24 



Sections 70S(b)(l) and (2) are repealed and reenacted to read as 

 follows: 



(1) The Secretary is authorized and directed to establish a 

 special fund and program of economic diversification loans and grants 

 to stimulate enhancement and diversification of the economy of 

 Southeast Alaska. The Secretary is authorized to promulgate 

 regulations deemed necessary to define eligibility requirements 

 providing for at least fifty percent of the fund to be utilized for 

 grants to small businesses, community, and regional efforts that 

 stimulate the economy of Southeast Alaska. The Secretary is 

 authorized to establish a loan program to provide loans to industries 

 within Southeast Alaska for "value added" initiatives or more 

 efficient utilization of natural resources of the Tongass. 



(2) To carry out the special economic diversification program 

 established by this Section, there is hereby authorized beginning 

 after Fiscal Year 1989 to be appropriated 320,000,000. from the 

 National Forest Fund receipts, to be deposited in a special fund in 

 the Treasury of the United States to reaairi available until expended. 



(A) On the first day of each fiscal year, the Secretary of the 

 Treasury shall transfer funds into the economic diversification fund 

 equal to the amount expended for grants during the prior fiscal 

 year. Repayments of principle and interest of loans and other 

 recoveries of funds authorized by this Section shall be credited to 

 the fund. The Secretary shall provide Congress with a report 

 annually regarding the use and effectiveness of the fund. The report 

 shall be prepared in consultation with the Southeast Conference, a 

 corporation representing municipalities and individuals of Southeast 

 Alaska. 



(3) Sections 705(b) (l)and (2) are repealed effective September 30, 

 1999. 



Section 705(c) is repealed and reenacted to read: 



(c) The Secretary of Agriculture shall review and if necessary 

 renegotiate the long term sale contracts to ensure: 



1) employment stabilization to the maximum extent possible for 

 those working in the Tongass National Forest: 



2) fair and reasonable accommodation to the contract holders 

 considering their investment in requiring fair market value rated for 

 t imber : 



3) fair and reasonable competition within the timber industry in 

 the Tongass National Forest: 



4) that the contracts are consistent with the the Tongass Land 

 Management Plan and any revisions thereto: 



5) that Southeast Alaskan communities are given consideration in 

 their respective interests; 



6) that the contractors are given a clear definition and commitment 

 of location and amounts of timber available through the contract 

 period as part of the forest plan revision: 



7) clear statements of the responsibility and authority of the 

 Forest Service to protect fish and wildlife resources and habitats. 



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