HRES - 02/03/95 HB 121 - SALVAGE TIMBER SALES JACK PHELPS, AIDE, REPRESENTATIVE BILL WILLIAMS, PRIME SPONSOR, said HB 121 addresses a significant problem facing Alaska's forests. He stated HB 121 provides the Department of Natural Resources (DNR) with new management tools to help address forest health problems. He noted that while the spruce bark beetle problem is the most well-known problem, HB 121 provides the department with the tools to address a variety of other issues and problems they are encountering in managing the state's timber lands for multiple use, sustained yield and general forest health. MR. PHELPS pointed out an item in committee member folders entitled "Alaska Forest Health 3/94" (may be found in the House Resources Committee Room, Capitol #124, and after adjournment of the second session of the 19th Alaska State Legislature, in the Legislative Reference Library). He noted the handout states that extensive loss of old-growth habitat, increased fragmentation, and lack of natural regeneration constitutes the largest ecological crisis facing Alaska's forests today. The potential for catastrophic fires from increased fuel loadings poses a growing social problem. The loss of economic forest values (tourism, wildlife/fish, and timber) will hinder Alaska's ability to diversify its economy and reduce the state's economic dependency on oil. He stressed those are important issues which HB 121 addresses. MR. PHELPS felt it is exceptionally important that the problem be addressed and pursued with vigor, management practices which will help restore the state's forests to health. He said section 1 of HB 121 allows the department to open the public comment period and begin to process timber sales in salvage situations without having to list those sales on two successive five-year plans. He stressed it was important to not only recognize what HB 121 does but also to understand what the bill does not do. He stated this proposed section does not exempt salvage sales from AS 38.05.112 which requires that a site specific forest plan be developed for timber sales. He emphasized this section only allows the department to begin sooner in difficult and crisis situations and does not by-pass any of the site specific responsibilities or the public comment period. MR. PHELPS stated subsection (b) in HB 121 exempts the department, if a salvage sale is being handled as a negotiated sale, from limitations imposed in AS 38.05.115, which include a one year limitation on the sale and a one-half million board foot limitation on the sale. He said the second section of HB 121 simply amends existing negotiated sale provisions to include crisis situations. He told committee members to note that all three conditions listed on lines 2-4, page 2, are required in order for the sale to take place. MR. PHELPS said it is important for the committee to note that provisions of HB 121 are in harmony with current state regulations, which were built off of the Forest Practices Act (FPA). He read a brief excerpt from a handout in member's folders, 11 AAC 95.180 Insect and Disease Prevention and Control (may be found in the House Resources Committee Room, Capitol Room 124, and after adjournment of the second session of the 19th Alaska State Legislature, in the Legislative Reference Library). "When trees on state and municipally owned forest land contain insects or disease which pose a significant threat to surrounding healthy trees, they must be salvaged as rapidly as is practicable, dependent upon access and marketability, to prevent spread of the forest pests or disease. Trees must also be salvaged where environmental catastrophes such as wind or flooding cause them to be highly susceptible to bark-beetle infestation. Where salvage of trees killed by insects or disease is conducted for the sole purpose of using wood fiber and is consistent with the management objectives for state and municipal forest land, salvage should occur before wood deterioration results, if a significant loss of merchantability is to be avoided." Number 099 CO-CHAIRMAN WILLIAMS noted for the record that Representative NICHOLIA had joined the committee at 8:17 a.m. REPRESENTATIVE JOHN DAVIES noted he intends to offer amendments on HB 121. One amendment regards reforestation and another amendment regards the prospective nature of the commissioner determining that something might happen two years from now. ERNESTA BALLARD, KETCHIKAN, testified via teleconference and expressed support for HB 121. She noted her pleasure in seeing the legislature continuing to take initiatives to increase opportunities for commercial access to state timber. She said HB 121 represents the kind of common sense and practicality that are the hallmark of economic development. The provisions of HB 121 are good for the state and the timber industry. MS. BALLARD stressed HB 121 is good for the state because it allows the DNR to respond to disease, insect infestation and fire in state forests within the short window of economic opportunity before all commercial value is lost. She said the normal five year planning cycle prescribed by Title 38 does not work when such natural disasters occur. She believed that the public interest is adequately protected in the new language of HB 121 which provides for a best interest determination by the DNR commissioner. She felt this process accommodates the need for public comment and interagency coordination. MS. BALLARD stated HB 121 is also good for the state because it provides the commissioner the opportunity to negotiate a timber sale when the stand is diseased, infested or damaged by fire. The negotiation procedures of AS 38.05.118 provide real advantages to the state in the volatile timber market. She pointed out that a negotiated sale can proceed far more quickly than a sale conducted with a competitive bid. She stressed the state also benefits from the exemption offered in HB 121 from the sales restrictions listed in AS 38.05.115. Diseased and damaged timber must be moved quickly. She said the state has challenge enough in securing a willing and qualified buyer for this special timber. Number 154 MS. BALLARD told committee members HB 121 is good for the people of the state. Sale of damaged timber provides revenue to support other state programs. She noted that the excellent record of the DNR in sale management, reforestation, and multiple use of forested lands attests to their qualifications to manage these sales. She said it was important to note these sales of damaged timber will be categorized as salvage sales. Despite the fact the commissioner has discretion under state law in managing salvage sales, DNR has a long-standing policy to require reforestation. MS. BALLARD stated HB 121 is good for the timber industry. She stressed HB 121 potentially offers thousands of board feet of timber for harvest and production. Alaska is home to a large and skilled work force with expertise and experience in every aspect of this industry including timber cruisers, engineers, heavy equipment operators, cutters, tug boat operators, and sales representatives. She said these people have made their homes here, invested in their businesses, and are raising their families in Alaska. She urged committee members to support passage of HB 121 into law. SANDRA MESKE, PRESIDENT, ALASKA WOMEN IN