist them.  She wondered also if it           
 would help smaller operations.                                                
                                                                               
 MR. BOUTIN said how they mesh together is in exempting salvage                
 sales from the five-year harvest schedule.  HB 121 does that, and             
 it requires a written finding, which makes it superior to HB 212,             
 in his opinion.  According to the testimony they heard, people on             
 the Kenai have businesses with one and two employees and they have            
 problems getting logs when there is more wood moving on the Kenai             
 than ever before.  The Division of Forestry and the University                
 together sold 25 million board feet in 1995.  That is enough wood             
 for the Seward mill for a year.  Dollars talk, he said, so if                 
 anybody has the money to pay, the wood is there.  One thing the               
 public process does, because of the forest land use plan, is that             
 it forces larger sales than we might otherwise have.  It makes                
 smaller sales less cost effective.                                            
                                                                               
 HSTA - 03/21/95                                                               
 Number 638                                                                    
                                                                               
 CHAIR JAMES concluded that if we continue in the same process with            
 the logging industry, without making big changes, the people who              
 provide value added cannot stay in business.  Changes are necessary           
 to have the product available to do some value added.  What makes             
 business work is a market, a product, and then a profit.  Present             
 laws are not working.  Somehow we have to have a stop-gap measure.            
                                                                               
 Number 665                                                                    
                                                                               
 MR. BOUTIN said there are people working on a way to allow the                
 state to require value added processing of timber from state lands.           
 He is more optimistic than ever before that they will be able to              
 get that done.  He reiterated that he does not see the public                 
 process as an impediment to bringing timber up for sale.                      
                                                                               
 CHAIR JAMES said, It is the time it takes.                                    
                                                                               
 Number 674                                                                    
                                                                               
 REPRESENTATIVE GREEN concluded that if the bureaucratic morass                
 continues, we will never be where we need to be when the market               
 comes.  Time is of the essence.  He thought Mr. Boutin failed to              
 get the point which was if logs are not available in a timely                 
 manner that people will not come into Alaska and commit to putting            
 up a value added type plant.                                                  
                                                                               
 MR. BOUTIN focused on their pipeline of timber that is in process,            
 explaining that once the timber is sold it takes some type of                 
 development, like building roads and so forth.  Most of their sales           
 are in the winter, but they cannot get to them until the next fall.           
 However, the pipeline of timber is more full than it has ever been            
 before, so despite the public process they are doing more now than            
 in the past.                                                                  
                                                                               
 TAPE 95-33, SIDE A                                                            
 Number 000                                                                    
                                                                               
 CHAIR JAMES requested that they move the bill out and let it be               
 heard in Resources, the next committee of referral.  She felt they            
 had a good discussion.                                                        
                                                                               
 Number 006                                                                    
                                                                               
 REPRESENTATIVE ED WILLIS noted that this bill covers a lot of                 
 variation that he is not an expert in.  His concern was how the               
 fish habitat is protected when they prepare the packages for sale.            
 Fisheries, is one of the main resources of the state, and a                   
 renewable resource.  He questioned what they do to protect that               
 habitat.                                                                      
                                                                               
 Number 029                                                                    
                                                                               
 MR. BOUTIN said they do a number of things.  The Forest Practices             
 Act for state land requires a riparian buffer, which they use as a            
 no-cut buffer.  The law would allow variations, but they do not use           
 variations on state land.  They have a 100 foot no-cut buffer, and            
 then from 100 to 300 feet they have a special wildlife management             
 zone where they defer to the Alaska Department of Fish and Game as            
 to whether they can enter into it or not.                                     
                                                                               
 Number 077                                                                    
                                                                               
 REPRESENTATIVE ROBINSON said she wanted to go through the                     
 recommendations from the department on the amendments before                  
 passing the bill out.  She wanted to understand everything and said           
 she wanted Mr. Boutin to go through the bill, point by point, to              
 show where he recognized problems.  Another issue bothering her was           
 the two year process.  She failed to understand why anyone had a              
 problem with it when it was so important to this state.  Two years            
 in her view was not a long time.  Another issue was the need for              
 federal changes before they can begin the promotion of the value              
 added.                                                                        
                                                                               
 MR. BOUTIN said he had heard in the Department of Law that it is              
 not possible to have enforceable state law requiring value added              
 without a change in federal law.                                              
                                                                               
