Chairman Noh stated there were two issues before the Committee.

The news media was in attendance because of concern about closed
committee meetings. The Committee’s issue is the protection of water
rights of the citizens of Idaho. He informed the Committee the meeting on
Monday would be general discussion.

Stennett noted there is a meeting scheduled Thursday, January 15, with the
Attorney General to be briefed and brought up to date on the issue. Any
concerns for their constituents will be noted at that time.

Roll call vote:

Ayes: Brandt, Burtenshaw, Cameron, Bilbao, Pearce, Williams, Noh

Nays: Kennedy and Stennett

Absent: Schroeder

Motion carried.

The committee secretary requested non-committee individuals to leave the
room.

Motion carried.

General discussion ensued in relation to subjects of interest to be discussed
by the Committee during this Legislative session.

Issues to be considered will be: Department of Fish and Game’s Access
Yes program; gubernatorial appointments of Alex Irby and Cameron
Wheeler to Fish and Game Commission; status and review of Tamarack
Resort; Department of Lands policy regarding timber harvesting; wolf
delisting report by Office of Species Conservation; Wyoming’s wolf
management plan; Cascade Reservoir; invasive species issues; ground
water quality program; nitrate issues; pending water litigation; Snake river
Basin Adjudication; administrative rules, which will be reviewed by
Senator Pearce and Chairman Noh; access to state land locked parcels
(Senator Burtenshaw stated legislation is being drafted to address the
issue); Senator Schroeder expressed concern regarding the high disease
rate in the Clearwater area due to a high concentration of deer and drought
conditions; an update on elk farms; Senator Kennedy would like to obtain
current information as to the Department of Fish and Game’s winter
feeding efforts for deer and elk; Senator Stennett expressed concern
regarding the interaction of state lands with local planning and zoning
authorities; Fish Creek dam and stream protection issues; Senator Stennett
also expressed interest in current information regarding water bank lease
program for the head waters of streams; and issues concerning the outdoor
recreational vehicles.

Youtz reported the Department of Parks and Recreation manages 27 state
parks, along with the administration of boating, recreational vehicles and
trails programs. The department is 25% supported by the general fund
with 65% funded by fee-supported dedicated funds and the balance from
federal funds. The comparative summary of the department was explained
noting the 20% increase in employee insurance costs. Youtz noted the
Department of Administration is working with budget personnel to adjust
the time frame for insurance bids to conform with Legislative needs.
Some state employees received less net take home pay due to the increase
in insurance costs no longer covered by the state. The Governor has
recommended a 2% salary increase to be given on a merit basis. Upon
inquiry, Youtz stated the criteria for merit raises is wide open. He urged
legislative guidance for fairness concerns because of the differences
between state agencies. Youtz noted the state employee salaries have not
meet statutory requirements to be equal to the average labor market. He
stated state employee salaries are approximately 14% behind the average
labor market now. Upon inquiry, Youtz stated the Governor has statutory
authority to recommend merit raises. He informed the Committee the
general funds returned by the various departments represented mostly
vacant positions that the department could have filled.

Youtz explained the Parks and Recreation Department budget by decision
units as set forth in the handout, noting the nonstandard adjustments reflect
cost allocation for attorney general, risk management, state controller and
state treasurer fees. Spending authority for receipts from the Sawtooth
National Recreational Area license plates and federal funds for various
department projects is provided. In conjunction with employee
compensation for department employees, the budget reflects a 1% salary
increase for permanent and group positions. The maintenance program of
the department sets forth requests for park facility and equipment upgrades
to enhance services. There is a request for funds for seasonal personnel
and operating expenses which would be from park user fees for camper
cabins in several parks, as well as expanded services for RV users.

The department requests funds to contract support and maintenance of the
existing network on a 24 and 7 basis. It was noted the demand for services
has been significant throughout the state and difficult for existing staff.

Additionally, the department requests funds to study the development of
marinas at Dworshak Reservoir and Heyburn State Park, along with a
master plan for the Thousand Springs complex and plans for Castle Rock
campground, phase two. The department has also requested facility
modifications and improvements at Billingsley Creek and marina
improvements at Cascade Lake. Dedicated funds will be used for camping
cabins and yurts. Three projects to be funded if donations are received
include: Bruneau Dunes Science Center, Harriman State Park Welcome
Center and the Ole Mission Sacred Encounters.

Included in the handout on page 4-57 is an index of self supporting state
parks setting forth the budget, receipts, the percent of self support, along
with visitation data for 2003.

Page 4-58 of the handout sets forth the current fee schedule for the
Department of Parks and Recreation and the proposed changes.
Specifically, daily motor vehicle entry fee would be raised from $3 to $4.
The annual park n’ski permit would increase from $19 to $25. Fees for the
nordic ski program at Harriman State Park and Ponderosa State Park
would be instituted at $2 per person per day and $25 per family per year.
In connection with reservations, the fee for an additional person overnight
fee would increase from $2 to $3. Youtz noted in addition to the basic fee
change, the department will collect sales tax on fees.

Houston noted the proposed reallocation of two positions between
programs resulting in a reduction in federal funding for a position under
the energy program. The budgeted personnel cost rollups are due to the
estimated changes in the state employee benefit program. The health
insurance rates are projected to increase by 17% and the retirement system
will increase in excess of 6%. The budget for the Department of Water
Resources includes a general inflationary increase of 1.9% for operating
expenditures and trustee/benefit payments.

Replacement items requested by the department are for 7 vehicles,
computer equipment, field equipment, office furniture and office
equipment. Houston noted the Governor does not recommend general
fund revenues for replacement items. Dedicated and federal fund spending
authority is recommended for office furniture, equipment and testing
equipment.

Adjustments to the statewide cost allocation for Attorney General, State
Controller, Risk Management and State Treasurer fees are included in the
budget. Houston noted the Governor’s budget does not recommend funds
to maintain the water measurement program which would result in 5% of
the measurement sites discontinued. The department has budgeted 1% for
salary increases for permanent and group positions, while the Governor’s
budget recommends 2% distributed on a merit basis.

Houston noted during the 2002 session, JFAC reduced the impact of
budget cutbacks by shifting funds from the general fund to the water
pollution control fund. JFAC was unable to shift funding back to the
general fund last year. The department requests shifting 6 positions and
$510,300 from the water pollution control fund to the general fund. The
shift from the water pollution control fund to the general fund is not
recommended by the Governor. The Governor does recommend
reappropriation authority which would mitigate the loss of four positions.
Therefore, the position are not eliminated, just the funding for the
positions.

In relation to the Idaho Water Center, the department is scheduled to move
in October 2004. The budget sets forth funds for the FY 2005 lease. The
department anticipates one-time costs of $500,000 for movable walls,
record vault equipment, security system, furnishings, office equipment,
and moving expenses. The Governor has recommended $360,000 for one-time moving costs which funding would come from the Miscellaneous
Revenue Fund and the Petroleum Price Violation Fund.

The Idaho Water Resource Board has four in stream flow water rights to
be adjudicated. Forty percent of the licenses and filing fees for these were
paid last year, with 30% scheduled to be paid this year and the balance in
FY 2006. Houston noted the Governor recommends funding from the
Water Pollution Control Fund.

The office space in the Idaho Falls office of the department is insufficient
with the existing space being inadequate for the computer network system.
The department has requested an increase in the annual lease payment,
plus one-time expenditure for remodeling, furnishings and moving costs.
The expansion would require trading places with the Department of
Environmental Quality’s Idaho Nuclear Engineering and Environmental
Laboratory oversight program. This budget request is not recommended by
the Governor.

The Department of Water Resources has acquired software for electronic
documents and data via the internet. Many of the department’s documents
are official records to be kept indefinitely and are converted to digital
format. The department has requested additional storage, but the
Governor has not recommended this budget item.

Information on issues and strategic planning performance has been set
forth on page 4-67 of the handbook along with the costs in the Snake River
Basin Adjudication on page 4-68.

Upon inquiry from Senator Schroeder, it was noted there is not an item for
the Palouse Aquifer study contained in the department’s budget.

The department has received funds for the Coeur d’Alene Basin remedial
action and to improve state waste management and remediation. Four
position unfilled last session are requested to be filled this budget year.
Spending authority for two federal grants for oversight of construction of
wastewater and drinking water facilities is provided in the budget. There
will also be funds for administration and support through indirect federal
funds.

The primacy issue for the National Pollutant Discharge Elimination
System will remain with the U.S. Environmental Protection Agency as the
Governor does not recommend taking over this program. It is estimated
the program could cost in excess of $2,000,000 per year to administer.

In relation to the Drinking Water State Revolving Fund which is funded by
the Environmental Protection Agency with 20% matching state funds, the
department charges the fund for time spent. The interest rate on loans
through the program range from zero to 4%. Congress has authorized
$60.3 million for Idaho which will require $12.1 matching state funds.
The fund is continuously appropriated and has a cash balance of $8.9
million with outstanding loans in the amount of $18.4 million.

The Clean Water State Revolving Fund finances publicly owned
wastewater treatment facilities and pollution control projects.
Environmental Protection Agency grants support the fund which requires
the state to match 20%. Interest rates on loans through the fund vary
between 3.75% and 4.5% with repayment over a twenty year period. The
department charges the fund for time spent, as there are no full time
employees. This fund is continuously appropriated by Congress. The
fund has a balance of $71.l million with outstanding loans of $66.1
million.

The department’s strategic planning act performance measures are set
forth in the handbook at page 4-12 included with the original minutes.

Another budget item for the department is the lease of additional office
space in Salmon and Jerome, along with spending authority of federal
funds for temporary customer relation specialists in Nampa, McCall and
Boise. Federal funds would also be used for office supplies. Fees
assessed from fishing and hunting violators are used to processed meat
which is then donated to charitable organizations. Houston noted license
fees provide for the deficit funding for the printing of hunting regulation
brochures. The Governor’s recommendation reduces the department’s
spending authority and allocates lease costs to be paid out of existing
spending authority.

The statewide information system operated by the department interfaces
with the employee information system and statewide accounting and
reporting systems. The department noted some critical applications are
outdated and need extensive maintenance. It was noted that the network is
overloaded which causes delays and system inactivity.

The department has requested funding for equipment in addition to the
replacement equipment request. Satellite phones, portable radios, blue
lights, generator, global positioning system, truck winch and training rifles
are items needed by the enforcement program. The wildlife program
needs power augers, wildlife guzzler, projection unit, remote cameras and
a welder. The winter feeding and habitat improvement program requests a
digital camera along with a security camera for the MK Nature Center.
These department requests are recommended by the Governor.

Repair and maintenance of state fish hatcheries and anadromous facilities
is budgeted for these facilities funded by U.S. Fish and Wildlife and Idaho
Power. This would include maintaining water supplies, repairing
raceways and buildings.

The department has requested spending authority for federal funds from
the U.S. Fish and Wildlife Service and Idaho Power to increase monitoring
by adding temporary season employees. Additionally, funds would be
needed to increase electrical and maintenance costs along with the repair
and maintenance of the sockeye and Chinook programs at the Eagle Fish
Hatchery.

Another budget item is for the improvement of fish habitat, fishing access
and fish screening operations. Houston noted the department, because of
the number of species listed under the Endangered Species Act, is required
to monitor, evaluate, develop plans and projects to assist in recovery
efforts. There are a number of federal fish management contracts to be
fulfilled and additional seasonal personnel will be needed.

The department’s “Access Yes” program to provide for public access for
hunting, fishing, trapping and wildlife viewing currently has 30
landowners enrolled in the program. This has provided access to 107,000
acres of private land along with access to another 200,000 acres of public
lands through private lands. The Governor has recommended the
continued funding of this program.

Dedicated license fees and federal funds will be used to pay lease rate
increases to the Department of Lands which provide fishing and wildlife
habitat. Likewise, the funding for this is recommended by the Governor.

The implementation of the state’s wolf management plan requires
authorization for spending authority. Wolves are currently managed by
the U.S. Fish and Wildlife Service and the Nez Perce Tribe with the
department coordinating with those agencies. The budget provides for elk
monitoring and for training and strategy development which would require
2 regional wildlife biologists and 6 part-time wildlife technicians. This
budget item also includes the leasing of vehicles and equipment through
the fleet management program. Source of funding is from federal funds
allocated by Congress on an annual basis through the U.S. Fish and
Wildlife Service and the Idaho Office of Species Conservation.

Current information is lacking on the distribution, abundance, trend, and
status of populations and habitats of at-risk nongame and endangered
species. The department requests temporary personnel and operating
expenses to gather this data for bird species.

Because of the increase in demand for hunter and fisher education
programs, the department is requesting temporary employees for the MK
Nature Center. Federal grants will be used for gathering and analyzing
information on wetlands, rare plants and rare animals.

Time having expired; Houston will continue the budget presentation to the
Committee at the Wednesday, January 21, meeting. Meeting adjourned at
3:00 p.m.

Motion by Senator Pearce to approve the minutes of January 14, 2004;
seconded by Senator Williams. At Senator Stennett’s request, a copy of
his letter regarding the executive meeting of the committee referred to in
the minutes of the meeting of January 14, 2004, will be included in the
internet copy. Motion carried

In connection with fisheries, the last 4 to 5 years have been excellent
salmon and steelhead fishing. The reservoirs have been good. Financially
the department 5 years ago was in dire need of sufficient funding to
properly manage. He noted the fleet management program has addressed
the department’s vehicle needs. Within the next couple of years, he
anticipates the challenge will be to meet the financial obligations required
by the programs within the department. The future concerns would be
biological and financial.

Senator Cameron inquired if the department has conducted any studies or
reports indicating the quantitative effect on the big game herds by the
wolves in regard to the economic impact to the state. Irby responded the
report is in progress and will be available at a later time. He noted
observations by those in the field recognize there is a problem, but the
quantitative data is not available currently.

A continuing problem has been access, stated Senator Cameron, and
inquired what the financial consideration could be. Irby recognizes the
access problem and pointed out that neighboring states have incurred
significant financial expenditures in obtaining access. There will never be
enough access but the commission will be working on how financially
they can build toward the future. He anticipates the financial figures
would be in excess of $1 million.

Senator Williams explained a hunting license fee scenario concerning an
out of state young hunter as compared to an in state young hunter which
will be researched by the director and the commission.

Upon inquiry from Senator Schroeder, Irby stated there were a number of
deer lost in the Clearwater Region last year. The area from Kamiah to
Kooskia experienced significant numbers It has not been determined
whether it was as a result of the Clearwater tag or because of a local deer
overpopulation compounded with 4 years of drought.

Senator Burtenshaw inquired as to the amount the commission allocates
for research and disease control. Irby noted in the example of the
Clearwater Region, the department veterinarian began researching the
problem. There is an ongoing program concerning disease control. The
department is presently checking with hunters for additional information.
The department is attempting to prevent any disease from coming into the
state in cooperation with the Department of Agriculture and the
universities.

Upon further inquiry, Irby stated the Salmon River sheep fatality
information was attributed to pneumonia. Chairman Noh stated concern
about wildlife and domestic animal diseases has increased in public
awareness. The inter-relation of animal, wild and domestic, and human
diseases is growing concern in the nation and world. He provided to the
Committee a copy of a letter, dated November 12, 2003, to one of the
scientist at the Caine Center. The original is on file with the minutes of
the Committee. Ward’s letter states his concern about the continuation of
wildlife disease research in Idaho and the availability and research of the
Wildlife Health Facilities at the Caine Center.

Irby stated determination has been made that domestic and wildlife
animals could live together if managed properly. Any research should be
coordinated with other opportunities. Chairman Noh noted the University
and the department are reviewing the status of diagnostic laboratories and
research efforts should be structured in relation to animal/human health
field. He stated the research facility and the Caine Center are being
encroached upon by the development of subdivisions. Inasmuch as federal
funds may be available, this would be a good time for those involved to
review the program’s future.

Senator Burtenshaw expressed concern regarding the new livestock/elk
feeding rules place an unrealistic responsibility on ranchers for reporting.
He stated the department is responsibility for the wildlife, not the rancher.
Ranchers should not be required to control the wild animals, especially
during deep snow conditions. The rules need to be reviewed by the
department to be fair and just. Irby urged cooperation and good
communication between the department and ranchers. He stated through
such efforts the department is urging the Corps of Engineers to develop
winter habitat for elk in other areas around Dworshak Dam as mitigation
for construction of the dam.

Senator Kennedy inquired as to Irby’s philosophy on the winter feeding
program. Irby stated the department’s winter feeding program which will
take care of the game when necessary. He noted some areas winter
feeding should be on a natural basis. The department has required the U.S.
Forest Service is to develop more in depth planning for the creation of
winter habitat and feeding in fire and logging operations.

Some areas have too many elk and in order to keep the population, winter
habitat and natural winter feeding need to be encouraged. He
acknowledged sometimes the department waits too long to begin winter
feeding operations. The department is aware of this and is working to
correct the problem. Senator Kennedy stated encroachment by the public
on winter feeding grounds can cause emergency situations, where if the
herd is to be maintained a supplemental winter feeding program will be
instituted. Kennedy noted the many problems in Boise and Elmore
Counties in the past which is the result of limited areas for the elk to
winter.

Upon inquiry from Senator Stennett, Irby stated the department’s Access
Yes program is intended to be widespread and not limited to specific
game, fish and birds. Stennett requested clarification about the $2 paid in
licensing for habitat improvement set aside. Irby responded the funds are
not used for access but for habitat improvement programs.

Upon further inquiry from Senator Stennett concerning pheasant hunting,
Irby stated the state does not have the quantity as in the past and the
department is working with landowners regarding access to move the
pheasant program ahead. He noted the main concern is pheasant habitat.

In relation to chronic wasting disease and cervidae farms, Irby stated there
is a joint effort with the Department of Agriculture in the planning and
testing. Hunters are encouraged to report any of their findings.
Additionally, the department limits imports.

Speaker of the House Bruce Newcomb informed the Committee, Cameron
Wheeler was a good committee chairman while he served in the Idaho
House of Representatives and good at solving problems and finding
solutions. He urged the Committee’s approval of Wheeler’s gubernatorial
appointment to the Fish and Game Commission.

Cameron Wheeler of Ririe, Idaho, appointed by the Governor to the Idaho
Fish and Game Commission, stated he has a long time interest in natural
resources and is curious about the Endangered Species Act (ESA). He
noted the impact on the state because of ESA and wildlife issues. He
hopes his grandchildren will have the same opportunities and enjoyment
he has had. Chairman Noh commended Wheeler for his efforts in the
development of the Office of Species Conservation. Wheeler stated his
concern for the funds necessary in connection with ESA listings and the
need for proactive actions. An example is the recovery plan for slick spot
lemon pepper grass, which could be accepted by the Department of
Interior. Through cooperation between the various departments and
agencies it could solve the problem for the benefit of landowners,
sportsmen, tax payers and everyone. Idaho has step forward on this issue
and can use this experience in connection with other such listings.

Senator Bilbao stated the slick spot lemon pepper grass was first
discovered by the Department of Transportation along Highway 16.

Senator Bilbao reported Senator Little had located 2 collared wolves
taking down one of his calves. This is the second sighting of collared
wolves in Gem County on their way to Oregon. Wheeler stated the state
wolf management plan in conjunction with Montana and Wyoming will
address the problem. Senator Bilbao noted an abundance of deer in Unit
32 and inquired of the commission will be increasing the deer harvest or
capturing and moving the deer. Wheeler stated mule deer will not be
transferred in the state at this time but the commission will consider
harvest numbers for proper management while sustaining the population.
He noted the decision is made on a region by region management basis.

Upon inquiry from Senator Stennett, Wheeler stated the department has a
role in the biological aspect of river usage. The existing statutory laws
guide the department and other agencies on river usage. Upon further
inquiry, Wheeler stated the department was involved in the water bank
program on the Lemhi River which has produced good results. He
supports this positive example of cooperative efforts in Idaho to natural
resources. Senator Stennett noted the conflict between recreational areas
and the preferences of local county commissioners and planning and
zoning as to the department’s ownership for use of the public. Wheeler
stated his philosophy on this issue is based on a willing seller/willing
buyer concept. The Access Yes program is a good example along with
incentive program for landowners meet public needs. Funding is a
significant problem for the department in this regard. The department has
resources which could be further developed, especially in relation to
education and being a competitive business.

Senator Kennedy inquired as to Wheeler’s philosophy on winter feeding.
Wheeler stated the winter feeding advisory group along with the criteria
developed by the department are guiding. He noted the department does a
reasonable job, but they know they can’t wait too long to begin the
program. Wheeler is not a proponent of feeding if you don’t have to but
the decision has to be made early enough. The department should have the
flexibility to determine on a regional or area basis what needs to be done.

Senator Burtenshaw stated he appreciates Wheeler’s understanding of the
issues and concerns in connection with the Department of Fish and Game.

Senator Schroeder expressed his appreciation of the two applicants under
consideration for the Fish and Game Commission.

Melanson stated Idaho’s adjudication process has become a model for
other states in addressing their claims. He noted financing of the
adjudication process is important because if funding is not available for
investigations the adjudication stops. The director’s report allows the
adjudication through the court. He also indicated changes in personnel
affects the progress of the adjudication process because of retraining of
key staff. Melanson noted the court has an excellent working relationship
with the Department of Water Resources and the director. The director’s
reports are admitting promptly and it enables the court to proceed. He
urged keeping personnel within the department to maintain the good
relationship with the court. He reminded the Committee nothing is
complete until the whole thing is complete. Anyone can come in at any
time and challenge prior decisions of the court until this is completed.

The potential for changes in federal water law could affect the
adjudication process. He noted the public interest is high because of the
drought conditions and asserting their water rights resulting in additional
filed claims. Melanson emphasized to the Committee that for the SRBA
to proceed to conclusion the Department of Water Resources must be
properly funded so that the investigations can be compiled and submitted
to the report. The reports are scheduled to be completed in 2005.

Upon inquiry, Judge Melanson explained the logistics of handling of the
negotiations on the Nez Perce Tribe claims by Judge Burdick. Burdick
moved the process along by setting deadlines. The last status hearing
Judge Burdick made it clear that it was appropriate for him to step aside
now. Melanson stated Burdick should be able to sit on the Supreme Court
should the action be appealed. Melanson’s position is that he does not
want to know from any of the parties the specifics of their negotiations,
but wants to keep the process moving along so when the case comes back
to the SRBA, Melanson will be able to handle the case.

Motion by Senator Stennett to recommend confirmation of the
gubernatorial appointment of Cameron Wheeler to the Idaho Fish and
Game Commission; seconded by Senator Burtenshaw. Motion carried.

Jean S. McDevitt of Pocatello gubernatorial appointment to the Idaho Park
and Recreation Board, informed the Committee of her personal,
educational and professional background, stating she strongly supports the
philosophy set forth in the department’s mission statement. She noted a
family interest and belief in community service and urges all citizens
throughout the state to do community service. The budget concerns of the
department have required reorganization and resourcefulness to assure
good usage of user fees. She noted the department is moving out of its
infancy stage and is developing and progressing towards the future.

Senator Stennett inquired as to the status of the Billingsley Creek Park
project. McDevitt noted through cooperation of federal, state, county and
state interests the development has obtained strong community support.
The biggest concern at the present time is finding a funding source for the
master plan for the area so they can proceed further. Stennett noted the
local offers of services comes from a wide background and he urges
utilization of those services to start the planning process.

