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Act (NEPA) . 



The existence of such extraordinary provisions explains the 

 motivation of Congress is writing Section 15(b) into NFMA. If 

 Section 15(b) of NFMA had been faithfully implemented, these 

 provisions , would have been eliminated. The procedure established 

 by H,R. 1516 should prove more successful. 



Fair Competition 



There are three principal reasons why the long-term 

 contracts are manifestly unfair to other timber purchasers on the 

 Tongass. The long-term contracts: 



o Provide a natural monopoly to the contract holders 

 in the form of large, extensively controlled, 

 exclusive timber supplies available at bargain 

 prices. 



o Allow log-term contract holders to harvest timber 

 without compliance with procedures standards 

 applied to every other purchaser, including 

 appraisals, deposits, timber accounting and 

 administrative rules. 



o Provide long-term timber contract holders with 



lower stumpage prices and highly advantageous rate 

 redetermination provisions that allow prices to be 

 reduced to minimum rates during failing markets. 



Pricing practice were a key element in the Reid Brothers 

 lawsuit against the two companies and the subsequent Forest 

 Service Reid Brothers review team centered its recommendations on 

 pricing reforms to assure fair competition. Unfortunately, 

 Forest Service management chose to ignore the recommendations of 

 the Reid Brothers review team just as it ignored the 

 congressional directive contained in Section 15(b) of NFMA. 



When the House Interior Committee reported H.R. 1516 to the 

 full House, it wisely embraced the original intent of Section 

 15(b) of NFMA — economic parity between long and short term 

 purchasers on the Tongass — and the Reid Brothers review team 

 recommendations. It is unfortunate that the Senate failed to act 

 on H.R. 1516. Because together the renewed mandate for change 

 and the Reid Brothers review team recommendations would have 

 provided the Secretary a clear road map for establishing fair 

 competition in the southeast Alaska timber economy. 



However, at stated above the window of opportunity for 

 revising the contracts has passed. Now, the only reasonable 



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