HOUSE RESOURCES STANDING COMMITTEE February 10, 1993 8:00 a.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Bill Hudson, Vice-Chairman Representative Con Bunde Representative Pat Carney Representative John Davies Representative Joe Green Representative Jeannette James Representative Eldon Mulder Representative David Finkelstein MEMBERS ABSENT None OTHER HOUSE MEMBERS PRESENT Representative Gail Phillips Representative Ed Willis SENATE MEMBERS PRESENT Senator Suzanne Little COMMITTEE CALENDAR Briefing on Spruce Bark Beetles Committee Discussion on Mental Health Lands Trust Settlement Issues WITNESS REGISTER Dan Golden Department of Natural Resources 3601 C Street, Suite 1008 Anchorage, Alaska 99503 Phone: 243-4733 Position Statement: Presented a briefing on spruce bark beetles Steve Albert Habitat and Restoration Division Department of Fish and Game 333 Raspberry Rd. Anchorage, Alaska 99518-1599 Phone: 267-2342 Position Statement: Available for questions on spruce bark beetles Steve Gibson 1622 Highland Dr. Homer, Alaska 99603 Phone: 235-6487 Position Statement: Voiced concerns about spruce bark beetles John Torgerson Kenai Borough 35322 Spur Highway Soldotna, Alaska 99665 Phone: 262-6192 Position Statement: Provided information on task force activities Ron Somerville, Deputy Commissioner Alaska Department of Fish & Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4100 Position Statement: Answered questions related to buffer strips ACTION NARRATIVE TAPE 93-16, SIDE A Number 000 The House Resources Committee was called to order by Chairman Bill Williams at 8:05 a.m. Members present at the call to order were Representatives Williams, Hudson, Bunde, Carney, Davies, Green, and James. Members absent at the call to order were Representatives Mulder and Finkelstein. CHAIRMAN BILL WILLIAMS announced the first item on the committee's agenda would be a background briefing on the spruce bark beetle problem. After that briefing, he said the committee would take up discussion of the Mental Health Lands Trust settlement. Number 103 DAN GOLDEN of the DEPARTMENT OF NATURAL RESOURCES (DNR), testified that the DNR had been working to assist foresters in dealing with the beetle problem on the Kenai. He said that fact-finding was essential in dealing with the beetle problem, and estimated that 365,000 acres have been affected by beetle infestation. MR. GOLDEN referred to a memo in committee members' packets dated February 4, 1993, to Mr. Golden from the chief fire manager regarding the fire risk associated with beetle- killed trees. The specific hazards posed included increased rates of spread, higher fire risks in the pre-green and post-green periods, and the tendency of downed timber to burn hot enough to change the soil's ability to foster new growth. The result, he said, was that new spruce growth could be inhibited for years. Number 180 MR. GOLDEN told the committee that in the worst-case scenario, there might be a 30,000 acre fire in an eight hour period. He referred to the second paragraph of page two of the memo, regarding the odds of simultaneous wind and drought conditions to contribute to a fire of that size. He said the odds were that such conditions could occur one in every ten to twenty years, and there had been an interagency effort in reaching solutions to the problem. He reported the Division of Forestry was attempting to manage forests for multiple use, and a 100 ft. buffer zone was prescribed by law, and no intrusion into that buffer was proposed. MR. GOLDEN noted the major concerns of residents and visitors were the loss of visual comfort and the fear of fire. A survey by the U.S. Forest Service was recently completed on perceptions of visitors and residents of the area. Mr. Golden said dead and dangerous trees were sometimes removed from the highway buffers, and this was affecting the tourism industry. The forests were being managed for recreation values, he noted, including trails and campgrounds. He mentioned the Forest Service spent $50,000 an acre to selectively log the Russian River campground area to preserve that environment. Number 254 MR. GOLDEN said $1 million had been spent on installing fire breaks and fuel reduction areas in the Cooper Landing area. Of that amount, $500,000 came from the borough, and $500,000 were federal monies. He said the U.S. Forest Service had additional money for Moose Pass. In the areas of prescribed harvest, the effects on habitat were a serious concern, he added. MR. GOLDEN remarked on the economic value of beetle-killed trees, and said it was marginal compared to timber in Southeast. Currently, there was a bull market for timber, however, as described in a Wall Street Journal article that Mr. Golden referred members to. A