Legislature(2015 - 2016)HOUSE FINANCE 519

04/12/2016 08:30 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time --
+ HB 300 FISH/SHELLFISH HATCHERY/ENHANCE. PROJECTS TELECONFERENCED
Moved CSHB 300(FSH) Out of Committee
+ SB 32 TIMBER SALES TELECONFERENCED
Moved HCS CSSB 32(RES) Out of Committee
+ SB 145 RECOVERY OF PUB. ASSIST. OVERPAYMENTS TELECONFERENCED
Moved CSSB 145(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 12, 2016                                                                                            
                         8:35 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
8:35:36 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Thompson   called  the  House   Finance  Committee                                                                    
meeting to order at 8:35 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Lance Pruitt                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Kevin Brooks,  Deputy Commissioner,  Department of  Fish and                                                                    
Game;   Forrest  Bowers,   Deputy   Director,  Division   of                                                                    
Commercial Fisheries,  Department of  Fish and  Game; Samuel                                                                    
Rabung,  Aquaculture Section  Chief, Division  of Commercial                                                                    
Fisheries,  Department  of  Fish  and  Game;  Ginny  Eckert,                                                                    
Associate  Director  of  Research,   Alaska  Sea  Grant  and                                                                    
Professor,   School  of   Fisheries   and  Ocean   Sciences,                                                                    
University  of  Alaska  Fairbanks; Chris  Maisch,  Director,                                                                    
Division of Forestry, Department  of Natural Resources; Sean                                                                    
O'Brien,   Director,   Division    of   Public   Assistance,                                                                    
Department of Health and Social Services.                                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Heather    McCarty,   Central    Bering   Sea    Fishermen's                                                                    
Association,  Anchorage; Julie  Decker, Executive  Director,                                                                    
Alaska  Fisheries  Development Foundation,  Wrangell;  Nancy                                                                    
Hillstrand,  Pioneer   Alaskan  Fisheries,   Seldovia;  Owen                                                                    
Graham, Alaska Forest  Association, Ketchikan; Carl Portman,                                                                    
Resource Development Council, Anchorage.                                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 300    FISH/SHELLFISH HATCHERY/ENHANCE. PROJECTS                                                                             
                                                                                                                                
          CSHB 300(FSH)  was REPORTED out of  committee with                                                                    
          a "no recommendation"  recommendation and with one                                                                    
          new  fiscal impact  note  from  the Department  of                                                                    
          Fish and Game,  one new zero fiscal  note from the                                                                    
          Department   of   Revenue,  and   one   previously                                                                    
          published zero fiscal note: FN2 (DFG).                                                                                
                                                                                                                                
CSSB 32(RES)                                                                                                                    
          TIMBER SALES                                                                                                          
                                                                                                                                
          HCS  CSSB 32(RES)  was REPORTED  out of  committee                                                                    
          with  a  "do  pass" recommendation  and  with  one                                                                    
          previously published zero  fiscal impact note: FN2                                                                    
          (DNR).                                                                                                                
                                                                                                                                
CSSB 145(FIN)                                                                                                                   
          RECOVERY OF PUB. ASSIST. OVERPAYMENTS                                                                                 
                                                                                                                                
          CSSB 145(FIN)  was REPORTED out of  committee with                                                                    
          a   "do   pass"   recommendation  and   with   one                                                                    
          previously published zero  fiscal note: FN2 (REV);                                                                    
          and one  previously published fiscal  impact note:                                                                    
          FN3 (DHS).                                                                                                            
                                                                                                                                
Co-Chair Thompson addressed the meeting agenda.                                                                                 
                                                                                                                                
HOUSE BILL NO. 300                                                                                                            
                                                                                                                                
     "An Act  relating to management  of enhanced  stocks of                                                                    
     fish; authorizing the  operation of nonprofit shellfish                                                                    
     hatcheries;  relating to  application  fees for  salmon                                                                    
     and shellfish  hatchery permits;  and providing  for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
8:36:44 AM                                                                                                                    
                                                                                                                                
KEVIN BROOKS,  DEPUTY COMMISSIONER,  DEPARTMENT OF  FISH AND                                                                    
GAME, relayed  that the bill  would enable  the commissioner                                                                    
of Department of  Fish and Game (DFG) to  manage fish stocks                                                                    
for the purpose  of supplying shellfish to  an aquatic farm.                                                                    
The  bill  was  inspired  by stakeholder  interest  and  had                                                                    
support  from the  industry. He  relayed that  the bill  was                                                                    
virtually  identical to  the companion  bill  on the  Senate                                                                    
side.                                                                                                                           
                                                                                                                                
FORREST  BOWERS,  DEPUTY  DIRECTOR, DIVISION  OF  COMMERCIAL                                                                    
FISHERIES, DEPARTMENT OF FISH  AND GAME, provided background                                                                    
on  the  bill.  He  relayed  that there  were  a  number  of                                                                    
shellfish fisheries that had been  closed for several years.                                                                    
There  were  other   depressed  shellfish  stocks  including                                                                    
abalone, sea cucumber, and other.  He remarked that some had                                                                    
failed to rebuild the populations  to a level of harvestable                                                                    
surplus.  Current statutes  did  not give  the authority  to                                                                    
permit  shellfish  for  restocking. The  bill  was  modelled                                                                    
largely after  the existing salmon  law for  consistency. He                                                                    
went through a sectional analysis:                                                                                              
                                                                                                                                
