Legislature(2005 - 2006)CAPITOL 124
04/13/2005 08:30 AM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| HB252 | |
| HB241 | |
| HB252 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 241 | TELECONFERENCED | |
| *+ | HB 252 | TELECONFERENCED | |
HB 252-SPORT FISHING FACILITY REVENUE BONDS 8:39:52 AM CO-CHAIR LEDOUX announced that the first order of business would be HOUSE BILL NO. 252, "An Act providing for a sport fishing facility surcharge on sport fishing licenses; providing for the construction and renovation of state sport fishing facilities and for other projects beneficial to the sport fish resources of the state as a public enterprise; and authorizing the issuance of revenue bonds to finance those projects." 8:39:58 AM REPRESENTATIVE JIM HOLM, Alaska State Legislature, presented HB 252 as sponsor. He explained that this bill proposes to establish funds in order to build a fish hatchery in Fairbanks and to rebuild the fish hatchery at Fort Richardson in Anchorage. He pointed out that as of October 2005 the current Fort Richardson hatchery will no longer function properly. He said: There's been some urgency to either fund a new hatchery or figure out some way to do it with a mechanism that will allow us to have these hatcheries available so we can increase the number of sport fish that will be able to be utilized by the people that come to Alaska. REPRESENTATIVE HOLM stated that in the committee packet, there is a schematic showing how the funds would be used by the revenue bonds. The amounts of the proposed sport fishing facility surcharges are listed on page 3, lines 18-28 of the bill. He estimated that the surcharges will raise about $6.1 million: $1.1 million from residents and $5 million from nonresidents. 8:43:56 AM REPRESENTATIVE HOLM explained how the surcharge revenue will be used as follows: Crystal Lake, which is by Wrangell, would receive $193,000 over 10 years, and $500,000 deferred, or roughly $2.5 million. Skagway would receive $1.6 million over 10 years, $160,000 per year. And [Northern Southeast Regional Aquaculture Association (NSRAA)], which is Sitka, Haines, will receive $1.4 million over 10 years ... and that's $5.5 million. Then ... in the $69 million there's $3.5 million in reserves, there's $45 million for the Anchorage Fort Richardson hatchery, and $15 million for the Fairbanks [hatchery]. We already have $10 million in federal receipts that are available.... The projects look like they're in a good position to be built. 8:45:55 AM REPRESENTATIVE ELKINS remarked that it sounds like Representative Holms has taken care of everyone pretty well. He said, "It makes it easier for Southeasterners to support this." REPRESENTATIVE HOLMS replied that he is trying to build consensus by helping out several regions of the state. REPRESENTATIVE WILSON noted that the application of the funds is not actually in the bill. She voiced concern that the funds might later be diverted to a different project if they weren't somehow "locked up." 8:47:30 AM DOUG VINCENT-LANG, Assistant Director, Division of Sport Fish, Alaska Department of Fish and Game (ADF&G), explained: There's three parts to this bill. There's a piece that deals with the surcharge, which is the revenue generation. There's a piece that builds up the revenue structure to issue the bonds, and that's in the bill before you. There's also a [capital improvement project (CIP)] request. That CIP request contains the authority to give the department the authority to expend money to spend on the bond, which has three pieces in it; it has the capital budget pieces into it, so that Fort Richardson hatchery is part of the bond, the Elmendorf hatchery is part of the bond, and the things that we could do with capital improvements are part of the bond in Southeast Alaska. That debt service payment will be about $5.2 million to $5.3 million per year. The operational costs will come from the revenue difference between $6 million and $5.3 million, and the authority to expend the projects we're talking about operational in Southeast Alaska are included in that CIP as part of operational costs for the next 10 years. 8:48:38 AM REPRESENTATIVE WILSON asked if that would have to be put in the budget every year or if it would be automatic. MR. VINCENT-LANG offered his understanding that every year [ADF&G] will need to be given the authority by the legislature to expend the debt service. "But once we have that CIP request that's gone through, we'll have the authority for those projects for the life of their projects." REPRESENTATIVE WILSON asked if the next legislature could decide to use that money for a different project. MR. VINCENT-LANG replied, "My understanding is that they couldn't because the CIP request will have gone through." 