UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549


                                 FORM 10-Q

                              ---------------

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                      Commission File Number 333-63825


                         SCOTIA PACIFIC COMPANY LLC
           (Exact name of Registrant as specified in its charter)



           DELAWARE                          68-0414690
 (State or other jurisdiction             (I.R.S. Employer
      of incorporation or              Identification Number)
         organization)


         P. O. BOX 712                          95565
  125 MAIN STREET, 2ND FLOOR                 (Zip Code)
      SCOTIA, CALIFORNIA
     (Address of Principal
      Executive Offices)


     Registrant's telephone number, including area code: (707) 764-2330


     Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes /X/   No /  /

The Registrant is a limited liability company wholly owned by an affiliate
of the Registrant.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A)
AND (B) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.


                             TABLE OF CONTENTS


PART I.  -  FINANCIAL INFORMATION
     Item 1.   Financial Statements:
          Balance Sheet at March 31, 1999 and December 31, 1998
          Statement of Income for the three months ended March
               31, 1999 and 1998
          Statement of Cash Flows for the three months ended
               March 31, 1999 and 1998
          Condensed Notes to Financial Statements

     Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations

PART II.  -  OTHER INFORMATION

     Item 1.   Legal Proceedings
     Item 6.   Exhibits and Reports on Form 8-K
     Signature

APPENDIX A - GLOSSARY OF DEFINED TERMS

                         SCOTIA PACIFIC COMPANY LLC

                               BALANCE SHEET
                          (IN MILLIONS OF DOLLARS)


<TABLE>
<CAPTION>

                                                    MARCH 31,    DECEMBER 31,
                                                       1999          1998
                                                  ------------  ------------
                                                   (UNAUDITED)
                      ASSETS
<S>                                               <C>           <C>
Current assets:
     Cash and cash equivalents                    $        5.2  $       31.9 
     Receivables from Pacific Lumber                       0.7           2.9 
     Prepaid timber harvesting costs                       2.6           2.6 
     Other prepaid expenses and current assets              .3           0.5 
                                                  ------------  ------------ 
          Total current assets                             8.8          37.9 
Timber and timberlands, net of accumulated
     depletion of $244.1 and
     $243.1, respectively                                262.2         252.0 
Property and equipment, net of accumulated
     depreciation of $8.3 and
     $7.9, respectively                                   14.4          14.4 
Deferred financing costs, net                             22.1          22.5 
Restricted cash                                            6.3          16.6 
Other assets                                               2.3           2.3 
                                                  ------------  ------------ 
                                                  $      316.1  $      345.7 
                                                  ============  ============ 

          LIABILITIES AND MEMBER DEFICIT

Current liabilities:
     Due to Pacific Lumber                        $        0.9  $        0.8 
     Accrued interest                                     12.4          28.4 
     Other accrued liabilities                             1.4           1.7 
     Long-term debt, current maturities                   15.9           8.2 
                                                  ------------  ------------ 
          Total current liabilities                       30.6          39.1 
Long-term debt, less current maturities                  846.5         859.5 
                                                  ------------  ------------ 
          Total liabilities                              877.1         898.6 
                                                  ------------  ------------ 

Contingencies
Member deficit                                          (561.0)       (552.9)
                                                  ------------  ------------ 
                                                  $      316.1  $      345.7 
                                                  ============  ============ 



<FN>

The accompanying notes are an integral part of these financial statements.

</TABLE>

                         SCOTIA PACIFIC COMPANY LLC

                         STATEMENT OF INCOME (LOSS)
                          (IN MILLIONS OF DOLLARS)


<TABLE>
<CAPTION>

                                                       THREE MONTHS ENDED
                                                           MARCH 31,
                                                  --------------------------
                                                       1999          1998
                                                  ------------  ------------
                                                          (UNAUDITED)

<S>                                               <C>           <C>
Log sales to Pacific Lumber                       $        6.3  $        9.7 
                                                  ------------  ------------

Operating expenses:
     General and administrative expenses                   2.4           1.5 
     Depletion and depreciation                            1.4           1.6 
                                                  ------------  ------------
                                                           3.8           3.1 
                                                  ------------  ------------

Operating income                                           2.5           6.6 

Other income (expense):
     Interest and other income                             0.4           0.7 
     Interest expense                                    (16.3)         (6.7)
                                                  ------------  ------------ 
Income (loss) before income taxes                        (13.4)          0.6 
Provision in lieu of income taxes                            -          (0.2)
                                                  ------------  ------------
Net income (loss)                                 $      (13.4) $        0.4 
                                                  ============  ============


<FN>

The accompanying notes are an integral part of these financial statements.