TIMBER, testified via teleconference and expressed support for HB 121. She said HB 121 is a healthy forest enabling bill. She stressed HB 121 allows the DNR to expedite its timber sale program for insect damaged trees on state lands, which will in turn assist in proper forest management on state lands. She urged committee members to assist Representative Williams in passage of HB 121. Number 177 BOB LOISELLE, PRESIDENT, KLUKWAN FOREST PRODUCTS, INC., stated the committee will receive much thoughtful and well-considered testimony on HB 121, both for and against. He said some will be based on philosophical beliefs. He noted his testimony is based on his philosophy that the state should make wise use of its resources, but is also based on his personal experience as a purchaser of state timber sales in recent years. Based on this experience, there is no doubt in his mind that HB 121 is needed. MR. LOISELLE stressed the recent Kalgin Island sale is a good case in point. He said his company's cruise of this timber indicated that 57 percent of the trees were dead and 90 percent were infected by the spruce bark beetle. Despite DNR's successful defense of a motion to stay this sale, when bid day arrived, no one came. He stated the timber was of such poor quality that most would have had to been chipped for pulp and there was not enough revenue to cover operating costs. He noted the key point is that DNR is behind the curve in the forest pests problem and if the state continues to offer these sales after most of the trees are dead or infected, many of them will not sell because of the difficult economics involved. He felt forest management in the state will be set back severely. He also felt there is still adequate public process and review of these sales. Number 212 RIKI OTT, REPRESENTATIVE, HABITAT COMMITTEE, UNITED FISHERMEN OF ALASKA (UFA), said the habitat committee opposes HB 121. She stated Speaker Gail Phillips came the day before to speak to UFA and a general packet of bills disposing large amounts of public lands into private hands with restricted public comment was discussed. She stated Speaker Phillips assured UFA that it is not the House's intent to limit public hearings and Speaker Phillips noted that a Special Committee on Fisheries was set up specifically to addresses fisheries issues. MS. OTT felt HB 121 should be referred to the Special Committee on Fisheries. She stated HB 121 is unnecessary because DNR can already complete the timber sale process in less than two years. DNR also has the authority to carry out emergency timber sales in response to forest health problems. She stressed HB 121 exempts forest logging from the sustained yield principle. Section 1 (b) of HB 121 provides for exemption from AS 38.05.115. She pointed out that specific statute includes the sustained yield principle. MS. OTT stated HB 121 provides for an exemption from forest cutting size limits. For example, the entire Tanana Valley could be cut. She said the habitat committee is also concerned about the ability of DNR to predict forest health problems. Specifically, under the FPA currently, there are numerous problems with DNR and Alaska Department of Fish and Game (ADF&G). She said the due deference given under the FPA has not been working and felt HB 121 gives DNR even more power, away from ADF&G. MS. OTT told committee members the commercial fishing industry is paying its own way and is the largest employer of Alaskans. She said the commercial fishing industry cannot afford to subsidize irresponsible timber harvest. She said HB 121 uses the forest health as an excuse for opening public lands to private cutting. She stated if the timber industry feels this is necessary, the habitat committee would ask that the timber industry, the fishing industry and other users of the forest get together, as they all did under the FPA, and work out the issue together. Number 269 TERRY HERMACH, REPRESENTATIVE, PRINCE WILLIAM SOUND CONSERVATION ALLIANCE, testified via teleconference and expressed opposition to HB 121. He said HB 121 would create a maze of roads hindering the long-term health of a natural ecosystem and open up areas for large scale road hunting which would highly impact the game in the area. He stated HB 121 would also hinder the long-term recovery of the forest. He felt if trees are left as they are, regeneration occurs. He noted it would be a detriment to the state to create a timber industry where none now exists. BILL COPELAND, REPRESENTATIVE, ALASKA WILDERNESS RECREATION & TOURISM ASSOCIATION (AWRTA), testified via teleconference and explained AWRTA. He stated ecotourism comprises about ten percent of the $315 billion that Americans spend each year on travel. It is the industry's fastest growing segment, with a growth rate of 20 percent per year. He pointed out that in 1993, Alaska visitors spent $1.5 billion, which created 15,200 jobs and generated a tourism industry payroll of between $275 and $300 million. By contrast, the forest products industry contributed only $565 million to the Alaskan economy, creating 3,185 jobs and producing an industry payroll of $140 million. Number 311 MR. COPELAND said after reviewing HB 121, AWRTA has no objection to the overall idea of providing for negotiated salvage timber sales where there is a demonstrated economic and scientific basis for salvaging timber and mitigating outbreaks of tree disease or insect infestation. He felt it must be provided, however, that these timber sales be subject to the requirements of public notice and allowance for public comment and involvement in the decision making process, and be consistent with overall land use plans and the provisions of the FPA. He stressed decision making on timber salvage sales should consider other beneficial and competing uses in the area, as well as the impacts of creating access to the salvage areas. MR. COPELAND stated AWRTA objects to the proposed language under AS 38.05.117(b) to exempt negotiated salvage sales from AS 38.05.115. Rather, AWRTA suggests the following: Add a new subsection applicable only to negotiated salvage sales of over 500,000 board feet that reads the same as the present AS 38.05.115(a), except delete the "without advertisement" provision contained in the third sentence. He stressed this new subsection would retain the language requiring the sale to be consistent with the sustained yield principle and be subject to preferences among other beneficial uses, but would require advertisement of salvage sales over 500,000 board feet. MR. COPELAND said AWRTA suggests that for negotiated salvage sales, a cap on maximum volume and a contract period be established by statute. He added that under the present language proposed in HB 121, there is no limit to the volume negotiable and a 25 year maximum is currently allowed by AS 38.05.118(a). He pointed out that the proposed language for AS 38.05.117(a) would allow the DNR commissioner to offer salvage timber sales in stands that will lose substantial economic value if not salvaged within two years. He noted this suggests the term of these salvage contracts should not exceed two years, since after that, the timber will then be of little value. MR. COPELAND stated AWRTA objects to the proposed language of AS 38.05.118(c) to include the addition of the phrase "or will exist within two years" in