HOUSE BILL REPORT

ESSB 5911

As Amended by the House

BYSenate Committee on Ways & Means (originally sponsored by Senators Amondson, Stratton, Hayner, Owen, McDonald, Newhouse, Anderson, Matson, Johnson, Smith, Lee, Bailey, Cantu, Thorsness, Patterson, Benitz, Nelson, Saling, Sellar, Craswell, Barr, McCaslin, Conner, Rasmussen, DeJarnatt and Bauer)

Providing for the sale of state timber.

House Committe on Natural Resources & Parks

Majority Report:  Do pass with amendments.  (8)

      Signed by Representatives Belcher, Chair;K. Wilson, Vice Chair; Dellwo, Ferguson,R. Fisher, Hargrove, Raiter and Sayan.

Minority Report:  Do not pass.  (3)

      Signed by Beck, Ranking Republican Member; Brumsickle and Fuhrman.

House Staff:Bill Koss (7868-7129)

Rereferred House Committee on Appropriations

Majority Report:  Do pass as amended by Committee on Natural Resources & Parks.  (24)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Appelwick, Belcher, Braddock, Bristow, Brough, Dorn, Ebersole, Ferguson, Hine, May, McLean, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Bowman and Nealey.

House Staff:      Randy Acker (786-7136)

AS PASSED HOUSE APRIL 12, 1989

BACKGROUND:

During recent years, the National Forests in Washington have been preparing new forest management plans, many of which incorporate lower timber sale levels.  During December, the Forest Service determined that, in order to protect habitat for spotted owls, it needed to withdraw certain timberlands from further harvest.  This decision, termed the Record of Decision, affects the entire state, but particularly the Olympic Peninsula.  Up to 1,655 direct jobs may be lost by 1990 due to the decline in timber sales.

The state, through the Department of Natural Resources (DNR), manages approximately 69,000 acres of old growth in the Hoh-Clearwater drainage of the Olympic Peninsula.  The state holds most of these lands in trust for the Common Schools, with the proceeds going to school construction. To date, approximately 6,305 acres, containing timber worth $87 million, have been deferred from sale on these lands.  DNR manages approximately 541,000 acres of Forest Board transfer land for the benefit of the counties.  The nature of the trust relationship between the state and the counties is prescribed by the Legislature.

SUMMARY:

In response to emerging timber management concerns, the Legislature finds that it should encourage the development of additional information, anticipate issues, and support a process that encourages counties and the state to develop a joint decision-making process affecting timber sales from Forest Board Transfer lands.  To do this, the Legislature establishes programs which (1) allow counties to sell timber to certain eligible firms, (2) require several reports from the Department of Natural Resources, (3) offer economic development assistance, (4) create a Forest Resource Council, and (5) provide for education and research.

USE OF FOREST BOARD TRANSFER LANDS

Counties with Forest Board transfer lands may petition the Board of Natural Resources to have a portion of the Forest Board transfer timber sold to firms that meet the following criterion:  (a) the firm bought at least 50 percent of its timber from public lands during the past three years; (b) at least 75 percent of the timber purchased by the firm in the past year was processed in Washington; and (c) the firm processes timber in Washington, making lumber, veneer, plywood, shakes, shingles, ports, poles or pilings.

The program expires June 30, 1994.

Participating firms must prepare annual reports to the Department of Natural Resources (DNR) regarding timber purchased under this program.

The DNR shall report annually to the House and Senate on the accomplishments of the program.

REPORTS REQUIRED FROM THE DEPARTMENT OF NATURAL RESOURCES

In order to obtain information that will allow the Legislature to make more knowledgeable decisions and take steps to protect sensitive land while stabilizing economies and meeting trust needs, DNR is directed to prepare three studies:  (1)  Identify opportunities for acquiring private forest land and the costs, benefits, advantages, and disadvantages of so doing. (2)  Evaluate the impacts of creating a "unitary" trust for the Forest Board transfer lands, i.e., one in which all counties obtain a share of the revenue generated from the Forest Board lands. (3)  Evaluate the impacts of exchanging Forest Board transfer land for granted trust lands containing old growth timber.

The reports shall be prepared by December 1, 1989.

Trust land management shall continue unaffected during the studies.

ECONOMIC DEVELOPMENT

The Governor shall form an interagency timber stabilization task force consisting of representatives from the Departments of Trade and Economic Development, Community Development, Natural Resources, and CINTRAFOR at the University of Washington and others deemed appropriate.  The task force shall oversee the tasks assigned to the Departments of Trade and Economic Development, Community Development and Natural Resources and any long term timber supply study enacted by the 1989 Legislature.

The Department of Trade and Economic Development shall administer the following programs:  (1) a timber industrial extension service providing technical and financial assistance to certain firms; and (2) a timber supply broker to identify timber that may be available to firms needing additional supplies. By December 1, 1990, the Northwest Policy Center shall report to the Legislature on (a) the present economy of areas of the state impacted by federal timber sale reductions; (b) the economic losses associated with reductions in federal timber sales; and (c) potential methods for increasing economic development in these areas.  A $752,000 appropriation is made from the general fund.

