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lages, the subsurface rights with the regional. They decided to 

 retain the village traditional lands. 



As a result, several village shareholders were left out of the 

 Claims Act, and what we call the outside shareholders lobbied the 

 Congress and were able to get the shareholders recognized again in 

 P.L. 94-204. 



Later on we lobbied Congress again and were successful in get- 

 ting land selection rights in the Tongass under P.L. 94-456. 



Beginning in 1981, Klukwan, Inc. began commercial harvesting 

 and planning operations on its land that it selected under the 

 Claims Act. Through careful planning, Klukwan Forest Products 

 plans to be a key player in the timber industry in southeast Alaska 

 and throughout the State of Alaska. 



We feel any changes in our operations at this date will only have 

 a negative impact upon the village corporation of Klukwan and its 

 shareholders who have become dependent upon the profitability of 

 their corporation. 



Recently we have begun preparing to move from harvesting our 

 native lands to harvesting public lands by acquiring our first Fed- 

 eral timber sale of roughly 10 million board feet. Our economic 

 future depends on the continued availability of Tongass timber. 

 Without this continuing opportunity, we may become one of the 

 ANSCA corporations doomed to fail. 



Klukwan first developed its ANSCA on Long Island in about 

 1981 with a harvest of 18 million board feet. Last year we harvest- 

 ed about 150 million board feet of ANSCA timber and built about 

 80 miles of road. Since 1981 we have not only harvested our own 

 timber but we have contracted for Sealaska and Kootznoowoo, Inc. 

 and Goldbelt, purchased stumpage from Cape Fox Corporation and 

 a village corporation called Anilchek up in the Homer area, and 

 are presently doing some harvesting in the Minana region outside 

 of Fairbanks. 



Since 1981 Klukwan, Inc. has become one of the largest and most 

 successful Alaska-based corporations in Alaska, ranking fourth in 

 1987 on the basis of sales. In terms of sales by naive corporations, 

 we are the second largest, with only Sealaska Corporation larger. 



As I mentioned earlier, Klukwan Forest Products is the largest 

 timber contract in Alaska. We feel also that this was the intent of 

 ANSCA to provide jobs for our shareholders in native corporations 

 to be successful. We employ roughly over 400 people with an 

 annual payroll of over $12 million. We have over $20 million in- 

 vested in timber harvesting equipment, with 43 percent of our total 

 assets in timber-related investments such as stumpage and a steve- 

 doring company. 



Most of our work, as I mentioned before, has been on native 

 lands. As the native corporations wind up their harvesting oper- 

 ations, we are presently looking to the Tongass as a source of work 

 for our company and our 400 employees. We are currently looking 

 for opportunities to either buy into or construct a manufacturing 

 facility in southeast Alaska which will require national forest 

 timber. 



We are very concerned about the proposed changes in section 405 

 of ANILCA. It is imperative that the 4.5 billion board feet cut per 

 decade not be diminished. Given that roughly 300 million board 



