Advisory Committee on Chip Mills-Meeting Minutes Nov 1 and 2, 1999

Governor's Advisory Committee on Chip Mills

Governor's Advisory Committee on Chip Mills
November 1 and 2, 1999
Department of Natural Resources
1738 East Elm St.
Jefferson City, Missouri

November 2, 1999

The meeting was called to order at 9:00 a.m. Stephen Mahfood welcomed everyone back to the second day of the meeting.

Committee Members Present:
Stephen Mahfood, Director, Department of Natural Resources
Mike Hoffmann, Forestry Division, Missouri Department of Conservation
Mark Garnett, Forest Products Representative, Brandsville
Jon Smith, Forest Products Representative, Mountain View
David Bedan, Citizen environmental conservation group, Columbia
Jay Law, Conservation Federation of Missouri, St. James
David Day, Private Property Owner Organization Representative
Senator Wayne Goode, St. Louis
Senator Doyle Childers, Reeds Springs
Representative Bill Foster, Poplar Bluff
Earl Cannon, Deputy Director, Business Expansion and Attraction, Department of Economic Development
Sarah Tyree, Special Assistant, Department of Agriculture

Facilitators:
Dr. Jerry Wade, University of Missouri, Columbia
Dr. Bernie Lewis, University of Missouri, Columbia

Interested parties present were:
Llona Weiss, Department of Natural Resources
Pam Duncan, Department of Conservation
Donna Homan, Department of Conservation
Brian Brookshire, Department of Conservation
Robert Riesenmy, Wood Woman, Hartsburg
Tom Kruzan, Missouri Coalition for the Environment, Mtn. View
Roy Hengerson, Missouri Coalition for the Environment, SL
John McCammon, The Nature Conservancy, SL
Greg Thorpe, Mill Spring Chip Mill, Mill Spring
Steve Galliher, Willamette Industries, Piedmont
Jack Slusher, University of Missouri-Columbia, Columbia
Louise McKeel, Village Image News, SL
Katie Auman, Dogwood Alliance, Yellville, AR
Ed Galbraith, Department of Natural Resources
Dan Schuette, Department of Natural Resources

MAHFOOD: We're going to allow time, although some members may have to leave early, we're going to get this done as quickly as possible, we have set a before noon adjournment time, and we'll offer some public comment period, but there may be members that have to leave. With that, let's get started.

WADE: Let me share with you my sense of today's agenda and what I think it's going to entail. On the Economic and Social Impact, we still have a couple items to finish up and then we'll devote our attention to the environmental, which I think is going to be one of the more difficult areas because Bernie and I have the poorest write up on that of any of the areas, and it's simply an area that we had not spent much time yet as a committee discussing. Then finish up with financial, which as I tried to analyze yesterday, I think the financial is going to be the simplest area because we simply have talked about through the whole discussion yesterday, all of the pieces that need to be built into financial, and I think a lot of that discussion has already taken place, and we just need to have the committee review the financial, make sure that we've got all the various pieces that we've already talked about, and I think informally the committee has already basically decided what the orientation on that is going to be.

What I'd like you to do is turn to Page 8, last paragraph, where the issue was prenotification. Based upon the general focus and orientation of the report, what I will do on that one because there was not a complete consensus on the committee on that, I will indicate that one of that areas of action discussed was prenotification, but there was little support on the committee for it. There was one who felt strongly, and part of the agreement we made was that everybody's ideas ____ indicate support.

If you could move now to the first item on Page 9, although I have a sense of what the committee's position is going to be, these are action areas that have been a part of the information and discussion. I want to remind you the last word in that paragraph is my typo, that should be logs, not mills. If we could target our discussion on that action idea.

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LAW: I thought that maybe a better way of saying that would be that the timber used by chip mills includes a mix of some sawlog material. I think high quality is a very relative term.

GARNETT: This last sentence puts us in the position of deciding who competes with who. I don't think we can do that. If a chip mill will pay a landowner twice as much for a sawlog as a sawmill will, I don't know how we can deal with that.

DAY: I don't think we can tell a landowner who they can sell to.

GOODE: I don't think you can tell them who to sell to, but I think you can put in place a process to permit a chip mill to only chip what we think they ought to chip. Just like you establish a landfill that can only take certain things. I think you can do that if there's a public interest in doing it. I think there is a way to deal with this issue, and I think this is part of the problem with chip mills. Chip mills are chipping waste, culls, do we want them as a state policy chip high quality hardwood? I doubt most people do.

CHILDERS: One thing that occurs to me is one of the highest priorities is that somehow to address the reduction of the amount of cull, rough, and rotten timber that we have. I think that's a very high priority. I am worried when you start telling business who is out here and has customers in this state that we want to do that. I see a long term advantage of saying we're going to limit what you can do as a landowner, we may say we're limiting the chip mill, but we're really limiting the landowner. Somehow I think it has to be from a positive standpoint and encourage the landowner to improve the quality of their timber, because if we make it too difficult-if we create a situation where it's at a disadvantage for them to deal with a chip mill, then why would they want to? I'm looking for an incentive than a regulation that says you can't sell to them.

GOODE: I'm not saying they can't buy it, I'm saying they can't chip it.

LAW: I don't think that works either Senator. It would be like saying to a person that has a pallet and sawmill that he can't saw up veneer logs. He's filling an order, and he's paid for it, he can run it through. I hate to see us talk about chippers being a waste wood site, they're not, they are part of the timber industry.

CHILDERS: But I would like to see us actually put a premium on their using cull timber. That's where you make it a positive to use cull timber.

LAW: One of the real problems we've had and always had is that we have a very hard time with people that are out there in the woods being able to come up with a system where they can bring out trees that will produce various products, sort them and get them to the right place. There's people that cut just stave bolts, there's people that cut charcoal wood, and sawlogs. Other parts of the country, they are much more integrated in their operations and have been doing it for forty years, and we've not caught on to that here in Missouri, and we need to do that. Bring the tree out, send it to its highest value.

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GARNETT: I'm in agreement with you Senator that those logs should not go to a chipper. That decision needs to be made by enlightened landowners. That's how that situation needs to be resolved. If the landowner knows, for example, that his veneer logs are worth X, his sawlogs are worth Y, and the pulpwood is worth Z, then it makes it pretty simple for him to sort that stuff out.

SMITH: I think there's a great frustration with what was advertised the chip mills would do and what potential may be to take care of all these rough and rotten trees and what the reality actually is. It's probably not going to be done the way it was advertised it was gonna happen, and probably not be used as a good forestry tool, it's going to be used to convert to pasture, clearcut areas that don't need to be clearcut with little regard to BMP's. I don't know if this is the right way to approach it, but there is a lot of frustration that this tool is not going to be used.

GOODE: There's not doubt in my mind that the state could, if it wanted to, require chip mills of certain size to go through a permit process, and part of that permit process would determine what they could use. Someone will probably question whether or not you can do it with the existing ones, although when we did landfills, hazardous waste facilities, we went back and applied the same standards to the existing ones. All landfills today are operated by individuals, not the government. You can go in and do those sorts of things. I think that's a much more effective way to do it than trying to do it with incentives. I think it gets the job done and I think it does it in a fair manner. I don't think it limits landowners to any great degree, chip mills have only been here for a few years, there are plenty of opportunities to sell the wood a lot of places, I think if you did that chip mills will probably become a little more integrated and do the right thing with the wood that comes in.

CANNON: That last sentence, can we try to state it in a more positive way? What would you think if we said "some mechanism needs to be developed to encourage a permit system for the chip mills to use a higher percentage of cull..." In the first sentence, it says one of the concerns about timber used by chip mills is that much of it is high quality. Do we really have proof? Much sounds to some people like a lot. What about "some".

GARNETT: That's something that's bothered me that ___. I've visited some other chip mills as well, but I have a hard time disseminating between the ability of a landowner to go in and have three high quality trees and take the one in the middle out because they are too thick. That goes to a chip mill or sawmill and it's an immature tree. To me, the landowner needs to have the ability to cut that tree and to market to someone regardless of who it is. How do we maintain that ability for the landowner?

DAY: I'm also not comfortable dictating markets for agricultural products like that. I'm not comfortable at all with that last sentence.

HOFFMANN: I agree. It's tough to put standard like that on there, and considering those wastes, if it has an economic value, it's hard for me to consider that waste. Most waste, you have to pay to dispose of. In this case, people pay for it. I do think that economically it's going to very difficult for chip mills to stay in business if they're chipping a high percentage of what we consider quality materials.

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LAW: Bob Todd is the editor and writer for Ozark Traveler, and I think most of you have seen this publication. He's not delighted with clearcutting, but in talking about chip mills in his article on that, he said that Ozark landowners aren't dumb. I think we need to remember that too, that most people, through education, know the difference between the value they can get for a saw log and the value they can get for chips. We don't want to do a disservice to the landowners in the Ozarks, they are not dumb.

BEDAN: The average person, who evidently is not thinking of forestry in the long term, and somebody shows up with a cash offer, how sophisticated is that person? I think you're speculating, Jay.

DAY: I think you can look at the fact that commodity prices have been in the gutter for a lot of years and a lot of folks are smart enough to make a living out there, so you have to give them credit.

BEDAN: But how many are knowledgeable about timber? I think the ones Jay deals with probably are because they are sophisticated enough to call you.

LAW: Some of them just get approached and they call a consultant and ask for assistance.