the first sentence. He said it is difficult enough to make resource decisions on existing conditions, and adding a hypothetical condition only weakens the decision. REPRESENTATIVE RAMONA BARNES requested Mr. Copeland to fax to the committee information on where he gets his ecotourism figures. She said they are not the figures she has seen. She reminded those who were testifying that all the money in the state comes from development dollars such as petroleum. Number 385 LOUIE BENCARDINO, REPRESENTATIVE, KENAI ECONOMIC DEVELOPMENT BOARD, testified via teleconference and stated he is in favor of HB 121. He said the Seward area meets all the requirements listed in HB 121. He added that Seward also has a $30 million mill which has been shut down for the past six months. He stressed there is a definite need for timber in order to get the mill back in operation. He noted the biggest problem is convincing companies that there is timber available for harvesting in Alaska. MR. BENCARDINO stated he favors supporting the federal forest regulations regarding distance from creeks and crucial slide areas. He felt the timber in the United States (U.S.) has been studied and restudied and the regulations already in effect should be used. He said there is a good possibility for reforestation. He also felt it important that the plant in the Mat-Su valley be supported. He said the state should take advantage of the timber available and thought DNR could do a good job as long as they have the tools. AL SHAFER, SEWARD, testified via teleconference and said he is in the logging business. He recalled that previously all timber in Alaska which had matured was called over mature which meant it was dying. He said the Kenai Peninsula has the bug kill and stressed it is ridiculous for someone to say let those trees die and fall down to put nutrients into the soil. He stressed Alaska is a resource state. He urged support of HB 121. Number 454 STEVE GIBSON, HOMER, testified via teleconference and said his understanding was that the Seward mill was shut down because it was more profitable for the owners to export than mill locally. He expressed opposition to HB 121. He felt HB 121 is a simplistic approach to the problem. He noted that all mature spruce on the Kenai Peninsula are at risk for the spruce bark beetle but that does not mean the entire area should be cut down. He added that the requirements of the FPA can be met with two listings in about a year and one-half which is not a prohibitively long time. MR. GIBSON stated there are many reasons some stands should not have salvage sales even though there is insect damage. Often a stand is made up of components which would suffer more damage to the regeneration than would be justified by the recovery of the salvageable trees. He felt the public review should not be shortened or exempted in the case of negotiated sales. For example, the forest in the Ninilchik area, which has been the focus of state sales, contain about 4,000 feet an acre. The rotation time in those woods are typically 100 to 150 years, unlike the forest in Southeast and outside. At minimum bids, this timber is currently advertised at about $35 an acre or $8.79 per thousand. He said many of the smaller and younger trees are damaged by salvage and thought it was in the public's right to have a year and one-half to consider the trade-offs which will be involved. MR. GIBSON stated DNR needs to focus on earlier intervention in those areas which are adjacent to the already catastrophic infestations and execute their prescriptions with a much lighter hand. He felt HB 121 does nothing to address those problems. He stressed that salvaging marginal timber cannot be equated with forest health and in many cases it is just the opposite. He pointed out the public needs a complete opportunity to review an evaluation of that. Number 511 DUANE ANDERSON, KENAI, testified via teleconference. He said there is one lie which continues to circulate and that is, timber loses its value immediately or very soon upon becoming dead. Referring to a book published by the National Log Home Builders in the U.S., he said there are 126 people (log home builders) and the manufacture is primarily American products. Since 1970, 105 of those people have gone into business, of which none are currently in Alaska. He said those outside western American areas became viable primarily for two reasons. First, the bark beetle suddenly made a large volume of dry timber available which makes logs a very viable, valuable, and commercially worthwhile product. Second, the American home building industry and its people who have the controls and develop guidelines for construction use of acceptable material for home building began to realize that log homes traditionally were highly successful and began to establish and remove the barriers that were in place. He added that finance institutions have precluded effective log home financing. MR. ANDERSON said Alaska is very late in the entire scenario. He stated the resource now dying is not nearly under so much stress of time or value lost as perceived. The state needs to realize a very large opportunity. He stated HB 121 mainly gives a very quick mechanism for wood chip people on the Kenai Peninsula to get their hands on more wood. Number 573 STAN STEDMAN, ECONOMIC DEVELOPMENT DIRECTOR, KENAI PENINSULA, testified via teleconference and said he is not prepared to represent his organization. However, he recognized and appreciated the intent of HB 121 and the desire to protect the state's forest health and provide an opportunity for public involvement. He stated he would also like to see a shortening of the time frame to realize the opportunity of utilization of the resource. MR. STEDMAN pointed out that in terms of the criteria listed on page 2, lines 2-4, the Kenai Peninsula has the highest regional rate of unemployment in the state. He added he is working with small operators, through the business assistance program, who are challenged with being able to access a supply of timber for their operations. He noted the Kenai Peninsula has the most severe timber beetle infestation in the U.S. He looked forward to the possibility of utilizing the timber and expressed appreciation for the tool to possibly accomplish that. KEN FREEMAN, PROJECTS COORDINATOR, RESOURCE DEVELOPMENT COUNCIL (RDC), testified via teleconference and stated RDC is a proponent of a healthy forest products industry and has worked over the years to advance a forest health initiative addressing the spread of the spruce bark beetle infestation in Southcentral and Interior Alaska. He said RDC supports HB 121, which is not a breach of the FPA. The FPA provides exemptions to the five-year schedule for timber salvage. MR. FREEMAN pointed out that currently, the commissioner of DNR can conduct a negotiated sale if there is a high level of unemployment, an underutilized manufacturing capacity, and an underutilized allowable cut of state timber. He said HB 121 merely amends current law to add timber that will lose substantial economic value due to disease, fire, or land use conversion. He stated HB 121 simply adds another circumstance under which the commissioner can utilize the existing negotiated sale authority. He noted that HB 121 will give DNR the ability to accelerate its timber sale program