157 



o Long-term timber sale contracts do not comply with the 

 guidelines and standards of the 1976 National Forest 

 Management Act (NFMA) , even though Section 15(b) of 

 NFMA directed the Forest Service to renegotiate the 

 contracts to implement necessary changes. 



o Long-term timber sale contracts have given two pulp 

 mills monopoly power in the southeast Alaska timber 

 industry. 



o Long-term timber sale contracts fail to allow a fair 



financial return to the United States treasury for the 

 sale of Tongass timber. 



o New, short-term timber sale purchasers suffer 

 competitive disadvantages as a result of the 

 exceptional provisions provided two timber companies by 

 long-term timber sale contracts. 



o The federal government has the necessary authority to 



to terminate long-term timber sale contracts to achieve 

 better forest management of the Tongass, promote fair 

 competition in the southeast Alaska timber market, and 

 to assure a fair return to the United States treasury 

 from the sale of Tongass timber. 



For most of this century the Forest Service has attempted — 

 without success — to establish a viable timber industry in 

 Southeast Alaska. The laudable objective has been to create jobs 

 and boost the economy. In the 1950s, the Forest Service 

 persuaded two timber companies to build pulp mills in the region 

 by offering them exceedingly generous terms. The inducements 

 were exclusive 50-year contracts guaranteeing them the right to 

 select the best timber at "favorable prices." In practice this 

 has meant heavily subsidized timber paid for by the taxpayer. 

 The availability of timber subsidized by the government is the 

 key factor that encourages the continuation of large scale 

 timbering on the Tongass. 



As part of the continuing effort to create a "forced" timber 

 program in the region, an amendment to the 198 Alaska Lands Act 

 (ANILCA) provided the Forest Service with an open-ended 

 appropriation of "at least $40,000,000 annually" to enable the 

 Forest Service to supply 4.5 billion board feet of timber per 

 decade to "dependent industry." The Forest Service interprets 

 this provision (incorrectly, we believe) as a congressional 

 directive to spend the money building logging roads and preparing 

 timber sales even when there are not buyers. They have spent 

 millions doing just that. For the past eight years they have 

 sold less than 50 percent of the timber offered for sale. 



97-1 3A 0-89-6 



