HOUSE FINANCE COMMITTEE April 23, 1998 2:35 P.M. TAPE HFC 98 - 123, Side 1. TAPE HFC 98 - 123, Side 2. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 2:35 P.M. PRESENT Co-Chair Therriault Representative Kohring Representative J. Davies Representative Martin Representative G. Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf Representative Kelly Co-Chair Hanley was not present at the meeting. ALSO PRESENT Representative Mark Hodgins; Pamela LaBolle, President, Alaska State Chamber of Commerce, Juneau; Martha Welbourn, (Testified via Teleconference), Deputy Director, Division of Forestry, Department of Natural Resources. SUMMARY HB 284 An Act relating to infestations and diseases of timber. CS HB 284 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Natural Resources dated 4/9/98. HOUSE BILL NO. 284 "An Act relating to infestations and diseases of timber." REPRESENTATIVE MARK HODGINS noted that HB 284 was an act relating to infestations and diseases of timber. The legislation would amend AS 41.17.082(d) to require the commissioner to implement necessary salvage measures when timber on State or municipal forestland is: ? Infested or diseased and thereby poses a significant threat to surrounding healthy timber; or ? Subjected to an environmental catastrophe, and as a result, is susceptible to infestation or disease, to prevent the spread of infestation or disease, the timber shall be salvaged as rapidly as practical. Representative Hodgins pointed out that since 1992, the spruce beetle insects have caused tree mortality and account for 2.3 million-acre loss. Representative Hodgins explained that the infestation occurs from a small wood-eating beetle which bore into a tree, lay eggs, and then those worms gird the tree. Once the tree has been girded, the circulation of nutrients is cut off and the tree dies. This beetle does not fly well, but will move with the wind, as the infestation process has demonstrated. Representative Hodgins noted that there has been a task force investigating this situation although no action has occurred to date. The problem stands that the infested timber is only in good quality for a few years, then it starts to loose moisture content and looses its weight. A lot of the Kenai Peninsula infested timber has been used for pulp. Representative Hodgins stressed that the most important concern is fire hazard because a fire in a spruce bark invested area burns much hotter. He urged that this concern be scrutinized. In South Central Alaska, the statewide aerial surveys mapped more than 1.1 million acres of dead and dying beetle-infested spruce in 1996, which is a 61% increase in the past two years. The legislation would mandate that the Commissioner "shall" be involved with a remedy. To begin an initiative will create jobs while addressing fire suppression and public safety. Representative Hodgins advised that the most important aspect of a salvage bill is the reforestation. He emphasized that the forests need to be saved for future generations and habitat. In response to Representative Martin's concern, Representative Hodgins noted that Mayor Navarre supports the finding a solution for the spruce beetle concern and is pushing for federal reforestation dollars. He emphasized that the bill states that the Department of Natural Resources will address the spruce bark beetle infestation. Representative J. Davies voiced concern that by replacing "may" with "shall" on Page 1, Line 9, would not give the commissioner any latitude to determine if it is feasibly possible to control the situation. Representative Hodgins assumed that some of the regulations brought forward such as the Forest Practices Act or the Reforestation Act would address that concern. He recommended that there are areas in which the commissioner could waive and make a determination. Representative Kelly questioned how a buffer zone of diseased timber would be beneficial. He suggested that the diseased trees would eventually become dangerous, ripping up the bank as they fall. Representative Hodgins replied that initially, it had been recommended that the commissioner be given the discretion. In the House Resources Committee, Representative Ogan felt that was too much power to give to the commissioner, consequently, he inserted language on Page 2, Line 19, which would allow the discretion of the commissioner to be somewhat dampened. Representative Kelly believed that it would be better to give the commissioner the leeway and then the foresters could decide if the trees in the buffer zone should be cut or left standing. He noted that he would offer an amendment to address that concern. Co-Chair Therriault asked the life cycle of the spruce beetle. Representative Hodgins replied that the bug could be transmitted in many different ways, but mostly by the wind. Basically, the bugs have been hitting trees 6 inches and above. Initially, there will be little holes in the tree, and then the tree will exude pitch as a defense to kill the bug. If a tree has pitch running out of it and the tree is a reddish color, then it is assumed infected. A tree remains a host while it contains moisture. Discussion followed between Representative Grussendorf and Representative Hodgins regarding the inclusion of "may" or "shall" and the responsibilities of the commissioner with use of each. MARTHA WELBOURN, (TESTIFIED VIA TELECONFERENCE), DEPUTY DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF NATURAL RESOURCES, noted that the Department of Natural Resources (DNR) opposes the bill because: ? It would not reduce the impacts of major infestations, but it would substantially increase agency costs. ? It doesn't provide effective new tools to address infestations. DNR already has the authority to do emergency sales and below cost sales. The authority to waive the Forest Practices Act (FPA) notification requirements risks water quality and fish habitat protection without effectively combating beetle populations. ? The Spruce Bark Beetle Task Force has nearly finished drafting its recommendations for actions to respond to the beetle infestation. Legislative changes should be coordinated with Task Force recommendations. Ms. Welbourn noted that HB 284 would have little or no effect on large infestations because it does not address the main factors that prevent control of insect outbreaks. First climatic conditions play a key role in determining the size of outbreaks, and are not controllable by agency action. Pests such as bark beetles occur naturally throughout Alaskan forests and their population can explode when weather conditions are favorable. Second, feasible salvage harvesting is limited by weak markets for low value timber, funding for timber sales and reforestation, and multiple use concerns about impacts of timber harvest and raiding on other resources and activities. Ms. Welbourn pointed out that HB 284 