for insect-damaged trees. TAPE 95-8, SIDE B Number 000 MR. FREEMAN said HB 121 provides the tools to advance proper forest management on state lands and helps decrease the potential for damage to the forest and its resources. He stated HB 121 will help expedite the recovery of the forest by promoting managed reforestation, which is considerably faster than natural regeneration. Habitat values for fish and wildlife will benefit if Alaskans are allowed to harvest and reforest. In addition, he stressed HB 121 will encourage the establishment of a rural forest products industry with year round jobs and tax revenues for local communities. He said RDC encourages the committee to pass HB 121. TABITHA GREGORY, REPRESENTATIVE, ALASKA CENTER FOR THE ENVIRONMENT, testified via teleconference and stated HB 121 removes the multiple use mandate for state forested land. Alaskans have many views on the best use for forest lands. She noted it is far from unanimous that the highest value of trees, even dead or dying trees, is after they have been cut and hauled out of the forest. In many areas which are targeted by HB 121, trees prove much more valuable (aesthetically, ecologically, and economically) when they are an integral part of a forest system. She felt it is unacceptable to unilaterally elevate the use of trees as timber over their importance for other things. This alone creates a single-use, not a multiple use, management agenda for DNR. She pointed out by removing the 500,000 board feet size limit on salvage sales, HB 121 would promote timber harvest on state lands on an uncontrollable scale. She said HB 121 makes salvage sale just another term for "come and get it". MS. GREGORY felt HB 121 shuts people out of decision making processes. She said one of the most important aspects of forest management is public involvement. Currently, timber sales must be shown on the five year schedule for at least two years prior to being offered for sale. This provision is there so that people are aware of upcoming changes to their area's forests and can respond to decision makers. She stressed that often, important local knowledge is passed on to DNR foresters so they can alter harvest and sale plans to better provide for all of the people in Alaska, not just the timber industry. MS. GREGORY expressed belief that it is not appropriate to direct the commissioner of DNR to predict the future in order to free up more timber sooner, and with no public oversight. She said HB 121 sets the stage for the commissioner to negotiate sales for forests that may, in actuality, not experience fire, disease, or insect infestation for a decade or longer. She stressed HB 121 allows DNR to use these natural conditions as excuses to allow a greater cut on forests that are traditionally used for other things. MS. GREGORY stated that although HB 121 asks the commissioner to negotiate timber contracts in an effort to head off possible high levels of future unemployment, there is no provision for the very real threat to existing industries like tourism and fishing by this increased logging. She expressed opposition to HB 121 because it creates single-use forests, removes meaningful public oversight, and directs the commissioner to predict the natural and economic future in order to open the state's forests to large scale logging. SEAN MCGUIRE, FAIRBANKS, testified via teleconference and expressed opposition to HB 121. He questioned the concept of protecting the forest from itself. He said before the white men arrived, North America had some of the most vast and healthy forests on the planet. He felt the idea of needing to save the forest from itself is a bogus proposition. He mentioned that a renowned forester from Canada recently detailed how important it is to have old growth die and fall down. It is important for habitat. The forester said it was crucial that old growth be allowed to fall down and that the health of the forest is dependent on old logs dying and rotting. If those old logs are taken out of the system, within a couple of cycles, the forest is no longer healthy. MR. MCGUIRE stated he does not want a situation where one person, such as the commissioner, can make broad decisions about the forests. He stressed that all Alaskans own the state's forests. He felt HB 121 provides a way for loggers to get around the public process. He stressed Alaska has the only remaining intact boreal forest ecosystem in North America. He said HB 121 appears to be little different than the idea that everyone now knows is bogus and that is, all forest fires should be put out. MR. MCGUIRE pointed out that tourism is the state's fastest growing industry and he felt that industry is the key to the state's economic health in the future. People are visiting Alaska in ever increasing numbers to see the state's natural wonders. He noted that people all over the nation are sick about what has happened to their forests. Polls have shown that over one-half of the nation's population wants all cutting on federal lands stopped. He stressed the state's forests are most valuable left standing. Number 092 DAN RITZMAN, REPRESENTATIVE, NORTHERN ALASKA ENVIRONMENTAL CENTER, testified via teleconference and expressed opposition to HB 121. He said HB 121, as written, would exempt salvage timber sales from the existing size limits, public review and reforestation provisions of the state law. He felt the provisions in HB 121 give the DNR commissioner extraordinary latitude in predicting forest health. He stated as he read HB 121, any tree that could lose economic value due to insect or fire could be salvaged, without any public comment. He stressed the entire forest would fall into that category. MR. RITZMAN said under current Title 38 language, DNR can complete the timber sale process in less than two years. He pointed out that HB 121 salvage sales would be unnecessary if DNR efficiently and competently planned sales under existing laws. He commented on the forest health issue and the need for salvage sales. He stated there are currently a number of people and organizations crying out for the need to save the forest from insects, and the need for logging to do this. He cited an analogy. If he was concerned with a sound coming from his car's engine and wanted to know if it was normal, he would check with a mechanic rather than a car dealer. Both of these people presumably know about cars, but the mechanic would be concerned with how the car runs and the dealer would have an economic interest in convincing him he needs a new car. MR. RITZMAN said the same can be said of the people and organizations pushing for salvage. He did not find it surprising that groups, who have an economic interest in cutting those trees, are promoting large scale logging as a response to spruce bark beetles and suggesting a logged forest is a healthy forest. He told committee members if they check with biologists and ecologists who are concerned with how wild forests function and do not have an economic interest in logging, they will find many who believe that insect epidemics are important to the long-term health of a naturally functioning forest. He added that where fires are infrequent, such as on the Kenai, insect epidemics are believed to be nature's way of recycling the older trees to make way for the new forest. Along the way, the