Idaho was the first state to mandate in-state processing for logs harvested from state forests. Since becoming a state in 1890, Idaho has required all timber sales from state lands to be manufactured into lumber for timber products with the State of Idaho. In 1984, the US Supreme Court ruled in South Central Timber v. Wunnicke that a similar provision in Alaska was unconstitutional in that it interfered with interstate commerce. In response, Idaho’s attorney general decided that the state’s processing requirement was also unconstitutional. The state agencies charged with coordinating timber sales were ordered to cease enforcement of the primary processing requirement.
In 1989 Idaho revamped and reestablished its in-state processing requirements for almost all state timber. Under the Timber Supply Stabilization Act, 95 percent of Idaho’s state timber is offered to qualified bidders each year. A qualified bidder is essentially an Idaho processor – that is, she has historically processed at least 95 percent of state timber within the state, or has sold at least 95 percent of the timber to other in-state processors. The remaining five percent of state timber sales are open to all bidders.
The Act guarantees about 156 million board feet of timber for local processing each year -enough wood to build about 10,400 houses.
TIMBER SUPPLY STABILIZATION
58-1001. SHORT TITLE.
This chapter may be known and cited as the "Timber Supply Stabilization Act of 1989."
58-1002. LEGISLATIVE FINDINGS AND PURPOSES.
(1) The legislature of the state of Idaho finds:
- That state forests are a valuable resource to the people of Idaho, providing employment opportunities and a significant source of income to the state and endowed state institutions;
- That section 8, article ix, of the constitution of the state of Idaho provides that the state board of land commissioners manage state forests in such manner as will secure the maximum long-term financial return to the institution to which granted or to the state if not specifically granted;
- That maximum long-term financial returns to the institutions to which granted or to the state if not specifically granted with state forests is derived from processing within Idaho timber from state forests because this sustains a healthy forest products industry in Idaho, thereby ensuring a sufficient number of bidders to compete for the timber, generating increased financial returns for it;
- That a stable supply of timber for the Idaho forest products industry will induce businesses to invest in processing facilities in Idaho, providing more jobs to Idaho’s people; and
- That the growth of the forest products industry in Idaho produced by a stable timber supply will contribute to the maximum long-term financial return to the institution or to the state by generating increased corporate and individual income and property taxes.
(2) It is hereby declared that the purposes of this chapter are:
- To promote wood processing and manufacturing in Idaho to generate related business and employment opportunities, creating additional corporate and individual income and property taxes for the state and its endowed institutions; and
- To act as a market participant in the timber market in a way that helps enhance the long-term maximum value of state forests by ensuring that an adequate proportion of the total sales of timber sold by the state of Idaho is sold to qualified purchasers within Idaho.
As used in this chapter:
- "Board" means the Idaho state board of land commissioners.
- "Person" means any individual, association, partnership, corporation, trust, or other legal entity.
- "Qualified bidder" means a person who has neither processed outside of Idaho, nor sold to another person who has processed outside of Idaho, five per cent (5%) or more of the cumulative total of the timber from state forests he or she has purchased; provided, however, that the purchase and disposition of pulp logs, as such logs are defined by the board, shall not be considered in determining whether a purchaser is qualified.
- "State forests" mean all forest lands owned by the state of Idaho, including those lands granted to an institution by the federal government, which are managed or controlled by the board pursuant to section 8, article ix, of the constitution of the state of Idaho.
- "Wood processsing or manufacturing" means the conversion of logs into finished wood products generally recognized as consumer goods, including, but not limited to: paper, shakes, lumber, shingles, plywood and panel products, utility and other finished poles, and posts and other fence products. Wood processing or manufacturing shall not include removing bark and the immediate underlying surfaces of logs thereby producing cants for export outside the boundaries of the state.
- Each fiscal year, the board shall offer ninety-five per cent (95%) of the total volume of the year’s timber sales from state forests, exclusive of estimated pulp log volumes from state forests, for sale to qualified bidders. The remaining five per cent (5%) of the total volume of the year’s timber sales shall be offered for sale to all persons, regardless of whether they are qualified bidders under this chapter.
- Notwithstanding the provisions of subsection (1) of this section, the board shall, if it finds after consideration of unanticipated dislocations in local timber supplies that timber from state forests in certain regions of the state will not be needed by qualified bidders, offer such timber for sale to all persons without regard to whether they are qualified bidders. In addition, if the board determines that a purchaser who has previously acquired state timber is adversely affected by a market dislocation, such purchaser may dispose of his timber without affecting his qualified bidder status.
- In the event qualified bidders do not purchase timber offered for sale exclusively to them, the board, if it finds after consideration of the reasons the timber was not sold, that it is in the best interests of the state and the endowed institutions, may offer the timber for sale to all bidders, without regard to whether they are qualified bidders as defined herein. The purchase and disposition of such timber shall not be considered in determining whether a person is a qualified bidder for subsequent timber sales.
58-1005. CERTIFICATION AND APPROVAL OF BIDDERS PRIOR TO BIDDING.
Aperson must be certified by the board as qualified prior to participating in any bidding for state forest timber offered for sale under the provisions of this chapter as described in subsection (1) of section 58-1004, Idaho Code. In support of such certification, each bidder shall present at the request of the board the timber purchase and disposition records described in this section. Such records shall show the cumulative annual purchases and disposition of timber from state forests for the years preceding the date of the timber sale; provided, however, that in no event shall the disposition of timber from a sale prior to the effective date of this chapter be considered. Any person seeking certification who has not previously purchased timber from state forests shall provide the board with the names and addresses of all persons who have any financial interest in the purchase or disposition of the timber, whether such interest results from open loans, mortgages, conditional sales, contracts, silent partnerships, trusts, or any other basis other than trade accounts incurred in the ordinary course of business, and the amounts of such interests. Persons seeking certification shall further provide any other information the board reasonably requires to determine whether such person is a qualified bidder as defined herein. In determining the status of a person, the board may take into consideration other evidence, such as scaling records, load tickets for vehicles transporting forest products, and other written and oral testimony. The information received pursuant to this section shall be subject to disclosure according to chapter 3, title 9, Idaho Code, and shall not be available to the general public unless the person seeking to become a qualified bidder authorizes a release of such information.
58-1006 . REMOVAL FROM LIST OF CERTIFIED BIDDERS.
Theboard shall maintain a current list of all certified bidders. The board shall immediately remove from its list of certified bidders any person who ceases to meet the definition of a qualified bidder as defined in section 58-1003, Idaho Code. Any person removed from the list of qualified bidders shall be ineligible for a period of five (5) years to participate in any bidding on timber sales reserved for qualified bidders. The board shall retain the power to make the final determination upon a bidder’s status.
58-1007. IMPLEMENTATION OF THIS CHAPTER.
- Upon passage of this act, the attorney general of the state of Idaho is hereby directed to take any and all such actions as he may deem necessary to determine the federal and state constitutionality of it. Pending the resolution of the attorney general’s actions, timber sales shall be made pursuant to the provisions of this chapter. If, however, for any reason the state cannot sell its timber pursuant to the provisions of this chapter, the board shall carry out its timber sale program under other existing statutes, rules and regulations.
- Upon passage of this act, pursuant to the procedures established by the Idaho administrative procedure act, chapter 52, title 67, Idaho Code, the board shall adopt such rules and regulations as are necessary to implement and administer the provisions of it.
Theprovisions of this act are hereby declared to be severable and if any provision of this act or the application of such provision to any person or circumstance is declared invalid for any reason, such declaration shall not affect the validity of remaining portions of this act.