</TABLE>

                         SCOTIA PACIFIC COMPANY LLC

                          STATEMENT OF CASH FLOWS
                          (IN MILLIONS OF DOLLARS)


<TABLE>
<CAPTION>

                                                        THREE MONTHS ENDED
                                                            MARCH 31,
                                                   --------------------------
                                                        1999          1998
                                                   ------------  ------------
                                                           (UNAUDITED)
<S>                                                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                             $      (13.4) $        0.4 
     Adjustments to reconcile net income (loss)
          to net cash used by operating
          activities:
          Gain on sale of assets                           (0.2)            - 
          Provision in lieu of income taxes                   -           0.2 
          Depletion and depreciation                        1.4           1.6 
          Amortization of deferred financing
               costs                                        0.4           0.3 
          Increase (decrease) in cash resulting
               from changes in:
               Receivables from Pacific Lumber              2.3           1.8 
               Amounts due to Pacific Lumber                0.1             - 
               Accrued interest                           (16.0)         (6.6)
               Other accrued liabilities                      -          (0.3)
                                                   ------------  ------------
          Net cash used for operating activities          (25.4)         (2.6)
                                                   ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of assets                           0.3             - 
     Restricted cash withdrawals used to acquire
          timberlands                                      10.3             - 
     Capital expenditures                                 (11.6)         (1.1)
                                                   ------------  ------------
          Net cash used for investing activities           (1.0)         (1.1)
                                                   ------------  ------------ 

CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments on debt                            (5.4)        (10.8)
     Incurrence of deferred financing costs                (0.2)            - 
     Dividends paid                                           -          (2.7)
     Contributions                                          5.3           0.6 
     Other changes in restricted cash                         -           0.3 
                                                   ------------  ------------ 
          Net cash used for financing activities           (0.3)        (12.6)
                                                   ------------  ------------ 

NET DECREASE IN CASH AND CASH EQUIVALENTS                 (26.7)        (16.3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD           31.9          20.9 
                                                   ------------  ------------ 
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $        5.2  $        4.6 
                                                   ============  ============ 

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND
     FINANCING ACTIVITIES:
     Assumption of net tax liabilities by Pacific
          Lumber                                   $          -  $        0.2 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Interest paid                                 $       31.9  $       12.9 


<FN>

The accompanying notes are an integral part of these financial statements.

</TABLE>


                         SCOTIA PACIFIC COMPANY LLC

                  CONDENSED NOTES TO FINANCIAL STATEMENTS


1.        GENERAL

          The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
financial statements; accordingly, the financial statements included herein
should  be reviewed in conjunction with the financial statements and
related notes thereto contained in the Form 10-K.  Any capitalized terms
used but not defined in these Condensed Notes to Financial Statements are
defined in the "Glossary of Defined Terms" contained in Appendix A. 
Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year end.  The results of operations for the
interim periods presented are not necessarily indicative of the results to
be expected for the entire year.

          The financial statements included herein are unaudited; however,
they include all adjustments of a normal recurring nature which, in the
opinion of management, are necessary to present fairly the financial
position of the Company at March 31, 1999, the results of operations for
the three months ended March 31, 1999 and 1998 and the cash flows for the
three months ended March 31, 1999 and 1998.  The Company is a wholly owned
subsidiary of Pacific Lumber which is a wholly owned indirect subsidiary of
MGI.  MGI is a wholly owned subsidiary of MGHI, which is a wholly owned
subsidiary of MAXXAM.

          There were no reconciling differences between the Company's net
income and comprehensive income for either of the three month periods ended
March 31, 1999 and 1998.

2.        HEADWATERS TRANSACTIONS

          As described in Note 4 below, on September 28, 1996, the Pacific
Lumber Parties entered into the Headwaters Agreement with the United States
and California which provided the framework for the acquisition by the
United States and California of the Headwaters Timberlands.  A substantial
portion of the Headwaters Timberlands contains virgin old growth timber. 
Approximately 4,900 of these acres were owned by Salmon Creek, with the
remaining acreage being owned by Pacific Lumber and the Company (Pacific
Lumber owning the timber and related timber harvesting rights on the
Company's acreage).  On March 1, 1999, the Pacific Lumber Parties, the
United States and California consummated the Headwaters Agreement.  Salmon
Creek received $299.9 million for its 4,900 acres, and for its 700 acres,
Pacific Lumber received the 7,700 acre Elk River Timberlands which are to
be contributed to the Company on or before August 1999.  Of these proceeds,
$285.0 million has been deposited into an escrow account held by an escrow
agent and are to be made available as necessary to support the Timber
Notes, and may be released only under certain circumstances.  As of March
31, 1999, the Escrowed Funds were $286.0 million which includes interest
earned.

          The Company and Pacific Lumber also entered into the Owl Creek
Agreement and the Grizzly Creek Agreement with California regarding the
future sale to California of the Owl Creek and Grizzly Creek groves.  The
Owl Creek Agreement provides for the Company to sell the Owl Creek grove to
California, on or before June 30, 2002, for the lesser of the appraised
fair market value or $79.7 million.  At California's option, 25% of the
payment may be paid upon closing with three equal annual installments
thereafter and without interest.  The sale of the Owl Creek grove will not
be reflected in the Company's financial statements until it has been
concluded.  With respect to the Grizzly Creek Agreement, California may
purchase from Pacific Lumber, on or before October 31, 2000, a portion of
this grove for a purchase price determined based on fair market value, but
not to exceed $19.9 million.  The net proceeds from the Grizzly Creek grove
will be placed into an escrow account (on the same basis as the net
proceeds from the sale of the Headwaters Timberlands) unless, at the time
of receipt of such proceeds, the Escrowed Funds are no longer held in an
escrow account.  California also has a five year option under the agreement
to purchase additional property adjacent to the Grizzly Creek grove which
is within the Grizzly Creek conservation area. 