insects provide food for a variety of birds and the dead trees provide valuable habitat for wildlife before enriching the soil for the new forest that will follow. MR. RITZMAN stated before succumbing to the sales pitch offered by groups with an interest in logging, Alaskans need to do more research and get other opinions from trusted professionals. He felt it should not be assumed that a logged forest is a healthier forest or that beetle killed trees increase the fire hazard. He encouraged members to find out what effects logging has on fisheries and tourism, find out why logging has actually increased unwanted grass and why reforestation efforts have had poor results. He stressed it is important to understand what the salesmen are trying to sell before buying their line. Number 136 JOE YOUNG, PRESIDENT, YOUNG'S TIMBER, testified via teleconference and said he has a value-added milling operation in Tok. He expressed support for HB 121. He felt HB 121 will provide a tool to speed up the process for salvaging dying timber and will also increase the wildlife habitat. K.A. SWIGER, EXECUTIVE DIRECTOR, STAND UP!, testified via teleconference and stated her testimony reflects the voice of community people throughout the region dedicated to maintaining a stable economy in Southeast Alaska. She said in terms of sound resource management, HB 121 is a win-win proposition. She pointed out that HB 121 provides for people and the economy, as well as the value of forest health. She felt the avenue providing the DNR commissioner the power to negotiate timber sales in diseased or damaged forest areas within two years is highly acceptable. Stand UP! believes this will enable foresters to act in a timely manner to arrest bug infestation or rot due to fire or blow down, as well as add value to a resource otherwise wasted. MS. SWIGER mentioned that land in the Haines valley currently contains 14,000 acres of forest killed by beetle infestation. She noted Haines is an area of high unemployment, has an underutilized timber manufacturing capacity, and has timber which is losing substantial economic value due to insects. She said after years of rampant bug kill, there are currently two salvage sales underway. She stressed the level of salvage is so small, there is no chance of curbing the infestation, and therefore no real help to restoring the forest. She pointed out that Haines would be a likely benefactor from the passage of HB 121, by perhaps increased sales which will ultimately benefit the forest and the people. MS. SWIGER stated damaged trees are already exempt from sustained yield management and for a good reason. The entire stand must be harvested if the disease is going to be brought under control. That is why the size of harvest of a damaged stand should not be a matter of law, but rather a matter of silviculture. She said Stand UP! does not believe the public process is jeopardized by HB 121. Preparation, planning, following guidelines and public comment are still very much a part of the sale offering process. Stand UP! encourages the committee to adopt HB 121 and push for its passage. Number 188 CHRIS MOSS, HOMER, expressed opposition to HB 121. He felt HB 121 gives too much latitude to the DNR commissioner in determining what "losing substantial economic value" is, determining what the disease process is, and determining what will exist in two years. He also expressed concern about the size and length of negotiated contracts and the possibility of lack of public input on a fast track method. He stressed the disease process cannot be stopped by cutting trees. He said most disease and fires create mosaic patterns which leave islands of viable populations within a forest and he would like to see protection of those areas for reforestation in the future. MR. MOSS said as a resident in Homer, he knows what happens to most of the trees which are cut on the Kenai Peninsula. Those trees are packed down in log bundles and piles of chips are sent overseas. He stated there are a number of small operators in that area who create a rough cut lumber bought locally. He hoped that if HB 121 is passed, there will be a method where the chunks of salvage timber is sold in small enough lots enabling local people to have an opportunity for land also. Number 215 WILLY DUNNE, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY (AEL), said the AEL supports the salvage sale of timber on land which will be converted to non-forest use, but AEL has reservations about other provisions in HB 121. He stated the DNR has acknowledged that cutting down the forest does not improve forest health. Forest ecologists believe that forest insect epidemics are often self-regulating and can often improve habitat for many types of wildlife. He added that HB 121 would only consider the economic value of timber when determining salvage sales. He stressed other economic values such as hunting, fishing, trapping, outdoor recreation, other forest products, etc. would be ignored. AEL would like to see those economic values acknowledged in HB 121. MR. DUNNE stated HB 121 does not mention damaged timber but mentions on line 6, page 1, "timber stands that will lose substantial economic value because of insect or disease epidemics or fire..." He felt that verbiage is open to interpretation. AEL would like to see language specifically indicating salvage refers to dead or downed timber. MR. DUNNE said the biggest problem AEL has with HB 121 is the provision for a negotiated timber sale which could last up to 25 years in length. AEL would like to see an amendment restricting negotiated salvage sales to no longer than two years. He stated the U.S. Forest Service has had a history of abusing salvage sale rules and now their salvage sales are restricted to only dead and down material. MR. DUNNE stated under current Title 38 regulations, the DNR can conduct timber sales in less than two years and has the authority to have emergency sales in response to forest health problems. He said AAC 71.010 specifically addresses the loss of economic value of timber as a reason for allowing salvage sales. He added that AEL objects to the phrase beginning on line 15, page 1, "or will exist within two years," because it gives the DNR commissioner the authority to predict future events. He noted last year the legislature passed SB 308 and one of the main arguments was that the DNR commissioner should not be required to predict future events in the disposing of natural resources. MR. DUNNE closed by reading a quote from a government survey of an Alaska forest, "Spruce bark beetles have killed a large number of trees. It is estimated that 60 percent of the spruce is already dead or dying. In a few years green spruce will be hard to obtain, and travel will be made more difficult by windfalls. The danger of forest fires will be increased. The beetles are not confining themselves to one particular area, but are threatening to devastate the entire region of spruce." He stated the quote might sound like a survey conducted in 1995 on the Kenai Peninsula, but in fact is from a 1933 survey in the Susitna Valley. He said that area is now designated as a critical habitat area due to its exceptional fish and wildlife habitats. REPRESENTATIVE OGAN asked Mr. Dunne if he had flown over the Kenai Peninsula recently. MR. DUNNE responded