Legislature(1999 - 2000)

03/20/2000 03:10 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         SB 258-SET NET SITES/ SHORE FISHERIES DEVELOPMENT                                                                  
                                                                                                                                
CHAIRMAN HALFORD announced SB 258 to be up for consideration.                                                                   
                                                                                                                                
MR. RICK THOMPSON, Department  of Natural Resources (DNR), said that                                                            
the current set net leasing  program is a long-standing program that                                                            
allows limited  entry gill-net permit  holders to obtain  leases for                                                            
their fishing  sites.  However, it  does not require one  to fish in                                                            
that spot.                                                                                                                      
                                                                                                                                
MR. THOMPSON  explained that  a lease gives  fishermen control  over                                                            
the locations  where they habitually  fish.  A lease holder  may use                                                            
the location for set net  fishing to the exclusion of others.  In FY                                                            
00, the  legislature  reduced the  funding in the  program by  about                                                            
two-thirds and  reallocated the program receipts to  other programs.                                                            
                                                                                                                                
MR. THOMPSON  said DNR cannot manage  the program as it stands  with                                                            
the finances  left so it  is proposing to  restructure the  program.                                                            
The registration  system would  not result  in the customary  lease,                                                            
but it  would give  fishermen  the right  to fish their  sites  in a                                                            
manner similar  to the existing lease program.  A  statute change is                                                            
required  to implement  the  registration  system.   At the  present                                                            
time, DNR is not accepting  any applications for leases and, without                                                            
modification to the statute  and with the resources DNR has left, it                                                            
cannot continue to manage the program as it exists.                                                                             
                                                                                                                                
CHAIRMAN  HALFORD  asked how  much  income  was generated  from  the                                                            
program receipts for the existing lease program.                                                                                
                                                                                                                                
MR. THOMPSON  answered that the total  income from program  receipts                                                            
was $360,000 and,  prior to FY00, $300,000 of that  was allocated to                                                            
the program.                                                                                                                    
                                                                                                                                
CHAIRMAN  HALFORD asked if  DNR is asking  to repeal a program  that                                                            
was making a $60,000 profit.                                                                                                    
                                                                                                                                
MR. THOMPSON explained  that DNR lost two-thirds of the resources it                                                            
had to  run the program.   DNR has 1,200  outstanding leases,  which                                                            
require  lease management,  and  the program  cannot be  run by  one                                                            
person.   He  was  asked to  come  up with  a  way to  continue  the                                                            
registration program with one person and this is his best shot.                                                                 
                                                                                                                                
CHAIRMAN  HALFORD asked if  the registration  would cost as  much as                                                            
the lease program, in terms of what the people pay.                                                                             
                                                                                                                                
MR. THOMPSON replied that the fee would stay the same.                                                                          
                                                                                                                                
CHAIRMAN HALFORD  asked if the lessees  were paying $360,000  to get                                                            
$300,000  worth of work in  the past and under  this bill they  will                                                            
pay $360,000 to get $50,000 worth of work.                                                                                      
                                                                                                                                
MR. THOMPSON  responded  the  lessees will  pay the  same amount  of                                                            
money to get less services from DNR.                                                                                            
                                                                                                                                
CHAIRMAN HALFORD asked where the program receipts went.                                                                         
                                                                                                                                
MR. THOMPSON replied they  were redirected by the legislature and he                                                            
isn't sure where they went.                                                                                                     
                                                                                                                                
MS. CAROL CARROLL,  DNR, explained that DNR received  a reduction in                                                            
its authority  to expend the program receipts and  her understanding                                                            
is that they are  now deposited into the general fund.   The program                                                            
receipts were not redirected within DNR.                                                                                        
                                                                                                                                
SENATOR  MACKIE commented  that this  might be  a Finance  Committee                                                            
question.   He  asked  if anyone  from  OMB  explained  this to  the                                                            
Finance  Committee members  so they  could give  DNR enough  program                                                            
receipts to manage the program.                                                                                                 
                                                                                                                                
Number 1900                                                                                                                     
                                                                                                                                
MS. CARROLL answered  when they went through budget  reductions last                                                            
year, the subcommittee knew it was redirecting program receipts.                                                                
                                                                                                                                