Senator Cameron noted the department has certainly been resourceful in
utilizing its budget. He expressed concern for the department’s budget in
FY 2006 which could be a target for the shifting of funds to other
departments. McDevitt noted her confidence and trust in the staff and
employees of the department in keeping the parks operating despite budget
constraints. Upon inquiry from Senator Cameron, McDevitt noted the
assistance of the Idaho Parks Foundation, as well as donations from some
estates. She stated the volunteer efforts the past year resulting in a savings
to the department equal to 28 full time employees. Upon further inquiry,
she stated the board will be adding approximately 200 yurts and cabins as
funds are available.

Senator Stennett asked about the status of the 427 mile ATV trail program
and area ranchers concerns. McDevitt stated the Lost River Trail is a
partnership among many city, county, state and federal entities. She noted
control concerns could be addressed through the availability of facilities
for trail users with the goal of “keeping on existing roads.” The board will
move forward with hearings to obtain user comments, as well as provide
education about equipment, safety and enforcement matters. Upon
inquiry, she stated the funding for enforcement will be determined after
negotiations with the entities involved in the project.

Senator Schroeder thanked McDevitt for her good service to the state over
the past six years. Chairman Noh noted the McDevitt family is an
excellent example of Idaho political and public service.

Houston then reviewed the budget of the Department of Lands. Pursuant
to the natural resources budget handbook provided to the Committee,
Houston explained the department has 5 budgeted programs: support
services, forest resources, land, range and mineral resource management,
forest and range fire protection and scaling practices.

Budget items requested by the department include requirements of the
Idaho Abandoned Mine Reclamation Act which is funded from a portion
of mine license tax. The Governor recommends this budget item.

Fire suppression for the 2003 fire season was approximately $11 million
from the general fund and an additional $1 million from receipts from
cooperating agencies. The department participates in cooperative fire
fighting agreements with federal, local and other state agencies and is then
responsible for costs for fire suppression on lands protected by the state,
regardless of ownership.

Due to an internal reorganization which shifted personnel without
realigning funding, endowment earnings operating expenditures is
budgeted for personnel costs. The shortfall for the Forest Resources
Management Program is now supported by personnel funding from the
Fire Protection Program.

The department has requested computer equipment, 16 pickups, 2 truck
chassis, field equipment, repeater stations, mobile radios and portable
radios (specifically for the Southern Idaho Timber Protective Association
of McCall). Houston noted the Governor’s budget recommends the
department use current year funding for information technology
replacement.

The annual timber harvest is requested to be increased by 20 million board
feet beginning in FY 2006 and another 10 million in FY 2007 for the next
ten years. The increased harvest would improve forest health on
endowment lands and result in better value for the milling of larger trees.
The increase in timber harvest will necessitate 10 full time positions,
temporary help, contractual services and vehicles, along with a global
positioning system, radios, relaskop scales, all-terrain vehicles, office
furniture and computers which would be funded from the Endowment
Earnings Reserve fund. The Governor supports this budget item.

Upon inquiry, Houston stated the Department of Lands cuts about 200
million board feet which has decreased to 160 million board feet. He
noted it is now back up to 180 million board feet. The department has
budget items to increase the timber harvest. Houston noted much of the
budget is driven by the stumpage prices so the funds to the endowment are
dependent on stumpage prices.

The department along with private landowners are faced with possible
litigation regarding endangered species. The coordination and review of
endangered species issues and development of agreements will need to be
funded. However, the Governor has not recommended this budget item
request by the department. The department has requested the dedication
portion of the request be approved.

Senator Brandt inquired whether actions regarding the Endangered
Species Act were under the Office of Species Conservation. Wiggins
explained the incidental take coverage involves a land owner agreement
negotiated with the federal agencies. The land owner is the endowments
administered by the department. The Office of Species Conservation is
assisting the department. He noted the program will probably take several
years to accomplish. Brandt expressed concern because it was his
understanding the Office of Species Conservation was to take care of these
types of issues. Wiggins stated there are a number of avenues under ESA
for getting incidental take coverage. He noted the department does not
currently have any specific plan so as to allow flexibility in negotiating
with the federal agencies. Wiggins noted he views the process as an
insurance program for the timber resource program. The timber resource
is worth approximately $1 billion which generates in excess of $50 million
per year. The department is attempting to buy an insurance policy which
will allow the department to continue timber operations without judicial
review. Upon inquiry, Wiggins noted the request for 10 additional
permanent employees for additional timber harvest results in
approximately an additional 3 million board feet per employee per year.
Designing and implementing timber sale projects is complex and labor
intensive but enhances the health of the forest stands and is estimated to
generate about $6 million in additional revenue per year.

Upon inquiry, Wiggins stated the department’s budget does not contain
litigation costs. He noted the department is not involved in any litigation
at the present time. The sixty day notice of pending litigation from the
environmental groups has expired. Wiggins responded to the notices, but
has not heard anything since his reply. There are costs associated with
negotiating agreements for assurance in connection with incidental take
coverage. Incidental take coverage means that the department agrees to
certain practices on the ground and the services will not hold the
department liable should a listed species be harmed. The department is in
discussions with the U.S. Fish and Wildlife Service regarding incidental
take coverage on state lands.

Senator Cameron informed the committee, due to a misunderstanding the
Governor does not agree with the department’s withdrawal of the general
fund request but agrees with the dedication fund request.

Larry Schlicht, Division of Financial Management, stated the division has
not had an opportunity to review this with the Governor but will make that
recommendation to him.

Through the Priest Lake office, the department oversees the Priest Lake
sewer hookup project. Due to the upgrading of the Coolin Sewer District,
the department has been assessed a fee of $6,000 for each residence unit.
There are 3 units, plus a trailer pad, at the Coolin housing complex and 6
at Cavanaugh Bay administrative site. The Governor recommends this
budget item which would be from general and dedicated funds.

Computer operations and proposed improvements require added computer
disk space. Inasmuch as these operations support accounting, geographic
information, land records, real estate, land range and mineral leases, the
web site, email, timber sales, compliance and fire systems, general revenue
funding is requested. The Governor does not support this budget request.

The Reclamation Fund is revenue from small mine operators since May,
2003. Mine reclamation, administration and mineral education are areas
supported by the fund. The Governor has recommended this budget item
from dedication funds.

The reorganization of the department has resulted in inadequate space for
staff and meeting rooms have been converted to office space. Funding is
requested to remodel a shop into office space at Cataldo, remodel the shop
into office space and build a new shop at Mica, construction of an addition
to the McCall office along with a storage shed. Part of the funding for
these projects would come from the Endowment Earnings Reserve Fund
and from the Permanent Building Fund Advisory Council. The Governor
has recommended $144,000 from dedicated funds for this budget unit.

The new organizational chart for the Department of Lands is set forth on
page 4-41 of the handbook included in the original minutes of this
Committee.

Chairman Noh noted the Land Board has reduced the percentage from the
endowment fund to the endowed institutions this year. Chairman Noh
inquired if the reductions are reflected in the Governor’s budget. Houston
stated the reductions are reflected. The Governor does not recommend
replacing that with general fund revenues. In the case of public schools,
the revision will show the $23 million reduction in the endowment fund
with no replacement from the general fund.

Schlicht further explained the public school budget request did not ask the
full anticipated reduction. The agency budget request for public schools
was predicated on the assumption there would be a 7 percent payout.
Because of the market situation and reduction in timber receipts, the
figures will be lowered. The Land Board agreed with the Governor’s
recommendation that the payout for the public schools would be lowered 5
percent and 7 percent in subsequent years. The numbers are being
revised and will be submitted to JFAC. Schlicht stated that based on the
estimates made by the endowment fund investment board there will be
enough money at the 5 percent payout rate to schools to generate under
$23 million, which is a $14.8 million reduction.

Chairman Noh requested clarification of the statutory provision that the
loss of corpus in the endowment fund must be replaced as of a certain date
by the legislature. He further inquired if there would be legislation from
the land board to modify the law. Houston stated he and Jason Hancock
are reviewing legislation to extend the pay back period from 4 years to10
years. Senator Cameron reported the legislation was discussed by JFAC
under the possibility of repayment over a period of time with a broader
scope. This would be reflected first in the FY 2006 budget. He reminded
the Committee the economic forecast is precarious with an estimated $70
million budget deficit. Legislation has been drafted to extend the time
frame from 4 years to 10 years. The 10 years would be a rolling time
frame so the full amount in arrears would not have to be paid at any one
time if there was an arrearage during the 10 year period. A suggestion was
made that the CPI (consumer price index) should be included in the
payback schedule. At this time, CPI will not be included because of the
potential of never being able to repay the amount. The legislation will be
handled by the State Affairs Committee. Cameron stated another meeting
is scheduled with the Endowment Fund Board and its director to finalize
the proposed legislation. Upon inquiry, Cameron noted the constitution
provides keeping the endowment fund whole without further definition.
The beneficiaries recognize that the fund must be held harmless and paid
back.

Senator Schroeder commented this is what happens when gambling debts
are due.

explained RS13534 will revise provisions regarding quarterly meetings of
Fish and Game Commission. Barton explained the legislation would
allow the Commission to meet at any time within the quarter instead of on
a specific month.

Motion by Senator Schroeder to print RS 13534; seconded by Senator
Bilbao. Motion carried.

Senator Cameron expressed concern for shifting legislation to rules.
Barton replied the industry preferred to have the flexibility of working
with the Commission as the need for changes evolved. He noted the
Commission does not have a reluctance to legislation just that it is easier
and more flexible through the rule making process on the minor changes
required by the industry and/or the Commission.

Motion by Senator Kennedy to print RS 13535; seconded by Senator
Brandt. Motion carried.

Upon inquiry from Senator Cameron, Barton noted depredation hunts
occur after the department has worked with the landowner to remove the
animals. The landowner wants and deserves to have the animals removed.
The regulation brochure provides for application by hunters to their
respective regional offices for notification of depredation hunts. If the
hunt is ordered on Wednesday to occur on the following Saturday or
Sunday, the regional office attempts to notify hunters who have indicated
interest in participating in a depredation hunt. Sometimes the regional
office contacts those who have controlled hunt permits in the same area to
see if they would be interested. The intent is to remove the animals as
soon as possible. However, the publication of the order appears later. He
noted there is a very short time frame and a small number of animals in
these types of depredation hunts.

Senator Cameron inquired whether the depredation hunts could be listed
on the department’s web site as soon as they were made available. He
noted this would make those types of depredation hunts available to
anybody who has a license.

Motion by Senator Cameron to return RS 13537 to sponsor; seconded by
Senator Kennedy. Motion carried.

EXCUSED:

Caswell stated this has been a positive year for OSC. He informed the
Committee wolves are now listed as a threatening species. The Western
Distinct Population Segment was created which includes half of Colorado
and Utah, all of Montana, Wyoming, Idaho, Oregon, California,
Washington and Nevada. There is pending litigation on the formation of
WDPS. The Governor, OSC and the Department of Fish and Game have
intervened in the case and been granted status to intervene on behalf of the
federal government. He anticipates the litigation will be ongoing with
David Hensley, OSC, and Michael Bogart, Office of the Governor, as the
attorneys of record representing the state. The issue is, when the three
states are delisted all the other states in WDPS will be delisted.
Accordingly, if a wolf is found in Oregon it would be considered delisted
the same as Idaho’s wolves. This would be true no matter where the
wolves range within WDPS.

Caswell stated the peer review of the three state wolf plans was completed
by 11 national and Canadian wolf experts at the request of the U.S. Fish
and Wildlife Service. The October 2003 report was then responded to by
the states and the Department of Fish and Game. On January 13, 2004, the
Secretary of Interior advised the Idaho state wolf plan was sufficient.
Montana’s plan was also approved. Wyoming’s plan states they will
manage for 15 packs, 8 in the parks and wilderness areas next to the parks
and 7 packs statewide. Anything over and above the 15, Wyoming will
determine on a quarterly basis whether they are a predator or a trophy big
game animal. USFWS reacted to this provision negatively, as well as to
Wyoming’s definition of a pack. Delisting is dependent upon Wyoming’s
state wolf plan being approved by the Department of Interior.

Caswell noted the Wyoming situation makes Idaho’s position important in
regard to amending Rule 10(j), because it will allow Idaho’s state plan
more flexibility. The Department of Interior has committed to publish a
proposed rule amending Rule 10(j) by the end of the legislative session.
Until Wyoming’s state wolf plan is approved, the proposed rule change
will allow flexibility, fulfills the Secretary of Interior’s commitment and
assists in an orderly transition to state management. Additionally, this will
provide an incentive for Wyoming to proceed.

Upon inquiry, Caswell anticipates the proposed amendment to Rule 10(j)
should be in the federal register or a copy for publishing will be available.
He noted because all 3 state plans have been through the review process he
anticipates publication will be forthcoming. Upon further inquiry, he
stated the Department of Fish and Game will be ready to operate by the
October 1 anticipated date. The Office of Species Conservation continues
work with the Nez Perce Tribe to define the Tribe’s role after delisting.

At the end of last year $90,000 was paid in compensation damages to
producers for lost stock for the previous two grazing seasons. The Board
of County Commissioners governing the compensation account will meet
next week to decide on payments to be made by the end of February. At
this time, only two producers have submitted claims, additional claims will
likely be filed before the deadline of February 1.

Upon inquiry, Caswell explained under the proposed amendment to Rule
10(j), the state would have the flexibility to amend the definition of
“livestock” to include guard dogs and has the ability to take positive
action. The people taking the action now would be the same people taking
the action under the proposed amendment of the rule.

Senator Stennett stated it is his understanding that the state will ultimately
manage wolves similar to management of cougars and bears. Caswell
noted that is what the plan provides. Huffaker affirmed, after the
harvestable surplus is determined tags would be issued to remove the
harvestable surplus where wolves need to be reduced.

Chairman Noh presided over the meeting at this time.

Caswell noted the Department of Fish and Game has been and continues to
monitor and collect data on elk and wolf interaction. He stated a study has
also been funded through the department. $400,000 has been accumulated
over the past three fiscal years to gather the data necessary.

Huffaker stated the Nez Perce Tribe has been gathering data which has
been incorporated into the department’s data base along with additional
information on pack activity and depredation rates in conjunction with an
enhanced monitoring program. Aerial survey information is added. The
department will have as much information as can be obtained. Upon
further inquiry, Huffaker noted the department began compiling
information on wolves as soon as the department was legally allowed. The
department does not have all the information it could have had if the
department had been involved over the past six or seven years. The Nez
Perce Tribe has been gathering information which will be utilized.
Department employees have now been trained to obtain further
information and which is shared among all interests.

Upon inquiry, Huffaker anticipates by next year there will be wolves in the
Boise Foothills and all the fringe areas. The back country territory is
filling up and because wolves are territorial and multiplying rapidly, young
male wolves leave existing packs and set up their own territories and form
a new pack. The places where they will inhabit first are big game winter
ranges and around the Cental Idaho area. He noted it was only a matter of
time before wolves are in Southeast Idaho. There are undocumented
reports in Owyhee County and Nevada. Wolves will range 150 miles and
will go anywhere they choose to go. The whole state of Idaho is wolf
habitat.

Upon inquiry from Senator Schroeder, Huffaker stated all the neighboring
states are contemplating what to do with wolves as they move into their
respective areas upon delisting. States that are included in the WDPS
would be able to deal with them as they would any other game animal.

Caswell noted the authority to kill wolves exists now in connection with
livestock but not in relation to big game or someone’s dog. A rancher has
the opportunity to kill a wolf if he sees a wolf actually killing livestock,
but that does not allow a rancher to kill a wolf feeding on livestock
carcass. In the future there will be a relaxed set of rules where the state
will manage for a minimum of 15 packs. He stated it is to be determined
what the definition of “packs” will be in the final delisting. Once delisting
occurs the state can bring the number down to 15, if it chooses to do so.
The decision will be up to the state under the state wolf management plan
in an open public process with the Department of Fish and Game and
under its rules. Caswell stated the pending draft wolf report includes the
statistics for all three states with the final report available by the end of the
month. It is estimated there are now approximately 361 wolves in Idaho,
plus or minus 20 percent.

In relation to slickspot pepper grass, Caswell provided to the Committee a
handout, incorporated into the minutes, setting forth pertinent data. He
noted listing of slickspot pepper grass was withdrawn by the U.S. Fish and
Wildlife Service last week. The plant has a small range in Idaho of
approximately 90 by 25 miles in Southwest Idaho. He noted this is the
first time a species as designated to be placed on the list as endangered has
been removed from the list. He further stated this is the first time,
nationally, that a conservation agreement has been reviewed and evaluated
by USFWS for implementation. In conjunction with the military, OSC,
Department of Fish and Game, Department of Lands, Bureau of Land
Management and a group of private landowners, a conservation agreement
was completed and submitted to the USFWS for consideration. He noted
several reasons for the success of the conservation agreement. He stated
there may be litigation by Western Watersheds challenging the
conservation agreement. He noted there was a significant contingent of
private land owners involved in the development of the conservation
agreement. Technical people assisted policy people in the development of
the agreement, with OSC drafting the document.

David Hensley, attorney, OSC, explained some of the types of
management as a result of the conservation agreement. He noted the
conservation measures are based on the potential threat to the species.
Wildfire, wildfire management, grazing, and outdoor recreational vehicle
usage were some of the considered threats addressed by the conservation
measures. The agreement would reduce or mitigate the threats. He stated
private landowners and grazers developed conservation measures that
address the impacts and process of grazing. One item was to allow a
buffer zone to provide water and supplements for livestock without
jeopardizing slickspot pepper grass. Private landowners also determined
they would not create new roads in areas where the species was located
and would use and limit existing usage to prevent impact to the habitat.
Upon inquiry, Caswell noted the area basically encompasses the Snake
River Plain from Marsing to Glenns Ferry.

In relation to the Bull Trout, Caswell stated a draft critical habitat plan will
be available by March as per court order. During the comment period, the
Governor and the congressional delegation requested a five-year status
review on bull trout. The ESA requires that every listed species has a five
year status review. He noted that in 30 years USFWS has never done a
five-year status review on bull trout. USFWS has three areas they are
working on in regard to bull trout: status review, critical habitat and the
recovery plan.

In regard to anadromous fish, the omnibus spending bill has passed
Congress and is to be signed by the President. There should be $5 million
additional available for salmon programs for the Idaho.

The Lemhi short term agreement provides for law enforcement discretion
on the part of USFWS and National Marine Fisheries. The long term
agreement is two-thirds completed. The short term agreement will expire
in the spring. Caswell noted the negotiations are proceeding through the
efforts of Clive Strong, Deputy Attorney General. He stated the same
approach is being used in the Upper Salmon Basin. A short term
agreement was signed in October 2003. Negotiations are underway for the
long term agreement.

Upon inquiry from Senator Stennett as to the use of the $5 million,
Caswell stated the funds can only be used where there are anadromous fish
which would mean the Clearwater River, the Salmon River Basin or the
Main Snake River. The bill had language added in regards to
accountability which has resulted in some confusion. One of the
provisions is that NOAA must enter into Section 6 agreements with the
five states. Idaho does not have a Section 6 agreement. Additionally there
is a provision for review of the project and review of the funds committed
to the projects. Caswell noted uncertainty until NMFS receives the fund
and discussions begin. He stated Steve Yundt heads up the program for
OSC. The intent is to use as much of the funds on the ground as possible
with minimal administrative costs. He noted there is an absolute need on
public lands. He estimates there are 1200 diversions needing attention in
the Upper Basin.

In relation to sage grouse, Caswell informed the Committee OSC is
working with the Department of Fish and Game along with the state
advisory committee on a plan with local working groups. Funds will be
available through OSC for project work. He noted Huffaker is head of the
Western Association of Fish and Wildlife Administrators which is in the
process of a science assessment and development of a regional plan
encompassing the state plans for sage grouse. There are 11 western states
participating in this significant, coordinated effort with a number of
unanswered questions. Upon inquiry, Caswell stated the Bureau Land
Management has requested coordinated state/federal efforts for sage
grouse throughout the 11 western states. The sage grouse listing decision
is scheduled for March. The six petitions relate to the greater sage grouse,
which is all sage grouse in all the western states.

Huffaker informed the Committee there is a 90 day review date for range
wide listings. Six petitions have been grouped for consideration as they
relate to a single species. Litigation is pending alleging a timely decision
had not been made which resulted in a settlement for a 90 day review
which expires on March 27. If the petitions are determined to have merit,
there is another nine months or a year from the original petition (January
2005) to enter a decision whether the species should be listed. The
western states sage grouse group will have a full science review and a
candidate conservation assessment done by May 2004. Following that will
be a written conservation agreement similar to the process used for the
slickspot pepper grass. Huffaker will be meeting with federal officials
next week on the national plan for sage grouse conservation for USFWS
consideration by January 27, 2005. The plan will apply to all lands not
just federal and state. Conservation is necessary on all lands to protect the
species on federal land. The local working group plans will be contained
within the state plan which will be contained in a western states
conservation plan for sage grouse. The federal plans will compliment and
complete the plan in relation to adequate regulatory mechanisms. Positive
actions must be undertaken so they can be considered when the decision is
made in January 2005.

Caswell stated the grizzly bear issue has resulted in a conservation
agreement with an anticipated USFWS delisting in 2005.

Chairman Noh informed the Committee of a National Public Broadcasting
crew will be active throughout the legislative session for a program on
state legislatures. Idaho was chosen to be the model. Their equipment and
personnel will be in attendance and in the background of many
proceedings.

Chuck Coiner, Board of Directors, Twin Falls Canal Company, has been a
leader in working out solutions to the conjunctive management issues.

Coiner then introduced Chuck Brendecke, hydrologist for the ground
water users, Chuck Brockway, and Tim Deeg, Idaho Ground Water
Association,.

The Eastern Snake Plain Aquifer studies began in 1977 and developed a
ground water model. The aquifer encompasses all of the Snake River
Plain from King Hill to Mud Lake and to Ashton. Significant parts of the
aquifer are American Falls Reservoir and the Milner to King Hill area
known as the Thousand Springs Reach. The aquifer is 10,000 square
miles of lava flows and basalt. The water flows from the northeast to the
northwest. Most of the water flows out the west end in the Thousand
Springs Reach. Between Blackfoot and the lower end of American Falls
Reservoir at Neeley, there are many springs. There are two main areas
where water comes out of the aquifer. The water goes into the aquifer
from irrigation application, water diverted out of the Snake River and its
tributaries and the Lost River comes into the aquifer but does not reach the
Snake River. The inflow to the aquifer is from deep percolation from
irrigation water applied to the aquifer and from precipitation that occurs
over the aquifer and snow melt. The tributaries, Lost River, Silver Creek,
Big Wood River, Little Wood River, Medicine Lodge Creek and the
Portneuf River flow into and contribute to the water going into the large
aquifer.

About 7 to 8 million acre feet of water goes through the aquifer annually.
Water exists from the aquifer at Thousand Springs and American Falls. In
addition there is ground water pumping from the aquifer and in some
places water is used for vegetation over the aquifer. He noted for a long
time it was thought the aquifer was an unlimited source of water, but that
is not the case.

He presented to the Committee an aerial map depicting the irrigated areas
over the aquifer. There is a significant amount of irrigated land overlying
the aquifer. On the west side of the aquifer there are two ground water
districts: the North Snake and the Magic Valley Ground Water Districts,
which comprise the bulk of the irrigated area on the western part of the
aquifer. Other ground water districts are 130 and 120. Water district 130
was recently created to cover most of the western part. Water district 120

covers the Blackfoot area. Irrigated areas are watered from ground water
and surface water diversions. Major canals from the Snake River are all
along the reach, particularly in the Milner area.