BEDAN: We've continually heard it's only about 10% that seek out advice. The other 90% are so well educated they can evaluate their own timber?

LAW: The problem is bad actors and people that liquidate their holdings. I think if you would look, I think a lot of what gets cut off in place of larger tracts are tracts that are bought by sawmill owners and loggers.

MAHFOOD: Part of the discussion early on, the issues I was hearing from a lot of different people was the issue we're discussing. The people are concerned about what not just what's happening right now, but what's the future and how much of our high quality growing stock is going to be there in the future. The concern is how do we get a handle on that and make sure that we have that stock in the future. The small operator is concerned about this. The idea that somebody pulls up, makes an offer, and you don't have to do too much and it sounds good, a lot of people would go for it.

DAY: But that happens everyday with cattle, corn, etc. If I leave money on the table, it's my fault. It's just marketing a commodity.

FOSTER: I represent the district we're talking about, Willamette is in my district. The people in my district, really resent when government thinks they can make better decisions for them than they can make for themselves. They visualize that being in other countries, not US. They resent that. They want help, education, but when government puts themselves at a higher plain and say we make the right decisions and you're so dumb that you don't make right decisions...government's made a lot of dumb decisions. I don't think government can hold itself up to that plain.

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BEDAN: Whether or not they have some sort of restriction is one issue, but whether or not landowners are making good decisions is another issue. We need to keep these things separate - do landowners know what they're doing and should there be restrictions on chip mills. They are two different things.

GARNETT: I agree.

CHILDERS: I guess my thought on that is the key is that the landowner have information, most of them will make a good decisions. Even with good information, there are some people that will make bad decisions. It may be a spur of the moment thing. One of the things that I still think is extremely important is getting the information out there and it could be something that goes out through the county assessor or collector because they know who actually has timberland and who doesn't. If there was information that went out, even if we just used their mailing list, and they knew something about what the different quality of timber was worth or what the market was doing on that, I suspect that would have a big impact on what would happened as far as selling the timber, and also the fact that they know the results of good forest management. When we start saying you can't do this, I suspect there's going to be a lot of resentment.

DAY: I'm not saying landowners don't need more education. But I am saying they are smart enough to know that there's more than one buyer out there. Whenever a chip mill knocks on their door, they know that that's not the only person in Missouri that will pay them for their timber.

LAW: I think one thing I've noticed with timber prices is that there was a long period there on the national forests where the average price paid for timber was $40-50/thousand. In the last ten years, it's up to $200-300/thousand. I see at the back of our paper, we have a little bit about price of cattle and things like that. We have Timber Price Trends put out by MDC which lists what was received for bid sales. Most of these other sales are negotiated sales, and that's where people need to know they have a commodity that's not like cattle in that when it's time to sell, they take the price they were given for it. With timber, there are other people that are looking around to bid for it and the price can go up quite a bit. Making that kind of information available on a quarterly basis would help people begin to realize the value, and once they see the value, most will think about managing. I think when you could only get $40-50/thousand, who needs help?

MAHFOOD: I'm trying to make the link between what we're talking about with the chip mills and how we got to restricting individuals ability to do what they want to do. I don't make that connection in the same way. I thought earlier on, we were talking about we get more out of value added industries than we do out of supporting the primary approach to __. I'm challenged by the fact that I thought we wanted to really push more toward adding value to products that come out of our forests, and adding it here because the economic potentials are much higher for us to do that. In some ways, we're discussing some economic policies. As the Senator suggested, the facilities could be looked at as resource recovery facilities in the state of Missouri. Resource recovery facilities have a lot of incentives and a lot of things built in. Those facilities have things out there that help them in the market and add value. We've seen a trend over ten years of going from no value added and nobody thinking about waste products to now people have new ideas everyday about how to use a product that before was thought of as waste. We have a policy in Missouri government that look for adding value to the things we have here in our state because it creates more jobs. I think we all agree that we would rather have added value, that would be our primary need, and promotion of jobs and of rural quality of life based on economic value rather than just something we can do now, quickly, that might have a short term economic plus but not a long term plus.

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CANNON: I would like to say something about incentives for waste recovery. Is there a way to justify a chip mill as a way to recover, and would they give enough incentive...

MAHFOOD: The possibility is there. We know how to do, and it's been...

CANNON: If that was possible with certain restrictions, ___ give incentive ____.

MAHFOOD: There's actually a fight to become a resource recovery facility, there's quite a market, quite a battle going on over control of waste products so that people can use them, remarket them, or add value to them. That's what's happened over the last 10 years.

LAW: But hasn't that been a product of change in our country? We have realized we are filling up our landfills with a lot of things that we could reuse? There is a general concern in our culture that we want to be more conservative, we want to have a more environmental approach to everything. The fact that we have an interest, we're going to pay for that, we're going to pay a little more for a recycled pad of paper than we would for one out of virgin fiber. That creates a market and interest - people see that they can make money from it, and they come in and do it. They can make paper from small trees, that's been established for years. I don't know that we have to encourage them from that standpoint.

CHILDERS: The only thing that I see is that in thinning and in getting rid of cull timber, those are the wastes that I see there. That's the thing that really has very little value. When you're thinning, you have some high quality, but a lot is still immature. The thing that strikes me is that if it's a decent stand of timber, it gets more valuable every year. There's no incentive, it's something that's growing, constantly improving, where most recycle materials don't. It's the cull and thinning timber that actually is creating a drag on the value to that landowner. I think there are some opportunities there that might be doable in that area.

LAW: If you want to help somebody, help someone that is able to pull those kinds of materials out of the woods, do the thinning, deliver to chip mills. If you wanted to support a logging company that could do that, to me that's the missing link. We now have markets for everything out here, we've got wood over here, it's getting the right things to the right place, and that's where we would go.

GARNETT: That's not going to happen on a scale across Missouri without an enlightened landowner and trained forester involved. In my mind, that's the key. When we talk about economic theory, but what the landowners get and how much their land is worth in a certain area because there's a better market, it gets very complicated figuring out whether that's better or more jobs are better.

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WADE: We have reached a point that it might help if I summarize what I'm hearing. In general, the committee agrees that chip mills should make use of as high portion of cull and rotten trees as possible, that is the real place that they pick in the picture. The difference then becomes how do you encourage that? On one hand, do you encourage that by creating a mechanism for holding the chip mill responsible for what they use in feed stock, and if so how do you do that in a way that does not limit the individual landowners freedom of market and choice. To summarize, I think the committee is in general agreement on one end but does not have an agreement on how you begin to support and encourage that outcome. Is that a fair summary?

TYREE: A comment on how you add value to something, I will use another commodity, cattle. Missouri is the second state largest feeder cattle state in the nation, but we are kind of known nationwide as not having the highest grade of cattle. A lot of cattle is sold on the margin. A lot times people who are growing good quality cattle aren't getting the best dollar for their buck. The Department of Agriculture along with the vet school has been working on teaching cattle owners to use BMP's - keep records on their cattle, so then when they go to the auction barn they get a premium price for their cattle. And the education effort has been working really well, and I don't really see any difference in reaching out to forest owners to teach them something that will give them better value for their commodity.

GOODE: One difference, it doesn't take 30+ years to grow a cow, and also a person that is managing cattle is in the farming business everyday. You don't raise cattle on a casual basis. You do own forest crop land on a casual basis that you don't think about a whole lot and don't have any real reason to get educated. A farmer can't make it in this world without being on top of things everyday. And there is a major difference between that and what we're talking about here.

I hear that government can do this or can't do that, but people are against government until they want something. Look at the landfill situation. It's not just what we did in the last ten years when we went through recycling, it what was done 20 years before that when everybody had a dump in their backyard throughout most of rural Missouri and the legislature had the guts to say if you own a piece of property under a certain size, mainly to draw the line between a farm and rural sprawl down the highway, is you have to have trash pickup. There was a fight, but think how much better the situation is today because you have that, you don't have people burning large amounts of trash or just letting it pile up in their backyard. Reasonable regulations make sense. Can I tell you what should be chipped and what shouldn't? No. I can tell you how to write a law that would set up a process that through hearings and experts would determine that, and that sort of thing could be lodged in MDC and DNR, and there are people there that would have no trouble at all going through those kind of processes and making something like this work. It isn't a radical proposal that's going to limit people's ability to sell their timber in any way that amounts to anything at all. There is going to be a market there to sell good timber.

GARNETT: What if Willamette, instead of paying $20/ton decided to pay $50/ton and wants to chip big logs? At that point, what do we do?

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GOODE: I think what you've got to do is look at what's happened throughout a great deal of the south, where a lot of forest crop land has been pretty much taken out. You have to decide as a state if you want that to happen or not? If you think that's fine, let the market take care of it, then that's one way to go. But if you think that's not right, then you say no, you're a waste recovery facility and you can do this and we want a good long term forest product business in Missouri so we don't want you coming in and in a fairly short period of time ruining an industry that's been here for 150 years or more. Sometimes people, through their government, just got to say no, that's not the right way to go.

