15 



cific Northwest. And that could have a dampening effect on the ap- 

 praised rates. But the other part of that provision that would 



Mr. Miller. Why would that be? 



Mr. Walk. The other part is that the rates shall be — similar 

 charges the purchaser shall be required to pay would be the part 

 that would go to the comparable price adjustments, so if the com- 

 parable rates for the Pacific Northwest similar enterprise was less 

 than our appraised rates, then the stumpage charge would be lower 

 than would be normally indicated by Alaska Region appraisals. 



Mr. Miller. So you wouldn't be factoring in the cost of doing 

 business in Alaska, is that what you are saying? Am I wrong? Why 

 would that bring down that comparable price when you compare 

 the Pacific Northwest? 



Mr. Walk. If the analysis between the similar enterprises in the 

 Pacific Northwest indicated that the prices generated in Alaska 

 would place the contract broker at a competitive disadvantage, we 

 would have to reduce the rates to where that competitive disadvan- 

 tage was 



Mr. Miller. That clause says — I am sorry for belaboring the 

 point, Mr. Chairman, but that clause says you take the cost of 

 doing business in Alaska, you compare that to the cost of doing 

 business in some facility in the Pacific Northwest. If that would 

 place that facility at a disadvantage against others in the Pacific 

 Northwest, you would have to reduce that price? 



Mr. Walk. You would reduce the price 



Mr. Miller. Neither firm is doing business in Alaska? 



Mr. Walk. That is dotfe^ct. 



Mr. Miller. Or possibly getting the logs? OK. 



Mr. Walk. Delivered log price. 



Mr. Miller. OK. 



The Chairman. Thank you, gentleman. I just have one question. 

 Why in the world — all we are seeking in this legislation is to ex- 

 tend the contract. It was written up the things that you object to. 

 You have legal counsel. I heard some questions not quite answered 

 here. Can you give us language back so we can get the years we 

 need? Why can't you do that? 



Mr. Janik. I believe our Under Secretary was asked that very 

 question in yesterday's hearing in terms of 



The Chairman. Weii, it is not yesterday's hearing. I am asking 

 you now. Why can't that be done? 



Mr. Janik. And I am going to respond, Mr. Chairman. The prob- 

 lematic parts of this bill as we understand it deal with the provi- 

 sions of the Tongass Timber Reform Act. And the Under Secretary 

 and I myself will answer right here, sir, that if once we get past 

 the completion of TLMP provision so we understand how big the 

 woodpile is and how much flexibility we have to talk about any 

 contractual relationship that might go beyond 2004, as well as any 

 other conditions or provisions, we have stated already that we 

 would be willing to entertain those considerations. 



The Chairman. Entertaining does not allow this company to in- 

 vest. It goes back to the independent sales that you just said a mo- 

 ment ago, if this company shuts down, you will not have any inde- 

 pendent sales unless you're high-grading. 



Mr. Janik. Well, sir, we're 