he has flown over it numerous times. Number 303 TYLER JONES, CITY MANAGER, CITY OF SEWARD, testified via teleconference and said the city council had not had the opportunity to act on HB 121 specifically. However, previously the council has taken specific actions to favor enhancement of productive and timely use of the forest resources in the Seward area. He assumed he had council backing when making his comments. He stated the comments previously made from Seward and those supporting HB 121 would be echoed by the council and the community. MR. JONES told committee members that Seward has a high rate of local unemployment and an underutilized timber manufacturing capacity with a dormant mill and an underutilized allowable state timber in the area. Therefore, the city qualifies under the terms of HB 121 and would be interested in enjoying the more ready access to beetle kill timber in the area. He stated HB 121 does shorten the time frame for access to timber which is something the community would support. He noted there are still requirements for the professional evaluation for the appropriate treatment of diseased or infested timber. He added that HB 121 does not detract from adequate public comment processes or limit public engagement. Therefore, the council feels HB 121 would be supported and useful in Seward. MR. JONES stated it is the sentiment of the community of Seward, although not unanimous, that the beetle kill issue on the Kenai Peninsula is not being addressed productively. He urged committee support for HB 121. Number 355 RON LONG, SEWARD, testified via teleconference and pointed out that one of the duties of good government is responsibly managing resources for quality. He said sometimes that means recognizing when situations change, such as the beetle kill problem on the Kenai Peninsula (indiscernible) and the tools are in place to deal with. He added the (indiscernible) strategy is not in existing regulations to address those changes. He felt a provision should be allowed to respond to the changes responsibly. He said existing regulations prohibit response and serious thought should be given to changing them. He urged committee support of HB 121. G.R. BROOKMAN, KENAI, testified via teleconference and felt HB 121 is too broad, too vague, and gives too much authority to the DNR commissioner. He said the commissioner will be relying on advice from the state forester and other professionals. He stated when a law is put in the books, it is going to remain there into the indefinite future and it is not known who will be occupying those positions of power. Therefore, he expressed wariness of the idea of giving this much power to any future DNR commissioner. MR. BROOKMAN said another reservation he has is the fact that a negotiated sale can go 25 years into the future. He suggested a two year time limit should be included in HB 121. He stated on page 2, lines 2-4, there are undefined terms such as "high level" and "underutilized". Number 407 RED SMITH, COOPER LANDING, testified via teleconference and said he bought his first sawmill through the Sears catalog in 1951 because the highway projects were wasting all of the timber. He stated he has continuously owned sawmills throughout the years. He stressed he has never seen anything as disgusting and as deplorable as the management of the timber resource on the Kenai Peninsula in the 46 years he has resided there. No one has ever been able to catch up with the continuous waste of the timber there. He noted that at one time about 25 years ago, statistics could show that destruction by bugs and various construction projects was occurring at 40 times the milling capacity of all the sawmills on the Kenai. He stressed today, that statistic is vastly beyond that figure. The bugs, by government statistics, are killing about 2,000 acres of the area's spruce forest every day. He added there is no milling capacity that anyone has envisioned or even suggested which can come close to utilizing the waste which is occurring in the forest. MR. SMITH stated the public decision making process is a dismal failure. He has listened to many people, some of them purporting to be scientifically knowledgeable, talking about things they know nothing about. He felt if they would come to the forest and see what good forest management can do, they would change their minds on how to approach the management of the state forests. He stressed the waste cannot be allowed to continue. He felt the waste will not continue and the problem will be addressed in every manner reasonable to get an industry started which can utilize the wasting resource. MR. SMITH said he listens and tries to understand the attitudes of the environmental community but everybody has told him the dead or dying timber should be used rather than cutting the healthy green. He stated that is the best public relations for any conservationist or environmentalist. He felt it was important to stop destroying the forests, particularly the healthy forests and develop better programs for utilizing the dead and dying trees. Number 475 CLIFF EAMES, REPRESENTATIVE, ALASKA CENTER FOR THE ENVIRONMENT, testified via teleconference and stated there are a couple of assumptions that underlie HB 121 which are not warranted. He said the first assumption is that logging should be a primary use of state forests...that is the only economic value which really matters is trees which are cut and taken off the land. He noted there was testimony from hundreds of people on HB 310 last year who believe that is not the case. Rather, they believe the state's forests should be managed for a wide variety of uses and resources. He stated it was ironic that a legislature which paid so much consideration to the multiple use idea would now pass a bill like HB 121 that gives commercial logging a clear preference on the state's forests. MR. EAMES agreed with previous testimony that the assumption the trees are going to waste if they are not logged is not accurate. He said most scientists believe the damage from large scale logging and road building in many of these areas is greater than allowing the beetle to take its course. He echoed the idea there is no need for HB 121. The state can already quickly get through the five year requirement. He stated it is clear that HB 121 is aimed at the Kenai Peninsula, yet already on the five year schedule is the proposal to log two-thirds of all of the state- owned commercial forest land on the peninsula within ten years. MR. EAMES noted other reasons for logging, in addition to salvage, is to bring the insect infestation under control. He stressed that is not going to happen. He said the fire hazard has also been grossly exaggerated and he did not think professional foresters would risk their reputation using that as a justification. Number 542 ROBERT LACOCK, ANCHORAGE, testified via teleconference and expressed opposition to HB 121. He said the presumption that the best solution to the beetle infestation is to cut the forest only addresses the short term economic value and does not consider how the long term health of the forest can be helped. On the contrary, logging will be a detriment to the long term health of the forest by the profound negative impacts on any ecosystem from the introduction of roads and destruction of wildlife