8:49:36 AM SARAH GILBERTSON, Legislative Liaison, Office of the Commissioner, Alaska Department of Fish & Game (ADF&G), offered her understanding that the $62 million that's part of the bond is in the CIP request for this year; that does not need to be approved annually. However, the $3.5 million in operating costs for Crystal Lake will need to be approved annually by the legislature. She remarked that the ADF&G commissioner has submitted a letter to the bill sponsor which outlines the department's intentions to "fight for that money every year." 8:50:30 AM REPRESENTATIVE HOLM noted that copies of the letter from the ADF&G commissioner are in the committee packet. He said that the letter spells out how and where the money would be spent. REPRESENTATIVE WILSON responded that she is not comfortable with [the bill]. She asked if there is any way to lock that money in to specified projects. MR. VINCENT-LANG replied: I believe that when this is within the CIP budget request that you have told us, by approving that CIP budget request, that those are the projects that you would like to have done for the life of their projects. Now you might need to annually appropriate the money for those projects, but ... you would have to end those projects by not approving those expenditures. ... Just like the debt service payment: you as a legislator have to expend the funds to make that debt service payment. In this case you would also have to annually appropriate the funds to those projects because we can't dedicate those things for the next 10 years; that's the legislature's prerogative, to dedicate funds. But we're committed to that, that's why we put it in there for the life of those projects.... 8:52:59 AM REPRESENTATIVE WILSON asked if this money is different than the regular money that was in the budget that "someone was able to take out and totally use it for something totally different." MR. VINCENT-LANG replied that this was his understanding as well and that's why it is within the CIP request. 8:53:16 AM REPRESENTATIVE ELKINS commented: If it's bond money and the bonds are sold to do specific things, then the money raised from those bonds, theoretically, can only be used for those things. So if we wanted to protect [that money] ... we would want to be sure that when we sell those bonds that those projects are designated in the bond. MR. VINCENT-LANG stated that ADF&G has been told by the Alaska Department of Revenue that it can't include operational costs within a bond package, but can include it within the CIP request. 8:54:03 AM REPRESENTATIVE ELKINS remarked that the money is for construction and renovation, not operations. REPRESENTATIVE WILSON disagreed and said that there are operational costs included as well. CO-CHAIR LEDOUX pointed out there is nothing in the bill for Kodiak. She asked if the sponsor had thought of adding something for the Kodiak area. REPRESENTATIVE HOLM replied that he had not. 8:55:11 AM MR. VINCENT-LANG responded: Our ability to produce fish in Kodiak is highly dependent upon the ability for the ... Anchorage hatcheries to produce fish over the next 10-15 years. ... We're not able to meet current production needs, and Kodiak currently gets stocked with about a third of a million fish, a variety of different species. We're going to decrease stocking, probably, in the Kodiak area because we can't simply meet the production with the current hatchery facilities we have. If we ... build a new hatchery in Anchorage, we're going to build that hatchery to meet the projected demand for the next 20 years. Some of that demand is going to be down in Kodiak, so we're going to produce more fish down in the Kodiak area based on the ... five-year stocking plan, which drives us in Kodiak. 8:56:01 AM CO-CHAIR LEDOUX asked what is stocked in Kodiak. MR. VINCENT-LANG replied that coho salmon, chinook salmon, and rainbow trout are stocked in many of the lakes. He noted that the stocking plan is locally driven; every five years ADF&G puts the stocking plan out for public review and input. 8:56:43 AM REPRESENTATIVE WILSON asked if there is any way [the appropriation of funds to particular projects] can be put into statute. MR. VINCENT-LANG answered: I think we want to keep this bond package as clean as possible from [the Department of Revenue's] perspective. I agree with what you're saying and I think that's why you want to keep that language direction in the CIP budget request, which is for the life of the project. That's why we do CIP budget requests; they're for the term of the projects. 