shortage of supply combined with increased demand had increased timber values, he reported. The economics of doing nothing would impact tourism, fisheries, hunting, and even things like insurance, he said. Fire coverage for homes or cabins might increase or become unavailable in areas of high fire risk, he told the committee. MR. GOLDEN referred specifically to provisions in the Division of Forestry. He said AS 38.05.113(e) required the Division to have a five-year plan, and to list in that plan any timber it planned to sell. The Division might exempt itself from that provision if they felt it was an emergency, he said. Forest infestation was one of the emergency situations that could justify such an exemption. In July, 1991, there was legislation passed to fund the Forest Health Initiative. As a result, the Division will not have to deal with the five year plan process, he said. MR. GOLDEN reported seven harvest areas were proposed on the Kenai that might have commercial harvest value. The first, False Creek, would call for a 14,000 acre plot to be selectively cut and harvested. The public response period for that had closed, but has since been extended. He then referred to the efforts of the Timber Task Force dealing with the utilization of timber. A map of affected areas and susceptible spruce forests was displayed for the committee. He quoted Paul Forward of the U.S. Forest Service, who reported to the legislature that spruce tree mortality was twice the rate of growth on the Kenai. MR. GOLDEN then presented a video program on the beetle infestation titled, "Beat the Beetle" which was produced by the DNR's, Division of Forestry. Mr. Golden said the video would be distributed throughout the beetle-affected areas in video stores. The video informs landowners about how to check for, prevent, and deal with beetle infestations in their trees. Number 558 MR. GOLDEN, after the video presentation was concluded, referred to the False Creek sale proposal. He said a preliminary appraisal of timber value was $570,000. Number 570 CHAIRMAN WILLIAMS noted for the record that Representative Finkelstein had joined the meeting and Representative Ed Willis was also present. Number 578 STEVE ALBERT testified from Anchorage by teleconference, on behalf of the ALASKA DEPARTMENT OF FISH & GAME (ADF&G), HABITAT DIVISION, REGION II. He had no prepared statement but was available to answer questions. Number 591 STEVE GIBSON testified from Homer by teleconference. He has been a logger and sawmiller there for approximately 15 years. After gathering information on the beetle problem, he came to question some of the widely held assumptions surrounding the problem, he commented. Regarding the fire hazard, he suggested that it may be greatly exaggerated. He believed it could be argued that the danger of fire was less after needle-drop than it was with green trees. MR. GIBSON remarked on the economic benefit of beetle-killed trees. He estimated stumpage value might be $20 - $40 per acre, while the costs associated with harvesting the trees would be higher than that. Another concern he cited was regeneration. He referred to an area that was cut and reseeded 23 years ago and had seen no regeneration. Another prohibitive cost to harvesting and marketing the beetle- killed trees, he said, would be road access and road maintenance. He questioned whether the cost of doing nothing really would be disastrous, as had been suggested by the DNR. MR. GIBSON proposed more site-specific information on regeneration be developed. He mentioned the Division of Forestry was considering reforestation to birch, but questioned whether soil types would sustain birch growth. MR. GIBSON also cautioned the committee that the market had been flooded with stumpage from private sources, which would pose problems for state owned lands. He suggested it would be unfair competition if state sales were subsidized. It would be poor policy, he said, to offer sales with the likelihood that there would be no significant bidders with higher prices. MR. GIBSON referred to regulations that had been written but not enacted, and others that could be adopted quickly. He said it was important to take affirmative action to protect the clearing practices agreed upon by all the parties. As regulations are currently written, he added, all state lands in Regions II and III receive protection from poor clearing practices. Region I was exempted, he added, and that included areas vulnerable to the spruce bark beetle. Particularly, he said maritime areas have proven to not be immune from infestation. TAPE 92-16, SIDE B Number 000 MR. GIBSON referred to the Afognak area, where infestation had occurred but then suddenly disappeared. He next mentioned a