habitat. He noted that even though wildlife habitat may be under stress due to the beetle infestation, that stress would be only worsened by HB 121 and logging. MR. LACOCK said HB 121 also ignores the many other long term values of the forest and the beetle infestation. A forest with the beetle still provides (indiscernible), recreation, and fish and wildlife. He noted all of these exist even in areas infested by the bark beetle. He stated the forest value is only worsened far beyond the effects of the bark beetle by logging. He noted HB 121 does not consider anything outside the short term economic profit by timber harvest. HB 121 exempts forest harvest size limits and an appropriate period of time for public review. He stressed HB 121 ignores the long term health of the forest. Number 578 DOUG YATES, REPRESENTATIVE, ALASKA BOREAL FOREST COUNCIL (ABFC), testified via teleconference and stated pursuant to the hearing on HB 121, the ABFC pointed out that insect outbreaks are a normal part of forest ecology. Insect outbreaks have always been a part of the forest and in many times, it is believed they are self-regulating. He said to base a policy strictly on commodity values is not good stewardship. He added that provisions within HB 121 would give DNR extraordinary latitude in determining and even predicting forest health, employment levels, and timber values while removing from the decision making process the wisdom of local residents and the concerns of the public which own and use the resources. MR. YATES said given the consequences to Alaska's fisheries from increased logging that can be assumed by the passage of HB 121, Alaska's fish and subsistence users deserve a greater voice in debating this critical issue. He expressed support for earlier testimony suggesting HB 121 be referred to the Special Committee on Fisheries. He said ABFC opposes HB 121 in its current form. TAPE 95-9, SIDE A Number 000 MARK LUTTRELL, PRESIDENT, EASTERN KENAI PENINSULA ENVIRONMENTAL ACTION ASSOCIATION, testified via teleconference and expressed opposition to HB 121. He felt HB 121 would inhibit the public process, the intended proper scientific management and the proper compliance and oversight by professionals. He said HB 121 also gives the DNR commissioner too much power and asks the commissioner to predict the future. He also objected to the unlimited size of a salvage sale. He stressed that HB 121 focuses on the single commercial value of timber and does not address other values, both economic and aesthetic. MR. LUTTRELL stated he is not against logging but is against wholesale logging without public input or recognition of other forest values such as outdoor recreation. LARRY SMITH, HOMER, testified via teleconference and encouraged committee members to read testimony received by the committee last year. He said there have been many salvage sales around Cook Inlet. He noted the west side salvage sale involved 223,000 acres in the early 1970s and cost the state $1.5 million. He felt the state's salvage sale abilities have not improved as $150,000 was just lost, compared to a scarce $600,000 appropriated by legislative budget and audit in the last few months for reforestation. He said that money was squandered to try and hold a timber sale but Klukwan's report advised the state it would never happen because there was no way to make any revenue. MR. SMITH said there is another salvage sale proposed at False Creek. The state hired and paid a contractor $50,000 to $60,000 to lay out the timber sale and then had to redo all the work with state employees. He suggested that DNR should not be any more trusted with salvage sales today as it has in the past. He felt giving bad management more tools just leads to more bad management and more dollars spent. Therefore, a significant fiscal note is needed for HB 121. MR. SMITH stated the DNR never fights the Division of Forestry's budget and there was a need to almost impose the request for reforestation dollars granted recently. He said thanks to Speaker Gail Phillips that money was received. He noted that Speaker Phillips has pledged to oppose these subsidized timber sales. MR. SMITH pointed out that in present circumstances HB 121 would be better represented as an export subsidy measure. He felt HB 121 is a thief of local jobs. He said there is no reason to have these trees shipped off instead of being available on the long term for local sawyers. He asked committee members, that before they enlarge the salvage sale problem, to use the legislative investigative and honest staff to look at last year's failed subsidy and waste of reforestation dollars. He encouraged members to visit the Kenai area. Number 062 CHUCK ACHBERGER, EXECUTIVE DIRECTOR, JUNEAU CHAMBER OF COMMERCE (JCC), stated the JCC supports HB 121. He said HB 121 does not hamper the public process. He noted that with regard to timber sales, the FPA would still be in effect. He pointed out that HB 121 provides DNR with the additional tools necessary to deal with special situations addressed in the bill (disease, insect infestation, and fire). He said put aside the jobs which might be created, the recreational opportunities that can be saved, and the lives and property which are lost to uncontrolled wild fires resulting from nature's efforts to manage dead and dying forests. Instead, the committee should look at their role as stewards managing the state's ecosystem to create food and shelter for the creatures who call the forest home. MR. ACHBERGER stressed HB 121 provides the necessary tools to manage the state's lands for a healthy ecosystem...management done in a controlled manner that eliminates the need for nature's catastrophic fires...management that can turn a dead and dying forest into one which is productive and healthy. He said if, in the process, this creates jobs, saves lives and communities are spared from nature's whims, great. Number 084 CHRIS GATES, EXECUTIVE DIRECTOR, ALASKA FOREST ASSOCIATION, testified via teleconference and said much of the previous testimony provides information in regard to reasons why nothing much has happened on the Kenai Peninsula. He stated one can still drive through miles and miles of dead and dying timber which is of no value to the recreation industry and tourism industry, and which could have provided substantial jobs and economic activity to the region. He said the state has in the past and is now paying substantial money to build fire breaks on the Kenai Peninsula to protect people from losing their lives and property from fire and beetle kill areas. He stressed that money could have been used productively for rural and year round jobs...much higher paying jobs than normally occur in tourism. MR. GATES advised that a recent report said 20 million trees died in Alaska last year, which is about 38 trees a minute. He stated these trees died because there is no mechanism available to take advantage of those trees. He said an earlier testifier tried to confuse committee members with a fact that a sustainable yield is not being dealt with. Mr. Gates stated a dead tree does not come under any confines of sustained yield. He stressed the tree is dead and needs to be harvested and produce value to people. MR. GATES said HB 121 will not hurt the multiple use of the forest but rather will build the health of trees by