The Department of Community Development shall provide the following services to communities adversely affected by reductions in federal timber sales:  (1) formation and implementation of community economic development plans; (2) grants to two non-profit groups to establish local re-employment centers to supplement the on-going efforts of local job centers administered by the Department of Employment Security; and (3) technical and financial assistance on employee ownership to timber industry employees or firms threatened with closure or large layoffs.  An $905,000 appropriation is made from the general fund.

The Department of Natural Resources shall (1) provide non-industrial forest landowners with technical assistance aimed at increasing timber supplies; (2) conduct a study of state-owned hardwood forests, emphasizing management policies to increase the supply of commercially harvestable hardwoods on state lands; (3) either contract for labor intensive forest land management activities and/or hire unemployed timber workers in areas impacted by federal timber sale policies; and (4) work closely with Employment Security to "get the word out" about availability of forest land management contracts per (3) above.  A $529,000 appropriation is made from the general fund, and $2,800,000 from the Resource Management Cost Account.

WASHINGTON FOREST RESOURCE COUNCIL

The Governor shall appoint a 25-member Forest Resource Council, representing certain named interest groups and others.  The Council shall advise the Governor, Commissioner of Public Lands, and the Legislature regarding forest policies.  Its primary objective is making recommendations which increase coordination between federal, state, and private forest policies.  A $150,000 appropriation is made from the general fund.

OLYMPIC INSTITUTE FOR OLD GROWTH FOREST AND OCEAN RESEARCH AND EDUCATION

The Institute is established to demonstrate innovative forest management methods which integrate environmental and economic interests into pragmatic management of forests and oceans.  It will be jointly administered by the Colleges of Forest Resources and Ocean and Fishery Science at the University of Washington.

A $150,000 appropriation is made to the University of Washington to prepare the Institute's development plan.  In preparing the plan, the preparers shall be guided by the recommendations of the Old Growth Commission appointed by the Commissioner of Public Lands.

EXPIRATION DATE

The program to sell portions of the timber from Forest Board transfer land to firms meeting certain eligibility standards shall expire June 30, 1994.

Appropriation:    $752,000 to the Department of Trade and Economic Development; $905,000 to the Department of Community Development; $529,000 to the Department of Natural Resources; $150,000 to the Washington Forest Resource Council; $150,000 to the University of Washington.  Total General Fund-State appropriation:  $2,486,000.

$2,800,000 from the Resource Management Cost Account to the Department of Natural Resources.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    (Natural Resources and Parks)  Brian Boyle, Commissioner of Public Lands; Rich Nafziger, Office of Financial Management; Bill Vaux, Skagit County Commissioner; Judy Turpin, Washington Environmental Council; Tom Shoemaker, Audubon; Gus Kuehne, Northwest Independent Forest Manufacturers; Bruce Stuhe, WTD Industries; Mike Buse, Liberty Mill; Herb York, Enterprise Lumber Company; Dave Buse, Buse Mill (all spoke with some reservations about the bill).

(Appropriations)  Rich Nafziger, Office of Financial Management; Meg Van Schoorl, Department of Community Development; Dennis Matson, Department of Trade and Economic Development; Jim Metcalf, Washington Association of Counties.

House Committee - Testified Against:      (Natural Resources and Parks)  Heather McPherson, citizen; Mike Meyers, citizen; Joseph Romero, citizen; David Kershaw, citizen.

(Appropriations)  None Presented.

House Committee - Testimony For:    (Natural Resources and Parks)  This proposal takes the Governor's four-point plan and refines it, trying to get more value from each log harvested.  It meets the constitutional requirements necessary to encourage domestic processing of timber.  By seeking to acquire additional forest lands, DNR can develop a management objective that meets whatever needs the Legislature identifies.

Washington should encourage marketing products overseas.

The state needs the economic studies proposed.  They will help focus attention and financing on the most important and responsive areas.

Washington needs to develop programs that recognize that less timber will come from Forest Service lands.  The current log supply shortage will last a long time; therefore, the state needs to act to require domestic timber processing.  When forced, foreign log customers will switch to processed products.

(Appropriations)  This bill refines the Governor's timber plan.  It takes steps to deal with both the short term and long term problems related to timber supply.

House Committee - Testimony Against:      (Natural Resources and Parks)  The Forest Research Council, designed to coordinate federal, state, and private forestry policies should be reconsidered.  Its duties must not conflict with the Board of Natural Resources or the Forest Practices Board.  It is too large and needs more focus.

The counties cannot afford to lose the income they receive from selling logs into the export market.  They prefer a program that will compensate them for any losses.

A task force is not needed to coordinate the economic development programs and the long-term timber supply study.

The mechanism to get more timber to domestic mills could be improved.  Washington could and should require domestic processing of state timber.

Several firms with too many employees to qualify for the sales program feel that any firm should be eligible to bid on sales.

Old growth timber harvesting should be slowed to develop a sustainable harvest of old trees.  This will assist local economies more in the long run than current policies.

(Appropriations)  None Presented.