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104TH CONGRESS

2D SESSION S. 1877

To ensure the proper stewardship of publicly owned assets in the Tongass

National Forest in the State of Alaska, a fair return to the United

States for public timber in the Tongass, and a proper balance among

multiple use interests in the Tongass to enhance forest health, sustainable harvest, and the general economic health and growth in southeast

Alaska and the United States.

IN THE SENATE OF THE UNITED STATES

JUNE 13, 1996

Mr. MURKOWSKI (for himself and Mr. STEVENS) introduced the following bill;

which was read twice and referred to the Committee on Energy and Natural Resources

A BILL

To ensure the proper stewardship of publicly owned assets

in the Tongass National Forest in the State of Alaska,

a fair return to the United States for public timber

in the Tongass, and a proper balance among multiple

use interests in the Tongass to enhance forest health,

sustainable harvest, and the general economic health and

growth in southeast Alaska and the United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Environmental Im3 provement Timber Contract Extension Act’’.

4 SEC. 2. MODIFICATION OF LONG-TERM CONTRACT RE5 GARDING TONGASS NATIONAL FOREST.

6 (a) DEFINITIONS.—In this section:

7 (1) The term ‘‘board feet’’ means net scribner

8 long-log scale for all sawlogs and all hemlock and

9 spruce utility grade logs.

10 (2) The term ‘‘contract’’ means the timber sale

11 contract numbered A10fs–1042 between the United

12 States and the Ketchikan Pulp Company.

13 (3) The term ‘‘contracting officer’’ means the

14 Regional Forester of Region 10 of the United States

15 Forest Service.

16 (4) The term ‘‘mid-market criteria’’ means an

17 appraisal that ensures an average timber operator

18 will have a weighted average profit and risk margin

19 of at least 60 percent of normal in a mid-market sit20 uation, representative of the most recent 10 years of

21 actual market data.

22 (5) The term ‘‘proportionality’’ means the pro23 portion of high volume stands (stands of 30,000 or

24 more board feet per acre) to low volume stands

25 (stands of 8,000 to 30,000 board feet per acre).
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1 (6) The term ‘‘purchaser’’ means the Ketchikan

2 Pulp Company.

3 (b) FINDINGS.—Congress finds the following:

4 (1) On July 26, 1951, the Forest Service, on

5 behalf of the United States, and the purchaser en6 tered into a contract to harvest 8,250,000,000 board

7 feet of timber from the Tongass National Forest in

8 the State of Alaska. While the contract is scheduled

9 to end June 30, 2004, it acknowledges an intention

10 on the part of the Forest Service to supply adequate

11 timber thereafter for permanent operation of the

12 purchaser’s facilities on a commercially sound and

13 permanently economical basis. This legislation is

14 necessary to effectuate that intent.

15 (2) A pulp mill or similar facility is necessary

16 in southeast Alaska to optimize the level of year17 round, high-paying jobs in the area, to provide high

18 value added use of low-grade wood and by-product

19 material from sawmilling operations, and to main20 tain a stable regional economy.

21 (3) The purchaser plans to make environmental

22 and operational improvements to its pulp mill, in23 cluding conversion to an elementally chlorine free

24 bleaching process, expansion of wastewater treat25 ment facilities, relocation of the existing wastewater
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1 outfall, and improvements to chemical recovery and

2 power generation equipment. Total capital expendi3 tures are estimated to be $200,000,000,

4 $25,000,000 of which the purchaser has already in5 vested.

6 (4) Extension of the contract for 15 years is

7 the minimum reasonable extension period to allow

8 amortization of these environmental improvement

9 and energy efficiency projects.

10 (5) Ketchikan is the fourth largest city in Alas11 ka. Its economic and job base are extremely depend12 ent upon the continuation of the contract, which

13 provides the principal source of year-round employ14 ment in the area. The purchaser has stated among

15 its goals and objectives the following:

16 (A) Continuation of a long-term commit17 ment to Ketchikan and southeast Alaska, in18 cluding maintenance of a stable Alaskan

19 workforce, utilization of Alaskan contractors,

20 vendors, and suppliers to permit those busi21 nesses to hire and maintain Alaskan employees.

22 (B) Participation in the Forest Service’s

23 land management planning process with other

24 users so that the process may be completed ex25 peditiously with maximum information.
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1 (C) Adherence to sound principles of mul2 tiple-use and sustained yield of forest resources

3 providing for the production of sustainable con4 tract volumes for the purchaser and the other

5 timber operators in southeast Alaska and the

6 protection and promotion of other forest uses,

7 including tourism, fishing, subsistence, hunting,

8 mining, and recreation.

9 (D) Protection of air, water, and land, in10 cluding fish and wildlife habitat, through com11 pliance with applicable Federal, State, and local

12 laws.