3.        RESTRICTED CASH

          Cash and cash equivalents include restricted cash of $3.1 million
and $28.4 million at March 31, 1999 and December 31, 1998, respectively,
which are being held for debt service payments on the Timber Notes.

          Restricted cash represents the amount deposited into an account
held by the trustee under the applicable indenture governing the Timber
Notes.  At March 31, 1999 and December 31, 1998, restricted cash primarily
consists of $5.8 million and $16.1 million which is remaining from the $25
million of the proceeds deposited into the Prefunding Account.  

4.        CONTINGENCIES

          Regulatory and environmental matters play a significant role in
the Company's business, which is subject to a variety of California and
federal laws and regulations as well as the Final HCP, Final SYP and 1999
TOL, dealing with timber harvesting practices, threatened and endangered
species and habitat for such species, and air and water quality.  While
regulatory and environmental concerns have resulted in restrictions on the
geographic scope and timing of the Company's timber operations, increased
operational costs and engendered litigation and other challenges to the
Company's operations, prior to 1998 they had not had a significant adverse
effect on the Company's financial position, results of operations or
liquidity.  However, the Company's first quarter 1999 and year ended 1998
results of operations were adversely affected by certain regulatory and
environmental matters, including during the second half of 1998 through the
date of this report, the absence of a sufficient number of available THPs
to enable the Company to conduct its operations at historic levels.

          On September 28, 1996,  the Pacific Lumber Parties entered into
the Headwaters Agreement with the United States and California which
provided the framework for the acquisition of the Headwaters Timberlands by
the United States and California.  Consummation of the Headwaters Agreement
was also conditioned upon, among other things,  approval of an SYP,
approval of a  Multi-Species HCP and issuance of the Permits.  As further
described in Note 2 "Headwaters Transactions," on March 1, 1999, the
Pacific Lumber Parties, the United States and California consummated the
Headwaters Agreement.  In addition to the transfer of the Headwaters
Timberlands by the Pacific Lumber Parties described in Note 2, the Final
SYP and the Final HCP were approved and the Permits were issued.  The
Pacific Lumber Parties and California also executed the California
Agreement. 

           The Final SYP complies with certain California Board of Forestry
regulations requiring timber companies to project timber growth and harvest
on their timberlands over a 100-year planning period and establish an LTSY
harvest level.  An SYP must demonstrate that the average annual harvest
over any rolling ten-year period will not exceed the LTSY harvest level and
that a timber company's projected timber inventory is capable of sustaining
the LTSY harvest level in the last decade of the 100-year planning period. 
The Final SYP is effective for 10 years and may be amended by Pacific
Lumber subject to approval by the CDF.  The Final SYP is subject to review
after five years.  Revised SYPs would be prepared every decade that address
the LTSY harvest level based upon reassessment of changes in the resource
base and other factors.

          Several species, including the northern spotted owl, the marbled
murrelet, the coho salmon and the steelhead trout, have been listed as
endangered or threatened under the ESA and/or the CESA.  The Final HCP and
the Permits allow incidental "take" of these and certain other listed
species so long as there is no "jeopardy" to the continued existence of
such species.  The Final HCP identifies the measures to be instituted in
order to minimize and mitigate the anticipated level of take to the
greatest extent practicable.  The Final HCP  not only provides for the
Company's compliance with habitat requirements for the northern spotted
owl, the marbled murrelet, the coho salmon and the steelhead trout, it also
provides for issuance of Permits for thirteen additional species that are
or may be listed in the future.  The Final HCP and related Permits have a
term of 50 years, and, among other things, include the following protective
measures: (i) setting aside timberlands as marbled murrelet conservation
areas; (ii) establishing streamside "no-cut" and limited cut buffers as
well as mass wasting areas based on an assessment of each of the Company's
watersheds to be completed within five years; (iii) limiting harvesting
activities during certain times of the year and during wet weather
conditions, and (iv) making certain specified improvements to the Company's
roads.   The Final SYP is also subject to the foregoing provisions. The
Company believes that the Final SYP and the Final HCP should in the long-
term expedite the preparation and facilitate approval of its THPs, although
there can be no assurance that the Company will not face difficulties in
the THP submission and approval process as it implements these agreements.

          Under the Federal Clean Water Act, the EPA is required to
establish TMDLs in water courses that have been declared to be "water
quality impaired."  The EPA and the North Coast Regional Water Quality
Control Board are in the process of establishing TMDLs for seventeen
northern California rivers and certain of their tributaries, including
certain water courses that flow within the Company's timberlands.  The
final TMDL requirements applicable to the Company's timberlands may require
aquatic measures that are different from or in addition to the
prescriptions to be developed pursuant to the watershed analysis process
contained in the Final HCP.