Forest Health Plan that was developed through the efforts of a number of agencies and individuals, although he said the contents of the plan were not necessarily sanctioned by all the agencies or individuals who participated. He concluded by saying there was not enough information to go forward with drastic harvesting measures. The seven sales in the plan he said, were DNR driven items. Regarding the comments of the ADF&G, Mr. Gibson contended the benefits, from a wildlife standpoint, were unclear. He felt any effect would be negative, so the best that could be hoped for was no effect. He repeated the threat of fire was one of the major areas needing further study. Number 079 CHAIRMAN WILLIAMS noted Senator Suzanne Little had joined the meeting. JOHN TORGERSON, of the Kenai Peninsula Borough, testified in Juneau on the activities of a Timber Utilization Task Force that had been formed to look into utilization of the beetle- killed resource. The task force was funded with $50,000 from the U.S. Forest Service, $35,000 from the Department of Commerce and Economic Development, and $15,000 from economic development district funds (EDD), he advised. MR. TORGERSON noted his previous timber experience included serving as a general manager with Louisiana Pacific in the 1970's. He noted also that in the past 20 years, the timber industry had made an estimated $100 million effort at the beetle-kill resource in the Kenai Borough. The task force attempted to determine how many acres were actually infested, and how many resources' owners would be willing to sell. That data was compiled, and comprised of approximately 170,000 acres. A large portion of that was Native-held lands, with 35,000 in state-owned lands, and 40,000 in Kenai Peninsula Borough-owned acres. University lands also made up a small portion of the acreage, he said. MR. TORGERSON said the task force attempted to bring all the public agencies together to avoid contradictions or duplication of services. The Kenai Peninsula Borough was established as the lead agency, with the proposal that the other public land-owning entities would transfer resources to the Borough. Costs and benefits would then be transferred back to the resources' owners based on the percentage of acreage. It was agreed that the parties would have to come forward with a large acreage to offer to industry to make any sale viable. They then obtained a listing of all potential buyers who manufacture products that could be made form the resource. The third component was a generic harvesting plan. The final phase was to put out the information in the form of a Request for Interest (RFI). Number 191 MR. TORGERSON told the committee the object of the RFI was to determine what the options were in terms of potential markets. The RFI's were sent out two weeks ago, he said, and two responses have already been submitted. He said of the ten million acres owned by the Kenai Peninsula Borough, approximately 2.2 million were forested and of that forested land, 1.2 million were dead from the beetle infestation. The marketability of that wood depended on acting quickly, he added, as the quality deteriorated after two to five years. He said his task force had not dealt with the issue of fire risks posed by the dead trees, simply with the potential for utilization of the resource. MR. TORGERSON recognized the concerns of various interests, including tourism, but noted the plan was generic in nature and explored the possibilities of utilizing the resource. Number 325 REPRESENTATIVE CON BUNDE referred to a recent newspaper article which seemed to indicate the mayor of Kenai was not in full support of the task force's work. He asked Mr. Torgerson to comment on local support. Number 338 MR. TORGERSON responded that in the report generated by the task force, it was estimated that approximately 400 miles of road would need to be built to get access to remove the dead and dying trees. These would not be mainline roads, he added. The concerns locally have to do with fish and wildlife habitat as well as tourism, he said. However, Mr. Torgerson said he had not heard anyone suggest that nothing be done about the million-plus acres of dead or dying trees. Regarding the mayor, MR. TORGERSON said he had talked with the mayor many times on the issue. The state and the university have not necessarily committed to go along with the task force's plan, and that might be a source of frustration, he added. In terms of the market for the resource, Mr. Torgerson referred to the reopening of the Seward Sawmill, and said they were interested in any resource and were looking at what might become available. He also referred to other companies that were currently utilizing the resource. Number 378 