BEDAN: It's interesting when you think about it that high capacity chip mills were invited into Missouri by MDC on the theory that they would take care of the wastes and culls. If that's truly what they are about, I don't know why the chip mills would oppose this, but I suspect that's not what they are about. They're here to get chips and they really don't care what they're chipping. I think Wayne has put it in the right context. What we're talking about is long term forest products industry and long term health of our forests. We have people here claiming to help us do that, but I think they may be here under false pretenses. Something like this would force them to do what they claim they are doing already. I noticed the term in here a certain percentage of culls, rough, and rotten trees. Its not saying you can't take a few larger logs. I don't know what the right percentage is, 80 or 85%, but if they start taking 50% stuff that could go somewhere else, the Asian market jumps to ski high prices, you forget all about being waste recovery unless there is restriction. I think we're sitting here fat, dumb and happy in Missouri at the mercy of these international __ markets, and we could wake up five years from now and say whoops, where's all those chips going? What's happened to our forest?

DAY: If that were in place and the chip mills were limited to having to use a certain amount of culls, if I've got 80 acres to harvest, will they come out there knowing all they can get is the culls? That's why I think you're limiting the landowner's markets.

SMITH: They don't do that now.

DAY: I know, but you can market to them. I'm saying if you limit what they will take or can take, then you're eliminating a buyer for the landowner themselves.

GOODE: Let me try to answer. The chip mills themselves don't go out and harvest. They have a very small number of employees and loggers are going out and doing the cutting. What the logger would be required under those circumstances is they have to do a better job of separating and redirecting where the wood is going because under that scenario the chip mill would have to set standards on what they can take that would be different from what they are now, and the logger would know that. There is some grey area, and a process could be established in a way to deal with that. What you would avoid is if the international price of chips should sway up, you would prevent them from just taking all the good stuff and chipping it with everything else. That's easy to see. You can put together a process to work through that.

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DAY: I go back again, and you won't say anything to change my mind and I won't say anything to change yours. I feel like it's limiting the landowner his ability to market his timber.

GOODE: If it is limiting I think it is minimal.

DAY: It may be, I don't know.

GOODE: Landowner limitations are often necessary for what's good not only for society as a whole, but in this case for an industry as a whole.

DAY: It's minimal now, but it could be major.

GARNETT: I don't know what would happen in Missouri, but I do know what's happening in Arkansas. Down there, you have many ___ stacked on top of each other down there. The timber market is incredibly fierce, their cost of timber is twice what it is here, and every timber sale they fight over. Timber land there is $1,000/acre, here it's $500/acre. The scenario that yea, we're gonna mess everything up, I understand that from the perspective of someone who's from an urban area. But from the landowner's perspective, he may want something long term with the ability to do something with that land that's far way and above what he's doing now with it, so it's a problem.

GOODE: But from the forest products business, if you want a forest products business like you typically have in Missouri, or do you want one like you have in other states where it's dominated by four or five large international companies, and people like you and John and others can't make a living in the long run in the forest products business. We've talked about how many sawmills there are in Missouri, hundreds, is that good or are you better off having 10 mega sawmills?

GARNETT: I think that the trend toward their companies is already occurring. I'm not defending Willamette or Canal, that trend's occurring. The industry in Missouri has not done the job, it's not be economical to first cut the culls. We've gone in, we've high graded, done some things that long term are not going to work for us.

BEDAN: Mark why is the value so much higher for timber land? Is it because of better management or just different trees?

GARNETT: The price paid for timber is so much higher that affords a higher level of management. They can come in and selectively harvest, clearcut, and within...

DAY: In a lot of other states, they look at timber as a crop, but whenever you get that mind set, then I will guarantee people start managing. I don't know the secret to getting that mind set.

GARNETT: The expectation for me, being from small sawmills, would be to go down there will all those multinationals, see the entire place obliverated. It's not that way. They have large clearcuts, and they plant pine, and there is no blackjack, zero hickory, all that stuff is gone.

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BEDAN: Do they have better soils?

GARNETT: No.

LAW: Better growing season. More rainfall.

WADE: Let me make a proposal to see if I think perhaps that the committee is ready to move on, I think this discussion has really put out on the table all of the critical points. If we can move on, if you're willing to give me a shot at writing this up in a way in which I would highlight the sense of the committee in terms of the need to have a high level of processing of the cull rough, and rotten trees, and that the committee has then captured what the limit is and highlighted in a way I think is fair to what I sense is a very __ of the committee, but if you're willing to give me a shot at that word smithing and see if I can be fair to the position of the committee...

CHILDERS: I sat here and wrote down a couple things. Would it be possible, and I don't know if we can agree to this or not, to say that we would strongly encourage two years of very high-concentration on educating the public, the landowner, then to survey the changes, and that would mean first inspecting, we'd have to know what's going to chip mills now, the second thing would be two years of education, then come back again. That's just a suggestion that I thought might work.

LAW: And to focus it on that area down there.

CHILDERS: That would give us some real facts to see if the education can make a difference.

LAW: I think this has been one of the most valuable discussion we've had.

DAY: I agree with Senator Childers, it would be great to focus on that area and hit it hard with education.

LAW: We've got all the education things out there, but we just haven't found a way to make it effective.

BEDAN: I will support that if the education effort is very serious, it is well publicized and funded, there be a new in-depth evaluation, and we keep very close tabs on our total forest resources.

GOODE: I don't have a problem with doing that at all. I still don't think that solves the problem, because if have economic conditions that are under which you have very strong international market for wood chips, you're going to see what's going through the wood chip mills in Missouri change dramatically. You're going to see export out of the state and probably out of the country of a good deal of high quality wood, and that isn't going to protect us from that happening, and that's the type of thing that can quickly strip off a good deal of our high quality wood. I don't think that's in the best interest of the state, and I don't think that's the best interest of ___. With that said, let's let him write it up.

CHILDERS: Would two years give a chance to survey?

GOODE: It does as long as you don't have a market that really pushes that sort of resolve, that will help a lot. But if you don't protect yourself from that market and you look at the market when Asia was booming up until about four years ago, and Japan's markets are coming back.

WADE: Doyle, would you provide me a couple sentences on what you were saying, and I will draft this one up fairly quickly and E-mail it back out to you as a draft so you can take a look at this one very quickly, and so some additional rewriting on this before we get to the November 15th one.

Move to next paragraph, I think that last night that we eliminated that paragraph with a high degree of concurrence? Did the committee agree to remove that paragraph with the suggestion of an export tax?

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BEDAN: If we want to do it, it would take a lot of resources and we may or may not prevail.

WADE: The last paragraph on alternative resources, (tape change)...feedstock for paper production, my sense is that you want that in and that the action is that there needs to be a support of a program that builds that industry as part of our agriculture sector, is that correct?

MAHFOOD: We also decided that we were going to get into some details and provide more information.

WADE: You were going to add on the recycling part, and Sarah was gong to add some information on the program base that we already have in place. My sense was that you are supporting action that would expand and enhance that.

Ok. Environmental Sustainability. The changes that have already been made in this is that some of the information in here that is really background information is moved into the thematic background. So if as you work through this, focus on the areas that get into action recommendations and those action recommendations are primarily concentrated, starting on page 15.

GOODE: Back to Page 10, under soil erosion, we talked about this a little yesterday, but I think we should strongly state that it is our position that soil erosion is a serious issue with forest crop land, which is part of the agricultural industry, and that soil and water funds should be utilized to help control erosion to the same extend with how it's being used in other segments of the agriculture industry.

GARNETT: Do we need to mention BMP's in that same sentence so we're tying the money to BMP's?

GOODE: I think we did that elsewhere in here, somewhere more specifically, where we talking about if you do BMP's, then you're eligible for the grants and so forth, but I think that as an overall statement, soil erosion is a major problem and forest crops should be treated equally. I think you're stating it here, but you're stating it in a more philosophical approach.

WADE: A lot of the background information has been moved into the thematic background.

LAW: Are you going to take care of that head cutting quote in there? I'm not sure where it came from. Page 10 3rd line.

LEWIS: Ok.

GARNETT: We talked at length last night, we're not saying BMP's are mandatory, is that right?

WADE: That gets talked about later in one of the action things.

GARNETT: Will this be in Section IV?

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WADE: Yes, that part will be in IV, but later in one of the recommendations on Page 15, there's a question of how you ensure the use of BMP's, so that's part of that discussion.

LEWIS: On the material you had yesterday, on Page 49, at the end of the environmental sustainability, that's the framework that BMP's will be discussed, recognizing that there are various kinds and also recognizing that in one way or another, whatever is adopted is going to impact one way or the other on landowners and loggers.

GARNETT: The concern I had is that you can't say you must do it one place, and in another place say that we strongly ____.

WADE: The general structure that we're taking with this, with each of these erosions, there is a discussion of what has to be accomplished to prevent that. Those all get captured in terms of what we do and what's the committees action to see that those things are done. Those things are stated as factual things that will result in that not happening.

GARNETT: In the new Section IV, where does the sentence that starts "the following measures should be adhered to..." and then this list? Where does that go in the new Section IV?

LEWIS: That is not Section IV material...

WADE: I'm saying it is. I'm saying that those things will be in Section IV, and the action portion will become how do we encourage the implementation...

GARNETT: Why don't you just put MDC's BMP's in there instead of this list? Shouldn't we get it to where it's more to the point in Missouri, I don't know where this came from is what I'm saying. Did we come up with this or what?

LEWIS: This is kind of a menu from several sources. The problem is there are substantially different kinds of BMP's in different states, and MDC has a fairly small pamphlet, which compared to a number of other states, and I'm not saying our regulatory or voluntary are very different. Minnesota has a stack that is on voluntary BMP's. In Missouri we have a thin pamphlet. There are different degrees of emphasis and a different amount of funding or effort has been invested in defining what BMP's are. Most of the discussion throughout all the meetings here has pretty much assumed that we've got the perfect set, but that's really not necessarily true at all. The actual content of the BMP's is of interest.