8:58:09 AM REPRESENTATIVE WILSON pointed out that the legislature has CIP budget requests with Alaska Department of Transportation and Public Facilities, but those requests get "changed around all the time." REPRESENTATIVE HOLM stated: We're appliers of funds, we're not allocators of funds, and because of that we're frustrated.... But this particular bill is about building two fish hatcheries and we've incorporated in addition to that some help for Southeast and some help for these other areas. And so it hasn't been a major focus; it's been an add-on, and we've tried to accommodate those areas. You could certainly have some intent language in here, but the intent is already here from [ADF&G] to do this. And as in all of our budgetary processes ... we cannot go to another legislature and bind them. And ... we can't bind another [ADF&G] if it takes another course. 8:59:52 AM TOMAS BOUTIN, Deputy Commissioner, Alaska Department of Revenue said: There's a much stronger commitment for a capital project that's in bond documents, for which bonds have been sold to bond holders, ... than if bonds hadn't been issued. And so the projects for which the bonds are issued, the hatcheries and deferred maintenance included, those capital projects will be part of the bond documents.... Typically people in a community that's going to receive the benefit of those projects will tend to buy the bonds at retail; we can only surmise partly because they're interested in those projects. And so the state bond committee could not allow ... the projects to change once the bonds have been issued. The bond indenture is actually the contract between the state bond committee and the bondholders. And so for the capital projects, which is the deferred maintenance and the hatchery construction in the different parts of the state, it would be problematic if after the bonds were sold there was an attempt to divert the money to some project not in the bond documents. 9:01:56 AM MR. VINCENT-LANG pointed out that the legislature has to annually appropriate the debt service payment as well. He said, "To the same extent that you're worried about future legislatures not funding projects in Southeast Alaska, [future legislatures] could make us default on our bond, theoretically, by not paying for the debt service payment." He reiterated that ADF&G has made the commitment to follow through with these proposed projects. 9:02:52 AM CO-CHAIR THOMAS asked if the debt can be retired sooner if the number of sport fishing licenses sold increases. MR. VINCENT-LANG replied that the money generated from increased license sales will go into the pot of ADF&G money that can be allocated by the legislature to do any variety of projects regarding sport fish management or research. He said, "The percent on the surcharge will be available for debt reduction or any kind of other project. But I think it would be out intention to pay down that debt as quickly as possible." CO-CHAIR LEDOUX confirmed that the bill would fund hatcheries in Anchorage, Fairbanks, and Skagway, and then asked for further information about the proposed projects in Southeast Alaska. 9:04:39 AM JIM DERRINGER, Staff to Representative Holm, Alaska State Legislature, explained that currently the Crystal Lake Hatchery, operated by the Southern Southeast Regional Aquaculture Association (SSRAA), is getting $193,000 in federal money per year but will be losing that money either this year or next year. Under this bill, ADF&G would then fund this same amount for 10 years. He added that ADF&G would also give the hatchery $500,000 the first year for deferred maintenance costs. He noted that the Northern Southeast Regional Aquaculture Association (NSRAA) has not received any money from ADF&G. Under HB 252, NRSAA would receive $140,000 per year for 10 years "to support sport fish out in that area," and a one-shot $150,000 deferred maintenance on "that facility." 9:06:12 AM MR. DERRINGER said that a third proposed project is a hatchery in Skagway. Under HB 252, Skagway would have the option of either receiving one payment of $1.5 million to build a hatchery, or receiving $160,000 per year for 10 years. CO-CHAIR LEDOUX stated concern that the bill would cause a huge jump in fishing license costs. She said that it will be hard to explain to her constituents why they have to pay higher license costs while they are not benefiting. 