MR. TORGERSON said the task force was being careful not to tell industry how to use the resource, but to make it known through the RFI that the resource was available and to have them come forward with proposals as to how the resource would be utilized. He commented that Alaska no longer had a primary manufacture law, so the trees could be cut and exported. The RFI, he noted, went out to more than 300 parties. Number 409 REPRESENTATIVE JOHN DAVIES asked if Mr. Torgerson could describe the features of the RFI, and specifically how it incorporated requirements of the Forest Practices Act (FPA). Number 421 MR. TORGERSON answered that the RFI asked that respondents comply with the FPA. REPRESENTATIVE DAVIES then asked if specific terms of sales would require compliance. MR. TORGERSON confirmed they would, and read language from the RFI which stated the reforestation would be a requirement of the sale. Number 453 REPRESENTATIVE JOE GREEN asked whether there was an extensive list of possible products. MR. TORGERSON responded that a list had been compiled with everything the task force could think of. REPRESENTATIVE GREEN then asked whether there was a high potential for use of the resource. MR. TORGERSON answered that the potential for use depended on the condition of the resource, and added there were some very select trees among the dead and dying spruce. He told the committee he would have some of the documents, including a survey, sent to the committee members. REPRESENTATIVE GREEN asked about the relation of time to the value of the resource, and whether marketing opportunities were increased by working cooperatively with other resource owners, like federal, native and private landowners. MR. TORGERSON responded that federal lands included a large number of beetle-killed trees, and that some of those could be available, but that would require a full-blown environmental impact study. He said it would involve the question of burning versus logging to clear the trees. He added industry would not come in without some assurance of access to the resource. He said the task force had not approached private landowners regarding marketing the resource, and he assumed industry would make their own deals with the private sector. Number 525 REPRESENTATIVE DAVID FINKELSTEIN asked whether the task force plan was initiated in response to a perceived emergency, and whether marketing the resource was the highest priority. Number 541 MR. TORGERSON was of the opinion that the emergency existed at the leading edge of the infestation. Where the beetles have already been, the emergency changed to one of fire risk. He said the need to go in and reforest affected areas was also an emergency. REPRESENTATIVE FINKELSTEIN commented that the emergency might not be any more urgent than it was 20 years ago, and that this seemed to be an on-going emergency. Number 554 MR. TORGERSON responded that if a response plan had been implemented 20 years ago with a sustained yield basis, the emergency might have been averted. Regarding the fire risk, there were people on both sides of the fence. He personally did not want to take the risk of saying there was no emergency and then seeing a fire come along. Number 570 REPRESENTATIVE FINKELSTEIN asked who was in danger with the fire risk. MR. TORGERSON said he had not seen the report that Mr. Golden had presented. He estimated nearly $700 million in property values were at risk of fire. Number 582 REPRESENTATIVE BILL HUDSON raised the concern about potential loss of life with the infested areas encroaching on populated areas. He also expressed interest in the marketing issue. Number 590 CHAIRMAN WILLIAMS asked Mr. Torgerson to comment on the 100 ft. buffer strips along fish streams, and how beetle-killed fallen trees might affect those streams. Number 596 MR. TORGERSON answered that he had also heard concerns about trees falling into fishing streams. He proposed a new approach that would look at infested areas in "zones of sensitivity," and concentrate attention on the more sensitive areas. CHAIRMAN WILLIAMS asked if the ADF&G had any comment on the buffer strip question. Number 630 MR. ALBERT responded from Anchorage that there was a chance infested trees would fall into streams. In some cases, he said, logs in the streams were good for habitat. He referred to Afognak Island and said the department had decided to leave trees where they fell. Number 648 RON SOMERVILLE, DEPUTY COMMISSIONER, ADF&G, also responded to the question. He commented that the FPA made adequate provisions for removing trees in the buffer strip. Number 651 CHAIRMAN WILLIAMS addressed a question to Steve Gibson, asking how he derived the figure of $20 - $40 per acre for stumpage. Number 663 MR. GIBSON