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contract is almost 50 years old and is the subject of substantial 

 litigation. In addition, a number of significant environmental 

 laws have been enacted since the contract was signed. 



Section 2(b)(1) of H.R. 3659 states that the "contract" 

 acknowledges an intention on the part of the Forest Service to 

 supply adequate timber after the completion of the contract "for 

 permanent operation of the purchaser's facilities." However, 

 neither the original 1951 contract nor the post-Tongass Timber 

 Reform Act contract obligate the Forest Service to grant or approve 

 an extension of the long-term contract. 



Language in Section 2(b)(3) states that KPC plans to make 

 "environmental and operational" improvements to its facility. 

 Language in Section 2(b)(4) states that 15 years is the minimum 

 reasonable contract extension period necessary to allow for the 

 amortization of these improvements. H.R. 3659 requires that the 

 Government continue a contractual relationship with KPC in order to 

 assure that investments made by KPC may be amortized. An 

 arrangement of this kind between the Government and a private 

 corporation -- to substantially reduce business risk associated 

 with improvements made to a private facility -- is unusual. We are 

 concerned that this may create a precedent. 



The bill contains provisions that are unclear, problematic, or the 

 subject of ongoing litigation: Section 2(a) contains problematic 

 definitions, such as definitions of the contract, mid-market 

 criteria, and proportionality. Language in section 2(c)(2) 