          Lawsuits are pending and threatened which seek to prevent the
Company from implementing the Final HCP and/or the Final SYP, implementing
certain of the Company's approved THPs or carrying out certain other
operations.  On August 12, 1998, the EPIC lawsuit was filed by two
environmental groups against Pacific Lumber, Scotia Pacific and Salmon
Creek under which the environmental groups allege that certain procedural
violations of the ESA have resulted from logging activities on the
Company's timberlands and seek to prevent the defendants from carrying out
any harvesting activities under certain THPs until certain wildlife
consultation requirements under the ESA are satisfied.  On March 15, 1999,
the court affirmed a preliminary injunction preventing harvesting on three
THPs; however, it subsequently heard Pacific Lumber's motion to dismiss the
case and issued an order for the plaintiffs to show cause why the lawsuit
should not be dismissed as moot since the consultation requirement appears
to have been concluded upon approval of the Final HCP.  On May 5, 1999,
the court dissolved the preliminary injunction, granted the defendants'
motion for summary judgment and dismissed the case as moot.  On or about
January 29, 1999, the Company received the EPIC Notice Letter which alleges
various violations of the ESA and challenges, among other things, the
validity and legality of the Permits.  On March 31, 1999, the
EPIC-SYP/Permits lawsuit was filed which alleges various violations of the
CESA and CEQA, and challenges, among other things, the validity and
legality of the Permits issued by California and the Final SYP.  On March
31, 1999, the USWA lawsuit was filed which also challenges the validity and
legality of the Final SYP.  The Company believes that appropriate
procedures were followed throughout the public review and approval process
concerning the Final Plans, and the Company is working with the relevant
state and federal agencies to defend these challenges. Although
uncertainties are inherent in the final outcome of the EPIC Notice Letter,
the EPIC-SYP/Permits lawsuit and the USWA lawsuit, the Company believes that
the resolution of these matters should not result in a material adverse
effect on its financial condition or results of operations or the ability
to harvest timber.  While the Company expects environmentally focused
objections and lawsuits to continue, it believes that the Final HCP, Final
SYP and the Permits should enhance its position in connection with these
continuing challenges and, over time, reduce or minimize such challenges. 

5.        Member Deficit

          A reconciliation of the activity in member deficit is as follows
(in millions):


<TABLE>
<CAPTION>

                                                          THREE MONTHS
                                                             ENDED
                                                           MARCH 31,
                                                              1999
                                                         ------------
<S>                                                      <C>
Balance at beginning of period                           $     (552.9)
Net loss                                                        (13.4)
Contributions                                                     5.3 
                                                         ------------
Balance at end of period                                 $     (561.0)
                                                         ============



</TABLE>

ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS

          The following should be read in conjunction with the response to
Part I, Item 1 of this Report and Items 7 and 8 of the Form 10-K.  Any
capitalized terms used but not defined in this Item are defined in the
"Glossary of Defined Terms" contained in Appendix A.

          This Quarterly Report on Form 10-Q contains statements which
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.  These statements appear in a
number of places in this section and in Part II.  Item 1. "Legal
Proceedings."  Such statements can be identified by the use of forward-
looking terminology such as "believes," "expects," "may," "estimates,"
"will," "should," "plans" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of
strategy.  Readers are cautioned that any such forward-looking statements
are not guarantees of future performance and involve significant risks and
uncertainties, and that actual results may vary materially from those in
the forward-looking statements as a result of various factors.  These
factors include the effectiveness of management's strategies and decisions,
general economic and business conditions, developments in technology, new
or modified statutory or regulatory requirements and changing prices and
market conditions.  This Form 10-Q and the Form 10-K identify other factors
that could cause such differences.  No assurance can be given that these
are all of the factors that could cause actual results to vary materially
from the forward-looking statements.

RESULTS OF OPERATIONS

          General
          The Mbfe concept was used in structuring the Timber Notes in
order to take account of the relative values of the species and categories
of timber included in the Company Timber.  Under the Mbfe concept, one
thousand board feet, net Scribner scale, of old growth redwood timber
equates to one Mbfe.  One thousand board feet, net Scribner scale, of each
other species and category of timber included in the Company Timber was
assigned a value in Mbfe equal to a fraction of a Mbfe.  This fraction was
generally determined by dividing the SBE Price applicable to such species
and category for the first half of 1998 by the SBE Price applicable to old
growth redwood for the first half of 1998.  Historical harvest volumes
reflected in this report are stated on a Mbfe basis using June 1998 SBE
Prices. 

          The New Master Purchase Agreement generally contemplates that all
sales of logs by the Company to Pacific Lumber will be at the SBE Price (as
did the Original Master Purchase Agreement).  Harvest Value Schedules
setting forth the SBE Prices are published by the California State Board
of Equalization twice a year for the purpose of computing a yield tax
imposed on timber harvested between January 1 and June 30 and July 1 and
December 31.  Harvest Value Schedules are based on twenty-four months of
actual log and timber sales that occur within nine specified timber value
areas. These sales are arms length transactions adjusted for time by
indexing (using log and, in the case of old growth redwood, lumber price
trends) to a specific date, which is approximately sixty days prior to the
effective date of the Harvest Value Schedules.  However, SBE prices may not
necessarily be representative of actual prices that would be realized from
unrelated parties at subsequent dates.

          Seasonality  
          Logging operations on the Company's timberlands are highly
seasonal and have historically been significantly higher in the months of
April through November than in the months of December through March. 
Management expects that the Company's revenues and cash flows will continue
to be markedly seasonal.  The impact of seasonality on the Company's
results is expected to become more pronounced than it has been historically
because of the harvesting, road use, wet weather and other restrictions
imposed by the Final HCP.  As a result, a substantial majority of the
future harvesting on the Company's timberlands can be expected to be
concentrated during the period from June through October of each year. 
Some of these restrictions may be modified under the adaptive management
provision contained in the Final HCP, and as a result of the watershed
analysis process to be performed over the five-year period beginning March
1, 1999.  See Note 4 to the Financial Statements.