Indicator springs which flow out of the aquifer are used to determine the
health and actions within the aquifer. Spring Creek at Sheepskin Road
comes out of the aquifer just above American Falls and is a measuring
location utilized since 1980. The downward flow trend began in 1997 and
has continued to date. This is an indicator of the reach gain or loss of
other springs in the area. The current flow since April 2002 shows a wider
difference between the historic flow and the current decreased flow. In
January 2004 there is a difference of 100 cfs decrease over the normal of
356 cfs. Aquifer water levels and spring flows are declining in the
American Falls area as result of better water management by the use of
sprinklers. Ground water pumping began in 1950-60 and has taken water
out of the aquifer and consumptively used it which has resulted in less
water in the aquifer and less water coming out of the springs. Spring
Creek is a good indicator of what happening in the northeast portion of the
aquifer.

A US Bureau of Reclamation chart shows the accumulated reach gains.
The river from Blackfoot to below American Falls Reservoir gains flow
naturally from all the springs entering the river. The accumulated reach
gains indicate in 2000 there was 2 million acre feet of water coming into
the river through the springs in that reach. In the following years, 2001,
2002 and 2003, the reach gains have decreased to 1.5 million acre feet.
This is indicative of the decline in the river and must be addressed due to
water rights.

In the western part of the aquifer in the Gooding-Jerome area, there are
some indicator springs. Box Canyon Spring, located near Wendell, comes
out of the aquifer and is a large spring. The flow used to be 450 cfs and
fluctuates according to use, recharge and pumping. He noted the declining
trend is also reflected in the Box Canyon Springs at approximately 21.4
percent since 1950. Another indicator spring, the Blue Lake Spring,
provides domestic water for the City of Twin Falls, has been measured
since 1950. He noted the declining trend for the Blue Lake Spring is 30
percent since 1950. Blue Lake Spring and Box Canyon Spring are two
major indicator springs in the Thousand Springs Reach for the western
part of the aquifer.

The USGS estimate of flow for all of the springs depicts the Milner to
King Hill area, also known as the Thousand Springs Reach. Those
estimates began in 1902 and show the increase when irrigation began on
the Snake River Plain. In the 1950s through better water management,
well drilling, ground water irrigation, and the conversion from flood
irrigation to sprinklers, resulted in a 21 percent declining trend in those
stream flows in the Thousand Springs Reach. From Milner to Hagerman
the annual flow of the river has declined at about the same rate. He noted
the corroboration of information indicates the management needs of the
aquifer.

A chart depicting water levels in wells in various points within the aquifer

in the Burley-Minidoka area indicate a consistent decline since the 1950s.
He noted this area includes the A&B Irrigation District which is ground
water irrigated. The well level and the spring flow declines are indicators
of the declining trends in the aquifer. He noted the wells are operated and
maintained by the US Geological Survey and are measured many times
continuously with recorders showing the same trend. Another chart
depicting the Bonneville/Jefferson area indicates the ground water levels
are not declining at the same rate, but do show continuous declines. The
aquifer is experiencing declines everywhere. Brockway stated
management of the aquifer is imperative because of the declines and the
resulting conflicts by users of the aquifer.

The springs in the American Fall Reach run 2,000 to 2,500 cfs and
constitute the natural flow in the Snake River that is available at Milner for
diversion to the North Side, Twin Fall, and Minidoka projects. As the
water in the American Falls Reach declines, the water available to senior
water right holders goes down. In the Thousand Springs Reach, as the
springs decline, the water users with water right priorities that are senior to
the pumpers have a right to a call for their water. He noted a conflict
exists between the pumpers and the senior water right holders.
Conjunctive management of the aquifer is necessary and must be done, but
the ground water model, which was built in 1977 and has been updated,
must be available and utilized to manage the water use within the aquifer.
Brockway noted the ground water model is being recalibrated and
additional work will be required by the Department of Water Resources to
plan and manage the aquifer to assist in solving the problems associated
with conjunctive management. He stated the ground water model is
needed and needed quickly.

Upon inquiry, Brockway noted the recharge efforts in 1992 through 1994
have not shown effects because of the time factor the magnitude of the
recharge. The outflow in the Thousand Springs Reach is 5,500 cfs. He
noted the river in essence is remade in the Milner/King Hill Reach.
Sometimes the flow at Milner is zero and the resulting water in the river at
King Hill is spring flow. A Jerome recharge is spread out among the
springs over six months or more. Additionally, the amount of water
recharged was an insignificant amount of 25 to 30 cfs. Recharge is a good
tool but recharge is not the panacea for the problem. There is not enough
excess water in the system to recharge effectively in the needed areas to
overcome the long term decline in spring flows. Recharge should not be
abandoned because it does assist in the management and stabilization of
the aquifer.

Upon inquiry, Brockway stated the decreases in spring flows are causing
the declines in the river. The average flow in the summer time at Milner
can be zero. Everything above is diverted from the Snake River onto
irrigated areas. As the river flows from Milner, the springs come in and
form the river. In measuring the discharge in the river, you are actually
measuring the accumulated spring flow into the river from Milner on
down the river.

Upon inquiry, Brockway explained the winter water in 1994, Milner to
Gooding was going to the Lower Snake Recharge Project, north of
Shoshone. That water did some good but the problem is the magnitude of
the water going in versus the water coming out was very small. It was too
small to measure. He stated originally the North Side Canal and other
canal companies had water from the Snake River all year. The reason was
for stock water and the only source was the canal. Many communities
used the water from the canal for drinking purposes. Twin Falls used to
get their water from the Twin Falls Canal. The winter water savings
program was started when the Palisades project began. The canal
companies agreed to closed diversions for a certain number of days which
terminated the use of water and canal seepage in the winter time. In
return, added storage became available in Palisades.

Chuck Coiner informed the Committee the initial negotiations were
heading towards litigation, but through the commitment of ground and
surface water users they have been successful without attorneys. He noted
those within District 120 meet together as water users. The district needs
assistance in continuing the economic development of the resource. He
stated the water districts have been meeting with the assistance of Clive
Strong, Deputy Attorney General, and the director has attended most of
the meetings. Progress is being made in the development of a mitigation
plan or aquifer management plan but the process will take time. The
process needs the recalibrated model to accomplish their goals. Through
the process those involved have become more knowledgeable about the
model and water systems are managed. Coiner stated it is important to
have a funded Department of Water Resources with knowledgeable and
capable personnel. He urge the Committee’s support of the Department
of Water Resources.

Upon inquiry from Senator Stennett, Coiner replied the aquaculture
industry requires 52 degree water but the irrigators and diverters can use
any water out of any storage. The storage and the water bank in the Upper
Snake can be made available for mitigation. The water is mitigating the
irrigators and diverters and proceeds to assist conversions in district 130.
Coiner noted education is needed in the area of municipal usage. Funding
should be shared by all water users to move the process along stated
Coiner.

Upon inquiry Coiner noted funding is available for the completion of the
model, but there are some calibration problems in the Hagerman Reach
area. The tool is available and will be used to obtain the needed
information. This will allow the development of mitigation and aquifer
management plans. He noted the completion of the Snake River Basin
Adjudication is also important in the process. Senator Cameron noted
there has been a supplemental budget approved for the Department of
Water Resources to address the 2004 needs for the program, and he will
try to insure the 2005 budget is adequate.

Chairman Noh expressed the appreciation of the Committee for Senator
Bilbao participation and service to the Committee during Senator Little’s
absence.

Even though the department’s participation in the SRBA will decrease in
2006, there will not be a staff reduction because the department will then
be required to administer the adjudicated water rights.

In connection with the issue of conjunctive management, he noted the
misconceptions pertaining to water rights. A water right is the authority
to use the water for maximum beneficial use, not entitlement to the water
regardless of use. The water is owned by the state. A water right is a
unique property right ­ a right to use the water, but not own the water. A
water right is the right to beneficial use of the water. The other common
misconception is that the prior appropriation doctrine is as simple as first
in time is first in line. If this conception were correct, an engineer would
not be needed to serve as Director of the Department of Water Resources.
A clerk could look at the list of dates and make the determination as to
which water right was first in line. There are other common law doctrines
and case law provisions along with statutory provisions that must be
applied also. He noted it becomes even more complicated in connection
with the joint administration of ground water and surface water where the
effects of a right holder diverting surface water are immediate, but the
effects of a ground water diversion are delayed and spread over time and
dispersed geographically. Additionally, the results can only be measured
in certain places. Complicated computer models are necessary to
determine the results. Dreher stated the Legislature has provided funding
for the last several years for the department to reformulate and recalibrate
the ground water model. This will allow the resolution of the pending
conflicts before the director at this time, as well as litigation where the
department and the director are defendants. Dreher noted the facts
provided by the model are important to the ground water and surface
water right holders to assist in clarification the complex interface. Dreher
noted ESA issues will also continue to contribute to water issues.

He noted his pleasure that the Governor reappointed him to serve for
another three years.

Senator Schroeder inquired as to the status of ground water and the
aquifer in the Moscow-Pullman and Palouse aquifer. Dreher noted a
petition has been filed by an environment group seeking to have the two
aquifer systems designated as critical ground water areas and requesting a
moratorium on future ground water development. The Moscow-Pullman
aquifer system has declined for decades. A number of efforts have been
made to limit the number of withdrawals from the shallower system. The
deeper system is the Grand Ronde system. He noted conservation
efforts have been imposed on the shallower system and the system has
stabilized. The deeper system is a higher water quality system and
continues to decline. Whether the deeper system should be designated as
a critical ground water will be determined. He noted as the director of
the department he has some alternatives to consider in addressing the
issue. The City of Moscow and Latah County do not want any
designation and their views will be considered, but the decision is out of
their hands. The department will make the decision based on the facts
and information available. Dreher noted the lack of investigative effort
concerning the aquifer by the department. The department has in its
immediate plans to begin work on the Rathdrum Prairie aquifer, but
studies of the Moscow-Pullman aquifer have been postponed for now.
Upon further inquiry from Senator Schroeder, Dreher noted in 2001 funds
were appropriated by the Legislature to begin the hydro geological
characterization of the Moscow-Pullman aquifer system but those funds
were not encumbered when the first series of hold backs were imposed.
These funds were turned back at that time. Dreher noted his decision was
to return unencumbered funds rather than have a reduction of personnel.

Upon inquiry from Senator Stennett concerning the costs associated with
measuring and monitoring water use and if there was a better way to
measure through satellite technology. Dreher stated the department has
been utilizing limited resources to develop technologies to monitor water
use. Idaho was the first state two years ago to use satellite technology.
This technology was utilized in Bear River Basin because the department
had data to use as a comparison. The satellite technology is with spatial
images and computers. The department was able to calculate the
consumptive use of all the crops in that basin within ten percent of the
comparison information. Dreher noted that NASA has discontinued the
thermal band included in this satellite technology which is crucial to the
use of the technology. He stated there are other things that can be done
to acquire the needed information such as requiring an analog recorder on
measuring devices which would electronically sample the measurements
at predetermined increments and store the data. A water master or
hydrographer could then collect the data, down load to a computer and
provide it to the department. The department is attempting to reduce the
costs and improve efficiencies. Upon further inquiry from Senator
Stennett, Dreher stated for domestic use either metered usage or satellite
imagery would be used. The largest portion of depletion from domestic
use is because of landscape irrigation. The department can use satellite
imagery to determine if domestic users are complying with the ½ acre
limits authorized under a domestic water right. He noted there are a
number of areas in the state with violations and enforcement actions have
been instigated against the larger violations in Ada County.

Senator Cameron inquired if recharge has a role in negotiations between
ground water and surface water users. Dreher stated recharge is a
component but additional augmentation would be necessary. The use of
water can be extended by using it differently. As an example, he stated
there are a number of irrigated parcels in the Thousand Springs area with
water rights that rely on stream diversions which are created by springs.
He noted this is very high quality water. There is also a number of
irrigation systems in the same area which generate runoff water. Perhaps
the runoff water could be used for irrigation and then move the higher
quality spring water to fish producers. He stated there are some options
to apply this interchange now. Previously there were large diversions
from surface water to ground water above the Thousand Springs area.
The shares for that were sold and moved to the east. Ground water
permits were then issued. He explained to the Committee how this
scenario could be corrected without a forfeiture. Forfeiture occurs when
a users quits making beneficial use authorized under the water right. As
long as the beneficial use authorized by the water right is utilized, even
though a specific water supply is not used, forfeiture is protected. This
stops ground water depletions and leaves ground water in place for
discharged in the springs. Additionally, when surface water is added
there is some amount of water applied in excess of crop needs that will
become recharge. Another option is through the Bureau of Reclamation.
Minidoka Dam must be replaced because the structure is unserviceable.
He noted the dam could be replaced to a taller height to add storage space
using revenue bonds by the Water Board. The Water Board would then
own the added water supply which could be leased to ground water
districts. The revenue from the leases would be used to pay off the
revenue bonds.

Dreher informed the Committee the department needs to have the
institutional means and physical facilities to divert excess water,
recognizing in stream purposes, for recharge. The 1 million acre feet
annual deficit is not from drought but from irrigation efficiency
improvements. The deficit has occurred because of diversion from flood
irrigation to sprinkler irrigation. He estimates only about 300,000 acre
feet will be available in the right location but it could produce significant
affects in the Thousand Springs area.

Senator Cameron inquired as to the status of the moratorium on wells and
permits. Dreher stated there is a moratorium in place for the Eastern
Snake River Plain Aquifer since 1992. The moratorium does allow for
mitigation of depletions and the department has issued a limited number
of new permits to appropriate ground water. He does not anticipate the
moratorium will be lifted until there is a showing that management of the
water development can occur.

In reply to Senator Stennett’s inquiry regarding the Steam Channel
Protection Program, Dreher stated if the budget was adopted as
recommended by the Governor the department will not have the funds to
administer the program. A 404 permit from the Corps of Engineers will
satisfy the minimum requirements of the Stream Channel Protection Act,
but the department has a backlog of over 200 stream channel applications
which cannot be properly handled within the department. Dreher stated
he has suggested to JFAC the stream channel protection program should
be moved to another agency with adequate dedicated funds.

Lynn Tominaga, Idaho Ground Water Appropriators, informed the
Committee of his and the association’s support of Dreher’s reappointment
as Director of the Department of Water Resources.

Senator Keough informed the Committee about the Lake Pend Oreille
Basin Commission noting the formation of the commission is for the
purpose of assuring water quality and water quantity in connection with
Lake Pend Oreille and Priest Lake.

Ford Elsaesser of Sandpoint gubernatorial appointee to the Lake Pend
Oreille Basin Commission informed the committee of his personal,
professional and community participation as reflected on his Board
Member Data Sheet provided to the Committee.

Senator Williams stated to the Committee his appreciation for the high
quality experience and education provided by the gubernatorial
appointees to the Commission.

Brent Baker of Sandpoint gubernatorial appointee to the Lake Pend
Oreille Basin Commission provided the Committee with information
concerning his personal, professional and community participation, which
is reflected on his Board Member Data Sheet provided to the Committee.

Marc Brinkmeyer of Laclede gubernatorial appointee to the Lake Pend
Oreille Basin Commission was unable to attend due to a business
emergency. His appearance before the Committee will be rescheduled.

Linda Mitchell of Sagle gubernatorial appointee to Lake Pend Oreille
Basin Commission informed the Committee of her professional and
educational background as set forth on her Board Member Data Sheet
provided to the Committee.

Representative Campbell briefly informed the Committee of the
background of water quality and water quantity issues concerning Lake
Pend Oreille and Priest Lake. He noted the Department of Fish and Game
has provided good support to the Commission. In 1863 there were 4
species of fish in the two water bodies and today there are 29 species. He
expressed concern about negotiations with the Corps of Engineers
regarding the fluctuations in water levels for the river and lake.

Representative George Eskridge noted in addition to the community
pressures on the lake other concerns include environmental issues and
down stream power interests. After the Governor appointed the Lake
Pend Oreille Basin Commission, he was concerned about the
effectiveness of the committee in dealing with federal and down stream
interests. He attended several meetings of the Commission with the
Corps of Engineers, US Fish and Wildlife Service, NOAA and others and
was impressed with the members of the Commission and the interaction
with those with special interests. He noted the members of the
Commission have shown the expertise and been effective on water issues
and in dealing with special interests. He urges the Committee to
recommend the gubernatorial appointments be confirmed by the Senate.

Senator Stennett noted the high quality of individuals recommended by
the Governor for appointment to the Lake Pend Oreille Basin
Commission. Eskridge commented the concerns regarding the lake level
because of the economic impact on the region along with the fish and
wildlife health. The lake level is the number one priority of the
commission. He noted the down stream power interest also contributes to
the economic and fish and wildlife impact in the region. Water quality is
also a significant issue.

Steve Huffaker, Director, Department of Fish and Game, stated the
fisheries issue with Lake Pend Oreille is the wind and wave action which
cleans the gravel where the Kokanee spawn. He noted when the lake is
drawn down the spawning area is heavily sedimented and hinders
spawning. Huffaker noted the department is very supportive of the
Commission and welcomes the assistance the Commission will be able to
provide in negotiations with competing interests.

Upon inquiry, Eskridge noted some of the water from the lake is for
irrigation in Washington, but Idaho’s interest needs to be protected.

Chairman Noh reminded the Committee minimum lake levels are held by
the Governor on several of the lakes because the possibility of a threat to
Idaho water for irrigation in the Columbia Basin. The lake level laws in
the United States, passed in the 1920s, are held in trust by the Governor
for the state.

Upon inquiry from Senator Cameron, Huffaker noted the funding request
for the EIS will need to be retained for renovating the fishery in Cascade
Reservoir. Other ways to accomplish renovation would be to increase the
harvest of pike minnows, squaw fish, electric weirs and netting along
with restocking yellow perch, small mouth bass and other warm water
predatory fish that would have an impact on the squaw fish.

In relation to all terrain vehicles, Huffaker stated the Commission passed
a rule last year prohibits hunting from an ATV off the road in 22 of the
big game units. He noted this type of hunting has become the number
one complaint the department and commission receives from hunters and
land owners. There has been some concern about the enforcement of the
rule. The number of people hunting in those units is significant but only
one citation was issued. He noted there were 26 written warnings based
on complaints from other hunters. In addition there were 10 incident
reports but personnel were unable to track down the alleged parties.
Huffaker anticipates the Commission will expand the rule. Upon inquiry,
he stated a lot of the pioneering of new trails, where there should not be
trails, occurs during the hunting season by the ATVs. The Commission
rule allows packing into the camp on an ATV and retrieving game if it is
allowed by the land owner or land management entities. The department
recommends hunters put the unloaded gun in the case when packing in or
retrieving game.

In connection with the Access Yes Program, Huffaker informed the
Committee the Commission voted to expand funding for the program by
the selling of lottery big game tags. There will be two sales a year to
coincide with the control application hunt time frame. Between $100,000
to $200,000 is anticipated in revenue for the program. Last year with
$100,000 in the department budget, the department obtained 32 contracts
with landowners encompassing 117,000 private acres which opened an
additional 200,000 acres of public land behind the private land. Huffaker
noted on the department’s website is a map showing the contract areas
along with the landowner restrictions and available hunting or fishing.

Upon inquiry from Senator Stennett, Huffaker explained landowners who
wish to enroll their land submit bids stating the type of fishing or hunting,
access, number of people per day, if it is necessary to call, write or make
advance notice, or anything that the landowner wants. The bids are
submitted to the department which are then reviewed by a regional
sportsmen’s board. The regional board decides on the bids and the
contracts are written by the department. He noted the department makes
every reasonable effort to service the contracts to assure that the
landowner obtains what he expected and the sportsmen get what they
expected.

Motion by Senator Brandt to send S 1229 to the floor with a do pass
recommendation; seconded by Senator Burtenshaw.

Upon inquiry from Senator Schroeder, Barton explained the legislation
would allow the commission the opportunity to avoid having more than
one meeting during a quarter period of time by combining meetings.

Motion carried.

Motion by Senator Burtenshaw to send S 1230 to the floor with a do pass
recommendation; seconded by Senator Stennett. Motion carried.

Collignon explained specific fee changes such as the motor vehicle entry
fee, noting the department did not previously charge a fee for vehicle
entry. Another significant change is the collection of sales tax on fees as
the department previously included the sales tax and local option taxes in
the fee. He noted the previous system was because of the inconvenience
of coinage handling. However, 47 percent of the fees are now paid by
credit card with 37 percent by check. Thus the coinage issue would no
longer be significant.

Senator Stennett expressed concern about the public relations aspect of the
multiple fee charges instead of a charging an overall single fee. Collignon
noted the fee charges will be similar to fees charged in private
campgrounds.

Senator Cameron commended the department for keeping the parks open
and not having to close any parks or recreational facilities during the
state’s budget concerns. He stated the fees charged by the department are
still reasonable for the product provided.

In connection with the upcoming Lewis-Clark Centennial, Collignon
stated he believes estimated tourist numbers are low for the state. He
noted the Lewiston and Orofino areas, while not having a significant
number of state parks, will still experience increased usage, especially
Hells Gate State Park and the Lewis-Clark Discovery Center located
therein. The Lewis-Clark Discovery Center is scheduled to open in July
2004.

Collignon further informed the Committee that budget constraints have
challenged the department resulting in reorganization and retooling of
personnel. He additionally noted since September 11 there has been a
significant increase in park and recreation usage despite the economy. He
anticipates another record user year for the department.

Upon inquiry, Collignon explained the $22 vessel fee encompasses 85
percent designated county fees along with a 15 percent administrative and
safety program fees.

In discussions relating to the Billingsley Creek/Vardis Fisher properties,
Collignon noted there are some water access issues relating to the
University of Idaho fish lab which have been addressed through piping of
the necessary water and fencing of fishery site. Chairman Noh
recommended reading the biography of Vardis Fisher entitled “Tiger on
the Road” written by Tim Woodward. He noted Fisher is rated higher than
Hemingway by many literary people. Fisher was born on the South Fork
of the Snake River and that land has had protective easements filed this
past year. Collignon stated the Fisher site and the Billingsley Creek site
with the McFadden Farm are a good mix of resources and for addition to
the state park system.

Collignon noted in the Idaho facts booklet is a listing of all of the state
parks showing the expenditures and revenues from each of the units. He
stated some of the parks because of historical, cultural or natural resource
mission will never be significant revenue generators. The department has
attempted to incorporate the management of those types of units into
another unit which has other revenues. This allows the department to
spread the overhead costs and personnel over more than one park unit. He
noted Three Island, Hells Gate, Dworshak and Farragut state parks are
recreation parks and intended to generate a higher revenue than the
respective management costs which helps support other state parks with
inadequate revenue sources. There is a good mix of resource mission
parks and recreation mission parks within the state park system.

Upon inquiry, Collignon stated the Yankee Fork was the state’s centennial
effort to highlight Idaho’s mining heritage. The park is a collection of
sites on Forest Service land such as Bonanza, Yankee Fork Dredge and
City of Custer. In development of the Custer Motor Way with a visitors’
center the only revenue source is through merchandise sales. The
operational costs will be shared with the Lost River Trail Way when it is
completed. He noted the project has become an important project for
Custer County. The visitor center is always busy and an RV dump station
has been added there. The center is open 7 days a week during the season
and 5 days a week otherwise.

Chairman Noh noted the Idaho-Lemhi Pass is a significant and perhaps the
most interesting of all of the Lewis-Clark Trail sites. It is on an
undeveloped, gravel road with views of several miles of the actual trail.
Collignon stated there will be renewed discussion with the Bureau of Land
Management for joint efforts on the recreation needs on BLM lands.