LAW: Essentially though we don't have the time to write them in here, but they go back to this forest resource council, this could be one of their jobs is to put that together. We could support that.

BEDAN: Maybe this list could be just offered as suggestions.

GARNETT: Some of the things that could be done, __ must be adhered to here in Missouri.

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WADE: That's why we want this information in the thematic background. But it actually becomes part of what would be encouraged or made mandatory, however it's done, has to be developed within that action framework. If these become information of the kinds of things that will effect that kind of environmental degradation. We've got a list for soil erosion, a list for soil fertility, and a list for water quality. We're not saying these are what they are, but they are simply a description of the kinds of actions that impact those environmental ___.

CHILDERS: It occurs to me, and I have no problem with putting in these things, I think it might be a good idea to put in something that says that we will use what our forestry division says, because that is ongoing, that's going to be adjusted, it's going to be made to be more important, and that way it gives us something that we can follow. I hate to put something in that may not turn out to be _____.

MAHFOOD: Let me add that some of these look familiar to me, and some that are done, in our soil and water program and water pollution control program, some of those things that are in our advisories that we do recommendations. A lot of this looks real familiar. We have a lot of changes coming up in trying to deal with water quality, and all the states are having to tackle this watershed planning, and how we're gonna deal with this. As you know, Dan Schuette, two or three meeting ago, passed out the non-point source plan information that we're required to submit to EPA which has a lot of this silvilcultural practices. As time goes on, we will have to work more closely together to put these things together in order to deal with water quality.

I was a little uncomfortable with just designating an agency rather than saying government. It's going to take a cooperative effort as these BMP's start.

WADE: Would the committee support a statement of action that an interagency task force of MDC, Ag, and DNR define Missouri BMP's.

CHILDERS: That would make sense to me, as long as you don't have two or different things that confuse the people that have to comply with it.

LAW: These would essentially be the rules.

BEDAN: They don't become rules. If you put this in the thematic section, all you are saying is this is example drawn from several sources of the kinds of things ___. Then you say as an interim thing, use the MDC guidelines, but then get together this interagency task force to look at MDC's guidelines in the light of what DNR's responsibilities are to see if modifications are necessary. I think for the reader of the document, you want some idea of the universe of discourse that you might be operating in, and you don't want to just tie that down to some document of years ago before non-point issues.

LAW: It was done as a relationship because of non-point, and it was done between MDC and DNR and the Forest Service.

BEDAN: How long ago?

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LAW: I don't know, five to ten years ago. But it was in response to non-point.

BEDAN: Five to ten years ago is pretty ancient history in ____.

LEWIS: Again, the universe discourse you're talking about is intended, that's what page 49 is about, in the background. That's the section of the environmental sustainability that wasn't finished. That's where the kinds of BMP's are going to be described. The problem with what you have here is this sounds like, because of the wording, that the following measures should be adhered, it sounds like it's an action recommendation that the committee's making, when really it's a descriptive statement that all fits within the framework that will be described here.

BEDAN: Unless someone feels that there is something that is just totally wrong with one of these, I don't see the harm in throwing it out there as things to be discussed. It seemed to be they're all pretty common sense.

LAW: I do think clearing that up with what has been done to date in Missouri, I would still like to give credit to the efforts made by DNR, MDC, and the Forest Service, and I think I was the one that described BMP's as talking about an elephant here. We've been talking about an elephant like we all understood it. Which is what we don't, and it will take years to come up with a good set of BMP's.

BEDAN: In the meantime, we should recommend using the booklet.

DAY: Its my understanding we're going to recommend an interagency task force? Is it appropriate, and maybe it's not, to have along with MDC, DNR, Ag, a couple of industry folks on that also?

WADE: I think the recommendation can be left open to however that task force would best be composed.

MAHFOOD: My recommendation would be, you know we would do it anyway we have to, but I would say that we name the state agencies, you can't make or not make somebody else do it, then put the provisal in there that interested agriculture and conservation groups should be or must be invited to participate so that you leave that door open.

SMITH: We're talking about having an interagency group, it seems to me like Conservation has done a lot of work and it would probably would fall more under their jurisdiction than anyone else.

HOFFMANN: I agree. In terms of forestry practices, I think that's our authority.

MAHFOOD: Then you have water quality. What's happening is we're going to be sticking our nose, like it or not, our non-point source plan, we've been working with MDC to put our non-point source plan together, so as time goes by, we need to be partners.

WADE: I would hope, John, that this recommendation doesn't at all imply that MDC and forestry isn't doing their responsibility. But it does imply that there is starting to be a broader range of responsibilities within this, and hopefully this can handle that.

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CANNON: It seems to me that we're hung up on this second to last paragraph. But don't we all agree that BMP's, whatever this group determines they are, do impact soil erosion. Should we make a statement in the erosion section that we encourage the following BMP's?

WADE: That will be addressed on Page 15. It includes what you are talking about.

GARNETT: This is going to go into Section IV, do you have any problem with the language that says these things may or may not be appropriate for Missouri? What I'm uncomfortable with is we took things from all US which may or may not have anything to do with what we're doing here.

BEDAN: I think throwing out suggestions to be discussed and possibly using the discussion to modify the guidelines, it sounds like the world has moved on, and BMP's have gotten a little more sophisticated in the last 10 years, and we at least need to look at it and see if it needs updated.

GARNETT: Do you have a problem with language saying this may or may not be appropriate for Missouri? That needs to be in there, because basically if we don't do that, then Jay's comment about this being misused is right on point.

LEWIS: It's a problem that that part of Section IV was the part that is not finished. Within that framework on Page 49 it was my intention to discuss some representative kinds of BMP's that have been used by different places. I was not even planning on using all of these, but all of these are possible examples. None of them would be described as what is being currently used in Missouri now after this general description. These would be not only shifted, but I'm not sure that I would necessarily use them because these certain examples in that chapter are representing the kinds of BMP's.

WADE: I think your concern will be dealt with, but take a special look at them when you get the narrative draft on that and make sure it is.

CHILDERS: Would it be possible for us to say that we recommend at after consultation between the different agencies...that keeps it clear of only one source. The thing I'm worried about is getting into a situation where we have 4 or 5 different agencies, all that someone has to deal with. If we try to keep it in one spot, which constitutionally would be MDC, after consultation.

MAHFOOD: I wanted to emphasize the fact that what MDC has right now was developed in total cooperation with DNR. That reflected the period of time when we did that. The things are changing, and we're being forced more into silvicultural methods, and that has not been our area of expertise.

BEDAN: I don't want to sound like a broken record, but I think constitutionally, the fundamental issue here is prevention of water quality deterioration, and constitutionally that's more DNR's thing. It's just like other economic activities around the state, various agencies have certain responsibilities, but when it comes to preventing environmental degradation, it falls back on DNR. I want to see them cooperate, but I don't want to see one elevated above the other as the final authority.

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DAY: If I understand the Senator right, he wanted to have one agency for the landowner to go to for technical advice.

CHILDERS: It worries me a little bit when you have three or four different agencies dealing with it, because then you get the situation of going to this place, then that place, that place, etc.

HOFFMANN: The problem is water quality, and I think the issue is how is that impacted by silvicultural practices. I had a real concern about this being in Section V because that to me becomes a forest practices act, and I don't think we're ready to go to that degree. I think the other thing that we're missing here is the extent of the problem. We know within a logging operation where that erosion comes from, but how much erosion is that compared to other practices, like farming practices - look at the streams in the Ozarks compared to those in north Missouri, what is the degree of this problem? We don't know, and I think there's more information we need to look at.

BEDAN: But that's not our job. Our job is to deal with the silvicultural impacts. To say that there might be worse problems somewhere else doesn't take away our responsibility to deal with this one.

HOFFMANN: I'm saying there is really no indication of how much a problem this is or potentially could be.

GARNETT: We can't tell because we don't know. I agree with Mike, if we over react here without knowing where there is a problem, that makes no sense.

BEDAN: To me, I don't think pushing BMP's by whatever method we choose is over reacting. If we are so backward in Missouri that we can't do BMP's somehow...

GARNETT: What I'm saying is we're talking about the inter-relationship between DNR and MDC, MDC has constitutional authority over forest practices. Why change that if we don't even know if there is a problem with current practices?

MAHFOOD: I guess that's not what I saw with the issues. We're going to continue whether we like it or not, we're going to continue to have responsibility for __ practices. It's part of the clean water act. I prefer that what we do to make sure that we do not have problems is to work with MDC so that the guidelines that go out through the forest practices, and get everybody educated, and have 90% of the people do that, that would alleviate the issues that we're going to have to deal with. We know what it can do. We can bring people up and show you sedimentation and all the things we know effect stream quality. Again, to alleviate David's concerns, we've got a responsibility and we can't aggregate that responsibility to anyone, but we can work with a sister agency to make sure we are insync so our involvement is minimized.

BEDAN: We want to have "one stop shopping" for the landowner, and MDC can show the landowner how to do it to prevent erosion and water quality problems, but that has to be concurred by DNR, because if it isn't done right, the landowners will become subject to enforcement by DNR.

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WADE: I sense from conversation that everybody basically is in agreement in terms of what the action on this should be. I'm wondering if we're ready to move on.

