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produced in Southeast Alaska ccmies from the national forest. Alaska 

 Native corporations are major timber producers, and they have to 

 export their sawlogs, while leaving much of their pulp logs to rot on 

 the ground, because the two mills get their supply virtually for free 

 from the government. 



In scHne cases Native corporations derive less revenue from the 

 sale of their high-value tiii±)er than they do from the sale of their 

 net operating losses to other corporations seeking a tax break. Net 

 operating loss sales result in less tauc money flowing to the federal 

 treasury frran corporations outside the region. The 

 government-stibsidized monopoly of the fifty-year contracts in the 

 Tongass is part of the cause. 



According to a recent statement by an official of Sealaska, the 

 largest Native corporation in the region, efforts to invest in a 

 diversified forest products industry there have been thwarted by 

 conflicts created by the Icxig-tenn contracts. 



I would like to address the bill (S. 237) introduced by Alaska 

 Senator Frank Murkowski. NTU applauds the fact that Sen. Murkowski 

 recognizes there is a serious problem on the Tongass and has taken a 

 first step to address it. Unfortunately, this bill does not go nearly 

 far enough. Merely removing the autonatic appropriation leaves in 

 place the mechanisms — the tindser suf^ly goal and the 50-year 

 contracts — which drive the current econcMoic problems in the Tongass. 



The language in Sen. Nurkowski's bill pertaining to the allowable 

 sale quantity retains the goal of 4.5 billion board feet per decade. 

 If emything, it locks it in tighter by enploying a term of art — 

 allowable sale quantity — that gives the Forest Service very little 