20.03.03-0301

Scott Nichols, Bureau Chief, Department of Lands, informed the
Committee of the history of the Reclamation Fund. The proposed rule sets
forth the fee schedule for a reclamation plan, placer permit, temporary
permit or exploration project in connection with the Surface Mining Act.
The fee scheduled as a result of negotiations and participation by the
industry throughout the past 2 years. He noted the intent is that these
fees will not be an additional burden and is not in addition to reclamation
bonding, but a replacement. An operator who is required to pay a $250
minimum bond payment to the insurance fund will now pay approximately
the same amount to the Department of Lands. The goal within the surface
mining program is to ascertain the risks and have surface mining operators
comply with the Surface Mining Act, including the bonding provisions.
The proposed fee schedule provides a better economic alternative and
reclamation alternative for the operators and the state. In the event of a
forfeiture of a reclamation bond from the fund, the operator would be
ineligible to continue operations on other sites until repayment to the fund.
He stated the industry felt this would encourage operators to complete the
reclamation.

Upon inquiry from Senator Little, Nichols noted the difference between
restoration, reclamation and rehabilitation. A reclamation plan might not
call for the restoration, but for reclamation which is between restoration
and rehabilitation. Stream channels in the state are restored under the
regulations to nearly original conditions.

Upon inquiry, Nichols stated the Surface Mining Act applies to state,
private and federal lands. There are memorandums of understanding in
regard to Forest Service and BLM lands. The state endowment lands and
private lands are under the Surface Mining Act also. The Surface Mining
Act does not indicate to an operator how to mine or how much acreage can
be disturbed, but does set minimum standards for the reclamation. He
noted there are exceptions within the Surface Mining Act which are
applied evenly throughout the state regardless of ownership.

Upon inquiry, Nichols stated the pending fee rule applies only to
commercial operations where the operator is removing material for
immediate or ultimate sale. Under the present Surface Mining rules, if the
anticipated reclamation bond exceeds $2,500 per acre, the department is
required to hold a hearing, meet with the company and justify the reason
why the bond exceeds the $2,500. Nichols stated the department acts as
the underwriter for the reclamation costs for the site. It was never the
department’s intent to charge on a annual basis the total cost of the
reclamation. Nichols stated the program is non refundable. The industry
has accepted payment of the annual fee in lieu of the bond eliminates the
paperwork and posting of collateral. If reclamation is not completed, the
operator is not allowed to work in the state and the fees must be repaid.
The liabilities are low in terms of reclamation of the mining site which is a
nonrenewable resource. He noted many projects that cease operation are
purchased by another operator and continue operation. The bond is then
not forfeited. The Surface Mining Act provides for a four year period to
elapse between non use and final reclamation. The definition states three
years of non operation of a portion of the pit constitutes abandonment.
The operator may appeal and negotiate an extension of the time. The
department prefers to give an operator the opportunity to convey the
operation another or to reclaim the site.

Senator Kennedy complimented the department in its attempt to make the
program more economically feasible for the smaller business operators.
Nichols explained to the Committee the Surface Mining Act states that
when an operator’s bond is forfeited it is to fully satisfy all obligations.
He noted this is an area of concern for the department because of the bond
limitations. In the proposed rule and under the Idaho Code, the
department may recover costs expended in excess of the bond and the
operator would not be allowed to continue business operations and his
personal assets could be at risk.

Nichols noted the Surface Mining Act and the bonding provisions were
established to encourage an operator to maintain a lower disturbed
acreage. The department could increase rates for larger acreages or
decrease the liabilities. Nichols stated the Board has the ability to reduce
the liability. Senator Kennedy noted his concern that the public be
adequately protected by the proposed rule, as well as making it easier for
the small operators, along with an affirmative obligation by the operator.

25.91.91-0302

Upon inquiry from Senator Cameron, Howard stated the proposed fees are
to offset the direct staff costs for processing the various types of
applications. In 2003, there were in excess of 450 emergency or expedited
application requests out of the total of approximately 2,000 applications.
The abuse of the emergency or expedited applications will diminish when
the use of online applications increases.

Chairman Noh informed the Committee the legislation necessary for
approval of the pending fee rules will be coordinated with the House
Resources and Conservation Committee.

26.01.20-0301

In Arkansas, Potlatch’s large forest land blocks are leased for hunting. It
is hard to find any private land open for public access. Potlatch’s land is
leased to individuals or hunting clubs and is a substantial source of
revenue for the company. In Minnesota, Potlatch would not have
considered any other uses for the land five years ago other than open
access and timber management and harvest. Three years ago, over the
objection of some Potlatch employees and negative public reaction,
Potlatch decided to lease a few acres for hunting. The companies’
experience in Minnesota was unexpected; not only did the public not
object to the company leasing land for hunting, but requested additional
lands be leased. This year Potlatch will lease about 70,000 acres. Potlatch
is finding that lessee’s adopt a ownership interest by maintaining and
protecting the land.

Benson noted in Idaho, Inland Empire Paper Company with land in north
Idaho, now has a fee for use system. Anyone using IEP land pays to do
so. Additionally, the Department of Fish and Game’s Access Yes program
is an opportunity for private landowners to provide their lands for permit
hunting with conditions while providing a source of income for the

landowner. He stated large landowners are beginning to restrict access to
their lands because of damage or for other reasons. There are many
changes occurring in land use in Idaho. Conservation easements are an
opportunity for Potlatch to continue to manage the lands for timber and to
make the land available to the public for use.

In September 2003, Potlatch deeded to the state 2700 acres in conservation
easements. Included in the deed were development rights, rights of public
access and some special management considerations along the scenic
corridor of the St. Joe River. The total value of the easement was
$650,000 with a portion from federal funding from the Forest Legacy
Program along with private donations and a donation by Potlatch.

Benson stated in 2004 Potlatch plans to finalize the second phase of the
conservation easement. Congress appropriated $3.5 million for
conservation easement projects which will be matched with nonfederal
funding, in kind contributions and donations. The number of acres
anticipated to be conveyed will be between 20,000 to 25,000 acres.

In the future, Potlatch will continue to participate in the conservation
easement program. The President’s 2005 federal budget provides for
conservation easements in Idaho so it will be known by the end of the
summer what Congress appropriates for another phase of the project.
Potlatch intends to make available up to 600,000 acres for conservation
easements. Benson noted that there is limited funds available for
finalizing the conservation easements. Potlatch supports the Forest
Legacy Program in Idaho as a tool to provide Idaho with opportunities
which will last for generations. He noted the easements are in perpetuity
so generations will benefit from the public use access and the undeveloped
state of the lands into the future.

Senator Stennett inquired if Potlatch intends for the state of Idaho to be the
grantee rather than private organizations such as The Nature Conservancy.
Benson replied Potlatch will continue to work with the state of Idaho
because the company is comfortable with the state and the easements
conveyed to the state. He noted there are many entities that can hold
conservation easements, but Potlatch has chosen the state and would like
to continue that direction with its conservation easements.

Senator Kennedy inquired if part of the consideration relinquished by
Potlatch is allowing public access to some of the areas that it would not
ordinarily because of private property designation. Benson responded
currently Potlatch lands are open to the public and the conservation
easements preserves public access into the future. Kennedy further
inquired if Potlatch would be relinquishing a right to remove timber from
the property immediately by such methods such as clear cutting. Benson
stated it is clearly the intention of Potlatch to continue to manage the lands
according to standards in place and standards Potlatch has agreed to under
the sustainable forest initiative which is a third party certification system.
Any land owner in Idaho has to manage their lands under the state’s Forest
Practices Act. Benson stated it is not a risk that Potlatch would harm the
lands in a manner contrary to what Potlatch has agreed to in the
conservation easement.

Senator Little inquired what percent of the development rights are
generally given by Potlatch to match with the federal Forest Legacy
Program. Benson stated the range could be as low as zero donation from
the land owner. He would anticipate the range overall would be 5 to 10
percent. Little noted several contributors to the program have been subject
to IRS audits. Benson stated Potlatch just celebrated 100 years as of
November 2003. Potlatch is a very conservative company, very cautious
and is not concerned over audits. Chairman Noh noted tax considerations
must be taken into account in these programs. Murphy stated if in the
appraisal process there is a charitable donation the IRS plays a role in the
appraisal process. Two appraisers are involved; the primary appraiser
must follow federal standards for land appraisal and there is a reviewer
appraiser which provides a check and balance to the process.

Senator Stennett noted state endowment lands are open to the public but
could be closed. Litz replied that could conceivably be done but it is not
the intention of the Department of Lands to limit public access.

Motion by Senator Little to send RS 13489C1 to print; seconded by
Senator Brandt. Motion carried.

Motion by Senator Little to send RS 13474C2 to print; seconded by
Senator Brandt. Motion carried.

issues. The handout provided by Hardesty is included in the original
minutes of the meeting.

The Ground Water Quality Protection Act prevents contamination of
ground water from point and nonpoint sources of contamination to the
maximum extent practical. The policy and rules under the Act are to
maintain and protect the existing high quality of the state’s ground water.
She noted the restoration of degraded ground water to support beneficial
uses is also policy under the Act. To accomplish these goals evaluations
of nutrients and pathogens is conducted as part of the permit and approval

review processes. Restoration activities are centered on high nitrate
priority areas. She noted ground water is used by 90 percent of Idaho’s
population for drinking water and domestic purposes. The most
widespread ground water contaminant in Idaho is nitrates with 3 percent of
the sampled sites having a contaminant level above 10 mg. Another 30
percent of the sampled wells have levels of nitrate between 2 and 10 mg.

The department identifies areas with significant degradation, prioritizes
them, develops ground water management strategies and reviews the
effectiveness of the management strategies. In developing the ground
water management plans the department establishes local groups and
includes state and federal agencies. She noted the importance of the
development of Best Management Practices (BMPs) through education,
regulations and monitoring results.

In reviewing the effectiveness of a water quality management plan,
flexibility in refining the proposed strategy, enacting additional protective
measures and possibly recategorizing the aquifer need to be considered.

In nutrient pathogen evaluations, the prevention of contaminations is
necessary to prevent undesirable health effects.

Barry Burnell, Department of Environmental Quality, stated 2 milligrams
per liter is the evaluation point for determining whether the ground water
has been impacted or not. Anything under 2 milligrams per liter is
considered natural conditions. The department is working with the USGS
to evaluate nitrate trends in priority areas. He noted USGS’s report sets
forth where the trends are increasing and decreasing in the long and short
term. Upon inquiry, Burnell stated the data is tied to the state wide
monitoring network which began in the late 1980’s. He noted there is data
for before that time which was gathered by the Farm Bureau on a county
by county level.

Hardesty stated once areas are identified with degraded ground water, the
department identifies the area with significant degradation, prioritizes the
areas, develops ground water management strategies, and determine the
effectiveness of the strategies. In reviewing ground water management
plans, local groups are established to develop the management strategies
through BMPs, ordinances and education. After the ground water
management plans are implemented and have had a period of time to
work, the effectiveness is then evaluated. If the goals of the plan have
been met, the area is then removed from the priority list.

Hardesty stated the department’s goal is to protect and prevent ground
water contamination rather than restoration. When subdivisions are
proposed, nutrient pathogen evaluations are important to the department as
they are designed to prevent contamination and an undesirable health
effect. The evaluations determine if a proposed subdivision will affect
water quality in the proposed area. Characteristics of the aquifer and the
waste treatment system design are considered in the evaluation process.
Hardesty noted that the Health Districts lead the evaluation process with
the department assisting them.

Kathy Holley, Director, Central Health District, Boise, introduced Mike
Reno, Central District Health, who stated, when a developer requests a
permit the health district appraises the proposed area. The first
determination is whether a nutrient pathogen study needs to be done. The
the developer receives a spread sheet providing background information in
relation to relevant condition. If it is determined the proposed project does
not pass a level one spread sheet analysis, the developer has the option to
obtain on site data for the nutrient concentrations of the ground water.
Upon inquiry, Reno said this would mean drilling a test well. Reno stated
there have been subdivisions where the lots had to be reconfigured to
avoid the ground water flow pattern or the size of the lots may be
increased. Planning and zoning permits are applied for at the same time
the health district permit application is made. The determination of the
health district is then submitted to planning and zoning on the pending
application. Upon inquiry, Reno stated it was sometimes necessary for
developers to install a central nutrient reduction system which can reduce
nutrients up to 40 percent. Another alternative would be land application
treatment through the Department of Environmental Quality. Upon further
inquiry, Reno noted it is the health districts in each of the counties that
determine the areas of concern within the county.

Upon inquiry from Senator Burtenshaw, Rob Howarth, Central Health
District, informed the Committee there is an experimental tool being
further developed to refine the determination of the origin of ground water
nitrates. Hardesty further explained the nitrate contaminates do move and
will change as ground water conditions change.

Reno further informed the Committee that nitrate is a conservative ion and
is not absorbed as it moves through the soil. Once the nitrates hits ground
water it will disperse and the rate of spread can be determined. It
essentially moves with the water.

Senator Stennett inquired if nitrates dilute. Burnell stated nitrate will
degrade through and under very limited conditions when there is bacteria
which will denitrify and convert it to nitrate gas. In order for those
conditions to occur, there must be anaerobic conditions and a carbon
source must be present for the bacteria to use as a food source. Under
certain limited conditions, there could be denitrification. He noted those
conditions are typically not present in an aquifer or ground water.

Upon inquiry from Senator Little, Biladeau noted if the state has retained
the mineral rights, those rights can be leased through a ten-year lease with
restrictions.

The Committee was provided a copy of a letter from the Idaho
Conservation League, dated February 9, 2004, from Justin Hayes, Program
Director, stating their opposition both to primacy and to H510.

Upon inquiry, Biladeau further noted under land exchange the state does
have the right to exchange the full ownership.

Motion by Senator Little to send H 510 to the floor with a do pass
recommendation; seconded by Senator Stennett. Motion carried; Senator
Schroeder noted as voting nay.

In reviewing and evaluating state primacy, the initial process by the
committee determined the scope and estimated cost of a Idaho NPDES
program which would meet the requirements of the Clean Water Act.
The advantages, disadvantages and uncertainties of an Idaho program
resulted in the determination that state NPDES was possible, but a further
analysis of the costs and benefits was needed.

Phase two addresses whether the state has the capacity to run the program,
as well as program costs and funding. Additional key issues are the
interrelation of NPDES primacy and the Endangered Species Act, a
flexible and innovative state NPDES program, storm water and water
quality based effluent limits. Hardesty noted DEQ is drafting rules,
providing training for personnel and will seek 2 new positions for the
ongoing evaluation of the program.

She stated EPA would be required to consult with US Fish and Wildlife
Service and National Marine Fisheries Service on the state’s primacy prior
to authorization. When state primacy has been attained for the NPDES,
further consultation with the federal agencies on individual permits will
not be necessary, but the federal agencies can comment through the public
review process. She noted state primacy would allow flexibility and
innovative ways to ensure water quality in Idaho.

There are 916 permitted facilities within the state, Hardesty estimates 21
full time employees would be necessary in the administration of the
primacy program. Costs for a permit would include the issuance, annual
inspections, data management system, compliance and enforcement,
administrative and water quality standards costs for DEQ. She noted the
permit system should be simple with limited administrative requirements
for permit holders or DEQ. An alternative for funding would be the
sharing of costs between applicant, state and federal agencies.

In a comparison between a state and the federal program, noted advantages
were: state ability to interpret and apply Idaho standards, coordination of
water programs within the state, the elimination of the permit-by-permit
consultation required under ESA, and the use of state solutions to water
quality temperature, nutrients, cadmium and mercury concerns.

Hardesty stated members of the steering committee support state primacy
provided program costs and funding, capacity, and flexibility regarding the
program are resolved. DEQ will pursue legislation to allow the NPDES
program to be administered by the state. Further development towards
state primacy are constrained due to department budget constraints. A
legislative in 2003 to move more rapidly ahead attempt was not successful.

Upon inquiry, Hardesty stated DEQ has a grant from EPA to assist DEQ to
be prepared to take over the program should legislative approval be
achieved. DEQ has participated in inspections, training, reviewing and
drafting permits. Upon further inquiry, she noted there is $35,000 left in
the grant fund account which will expire the end of June.

Beaton noted the state expends significant funding for site specific water
quality and quantity criteria along with TMDLs to implement the
standards through citizen advisory groups. If the state does not have
control over the point source permit program, it is simply advocating its
control over the TMDL program as it relates to point sources and
implementation of water quality standards.

Beaton stated over the last few years there has been an increasing trend in
case law regarding the types of activities subject to point source permits.
He noted this is particularly evident in the Ninth Circuit Court jurisdiction.
EPA is taking a broader view of the kinds of activities that once were
considered nonpoint source activities and they are now required to obtain a
permit. He noted an appeal before the U.S. Supreme Court of a case
from Florida where the state court held the transfer of water from one
basin to another required a point source permit under the Clean Water Act.
The assumption in that case was the water was dirtier from the transfer
basin to the receiving basin so pollutants were added creating the point
source. The decision by the U.S. Supreme Court should be issued within
the year. Beaton noted this is another example of the issues becoming
more complicated under the Endangered Species Act and Clean Water
Act, as well as under the NPDES program. Potlatch and many industries
in the state support state primacy.

He noted the national fire plan is an excellent example of an approach
because of the grants provided to make the needed fire protection work.
Oregon has a disincentive through added taxes if the homeowner does not
meet certain fire protection requirements. The refusal to issue an
insurance policy has been implemented by State Farm Insurance in
Colorado.

Idaho has in place the national fire plan. After the fires of 2000, the
federal government recognized the problem and developed the national
fire plan. He noted Governor Kempthorne was instrumental in
representing the Western Governors’ Association in urging the completion
of the national fire plan with the provision that the states are the lead
agencies. The state of Idaho is the primary deliverer of the national fire
plan which is administered through Peggy Polichio, Department of Lands.
The national fire plan provides education and funding to reduce the risk of
catastrophic wildfires. Idaho developed a strategy to achieve the reduction
by having the counties be the lead agencies for the risk assessments and
mitigation planning. There is a statewide coordinating group which
oversees all the activities in the state by prioritizing the grants. This
eliminates duplication of grant funds from various agencies. The
statewide group is comprised of Department of Lands, Department of
Commerce, Governor’s Office, Bureau of Disaster Services, RC&D, the
Association of Counties, Idaho Fire Chiefs and the federal agencies: Forest
Service, Bureau of Land Management, Parks, Fish and Wildlife Service,
FEMA and BIA. The national fire plan provides the incentive through
funding for a wide variety of activities, including homeowner grants for
hazardous fuel treatment activity on their property, training and educating
fire district personnel, equipment for fire fighting, and the Fuels for
Schools program. He stated the department recognizes the need to have a
balanced approach. Idaho would benefit from additional revenue
authority. If there is an increase in regulatory requirements, the counties
are the logical entities. The Department of Lands is a wild land fire
organization and does not fight structural fires which are taken care of by
the rural fire districts.

Litz provided to the Committee a map depicting communities at risk
indicating subwatersheds classified according to their area-weighted
average of community-at-risk values. The map is attached to the original
minutes of the meeting.

Upon inquiry from Senator Kennedy concerning the high priority
designated area between Boise and Mountain Home, Peggy Polichio stated
that in comparison to other areas there is more risk. Structures and
vegetation are some of the attributes contributing to the designation. She
also noted that over a 20 year period fire behavior patterns are also
considered. She further explained that even though there was not a high
density of structures, there are a significant number of structures in that
area combined with high vegetation.

Upon inquiry, Polichio stated all the agencies with wildlife fire protection
responsibilities work together and set priorities with life and property the
highest, along with protection of wild land.

Brian Shiplett, Department of Lands, stated after identification of the risk
to life and property the resources are allocated to protect and control the
fire. A management team assigned to the fire decides what resources are
needed to protect and control and then request what is needed.

Upon inquiry from Senator Little concerning fire expenses, Shiplett stated
blocks of land within Idaho are designated for full fire protection
responsibility by written agreement among the wild land agencies. The
agency responsible for a specific area pays the total bill. The agreement
between the agencies are for a five-year basis. He noted the national
forests would like to protect largely national forest lands and the
Department of Lands has the responsibility for the protection of state and
private. Upon further inquiry regarding protection of private property, the
rural fire districts have the structural responsibility. He noted there are a
number of agreements with the rural fire districts. Overlaying a
population density map with rural fire protection districts, the maps are
very similar. Most of the population concentrations do have some sort of
structural protection organization in place. A portion of the homeowner
fee for protection comes from a developed parcel fee because of the
potential fire threat. In the initial stages of a fire, initial suppression is
undertaken through mutual aid agreements regardless of fire protection
agency designation. If the fire advances or progresses then the designated
agency takes over. The first $3500 of the costs of each fire is the
responsibility of the rural fire district.

Upon inquiry, Cope stated the program in Lemhi County follows the fire
wise program with the elimination of fire fuels and thirty foot gaps
between trees. At the present time, shake roofs are discouraged which is
reinforced through homeowners insurance companies. He noted State
Farm is the first insurance company that will not insure houses in the wild
land areas with cedar shake roofs. Upon further inquiry, Cope noted in
the Lemhi mitigation plan there are several areas which need road
improvement to facilitate fire suppression. Home evaluations in high and
moderate risk areas, fire wise workshops, home site survival and wild fire
behavior education, hazardous fuel treatment, wild fire suppression
training, along with active and continuous fire training, additional fire
protection equipment, improving access routes and county wide
evacuation are some of the issues addressed in the Lemhi plan. Lemhi
County will begin developing comprehensive planning and zoning
ordinances incorporating the fire mitigation plan within the next two years.

Cope reminded the Committee the amount of public land within each
county varies significantly throughout the state. The geography,
topography and demographics are too varied throughout the state for a
single plan.

Upon inquiry, Litz noted at this time State Farm is the only insurance
company to their knowledge which has wild land fire insurance
restrictions in Colorado. The department has not researched the fire
insurance issue.

Senator Little noted structures are classified by the insurance companies in
relation to distance within a fire district. In Gem County, road width must
accommodate fire equipment and evacuation.

Litz noted the national fire plan has provided good cooperation among the
various governmental entities and will enable further fire protection
planning and protection.

Senator Kennedy inquired what regulatory agency would be responsible
for fire protection requirements for subdivision developments within
heavily forested areas. Litz stated that other than the national fire plan,
fire protection is a voluntary program. The Department of Land believes
a balanced governmental entity approach should be utilized for fire
protection. If a homeowner does enter into a fire mitigation plan and
receives funding for the plan, then there is a contractual obligation.

Motion by Senator Little to send RS 14003 to print; seconded by Senator
Stennett. Motion carried.

Senator Ingram urged the Committee to send RS 14084 to print explaining
the significance of several laterals in downtown Boise under the purview
of the Boise City Canal Company. He noted due to the change in
demographics of the population and the ability and knowledge of the
public to handle the needed work the proposed legislation would assist the
irrigation delivery entities in performing the needed work.

Norm Semanko, Idaho Water Users Association, stated the support of the
Association, noting the proposed legislation has been given a thorough
review and consideration by their association. Semanko introduced Alan
Winkle, Boise City Canal Company, who is present to answer any
questions the Committee may have.

Motion by Senator Burtenshaw to print RS 14084; seconded by Cameron.
Motion carried.

Dreher further stated the applications the proposed legislation would apply
to would meet strict criteria. He noted since 2001 almost 700 applications
to transfer water rights were filed with the department. Of those, less than
10 percent involve corrections to legal descriptions for place of use, points
of diversion or do not represent any change. The way to correctly
document place of use and point of diversion is through a transfer
application. The department proposes, where the strict criteria is met, the
director would have the discretion to determine what notice would be
appropriate. Dreher explained the existing statute references another
section of the code dealing with the notice provisions for an application
for permit to appropriate water. These applications are for transfer and not
applications for permits to appropriate water. The criteria would not
apply to transfers for a change in the nature of use. Any change in the
nature of use will still be noticed regardless of how small the change. Any
time there is a change of use there is the potential to affect other rights, the
source or public interest concerns. Only a change to the legal point of
diversion or the legal place of use and changes that would have no affect
on the source before or after the change would be affected by this
legislation. The legislation is intended to apply to quantity and quality. If
the changes affect quantity or quality, notice must be provided. Ninety-nine percent are changes to correct legal descriptions.

