AN ACT Relating to reserve timber; amending RCW 76.12.190; making an appropriation; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 2, chapter 424, Laws of 1989 and RCW 76.12.190 are each amended to read as follows:

(1) Whenever the board of county commissioners or the county council of any county determines that it is in the best interests of the county as a trust beneficiary and that it would help to ensure the economic viability of that county, the county may petition the board of natural resources to reserve, for the purposes described in this section, a portion of the timber to be sold in any given year from forest lands which have been acquired from that county by the state under RCW 76.12.030. A county whose forest board lands are managed by the county need not obtain the prior approval of the board of natural resources to reserve timber under this section. The county shall specify what portion of such timber is to be reserved, and the portion reserved may be up to one hundred percent of such timber.

(2)(a) Timber reserved under this section and timber reserved by counties who manage forest board lands shall be made available for sale to enterprises which meet all of the following criteria: (i) At least ((~~fifty~~)) seventy-five percent by volume of the timber purchased by the enterprise in the previous three years ((~~was state-owned or federally-owned~~)) must be from lands that are not owned or controlled by the enterprise; (ii) at least eighty-five percent by volume of the timber purchased ((~~by the enterprise in the previous year was processed in Washington state~~)) from public lands in the previous year was processed in the state of Washington or adjacent states. This criteria shall escalate to ninety-five percent for an enterprise that has purchased one or more sales established under this section during the previous year; ((~~and~~)) (iii) an enterprise with no history of public timber purchase can be exempted from the criteria in (a) (i) and (ii) of this subsection if it operates a facility as described in (a)(iv) of this subsection for sales with a volume of timber up to the volume of timber equivalent to that which can be processed by the enterprise's facility within one-half of the time granted for removal on the timber sale; and (iv) the enterprise operates facilities in Washington which manufacture lumber, plywood, veneer, posts, poles, pilings, shakes, or shingles. For purposes of these criteria, "processed" means manufactured into lumber, plywood, veneer, posts, poles, pilings, shakes, or shingles.

(b) Once the board of natural resources has accepted the petition of a county to reserve a portion of timber pursuant to this section, the department shall compile a list of enterprises which meet the criteria listed in (a) of this subsection. An enterprise must petition the department for inclusion in the list of eligible enterprises, and must include with the petition certified records sufficient to establish that the enterprise meets the criteria listed in (a) of this subsection. If an enterprise purchases a processing facility, the enterprise may incorporate the records of that facility in its petition for inclusion in the list of eligible enterprises. The department shall establish by rule what types of records are acceptable for purposes of establishing eligibility. Timber reserved under this section shall be sold only to enterprises contained in the list of eligible firms prepared by the department.

(c) For each sale of timber under this section, the department shall require the purchaser to: (i) Submit annually, until all unprocessed timber is accounted for, a certified report on the disposition of any unprocessed timber harvested from the sale, including a description of unprocessed timber which is sold, exchanged, or otherwise disposed of to another enterprise and a description of the relationship with the other enterprise; (ii) submit annually, until all unprocessed timber from the sale is accounted for, a certified report on the sale of any unprocessed timber from private lands which is exported or sold for export; and (iii) maintain records of all such transactions involving unprocessed timber, and to make such records available for inspection and verification by the department for up to three years after the sale is terminated.

(d) For purposes of this section, "enterprise" means any business concern and its affiliates, as that term is defined in 13 C.F.R. 121.3, in effect as of January 1, 1988.

(e) Counties shall be compensated for any loss in revenue attributable to sales under this section. Compensation moneys shall be from the general fund, from money credited to the general fund through the timber excise tax, chapter 84.33 RCW. The compensation level shall be determined by comparing the bid price actually paid for the sales sold under subsection (2) of this section with the valuation estimated for private timber that is fully exportable under the excise tax system. A cumulative total shall be kept for each county participating in the program. At the end of each fiscal year, the department of revenue shall determine the aggregate difference in harvest revenue of sales sold under subsection (2) of this section and the excise tax value. The county will then be compensated for the amount of any deficit. If a surplus should occur, that surplus will be carried forward to the following year.

(3) If a county petitions the board of natural resources to reserve timber as provided in this section, the use of the forest board land trust assets for the purposes of *this act shall be deemed to be consistent with the trust mandate imposed on the management of lands acquired pursuant to RCW 76.12.030.

(4) A petition to reserve a portion of timber may be revoked by the board of county commissioners or county council. Notice of such revocation shall be delivered to the board of natural resources. The board of natural resources shall not unreasonably deny such a request. Such revocation shall not impair any sale of timber which is approved by the board of natural resources before the board receives the notice.

(5) This section shall expire June 30, 1994.

NEW SECTION. Sec. 2. The sum of five million dollars, or as much thereof as may be necessary, is appropriated from the general fund to the department of natural resources for the biennium ending June 30, 1991, to carry out the purposes of this act.

NEW SECTION. Sec. 3. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 4. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.