article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Environmental Improvement Timber Contract Extension Act of 1996''. SEC. 2. MODIFICATION OF LONG-TERM CONTRACT REGARDING TONGASS NATIONAL FOREST. Title III of the Tongass Timber Reform Act (Public Law 101-626; 104 Stat. 4430) is amended by adding at the end the following new section: ``SEC. 302. 1996 CONTRACT MODIFICATIONS. ``(a) Definitions.--In this section: ``(1) The term `board feet' means net scribner long-log scale for all sawlogs and all hemlock and spruce utility grade logs. ``(2) The term `contract' means the timber sale contract numbered A10fs-1042 between the United States and the Ketchikan Pulp Company. ``(3) The term `contracting officer' means the Regional Forester of Region 10 of the United States Forest Service. ``(4) The term `mid-market criteria' means an appraisal that ensures an average timber operator will have a weighted average profit and risk margin of at least 60 percent of normal in a mid-market situation, representative of the most recent 10 years of actual market data. ``(5) The term `proportionality' means the proportion of high volume stands (stands of 30,000 or more board feet per acre) to low volume stands (stands of 8,000 to 30,000 board feet per acre). ``(6) The term `purchaser' means the Ketchikan Pulp Company. ``(b) Findings.--Congress finds the following: ``(1) On July 26, 1951, the Forest Service, on behalf of the United States, and the purchaser entered into a contract to harvest 8,250,000,000 board feet of timber from the Tongass National Forest in the State of Alaska. While the contract is scheduled to end June 30, 2004, it acknowledges an intention on the part of the Forest Service to supply adequate timber thereafter for permanent operation of the purchaser's facilities on a commercially sound and permanently economical basis. This legislation is necessary to effectuate that intent. ``(2) A pulp mill or similar facility is necessary in southeast Alaska to optimize the level of year-round, high- paying jobs in the area, to provide high value added use of low-grade wood and by-product material from sawmilling operations, and to maintain a stable regional economy. ``(3) The purchaser plans to make environmental and operational improvements to its pulp mill, including conversion to an elementally chlorine free bleaching process, expansion of wastewater treatment facilities, relocation of the existing wastewater outfall, and improvements to chemical recovery and power generation equipment. Total capital expenditures are estimated to be $200,000,000, $25,000,000 of which the purchaser has already invested. ``(4) Extension of the contract for 15 years is the minimum reasonable extension period to allow amortization of these environmental improvement and energy efficiency projects. ``(5) Ketchikan is the fourth largest city in Alaska. Its economic and job base are extremely dependent upon the continuation of the contract, which provides the principal source of year-round employment in the area. The purchaser has stated among its goals and objectives the following: ``(A) Continuation of a long-term commitment to Ketchikan and southeast Alaska, including maintenance of a stable Alaskan workforce, utilization of Alaskan contractors, vendors, and suppliers to permit those businesses to hire and maintain Alaskan employees. ``(B) Participation in the Forest Service's land management planning process with other users so that the process may be completed expeditiously with maximum information. ``(C) Adherence to sound principles of multiple-use and sustained yield of forest resources providing for the production of sustainable contract volumes for the purchaser and the other timber operators in southeast Alaska and the protection and promotion of other forest uses, including tourism, fishing, subsistence, hunting, mining, and recreation. ``(D) Protection of air, water, and land, including fish and wildlife habitat, through compliance with applicable Federal, State, and local laws. ``(E) Commitment to continue to explore new processes and technology to maximize the use of timber harvested and increase the value of products manufactured in southeast Alaska. ``(6) The national interest is served by a policy that accomplishes the proper stewardship of publicly owned assets in the Tongass National Forest, a fair return to the United States for public timber in the Tongass National Forest, and a proper balance among multiple use interests in the Tongass National Forest to enhance forest health, sustainable harvest, and the general economic health and growth in southeast Alaska and the United States in order to improve national economic benefits. The national interest is best achieved by fostering domestic forest product markets and by modifying the terms of the contract pursuant to subsection (c). ``(c) Contract Fairness Changes.--The contract is hereby modified as follows: ``(1) Extension.--The term of the contract is extended by 15 years from June 30, 2004. ``(2) Sale Offering plan.--The contract shall include a plan describing the amount of volume, location, and the schedule by which the purchaser shall receive the timber required by paragraph (3) for the remainder of the contract term. The plan shall be coordinated with the Tongass Land Management Plan. ``(3) Volume requirements.--The volume of timber required under the contract shall be provided in 5-year increments of 962,500,000 board feet, which the purchaser shall be obligated to harvest in an orderly manner, subject to the following: ``(A) Until March 1, 1999, when the next 5-year increment is provided to the purchaser, the Forest Service shall provide the purchaser with at least 192,500,000 board feet per year of available timber at a date certain each year and shall maintain a supply of timber adequate to insure the purchaser can reasonably harvest 192,500,000 board feet each year. ``(B) To ensure harvest in an orderly manner, the contracting officer shall provide for the construction by the purchaser of roads in portions of the 5-year increment area of timber in advance of the 5-year operating period by including such roads in the environmental impact statement prepared for the 5-year operating period. ``(C) Timber selected for inclusion in the 5-year increment shall meet the mid-market criteria. ``(4) Appraisals and rates.--The contracting officer shall perform appraisals using normal independent national forest timber sale procedures and designate rates for the increments of timber to be provided. The rates shall not be designated at a level that places the purchaser at a competitive disadvantage to a similar enterprise in the Pacific Northwest and those rates shall be the sole charges the purchaser shall be required to pay for timber provided. ``(5) Measurement of proportionality.--The Forest Service shall measure proportionality using the following criteria: ``(A) Measure for groups of all contiguous management areas. ``(B) Measure proportionality by acres. ``(C) Measure proportionality over the entire rotation age. ``(6) Conversion or replacement of pulp mill.--The purchaser may convert or replace, in part or in whole, its pulp mill with a facility the manufactures any other value added product that utilizes pulp logs as a raw material component. ``(7) Unilateral termination.--The unilateral termination clause of the contract is eliminated. ``(8) Subsequent modifications.--Any clause in the contract, as modified by this subsection, may be further modified only by mutual agreement of the Forest Service and the purchaser and may be so modified without further Act of Congress. ``(d) Effective Date for Contract Modification.-- ``(1) Effective date.--The modifications made by subsection (c) shall take effect 45 days after the date of the enactment of the Environmental Improvement Timber Contract Extension Act of 1996. ``(2) Ministerial duty to modify the contract.--Not later than such effective date, the contracting officer shall revise, as a ministerial function, the text of the contract to conform with the modifications made by subsection (c) and implement the modified contract. The contracting officer shall make conforming changes to provisions of the contract that were not modified by subsection (c) in order to ensure that the modifications made by such subsection are implemented. ``(e) Transition Timber Supply.--Timber volume available or scheduled to be offered to the purchaser under the contract in effect on the day before the date of the enactment of the Environmental Improvement Timber Contract Extension Act of 1996 shall continue to be offered and scheduled under the contract as modified by subsection (c) along with such additional timber volume as is necessary to satisfy the timber volume requirement of 192,500,000 board feet per year.''.
summary: Environmental Improvement Timber Contract Extension Act of 1996 - Amends the Tongass Timber Reform Act to extend and modify the timber contract between the United States and the Ketchikan Pulp Company with regard to the Tongass National Forest, Alaska.