BP BHEAD INT S [atlas:bill]

AN ACT Relating to timber sales; and adding a new chapter to Title 79 RCW.

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

NEW SECTION. Sec. 1. (1) The legislature finds that:

(a) State forests are a valuable resource to the people of the state, providing employment opportunities and a significant source of income to the state and endowed state institutions;

(b) The commissioner of public lands is entrusted with managing state forests in such a manner as will secure the maximum long‑term financial return to the institution to which granted or to the state if not specifically granted;

(c) Maximum long‑term financial returns to the institutions to which land is granted or to the state if not specifically granted with state forests is derived from processing within Washington timber from state forests because this sustains a healthy forest products industry in the state, thereby ensuring a sufficient number of bidders to compete for the timber, generating increased financial returns for it;

(d) A stable supply of timber for the Washington forest products industry will induce businesses to invest in processing facilities in Washington, providing more jobs to Washington's people; and

(e) That the growth of the forest products industry in Washington produced by a stable timber supply will contribute to the maximum long‑term financial return to the institution or to the state by generating increased corporate and individual property taxes.

(2) It is declared that the purposes of this chapter are to:

(a) Promote wood processing and manufacturing in Washington to generate related business and employment opportunities, creating additional corporate and individual property taxes for the state and its endowed institutions; and

(b) Act as a market participant in the timber market in a way that helps enhance the long‑term maximum value of state forests by ensuring that an adequate proportion of the total sales of timber sold by the state of Washington is sold to qualified purchasers within Washington.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Board" means the board of natural resources created in RCW 43.30.040.

(2) "Person" means any individual, association, partnership, corporation, trust, or other legal entity.

(3) "Qualified bidder" means a person who has neither processed outside of Washington, nor sold to another person who has processed outside of Washington, five percent or more of the cumulative total of the timber from state forests he or she has purchased. However, the purchase and disposition of pulp logs, as such logs are defined by the board, shall not be considered in determining whether a purchaser is qualified.

(4) "State forests" means all forest lands owned by the state of Washington, including those lands granted to an institution by the federal government, which are managed or controlled by the board.

(5) "Wood processing or manufacturing" means the conversion of logs into finished wood products generally recognized as consumer goods, including, but not limited to: Paper, shakes, lumber, shingles, plywood and panel products, utility and other finished poles, and posts and other fence products. Wood processing or manufacturing shall not include removing bark and the immediate underlying surfaces of logs thereby producing cants for export outside the boundaries of the state.

NEW SECTION. Sec. 3. (1) Each fiscal year, the board shall offer ninety‑five percent of the total volume of the year's timber sales from state forests, exclusive of estimated pulp log volumes from state forests, for sale to qualified bidders. The remaining five percent of the total volume of the year's timber sales shall be offered for sale to all persons, regardless of whether they are qualified bidders under this chapter.

(2) Notwithstanding the provisions of subsection (1) of this section, the board shall, if it finds after consideration of unanticipated dislocations in local timber supplies that timber from state forests in certain regions of the state will not be needed by qualified bidders, offer such timber for sale to all persons without regard to whether they are qualified bidders. In addition, if the board determines that a purchaser who has previously acquired state timber is adversely affected by a market dislocation, such purchaser may dispose of his or her timber without affecting his or her qualified bidder status.

(3) In the event qualified bidders do not purchase timber offered for sale exclusively to them, the board, if it finds after consideration of the reasons the timber was not sold, that it is in the best interests of the state and the endowed institutions, may offer the timber for sale to all bidders, without regard to whether they are qualified bidders as defined in section 2 of this act. The purchase and disposition of the timber shall not be considered in determining whether a person is a qualified bidder for subsequent timber sales.

NEW SECTION. Sec. 4. A person must be certified by the board as qualified prior to participating in any bidding for state forest timber offered for sale under the provisions of this chapter. In support of such certification, each bidder shall present at the request of the board the timber purchase and disposition records described in this section. The records shall show the cumulative annual purchases and disposition of timber from state forests for the years preceding the date of the timber sale. However, in no event shall the disposition of timber from a sale prior to the effective date of this section be considered. Any person seeking certification who has not previously purchased timber from state forests shall provide the board with the names and addresses of all persons who have any financial interest in the purchase or disposition of the timber, whether the interest results from open loans, mortgages, conditional sales, contracts, silent partnerships, trusts, or any other basis other than trade accounts incurred in the ordinary course of business, and the amounts of the interests. Persons seeking certification shall further provide any other information the board reasonably requires to determine whether such a person is a qualified bidder as defined in section 2 of this act. In determining the status of a person, the board may take into consideration other evidence, such as scaling records, load tickets for vehicles transporting forest products, and other written and oral testimony. The information received pursuant to this section shall not be available to the general public unless the person seeking to become a qualified bidder authorizes a release of the information.

NEW SECTION. Sec. 5. The board shall maintain a current list of all certified bidders. The board shall immediately remove from its list of certified bidders any person who ceases to meet the definition of a qualified bidder as defined in section 2 of this act. A person removed from the list of qualified bidders is ineligible for a period of five years to participate in any bidding on timber sales reserved for qualified bidders. The board shall retain the power to make the final determination upon a bidder's status.

NEW SECTION. Sec. 6. (1) The attorney general is directed to take any action he or she deems necessary to determine the federal and state constitutionality of this chapter. Pending the resolution of the attorney general's actions, timber sales shall be made under the provisions of this chapter. If, however, for any reason the state cannot sell its timber under the provisions of this chapter, the board shall carry out its timber sale program under other existing statutes and rules.

(2) The board shall adopt those rules necessary to implement and administer the provisions of this chapter.

NEW SECTION. Sec. 7. 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. 8. Sections 1 through 7 of this act constitute a new chapter in Title 79 RCW.