13 (E) Commitment to continue to explore

14 new processes and technology to maximize the

15 use of timber harvested and increase the value

16 of products manufactured in southeast Alaska.

17 (6) The national interest is served by a policy

18 that accomplishes the proper stewardship of publicly

19 owned assets in the Tongass National Forest, a fair

20 return to the United States for public timber in the

21 Tongass National Forest, and a proper balance

22 among multiple use interests in the Tongass Na23 tional Forest to enhance forest health, sustainable

24 harvest, and the general economic health and growth

25 in southeast Alaska and the United States in order
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1 to improve national economic benefits. The national

2 interest is best achieved by fostering domestic forest

3 product markets and by modifying the terms of the

4 contract pursuant to subsection (c).

5 (c) CONTRACT FAIRNESS CHANGES.—The contract is

6 hereby modified as follows:

7 (1) EXTENSION.—The term of the contract is

8 extended by 15 years from June 30, 2004.

9 (2) SALE OFFERING PLAN.—The contract shall

10 include a plan describing the amount of volume, lo11 cation, and the schedule by which the purchaser

12 shall receive the timber required by paragraph (3)

13 for the remainder of the contract term. The plan

14 shall be coordinated with the Tongass Land Man15 agement Plan.

16 (3) VOLUME REQUIREMENTS.—The volume of

17 timber required under the contract shall be provided

18 in 5-year increments of 962,500,000 board feet,

19 which the purchaser shall be obligated to harvest in

20 an orderly manner, subject to the following:

21 (A) Until March 1, 1999, when the next 5-

22 year increment is provided to the purchaser, the

23 Forest Service shall provide the purchaser with

24 at least 192,500,000 board feet per year of

25 available timber at a date certain each year and
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1 shall maintain a supply of timber adequate to

2 insure the purchaser can reasonably harvest

3 192,500,000 board feet each year.

4 (B) To ensure harvest in an orderly man5 ner, the contracting officer shall provide for the

6 construction by the purchaser of roads in por7 tions of the 5-year increment area of timber in

8 advance of the 5-year operating period by in9 cluding such roads in the environmental impact

10 statement prepared for the 5-year operating pe11 riod.

12 (C) Timber selected for inclusion in the 5-

13 year increment shall meet the mid-market cri14 teria.

15 (4) APPRAISALS AND RATES.—The contracting

16 officer shall perform appraisals using normal inde17 pendent national forest timber sale procedures and

18 designate rates for the increments of timber to be

19 provided. The rates shall not be designated at a level

20 that places the purchaser at a competitive disadvan21 tage to a similar enterprise in Pacific Northwest and

22 those rate shall be the sole charges the purchaser

23 shall be required to pay for timber provided.
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1 (5) MEASUREMENT OF PROPORTIONALITY.—

2 The Forest Service shall measure proportionality

3 using the following criteria:

4 (A) Measure for groups of all contiguous

5 management areas.

6 (B) Measure proportionality by acres.

7 (C) Measure proportionality over the entire

8 rotation age.

9 (6) CONVERSION OR REPLACEMENT OF PULP

10 MILL.—The purchaser may convert or replace, in

11 part or in whole, its pulp mill with a facility that

12 manufactures any other value added product that

13 utilizes pulp logs as a raw material component.

14 (7) UNILATERAL TERMINATION.—The unilat15 eral termination clause of the contract is eliminated.

16 (8) SUBSEQUENT MODIFICATIONS.—Any clause

17 in the contract, as modified by this subsection, may

18 be further modified only by mutual agreement of the

19 Forest Service and the purchaser and may be so

20 modified without further Act of Congress.

21 (d) EFFECTIVE DATE FOR CONTRACT MODIFICA22 TION.—

23 (1) EFFECTIVE DATE.—The modifications

24 made by subsection (c) shall take effect 45 days

25 after the date of the enactment of this Act.
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1 (2) MINISTERIAL DUTY TO MODIFY THE CON2 TRACT.—Not later than such effective date, the con3 tracting officer shall revise, as a ministerial function,

4 the text of the contract to conform with the modi5 fications made by subsection (c) and implement the

6 modified contract. The contracting officer shall

7 make conforming changes to provisions of the con8 tract that were not modified by subsection (c) in

9 order to ensure that the modifications made by such

10 subsection are implemented.

11 (e) TRANSITION TIMBER SUPPLY.—Timber volume

12 available or scheduled to be offered to the purchaser under

13 the contract in effect on the day before the date of the

14 enactment of this Act shall continue to be offered and

15 scheduled under the contract as modified by subsection (c)

16 along with such additional timber volume as is necessary

17 to satisfy the timber volume requirement of 192,500,000

18 board feet per year.

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