LAW: I was introduced to the 1997 management guide for maintaining forest watershed and protecting streams, and the acknowledgment in there that this is published by the State Forester and it's about non-point sources, water pollution, and it acknowledges that this was put together by MDC, DNR, Missouri Forest Products Association, the University of Missouri, the USDA Forest Service, Mark Twain National Forest, and USDA National Resource Conservation Service.

WADE: Could I move your attention to Page 15? Starting on Page 15, and on to page 16 are seven actions that have circled through this committee...

LAW: What about page 14?

WADE: Those are not actions, those are part of the same thing we've been talking about.

GARNETT: Page 14 is going into Section IV, is that correct? And you're going to take the action language out of it?

WADE: Yes. Start at the top and work down through those.

LAW: Pesticide use is the first one. I don't know what that has to do with this.

TYREE: We have regulations that cover pesticide use, and I don't, maybe I missed the meeting that this was part of the issue to be addressed....

DAY: Why is this here? What does this have to do with chip mills?

GARNETT: I think we're going to have a very difficult time talking about pesticide use in any kind of context, it's different from agriculture.

WADE: Is it the consensus of the committee that this should come out?

BEDAN: It really ties back to the water quality issue. I think it's one of the things that needs to be monitored. Pesticides are showing up in Ozark springs.

WADE: That is a sub-set of water quality.

LAW: We pretty much know we have to go through a process to apply pesticides.

HOFFMANN: Does it need to be mentioned under water quality?

MAHFOOD: I think it does.

HOFFMANN: I think some of the elements of this are things that we would definitely support, but in terms of a forestry practices act, the concern is that we become in a regulatory role, and in all of our efforts, a lot of resources are shifted to regulation and compliance rather than being proactive in terms of assisting, educating landowners, and to me it takes away from some of the things already said that we're wanting to do here because it will take quite a dedication of resources to manage. There are states that have mandatory forestry practices that utilize 75% of their resources just to enforce.

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WADE: Let me ask a very specific question of the committee. Is there anyone on the committee that wishes to advocate support of the development and implementation of the forestry practices act?

BEDAN: There are a lot of different models out there, different states, and some are much more comprehensive than others. To me, the bottom line is mandatory BMP's, but harvest notification would solve a lot of our goals.

CHILDERS: One area would be that one line that say companies should be encouraged to implement SFI standards on all lands. That's probably about as __ as I see right there to encouraging them to do it. What level of encouragement is another ___.

LAW: That was a point the Federation made when we did our thing, we wanted them to be a spokesperson for that, to help distribute that information.

BEDAN: All lands, does that mean on lands other than the industry-owned land? I think that's a good idea if SFI can get in third party verification. I think it's the editorial and timber processing ___ that people say it's kind of a joke right now until you have third party verification to know it's going in the right direction. Without third party verification, it's just a PR thing.

CHILDERS: With the word utilize instead of implement be a better term?

BEDAN: The standards are certainly going in the right direction. SFI is a industry association program and the two issues are should it apply in Missouri, it's very significant when it applies to their own lands because they don't have any here, or all lands that they source timber from, and secondly, how do we verify that something is actually happening because right now it's just self-reporting.

LAW: They do have an auditing system.

HOFFMANN: There's actually three levels of audit. There's an internal audit. For instance, within the department if we're auditing our own practices we'd have another division within the Department audit what we're doing. There is a second party audit where you would have Sierra Club or some other interested party audit what's being done. Or you could go to the third party audit where you actually hire an auditing firm. There are different levels, and the cost increases with each level.

LAW: The presentation that was made to us by Westvaco, I think they went through the list of people they had, a long list of people on their auditing list. Then they publish that. I think we should say here that we hope that they would encourage those same kinds of standards be adopted on any landowner they have contact with. The best we can do is ask them to encourage BMP's. Third party verification on private lands - we've been through that on how we get onto private lands to do that.

BEDAN: But this doesn't mean anything in Missouri if we can't do that.

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CHILDERS: It occurs to me though that we encourage them to utilize or implement, they are at least saying these are good standards, giving it some credibility or some backing to say this is a good way to move. I'm not comfortable with putting any kind of mandate on it or to say you must do it, but if it shows up in these studies that we do in ways that we're looking at, then we can see that there are some directions that are moving positively.

BEDAN: We can't mandate it because it's an ___ but ensures that.... What I'm saying is that for it to be credible, it has to be all lands, not just industry lands, and you have to have third party verification. Otherwise, it has the look of a PR campaign. If they're not willing to do that, then I don't know how it has credibility.

HOFFMANN: For industry to maintain SFI participant, they have to be able to certify that they are meeting these 12 objectives, there are only 8 listed in here earlier but there are really 12.

BEDAN: But that's on industry land?

HOFFMANN: No, it's on a certain percentage of the product that comes through their mill they process actually have to be procured from lands that are certified as lands that are sustainable. They're looking at how other management programs (Stewardship programs, Forest Cropland, Tree Farm) how those things would fit into this if they are being managed under SFI.

BEDAN: Maybe the program is changing, because what I heard the gentleman from Willamette say that they would not require their sources on other lands to follow SFI. That's what I heard.

HOFFMANN: But a percentage of whatever they process has to come from land that has been certified as being managed sustainably, so they have to be able to provide their sources in terms of an audit.

RIDENHOUR: ...SFI and I did address that article that went ____. That's purely a political article. There is a movement around the US with loggers who do not want to comply with SFI standards, and they have created that, and that's one of the things the industry has been addressing. So that article has really no weight. SFI has an independent program, they have a committee of scientist that evaluate the program. Marvin Brown, the former State Forester, served on an independent panel that would actually go through and evaluate the SFI program, so it is not just one of those ____.

BEDAN: I'm not concerned about evaluating the program, I'm concerned about evaluating the actions of what's done in the forest.

RIDENHOUR: Those companies that are involved in the internal audits are very thorough. These companies have placed a lot of resources into audits.

BEDAN: So we're going to see auditors going out to places where Willamette is cutting?

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RIDENHOUR: They can talk about that in more detail.

GALLIHER: We do not require people from coming outside the area on land that we don't control to follow SFI standards even though we do push that very heavily through various logger training and working with landowners trying to get them to implement some of those things. As far as SFI practices on our own lands, a lot of companies are starting to do this now, are getting set up to go to a third party audit on 600,000 acres of our own lands in Oregon where we did have a third party auditing team, and I understand we're the first timber company in the US to pass a third party audit. We'll begin rotations to some other regions to do our Missouri lands. Any land that we have any kind of control on, private or whatever, SFI standards will be implemented.

BEDAN: That's consistent with what ____.

GALLIHER: Before we get into problems with some the thing with timber processing article, it's been determined that we can't go out and arbitrarily say we won't buy from you because you're not following standards. But that doesn't mean that we can't promote heavily and encourage loggers to follow those standards.

BEDAN: But you understand my concerns since there's only 1% of commercial forest land that is industry owned, SFI really doesn't mean much in Missouri.

LAW: Well, other than this is just another source of people in the business talking to other people and saying here are some good standards. It's part of the education system.

MAHFOOD: We had a discussion at one of the meetings where we ___ that the forest practices act. The question I have is we had a long discussion and it seemed to be more amiable to looking at some concept of a forest practices act done by size. In other words, I can remember having a discussion where we more or less wound up putting a fairly hefty acreage in there where something like this would apply, and it would act more or less as a fail safe mechanism as opposed to impacting traditional landowner in Missouri. I don't know what happened to that, but we had a discussion about a forest practices act done more by size.

GARNETT: If there is any involved process in Missouri to extend it, whatever that amount of land, if it's $20 million, if they could just spend $5 million educating landowners they'd do more good. An enlightened landowner is the key to this entire thing.

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WADE: ... to develop some mechanism to encourage the utilization of the SFI, by companies and include within that the utilization of a third party verification process. From the discussion, my sense is that's all the committee wants to see in there.

BEDAN: We haven't really discussed Steve's compromises (inaudible)....

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MAHFOOD: I just remember somebody other than me that brought this up as an issue, and I filed it away and forgot about it until today simply for that logic was it more or less would have exempted most everybody in Missouri, but it also was discussed.

DAY: I can remember a little bit of it.

TYREE: We also had a discussion similar to that about what size clearcut may need to be overseen, and the concerns were if we regulate only 500 acres and up, let's just ___ too, then you have people with 250 acre parcels of land, and increasing fragmentation by doing it that way.

DAY: That's what I remember of it. That and the fact that there are easy ways to get around it.

BEDAN: But other states have dealt with this and certain guidelines have been met on how clearcuts can be. Just as a general statement on what I'm in favor of, the forest practices act, especially mandatory BMP's, they certainly make concerns of smaller landowners are legitimate, I think we could have some sort of phase in period and some sort of cut off so that the smaller landowners aren't involved, ways to cushion this so those 300,000 landowners aren't' all affected.

DAY: My concern is that regulations never become less stringent, and if you said 400 acres, over time I'm convinced that will continue...

BEDAN: I think it should be based on performance. If education works ___ landowners and their ability to do it, if it doesn't work, education doesn't work regardless of whether we recommend them now.

DAY: If the things we're talking about with education don't work, I'm convinced that a committee like this will be back together before too long.

WADE: With that summary, let's move to the bad actors.

BEDAN: Bad actors don't mean much if you don't have a forest practices act. Unless their just consistently shown ___ current water quality laws.