The legislation is not intended to hinder the development of geothermal
water but is intended to encourage good construction methods so the
geothermal resource is withdrawn and used without a water right so long
as it does not affect other water.

Dreher stated a pending application of a feasibility study involves a second
use of the geothermal resource after it is cooled and is no longer
geothermal. The proposal is to connect a fish farm to the outfall from a
geothermal plant in the Raft River area. The geothermal resource would
be withdrawn and the heat removed and the condensates would be used to
raise fish. Under the current statute and as the statute would be amended,
a water right would be needed.

Wiggins informed the Committee the Department of Lands is charged with
managing 2.5 million acres of state endowment trust land. This is land
that was granted to Idaho upon statehood for the purpose of supporting 9
separate institutions that the federal government determined were essential
to operation of the new state. The original grant was 3.6 million and
through consolidations and sales in the early years of the state the acreage
has been reduced to 2.5 million acres. One million acres is classified as
forest land and 800,000 acres of that is primary forest land. The primary
forest land is actively managed to generate revenue. That provision is in
the Idaho Constitution and is specific. He noted the provision is also a
requirement of the Admissions Act that granted Idaho statehood. The
Idaho Constitution requires that the trust lands be managed to maximize
the long term financial term to the beneficiary institutions. The
generation of long term financial return is the objective of the department
and the State Board of Land Commissioners in relation to the trust lands.
The State Board of Land Commissioners are the trustees and the
Department of Lands manage the lands on behalf of the Board. He further
clarified that there are 9 separate trusts. Each piece of land has a specific
trust owner. He noted the revenues and expenses are tracked to the
specific trust. There are separate trusts and are not co-mingled of funds
and activities.

Wiggins stated active management is the key to meeting the fiduciary
obligation to the trusts. The revenue stream and the value of the
underlying asset is tied to the health of the asset. If the timberlands were
allowed to deteriorate there would be losses related to insects, disease, fire
and other prevalent concerns which are evident on other land ownerships
throughout the state and western states. The goal of the department is to
maintain the lands in a vigorous and healthy condition. The department
conducts a regular analysis of the conditions of the lands on a five-year
rotating basis. The data collected allows plans to be generated to meet the
objectives of the respective lands. In the past few years, 182,000 million
board feet per year has been harvested from the land. The harvested land
are scattered throughout the state.

Wiggins noted in developing the department’s budget for this year, there
were significant concerns about the health of some of the timber lands. He
stated he believed there were number of acres in the state that have too
many trees for their long term health. In order to achieve the potential the
lands have for long term productivity, it is important that the excess trees
be removed. The department has submitted a proposal to increase timber
harvest to 202 million board feet in 2006 and 212 million in 2007. The
212 million board feet level would be held for ten years while the
department reassess the program. In order for the department to be certain
of the figures, an independent verification was conducted by a forestry
consulting firm in Portland, Oregon. Their analysis was that the proposal
was sustainable, but it was conservative based on the potential growth of
the lands and the condition that they are in. He noted the proposal has
been approved by the Joint Finance and Appropriation Committee. There
will be 10 additional full time employees and $1 million for the
implementation of the additional harvest beginning in 2006.

Wiggins stated that the state has specific obligations under state and
federal law which are recognized by the department and the Board for
compliance. At the state level, the Idaho Forest Practices Act is
recognized and adopted by EPA as the standards for Idaho and also
includes the Endangered Species Act. The Endangered Species Act has
specific provisions which apply to nonfederal land owners which are
different from federal land owners. The standard to which Idaho must
comply is the standard of “take,” which means do not kill one of the
members of a listed species. He noted the court’s have interpreted the
definition in a broader scope taking into account modification of habitat.

Wiggins stated the two letters of Notice of Intent to sue under ESA from
the Land and Water Fund of the Rockies representing four environmental
groups: Idaho Conservation League, Members of Wildlife, Alliance for the
Wild Rockies, and Selkirk Conservation Alliance. Copies of the letters are
attached to the original minutes of the Committee. He noted the letters
allege take violations of the ESA in the Priest Lake area. The department
met with the representatives of the environmental groups in October 2002
for an exchange of ideas. The department responded to the groups in
January 2003 outlining the department’s position on the allegations. He
stated the department was in full compliance with the ESA, but outlined
certain measure that the department would undertake to alleviate some of
their concerns. He noted the department also encouraged them to be more
proactive in providing public input to the timber sale program. The timber
sale programs are advertised every year on two different occasions for
comments and observations prior to consideration by the Land Board. The
department has not heard from any of the groups.

Wiggins further informed the Committee the organizations had identified a
couple of timber sales in the Priest Lake area of concern to them. The
Lake Fly timber sale has had some modifications on the sale and the
department has worked with the Department of Fish and Game to make
some adjustments that would alleviate the concerns of the environmental
groups. The changes would not impact the department’s activities in
regard to the sale. He stated the environmental groups were notified in
January 2004 that the department intended to proceed with the sale. The
sale was approved to go to auction by the State Board of Land
Commissioners recently. The sale will be advertised, which the timber
will be sold at public auction.

Upon inquiry from Chairman Noh about a focus on cutting large trees,
Wiggins stated the timber will be harvested with a focus on stands in an
overstocked, unhealthy condition. He stated he has given no specific
direction regarding trees of any age or of any particular characteristic. The
department’s intent is to bring the stands into a healthy condition. The
decisions will be made on a site-specific basis by professional foresters on
the ground who will select the stands and develop the prescriptions used
for harvest. Trees of all sizes and all species will be considered for
harvest.

Upon inquiry from Senator Burtenshaw, Wiggins stated that the salvage of
visibly dead trees depends on the species and the time that has elapsed
since the tree died. Certain species deteriorate very rapidly. Some of the
trees are still usable for saw timber 2 to 4 years after they die. In other
cases, some trees become pulp wood and are only good for chipping very
quickly.

Upon inquiry from Senator Burtenshaw, Wiggins stated the objective is to
maintain the timber stands in good condition, but when a problem occurs
the department targets those areas as soon as possible. The department is
committed to prompt salvage where it reasonable to do so. They target
areas that show signs of the bark beetle quickly to prevent spread and
infestation.

Upon further inquiry, Wiggins stated the department allows salvage in
burned areas. He noted the size of the burned area and access would be
the determining factor. At Priest Lake this year there was a sizeable
timber sale in a burn area which has resulted in salvaging some of the
timber.

Senator Williams commented that on a tour of northern Idaho forest lands
he was most impressed with the management on private and state lands,
but was discouraged with management on federal lands. The federal
forests were sick and in a terrible condition. He further congratulated the
Department of Lands for stepping forward and doing the best they can in
the management of state lands.

Chairman Noh inquired whether the woodland caribou, grizzly bear and
bull trout are species of concern in the same block of land? Wiggins
stated

two-thirds of the state forest land is impacted by some listed species under
ESA. He noted bull trout is the species of concern geographically
throughout the state. Grizzly bear could also be included in the Priest
Lake and eastern Idaho areas. The sturgeon out of the Kootenai River
would also be included in the list.

Wiggins noted the Priest Lake area is unique because of the number of
species located in the same area. In 2001, the department and the U.S.
Fish and Wildlife Service began efforts in the Priest Lake area for
incidental take coverage under ESA. In exchange for undertaking certain
practices by the department, USFWS authorizes incidental take. He noted
there are several methods to provide for incidental take coverage. These
efforts are ongoing by the department and are not inconsistent with the
requirements of ESA. He noted the value of the state land ($800 million
to $1 billion) with a revenue stream of $40 to $80 million per year along
with the payout to schools, justifies the incidental take insurance acquired
to protect the state’s activities from a court challenge. He noted the
department’s efforts are not cheap or quick. In the department’s budget
this year, an additional position has been requested along with $350,000 to
support these efforts regarding incidental take coverage for state lands.

Upon inquiry, Wiggins stated the department’s road management policy
has not been changed significantly. The Priest Lake lands have been
under management for many decades by the state. The early logging
consisted of steam donkeys and flumes for sending the logs to the lake.
The logs were then barged down the lake to the outlet. He noted the
remnants are evident on the lands. In the 1940’s road building began in the
area which would not be consistent with the Forest Practices Act and
would be considered violations today. Wiggins stated because technology
and scientific knowledge have progressed so has road building practices.
Most of the state land at Priest Lake has roads because of the early logging
practices. The department continues to build roads as appropriate for
access for timber harvest. He noted the current techniques are more
sensitive to the environment. The department has closed and obliterated
some roads at Priest Lake. He estimated there has been some 300 to 400
miles of roads permanently closed. Wiggins noted the land is so
productive that if a road is left for an estimated 15 years, the road will
close itself because of tree growth. He stated it was appropriate the roads
were closed. The old roads were narrower, had inadequate drainage and
log culverts. Wiggins stated the department has a road management
program which requires gating roads. The department would like to have
localized single all weather type of access into drainages with an
appropriate number of side roads where access would be restricted so the
public has access to the drainages but not every corner. He noted that
gates on roads in remote areas are difficult to maintain and monitor. The
department has a rotating repair and replacement program on gates.
Beside the significant capital investment by the department on state land,
the deterioration and damage beyond normal usage affects the state’s
management of the lands.

Upon inquiry, Wiggins stated a 75 year old Portland forestry consulting
firm compiled the management report and a copy will be provided to the
Committee. Upon further inquiry, Wiggins notified the Committee the
pending notice to sue is the first 60-day notice on state timber lands.

The main issue with grizzly bear is the density of roads. One of the
grizzly bear management areas is within the Priest Lake State Forest. She
stated roads allow increased human access into bear habitat and the
majority of bear deaths are human caused. Studies have shown that bears
will avoid roads and areas with high road density which displaces the
bears from potential habitat. Rule stated there is a high density of roads in
the area of concern and even closed roads are a problem. She stated an
inventory of 36 gates in the grizzly bear area showed that 12 were actually
closed and effective. The rest of the gates were open or being breached by
motor vehicles. She stated an increase in harvest levels would result in
additional roads which would impact grizzly bear habitat.

Upon inquiry from Chairman Noh regarding ATV situation, Rule stated if
the roads and area could be closed to ATV there would be significant
positive impact on the grizzly bear habitat. She noted currently there are
not restrictions on ATVs. ATVs are able to breach the gates and berms
used to block the roads.

In regard to woodland caribou, Rule stated they are considered the most
endangered mammal in the United States. She stated there was one single
small population in the Selkirk ecosystem. The concern for caribou is
their early winter habitat, which is old growth, cedar/hemlock stands and
old growth spruce/fir stands at 4,000 to 6,200 feet. She stated there is a
good amount of caribou early winter habitat on the Priest Lake State
Forest. Early winter habitat is important for caribou because of the dense
canopies which intercept the early winter snow. This results in less snow
buildup on the forest floor allowing the caribou to move easier and spend
less energy obtaining their food source. In the late winter as the
temperatures get colder and the snow gets compacted, the caribou then
move up in elevation because they can walk on the snow. Another
important aspect of the early winter habitat is the older trees provide a
large quantity of lichen, which caribou subsist on throughout the winter.
Rule further stated there was not much of this type of habitat left. She
noted that the Fish and Wildlife Service has determined in the caribou
recovery zone only 6 percent of the area is early winter habitat. Removal
of any portion of the early winter habitat will be harmful to the caribou.
She stated that even removing trees by thinning will remove the dense
canopy and allow more snow and limit the lichen food source.

Senator Pearce inquired as to the number of woodland caribou now. Rule
stated the population is between 30 to 40. Upon further inquiry, Rule
stated that caribou is not a major prey for wolves, but mountain lions are a
concern and some have been moved out of the area. Senator Pearce
inquired as to the management necessary when two endangered species
overlap an area. Rule stated inasmuch as there is a significant number of
wolves, they could be trapped and moved to protect the caribou. Wolves
are not as scares as the caribou.

Upon inquiry from Senator Schroeder, Rule stated historically caribou
covered the southern half of Canada and the northern tier of the United
States. Schroeder further inquired if the same species of caribou exists in
Canada up into the Peace River area and that they are actually hunted in
some parts of Canada. The population in the Selkirk is really the only
population in the United States. Rule stated it was a different species, the
mountain caribou. The woodland species is a separate species according
to Rule. She further stated that some caribou were transplanted. The
caribou range from northern Idaho to southern British Columbia. Some in
British Columbia were trapped and brought down here to try and increase
the numbers in the United States.

Senator Schroeder stated the caribou herd existed in British Columbia and
the northern United States and there had been significant mortality in the
Selkirk herd in the calves. With every calf born it was a mortality. He
noted this is not the only population of caribou left. They are classified as
endangered in the United States but not in Canada. Caribou exist north of
the border and the Selkirk herd is maintaining due to migration. Schroeder
further inquired if there was data verifying that caribou have actually been
there in the early winter? Rule stated the Washington Department of Fish
and Wildlife has some studies for the past 7 or 8 years and Idaho has also
done some studies. The studies by Washington Fish and Wildlife show
caribou have an extensive range and are using portions of the Priest Lake
State Forest as well as a significant amount in British Columbia.

Senator Schroeder requested caribou data from the Idaho Fish and Game.

Rule then stated a number of streams on the Priest Lake State Forest
support bull trout. High road densities degrade bull trout streams
primarily from sediment. She also noted that high levels of logging also
have an impact on bull trout. When the forest canopy is removed from the
watershed, more precipitation hits the forest floor which causes sediment
to move down slope which scours out the streams and removes the things
needed by bull trout.

EXCUSED:

Steve Barton, Department of Fish and Game, explained to the Committee
the department and commission will draft a new pending rule taking into
considerations the concerns of the community.

Motion by Senator Schroeder for unanimous consent to send RS 14136 to
a privileged committee to print and to the floor with a do pass
recommendation; seconded by Senator Williams. Motion carried.

Chairman Noh introduced Emily Infanger of Salmon, who will be the
Committee Page for the remainder of the legislative session.

Semanko then explained S 1367 would authorize repairs, improvements
and maintenance by an irrigation delivery entity in the event a water users’
association for laterals or if an association had not been established. He
noted any individual water user could authorize the irrigation entity to
perform repairs, improvements and maintenance. The work could only be
performed if the irrigation entity has adopted a by-law or resolution
authorizing the work. In order to perform the work, the irrigation entity
would have the same rights and privileges for access to do the work as
would the water user authorizing the work. He further noted that the
irrigation entity would not assume ownership, responsibility or liability for
any injury to person or property. The water user will be assessed annual
costs, necessary repairs, improvements or maintenance in addition to the
assessments levied for water delivery.

Motion by Senator Burtenshaw to send S 1367 to the floor with a do pass
recommendation; seconded by Senator Schroeder. Motion carried.

He noted two pending lawsuits: one is whether or not the 1995 agreement
required removal of buried transuranic materials. They contended they
only had to remove the material stored in buildings and on pads, but there
is a significant amount of material underground. DEQ filed suit in federal
court and the court agreed with DEQ’s interpretation, but the case has
been appealed by the Department of Energy to the Ninth Circuit. Allred
stated negotiations are underway to resolve the issues.

In the second pending litigation DEQ has filed as a friend of the court
regarding the reclassification of high level waste. The court decision
supported DEQ and used DEQ’s brief as the basis for the decision. He
noted this case has also been appealed to the Ninth Circuit.

She stated the cleanup at the Idaho National Laboratory is progressing
with some remaining issues. In regard to spent nuclear fuel, the
Department of Energy has moved all the spent nuclear fuel from the aging
pool basins at several reactor facilities into dry storage or into a new state-of-art facility at INEEL. The new facility has leak detection and several
monitoring systems so there is greater confidence in the operation. She
further noted under the court settlement, all of the fuel in Idaho will be
stored in dry storage pending shipment to a repository.

In regard to high level waste, there are 11 tanks at the tank farm at INEEL
which contain approximately 1 million gallons of waste. She noted there
has been considerable progress for protecting the worst tanks against
seismic activity. The tanks have been emptied and cleaned to within 1200
gallons of lightly contaminated material. She noted there are closure plans
in place for two of the tanks because they contain chemicals and
radioactive materials.

In connection with transuranic waste which is contaminated with
plutonium, DOE has shipped 15,000 barrels out of Idaho with quite a bit
left to be shipped and is awaiting certification from WHIP. She stated
those shipments are to begin on a daily or weekly basis this summer.

Other cleanup activities relate to an incinerator which has been closed
under DEQ regulation. She stated the closure appears to be complete with
final monitoring required. INEEL has also been consolidating
contaminated soils located at various sites into a new lined landfill with a
detection system along with taking down the buildings no longer in use.
All of the waste treatment removal effort comes with the benefit of
reducing the risks to the aquifer and public health. The court settlement
focused on the types of waste that the nation determined should be
deposited in a repository deep under ground. This would include the high
level waste, spent nuclear fuel and transuranic waste. How to deal with
the other contaminates is to be determined.

Trever stated the maps on the reverse of the handout show the monitoring
network of the oversight program. This measures radioactive materials in
the air and radiation in ground water samples from the site and across the
Magic Valley. Results from off site indicate that there is no noticeable
impact from INEEL activities, but on site there are some ground water
contamination pools which have been known historically. These came
from operations where INEEL used to inject into the aquifer. These
ground water pools are the subject of ongoing cleanup discussions. The
ultimate goal is make sure that the aquifer is healthy for the long term and
DEQ expects cleanup operations to those areas. The enforcement action
against the INEEL laboratory has been closed. DEQ will continue to
provide independent oversight of the site.

In regard to shipment in and out of INEEL, several thousand barrels of
transuranic waste have left Idaho as part of the court settlement. There is
an allowance for DOE to continue to send shipments of spent nuclear fuel
in a limited annual quantity, as long as DOE is meeting the requirements
of the settlement. Last year DOE shipped two rail cars of spent nuclear
fuel and eight truck containers of spent nuclear fuel and the Department of
the Navy sent in ten rail containers from the nation’s nuclear fleet.

New contracts for cleanup and laboratory operations will be governed by a
draft proposal by DOE for operation of Idaho National Laboratory. She
noted the name change will be effective in October 2004. There will be a
contract for laboratory operations and a second contract for cleanup
operations. The cleanup operations contract is scheduled to last thru 2012
while the laboratory is on a five year term with a five year renewal. The
state will submit comments by March 3 on the proposal. One issue is the
terms of the laboratory contract which the state feels should be for longer
than five years. Another issue assurance that the cleanup and the
laboratory contracts are integrated in order to build on one another. The
purpose is to assure that the infrastructure of the two contracts fit together
for the maximum benefit of the site.

A main issue at this time is tank classification where DEQ is a friend of
the court in a case brought by the Natural Resources Defense Council, the
Snake River Alliance, and the Shoshone-Bannock Tribes challenging
DOE’s classification of waste. As a result of the court decision, DOE is
unwilling with legal certainty how to define waste to move forward with
some of the activities for tanks located in Idaho. DOE has proposed
legislative language in Congress to allow them to reclassify the waste as
something other than high level waste. This has caused the state concern.
DOE’s position is that they are in charge of making the determination.
She noted there have been some progress with the negotiations through
Idaho’s congressional delegation along with other states for a rational
classification process which protects the Idaho environment.

In regard to the repositories, Nevada has filed six different lawsuits against
DOE challenging the construction of the facilities at Yucca Mountain.
There is uncertainty when and how the Yucca Mountain repository will
begin operations. This is the repository where the spent nuclear fuel and
high level waste in Idaho will be sent. In the meantime, the state will
make sure that the materials are managed safely in Idaho and are ready to
be moved to the repository when it opens.

With the waste isolation pilot plant in New Mexico where the plutonium is
scheduled to be placed, New Mexico has taken issue with some of the
materials that DOE proposes to send to New Mexico. There is uncertainty
in the timing and ability of DOE to manage all of the waste in Idaho.

Trever stated in regard to Pit 9, retrieval efforts are progressing. She
provided to the committee pictures of a graphite mold used to form the
plutonium to make nuclear weapons. Pit 9 and other areas of the land fill
at INEEL received shipments from the Rocky Flats in Colorado from
1950’s to 1970’s. Another picture depicted remnants of steel barrels
twenty years later. Upon inquiry, Trever stated Pit 9 has a long and
historic history in that it is one of several pits that received waste from the
Rocky Flats plant. In 1991, DOE, EPA and DEQ began cleanup of the
pits. DOE contracted with a company that ultimately became a subsidiary
of Lockheed at the same time they were contracting with another
subsidiary to run the whole facility. In the cleanup of Pit 9, there was
$300 million spent on buildings and equipment with Lockheed not
excavating any dirt. This resulted in a contract controversy with DOE.
There was hundreds of millions of dollars invested without progress. The
two subsidiaries are in federal court against each other with an expected
court ruling later this year. While that has been going on, the project was
scaled back to a smaller area and move ahead with excavation. Trever
noted that although the costs were high and it involves 450 barrels of
contaminated soil, waste and dirt. The estimated cost was $80 million.
From a technology perspective, there is a better understanding of what
waste looks like after a couple of decades and hence can apply the
knowledge to other areas of the landfill.

Upon inquiry, Trever stated the new system was a collaboration with the
Environmental Protection Agency, State of Idaho, Department of
Environmental Quality and the Department of Energy. She noted it was
often the state and federal regulators who found ways to do the project
simpler. Those efforts to reduce costs and simplify the process are still
undergoing negotiations. She stated that some of the subsurface disposal
area contains higher concentrations of plutonium contaminated waste and
need further disposal considerations. Upon inquiry, she noted part of the
reason the operations were expensive are attributable to the remoteness of
the area and the necessity of operating outside the building. The type of
operations used now are mining approaches with excavation in greater
quantities, but still within safety considerations. Upon further inquiry,
Trever noted the state has attempted to promote a sensible approach
throughout the process and the information received to date indicates
simpler methods may be used.

Allred informed the Committee that part of the problem at INEEL has
been worker safety and any potential contamination to the environment.
DEQ has been urging DOE to adopt methods that do not contain double
containment and remote handling as well as the methods typically used
there. Pit 9 is an example of success within a week or two. With
equipment more typical to mining operations with human operators rather
than remote operations, much larger quantities can be moved and
removed. He anticipates being able to start this year. He further stated
that good progress has been made on Pit 9.

Upon inquiry from Senator Williams, Allred replied the building belongs
to Lockheed and they will not allow anyone else to use it. Trever noted
what happens to the building is part of the contractual dispute. Allred
noted there are a lot of old buildings on the site that were never used.

Senator Burtenshaw inquired about the status of melting down the
contaminated waste for block storage. Trever replied there was a project
for liquid waste with a facility which converted it into a granular form. A
thermal treatment process was used to convert the liquids to solid
materials. The facility was built before DOE was required to comply with
state and federal air quality regulations. DOE has chosen not to upgrade
the facility so that is in a closure mode. DOE still has to find a way to
solidify the remaining liquid waste and is considering newer technology
for that process. Burtenshaw further inquired if the spent fuel could be
reused. Trever stated the national policy is against the recycling of spent
nuclear fuel for extracting the uranium. She further stated it has become
an issue of economics and there has been no commercial enterprise
wanting to begin recycling because uranium could be obtained from other
sources. There are concerns whether in recycling other materials could be
produced, causing safety concerns. She noted there is some recycling for a
certain type of fuel, but the matter is really an issue of national policy and
economics rather than the technical ability to extract a material. Upon
further inquiry, Trever stated other nations rely on nuclear power for their
energy supply. Different nations have taken different approaches on how
they deal with the nuclear waste. France and Great Britain have relied
heavily on a recycling process which results in smaller, more concentrated
amounts of waste. In the United States, the current national policy is to
run it through the reactor once and then prepare it for disposal at a
repository. The national policy is being re-evaluated from a natural
resource prospective and making the best use of repository.

