(a) Notwithstanding the provisions of AS 38.05.115 and 38.05.120, and upon a finding that the sale is in the best interest of the state, the commissioner may negotiate a sale of timber for use in the local manufacture of high value-added wood products. A timber sale contract entered into under this section may provide for a harvest of up to 10,000,000 board feet of timber each year, consistent with sustained yield principles, and may be for a term of up to 10 years. Initial stumpage rates for a contract under this section shall be determined by negotiation but may not be less than the base price for the area as established under regulations adopted by the commissioner. A contract under this section must provide that stumpage rates shall be redetermined by negotiation at least once every three years during the term of the contract, to reflect changes in market conditions; the redetermined rates may not be less than the base price for the area as established under regulations adopted by the commissioner. The commissioner shall by regulation set a maximum number of contracts, but not less than two, per region of the state that may be negotiated each year under this section.

(b) Notice of intent to negotiate a contract under this section shall be given in accordance with AS 38.05.945.

(c) The commissioner may negotiate a sale of timber under this section if the prospective purchaser agrees to use to the maximum extent commercially practicable the timber subject to the sale for the local manufacture of high value-added wood products. The commissioner shall determine the maximum amount of the timber being sold that is commercially practicable to use for those purposes and make the use of that percentage of the timber for those purposes a term of the contract. In evaluating proposals, the commissioner shall take into account the proposed manufacture of other value-added wood products to be produced under a negotiated contract.

(d) Before a sale may be negotiated under this section,

(1) the area of the sale must be designated for forestry purposes or other purposes that permit forestry uses by a valid existing area plan adopted under AS 38.04; and

(2) the requirements of AS 38.05.112 and 38.05.113 must be met.

(e) In making the best interest finding required by AS 38.05.035(e) and this section, the commissioner shall consider, in addition to other factors,

(1) the direct economic benefit from the local manufacture of high value-added wood products as a result of the sale;

(2) the direct economic benefit from other local processing of the timber to be undertaken by the purchaser as a result of the sale, including the manufacture of other value-added wood products in addition to high value-added wood products;

(3) the likelihood of commercial success of the locally manufactured high value-added wood products and other value-added wood products;

(4) the extent to which the sale is likely to result in the creation and maintenance of a stable local job base;

(5) the existence of adequate protection measures to ensure the sustainability of fish and wildlife habitat and populations and continuation of other uses of the area subject to the negotiated sale;

(6) the stumpage return to the state; and

(7) any other reasonably foreseeable benefits to the state and local economies from the sale.

(f) As part of the timber sale negotiations authorized by this section, the commissioner may require a prospective purchaser negotiating a timber sale contract to submit financial and technical data that demonstrates that the requirements of this section have been or will be met. Upon the prospective purchaser's request, the commissioner shall keep data provided by the purchaser confidential in accordance with the requirements of AS 38.05.035(a)(8).

(g) If the commissioner determines that additional analysis is necessary in order to complete the best interest finding for a sale under this section, the commissioner may require the prospective purchaser to retain and pay for the services of a contractor to assist the commissioner in evaluating the proposed negotiated sale and financial and technical data relating to the proposed sale. The contractor shall be selected by the prospective purchaser from a list of consultants in forestry and timber economics provided by the commissioner. If the commissioner requires a prospective purchaser to retain the services of a contractor under this subsection, the commissioner shall determine the scope of the work to be performed by the contractor.

(h) Under this section, a performance review shall be completed not more than five years after a timber sale contract is entered into by the department to ensure that the purchaser is performing in accordance with the terms of the contract. If the commissioner determines that the purchaser is not performing in accordance with the contract, the commissioner may terminate the contract.

(i) A timber sale negotiated under this section does not affect other timber harvest programs under AS 38.05.110 - 38.05.120.

(j) In this section,

(1) “high value-added wood product” means interior finish paneling, trim molding, flooring, doors, windows, cabinet stock, furniture, musical instruments or parts of instruments, toys, tools and implements, ready-to-assemble building kits, veneer, plywood, finger-jointed lumber, faced house logs, dissolving pulp, engineered wood products, paneled wood products, kiln-dried lumber, and other similar finished wood products as determined by the commissioner to have received processing beyond sawing and planing that adds high value to the wood product;

(2) “other value-added wood product” means round house logs, chips, green lumber, flitches, cants, rough planks, and other similar wood products as determined by the commissioner.