text: 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.''.
target: 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.
feat_title: Environmental Improvement Timber Contract Extension Act of 1996