explained that his figure was based on an estimate of 4,000 to 5,000 board feet per acre, with a stumpage value of approximately $5 per acre. He wondered about the basis for the estimate for the False Pass sale. Number 673 REPRESENTATIVE FINKELSTEIN offered a question to Mr. Golden regarding fish streams being in jeopardy if mature trees died and fell. MR. GOLDEN responded that if there was a fire there would not be any buffer strips left. He said the DNR has the view that a healthy forest around a stream was better than a dead forest. REPRESENTATIVE FINKELSTEIN asked if there were any reports showing that to be the case, or showing where the conclusion was drawn from. Number 692 MR. GOLDEN reiterated that a healthy stream was supported by healthy vegetation around it. He said it was the intention of the DNR to keep forests healthy. He referred to efforts at the Russian River campground where the U.S. Forest Service spent $50,000 on one acre to try to stabilize the environment, and that effort was unsuccessful. TAPE 93-17, SIDE A Number 000 MR. GOLDEN added the DNR intended to work closely with the ADF&G to enhance fish habitat. MR. ALBERT, speaking on teleconference from Anchorage, said to his knowledge no one at the ADF&G had ever asked anyone to intentionally cut trees and drop them into the streams. REPRESENTATIVE FINKELSTEIN asked if members of the committee might have a copy of the public opinion survey that shows people's feelings on the issue. Number 029 REPRESENTATIVE JOHN DAVIES asked if in the future, Mr. Golden could provide an analysis of the probability of fire and on the overall economics of the spruce bark beetle problem. MR. GOLDEN said the memo in members' files from Frenchie Mallott regarding fire risk provided a good analysis of that issue. SB 67: MENTAL HEALTH TRUST AMENDMENTS Number 055 CHAIRMAN WILLIAMS thanked participants for their input on the beetle issue, and announced the committee would take up discussion of the mental health lands issue for the remainder of the meeting. He referred to the two previous meetings where the state and the plaintiffs had presented their views on the issue. He asked committee members to consider the options available to them on the issue, one being to introduce a committee-sponsored bill in the House, and referred their attention to a draft bill before them. He also directed their attention to copies of SB 67 and back-up material in members' packets. Other options included doing nothing and letting the current settlement agreement run its course in the courts, or waiting to see what became of SB 67. Number 124 REPRESENTATIVE FINKELSTEIN referred to SB 67 and said his thought was that the committee should introduce draft legislation for discussion purposes, rather than waiting until late in the session to make decisions on such a complicated issue. REPRESENTATIVE DAVIES concurred, and said he thought having a bill before the committee would give purpose to their discussions and would be the best course to take. REPRESENTATIVE JEANNETTE JAMES objected to introducing bills just for the purpose of discussion. She was not convinced any legislation could solve the problem, and felt Chapter 66 should be given more opportunity to work. Number 158 REPRESENTATIVE PAT CARNEY agreed, but said the committee had to have something to work with. He believed SB 67 could be modified to suit the committee's intent. Number 183 REPRESENTATIVE FINKELSTEIN clarified he was not suggesting the bill be introduced for the sole purpose of discussion. REPRESENTATIVE BUNDE was not satisfied with the options available and wanted more information. Number 203 REPRESENTATIVE HUDSON suggested one of two things could occur. First, the committee could do nothing and Chapter 66 would go through its process, or second, it could introduce the draft bill knowing it would not necessarily be the bill that came out. The advantage of introducing the bill, he said, was that it would allow all interested parties the opportunity to come forward with their ideas. He proposed the committee vote on how members would like to proceed. Number 240 CHAIRMAN WILLIAMS believed the committee needed a bill before them for the purpose of discussion. He appointed a subcommittee to look into the issue, which included Representative Hudson as chairman, and Representatives Carney, Davies, and James as members. Number 254 REPRESENTATIVE BUNDE asked that the committee defer further discussion of the mental health lands issue. CHAIRMAN WILLIAMS announced the matter would be examined by the subcommittee, and thanked witnesses who had offered to be available. ADJOURNMENT There being no further business to come before the committee, Chairman Williams adjourned the meeting at 9:50 a.m.