CHAIRMAN  HALFORD   asked  what  the   difference  is  between   the                                                            
registration   program  and  the  lease  program  from   the  user's                                                            
perspective.                                                                                                                    
                                                                                                                                
MR. THOMPSON  explained  that  users get  the exclusive  use of  the                                                            
beach for  that site,  but applicants  have to  locate the site  and                                                            
fill  out  a form  with  DNR  to register  it.    That registration                                                             
information will  be a matter of public record.  Applicants  have to                                                            
provide the coordinates for that location.                                                                                      
                                                                                                                                
CHAIRMAN  HALFORD asked what's  different and  what they get  with a                                                            
lease that they didn't get with registration.                                                                                   
                                                                                                                                
MS. CARROLL  explained that DNR used  to adjudicate any controversy                                                             
but will  no longer  do that if  the bill passes.   Any controversy                                                             
will be decided through arbitration, mediation, or the court.                                                                   
                                                                                                                                
CHAIRMAN HALFORD  asked if DNR would  accept multiple registrations                                                             
for the same site.                                                                                                              
                                                                                                                                
MR. THOMPSON  answered  yes; a  system would  be set  up so that  if                                                            
someone  registers  for a  site and  someone  else comes  along  and                                                            
claims it, there's  a conflict resolution system the  parties can go                                                            
through but DNR wouldn't handle it.                                                                                             
                                                                                                                                
CHAIRMAN  HALFORD  said  so he  is  not guaranteeing  a  lessee  the                                                            
exclusive right to use a specific piece of beach.                                                                               
                                                                                                                                
MR. THOMPSON replied  that the lessee has to be able  to prove he or                                                            
she is the superior fisherman on that site.                                                                                     
                                                                                                                                
SENATOR MACKIE  asked who would do  the conflict resolution  in that                                                            
situation.                                                                                                                      
                                                                                                                                
MR. THOMPSON replied that it would be an arbitrator.                                                                            
                                                                                                                                
SENATOR MACKIE  asked if it would be up to the fisherman  who's been                                                            
fishing the same site for 20 years to find an arbitrator.                                                                       
                                                                                                                                
MR. THOMPSON  answered if a person  has an existing lease,  it would                                                            
be converted  and  no one  will be  able to  challenge  it.  He  was                                                            
referring to the way it would work for a new site.                                                                              
                                                                                                                                
CHAIRMAN  HALFORD said he  thought DNR isn't  accepting leases  this                                                            
year.                                                                                                                           
                                                                                                                                
MR. THOMPSON  responded  DNR isn't  accepting any  leases but  if it                                                            
switches  over  to the  registration  program,  the leases  will  be                                                            
allowed  to go through  the normal  cycle.  When  they expire,  they                                                            
could convert.                                                                                                                  
                                                                                                                                
CHAIRMAN  HALFORD asked what  would happen  if a lease expires  this                                                            
year.                                                                                                                           
                                                                                                                                
Number 2100                                                                                                                     
                                                                                                                                
MR. THOMPSON replied they  will renew a license that just expired in                                                            
the  interim   to  protect  people's   ability  to  maintain   their                                                            
exclusivity on the site.                                                                                                        
                                                                                                                                
MR. DAVID RANG, Cook Inlet  fisherman of 48 years, said he sees this                                                            
as  a divestiture  of  interest.    When you  put  a municipality's                                                             
interest ahead of fishermen's,  the process of eminent domain should                                                            
take care  of that.  The people at  DNR forced  a utility outfit  to                                                            
tempt him  to buy out  his fishing  interests for  the season.   The                                                            
other  thing he does  not like  about SB  258 is  that it  addresses                                                            
several  issues  to  be handled  by  one  claim.   He  didn't  think                                                            
registering  would work very well  for the fishermen and  would work                                                            
to  someone else's  advantage.   He  also asked  that  this bill  be                                                            
translated into lay language.  He is opposed to SB 258.                                                                         
                                                                                                                                
MR. MARV EBNET,  Bristol Bay set netter,  said, "If something  ain't                                                            
broke, don't  fix it, and this ain't  broke."  There are  two things                                                            
lessees pay  for with the shore lease  program - long term  security                                                            
and  conflict resolution  without  the  risk of  injury  or loss  of                                                            
income.  Take that away,  and there will be no incentive for the set                                                            
netters  to participate  in the program  and the  program will  die.                                                            
He said there  is a history of people dying while  trying to protect                                                            
set net sites.  He also  said that GPS isn't accurate enough to nail                                                            
down  site  locations.    Everyone  out there  has  already  made  a                                                            
substantial  investment  in existing  survey data.   That  shouldn't                                                            
change; there's nothing wrong with that data.                                                                                   
                                                                                                                                