     Sec. 1                                                                                                                     
     Provides  the Alaska  Board of  Fisheries authority  to                                                                    
     direct the department to  manage production of enhanced                                                                    
     shellfish  stocks, beyond  broodstock  needs, for  cost                                                                    
     recovery harvest.                                                                                                          
     Sec. 2                                                                                                                     
     Increases the  permit application  fee for  new private                                                                    
     nonprofit salmon hatcheries from $100 to $1,000.                                                                           
     Sec. 3                                                                                                                     
     Adds a  new Chapter  12 to  Title 16,  "Shellfish Stock                                                                    
     Rehabilitation   Efforts,  Enhancement   Projects,  and                                                                    
     Hatcheries. Provides  direction to the  commissioner on                                                                    
     issuance  of permits  for  private nonprofit  shellfish                                                                    
     stock rehabilitation  and fishery  enhancement projects                                                                    
     and associated  shellfish hatcheries and  establishes a                                                                    
     $1,000  permit application  fee.  This section  directs                                                                    
     the commissioner  to consult with technical  experts in                                                                    
     the  relevant   areas  before  permit   issuance.  This                                                                    
     section provides for  a hearing prior to  issuance of a                                                                    
     permit  and describes  certain  permit terms  including                                                                    
     cost recovery fisheries, harvest,  sale, and release of                                                                    
     hatchery-produced    shellfish,   and    selection   of                                                                    
     broodstock  sources. This  section describes  reporting                                                                    
     requirements and  terms for modification  or revocation                                                                    
     of a permit.                                                                                                               
     Sec.  4  Provides  the commission  authority  to  issue                                                                    
     special  harvest  area  entry  permits  to  holders  of                                                                    
     private     nonprofit     shellfish     rehabilitation,                                                                    
     enhancement or hatchery permits.                                                                                           
     Sec. 5                                                                                                                     
     Defines  legal fishing  gear for  special harvest  area                                                                    
     entry permit holders.                                                                                                      
     Sec. 6                                                                                                                     
     Exempts  shellfish   raised  in  a   private  nonprofit                                                                    
    shellfish project from the farmed fish definition.                                                                          
     Sec. 7 and 8                                                                                                               
     Establish  tax exemption  for  a nonprofit  corporation                                                                    
     holding  a   shellfish  hatchery,   rehabilitation,  or                                                                    
     enhancement permit.                                                                                                        
     Sec. 9                                                                                                                     
     Exempts  shellfish harvested  under  a special  harvest                                                                    
     area entry permit from certain taxes.                                                                                      
     Sec. 10                                                                                                                    
     Establishes  an effective  date of  the fee  for salmon                                                                    
     hatchery permits described in sec. 2.                                                                                      
     Sec. 11                                                                                                                    
     Authorizes   the  department   to  adopt   implementing                                                                    
     regulations.                                                                                                               
     Sec. 12                                                                                                                    
     Establishes  an immediate  effective date  for sec.  12                                                                    
     pursuant to AS 01.10.070(c).                                                                                               
     Sec. 13                                                                                                                    
     Establishes an  effective date  for sec.  9 concomitant                                                                    
     with sec. 2 effective date.                                                                                                
                                                                                                                                
8:43:41 AM                                                                                                                    
                                                                                                                                
Representative Wilson asked about the support of industry.                                                                      
She thought fishermen were not excited about it.                                                                                
                                                                                                                                
Mr. Bowers replied that the department had received broad                                                                       
support from the United Fisherman of Alaska.                                                                                    
                                                                                                                                
Representative Wilson asked if the department had received                                                                      
any opposition to the bill.                                                                                                     
                                                                                                                                
Mr. Bowers replied that the department had not received any                                                                     
opposition.                                                                                                                     
                                                                                                                                
Representative Wilson asked about the opposition in public                                                                      
testimony.                                                                                                                      
                                                                                                                                
Mr. Bowers  replied that the opposition  was concerned about                                                                    
hatcheries in general.                                                                                                          
                                                                                                                                
Vice-Chair Saddler  referred to  the sectional  analysis. He                                                                    
asked who the technical experts would be.                                                                                       
                                                                                                                                
Mr.  Bowers  replied  that  the   panel  had  not  yet  been                                                                    
appointed. It was a group  the department would put together                                                                    
and  would  describe  the  number of  seats  and  makeup  in                                                                    
regulations.                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler asked  about the  size of  the shellfish                                                                    
industry currently.                                                                                                             
                                                                                                                                
Mr. Bowers answered that the  shellfish industry was about a                                                                    
$400 to $500 million commercial fishery.                                                                                        
                                                                                                                                