Upon further inquiry from Senator Burtenshaw, Allred stated if Yucca
Mountain is not opened then the issue of safe storage of the fuel rods will
still be a concern. Idaho will then continue to provide oversight for a long
time. Allred noted the President and Congress already had the opportunity
to say no to Yucca Mountain. He expects any challenge regarding Yucca
Mountain will address the adequacy of design or upgrades of the design.
He noted the design for Yucca Mountain is conservative in regards to the
number of useful years and designs for retrieval if there is a problem with
the repository or if there were economic issues.

Senator Kennedy inquired as to the amount of volume of nuclear waste
coming into Idaho. Trever stated in relation to national spent nuclear
waste, Idaho is receiving only a small amount of material. In 1995, Idaho
had 250 mega tons of heavily metal. The amount coming into Idaho each
year since 2000 is approximately 1 metric ton or less a year. The amount
of spent nuclear fuel is small compared to the national inventory amount.
Allred noted the shipping casts are large and very well shielded. They are
designed with an inside rack containing a few fuel rods. The interior of
the big thick shielded container has a few spent fuel rods inside. The rods
are removed from the shipping container and put into the swimming pools
and shielded underwater. Eventually this will be converted and put into
dry storage which uses large air-cooled containers.

Senator Stennett inquired about calcine testing. Allred stated in the mid
80’s Idaho took over the program. He noted a group disagreed with the
operation and alleged that the state has not handled its responsibilities and
has not required certain facilities to be permitted. Facilities were brought
into the program and given a part A permit, which was a matter of
submitting certain information. Those facilities that were going to
continue operation then had to obtain a part B permit, which was an
operating permit. Those facilities that were not going to continue to
operate were given interim status. A group petitioned EPA to withdraw
Idaho’s status to run the program because they alleged that Idaho had not
implemented the program according to law. Allred stated after a number
of investigations by EPA and EPA’s Inspector General, the Inspector
General found Idaho’s implementation and operation of the program was
according to the law. The Inspector General found no reason why the
program should be withdrawn from Idaho. There were some comments by
the Inspector General which will be implemented, but some of the
comments concerned Idaho’s enforcement discretion and the way the
federal government thought it should be used. Allred noted one of the
advantages of having primacy on the programs, is that Idaho has
enforcement discretion. He further noted Idaho’s program is good and
keeps a close eye on what happens at the site.

Stennett further inquired about security. Trever informed the Committee
of an active security force at the site which is tested periodically. There
are a variety of safeguards and management safeguards to ascertain the
material is responsibly secure. In regard to employees taking materials,
Trever noted one person was taking samples with small amounts of
radioactivity or chemicals home. The person was prosecuted. As a result,
DOE, the Inspector General, Idaho Attorney General, and Department of
Justice reviewed the sampling and management control system. Changes
were put into effect to assure that small quantities could not be removed
from the site as well. Trever noted there are quantities of radio active
materials used in commercial enterprises which are overseen by the
National Nuclear Regulatory Commission. All national state and
enforcement agencies are finding ways to assure those materials are
properly managed from the manufacturer to disposal. She stated the DOE
and Department of Defense are continually assessing and reevaluating
security. Upon further inquiry, Trever noted the number of security
personnel fluctuates depending on what is happening on site. The
upcoming contract will contain provisions determining management of the
security force. Trever further noted one project came to the site a facility
involving radioactivity materials from Ohio because of better security.

Senator Stennett inquired about Pit 9 and the status of the 88 acres. Allred
stated that people should not be walking across the area, but people could
without ill effects. He noted Pit 9 is providing significant information
concerning the retrieval processes.

Will Judge informed the Committee of his professional background and
his experiences on the Board this past term. He and his wife own and
operate St. Joe Outfitters and Guides, a background country lodge on the
Upper St. Joe River accessible only by horseback into the Wild and Scenic
Area. He noted the many issues handled by the Board and dealing with
many federal and state agencies, rules and regulations. As an individual
outfitter, he is concerned about the Endangered Species Act and the
consequences from that act.

Marc Brinkmeyer informed the Committee of his professional and
personal background, noting he has been a resident of the Sandpoint area
for over 20 years. His resume’ is attached to the original minutes of the
Committee. He noted the issues involving the lake are controversial and
the commission is hopeful to facilitate and negotiate for the best interests
of the lake and the surrounding communities.

Representative Eskridge urged the Committee’s approval of the
gubernatorial appointment of Brinkmeyer.

Swensen briefed the Committee on the background and history of the
Henry’s Fork Watershed Council. He noted in 1992 the Legislature
passed the Henry’s Fork Basin Plan to address the management of the
river for irrigation and water resource development. He noted this
coincided with the sixth year of drought. During this same time frame,
during work on the Marysville Canal for a hydroelectric plant a significant
amount of sediment went into the Fall River, added to management
concerns and conflict. In September 1992 approximately 50,000 tons of
sediment were released into the Henry’s Fork downstream from Island
Park Dam. As a result of the ongoing conflicts, meetings were held
throughout 1993 and the Henry’s Fork Watershed Council was formed.
He noted the Henry’s Fork Foundation and the Fremont-Madison
Irrigation District are co-facilitators of the council. $20,000 initial funding
was provided through the Bureau of Reclamation with an additional
$150,000 from a settlement in regard to the sediment spill. These funds
have been used by the council over the past ten years for the various
projects with a current balance of approximately $30,000.

In 1994 the council developed the Watershed Integrity Review and
Evaluation process which is the basis for evaluating projects proposed for
endorsement and/or funding. Since that time the council has reviewed 41
projects proposed by 80 different sponsors. Twenty-five of these projects
have been funded. The projects involved restoration, research and
monitoring and education programs. He noted the council has held many
educational and informational meetings in relation to water law and
management.

Through its role as a watershed advisory group several programs of note
are the upper Henry’s subbasin assessment, review of TMDL for scientific
basis regarding Henry’s Lake and the Henry’s Fork from Island Park to
Riverside. They have also provided the scientific basis for adding
Sheridan Creek to the list of water quality limited stream segments in
Idaho. The council/advisory group provided formal public comments on
the state’s 1998 draft list of water quality limited streams and proposed
changes to state water quality standards. Another benefit from the
establishment of the council and watershed advisory group is the
establishment of a cohesive community with common goals and an
understanding of individual concerns.

Steve Trafton, Executive Director, Henry’s Fork Foundation, stated the
foundation began in 1984 over concerns by anglers and trout fisherman.
There are currently over 2,000 members world wide. He noted the
Henry’s Fork is the world’s most famous trout stream. He further noted
the history of the Henry’s Fork Watershed Council that is set forth in the
handout attached to the minutes of the Committee.

Upon inquiry from Senator Burtenshaw, Swensen stated the Shoshone
Bannock Tribes went to the Forest Service in regard to a fish hatchery. He
noted the Tribes had been approached by a private individual about the
construction of a fish hatchery for commercial gain. The Forest Service
approached the Watershed Council for the initial scoping for the proposed
project. In processing the proposal, the council found problems with the
project, were not comfortable with the Tribe being used in this manner,
and the significant impact restoring the fishery would have on water
resources in the area.

Upon further inquiry, Trafton stated one reason for the Sheridan Creek
project was because of rainbow trout making their way to irrigation
ditches. The project fixed the various diversions, putting the stream back
into historic channel and providing fish passage around the diversions so
that fish from Island Park Reservoir would stay in the creek. Upon further
inquiry, Trafton stated he understood the new owner is very interested in
restoring the fishery on the creek. He noted there has been a significant
amount of resources devoted to Sheridan Creek to date.

Unsworth stated the primary functions of the lab are field assistance,
diagnostic services, genetic services and research. He explained field
assistance involves requested projects regarding animal health or capture
and transporting. The lab provides capture methodology, chemical
immobilization, biological sampling and necropsy. It provides diagnostic
services for all species of wildlife in the state. A data base is maintained
of all samples, necropsy and live animal samples received since 1998. He
noted the lab is in the process of completing a database providing an
overview of the scope and extent of disease for wildlife in the state. An
extensive serum bank has been accumulated over the past 10 years.

Unsworth noted a genetics specialist is on staff for species and sex
determination, along with genetic sequencing for population enumeration
and estimation. He further noted captive animals and the research
facilities are available to department personnel and collaborating
scientists, but the committee at the University of Idaho must approve all
projects, as well as follow the lab’s policies and procedures.

In regard to West Nile virus, Unsworth stated this is an area where the lab
could participate in relation to sage grouse. He noted some other areas
where the lab might shift their research efforts would require the
disposition of the animals. The Big Horn sheep have been moved to
Colorado to the USDA Research facility for a cooperative research
project. The bison will be moved to the Colorado facilities in the spring.
He noted the bison are in the last phase of research and the research on the
elk has been completed. The elk are now being butchered and sold.

In connection with cooperative efforts with the Department of Agriculture,
Unsworth stated over the past 2 years the Department of Agriculture and
the lab have discussed the possibility of combining facilities, along with
the University of Idaho. This has not progressed beyond the discussion
stage. There would be some efficiencies and the elimination of duplicate
equipment. Currently the lab uses the Caine Center for incineration. The
Department of Agriculture processes all blood and tissue samples. He
noted the overlap with other state programs.

Unsworth informed the Committee that the lab works closely with the
Department of Health in regard to the West Nile virus by sampling and
education. He noted crows and ravens are some of the first birds to carry
the virus. Samples are examined by the lab. Any disease that could
transmit from wild life to humans is a concern, as well as any possible
transmittal to livestock from wild life.

Upon inquiry, Unsworth noted the list provided to the committee is
significant and includes not only things done at the Caine Center and the
lab but things that are done between the field and those programs. He
stated they would like to emphasize the synthesis of the information
directly to field programs and how the information impacts management
decisions. The lab will still be cooperating on basic research. Eighty
percent of the funds provided to the Caine Center is for basic bacteriology
research. He does not anticipate that will change.

Upon inquiry from Senator Stennett, Unsworth stated that chronic wasting
disease has not been discovered in antelope. Upon further inquiry,
Unsworth stated the Rainey Creek (south fork of the Snake River) elk
tested positive for brucellosis and are most likely to transmit the disease
when they are pregnant. Processing plants are reluctant to take the elk
from a human safety standpoint. In relation to the big horn sheep, 2 rams
are being euthanized because there was no research interest in them.

Upon inquiry from Senator Little, Unsworth stated the costs for DNA
testing is $20 a sample and is done at the lab for some species. Dr. Karen
Rudolph does the DNA work for the lab. The processing time is a few
days. The lab has the capability to do DNA for deer, elk, all the big game
animals to identify by sex and species.

Upon further inquiry, Unsworth stated the lab is interested in remaining at
the present facilities because there is no rent and the only expense is the
utilities. The holding pens are in good shape and the lab will always need
the ability to house animals temporarily. He noted there is always the
possibility of live animal research when funding is available. The lab
would be interested in changing facilities if they were better and more
economical. Senator Little expressed concern about urbanization around
the lab.

Chairman Noh welcomed the new Dean of the College of Agriculture, Dr.
Hamer, who was in attendance.

Motion by Senator Cameron to approve the minutes of January 28, 2004;
seconded by Senator Williams; motion carried.

Judi Danielson

The subbasin planning is set to have all the plans submitted by May 28.
She stated this was the biggest planning process in the United States with
the first subbasin plan submitted from the Clearwater area in Idaho. The
Kootenai plan will be submitted in mid-March to the independent science
review panel. There is a total of 58 plans to be considered in May.
Danielson noted the Portland staff and state staffs have been scheduled to
work through all holidays without vacations through the summer so the
plans can be ready for amendment. The public review process will be then
undertaken. She is hopeful of having the project done by December 2004.

Danielson noted the power plan is also underway and is headed by Jim
Kempton, Idaho’s other representation on the council. Danielson is the
elected chairman of the council again this year. She acknowledged the
good work and efforts by Kempton in furthering the power plan. Upon
inquiry, Danielson stated Kempton is responsible for Idaho’s power interest
and she handles fish and wildlife resources.

Upon inquiry from Senator Stennett, Danielson responded she felt the
council had progressed further than ever before. The council is now more
aggressive in fulfilling the responsibilities of the Power Act. The financial
issues with Bonneville have taken a lot of the council’s time.

Upon further inquiry from Senator Stennett, she stated some of the first and
very innovative water basin plans were from the Lemhi Basin.

Danielson explained the fish and wildlife program is funded at $139 million
less $12 million for Bonneville’s expenses for administration. Also funding
for the scientific review panel through the Gorton Amendment is taken out
of the fish and wildlife program. There is approximately $114 million
remaining which the council administers through the Act. The projects are
submitted to the council and then forwarded to the scientific review panel
followed by the public review and recommendations to Bonneville. If
Bonneville does not fund them, there is a process under the Act which
Bonneville must complete. Generally Bonneville takes the advice of the
council.

Motion by Senator Little to recommend the appointment of Marc
Brinkmeyer to the Lake Pend Oreille Basin Commission be confirmed by
the Senate; seconded by Senator Brandt; motion carried.

Senator Little inquired if there were other misdemeanors with the 5 year
statute of limitation. Steve Barton, Department of Fish and Game,
informed the committee that some medical statutes have the 5 year time
frame.

Fred Christensen, President, Citizens Against Poaching, provided a handout
to the committee on S 1380, noting the information from other states
regarding fish and game misdemeanor statute of limitation.

Motion by Senator Stennett to send S 1380 to the floor with a do pass
recommendation; seconded by Senator Kennedy. Voice vote. Chairman
Noh asked for a roll call vote:

Ayes: Kennedy, Stennett, Noh

Nays: Brandt, Cameron, Little, Pearce, Schroeder

Absent: Burtenshaw, Williams

Motion failed.

Dreher stated the order is lengthy because it is written to provide as full a
background as the department can provide. The issue is contentious and
some or all of the issues will be litigated. The order explains the
department’s use of the model to simulate the affects between ground and
surface water that are reliant on the source. The Eastern Snake Plain
Aquifer is a unique source and comprised of large complexes of jointed
basalt with a high hydrological activity and a large amount of water in
storage. He noted the estimates vary but there are 10s of millions of acre
feet of ground water potentially in storage in the aquifer. East to west in
the aquifer the depth decreases and water exits at the Thousand Springs
reach. He stated the springs would not discharge if the aquifer was empty,
but the spring discharges are very sensitive to fluctuations in ground water
levels. Because of the 4 years of drought, ground water levels which have
been stable since 1980 have now declined by approximately 30 feet in the
area of Gooding. Some areas are more and some are less. He stated 30 feet
is not significant in terms the saturated depth of the aquifer, but the
variation does impacts the discharge at the springs. On top of the affects of
the drought are affects which have occurred and still occurring because of
changes in surface water irrigation systems as well as the development of
large ground water rights. Those depletions have a potential for injury to
water rights. He noted because ground water cannot be seen and it can only
be measured indirectly, the ground water model must be used to simulate
what is happening. Dreher stated there is no other way to measure or
quantify the impacts and relationship between ground water diversions and
surface water diversions. He noted the department has tried over the last
couple of years to equip certain wells with power meters which record
when a well goes on and off. Additionally, several springs have been
outfitted with real time recorders and the department has attempted to see if
there is a meaningful correlation between when certain wells close to the
rim turn on and what happens to spring discharge immediately below. The
department has been unable to determine a correlation even though it has
been regarded by many as being in existence. At this point, the department
is left with the information from the model. The springs do not discharge at
a constant rate because of interrelated factors and the affects of which
cannot be separated at this time. The application of surface water for
irrigation on lands above the springs has an impact and does affect the
pattern of the spring discharge. The surface water irrigation was
established in the late 1800’s and has existed for many decades. The pattern
of variation of spring discharge has existed for a significant period of time
and existed at the time that most of the water rights for fisheries facilities
were appropriated begin in the 1960’s.

Because of the drought in 2001, the director was required to make the
determination that diversion and use of ground water under relatively junior
priority water rights was causing injury to surface water rights of more
senior priority water rights in the Thousand Springs area. The director
determined under the law what was necessary to begin implementation of
conjunctive administration on the Eastern Snake Plain aquifer and
connected sources. Dreher noted the Snake River is hydrologically
connected to the aquifer in four locations: from Lewisville to the Idaho
Falls area; from Shelley to Blackfoot to Neeley; from Neeley to below
Minidoka; and from Milner to King Hill, which contains the Thousand
Springs area. In 2001 because of the affects of several years of drought, the
department designated two ground water management areas: Thousand
Springs Ground Water Management Area and American Falls Ground
Water Management Area. The intent was to issue notices of curtailment to
water rights junior in priority to 1967 beginning the next irrigation season.
Subsequently negotiations were begun between surface water users and the
ground water users which resulted in a stipulated agreement. The
agreement provided that the ground water users would supply an amount of
replacement water in exchange for not having the senior priority of the
surface rights exercised against them. There was an agreement to reduce
the overall ground water use. The amount of the surface water that was
provided pursuant to the agreement was based on use of the department’s
then existing ground water model. At that time, the department did not
have a means by which to segregate depletions caused by ground water
based on priority date of the right. As an interim measure, the department
used criteria to review the ground water rights junior in priority to 1967 that
were located such that 50 percent of the depletion from those rights was
expressed in the form of diminished reach gains or spring discharges within
six months. The criteria were developed in anticipation of litigation from
the ground water users claiming that there was not a significant affect from
their use of ground water. The criteria was devised with the premise that a
court might find the criteria reasonable.

Dreher stated there was concern at the time that the reliability of the
existing ground water model was unknown. The reason it was not known
even though it was calibrated but it was calibrated for one year, 1980.
Models like this have numerous assumptions that are made in them all of
which were undocumented. An undocumented model would be very
difficult to defend in litigation. At that time, the director initiated efforts to
reformulate and recalibrate the ground water model in a collaborative
method between the Department of Water Resources, University of Idaho,
Bureau of Reclamation and the US Geological Survey. For the past 3
years, the collaborating group has been working to reformulate and
recalibrate the ground water model and quantify the likely uncertainty
associated with it with detailed documentation. The new ground water
model is essentially completed and is calibrated over a period of 22 years
through a computerized method. The model has a much finer grid which
will allow the department to divide the 4 reaches of the river into
subreaches and begin to refine what the model is able to determine. Dreher
noted the information from the new model indicates the old model’s results
are closer than anticipated. Regardless, the new model was needed because
of the documented information and quantification of the reliability.
Additionally, the finer grid allows the department to subdivide the reaches
for better decisions. He noted the department is satisfied with the results
except with the Thousand Springs reach. Dreher noted it was difficult to a
use this type of model to simulate the kind of flow which occurs through
the fractured basalt at the springs. That kind of discharge does not follow
the normal rules associated with the movement of ground water through an
aquifer system. The department has undertaken adjusting the calibration to
improve the predictions by the model for the Thousand Springs area.
Dreher stated the department developed a tool which allows for the
segregation of ground water use and depletions based upon priority date.

Dreher informed the Committee an order was issued last year dissolving the
Thousand Springs Ground Water Management Area and reducing the size
of the American Falls Ground Water Management Area. This was done to
avoid conflicting requirements regarding the administration of ground
water rights. Dreher stated, as a result of the stipulated agreements, there
was another agreement to support the state in seeking authority from the
SRBA court to initiate interim administration of water rights that had been
partially decreed. This was supported by both surface and ground water
users and the authority was granted by the court. Two new water districts
were created as a result: Water District 120, which is in the American Falls
area, and Water District 130, which is in the Thousand Springs area.

The statues pertaining to the administration of water rights provide that
curtailing junior priority uses in a water district can be accomplished
quickly once it is determined that injury is occurring, curtailment is
necessary and any mitigation does not offset any injury. In a ground water
management area, the statute requires any curtailment must be noticed prior
to September 1 of the year preceding when the curtailment is to occur. By
abolishing the Thousand Springs ground water management area and
reducing the size of the American Falls area, all of the ground water rights
in 130 were no longer in a ground water management area. All the ground
water rights in 120 were also not in a ground water management area. The
action was not taken because the springs had improved but because the
springs had not improved and have continued to decline.

In further describing the order, Dreher stated the conjunctive rules were
adopted and passed into law in 1995 before he became director. The rules
were properly promulgated; the Legislature has never rejected, amended or
modified the rules so the rules are final. The rules have been applied to the
delivery call made by Rangen, Clear Lakes and other fish producing
entities.

In relation to the Rangen call, there are 3 rights: 1957, 1962 and 1977. The
1977 water right does not apply to the call because there is no information
in the department’s files that water was ever diverted and applied for
beneficial use. The 1977 water right, licensed by the department, was
based on an estimate of the spring discharge made by the water master of
district 36A five years before the application. Dreher has determined that
water right was inappropriate and the department erred in issuing that
license. The licensed amount is supposed to be the amount that has been
actually diverted and applied to beneficial use and there is no evidence it
ever was. Because a license had been issued for the right, the department
made a recommendation in the SRBA to decree the right based upon the
license. There is a decree for the 1977 water right and the department has
no legal authority to overlook the court decree. Dreher further stated that
according to common law of prior appropriation, the department does not
believe Rangen has the right to call for curtailment of junior priority ground
water use that has actually been diverted and applied to beneficial use when
water was never available to Rangen and applied to beneficial use.

Dreher then explained to the Committee the sketch appearing on page 10 of
the order depicting the Rangen facilities. One diversion is the Curran
Tunnel which is water from the Curran spring and is diverted by Rangen
and 2 senior priority irrigation water rights dated in the 1800s. The total
amount of water available to Rangen is the sum of the water discharged
from CTR raceways plus the water that flows over the check dam above the
CTR raceways. He noted that is water which has been diverted through the
facilities and was returned to Billingsley Creek or was available but not
diverted. The first of Rangen’s water rights has been continuously
satisfied. The second water right has not received the entitled supply of
water since 1987. The order further sets out a comparison chart of the
maximum daily flow and the average daily flow for the years 1987 and
2003. 1987 is the last time that the second water right was satisfied during
a period in November. The chart shows the significant diminishing of the
discharges.

Dreher stated when there are complex factors resulting in the diminished
discharge coupled with the depletion by junior priority ground water rights
injury definitely occurs. The maximum injury to the second priority water
right is determined by comparing and determining the quantity of water
diverted in 1987 versus 2003. The administration of ground water rights is
new in Idaho and evaluations have not been made before. The director is
required to determine that means of diversion are reasonable. Rangen has
made reasonable efforts. Dreher noted it is also necessary to determine
whether there are reasonable alternatives for obtaining and diverting water.
The department had no basis to determine that there were alternative means
at this time. Based upon the diminished water available and other factors, it
was determined that material injury was occurring. The existing ground
water model was used to segregate depletions from ground water rights
based on priority date. The model was used to simulate the total
curtailment of ground water rights junior in priority to July 13, 1962, in
water districts 130 and 120. The results indicated that junior ground water
diversions in the 120 American Falls area do not cause significant
depletions. The model results curtailing ground water use in water district
130 indicated that if junior ground water rights were fully curtailed then at
the end of 1 year a total volume of additional water would be discharged
throughout the Thousand Springs area. This was the basis for determining
what could be expected from ground water curtailment and what could be
done to replace ground water curtailment. Dreher further stated if the
curtailment lasts 2 years or more the amount of additional water will
increase each year until a new steady state is reached in the aquifer system.