If this fishery becomes  disorderly through violence, the Department                                                            
of Fish  and Game  will shut  down the  fishery.   That will have  a                                                            
serious impact on fishermen  and the State.  He is opposed to SB 258                                                            
and would like  to see this program have dedicated  funds similar to                                                            
the guide program.                                                                                                              
                                                                                                                                
MR. AL  BAUMAN, Bristol  Bay fisherman, testified  that in  October,                                                            
1992, a  letter from Ron  Swanson said if  the program was  not self                                                            
supporting, it  might be eliminated.  Fees were then  increased from                                                            
$150 to  $300.  At  the time  there were four  full-time  employees,                                                            
which accounted for about  90 percent of the just over $200,000 cost                                                            
of the  program.   The program's  viability  was to  be reviewed  in                                                            
1997.   In  February of  1998,  they received  a letter  from  Cathy                                                            
Doogan,  Bethel   Resource  Officer,  saying  that   costs  had  not                                                            
increased  so no  fee  increase was  necessary,  and  that the  next                                                            
review would be in 2002.   At that time, there were three employees;                                                            
one was cut due  to DNR budget cutting.  At present,  the program as                                                            
he knew it  no longer exists.  One  person is employed part-time  on                                                            
shore fishery issues.                                                                                                           
                                                                                                                                
TAPE 00-11, SIDE B                                                                                                            
                                                                                                                                
MR. BAUMAN  continued.   Under  the proposed  registration  program,                                                            
which is partially operating  now, no new diagrams are accepted.  No                                                            
amending  diagrams are allowable,  conflicts  are not resolved,  and                                                            
public  notices  have been  eliminated.   From  time  to time,  it's                                                            
necessary to adjust shore  fishery diagrams because of shore erosion                                                            
or  the  voluntary  elimination  of an  existing  site  to  increase                                                            
"fishability." The ability to change a diagram is essential.                                                                    
                                                                                                                                
At  present, most  arguments  have  already  been settled.    Public                                                            
notice of new  lease and lease changes is a tool to  avoid conflicts                                                            
and is  paid for directly  by the fishermen.   Three hundred  dollar                                                            
fees are  still required.   The fee is not  the issue; the  issue is                                                            
that the  participant-funded  receipt program  is accepting  funding                                                            
and not  performing services.   They would  like to see the  section                                                            
pertaining  to shore fishery  leases in SB  258 be stricken  and the                                                            
former program reinstated.   The best way to stop what has become an                                                            
annual fight to  save the program would be to declare  fees from the                                                            
shore fishery  program as non-general fund monies.   It appears that                                                            
DNR is using  the shore fishery program  as a cash cow.   Last year,                                                            
it had one employee and  he can't see how DNR spent $300,000 on this                                                            
program.                                                                                                                        
                                                                                                                                
MR. KIM RICE,  Egegik set netter, said he is opposed  to SB 258.  He                                                            
wants  to save  the  program  because  it brings  stability  to  the                                                            
fishery.  He said the Governor  should have discussed this bill with                                                            
them to see what  they could do to help before submitting  it to the                                                            
legislature.   The lease program as  it exists works fine;  changing                                                            
it to a yearly  lease as opposed to  a 10-year lease (as  it is now)                                                            
will disrupt  the fishery and create  a Smith and Wesson  mentality.                                                            
The program  was  enacted to  add stability  to  the mostly  Alaskan                                                            
fishery  (90 percent).   Set  netters are  paying  $360,000 for  the                                                            
program and he  would like to see that money dedicated.   That would                                                            
end the conflict.                                                                                                               
                                                                                                                                
MR. RICE agreed  that GPS is not accurate enough to  use for set net                                                            
location  as sites  are 300  ft. apart in  Bristol  Bay.  They  have                                                            
already  spent  millions  on  surveyors   statewide  to  locate  and                                                            
dedicate  these sites to their  leases.  They  need the 10  years so                                                            
that they  can plan  their seasons.   They  are willing  to pay  the                                                            
money for the system as long as they get it.                                                                                    
                                                                                                                                