 REPRESENTATIVE ROBINSON said we should look at some kind of                   
 resolution to our congressional delegation about whatever it is               
 that we need to do.  She wanted to get on the record also that HB             
 16 was introduced by Representative Tom Brice that was nearly                 
 identical to this bill.  It was upsetting to her, she said, that              
 they introduced a bill through State Affairs and they did not hear            
 Representative Brices bill.                                                   
                                                                               
 Number 140                                                                    
                                                                               
 CHAIR JAMES had an explanation for Representative Robinson, saying            
 that she received the same documentation that Representative Brice            
 received from timber operators in the Fairbanks area, but he filed            
 a bill that excluded important sections of the documentation.  The            
 timber operators wanted it like it was and HB 212 is what the                 
 timber operators wanted.  HB 212 includes their original requests.            
                                                                               
 REPRESENTATIVE PORTER said it would be appropriate that Resources             
 deal with these amendments, where there are the people who have               
 that specific interest and expertise.  He felt State Affairs dealt            
 appropriately with the policy issues that the committee was                   
 required to look at.  He also recognized and believed there are               
 people who rely on and benefit from the current procedural                    
 requirements of statute and regulation.  Representative Porter said           
 he would only add that there are others who are adversely affected            
 and who object to the time required in the process.  He stated that           
 the courts have upheld the divisions application of the law, and              
 they have crossed all the Ts and dotted all the Is.  In his view,             
 the policies should be made in the legislature, not in the courts.            
 He felt that meeting markets is a function of competition and it is           
 only fair to put the state on the same playing field as others who            
 are competing.  He supported moving the bill out.                             
                                                                               
 Number 193                                                                    
                                                                               
 REPRESENTATIVE IVAN said he followed the purpose and intent of the            
 bill and he approved of it.  As he explained, he came from an                 
 economically depressed area, where there is minimal resource                  
 development.  Timber supplies are small, and there is small timber            
 in the middle Kuskokwim he would like to see developed wherever               
 possible, and to make it available within their local area.  He               
 thought this bill would provide opportunities for economic                    
 development for small operations there.  When they have timber                
 projects now they have to order it from Seattle, and it arrives the           
 following year.  The people he represents are some of the best                
 conservationists as far as fishery resources are concerned.  If the           
 bill passed, they would make sure the fisheries are protected.                
 Also, this would provide jobs and make the product available to the           
 people there, where they hardly have anything as far as timber is             
 concerned.                                                                    
                                                                               
 CHAIR JAMES called for a motion to move the bill out.                         
                                                                               
 REPRESENTATIVE OGAN moved that the committee pass HB 212 out of               
 State Affairs with fiscal notes attached and individual                       
 recommendations.                                                              
                                                                               
 REPRESENTATIVE ROBINSON objected, and wanted to reiterate why she             
 objected.  She agrees with Representative Ivan, and she would like            
 to see smaller operators have a better access to our forests.  She            
 also would like to see the smaller operators do better value added            
 products with the lumber.  The reason she objected was that they              
 did not go through the bill, and she had not heard the true                   
 objections from the department one by one, or go through the                  
 recommended amendments brought to the committee.  Her desire was to           
 move the bill out in the best shape possible, and she did not think           
 they accomplished that.                                                       
                                                                               
 CHAIR JAMES responded to Representative Robinson saying that this             
 bill should have and could have gone directly to Resources.  It was           
 heard in State Affairs at her request, so this committee would                
 understand the gist of what they were doing with this bill.  She              
 regretted that they did not have the amendments soon enough so they           
 could look at them for a few days and come prepared to deal with              
 them.  Nevertheless, she felt they had a good State Affairs                   
 Committee meeting on the bill.  They gave it a lot of attention and           
 did not slight anyone.  They allowed testimony and got good                   
 response from Mr. Boutin on all the questions and comments.  They             
 met the State Affairs requirements, so she was comfortable about              
 moving it on to Resources where the amendments will be addressed in           
 a timely fashion.                                                             
                                                                               
 REPRESENTATIVE ROBINSON said she just did not understand why the              
 rush.  She said she would obviously lose on this, but she had at              
 least put her comments on the record.                                         
                                                                               
 REPRESENTATIVE WILLIS said he would be voting not to pass the bill            
 out for similar reasons as expressed by Representative Robinson.              
                                                                               
 CHAIR JAMES asked for a roll call vote because there were                     
 objections.  Representatives Porter, Ogan, Green, Ivan and James              
 voted in favor of moving the bill out.  Representatives Willis and            
 Robinson voted against passing the bill.  HB 212 was passed out of            
 the State Affairs Committee.                                                  

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