MAHFOOD: We don't have a bad actor clauses, we might have a specific piece of legislation that may have a bad actor clause, but usually a lot of that is taken into consideration because we have conference, conciliation, persuasion, sit down and try to work through the issues, and if we can't get it done, they usually wind up in Bill's or one of his peer's lap and that's where the bad actor gets referred to the Attorney General.

DAY: You basically have this only under a different name, is that right?

MAHFOOD: Yes, and do I think it's strong enough, I don't think so because I want to make sure that DNR rewards, helps, holds the hand of somebody who cares and is trying to do the right thing. We should not be going after people who even mistakenly do something wrong if they are trying and we see what's going on. We have a very small number of bad actors in the state, and you almost can't tolerate any further actions that they do. We still go through that process that we're supposed to, even with the ones that are identified as bad actors.

DAY: Is this process similar to what our Hazardous Waste Commission does?

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MAHFOOD: Yes.

GARNETT: If DNR wanted to, is it legal for DNR if for example there was someone logging doing a poor a job of it, if you had knowledge of it, is it appropriate and legal for you to have investigators check every timber sale they cut?

MAHFOOD: Shooting from the hip I'd say no.

BRYAN: If on a specific case you have reason to believe there is violation, ____.

MAHFOOD: Yes. To go and __ that all out, a full blown investigation is not real likely, except that I can tell you that there are certain laws, like our land reclamation laws. There are some bad actor provisions, and we're almost required to go and look at the company's past practices...

GARNETT: I'm not advocating that you do. But could you do it if you felt the need to?

MAHFOOD: I would imagine.

BEDAN: I think the concept of bad actor, I'm not sure what's being referred to in this paragraph, but often the concept with bad actor is something like in the Hazardous Waste Law where the company wants to come into Missouri and set up a hazardous waste facility, DNR can look at their history of violations in other states to judge whether to give permit or not. If we had a permit process...

DAY: And also we hear that term used quite a bit whenever it's the third time that company's attorney's been here visiting here with us.

CHILDERS: We probably ought to incorporate some bad actor examples in our education process, so that the landowners recognize some of the really bad practices and how they've taken place.

WADE: My sense is that the committee is ready to move to the next section, Maximize Utilization and___.

BEDAN: I took this to mean maximize utilization of culls and waste wood, is that what's being proposed?

MAHFOOD: Yes, it's kind of like what we were talking about earlier with the proposal for resource recovery type approach in those partnerships, but would also be a permitting type process for the chip mill.

HOFFMANN: I wasn't clear where the recycling plan, how that applied to the landowner, what specifically they should recycle.

MAHFOOD: I sure didn't think through the landowner, I can see this in here and I'm not quite sure what Jerry meant by that....

BEDAN: It seems to me that it really applies to a facility, not landowner.

HOFFMANN: What are they, even within a facility, for instance a chip mill, what should they be recycling?

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MAHFOOD: I think Jerry was trying to write what I briefly said at the last meeting and didn't get it exactly right. It's recycling, but it's really more resource recovery and that's using a resource that has not been previously exploited. Again, we're back to the culls, rotten logs.

BEDAN: It's really the same conversation we had earlier.

HOFFMANN: I guess I don't see that as recycling.

MAHFOOD: That's why I just said that Jerry put recycled instead of resource recovery, and that's how it should be approached.

DAY: I think we've beat this one long enough. It's basically the same thing we discussed earlier.

CHILDERS: There might be something in there...the middle where it says Innovative Plans. I can see maybe an effort made to try to get participation from people and how to best utilize this. In other words, if someone comes up with an idea and has some sort of recognition, such as Community Betterment that DED has, I could see that being utilized. Any way that you can get landowners to partner together, maybe they have a small amount of culls, get a bunch of them to work together.

CANNON: That's a good idea. We talked about the Governor's Economic Development Conference, having some new type of awards for not only communities but also companies that do things that make progress.

LAW: This goes back to my interest in the logger out there so that we could support them and get them started with the right equipment so they can do the thinnings and after it's seen and developed for a while, perhaps with public funds, people would say this works.

MAHFOOD: And that's part of the development of the resource recovery recycling policies that have evolved over the last ten or fifteen years. They started off in places to manipulating the economic system and it didn't work. What they learned is to remove themselves more and more from that system and put incentives, put the structure in place for the primary industry, then allow the market takes its role in our capitalist-based system. That is the idea to get away from the original ideas that were really manipulating the system and didn't have sustainability. Now we've got some sustainability, and really turned the corner when the waste industry decided to tax themselves and put that in a fund so that somebody could put new ideas and thoughts about recovering waste products could be put into place. They didn't advocate more regulation, although there is regulation there for the waste industry. They've gone the other route. They've been very successful. What they've done is held their own feet to the fire and put resources into the put, that's the other side of this. When you put a dollar in, you start looking at it more closely. How we get to that, since we really don't want to go and put any kind of lug on anybody in the industry, I'm not sure we can, other than through voluntary efforts, push anybody in a certain direction.

CHILDERS: DED might be able to do something through some of their programs. Just to recognize...

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CANNON: (Inaudible)... special awards... It might be possible to safely designate certain mills as ____, ...more as a tax credit if a certain amount of their raw materials were culls, rough and rotten. Maybe the reward would be __ and the logger tax credit for bringing a certain percent into that resource recovery. Just a thought...

GOODE: Why use a tax credit? If you want to give them money, put it up front and give it to them in appropriation. Why a tax credit? We have piddly tax credits all over the place.

CANNON: Could part of the soil and parks conservation funds be used for a grant?

DAY: Isn't that very specific funds?

MAHFOOD: It is. I don't want to discount that, but again I think it was pointed out there is still going to be pressure, when you start cutting the pie up, there's only a limited amount of money that's there.

GOODE: There's areas where they could be used for forestry in place of agriculture for grants, for carrying out soil conservation practices, doing those things.

TYREE: I was thinking that some of the other options regarding value added, I'm not sure where it would fit. You were talking about existing things and how to reward them for what they are doing, if you want them to do something a little different through the value added grant program, that would be an opportunity for mill owners to use a different type of process that may be a little pricier, and being on the cutting edge (INAUDIBLE)....if it would add value to the timber.....

MAHFOOD: And that is also the way that resource recovery/recycling approaches taking place. People come up with new ideas and may not be able to ___, so they come to get funding to try a new process to add value to a product. A lot has been successful, there's been a lot of failures.

TYREE: One resource that we haven't talked about but it's been brought up for this issue is regarding 1% of the money coming in for the tobacco settlement will go to assist rural Missouri through providing value added grants. It's just a concept that someone threw out on the table, but we might want to consider recommending as well.

BEDAN: Are we talking about trying to get high capacity chip mills resource recovery status, or are we talking about new operations that apply?

MAHFOOD: The proposal would be that you could permit high capacity chip mills not as a resource recovery facility, but use the resource recovery facility as a model for permitting chip mills.

BEDAN: This would be mandatory?

MAHFOOD: No, it would be a permit.

BEDAN: You kept talking about incentives...

MAHFOOD: But it's all those things.

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BEDAN: I can't see them doing it voluntarily because they want to keep their options open for chipping anything they want.

MAHFOOD: In resource recovery, as it's done now, it is a complex equation of required permitting, but also incentives for those same companies so you have a compliance rate that is very high. They bit the bullet, and it's one of these situations where you've got voluntary involvement with the permitting and the two going together very well have made for some real solutions to a waste problem. But you need them both, you couldn't have just the permitting side and not have a strong incentive program with it.

BEDAN: I'm just trying to think how it would apply here, aren't those resource recovery facilities, their feedstock is all some kind of waste. They're not putting any raw resources in there, right?

MAHFOOD: No. It's like anything else, not that we know of.

DAY: Did you say that those industries have a self-imposed...

MAHFOOD: It was kind of a long evolution. The industry more or less agreed to the permitting process because there were a lot of incentives, and there was money out there, and they saw the state agencies working with them, not opposing them, on making the permitting process ___, they kind of go out there, and we work with these facilities to make sure they do cut it and very few bad actors, and it's just been a process that's really the right model for a lot of things that DNR does in general. But this was more getting at the issues that we had heard the chip mills were focusing their operations on wood waste products. I heard that early on, but it's come out a lot differently, and I've learned a lot about this, but it was intended to be a wood waste processing operation. The only thing I know that we do in the way of permitting involvement is that type of facility that __ as a resource recovery. The resource recovery law does have a threshold, there is a percentage, and it doesn't limit it, it's more the other way around, and it says at least X% should be of a certain waste product. It was a standard that the industry developed, told us, and we incorporated it.

WADE: I don't have a sense of the extent in which the committee would like to begin pursuing this, I do have a sense that what is written here is totally inappropriate and doesn't capture the idea at all.

GOODE: ___ this with what you have from our earlier discussion and see what you come up with.

WADE: What I suggest is if Steve will provide more information and we'll get that back to you and see what kind of response you have to it. I have a feeling we don't have enough here yet.

DAY: I feel that basically it's the same discussion we had an hour ago.

CHILDERS: Can we also get some input from DED on what programs they might have, and Agriculture too? I think all three of those are good.

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WADE: Yes. One of the ideas that's been very vigorously advanced and I would like to hear some discussion on is the creation of something similar to a forestry resources council. I think Minnesota is the best example we have, although there are some other examples.