9:07:45 AM REPRESENTATIVE HOLM remarked that if the hatcheries in Anchorage shut down, Kodiak will lose all of its fish. He added that 80 percent of the increased fees will be paid by nonresidents, not locals. MR. VINCENT-LANG commented: Hatcheries do three things. They provide additional fishing opportunity. Across the State of Alaska they provide anywhere from 10-20 percent of the recreational fishing opportunity. ... In so doing providing that additional recreational fishing opportunity, they take pressure off fully allocated wild stocks. So we have to do something with our hatchery program; if we don't do something with our hatchery program you're going to see a lot more pressure on wild stocks. Given that, our hatcheries are in decline. We're going to have to somehow deal with out hatchery infrastructure, whether it's through this bond or some other thing. ... The wild stock management program will likely have to take some kind of suffering in the short term to deal with our hatchery infrastructure issues. ... And the other thing is it provides significant economic benefit; a recent study showed that hatchery production results in about $45 million annually to the Alaskan economy. So this will over the life of this bond give about $800 million to the Alaskan economy for a $60 million bond. MR. VINCENT-LANG continued: Now, in your district specifically [Kodiak area], we stock over a third of a million fish. Those provide recreational fishing opportunities, especially for families that want to get out and start to learn how to fish. ... It's a jump [in license fees] but we haven't seen a jump in license fee increases for the last 15 years; it's time. And it's time for people to start paying for the hatcheries that they benefit [from]. 9:10:36 AM CO-CHAIR LEDOUX asked what lakes around Kodiak are stocked. MR. VINCENT-LANG named lakes in the Kodiak management area that are stocked with either coho or rainbow trout. 9:12:03 AM REPRESENTATIVE SALMON asked why fishermen who are catching wild stock should have to pay for the hatchery fish. REPRESENTATIVE HOLM stated that sport fishermen are usually from out of state. He remarked that the cost of transportation to get to rural areas to go sport fishing [is so high that the license is very cheap in comparison.] He pointed out that in HB 252 on page 3, lines 7-8, some local people are exempt from the proposed surcharge. MR. VINCENT-LANG reiterated that the hatcheries take pressure off of wild salmon stocks. He also noted that [ADF&G] completes a lot of wild stock assessments in rural areas. 9:15:18 AM CO-CHAIR THOMAS commented that he likes HB 252. He remarked that Skagway has asked to have their own hatchery so that they wouldn't need to request general fund money each year in order to get fish from other hatcheries. He also noted that a lot of fish go up to the interior from Cordova. He stated that the impact of dipnetting is going to increase and there will be more pressure on rural area fisheries while the Fairbanks hatchery is in the process of being built. He added: The other reason I liked [the proposed hatchery] in the Anchorage vicinity is that, being a fisherman, a lot of that fish is going to go by Kodiak anyway to go to the interior; we call that common property fishery. It would be intercepted by sport fishermen, commercial fishermen, everybody's going to have an opportunity at these fish. CO-CHAIR THOMAS reiterated that having hatchery fish in urban areas will take the pressure off of wild stock in rural areas. 9:17:49 AM REPRESENTATIVE ELKINS commented that roughly 28 percent of all the licenses sold in the state were sold in the area "from Cordova south," and therefore the area has a major impact on the money coming into the fisheries. REPRESENTATIVE WILSON remarked that when she lived in Tok it was fun to fish in some of the nearby stocked lakes. 9:19:18 AM CO-CHAIR LEDOUX turned to public comments. RUSSELL THOMAS, Alaska Sportfishing Expeditions (ASE), stated that he works for ASE, a 20 year old family-owned business that operates three resorts in the Ketchikan area. He testified in opposition to HB 252 in its current form. He said that his biggest concern is that nonresidents, who are his clients, will be paying the majority of the costs. He pointed out that some of the proposed surcharges are almost double the current license fees, which he opined is not a modest increase. He turned to an [ADF&G] information handout [included in the committee packet] titled, "Sport Fishery Enhancement Surcharge FAQ's," from which he quoted, "There is no correlation between changes in license/tag fees and the number of licenses/tags sold, or in the number of angler days of fishing effort with guides." He commented: I think it would be a big mistake to think that there is absolutely no correlation between how much a fishing licenses costs and whether or not people choose to do fishing as a recreational activity, especially given the fact that some people are here on a cruise ship for just a few hours. Here in Ketchikan, the half day cruise ship charters are a big part of the fishing, and somebody already in the king salmon season will pay $10 for a one-day license, $10 for a king salmon tag, and now an additional $8.50 in a surcharge. That means that four hours of fishing, in addition to what they've already paid to go out on the boat, will cost them close to $30. 