Dreher stated because of the interest in how the calculations were
determined, the department has scheduled a status conference pursuant to
another contested case which is pending before the department. At that
time the department will explain how the modeling is done. The status
conference will be held March 5 at the offices of the department. The
purpose of the status conference is to provide a forum for the department to
present the methodology and the results used to calculate the numbers.
This will enable the information to be provided to interested parties as
quickly as possible.

Dreher stated the order instructs the water master for 130 to issue written
notices within 5 days of the order to holders of consumptive ground water
rights that are junior in priority of July 13, 1962, including rights for
agricultural, commercial, industrial, municipal and other uses. The notice
is to inform them of the issuance of the order and they are prohibited from
diverting ground water or continue diverting water beginning April 1. The
notices were issued February 26 by the water master.

In order for the curtailment not to go forward, Dreher stated the holder of
the senior priority right is entitled to divert a quantity of water from the
source under its priority date. One way that this can be mitigated is if the
ground water right holders deliver an amount of water to Rangen equal to
the injury. Dreher further noted in this action, the right is a fish production
right which relies on a certain level of water quality so not just any water
will do. If the ground water right holders elect to replace the water, the
water has to be of a quantity and quality sufficient for the purposes of
raising fish. Additionally, the water has to be delivered at a location and
at a time that the water is usable by the senior water right holder. He noted
this would be difficult to do, but is an option the junior ground water

right holders have. Dreher further stated the order gives notice of another
pending order that may cause this order to be inadequate to avoid
curtailment of some portion of consumptive ground water rights. He noted
a whole series of calls have been made since Rangen’s and one call was
made prior to Rangen’s.

Dreher further stated another option would be for the junior ground water
users to supply to the reach an amount of water equal to what the reach
would receive if curtailment was made. Delivery to the reach is necessary
because the existing ground water model and the new ground water model
cannot be used to accurately calculate the affects from junior ground water
diversion and use on a particular spring. The only calculation of the affects
of curtailment that can be predicted is to the reach. If junior ground water
rights are curtailed, pursuant to this order, the department does not know
how much will be of benefit to Rangen. He further noted the department
does not know how much of replacement water which may be provided
would go to Rangen and how much to other facilities. He stated there is no
way to estimate that information. Dreher stated this is the best that can be
done at this time. The deadline for submission of a replacement water plan
is April 1 and until the plan has been approved the junior ground water
right holders cannot divert water. If a plan is approved, the junior ground
water right holders will be required to document the replacement water on a
monthly basis. If the junior ground water users are unable to substantially
comply with the plan, curtailment of right that are junior will be
implemented.

Dreher noted the order is for one year. The department is unable to
determine what the obligation may be for the subsequent years and
subsequent orders will be issued setting forth the curtail provisions or the
obligations to provide replacement water. He further noted there is a
provision for late season deliveries of water. The replacement water would
be most effective if it is delivered via the North Side Canal Company
facilities. In order to meet any replacement obligation, the North Side
Canal Company facilities must be used. He noted those facilities divert
irrigation water during the summer and there is limited canal capacity
available to get replacement water through the facilities. Dreher stated the
opportunity has been left open for the replacement water to be delivered
after August 31 or as long as the North Side Canal Company facilities can
deliver water. This will ensure every opportunity is available to get water
to the reach in a way that will increase the spring discharges.

Motion by Senator Schroeder to approve the minutes of January 26, 2004
seconded by Senator Williams. Motion carried.

is to clarify that small in stream barriers that store water and which are in
low risk areas remain under the jurisdiction of the Department of Water
Resources. The department may decline to regulate such barriers that
store water based on the department’s determination but exclusive
jurisdiction would remain with the department. Semanko noted the
legislation is intended to avoid unnecessary and duplicate regulation by
other regulatory entities, such as cities and counties. For public safety,
ensuring uniform engineering standards established by the department for
construction, maintenance and operation would be regulated only by the
department. These same standards would apply to barriers that are
classified as dams by the department. He noted the legislation would
provide a means to avoid conflicts between regulatory entities when the
department determines that regulation of a barrier or dam is necessary.
The legislation is intended to assure jurisdiction resides in the Department
of Water Resources and there is not duplicate regulations from other
entities.

Senator Burtenshaw expressed concern that barriers in existence for many
years which are solid, sturdy with trees planted and gravel would not meet
the qualifications. Semanko replied that nothing in the legislation will
require the department to do new inspections that they haven’t already
been doing. The inspections would be every 5 years instead of every 2
years for dams. Burtenshaw stated he believed the barrier at Mud Lake
has been maintained by the users. He stated there are now provisions for
excess water to be pumped out and the barrier cannot be overfilled.

Upon inquiry from Senator Kennedy, Semanko stated that the director
serves on the legislative committee of the Idaho Water Users Association
and has been in attendance at the meetings discussing this legislation and
has expressed no opposition.

Phil Rassier, Deputy Attorney General, Department of Water Resources,
stated the department does not oppose the legislation but is not actively
supporting it. There is a concern by the dam safety division personnel that
there not be an increase to the department’s work load. Rassier noted this
was not the intent of the sponsors of the legislation. The department
cannot do anything more than it presently does with respect to regulation
of facilities. He further noted the legislation sets out “if regulation is
required,” regulation is to be exclusively by the department.

Upon inquiry from Senator Stennett, Semanko stated nothing in the
legislation would affect the current jurisdiction over private canals and
there is no intent to change that.

John Priester, Engineer for Ada County, explained the county’s opposition
to the legislation stated the ordinance which guides such regulation is
administered through the planning and zoning office by the county
engineer. Priester stated the county does not regulate dams. The county
ordinance restricts damaging construction in the foothills and hillside areas
where there are steep slopes of 15 percent or greater or erosion concerns
along with slope stability. He stated the ordinance is intended for
proposed development. Any work in the foothills is considered
development because it could impact people and property down stream.
He stated that ordinance is known as the “Hillside Ordinance.” Under the
regulations for a dam, there would need to be proper design and
construction. He noted these are the requirements of the county. Another
area of concern is the regulation of flood plains in Ada County. There is a
foothill flood-way provision which applies to a structure built across a
water way that is considered a flood way. Ada County asked that the
structure be removed and rebuilt to allow proper room for the flood way.
Ada County wants to be able to continue to regulate development and
structures which may impede and slow the flows of the flood way stream.
He further stated the county opposes the legislation.

Chairman Noh inquired if Ada County had been approached by the Idaho
Water Users Association in regard to the legislation. Priester stated he had
not been directly involved but is interested in the proposed process.

Upon further inquiry from Chairman Noh, Rassier stated the department
considers the risk to human safety and to property, but not necessarily to
sediment control. He further stated that sediment control could result in
damage to real property.

Matt Howard, Boise attorney, informed the Committee of events in Ada
County contributing to the drafting of the legislation. He stated he
represents clients who own a small dam he wonders why this legislation is
necessary. He explained the dam was pre-existing, with storage of a water
right dating back to 1910. The dam hold less ½ acre foot of water. The
dam did not fail but an excavator, in cleaning out the pond which is fed by
a spring in the bottom of the pond, got too close to the sides and slide into
the pond and the dam breached. This caused sediment to flow into
McFarland Creek. The Corps of Engineers and the Department of Water
Resources under the Stream Channel Protection Act ordered remedial
action. Subsequently the dam was reconstructed and the county believes
the new dam poses a hazard to public safety. The Department of Water
Resources’ dam safety engineer inspected the pond to determine if the area
was low risk. The low risk determination by the department meets the
requirements that the dam poses no threat to permanent structures or
human habitation and there is only a little threat to down stream lands.
The department engineer determined that if there was total failure of the
dam the potential for damage was very low. The department also
determined there was no threat to permanent structures for human
habitation and very little threat to down stream lands. The preliminary
determination was made by the department and is not final. The county
has just issued a determination stating that the dam poses a risk to the
public safety and there could be substantial damage if the dam collapsed.
The landowners are being told by the experts of the Department of Water
Resources the dam is in a low risk area but are being told by Ada County
the dam poses a threat to public safety. The purpose for the legislation is
to clarify the authority. He noted the landowners are not opposed to
regulation but it must be clarified who has the regulation authority.

Upon further discussion by the Committee, Senator Little requested to
hold the legislation for a couple of days to obtain further information.

Chairman Noh, hearing no objection, stated the legislation will be
continued at a later date.

H 482aa

Steve Barton, Department of Fish and Game, explained H 482aa would
change the price for a controlled hunt application and for a controlled hunt
permit. He explained because the current prices are the same, confusion
has been created. The new controlled hunt permit fee would be $6 and the
controlled hunt application fee would be $4.50.

Motion by Senator Schroeder to send H482aa to the floor with a do pass
recommendation; seconded by Senator Kennedy. Motion carried.

Motion by Senator Schroeder to send H 623 to the floor with a do pass
recommendation; seconded by Senator Cameron. Motion carried.

Carl Ray, co-chairman, Idaho Fish and Game Advisory Committee, stated
the committee was created by statute to provide oversight of the state’s big
game depredation program. He stated H 700 has been presented to the
Idaho Wildlife Federation, the original wildlife councils, Idaho Cattle
Association, Idaho Grain Producers, Idaho Hay Growers, and the Idaho
Farm Bureau. Over the last 2 years there have been several versions of the
legislation. H 700 accomplishes what the previous proposals did not. The
legislation is acceptable to the sportsmen and to agriculture. The advisory
committee believes H 700 will streamline the procedures and make it
easier to administer the depredation program. The use of a crop adjuster
will lead to fewer claims for arbitration. He stated there are not many
claims that go to arbitration now.

Upon inquiry from Senator Cameron, Ray stated the funds are available to
make the change inasmuch as the change would not affect the total claim
amount. Steve Barton, Department of Fish and Game, stated there would
be no adverse impact based on the last 10 years of payments out of the
depredation account.

Motion by Senator Kennedy to send H 700 to the floor with a do pass
recommendation; seconded by Senator Cameron. Motion carried.

Mark McKintrick, Idaho Forest Owners Association, appeared before the
Committee and urged the Committee’s support of H 670.

Motion by Senator Brandt to send H 670 to the floor with a do pass
recommendation; seconded by Senator Pearce. Motion carried.

Motion by Senator Kennedy to approve the minutes of February 9, 2004;
seconded by Senator Little. Motion carried.

Motion by Senator Williams to approve the minutes of February 11, 2004;
seconded by Senator Brandt. Motion carried.

Upon inquiry from Chairman Noh, Biladeau stated if the board made a
decision not to hear the testimony or issue, the option of litigation would
still be available. An injured party in the particular issue would have
standing.

Senator Stennett inquired if the legislation would allow the land board to
sell property without citizens having the opportunity to discuss the matter
with the land board if the board decided not to hear the case. Stennett
inquired if local planning and zoning have no authority over state lands,
how can a citizen participate? Biladeau stated the sale of state lands are
noticed to the affected counties for their input. A sales plan submitted to
the board includes that any comments by the county are considered at that
time. The department attempts to involve any one, such as an adjacent
land owner, that the department is aware of, who have a concern about a
parcel. He noted the transactions are also advertised. The intent of the
legislation is to clarify procedures under the Administrative Procedures
Act.

Dick Rush, Vice President Natural Resources, Idaho Association of
Commerce and Industry, stated their support for H 669 because the
legislation would clarify the State Land Board’s management authority
and decisions.

Judy Bartlett, Idaho Farm Bureau Federation, stated their support for H
669.

Motion by Senator Cameron to send H 669 to the floor with a do pass
recommendation; seconded by Senator Pearce.

Senator Werk provided a handout to the Committee from the Office of the
Attorney General, dated March 1, 2004, which is attached to the original
minutes of the Committee. Senator Werk supports the legislation.

Roll call vote:

Ayes: Brandt, Burtenshaw, Cameron, Little, Pearce and Williams

Nays: Kennedy, Schroeder, Stennett and Noh

Motion carried.

would provide for a minimum fee in addition to the amount required under
the fee schedule which is based on reservoir storage capacity. Fees
collected will be for design review of the construction of new dams or
alterations to existing dams. Most of the applications received by the
department are for small storage capacity dams but can require many
hours for review. The present amount does not adequately reflect
department costs. The legislation would provide for a minimum amount
of $200 to the added to the application fee based on storage capacity. The
department is responsible to carry out the provisions of the Dam Safety
Act.

Motion by Senator Burtenshaw to send H 593 to the floor with a do pass
recommendation; seconded by Senator Stennett. Motion carried.

Motion by Senator Cameron to send H 633 to the floor with a do pass
recommendation; seconded by Senator Stennett. Motion carried.

EXCUSED:

Chairman Noh informed the Committee April 1 would be the deadline for
submission of plans pursuant to the order of the director of the Department
of Water Resources in the Hagerman area call for curtailment. He noted
negotiations have been underway with the current status unknown at this
time.

Jim Caswell, Office of Species Conservation, stated the amendment to the
10(j) rule will be published in the Federal Register on Tuesday. The
amendment will provide equal footing between the state, Tribe and federal
government. He complimented David Hensley, Office of Species
Conservation, and Michael Bogart, Governor’s Office, for their
negotiations with the Department of Interior on this matter.

Hensley provided to the Committee a copy of the proposed amendment
and a copy of his power point presentation in regard to the amendment.
Copies of both documents are attached to the original minutes of the
Committee. The goal was to increase the state’s management role and to
increase the flexibility for taking wolves, especially in regard to big game
herds, private property and domestic animals, including pets. The results
are 2 rules for nonessential experimental wolves in Idaho, Montana and
Wyoming: the amended 10(j) rule and the current 10(j) rule. He noted the
current 10(j) rule contains provisions for states without approved
management plans, such as Wyoming. The amended rule increases
management responsibilities and provides flexibility for the states with
approved management plans, such as Idaho and Montana. The amended
rule provides for two levels of management in Idaho, the ability to
implement lethal means or to move wolves impacting big game herds, the
protection of domestic animals (including pets) and the expansion the
criteria for the issuance of permits for taking wolves on private property.
Hensley noted the amended rule will apply to the area in Idaho south of
Interstate 90. Under the federal rule making process, after the publication
in the Federal Register there will be a 60 day comment period. He stated
the rule could be finalized early this summer.

Hensley stated the amended rule allows management flexibility which
would allow taking wolves by lethal means. In relation to private land, the
amended rule would provide the ability to shoot, wound or kill a wolf in
the act of biting, wounding, grasping, molesting, harassing or killing
livestock, livestock guard animals or domestic animals.

The amended 10(j) rule provides that “in the act” means the actual biting,
wounding, grasping, molesting, harassing or killing or the reasonable
belief that such biting, wounding, grasping, molesting, harassing, or
killing is imminent. In relation to private land, the amended rule would
also allow wolves to be taken on private land if there is a depredation of
livestock or domestic animals on owned or adjacent private property or if
wolves are present and pose a significant risk to livestock or domestic
animals. The management flexibility would provide for a permit allowing
the taking of a wolf would be good for one year. In relation to ungulates,
wolves can be remove if there is an unacceptable impact on big game
herds in the state. The impact on big game herds would involve mitigation
and consultation regarding wolf recovery levels.

Additionally, the amended 10(j) rule defines “unacceptable impact” as any
decline in an ungulate population so that population is not meeting
established state population management goals, with recruitment that does
not allow the population to recover. He further noted under the current
rule, as well as the amended rule, anyone can take a wolf in self defense
and in the defense of others.

Steve Huffaker, Director, Department of Fish and Game, stated the
department has the ability to determine what is the unacceptable impact.
He noted “unacceptable impact” is defined in the amended rule as a
decline in an ungulate population to below the published management
goals for deer and elk herds statewide. If the population is below state
goals and there is documentation recruitment into the population is not
sufficient to allow the population to recover to management goals, then the
department can control the wolves. This gives the department
management capability in the back country where there are habitat
problems and the department has endeavored to increase the harvest of
black bears and mountain lions and the elk populations are not recovering.
The data will be compiled and presented to the US Fish and Wildlife
Service and the management determination will take into consideration the
total status of the state wolf population not just the population in a given
area.

Upon inquiry from Senator Little, Hensley stated the primary goal is to get
to a holistic management approach and manage the species in
consideration of other species. Huffaker added that in the rule there is no
provision for taking wolves that are impacting anything other than
livestock, pets and ungulates. He does not anticipate significant impacts on
other wildlife. Hensley noted that lawsuits are anticipated and they have
planned vigorous defenses. Hunting wolves in a open season is not an
option at this time.

Hensley noted, upon inquiry from Chairman Noh, that if the rule is
enjoined there will be no implementation. The 4d rule has not been
enjoined so the process is operating. Secretary Norton has stated that
everything is subject to litigation and they are well prepared for that. The
rule is legally solid.

The status of wolves in neighboring states will operate under the Western
Distinct Population Segment (DPS) which provides that anywhere a wolf
shows up in an area that is not designated a non-essential experimental
area, it will be treated as threatened. If a wolf crosses into Utah, it is
considered as threatened. The down listing proposed rule would change
that. Hensley further stated that it is important to note that there are two
wolf populations in the state. Prior to delisting, if the down listing
succeeds, the state should manage the wolves under provisions of the state
plan regardless of the arbitrary line, Interstate 90. Idaho would negotiate
with the federal government in a two step process. First, to increase the
authority language within the current 4(d) rule that mirrors the authority
language in the 10(j) rule. The second step would be negotiating one
memorandum of agreement with the federal government for wolf
management in the state of Idaho under provisions of the state plan. When
wolves are delisted, there will be one state management plan that will
manage the wolves within all of Idaho.

Upon inquiry from Senator Pearce, Huffaker stated the department has
been keeping track of ungulate populations as part of routine management
procedures. The funds from Congress further enabled ungulate monitoring
in wolf management areas. He noted the Tribe, in the 8 years prior to the
state’s involvement, did not collect data on ungulates in conjunction with
their activities. The Tribe solely monitored locations of radio collared
wolves and collaring the wolves and documenting reproduction. The
department will continue the ungulate monitoring and assemble the
information for presentation to the US Fish and Wildlife this summer. The
department could potentially begin managing wolves this summer. He
stated the department will need to determine how many wolves can be
taken under permit on private property because of depredations and how
many can be taken to control depredation of ungulates. Unless there is an
injunction, the department will be able to proceed with management under
the rule when it goes into effect.

Huffaker stated the department has known for some time that in the
Lochsa-Selway country, where there are habitat problems for elk,
depredation by bear and mountain lions, wolves are having a depressing
effect on the elk population. He anticipates the department will be able to
demonstrate that impact. He noted one of the concerns is there are a lot of
wolves in that area that have not been radio collared through the tribal
program. It will be difficult to determine the number of wolves and
documentation will be necessary. The department will attempt to use
radio monitoring to document the 15 packs and the number of required
breeding pairs under ESA. It is in the department’s best interest to radio
collar additional wolves for control action documentation to prove wolf
conservation requirements are being met. Eventually, as wolves continue
to expand the department will be able to verify the presence of a wolf pack
in areas where they do not have radio collars. He noted wolves are going
to continue to spread out throughout the west.

Jeff Allen, Office of Species Conservation, stated the only entity with a
memorandum of agreement with the US Fish and Wildlife Service is the
Nez Perce Tribe. The state does not have a MOA with US Fish and
Wildlife Service in regard to wolves. A MOA is under negotiation with
the Tribe upon resolution of the outstanding issues and concerns, the
signing of the MOA would allow the state to take the MOA to the US Fish
and Wildlife Service to negotiate an MOA with them to carry out the
provisions agreed to with the Tribe. If the tribe and the state fail to reach
agreement, the US Fish and Wildlife Service may negotiate their own
MOA with the Tribe. This option results directly from the legislation
prohibition against the Department of Fish and Game participation in wolf
recovery at the time of reintroduction of the wolves under the
experimental designation.

The Governor has indicated a desire to see the Tribe maintain a significant
role in wolf activities. Allen stated this could include monitoring the wolf
population in the Clearwater area and participating in the out reach efforts
in the Clearwater and McCall areas. The state would have primacy over
those activities elsewhere in the state and coordinate the monitoring and
the outreach with the Tribe within the Clearwater area.

Chairman Noh announced a change in the agenda regarding the order of
hearing the legislation with RS 14178 to follow H 634aa.

Andy Brunelle, U.S. Forest Service, reminded the Committee of the
invitation extended to meet with Forest Supervisors Tuesday, March 9
from 7-8 am in the J.R. Williams Building, West Conference Room.

Norm Semanko, Idaho Water Users Association, stated the association’s
support for H 592.

Motion by Senator Burtenshaw to send H 592 to the floor with a do pass
recommendation; seconded by Senator Little. Motion carried.

Theresa Baker, Ada County, the county has liability concerns, but support
the proposed amendments.

Motion by Senator Little to send H 635 to the fourteenth order for
amendment; seconded by Senator Cameron. Motion carried. Norm
Semanko and Karl Dreher will work with Legislative Services on the
proposed amendments to H 635.

John Tensen, City of Boise engineer, stated the city’s concern for the
clarification of rights of way and the varying widths of those rights of way.
He stated it was often difficult to determined the land owner and to obtain
approval. He suggested the notification provision of the H 634aa provide
for notification by certified letter. This would allow the work to be done
after the expiration of a certain time without approval. He noted many
times the irrigation or land owner fail to respond to requests.

Jeff Hess, Hawkins Companies, stated the legislation would be an
unreasonable requirement for developers because canal companies could
unreasonably deny or withhold approval. He suggested that if there is no
response from the canal company or land owner within 30 days then the
work could proceed.

Tom Miller, Payette rancher, stated his concern that H 634aa would take
away land owner rights. He noted the legislation should take into
consideration agricultural interests. Additionally, he also noted
unreasonable or lack of action by the canal company would stop any
necessary work from being done.

Judy Bartlett, Idaho Farm Bureau, noted the canals are used for the
delivery of water and maintenance of the canals are necessary for this
purpose. She stated the Farm Bureau supports H 634aa.

Motion by Senator Burtenshaw to send H 634aa to the floor with a do pass
recommendation; seconded by Senator Brandt.

Substitute motion by Senator Stennett to hold H 634aa in committee;
seconded by Senator Kennedy.

Roll call vote on substitute motion:

Ayes: Kennedy, Schroeder and Stennett

Nays: Brandt, Burtenshaw, Cameron, Little, Pearce, Williams and Noh.

Motion failed.

Voice vote on original motion passed with Senator Kennedy, Schroeder
and Stennett voting nay.

Senator Stennett inquired about a controversial proposed project in the
Sawtooth Mountains. Gorsuch stated she was unaware of a proposed
project in that area. The Central Idaho ecosystem project encompasses
Valley County area.

Robert Maynard, Boise attorney, Perkins Coie, stated his firm has the
consulting contract with the Department of Lands to assist in
implementing the pilot projects. He noted the two reports issued in
relation to the proposed pilot projects: Federal Lands Task Force report in
1998 and the Federal Lands Force Working Group report of 2000. He
provided to the Committee an Idaho map depicting the five proposed pilot
project areas. A copy of the map is attached to the minutes of the
Committee meeting.

The pilot projects focus on federal public lands administered by the Forest
Service in Idaho. The projects are about testing more collaborative
effective ways for federal agencies to work with the state and local
governments and citizens in the management of the federal lands. He
noted no federal lands will be transferred to the state. He further noted it
does not encompass transferring the decision making authority from
federal to state. Environmental protection will not be reduced on these
lands. The projects are designed and intended to improve management
with less conflict.