GOODE: This is separate from what we were talking about before, an interagency task force. This is broader than that. It seems to me that if this is a good idea, the place for that to be established within Conservation rather than outside as a separate entity. Most will default to Conservation as far as what you have here, I think.

WADE: Our sense in the other states that have done that is that they have made this independent of existing state agencies so that it becomes an independent advisory board in a broader sense.

DAY: Is this set up similar to our hazardous waste commission, are they appointed by Senate?

LEWIS: No, it's basically, the membership would be the whole spectrum, industry, agencies, I don't think any active legislators are on the board, but a number of them are past legislators. The whole spectrum, not overseen by DNR or MDC, but obviously a major representative on the board. In Minnesota, it has been given legislative status. But the Governor may appoint members to the board, and basically it serves as a forum for public discussion. In Minnesota's case, the legislature gave it $2.5million to develop a comprehensive set of voluntary forest practice standards, like BMP's.

GOODE: I need to leave here in about 10 minutes for a 1:30 meeting. In Missouri, you have the constitutional authority of MDC on forestry. Also, when you come in here you see a sign out there, it's the 25th anniversary of DNR. Prior to that, about 120 different boards reported to tthe Governor. Now they are all in 14 departments. If you create something like this, it's got to go somewhere. Also, there is ____ authority given for anything that's under Conservation.

BEDAN: Is it possible to have a council be appointed by the Governor but assigned to an agency for administrative support?

GOODE: Yes, it's not very often done with Conservation because of their constitutional independence because it could be that if it's required by the Governor it automatically requires constitution by consent of the Senate, but generally you don't appoint advisory committees because you don't want to go through that high level process. Advisory committees are usually appointed by Department heads because you avoid confirmation and they are not a policy-making body.

HOFFMANN: I think it's important that we have follow up of what this committee is doing with some sort of board, whether it's advisory or not. We have similar things. In urban forestry it's called Missouri Urban and Community Forestry Advisory Council, and their role is to advise the State Forester on matters dealing with urban forestry and the green industry, and we've been making an effort to try to remove them somewhat from MDC involvement and to focus into operating a little more independently so they are providing some input into what we do.

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GOODE: That's probably a good model. That's why I said it should probably be done, because you can't really give them any authority unless you're going to change the constitution. That's why I said, if you're going to do something like this, it'‘s probably to have the Director of MDC make the appointments and set it up similar to the urban forestry approach. Otherwise it's just dangling out there.

SMITH: If that's the way it needs to be set up, and it sounds like a good idea to me to have a council like that in MDC, and I would recommend we encourage them to set that up.

WADE: I sense a very strong support for something like this for exactly what Mike said, to carry on the work of this committee. Would it, given using the kind of concept that Minnesota has, be possible to include in that recommendation specific organizational representatives that would be on it under appointment of the Director of MDC? Perhaps a representative would be on it from DNR, DED and the tourist industry, so that you have that broad range?

GOODE: Since it's going to be advisory, my opinion is that we do that in a general way to give directions to the Director, as opposed to saying there would be this number representing this, and this number representing this, etc.

CHILDERS: Say representing a broad spectrum.

GOODE: And mention tourism and conservation.

LEWIS: One last comment on the Minnesota example. They specifically did not want the council to be under the DNR, but the did want the resource agency to be represented.

GOODE: They probably didn't have the constitutional authority to deal with that Conservation has, DNR probably had statutory authority to do something in the timber area, and therefore you could pass another statute that gave some of that to a board like this. In Missouri, it's in the constitution...

DAY: I don't have any problem with it going under MDC. Usually, you get a board or advisory committee, they don't give a rip about authority anyway, they are going to do what they want.

LAW: We talked about things like the education, BMP's, this would be a good way to continue that effort.

BEDAN: It's kind of a dilemma here, I like the Minnesota model because of it's independence from agencies and it has it's own budget which really means independence. But I also recognize the issue that Wayne has brought up about the constitution.

TYREE: This is an advisory council, again, back to the ___ Coordinating Council. That's something that the Department of Agriculture and MDC trade off every two years on which Director is going to be chair of that. But it again is just another model.

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BEDAN: I'm thinking of the Governor's Council on Health and Fitness, and it has all of the agencies represented plus organizations. Does it have it's own budget?

MAHFOOD: I doubt it. I think the budget comes through the Office of Administration.

BEDAN: But it's not tied with the Health Department?

MAHFOOD: I think it does have ties.

BEDAN: But it has it's own staff?

MAHFOOD: We do have models out there that are semi-independent.

GOODE: That probably either a tax ___ or it involved the Office of Administration.

FOSTER: It does not have it's own budget.

WADE: I think I have enough sense to rewrite that. One recommendations was to put some restrictions on clearcutting, and included a paragraph on that to see if the committee wanted that left in as an area of action or not.

BEDAN: BMP's have some limitations on how close you can get to the stream.

WADE: And the last one in this section, that one-liner that's come up in a couple different places.

HOFFMANN: I know my bosses wouldn't like that, because again this gets back to what Senator Goode was saying, the Conservation Commission has the authority to make those decisions, and I don't think they feel that could be done constitutionally. Both of these paragraphs, saying that we can't purchase land, our land purchase is way down and we've been purchasing and acquiring a lot of various sensitive sites in areas that we think are pretty important.

DAY: I would like to see both of those deleted.

CHILDERS: Back on the clearcutting issue, could I ask you in that one deal we talked about before doing a study and keeping track of what's going on, that we pay special emphasis to clearcutting in that? Would anyone have any problem with that as a matter of record keeping to see what happens in the two year study?

WADE: Ok. Can we then move to the financial and let me ask Senator Goode if he has any special comments he wants to make on that before he leaves.

GOODE: David brought up the check offs, and I thought we'd try to mirror what goes on generally in the agriculture industry is a good idea, and the soil and water, we've talked about that as far as how that can be, my feeling is to utilize it where it's appropriate. You can't utilize things that the constitution doesn't allow, but where it allows as part of agriculture.

WADE: Perhaps more to the point, on the items that follow that, are there any you are in support of keeping into the report as a potential area of action?

GOODE: I think we kind of settled that.

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MAHFOOD: I'd like to add based on the discussion we had yesterday the check off soil and water conservation, I'd like to add conservation sales tax we talked about.

DAY: On the check off, it says the committee strongly supports the development, and in my mind, we're supporting the producers being able to vote on it. We're not saying there has to be one, we're saying the producers ought to have a chance to vote on it.

WADE: The heart of the check off program is that they are developed and controlled by producers. When I use the word development of that, I'm talking about the producers making the decision about that.

CHILDERS: On that one area, I still like tax credits.

WADE: We're going to have three then. Soil and Water, Conservation.

LAW: And that financing goes to education?

WADE: On the soil and water, it has to go to uses.

LAW: We're going to have to say that we have created these needs for funds.

MAHFOOD: What do you think about the first paragraph, educational programs and incentives in supporting landowners. I think I like that as the who uses sustainable management and BMP's? Isn't that the reason why we __ these?

GOODE: The check off goes off somewhat in a different direction.

WADE: They can make the decision to check off the use for landowner education, but that is their decision.

CHILDERS: We might want to add in there that marketing initiatives. That's one __ that was used there for value added.

DAY: I took that sentence out just because they'll make that decision.

FOSTER: In that first paragraph, you have still quite a bit about this is a difficult issue the committee had a high level of disagreement. Is it really important to emphasize that?

CANNON: I have a question on ___ education, verification. Talking about the soil and water conservation funds, is that the same of different than the parks and soil conservation money?

MAHFOOD: We'll get the terminology right, that's not exactly the right way to say it.

WADE: Following your comments, unless the committee takes it out, I will include in there that the financing of the educational recommendations is not addressed in the recommendations. I will leave that out if the committee does not feel that's appropriate. But one of the things that's not being dealt with is how do we put the very high emphasis on education throughout the entire thing. It was my intention to include that in unless the committee asks me not to.

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FOSTER: The 1/20th of 1% for water and soil conservation, that's pretty clear cut that we use that for erosion purposes. The 1/8th conservation, how can that money be used?

BEDAN: It can certainly be put into education.

HOFFMANN: That's up to the Commission.

BEDAN: I think in essence what we're doing is requesting the Conservation Commission that they give more priority to forest landowner education.

MAHFOOD: One of the things we talked about, in talking to Jerry Conley and a couple of the Commission members, we talked about holding a joint meeting of the Soil and Water Commission and the Conservation Commission just to discuss these issues and see how we can compliment the funding from the two sources, and maybe this is the time to do that.

FOSTER: In this specific area. We're talking about two funding sources, and I think those do address everything we've talked about.

DAY: But we don't know the Conservation Commission ___.

BEDAN: No, we can't be specific, but we have fund sources that can be used.

CHILDERS: There's one area that I think is the study of knowing what's happening, like remote sensing, that probably we need to look at. I don't know what the costs are or how much we're doing already through different agencies in the state.

LAW: That might be one of the projects that legislation would have to appropriate funds for.

MAHFOOD: Resource assessment, as Mike was saying, is not cheap.

HOFFMANN: We're supporting that, and we're doing some on our own, but we're limited.

DAY: Would it be appropriate to put a line in there just saying that we request assembly. We don't want to get specific on dollar amounts.

FOSTER: I think if MDC came to us in budget and requested that specific funding, we would listen to that.

CHILDERS: Or DNR, if we get it from the whole group, saying this is something Department of Agriculture, DED, DNR, MDC, if they all said this is something that would help everyone because it probably impacts everyone through jobs, clean water, every aspect.