9:22:54 AM MR. THOMAS voiced concern that a large amount of revenue would be generated via the surcharge in parts of the state that wouldn't be benefiting from that money. He continued: If we enhance fisheries in the northern area, in Anchorage and Fairbanks, to the point that that fishing then becomes better than what we have to offer here in Southeast Alaska, then my customers choose to go there to fish rather than stay in Southeast and spend money here. So in essence what you're asking me to do as a business owner is to encourage my customers to fund my competition farther north. MR. THOMAS asked the committee to consider amending the bill so that the money raised in particular ADF&G management areas stays within that area. 9:25:49 AM CO-CHAIR THOMAS remarked that if this philosophy were used statewide, people living in Southeast wouldn't get any of the North Slope oil revenues. Noting that sport license fees haven't been raised in about 15 years, he asked Mr. Thomas if he had increased his sport fishing charter fees in that time. MR. THOMAS replied that he had. He clarified that he is not opposed to an increase in fishing license fees, but he is opposed to the sudden doubling of fees. He remarked that no one would complain if the fee gradually increased $1 every other year over the course of five years. 9:27:39 AM REPRESENTATIVE SALMON commented, "That's the true case of the matter." REPRESENTATIVE ELKINS asked how much it costs to sport fish in British Columbia, Washington, or Oregon. MR. THOMAS replied that he didn't know. He noted that some of clients think the license fees are low. But he reiterated that he didn't want to be funding his competition up north and the increase in fees is too dramatic for one year. 9:28:52 AM REPRESENTATIVE ELKINS remarked that he firmly believes in competition, and said, "The more competition, the keener you are." He opined that Alaska sport fish license fees are cheap compared to British Columbia, Hawaii, Washington, and Oregon. 9:29:28 AM KELLY HEPLER, Director, Division of Sport Fish, Alaska Department of Fish & Game (ADF&G) commented that nonresident license fees in Alaska are lower than many other states. He noted, "The opportunities that a nonresident can exercise in Alaska is incredible; the number of fish they can bring back, the wealth of opportunities they have here is different." CO-CHAIR LEDOUX asked how Alaska compares with other states regarding price of resident licenses. MR. HEPLER replied that he did not have that information on hand, but he opined that, "It's a heck of a bargain." CO-CHAIR LEDOUX, after ascertaining that no one else wished to testify, closed public testimony on HB 252. 9:31:19 AM REPRESENTATIVE ELKINS moved to report HB 252 out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE SALMON objected. 9:31:57 AM A roll call vote was taken. Representatives Wilson, Elkins, and Thomas voted in favor of reporting HB 252 out of committee. Representatives LeDoux and Salmon voted against it. Representatives Kapsner and Harris were absent from the vote. Therefore, HB 252 failed to report out of the House Special Committee on Fisheries by a vote of 3-2. [The committee returned its attention to HB 252 later in the meeting.] HB 252-SPORT FISHING FACILITY REVENUE BONDS 10:00:03 AM CO-CHAIR LEDOUX returned the committee's attention to HB 252. REPRESENTATIVE WILSON asked for reconsideration of HB 252. REPRESENTATIVE SALMON objected. A roll call vote was taken. Representatives Wilson, Harris, Thomas, and Elkins voted in favor of reconsidering HB 252. Representatives LeDoux and Salmon voted against it. Representative Kapsner was absent for the vote. Therefore, the motion passed by a vote of 4-2. [The committee treated HB 252 as before it again.] 10:00:57 AM CO-CHAIR THOMAS moved to report HB 252 out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE SALMON objected. 10:01:19 AM A roll call vote was taken. Representatives Wilson, Harris, Thomas, and Elkins voted in favor of reporting HB 252 from the committee. Representatives LeDoux and Salmon voted against it. Representative Kapsner was absent for the vote. Therefore, HB 252 was reported out of the House Special Committee on Fisheries by a vote of 4-2.
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