          Log sales to Pacific Lumber
          Net sales from logs were $6.3 million and $9.7 million for the
three months ended March 31, 1999 and 1998, respectively.  The volume of
log deliveries for such periods represented approximately 11,000 Mbfe and
14,700 Mbfe, respectively.  The decrease in volume was due largely to the
absence of a sufficient number of available THPs.  See "--Trends" for
further discussion of the factors affecting the supply of approved THPs.

     Operating income (loss) before income taxes
     Operating income was $2.5 million and $6.6 million for the three
months ended March 31, 1999 and 1998, respectively.  Income (loss) before
income taxes was $(13.4) million and $0.6 million for the three months
ended March 31, 1999 and 1998, respectively.  The decline in operating
income and income before income taxes is principally due to the decrease in
log sales discussed above and an increase in general and administrative
expense due to higher road maintenance costs under the New Services
Agreement and professional and consulting services.

FINANCIAL CONDITION AND INVESTING AND FINANCING ACTIVITIES

          The Escrowed Funds, including accumulated interest, were $286.0
million as of March 31, 1999 and are to be made available as necessary to
support the Timber Notes.  The Escrowed Funds will be released by the
Escrow Agent only in accordance with the terms of the Escrow Agreement.

          The Company had sufficient cash on hand to pay the interest due
on the Timber Notes on the January 20, 1999 payment date, but did not have
sufficient additional cash to pay Minimum Principal Amortization or
Scheduled Amortization.  Nonetheless, the Company paid $5.4 million of
principal on the Timber Notes (the amount equal to Scheduled Amortization)
using funds provided as a capital contribution by Pacific Lumber, which in
turn received a $5.0 million capital contribution from MGI.

          The Company believes that it will not generate sufficient cash
from operations to pay interest on the Timber Notes on the July 20, 1999
payment date.  However, the Company expects that funds sufficient to meet
debt service obligations on the Timber Notes during 1999 will either be
made available from funds borrowed under the Line of Credit Agreement,
through capital contributions from Pacific Lumber or a direct or indirect
parent corporation, or from the use of funds now held under the Escrow
Agreement.

          With respect to long-term liquidity, the Company believes that,
without giving effect to any use of the funds held under the Escrow
Agreement, its existing cash and funds available under the Line of Credit
Agreement, together with its ability to generate sufficient levels of cash
flows from operations over the long term, should provide sufficient funds
to meet its long-term working capital, capital expenditures and required
debt service obligations.  If the Company generates excess funds after the
payment of operating expenses, capital expenditures, interest, premiums and
required principal payments, it may at its option either pay dividends,
retain these funds for internal purposes or make voluntary principal
payments.  Cash flows from operations may continue to be adversely affected
if the Company does not experience improvements in the THP submission and
approval process, or if inclement weather conditions or seasonal operating
restrictions under the Final HCP hamper harvesting operations.  Cash flows
from operations would also be adversely affected if additional judicial or
regulatory restrictions are imposed on the Company's harvesting activities,
or if the Final Plans are not implemented in accordance with the Company's
current expectations.

TRENDS

          This section contains statements which constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995.  See above for cautionary information with respect to
such forward-looking statements.

          Regulatory and environmental matters play a significant role in
the Company's business, which is subject to a variety of California and
federal laws and regulations as well as the Final HCP, Final SYP and 1999
TOL dealing with timber harvesting practices, threatened and endangered
species and habitat for such species, and air and water quality.  Moreover,
these laws and regulations are modified from time to time and are subject
to judicial and administrative interpretation.  The Company has also been
adversely affected by a lack of available logs as a result of a severely
diminished supply of THPs.  Prior to the consummation of the Headwaters
Agreement on March 1, 1999, the reduced number of approved THPs was
attributable to several factors, including a significantly reduced level of
THPs submitted by the Company to the CDF during 1998 and during the first
two months of 1999 due to (a) the extensive amount of time devoted by the
Company's foresters, wildlife and fisheries biologists and other personnel
to (i) amending a significant number of previously submitted THPs to
incorporate various new requirements which Pacific Lumber agreed to as part
of the Pre-Permit Agreement, (ii) preparing the Combined Plan and all the
related data, responding to comments on the Combined Plan, assessing and
responding to federal and state proposals and changes concerning the
Combined Plan and evaluating the Final Plans, (iii) responding to comments
received by the Company from various federal and state governmental
agencies with respect to its filed THPs in light of the new and more
stringent requirements that Pacific Lumber agreed to observe pursuant to
the Pre-Permit Agreement, and (iv) assisting Pacific Lumber (in accordance
with the New Additional Services Agreement) with responding to newly filed
litigation involving certain of the Company's approved THPs and (b)
implementation of a provision contained in the Pre-Permit Agreement which
requires, for the first time, a licensed geologist to review virtually all
of the Company's THPs prior to submission to the CDF.  The Company also
experienced an unexpected significantly slower rate of review and approval
with respect to its filed THPs due, in large part, to the issues that
emerged in applying the requirements embodied in the Pre-Permit Agreement
to the Company's THPs, certain of which requirements imposed new forestry
practices that applied solely to operations on the Company's timberlands.