He noted the Federal Lands Task Force Work Group report was approved
by the Idaho Board of Land Commissioners in February 2001. It was
thereafter transmitted to the Idaho Congressional delegation for
consideration. The Department of Lands was directed by the Board of
Land Commissioners to support the implementation of the report in
Congress. His firm consults with the Department of Lands for the
implementation of additional pilot projects.

The five proposed pilot projects are: Priest Lake Cooperative, St. Joe
Ecosystem Stewardship Project, Clearwater Basin Stewardship
Collaborative Project, Central Idaho Ecosystem Trust, and Twin
Falls/Cassia Resource Enhancement Trust. The leading project is the
Clearwater Basin project which is a collaborative model project addressing
wild life and fish habitat, wild fire risk, and other forest health issues on
the Clearwater and Nezperce National Forests and encompassing about 2.7
million acres. This project was determined by the working group as
needing priority attention in regard to pressing needs and prospects for
authorizing and enacting legislation. The legislation is now being
considered in both houses of Congress.

Some of the basic efforts are a local collaborative advisor panel composed
of environmental groups, forest industry and community government
working with the Forest Service to identify and reach a consensus to
implement specific high priority activities, such as conservation and
stewardship objectives for forest health. Public participation and other
measures are provided to reduce litigation and other conflicts in regard to
the project. The project provides a working test of the collaborative
approach within exiting environmental laws. He noted there will be
regular monitoring and reporting to assure adjustments can be made and
the objectives and benefits are achieved.

Maynard further stated progress in Congress was delayed by controversies
under the Healthy Forest Restoration Act and other priorities. That Act
was enacted and became federal law in 2003. The project will enhance
opportunities under the Act, stewardship contracting, national and state
fire plans and other initiatives the Forest Service and communities
undertake. He noted the project is designed with a neutral inclusive
structures to assure bi-partisan support. He anticipates enactment enabling
the project should be accomplished by the end of the year or in 2005. A
hearing in the Senate on legislation is anticipated to be held by the end of
March 2004.

In regard to the Twin Falls/Cassia area project, Maynard stated the area
encompasses 1.3 million acres of BLM and Forest Service administered
lands primarily in Twin Falls and Cassia Counties. The land is a mix of
forest and range land with grazing allotments along with recreation uses.
The integration of the two federal agencies is an issue in this area. He
noted there is strong local interest in the project so this project will be the
next to be prepared for Congressional consideration. An updated draft
proposal has been prepared for public comment. He noted the discussion
information provided to the Committee (a copy of which is attached to the
minutes of the Committee) sets forth the status and pertinent information
regarding the Twin Falls/Cassia project. Some comments have been
received on this project and will be incorporated into the project. He
stated the BLM and Forest Service is already proceeding toward better
integration and coordination of management under existing pilot authority
entitled “Service First.” The offices for these two federal agencies will be
a joint location in Burley and Twin Falls. The current plan is to build on
and further such efforts. One consideration is a single supervisory
coordinating manager for the BLM and Forest Service in regard to the
project area. In addition, a local collaborative resource advisory group for
the lands and an attempt to develop and implement a single set of resource
management rules for the lands are under consideration. The project
would also provide for regular monitoring. From public meetings and
comments, the project appears to have local support. He stated the Twin
Falls County Commissioners have stated their support. He further stated
that federal legislation will be necessary for some aspects of the project. A
draft proposal for consideration by BLM and Forest Service and Idaho’s
congressional delegation should be ready in the near future. He
anticipates the BLM and Forest Service will proceed with some elements
of joint collaborative management to be implemented regardless of the
project.

In regard to the Central Idaho Ecosystem Trust, it does not extend into the
Sawtooth Valley, but does include some Sawtooth National Forest lands
which were already being administered by the Boise Forest. If this project
moves forward there will be public notice. He noted there have been
many changes in the proposed pilot project so that a major revision will be
necessary before the project could proceed. When the Boise Cascade mills
closed, there was little interest in proceeding.

A fourth project is the Priest Lake Basin Cooperative which involves
265,000 acres of national forest lands adjacent to Priest Lake and State of
Idaho lands. This project has not progressed, but was redirected towards a
stewardship contract project with the Forest Service which has been
successful.

The fifth project is the St. Joe Ecosystem Stewardship project which is
based on authorizing increased stewardship contracting. He noted the
stewardship program has been expanded at the federal level to nationwide
authorization. So he does not anticipate his participation in this project as
a result.

Senator Stennett expressed concern regarding the area encompassed by the
proposed Central Idaho Ecosystem Trust. He noted the proposed area
encompasses the Sawtooth Wilderness, Blaine County, Elmore county and
Boise County. He noted some of the area is truly a recreational area with
different land use goals. Maynard stated the project follows an ecosystem
based boundary and includes designated wilderness area, but it was not
designed to mandate change in recreation or non timber management in
those areas. He further stated he does not anticipate it will.

Upon inquiry, Larry Schlete, Division of Financial Management, stated
$400,000 was originally appropriate for these projects and that has been
expended. An additional $100,000 was appropriated for this year with the
current balance is unknown at this time. He will provide information to
the committee on the account balance.

Senator Stennett and Senator Kennedy expressed their concern over the
lack of information available to them and county officials in regard to the
proposed pilot projects and the counties encompassed by the pilot project.
Senator Stennett asked for consideration to amend the joint memorial to
change the number from 5 to 4 and eliminating the Central Idaho
Ecosystem Trust from the memorial.

Motion by Senator Little to send RS 14178 to privileged committee to
send to floor with do pass recommendation. Chairman Noh asked for
unanimous consent from the Committee to send RS 14178 to privileged
committee and to the floor with a do pass recommendation. No objection
was made.

Representative Cuddy informed the Committee Idaho is 13^th in the nation
with the amount of federal land and 43^rd in regard to private land. He
noted this contributes to the economic struggle in Idaho and the emphasis
of the project is to get the federal land back into productivity.

To Iran

Franklin thanked Chairman Noh for his many years of assistance to her to
educate her on natural resource issues and for his public service.

Franklin introduced Peter Morrill, General Manager, Idaho Public
Television, to the Committee.

Her trip to Iran last fall was for 6 weeks under the auspices of a non-partisan fellowship designed to give journalist an opportunity to travel
internationally who would not otherwise have the opportunity to do so.
Her proposed project was based on a personal interest in Iran. She noted
she has created a web site containing the information from her trip and the
full program will be a broadcast on public television on March 18, 2004 at
8:30 p.m.

Chairman Noh advised the Committee of the need for further committee
meeting to be scheduled on Tuesday, March 16 at 7:30 p.m. He provided
to the Committee a handout in regard to HJM 11. It contains an analysis
of potential legal problems stemming from such constitutional
amendments from the legal department of the International Association of
State Wildlife Agencies. A copy is attached to the original minutes of the
Committee. He stated his concern that the proposed memorial for a
constitutional amendment regarding hunting would shift the burden of
proof from the person who is aggrieved by a rule to the department. This
would require the department to defend a hunting season schedule or
trapping rule. He noted there was no testimony in the House committee
regarding the legislation other than the sponsor and the Speaker of the
House. He noted there has been no legal analysis of the proposal and
hence the legislation will not be considered by the Committee this session.

Dreher further stated there are other calls pending which are not part of the
contested case and the orders have not been issued at this time because the
evaluation has not been completed. He stated his concern that spring
rights and others will continue to decline. If earlier priority date water
rights are not satisfied, they could make a call and it would be a very
difficult decision for the director to make. Such a call would have
additional ramifications on ground water rights. Upon further discussion,
Dreher stated department personnel are making necessary staff
adjustments to accommodate curtailment that may be required. He noted
the county sheriffs will be contacted and requested for assistance and
security for the well being of the department’s employees.

Senator Williams inquired if the director was prepared for the publicity
because of dead cattle due to lack of water. Dreher stated if that was the
outcome that would be unfortunate, but he has a statutory responsibility to
apply the law. Chairman Noh noted one of the reasons for the current
confrontation is because it was necessary last summer for trucks to remove
many thousands of pounds of trout out of raceways to other places or to
slaughter because there was not adequate water. The situation is not
unprecedented in this type of crisis. Surface users have for years, had the
experience of being curtailed and ground water users have not yet had to
do so.

Dreher stated there are surface water users with junior priority surface
water rights who have had to move cattle because there is no water for
them. Water rights have not been administered this way previously.

Chairman Noh stated that every effort was made to reach agreements so
that the director was not placed in this position, but the negotiations failed.
Dreher informed the Committee the situation needs to be settled through
an agreement. He noted he now has a contested case and he cannot
promote an agreement at this time. It is up to the parties to come to an
agreement between themselves and present it for approval. He is aware
discussions are underway, but he is not a party to the discussions.

Senator Burtenshaw inquired about drilling additional wells. Dreher
stated drilling additional wells would have the potential of affecting water
rights. The aquifer system is primarily a fractured basalt and the water
flows through the fractures. If the water flow is disrupted through the
fractures, there will be an affect. He noted it is very difficult to foretell
what the affect might be. An action to try to increase the amount of water
discharged through a particular spring complex, could remove water from
an adjacent spring complex. He stated the cost effectiveness of deep well
drilling would be a consideration. Those types of wells would normally be
located close to the rim and would have the potential of affecting other
springs. Dreher further noted one of the parties involved has filed an
application for a permit to drill a vertical well in the unrelated aquifer
below the springs. He noted that application has been protested as well.

Senator Little inquired if an agreement with a change in crop rotation
using less water over a longer period of time would help. Dreher stated
consumptive use is not a limitation of a water right. The elements of a
water right are limitations on a water right. Chairman Noh noted the
particular area has had a major shift in cropping patterns towards alfalfa
and corn which are water intensive.

Senator Stennett inquired what happens upstream as a result of the call.
Dreher stated there are rights across the spectrum of priorities. All ground
water rights up grade of the springs do not have a significant impact on the
springs. The model verifies this. Dreher noted ground water cannot be
seen, but it can be simulated. He reminded the Committee, the model is
calibrated to measure reach gains in the river so it is not an arbitrary guess.
It is calibrated to measure flows in the river, as well as ground water levels
in the aquifer. Dreher further stated ground water right to ground water
rights are administered based upon pumping levels. Whether or not a
junior ground water right has unreasonably reduced the level of ground
water available to the senior right is the determination. The effects of a
well on surface water source is whether or not the well has reduced in
quantity the water available to the surface water right with a senior priority
and causes injury. Dreher further clarified the fact that a ground water
right reduces the quantity available to the senior water right does not in
and of itself constitute injury. In the current situation, there has been
significant decreases spring flow due to other reasons such as drought.

Senator Cameron inquired whether a junior water user to the springs who
is shut off based on the order, could make a call to request their full right
against junior pumpers. This would create the potential for a rippling
affect upstream all the way to eastern Idaho and back down on the other
side of the river. Dreher stated the potential is always there for people to
come forward and allege injury. The issue is if other junior priority rights
reduce the quantity available to the senior right. Only in that instance
could they possibly prevail on an alleged injury. Other reasons may exist
why a particular well may not be producing the full quantity of water
totally unrelated to upgrade junior priority water right. Just because the
senior right was not receiving its full quantity of water, does not mean that
is because of an upgrade junior rights. The determination would need to
be made by the department and potentially a similar order could be issued.
Senator Cameron further stated one of the concerns is the potential
economic affect this could have on many communities and the fact that
3/4ths of Idahoans do not understand the potential economic impact this
could have on the agriculture industry and on the state. Dreher stated he
does not take the economic affects lightly but he cannot weigh the
economic impact in making these kinds of decisions. The Legislature
affirmed the prior appropriation laws as they apply to ground water, but
then stated that an exercise of a senior priority right cannot be used
unreasonably. He noted the statute has not been tested in the courts. He
stated many Idahoans believe the water problem is just a Magic Valley
problem and do not understand that water is a finite resource everywhere
in the state. These kinds of water problems are going to continue to
increase all over the state because we cannot make more water but there
are more people and industries moving into the state. The competition for
water is growing and the water conflicts will continue. He expressed
concern that the local media does not understand how serious the situation
is. He noted the economic affects are not just to the Magic Valley. The
ripple affect will be noticed throughout the state on people that rely on the
agriculture economy.

Chairman Noh informed the Committee of the negotiations yesterday in
relation to the call for water by the Director of the Department of Water
Resources. Chairman Noh complimented the Speaker of the House,
Deputy Attorney General Clive Strong and the Governor for their efforts.
He noted there will be legislation to be considered by the committee as a
result of the negotiations, including appointment of an interim committee.
The spring users and the senior surface users needed to be convinced that
the Legislature and the Governor are committed to finding a long term
solution with significant solutions within a year to the declining aquifer.
The litigation, the director’s order, and other aspects of the situation will
be stayed for one year. If solutions are not accomplished within one year
to the satisfaction of the senior surface users and the spring users, the
situation will revert to its present state. He further stated there would be a
broadening of the membership on the interim committee will be necessary
and adding non membership. He noted the members of the committee will
need to be committed to a significant amount of time. The two major trout
companies reached a compromise which enabled negotiations to proceed.
The state has agreed to pay the rental costs on 40,000 acf. of water from
the water bank which will then release the private money which the
ground water users are committing for funding of infra structure and
mitigation for the trout companies. He stated the details will be provided
to the Committee as soon as it is available. There will be a status
conference on Wednesday with the director of the Department of Water
Resources to establish procedures and necessary documentation.

Kevin Beaton, attorney appearing for Potlatch Corporation and the
Intermountain Forest Association, noted the concerns regarding H 544aa
because of the fifty percent requirement for watershed advisory groups to
approve the TMDL before it was considered for public comment and
submission to EPA. The concern was the requirement could hold up the
TMDL process resulting in EPA taking over the development of TMDLs
for certain watersheds in Idaho. The proposed amendments codify the
existing process which is already in place in well functioning watershed
advisory groups. He informed the Committee that DEQ has some
reservations and concerns regarding the consultation process for some
watershed advisory groups. The proposed amendments set forth a
detailed process for DEQ to follow to ensure meaningful input from a
watershed advisory groups. Additionally, the proposed amendments
would codify the process to ensure that water quality standards are revised
if appropriate. Beaton noted that during the development of TMDLs the
water quality standards may not be attainable or may be inappropriate.
However, the TMDLs are required to be based on existing standards. The
legislation would require that the watershed advisory groups with
concurrence of the basin advisory groups recommend changes to the
standards and DEQ is required to take those recommendations seriously.

Beaton then explained to the Committee the respective amendments to H
544aa. A copy of proposed engrossed H544aa and the proposed
Amended Statement of Purpose are attached to the original minutes of the
Committee. He noted a new definition regarding “subbasin assessment” is
added to the statute. The subbasin assessments are codified or
memoralized in DEQ guidance in the development of TMDLs. Because
the number of TMDLs DEQ is required to develop, the subbasin
assessment process is a component of the TMDL. He noted the watershed
advisory group is critical to the process. DEQ is required to consult with
the watershed advisory group over the development of the subbasin
assessments. He noted the definition is verbatim from the DEQ guidance
on TMDL development.

Beaton further informed the Committee there were some problems with a
watershed advisory group and DEQ’s interaction with that group. As a
result, the amendments provide for a consultation process which requires
DEQ to try to get the watershed advisory groups involved as much as
possible in the development of the subbasin assessment of the TMDL.
There is a prohibition for DEQ to submit TMDLs for public comment or
to EPA for approval until the consultation process has been followed. A
minority report provision is also available if the watershed advisory group
agrees with the TMDL or portions of the TMDL and DEQ is required to
respond to the disagreements in the public record and in any submission to
EPA. Beaton stated the amendments just codify the existing practice. It
has been typical for DEQ to share the data with the watershed advisory
groups and the opportunity has been provided to DEQ to utilize the
knowledge and expertise of the watershed advisory groups. The ultimate
responsibility of the TMDL is still DEQ’s and DEQ has to defend it when
it is submitted to EPA for review and approval.

Beaton further stated the amendments also specify the responsibilities of
the watershed advisory groups and tracks what is involved in the
consultation process. Additionally, it provides that the watershed advisory
group can advise DEQ on the appropriateness of water quality standards
during the TMDL process. The amendments also discusses the process in
which the watershed advisory group with the concurrence of the basin
advisory group recommend changes to the water quality standards. He
noted changing the water quality standards can be a rigorous and difficult
process for DEQ in order to get approval from EPA. If there are
endangered species are involved, an ESA consultation would be required.
In some instances, the TMDL is set to achieve standards which can not be
achieved, such as temperature standards. He noted this would force the
process to evaluate changes in water quality standards, but is not intended
to slow down the TMDL process. Nothing DEQ does based on the
recommendations of the watershed advisory group or the basin advisory
group can affect EPA’s review and approval of the changes and standards.

The amendments also set out a more formalized membership of the
watershed advisory groups. He noted this follows DEQ’s existing
practices as to the membership in a watershed advisory group. The duties
of the watershed advisory group are also restated in the amendments.
Beaton stated the only potential fiscal impact to DEQ would be in the
standards revision process, which can sometimes require the collection of
data and undertaking of studies which might require additional funding.

Toni Hardesty, Department of Environmental Quality, stated the proposed
amendments to H 544aa are workable. She noted there will be some
additional administrative burden to the process but DEQ anticipates that
can be managed. The handout provided by Hardesty is attached to the
original minutes of the Committee meeting. She stated the department
understands the proposed amendments would not preclude TMDLs from
being submitted even if the basin advisory group, the watershed advisory
group or the department is considering a possible change or an assessment
of water quality standards. She further stated DEQ would initiate an
assessment of water quality standards upon advice from the watershed
advisory group and concurrence from the basin advisory group. Any
decision by DEQ to change the standards would be made after the
assessment is complete and the results indicate a change is appropriate and
feasible. Hardesty further stated DEQ would be required to reevaluate
existing watershed advisory groups to ensure that membership conforms to
the requirements set out in the legislation. If the membership does not
represent the necessary interests, the director is required to evaluate and
appoint appropriate members.

Bill Sedivy, Executive Director, Idaho Rivers United, stated the proposed
amendments makes the legislation more acceptable to their organization.
He stated concern if the legislation was necessary, but a major concern
regards the ability of the watershed advisory group to affect potential
changes in water quality standards. He noted the WAGS are citizen
groups that do not have the technical or legal experience needed to make
water quality decisions affecting watersheds or decisions regarding
whether a TMDL would comply with state and federal laws. Sedivy stated
there it could be difficult for DEQ to find representation to fill all the
different interest groups for the watershed advisory groups. He stated
Idaho Rivers United opposes the legislation even as amended.

Beaton informed the Committee he had an opportunity to review the
submitted memorandum handout by Hardesty as requested by Chairman
Noh and agrees with the first and second statements. He stated concerns
with the change in standard process. If the standard should be changed is
not DEQ but the Board of Environmental Quality because a change in the
rules would be required. It is the responsibility of the Board of
Environmental Quality to establish rules.

Justin Hayes, Idaho Conservation League, expressed concern that the
water quality standard could be changed. He acknowledged that it is good
to have a process to enable the initiation of the possibility of change to the
water quality standard, but feels the legislation is highly direction to
change and requires DEQ to change the standard. He urged the committee
to change the legislation or to hold it in committee.

Jane Gorsuch, Intermountain Forest Association, stated their support of the
legislation and the proposed amendments.

Kyle Hawley, Idaho Association of Soil Conservation Districts, stated the
associations support of the legislation because it encourages local input in
the process.

LaVelle Braun, Weiser Watershed Advisory Group, stated their concern
that the information and knowledge from the local citizens participating in
the watershed advisory group not be ignored by DEQ. He explained to the
Committee the Weiser Watershed Advisory Group’s experience with a
TMDL recently. They concur with the proposed amendments to the
legislation and urged the committee’s support.

Norm Semanko, Idaho Water Users Association, stated their support for
the legislation and the proposed amendments.

Dick Rush, Idaho Association of Commerce and Industry, stated their
support of the legislation and proposed amendments.

Motion by Senator Pearce to send H 544 aa to the fourteenth order with
the proposed amendment; seconded by Senator Cameron. Motion carried.
Senator Stennett voting nay.

H 745

Semanko stated in regard to the nature of a water right, there is difference
in the law between water that is in stream and when it is lawfully diverted
and used. He noted Section 42-101 provides that all waters of the state
when flowing in their natural channels are the property of the state. He
further noted there have been several cases in Idaho which have
recognized that the situation is different once the water is diverted out of
the natural channel pursuant to an existing water right. Private rights in
water authorized by law is not an ownership while they are flowing in the
natural channels. He further stated after diversion from the natural stream
into ditches, canals and pipes the water becomes the property of the
appropriator. The proposed amendment only clarifies existing law.

Justin Hayes, Idaho Conservation League, expressed concerns urged the
committee to oppose the legislation and proposed amendments.

Bill Sedivy, Idaho Rivers United, stated their opposition to the legislation
because of ownership concerns.

Motion by Senator Cameron to send H 745 to the fourteenth order;
seconded by Senator Pearce.

Substitute motion by Senator Stennett to hold H 745 in Committee;
seconded by Senator Kennedy.

Roll call vote on substitute motion:

Ayes: Kennedy, Schroeder, and Stennett

Nays: Burtenshaw, Cameron, Little, Pearce, Williams and Noh

Absent: Brandt.

Motion failed.

Voice vote on original motion passed with Senator Stennett and Senator
Kennedy voting nay.

Motion by Senator Little to send S 1417 to the floor with a do pass
recommendation; seconded by Senator Williams. Motion carried.

Time having expired; the meeting was recessed at 9:20 a.m. to reconvene
at 1:00 P.M.

Upon inquiry from Senator Schroeder, Biladeau stated the legislation is
not being introduced because of any specific parcel or bidder. Biladeau
further stated if the legislation did not pass this year the department and
Land Board will submit the legislation again next year.

Motion by Senator Cameron to send H 515 to the floor with do pass
recommendation; seconded by Senator Burtenshaw.

Motion carried.

stated H 755 would allow the state to sell the mineral rights for land
previously sold if the use is for development purposes. He noted H 510
passed by the Legislation this session enables the state to sell surface and
mineral rights together to the highest bidder if the land is to be used for
development purposes. He noted the Department of Lands has expressed
concern about the constitutionality of some provisions of the proposal.
Their concerns will be accommodated and request the legislation to be
sent to the fourteenth order for a proposed amendment.

Motion by Senator Little to send H 755 to the fourteenth order for
amendment; seconded by Senator Stennett. Motion carried.

Bill Sedivy, Idaho Rivers United, stated their opposition to HJM 23.

Motion by Senator Little to send HJM23 to the floor with a do pass
recommendation; seconded by Senator Williams

Bill Sedivy, Idaho Rivers United, stated their opposition to HJM 24.

Motion by Senator Burtenshaw to send HJM 24 to the floor with a do pass
recommendation; seconded by Senator Pearce.

Substitution motion by Senator Stennett to send HJM 24 to the fourteenth
order for amendment; seconded by Senator Kennedy.

Voice vote on substitution motion failed.

Voice vote on original motion passed.

Motion by Senator Little to send H 774 to the floor with a do pass
recommendation; seconded by Senator Brandt. Motion carried.

April 1
curtailment of
ground water
users in the
Hagerman
Reach of the
Snake River

Clive Strong, Chief Deputy Attorney General, Natural Resources,
informed the Committee on the status of agreement staying the April 1
curtailment of ground water users in the Hagerman Reach of the Snake
River. The handout provided to the Committee is attached to the original
minutes of the meeting. He noted the agreement is not final at this time;
the last paragraph is under negotiations.