11 AAC 71.092. Pricing for sale of timber

(a) The commissioner will determine the price of timber for sale under AS 38.05 and this chapter in accordance with this section.

(b) When the commissioner considers entering into a timber sale contract under AS 38.05.123 ,

(1) the commissioner will establish a base price for timber stumpage that represents the cost to the Division of Forestry of administering the timber sale contract after purchase; the Division of Forestry may not sell the timber for less than its base price;

(2) the base price for timber determined under (1) of this subsection is subject to adjustment; the commissioner will, in the commissioner's discretion, establish an initial stumpage rate; the rate is set by adding adjustments to the base price based upon factors that include, but are not limited to,

(A) the projected or actual percentage of the volume of timber sold under the contract that is locally manufactured into high value-added wood products or other value-added wood products; and

(B) the projected or actual costs to the purchaser of the timber of establishing or improving local manufacturing facilities for the wood products.

(c) Except for timber that is subject to sale under a timber sale contract as provided in AS 38.05.123 (a), the department will sell timber on the basis of its appraised price. The appraised price is a formal determination of the timber's fair market value and is determined by an appraisal conducted by the commissioner. The commissioner will, in the commissioner's discretion, select and apply one or more appraisal methods to determine the appraised price of the timber. Appraisal methods include, at the discretion of the commissioner, comparative market or transactional evidence; end or residual values; other methods customarily used for appraising timber; or another method designed to yield fair market value as determined by the commissioner. To make the appraisal, the commissioner will, in the commissioner's discretion, use costs, prices, values, and other information obtained from prudent operators, state and federal agencies, industry associations, price or market reporting services, or other sources that the commissioner considers reliable.

(d) The commissioner will, in the commissioner's discretion, adjust the appraised price or adjust the method of appraisal under (c) of this section to allow for operating costs. Operating costs that the commissioner may allow include, but are not limited to, costs for activities such as recovering, removing, handling, storing, or transporting the timber.

(e) Except when a redetermination of the appraised value of unharvested timber is required by AS 38.05.118 (a), a contract for the sale of timber will, in the discretion of the commissioner, provide for a redetermination of the appraised price of the timber at specified intervals in order to evaluate the original appraised price as a continued indicator of fair market value. The department may conduct a redetermination under 11 AAC 71.210 whenever a timber sale contract is extended. A timber sale contract must specify other conditions when a redetermination is required and must specify the method of redetermination.

History: Eff. 6/21/98, Register 146

Authority: AS 38.05.020

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