          With the consummation of the Headwaters Agreement, Pacific Lumber
has completed its work in connection with preparation of the Final Plans;
however, significant additional work will be required in connection with
its implementation.  The remainder of 1999 will be a transition year for
the Company with respect to the filing and approval of its THPs.  Certain
of the THPs which were approved by the CDF prior to March 1, 1999 were
grandfathered under the Implementation Agreement, and are harvestable
subject to the harvesting restrictions prescribed under the THPs and
satisfaction of certain agreed conditions.  The remaining THPs which were
in the process of being reviewed but were not yet approved by the CDF at
the time of the consummation of the Final Plans each require varying
degrees of revisions.  The Company believes that the rate of submissions of
THPs and the review and approval of THPs during at least the second quarter
may be slower than the Company has historically experienced as the Company,
the CDF and other agencies develop procedures for implementing the Final
Plans.  Nevertheless, the Company anticipates that after a transition
period, the implementation of the Final Plans will streamline the process
of preparing THPs and potentially shorten the time to obtain approval of
THPs. 

          There can be no assurance that certain pending regulatory and
environmental matters or future governmental regulations, legislation or
judicial or administrative decisions, or adverse weather conditions, would
not have a material adverse effect on the Company's financial position,
results of operations or liquidity.  See Part II. Item 1. "Legal
Proceedings" and Note 4 to the Financial Statements for further information
regarding regulatory and legal proceedings affecting the Company.

YEAR 2000 

          Management has completed its assessment of and modifications to
the Company's critical information technology and embedded technology.  The
principal software and equipment of the Company that will be affected  by
the date change to the year 2000 are the financial information systems, the
GIS and certain personal computers and field equipment used by the
foresters and other professional staff. Year 2000 progress and readiness
has also been the subject of the Company's normal, recurring internal audit
function.  The Company is now in the process of testing the modifications
and expects to be completed with this by mid-year 1999. The modification
costs and the costs associated with new systems are expected to be
immaterial, costing less than $50,000.  Systems modification costs are
being expensed as incurred.  Costs associated with new systems are being
capitalized and will be amortized over the life of the product. 

          In addition to addressing the Company's internal systems,
management has identified key vendors that could be impacted by year 2000
issues, and surveys have been conducted regarding their compliance efforts.
Management is evaluating the responses to the surveys and making direct
contact with parties which are deemed to be critical.  These inquiries are
being made by the Company's own staff, and the costs associated with this
program are expected to be minimal.  Pacific Lumber has also completed its
assessment of the susceptibility of its internal systems and equipment to
the year 2000 date change and except with respect to the cogeneration
plant, expects to be completed with the required modifications and
substantially all of the testing  by mid-year 1999.  Modifications and
testing of the cogeneration plant are expected to be completed by the end
of the third quarter of 1999.

          While the Company believes that its program is sufficient to
identify the critical issues and associated costs necessary to address
possible year 2000 problems in a timely manner, there can be no assurance
that the program, or underlying steps implemented, will be successful in
resolving all such issues prior to the year 2000.  If the steps taken by
the Company (or critical third parties) are not made in a timely manner, or
are not successful in identifying and remedying all significant year 2000
issues, business interruptions or delays could occur.  However, based on
the information the Company has gathered to date and its expectations of
its ability to remedy problems encountered, the Company believes that it
will not experience significant business interruptions that would have a
material impact on its results or financial condition.  The most reasonably
likely worst case scenario which the Company could experience would be
problems with certain of the Company's personal computers, field equipment,
financial software or GIS software.  The Company believes that any such
problems could be remedied at minimal cost within a few days and that
contingency plans used in the past for dealing with problems with its
equipment and software are adequate to address the types of problems which
could be encountered in such a scenario.  These plans include purchases of
replacement equipment, use of third parties for processing GIS information
and working with vendors to make any needed software modifications.


                        PART II.  OTHER INFORMATION


ITEM 1.        LEGAL PROCEEDINGS

          Reference is made to Item 3 of the Form 10-K for information
concerning material legal proceedings with respect to the Company.  The
following material developments have occurred with respect to such legal
proceedings subsequent to the filing of the Form 10-K.

          TIMBER HARVESTING LITIGATION

          On March 31, 1999, the EPIC-SYP/Permits lawsuit was filed against
Pacific Lumber, Salmon Creek, the Company and others in the Superior Court
of Sacramento County.  This action alleges, among other things, that the
CDF and the CDFG violated the CEQA and the CESA with respect to the Final
SYP and the Permits issued by California.  The plaintiffs seek, among
other things, injunctive relief to set aside the CDF's and the CDFG's
decisions approving the Final SYP and the Permits issued by California.
The Company believes that appropriate procedures were followed
throughout the public review and approval process concerning the Final
Plans, and the Company is working with the relevant state and federal
agencies to defend this lawsuit.  Although uncertainties are inherent
in the final outcome of the EPIC-SYP/Permits lawsuit, the Company believes
that the resolution of this matter should not result in a material adverse
effect on its financial condition or results of operations or the ability
to harvest timber.

