HOUSE BILL REPORT

ESHB 3016

BYHouse Committee on Appropriations (originally sponsored by Representatives H. Myers and Belcher)

Implementing provisions relating to reserved timbers.

House Committe on Appropriations

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (16)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Belcher, Braddock, Brekke, Dorn, Ebersole, Ferguson, Hine, Peery, Rust, Spanel, Sprenkle, Wang and Wineberry.

Minority Report:  Do not pass.  (8)

      Signed by Representatives Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Bowman, Doty, May, McLean, Nealey and Valle.

House Staff:Randy Acker (786-7153)

AS PASSED HOUSE FEBRUARY 12, 1990

BACKGROUND:

In December 1988, the United States Forest Service determined that to protect habitat for spotted owls there was a need to withdraw timberlands from harvest that had previously been scheduled to be cut.  On state trust lands, the Board of Natural Resources delayed the harvest of timber scheduled to be cut during 1988 and 1989.  Because of the impact of these actions on the timber harvest level, and the resulting negative impact on timber related jobs, particularly on the Olympic Peninsula, the 1989 Legislature enacted into law provisions intended to help mitigate these impacts.

The 1989 legislation allowed counties with Forest Board transfer lands to reserve a portion of the timber on these lands for sale to firms that meet the following criteria: (a) at least 50 percent of the firm's volume was bought from state and federal lands during the past three years; and (b) 85 percent of the volume of timber purchased during the last year was processed in Washington. Forest Board transfer lands are lands managed by the Department of Natural Resources for the benefit of the counties.

Counties receive maximum revenue when the timber on Forest Board Lands is sold to the highest bidder.  Under the 1989 legislation, counties may opt to reserve timber if they determine that doing so will help to ensure the economic vitality of the county.  Because reserved timber can not go to the export market, and thus to the highest potential bidder, counties will receive reduced revenue if they reserve timber.

To date no county has elected to reserve timber under the provisions of the 1989 legislation.

SUMMARY:

Counties are eligible to be compensated for revenues lost when they reserve timber from Forest Board Lands, or county lands, for sale to firms that process timber in-state.  The basis for compensation is to be calculated by the Department of Revenue by comparing the actual bid price of the timber reserved, to the valuation determined by the department for private timber that is exportable.  The difference is the compensation to be paid. Twenty-five percent goes to the Department of Natural Resources for the Forest Development Account, with the balance distributed between the counties and other junior taxing districts in the same manner as general taxes are distributed.

Reserving timber under this act does not constitute a contractual relationship between any of the affected parties.

Fiscal Note:      Requested February 3, 1990.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    (ORIGINAL BILL)  No one.

House Committee - Testified Against:      (ORIGINAL BILL)  No one.

House Committee - Testimony For:    None.

House Committee - Testimony Against:      None.