CHAIRMAN HALFORD asked  if the $300 fee is for the 10 year period or                                                            
whether it is annual.                                                                                                           
                                                                                                                                
MR. RICE replied they pay an annual fee for a 10-year lease.                                                                    
                                                                                                                                
MR. TOM CHURCH, Prince  William Sound set netter, clarified that the                                                            
fee is $300  per year per  lease site.    In his district,  they are                                                            
entitled  to have three lease  sites for a  total of $900 per  year.                                                            
He   supported   the   previous   shore   fishery   lease   program.                                                            
Historically,  it  has  proven  to be  successful  and  provided  an                                                            
efficient,  valuable, and  stable  means of managing  that  fishery.                                                            
The facts  show  that the  annual fees  have been  increased to  the                                                            
point where the program  provides a surplus to the State.  It's been                                                            
successful so why fix something if it's not broken.                                                                             
                                                                                                                                
MR. JIM PAHL,  Prince William Sound  set netter, said he  is opposed                                                            
to SB  258.  He pays  $600 per year  for his plots  and it cost  him                                                            
$1,000 last year  to have an amendment to it.  He  is concerned that                                                            
something like this could happen without his knowledge.                                                                         
MR. DAN CHALUP,  Kachemak Bay Salmon  Co-op, opposed SB 258  for the                                                            
reasons already stated.   He would like to see the fees dedicated to                                                            
the shore lease fisheries program instead of the general fund.                                                                  
                                                                                                                                
MS. SANDY UMLAUF,  President, Ugashik  Set Net Association,  opposed                                                            
SB 258.  The old program  was self sustaining, offered stability for                                                            
shore fishery  leases and provided a means for conflict  resolution.                                                            
There was general satisfaction  with the program from the fishermen.                                                            
The resulting  chaos of abandoning this program might  cause the set                                                            
net fishermen  to abandon the program  and lose that state  revenue.                                                            
Set   net   sites  are   frequently   hotly   contested   and   very                                                            
controversial.                                                                                                                  
                                                                                                                                
SENATOR TAYLOR asked Ms. Carroll if anyone supports this bill.                                                                  
                                                                                                                                
MS. CARROLL responded  that DNR came forward with  this bill because                                                            
its  budget was  cut last  year.   It is  an attempt  to handle  the                                                            
program and still  give the people who have a shore  fishery lease a                                                            
registration program.   Right now there is a moratorium on the lease                                                            
program because DNR cannot run it the way it used to.                                                                           
                                                                                                                                
SENATOR  TAYLOR said  it wasn't  actually  a budget  reduction.   He                                                            
asked if the money went some place else within DNR.                                                                             
                                                                                                                                
MS. CARROLL  replied that it was a  reduction in their authority  to                                                            
expend program  receipts.  The money  did not go anywhere  else.  It                                                            
was not allocated anywhere  else in DNR's budget.  It resides in the                                                            
general fund if  people are still paying; and they  are.  The people                                                            
testifying  today are saying  that they totally  fund this  program;                                                            
but DNR does not have the  authority to spend that money like it did                                                            
in previous years.                                                                                                              
                                                                                                                                
SENATOR TAYLOR  asked if DNR doesn't believe it still  has a mission                                                            
to provide the same service.                                                                                                    
                                                                                                                                
MS. CARROLL replied that  DNR cannot provide the same services if it                                                            
doesn't have the staff  to do that.  Statutorily, DNR is required to                                                            
do a lease program, but  it doesn't have the authority to expend the                                                            
money.  Without  the legislature's  permission, it is unable  to run                                                            
the program like it used to.  SB 258 is a fix.                                                                                  
                                                                                                                                
SENATOR  TAYLOR asked  if the Senate  and House  Finance  Committees                                                            
actually cut DNR's budget by $200,000 last year.                                                                                
                                                                                                                                
MS. CARROLL  said that is  correct - directly  to the shore  fishery                                                            
program.                                                                                                                        
                                                                                                                                
SENATOR TAYLOR  said DNR should have just asked for  program receipt                                                            
authority  again, which  doesn't  take a bill.   It  just takes  the                                                            
Finance Committee to reinsert it that way.                                                                                      
                                                                                                                                