          On March 31, 1999, the USWA lawsuit was also filed against
Pacific Lumber, Salmon Creek and the Company in the California Superior
Court of Sacramento County.  This action alleges, among other things,
violations of the Forest Practice Act in connection with the CDF's approval
of the Final SYP.  The plaintiffs seek to prohibit the CDF from approving
any THPs relying on the Final SYP.  The Company believes that
appropriate procedures were followed throughout the public review and
approval process concerning the Final Plans, and the Company is working
with the relevant state and federal agencies to defend this lawsuit.
Although uncertainties are inherent in the final outcome of the USWA
lawsuit, the Company believes that the resolution of this matter should
not result in a material adverse effect on its financial condition or
results of operations or the ability to harvest timber.

          With respect to the EPIC lawsuit described in the Form 10-K, on May 5,
1999, the Court dissolved the preliminary injunction, granted the defendants'
motion for summary judgment and dismissed the case as moot.

          USAT MATTER

          With respect to the Martel action described in the Form 10-K, on
April 14, 1999, the Court awarded approximately $110,000 in attorneys' fees
and expenses to the defendants.

          HUNSAKER MATTER

          With respect to the Hunsaker action described in the Form 10-K,
on March 30, 1999, the Court dismissed the lawsuit with prejudice and
ordered the plaintiffs to pay the defendants' costs with respect to the
lawsuit.  On April 30, 1999, the plaintiffs filed a notice of appeal.


ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

          A.        EXHIBITS:

                    *27  Financial Data Schedule

          *    Included with this filing

          B.   REPORTS ON FORM 8-K:

                    On March 19, 1999, the Company filed a current report
on Form 8-K (under Item 5) concerning the filing of a Prospectus
Supplement to its Prospectus dated December 30, 1998 relating to
the exchange of its Timber Notes.


                                 SIGNATURE


          Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized, who has signed this report on
behalf of the Registrant and as the principal financial and accounting
officer of the Registrant.


                                    SCOTIA PACIFIC COMPANY LLC



Date: May 7, 1999                 By:    /S/ GARY L. CLARK       
                                           Gary L. Clark
                                   Vice President - Finance and
                                          Administration
                                     (Principal Financial and
                                        Accounting Officer)



                                                                 APPENDIX A


                         GLOSSARY OF DEFINED TERMS


California Agreement:  An agreement between the Pacific Lumber Parties and
     California regarding the enforcement of the California bill which
     authorized state funds for the purchase of the Headwaters Timberlands
     while imposing certain restrictions on the remaining timberlands held
     by the Pacific Lumber Parties

CDF:  California Department of Forestry and Fire Protection

CDFG: California Department of Fish and Game

CEQA: California Environmental Quality Act

     CESA:  California Endangered Species Act

Combined Plan:  The combined SYP and Multi-Species HCP released by Pacific
     Lumber and the Company for public review and comment in July 1998


Company:  Scotia Pacific Company LLC, a limited liability company wholly
     owned by Pacific Lumber

EPA:  Environmental Protection Agency

EPIC: Environmental Protection Information Center, Inc.

EPIC lawsuit:  An action entitled Environmental Protection Information
     Center, Inc., Sierra Club v. The Pacific Lumber Company, Scotia
     Pacific Holding Company and Salmon Creek Corporation (No. C-98-3129)
     filed August 12, 1998 in the United States District Court for the
     Northern District of California

EPIC Notice Letter:  A notice received by the Company on or about January
     29, 1999 from EPIC and the Sierra Club of their intent to sue Pacific
     Lumber, the Company and several federal agencies under the ESA

EPIC - SYP/Permits lawsuit: An action entitled Environmental Protection
     Information Association, Sierra Club v. California Department of
     Forestry and Fire Protection, California Department of Fish and Game,
     The Pacific Lumber Company, Scotia Pacific Company LLC, Salmon Creek
     Corporation, et al. (No. 99CS00639) filed March 31, 1999 in the
     Superior Court of Sacramento County

ESA:  The federal Endangered Species Act

Escrow Agent: The agent holding the Escrowed Funds under the Escrow
     Agreement

Escrow Agreement: The agreement covering the Escrowed Funds

Escrowed Funds:  Proceeds of $285.0 million received by Salmon Creek in
     in connection with the sale of the Headwaters Timberlands plus accrued
     interest which have been deposited into an escrow account pursuant to
     the Escrow Agreement as necessary to support the Timber Notes

Final HCP:  The Multi-Species HCP approved on March 1, 1999 in connection
     with the consummation of the Headwaters Agreement

Final Plans: The Final HCP and the Final SYP

Final SYP:  The SYP approved on March 1, 1999  in connection with the
     consummation of the Headwaters Agreement

Forest Practice Act: The California Forest Practice Act

Form 10-K:  The Company's Annual Report on Form 10-K filed with the
     Securities and Exchange Commission for the fiscal year ended December
     31, 1998

GIS:  The geographical information system of the Company

Grizzly Creek Agreement: The agreement entered into by the Company and
     Pacific Lumber with California for the future sale of a portion of the
     Grizzly Creek grove