eliminating the area where beetles can generate to affect other areas. He stated the environmentalists will never talk about the cost of reforestation. He pointed out the real damage and real problem with the Kalgin sale was the trustees for Alaska delayed the sale long enough that the value could not support the $500,000 of required reforestation. He felt that was a shame because the wildlife now has to wait for the trees to die and reforest naturally, which is much longer and has a much more severe impact than if it would have been done under managed reforestation. He encouraged committee members to think about reforestation and the costs of reforestation when considering HB 121. Number 128 TOM BOUTIN, DIRECTOR, DIVISION OF FORESTRY, DNR, said he would answer any questions from committee members. REPRESENTATIVE OGAN stated there has been a lot of testimony stating the best way to manage a forest is not to manage it at all but rather allow the trees to die and fall. He wondered what Mr. Boutin's opinion was on that subject. MR. BOUTIN said much of the testimony spoke to the Kenai Peninsula situation and noted that HB 121 has a statewide application and implication. He responded specifically to the Kenai where DNR is being sued both for not logging enough timber and for logging too much timber. He added that many of the people testifying are plaintiffs against the state. MR. BOUTIN stated most professional foresters and scientists believe the situation on the Kenai Peninsula is not a natural situation. The spruce bark beetle is endemic to Alaska and it can be seen in other places throughout the state. He said on the Kenai Peninsula, large scale fires have been suppressed in the past eighty years. Therefore, the mosaic of different age classes of timber has been prevented. He added that fire is now not an acceptable remedy for the situation on the Kenai Peninsula. He stressed that no one at DNR has ever represented that logging will eliminate the spruce bark beetle. MR. BOUTIN noted in regard to the timber sales being offered and sold on the Kenai Peninsula, the winning bidder is committing to incur most of the reforestation. Therefore, it is possible to get regeneration going more quickly by logging. He said absent the timber sale, regeneration in many cases might take 30 to 40 years. REPRESENTATIVE IRENE NICHOLIA stated testimony indicated that DNR already has the capability of implementing an emergency salvage sale. Number 189 MR. BOUTIN responded AS 38.05.113 allowed DNR to promulgate regulations allowing emergency sales to be exempt from AS 38.05.113. He said DNR did that but added that the advice from the Department of Law was in theory AS 38.05.113 could be interpreted to mean a requirement of one year and one day. Therefore, the Department of Law advised if DNR is going to use emergency regulations they had better be for a sale which can be sold, logged, and done within one year and one day or less. He noted logging on the Kenai is winter only and occurs in a very short period of time. Therefore, those regulations are not useful for the Kenai Peninsula. REPRESENTATIVE NICHOLIA wondered if a reapplication and extension would be possible. MR. BOUTIN replied the Department of Law advised DNR not to extend a sale. He reiterated the department has been advised to be done with a sale in one year and one day or less. REPRESENTATIVE DAVIES asked why DNR could not issue an emergency order in those situations, simultaneously put that sale on the five year plan, and go through the emergency time period of one year and one day. He felt by having parallel tracked the sale on the five year plan, the department would be ready to offer a considered sale beyond the end of that time period. MR. BOUTIN stated if HB 121 were enacted and signed into law, the Division of Forestry would put all sales into the five year plan. He stressed the five year plan is a valuable public process and needs to be complete and comprehensive. He explained even in the instance of a small sale involving a forest health situation where the department could get that sale up quickly, the department would still put that sale in the existing five-year plan. He added that on the Kenai Peninsula, the department has put all sales in the five-year plan. The department does not have the ability to have two five-year plans in the span of one year and one day. Therefore, the bark beetle sales have deteriorated much in the period of time when the department has gone through the five-year plan or 24-month process. Number 254 REPRESENTATIVE DAVIES clarified the department's intention is to always also parallel emergency sales on to the five-year plan. MR. BOUTIN replied that is correct but added the Division of Forestry would utilize HB 121 and many salvage sales would be put up for sale, logged, and reforested inside of a two year period. REPRESENTATIVE DAVIES stated that many people testifying suggested there should be a time limit. He wondered if there is a time limit which might be workable. MR. BOUTIN responded the timber sales currently have a three, four, or occasionally five year time limit. He added the division is not required by law to have a time limit but administratively and as a matter of contract performance, the division needs a time limit. He stressed the current time limit seems to work well. He was not sure what advantage there is in having a time limit in the law. REPRESENTATIVE DAVIES stated concern has been expressed that the salvage sale mechanism would be abused to establish 25 year sales and concern was also expressed about future people in Mr. Boutin's position in regard to that abuse. MR. BOUTIN stressed there is no time limit today on the duration of a timber sale. The division could do a 50 year timber sale currently under state law. He said there is a limit if the sale is sold as a negotiated sale and that limit is in regulation, not in law. DNR adopted a regulation pursuant to AS 38.05.115 which limits negotiated sales to one year. He noted that DNR very rarely uses negotiated sales. He said it is far better to have a competitive sale and have one bidder than to have a negotiated sale. He added that salvage sales would be less likely to be of long duration because the timber is dying or dead. Number 317 REPRESENTATIVE DAVIES asked for Mr. Boutin's interpretation of the word underutilized allowable cut in the context of a multiple use forest. MR. BOUTIN stated that has been defined in regulation. REPRESENTATIVE DAVIES asked if the calculation of allowable cut takes into account the multiple use planning which goes into developing the area plans for a forest. MR. BOUTIN stated under AS 41.17.060 which is the intent language for the FPA, multiple use is clearly defined and the department cannot violate that multiple use in its forest land use plans under AS 38.05.112 or in its five year harvest schedules under AS 38.05.113. He said allowable cut is in accord with multiple use. He noted that multiple use and sustained yield are overriding factors. He pointed out HB 121 does not address sustained yield. CO-CHAIRMAN WILLIAMS stated HB 121 would be brought back to the committee for action on Monday, February 6 at 8:00 a.m. and the committee will also hear HB 113. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Williams adjourned the meeting at 10:00 a.m.