would increase state costs by requiring the State to do more intensive insect and disease surveys, and to develop agreements with private landowners, regardless of the private owners' interests. Landowners respond to infestations in a variety of ways depending on their management intent and authorities for their land. Reforestation actions after harvest also vary depending on the owners' long-term intent for the land and their financial situation. It is unclear whether Section 1 would require the State to pay for "necessary salvage measures" on private land. She added that implementing the bill would be costly, since it requires action statewide. The sites are scattered around the State, many in areas that are remote. Because of the land ownership patterns in Alaska, many of these outbreaks cross ownership boundaries. It is not feasible or cost effective to actively fight all the outbreaks; particularly in remote areas. Co-Chair Therriault asked when the task force recommendations would be available. Ms. Welbourn replied that the short-term recommendations are currently available; DNR is working with the U.S. Congress and Senator Stevens to acquire federal money for approval for the task force projects and implementation of the short-term recommendations. The final recommendations will be drafted on May 6th, 1998. Representative Mulder asked how large were the 26 salvaged sales on the Kenai Peninsula. Ms. Welbourn replied that the largest one was about 3400 acres. There are 2 million total acres infested statewide with the spruce beetle and around 100 thousand acres on the Kenai Peninsula. She noted that there had been responses on all sales but 2. Representative Mulder stressed the importance of the problem which exists on the Kenai Peninsula and which warrants a quick response soon. Representative J. Davies questioned the percentage of ownership between private and State lands. Ms. Welbourn stated that the breakdown is approximately in thirds, i.e., State, federal and private. Co-Chair Therriault asked if the Department has an aggressive program to stop the infestation in these areas where most of the spreading is occurring. Ms. Welbourn replied that the population of the beetles is out of control and that other than clear-cutting, those areas are questionable. The ownership of the land is split. It is not possible on state lands to control what is happening on adjacent lands. In response to concerns of Co-Chair Therriault, Ms. Welbourn pointed out that on all state lands, the Department is overseeing reforestation. Representative Grussendorf asked if the commissioner had made a determination that the spruce bark beetle was a threat to the forestlands and adjacent timber owners. Ms. Welbourn replied that a determination has not been made because the Department did not feel that would give them any additional tools in how to respond. Representative Grussendorf asked why the Department was concerned about the bill. Ms. Welbourn noted that once a determination is made, then the public assumes that the Department can control the outbreak, which they can not. (Tape Change HFC 98- 123, Side 2). Representative Grussendorf reiterated that the power of the determination rests with the commissioner. Representative Hodgins advised that the State of Alaska owns approximately 2.1 million acres of land on the Kenai Peninsula or approximately 20% of the total area. Half of the State land is in State parks, refuges and critical habitat areas. Of the 1.1 million acres of the public domain, 439 thousand acres are forested lands. The State has selected an additional 410 thousand acres which may be State owned in the future. The estimated annual cut for the forest plan for the Kenai Peninsula is 1652 acres. Allowable cuts are regulated over a ten-year period. The basis of this bill is that more could be harvested. PAMELA LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, JUNEAU, stated that the spruce bark beetle infestation has been a major concern of the Alaska State Chamber of Commerce. She noted that their resolution calls for a declaration of an environmental emergency. Since logging began in the Tongess National Forest more than 40 years ago, 400 thousand acres has been harvested. In nine years, the spruce bark beetle has harvested over a million acres. Ms. La Bolle advised that we have a resource being lost with no economic benefit. The spruce bark beetle is destroying valuable habitat on both public and private lands, diminishing property values, increasing fire risks and taking resources which wildlife needs. Ms. La Bolle urged the Committee to pass the proposed legislation. Representative J. Davies MOVED to adopt Amendment #2. [Copy on File]. Co-Chair Therriault OBJECTED for the purpose of discussion. Representative J. Davies explained that the amendment would clarify that the statute would be interpreted the way in which the sponsor believed it to be. Representative Hodgins commented that he did not have a problem with the language of the amendment. Co-Chair Therriault WITHDREW the OBJECTION. There being NO further OBJECTION, Amendment #2 was adopted. Representative J. Davies questioned the meaning of "municipal" on Page 1, Line 12. He asked if the legislation would give the State authority to "mow down" a municipal forest without their consent. Representative Hodgins replied that there are a lot of municipal forests on the Kenai Peninsula and when an epidemic is being controlled, there would be steps taken which do not exist under normal circumstances. This must be the commissioner's prerogative. Co-Chair Therriault pointed out that the language read that the commissioner "shall enter into an agreement with an owner or governmental agency". The Committee agreed that language clarified the concern. Representative Kelly WITHDREW Amendment #1. [Copy on File]. Co-Chair Therriault MOVED a conceptual Amendment #3 to Page 1, Line 12, clarifying that municipal forestland would be under an agreement which is the agreement spoken to on Line 9. This would prevent the State from dictating what happens on municipal land without some type of pre-existing agreement. There being NO OBJECTION, it was adopted. Co-Chair Therriault referenced the fiscal note and asked why DNR was not indicating any revenue stream from the timber. Ms. Welbourn replied that there could be a small amount of revenue, although, it would probably be low cost sales particularly because of the costs associated with reforestation. The most recent sales were going for $5 dollars per thousand board feet. Following Committee members voicing support of the legislation, Representative G. Davis MOVED to report CS HB 284 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 284 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Natural Resources dated 4/9/98. ADJOURNMENT The meeting adjourned at 4:00 P.M. H.F.C. 7 4/23/98 p.m.