DENVER – At least four bills and one resolution are being considered by state lawmakers this year in the search for funds to mitigate the devastating impact that the mountain pine beetle is having on Colorado’s forests and mountain communities.

And with the backing of Gov. Bill Ritter’s new Forest Health Advisory Council, at least three of the measures are advancing through the process.

State and federal forest officials are warning that without action, Colorado faces an increasing likelihood of forest fires that could pollute headwaters of rivers that provide water to millions of people, destroy transmission lines that power several Western states, and further damage the recreation-based economies of many mountain towns.

The mountain pine beetle has chomped its way through 1.5 million acres of Colorado’s forests and is expected to kill up to 90 percent of the state’s lodgepole pine before the epidemic is over.

Nancy Fishering of the Montrose-based Colorado Timber Industry Assn. said Colorado has been identified as have the third worst forest health problem in the country, behind only Georgia (because of drought) and California (because of the threat of brush fires).

She spent time in Denver last week lobbying for any bills that would improve forest health, while at the save time giving a boost to Colorado’s struggling logging industry.

Fishering supported two Republican-sponsored bills that would exempt the state sales tax on lumber and products made from beetle-killed trees.

“A tax exemption to people who use wood from our dead trees as opposed to buying wood from outside Colorado is good,” Fishering said. “In a bleak market, it would help everyone.”

One such bill is sponsored by Rep. Al White, R-Hayden, who with Fishering is a member of the governor’s forest health council. His House Bill 1269 barely survived a 6-5 vote in the House Finance Committee last week and will next be considered by the House Appropriations Committee.

“The good we are doing will far outstrip any revenue loss to the state,” said White, referring to a fiscal impact statement that estimates a $1 million revenue loss to the general fund. “If you do the math, that would be $30 to $40 million worth of retail lumber sales and would remove a huge amount of beetle kill from the forests.”

Four of the committee’s five opposing votes were from Democrats who objected to increasing any tax exemptions.

“We already have 40 different exemptions that we need to be reducing, not increasing,” said the committee’s chair, Rep. Joel Judd, D-Denver. “Having one exemption statewide and options for different jurisdictions to adopt or not just adds more complexity to the system.”

White said his sales take exemption would only be in effect until 2014, when most of the beetle-killed timber will either be harvested or no longer usable for commercial products.

A similar bill is sponsored by Rep. Kevin Lundberg, R-Berthoud. In addition to exempting sales of beetle-killed wood products from the sales tax, his House Bill 1318 would create a Pine Beetle Mitigation Fund with voluntary contributions from applicants for hunting and fishing licenses.

The Lundberg bill also is headed to the House Appropriations Committee with the unanimous endorsement of the House Agriculture and Natural Resources Committee.

The Colorado House last week overwhelming passed and sent to the Senate a Republican-sponsored bill that gives a 50 percent state income tax deduction of up to $2,500 on a landowner’s directs costs of removing trees and other measures taken to prevent fire.

To qualify for the credit, the mitigation measures must be taken within a wildland-urban interface area and be authorized by a community wildfire protection plan.

“This is not a tax credit but a deduction to landowners who live in a designated plan area,” said Rep. Rob Witwer, R-Golden, who introduced House Bill 1110. “One well-mitigated community can make the difference between a 10-acre fire and a 100,000-acre fire.”

The fiscal impact statement on Witwer’s bill refers to a 2007 study that estimates almost 95,000 households lie within the boundaries of wildland-urban interface areas in Colorado. However, only about 10 percent are expected to claim the deduction, resulting in an estimated annual revenue loss of under $1 million.

Sen. Dan Gibbs, D-Silverthorne, who is pushing a resolution demanding more help from federal government to deal with the beetle with the beetle infestation and its aftermath, also is seeking $1 million from the state Department of Natural Resources to fund another year’s worth of grants to local wildlife mitigation efforts.

“All of these measures complement each other very well, but mine is the only bill that actually brings real money to the table,” said Gibbs, who also is the Senate sponsor of White’s bill. “The others are incentives and rebates.”

Even if everything passes, Gibbs said, the total monetary impact will barely touch the need.

“It all might sound like a lot of resources, but in my opinion we’re still nickeling and diming the problem,” Gibbs said. “The cost of mitigating the (2002) Hayman fire, that burned 138,000 acres, is $200 million and counting. We really need to step up to the plate to keep that from happening anywhere else.”