Alaska Lumber Grading Program created in bill signed by governor Wednesday

Gov. Mike Dunleavy has signed SB 87 into law, establishing a lumber grading training program for sawmill operators in Alaska.

The lumber grading program will help local sawmills get their product to market and reduce Alaska's dependence on lumber shipped in from Canada and the Lower 48 for residential construction.

"The timber industry is an integral part of Alaska's history. This lumber grading program will help shape the timber industry for Alaskan small businesses to allow them to thrive now and in the future," Dunleavy said at the bill-signing ceremony on Wednesday, Aug. 30.

Senate Bill 87 received strong, statewide bi-partisan support during the 2023 legislative session, passing the House with a vote of 38 -1 and the Senate unanimously. Rep. Jesse Sumner, R-Wasilla, sponsored the bill in the state House and helped steer it through that body.

"This law is critical to implement the state's local construction lumber program as we continue to grow Alaska's timber industry," said Department of Natural Resources Commissioner John Boyle. "I want to thank Senator Bjorkman, Representative (Jessee) Sumner, and the other legislators who agreed with DNR on the importance of training sawmill operators locally to grade quality Alaskan lumber - creating jobs, lowering construction costs, and solving supply chain issues."

Membership in a lumber grading agency can be cost prohibitive for small sawmills. In Alaska, many sawmills do not produce enough lumber to justify the cost of membership in a lumber grading agency accredited by the American Lumber Standards Committee. As a result, most dimensional lumber in Alaska is imported from the Pacific Northwest and Canada where stamped lumber is produced.

SB 87 directs the Alaska Division of Forestry to develop a lumber grading program and issue lumber grading certificates to individuals who complete the program or meet other specific qualifications.

The certification authorizes the individual to grade load-bearing dimensional lumber that they mill. The bill specifies when the lumber can be used in residential construction and requirements for informing the purchaser of the designating characteristics of the lumber. The bill allows a home inspector to authorize the use of the lumber, reject its use, or authorize use with more restrictive construction requirements.

“Local lumber grading in Alaska will create economic opportunities for small businesses, provide an opportunity for Alaskans to purchase local products, and perhaps offer building materials at a lower cost than dimensional lumber from the lower 48,” said Bjorkman. “It will also encourage higher value-added use of materials harvested from forest thinning and hazardous fuels reduction projects that would otherwise be piled and burned.”

Alaska is struggling to meet housing shortages across the state, made worse by the significant increase in the cost of construction materials and lag time due to supply chain issues. Currently, dimensional lumber used in construction must be graded and stamped by third-party grading agencies in order to meet lender requirements and building codes.

“This legislation is helpful for a developing industry,” said Andrew Traxler, owner of Papoose Milling in Big Lake. Traxler’s company hopes to take advantage of the new program. “I look forward to managing our forests through sustainable harvest with regards to natural regeneration," he said.

Trevor Kauffman, Kenai Peninsula sawmill operator and owner of Kauffman Enterprises, said: “Local lumber has been used successfully to build sturdy houses, boats, and even aircraft parts for generations. However, Alaska's relatively small forest products industry has not been able to bear the cost of Pacific Northwest lumber grading services, in most cases.”

The Department of Natural Resources will operate the local lumber grading program and oversee the criteria used for grading the allowed Number 2 and better, Stud and Number 3 grades of dimensional lumber. The department will provide free training for sawmill operators and establish benchmarks for certification.

Once certified, a sawmill operator could then grade and sell the dimensional lumber they produce directly to a homeowner or their contractor for use in a residential structure with three or fewer units in areas where building codes allow for the use of locally graded lumber.

“Creating new opportunities for lumber sales through the local lumber grading program can serve as a catalyst to help grow Alaska’s timber sector by lowering the barrier of entry for new sawmills,” Bjorkman said. “In addition to providing economic opportunities across the state, this could provide the additionally needed for creating and selling forest carbon offset projects.”