FOSTER: And Senator, you know if it comes down as a Governor's recommendation on budget, 99.99% of those are approved.

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WADE: This helps, because the concern I had is that yes, some sources of funding had been identified, my suspicion is that, for instance, the conservation sales tax is already being fully used and we're recommending an additional substantially expanded educational programs, they may think that they don't quite have the funding.

BEDAN: The Commission has considerable power to redirect funds, and I understand they just got a new windfall because they are not subject to Hancock.

WADE: I will put into this the Committee's recommendation that Conservation needs to...

FOSTER: This goes to the Governor, and I think the Governor has some influence on how that money is to be spent.

TYREE: Regarding the marketing issues, we talked about value added grant programs that we have, and I would like to see a recommendation here supporting additional funding for the ongoing program. That's the same type of grant we gave to the kenaf growers, and I can help with some language on that.

WADE: Ok. Please.

CANNON: That last portion, does that relate back to the value added incentive we talked about a while ago.

GARNETT: Is there any support, I know Senator Goode was totally opposed to a tax credit, but is there any support for direct funding of a pilot project in the area impacted by chip mills to help landowners?

CHILDERS: I've been supportive of that for a long time. I think that's one of the original thoughts I had when we first started was how can we make maintaining the forest lands economically more feasible for people when they have high percentage of low grade timber there and they get a choice of clearcutting it off and going to pasture, which seems to be what's happening right now, that if we can go to something that actually rewards or makes some sort of financial incentive to upgrade the timber and maintain it for the long term.

WADE: May I make a suggestion that would provide funding for a pilot program doing that without specifying the details of how that program would operate, and then that would put that into the possibility of becoming part of the Governor's legislative agenda? Ok, can you give your language you just used in a written form?

CHILDERS: I'd have to do a little thinking, but I think I can.

WADE: Please, and we will make that one of the proposals of the financing. I think there's general support of that as an action. Is there anything else? We're awful close to what we aimed for.

LAW: Can we move into new business so we can remove the table?

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MAHFOOD: We want to get that proposal off the table that we had yesterday. What did that motion say?

LAW: One of the parts of it was to extend the time of our committee to allow for the 30 day period, to January 15th, to allow for a public comment period on the final draft.

MAHFOOD: Is that what we had? That got seconded and tabled.

LAW: I will remove my second, and it's done.

MAHFOOD: We have a proposal on the table to recommend to the Governor to extend the executive order to January 15th.

WADE: Her motion was to extend it. The details of the extension probably now needs to be made as an amendment to the motion.

SMITH: Emily's motion was not to extend the deadline, her motion was to not extend the deadline.

MAHFOOD: Thank you. If Jay withdraws his second, then that motion is dead.

BEDAN: What I would like to do is think through the time

table about what has to happen when.

MAHFOOD: We're in discussion period on the motion to extend to January 15th.

WADE: Ok, November 15th, Bernie and I finish the rewrites. That would need to be back to us from you, any written comments would have to be returned to us by November 22nd, and we would have it overnighted to you on Monday, you would have to get it back in the mail to us Friday or overnight it to us the 22nd. Over the Thanksgiving holiday, we would rewrite. You would have to give us and the chairs the right to call what we would call a final draft by December 1st, because I think if you're going to have a public comment period, you have to allow 30 days.

MAHFOOD: There's a lot of different comment periods. Bill, do you have any statutory requirements?

BRYAN: No, there are not statutory requirements, but if you're going to do it and make the January deadline, there is not a lot of time.

WADE: Then this committee would have to come back together sometime around the 7th of January that would give a little time to feed that in to see if there are any suggestion we would make for rewriting. This committee would need to come back together about January 10th to give it's blessing to the report that will be conveyed to the Governor. Does that make sense?

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MAHFOOD: What I'm thinking about practicalities, nobody is going to want to hear this, and I just want to put this so that we're not bucking up against something that may be artificial, I think I would probably recommend that we have a two month extension, bad weather may cancel a meeting, there may be things that happen, I think we should set our schedule up so it ends on the 15th, but I'd like to make sure that something doesn't happen and then we're up a creek.

DAY: Can I ask if we can meet the week after the 10th? Or does that mess things up.

MAHFOOD: No.

FOSTER: It's not a problem on Monday.

TYREE: That Monday is Martin Luther King Day.

MAHFOOD: We can't meet on the 17th.

DAY: Ok.

BEDAN: What about the public hearing?

MAHFOOD: Talking about in the public process, we're going to get these dates down and we'll have a public process between the 1st and 31st, but how does the committee want to handle it where people could come in, submit their comments, and have the committee represented at that hearing.

FOSTER: The meeting January the 10th, is pretty routine, it shouldn't take long?

MAHFOOD: It depends.

LAW: I think if you get public comment, you're going to have a lot of stuff to wade through.

MAHFOOD: I would not see this as a __ meeting. Maybe we should focus on trying to work the meeting in to our schedules.

CHILDERS: With the legislature, it's Fridays or Mondays, except early we may have some evenings that we could meet.

MAHFOOD: The final draft on December 1st gets mailed and/or available to everyone who is on our mailing list or who has interest. Any input from you on where you want the report to go?

BEDAN: I'd like to see it on the website.

MAHFOOD: Absolutely. And then that 1st to the 31st process, we'll have to figure out and what I'd like your reaction to is we need to have some public meeting in there...

SCHUETTE: I was going to suggest to the committee that if they allow a 30 day review time and then schedule a period shortly after that for a public meeting for anybody, as many committee members as can be here can listen to any public comment and then give yourselves a couple week period after that to simulate those comments and make your final recommendation. It's my recommendation that you have two meetings, one as a public meeting, and one to establish your final recommendations. So maybe January 5th or 6th time frame for holding a public meeting to receive final public comments along with any written comments that are submitted during that 30 day time period, then give yourself a couple weeks to understand those comments and come up with final recommendations and a final report.

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LAW: On your public comment meeting, do you have a set procedure for that?

SCHUETTE: No, basically each law is slightly different as to how that's done, but generally there is some sort of a process to make the document available. Different laws dictate different ways of doing that. Most of the time we have a court reporter to formally transcribe all the comments that are made, then that transcription copies are shared. That way committee members that aren't present can read the transcript.

MAHFOOD: Often times we would have a hearing officer, but I don't think that's appropriate here.

BEDAN: What would be the final deadline for written comments, often there's a period after the hearing.

SCHUETTE: That is dictated by a statute, in this case there is no requirement, it's up the committee. It seems logical if the committee would say, based on the schedule that we would accept written comments, typically we allow another week after so that if anything was said during public comment period they can respond with written comments. We would allow 30 days for review, then a public meeting, and another week to receive any written comments.

BEDAN: I don't know if this is logistically a good idea, but from that point of view, it might be better to have the public hearing in December. Then you have a total 30 days, but if you want to have the hearing in January, you're really extending the whole thing to about 45 days.

MAHFOOD: But you would still accept comments to the end of that 30 day process.

WADE: Based on that, are you saying that the final draft may not have to be available until December 10th.

MAHFOOD: No. What's key to this is that final draft on December 1st, or the whole time line falls apart.

CHILDERS: If we move the public meeting back into December 20th, then even though the written comments are still being received all the way to the 31st, that would help there.

MAHFOOD: If we get too close to Christmas, that could cause problems.

LOUISE MCFEEL: What treatment do written comments get?

MAHFOOD: Depends on the law about what process. They all have to be addressed. We don't have any law that governs this process, so we're working through. We know that everybody at the table will get all the written comments that are submitted. All comments are made available to the public, usually put out on the website.

FOSTER: We've got a motion on the table and we really need to get on with it.

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MAHFOOD: Ok. We need to refine the schedule better, and we can do that. Can you modify your motion to make it the two months?

LAW: Then I withdraw my motion, the second, and do we want a date or do we want just to extend 2 months?

MAHFOOD: I would say to the end of January.

LAW: I move that we request that our committee be extended until January 31st to allow for a period of public comment on the final draft.

DAY: I second.

MAHFOOD: Any further discussion? All in favor say I. Opposed? Motion carried. As far as a schedule, let's try to get as much definition as possible. I think we need to check everybody's schedule, people that are not here, and then check with your schedules and come up with a meeting time that gets most of us here. That would be in the first couple weeks in January, probably more toward the middle.

WADE: The problem is the report isn't available until December 1st, and that allows less than 2 weeks.

MAHFOOD: That's my concern.

DAY: The 13th is the Governor's Conference on Ag.

MAHFOOD: The 20th would make more sense. The 20th is a Monday.

TYREE: So then, the 31st would be the last day for written comment?

MAHFOOD: Yes, and generally it's postmarked on the 31st. I don't know what else schedule wise we can pin down today other than looking back on times that can work those couple weeks in January. Is there anything else we are leaving out here?

TYREE: I'm thinking out procedures..just to reiterate, the final draft will go to all interested parties, it will be on the internet, does there need to be some sort of press release?

MAHFOOD: What we've been doing to support the Dep

Governor's Advisory Committee on Chip Mills

Governor's Advisory Committee on Chip Mills November 1 and 2, 1999 Department of Natural Resources 1738 East Elm St. Jefferson City, Missouri

November 2, 1999

Governor's Advisory Committee on Chip Mills
November 1 and 2, 1999
Department of Natural Resources
1738 East Elm St.
Jefferson City, Missouri