Harvest Value Schedule: A schedule setting forth the SBE Prices published
     bi-annually by the California Board of Equalization applicable to the
     timber sold during the period covered by the schedule for purposes of
     computing timber yield taxes

Headwaters Agreement:  The September 28, 1996 agreement between the Pacific
     Lumber Parties, the United States and California which provided the
     framework for the acquisition by the United States and California of
     the Headwaters Timberlands

Headwaters Timberlands:  Approximately 5,600 acres of Pacific Lumber
     timberlands consisting of two forest groves commonly referred to as
     the Headwaters Forest and the Elk Head Springs Forest which were sold
     to the United States and California on March 1, 1999

Hunsaker action: An action entitled William Hunsaker, et al. v. Charles E.
     Hurwitz, The Pacific Lumber Company, MAXXAM Group Inc., MXM Corp.,
     Federated Development Company and Does (1-50) (No. C98-4515) filed
     November 24, 1998 in the United States District Court for the Northern
     District of California

Implementation Agreement:  The Implementation Agreement with Regard to
     Habitat Conservation Plan agreed to in connection with the
     consummation of the Headwaters Agreement

June 1998 SBE Prices:   SBE Prices applicable to the six month period ended
     June 30, 1998

LTSY:  Long-term sustained yield

Line of Credit: A line of credit available to the Company from a bank
     pursuant to which it may borrow to pay interest on the Timber Notes

Martel action: An action entitled U.S., ex rel., Martel v. Hurwitz, et al.
     (No. C 95-0322) filed in January 1995 in the United States District
     Court for the Northern District of California

MAXXAM:  MAXXAM Inc.

Mbfe:  A concept developed for use in structuring the Timber Notes; under
     this concept one thousand board feet, net Scribner scale, of residual
     old growth redwood timber equates to one Mbfe

MGHI:  MAXXAM Group Holdings Inc., a wholly owned subsidiary of MAXXAM

MGI:  MAXXAM Group Inc., a wholly owned subsidiary of MGHI

Minimum Principal Amortization: For each class of Timber Notes, the minimum
     amount of principal the Company must pay through each Timber Note
     payment date to the extent of certain available funds

Multi-Species HCP:  A habitat conservation plan covering multiple species

New Additional Services Agreement: An agreement whereby the Company is to
     provide certain services to Pacific Lumber in return for which the
     Company is paid a fee

New Master Purchase Agreement:  The agreement entered into between Pacific
     Lumber and the Company that governs all purchases of logs by Pacific
     Lumber from the Company after July 19, 1998

Original Master Purchase Agreement:  The agreement entered into between
     Pacific Lumber and Scotia Pacific which governed all purchases of logs
     by Pacific Lumber from Scotia Pacific prior to July 20, 1998

Owl Creek Agreement:  The agreement entered into by the Company with
     California regarding the future sale of the Owl Creek grove

Owl Creek Grove:  A grove of approximately 900 acres of primarily old
     growth timber owned by the Company

Pacific Lumber:  The Pacific Lumber Company, an indirect, wholly owned
     subsidiary of MGI

Pacific Lumber Parties:  Pacific Lumber, including its subsidiaries and
     affiliates, and MAXXAM

Permits:  The incidental take permits issued by the United States and
     California pursuant to the Final HCP

Prefunding Account:  Restricted cash held in an account by the trustee
     under the indenture governing the Timber Notes to enable the Company
     to acquire timberlands

Pre-Permit Agreement:  The February 27, 1998 Pre-Permit Application
     Agreement in Principle entered into by Pacific Lumber, MAXXAM and
     various government agencies regarding certain understandings that they
     had reached regarding the Multi-Species HCP, the Permits and the SYP

Salmon Creek:  Salmon Creek Corporation, a wholly owned subsidiary of
     Pacific Lumber

SBE Price:  The applicable stumpage price for a particular species and
     category of log, as set forth in the most recent Harvest Value
     Schedule published by the California State Board of Equalization at
     six month intervals for the purpose of computing yield taxes imposed
     on the harvesting of timber

Scheduled Amortization:  The amount of principal which the Company must pay
     through each Timber Note payment date in order to avoid prepayment or
     deficiency premiums

Scotia Pacific: Scotia Pacific Holding Company, a wholly owned subsidiary
     of Pacific Lumber, which was merged into the Company on July 20, 1998

SYP:  Sustained yield plan establishing long-term sustained yield harvest
     levels for a company's timberlands

THP:  Timber harvesting plan required to be filed with and approved by the
     CDF prior to the harvesting of timber

Timber Notes: The Company's $867.2 million original aggregate principal
     amount of 6.55% Series B Class A-1 Timber Collateralized Notes, 7.11%
     Series B Class A-2 Timber Collateralized Notes and 7.71% Series B
     Class A-3 Timber Collateralized Notes due July 20, 2028

TMDLs:  Total maximum daily load limits

TOL: Timber operator's license allowing the holder to conduct timber
     harvesting operations

USWA lawsuit: An action entitled United Steelworkers of America, AFL-CIO,
     CLC, and Donald Kegley v. California Department of Forestry and Fire
     Protection, The Pacific Lumber Company, Scotia Pacific Company LLC and
     Salmon Creek Corporation (No. 99CS00626) filed on March 31, 1999 in
     the Superior Court of Sacramento County