MS. CARROLL  said that DNR  recognizes that  the State doesn't  have                                                            
the  money it  used to  and that  the  legislature  is reducing  the                                                            
overall State  budget.  DNR has been  participating in those  budget                                                            
cuts.                                                                                                                           
                                                                                                                                
SENATOR TAYLOR  said DNR  would be much wiser  to discuss this  with                                                            
the Finance Committees.                                                                                                         
                                                                                                                                
Number 1512                                                                                                                     
                                                                                                                                
MR.  KARL   KIRCHER,  Kenai   Peninsula   Fishermen's  Association,                                                             
submitted documents  to the committee:   an October 29, 1992  letter                                                            
from DNR to  set netters outlining  the need for an increase  in the                                                            
yearly rental  fees for shore fishery leases and an  October 5, 1992                                                            
letter from  DNR detailing how the  increased fees would  be used to                                                            
ensure   that   the   adequate   program    receipts   would   cover                                                            
administrative costs.   AS 38.05.082 gives authority to the director                                                            
to administer  the program.   This program  brought a great  deal of                                                            
stability  to  the  program.    They  should  look  closely  at  the                                                            
circumstances surrounding the original cut to the fund.                                                                         
                                                                                                                                
He agreed with Senator  Taylor that this should be dealt with in the                                                            
Finance  Committee.  He thought  they should  ask DNR  if there  are                                                            
specific areas of the shore  lease program that are administratively                                                            
or financially  problematic.   Mr. Kircher  said this is a  bad bill                                                            
but, if it is killed, it  would still leave the moratorium in place.                                                            
At a minimum,  DNR should  continue to issue  renewals so as  not to                                                            
harm  those whose  leases have  expired.   DNR should  be given  the                                                            
authority  to spend  the  program  receipts as  they  came from  the                                                            
industry.                                                                                                                       
                                                                                                                                
MR.  BRENT JOHNSON,  Vice  President,  Kenai  Peninsula Fishermen's                                                             
Association,  said he had  been surveying  shore fishery leases  for                                                            
many years  and he  didn't see how  this new  program would  work in                                                            
Cook Inlet.  In this area,  nets are sometimes a mile and a half off                                                            
shore.   The only time  they can  possibly be  surveyed is at  slack                                                            
tide when  the buoy  lines are pulled  absolutely  tight so  you can                                                            
locate the anchors which  lay at the bottom of the ocean.  He didn't                                                            
think it could be done with GPS.                                                                                                
                                                                                                                                
MR. ROGER KUCHENBECKER  said that  Senator Taylor had suggested  the                                                            
solution  to the problem.   He said he fished  in the Ugashik  River                                                            
district  for 13  years  and is  opposed  to SB  258.   The  current                                                            
program works  and has taken  15 years to  implement.  He said  that                                                            
"peacefully" was one of  the important catch words here.  One of his                                                            
main concerns  would be the  GPS location  as mentioned by  previous                                                            
speakers.                                                                                                                       
                                                                                                                                
CHAIRMAN  HALFORD said  it  is his  understanding  that the  highest                                                            
percentage of  Alaska resident ownership and the highest  percentage                                                            
of local area  resident ownership of a fishery is  in set net sites.                                                            
The State  shouldn't be dismantling  something  that works.   If DNR                                                            
can come back with something  that provides the same kind of service                                                            
that the existing  system provides, it can make its  case.  Short of                                                            
that, this bill isn't destined to be a fast mover.                                                                              
                                                                                                                                
SENATOR MACKIE  said the problem is  that DNR isn't going  to manage                                                            
the lease program  any more and it needs to fix the  program receipt                                                            
question in the budget  so that the funds collected for that purpose                                                            
can be used for that purpose.                                                                                                   
                                                                                                                                
CHAIRMAN  HALFORD  said this  may be  one of  those  cases in  which                                                            
something  happened to the  program receipts  in the prior  year and                                                            
because something  wasn't done correctly, the program  receipts were                                                            
reduced further.                                                                                                                
                                                                                                                                
SENATOR MACKIE  repeated that whatever the cause of  the problem is,                                                            
the funds collected  for that purpose should be allocated  to manage                                                            
that program.                                                                                                                   

Document Name Date/Time Subjects