Vice-Chair  Saddler   asked  if  nonprofits   receiving  the                                                                    
permits, and  expanding their business  or limiting  to only                                                                    
shellfish.                                                                                                                      
                                                                                                                                
Mr. Bowers  answered that there  were currently a  couple of                                                                    
projects in the research stage.                                                                                                 
                                                                                                                                
8:48:15 AM                                                                                                                    
                                                                                                                                
Vice-Chair Saddler asked if new fisheries were anticipated.                                                                     
                                                                                                                                
Mr. Bowers  provided stated  that rehabilitation  would take                                                                    
place  of   some  depressed  stocks.  There   were  existing                                                                    
populations at a very depressed  level. Enhancement would be                                                                    
beyond the natural productivity level.  He did not know that                                                                    
there would be additional fisheries.                                                                                            
                                                                                                                                
Representative Kawasaki  pointed to  a letter in  support of                                                                    
the bill.                                                                                                                       
                                                                                                                                
Mr.  Bowers replied  that the  group was  operating under  a                                                                    
research permit.                                                                                                                
                                                                                                                                
Representative    Kawasaki    stated    that    the    words                                                                    
rehabilitation  and  enhancement   were  mentioned  multiple                                                                    
times in the letter.                                                                                                            
                                                                                                                                
Mr.  Bowers answered  that a  hatchery could  open, but  the                                                                    
bill was not necessarily about hatcheries.                                                                                      
                                                                                                                                
8:52:19 AM                                                                                                                    
                                                                                                                                
Representative  Kawasaki was  confused  about  the bill.  He                                                                    
wondered if the  hatchery was the only new  allowance in the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr.  Bowers  answered that  under  the  existing permit  for                                                                    
research small scale projects were allowed.                                                                                     
                                                                                                                                
Representative   Kawasaki  wondered   how  the   science  or                                                                    
research would take  place prior to approving  a large scale                                                                    
operation.                                                                                                                      
                                                                                                                                
Mr.  Bowers answered  that the  department would  engage its                                                                    
research lab,  and maintain integrity. The  department would                                                                    
look  at  the  habitat,  the  dynamics  of  the  stock,  the                                                                    
population  level  that  would  be supported,  and  how  the                                                                    
project would impact other animals.                                                                                             
                                                                                                                                
Co-Chair Neuman  asked what a  nonprofit meant in  the bill.                                                                    
He asked if  it was an entity that made  a profit by selling                                                                    
fish, but did not pay taxes.                                                                                                    
                                                                                                                                
Mr. Brooks deferred the question to a colleague.                                                                                
                                                                                                                                
SAMUEL  RABUNG,  AQUACULTURE   SECTION  CHIEF,  DIVISION  OF                                                                    
COMMERCIAL FISHERIES, DEPARTMENT OF  FISH AND GAME, answered                                                                    
that  the bill  designed to  be not  for private  ownership,                                                                    
rather  the  private  nonprofit  model,  the  entities  were                                                                    
registered  with  Department   of  Commerce,  Community  and                                                                    
Economic Development made up of boards with stakeholders.                                                                       
                                                                                                                                
Co-Chair  Neuman  asked  about   nonprofit  or  a  shellfish                                                                    
hatchery harvest and sell for a profit.                                                                                         
                                                                                                                                
Mr.  Rabung  replied  that  cost   recovery  was  a  funding                                                                    
mechanism, but was not the only one.                                                                                            
                                                                                                                                
8:57:54 AM                                                                                                                    
                                                                                                                                
Co-Chair Neuman assumed the reports were audited.                                                                               
                                                                                                                                
Mr. Rabung nodded in the affirmative.                                                                                           
                                                                                                                                
Co-Chair Neuman spoke  to the original version  of the bill.                                                                    
He  discussed fish  or shellfish,  and he  asked why  it had                                                                    
been removed.                                                                                                                   
                                                                                                                                
Mr.  Rabung  answered that  it  was  the exact  language  in                                                                    
statute   for   salmon.   The  department   had   overlooked                                                                    
additional shellfish issues.                                                                                                    
                                                                                                                                
Co-Chair  Neuman remarked  on budget  concerns. He  asked if                                                                    
the state was putting money into the project.                                                                                   
                                                                                                                                
Mr. Brooks replied  that there was a staff of  five that ran                                                                    
the  aquaculture program;  the  department envisioned  using                                                                    
the  existing  staff for  the  project.  There was  one-time                                                                    
permit fee  of $1,000  and only expected  a few  permits per                                                                    
year.                                                                                                                           
                                                                                                                                
Co-Chair  Neuman believed  it  had been  the  intent of  the                                                                    
legislature  to direct  the departments,  and  he hoped  the                                                                    
state would recoup the costs                                                                                                    
                                                                                                                                
Mr. Bowers  replied that if  they were successful  the state                                                                    
could do cost recovery on test fishing.                                                                                         
                                                                                                                                
Co-Chair  Neuman would  like  to see  a  mechanism for  cost                                                                    
recovery.                                                                                                                       
                                                                                                                                
Co-Chair  Thompson directed  the department  to work  on the                                                                    
issue.                                                                                                                          
                                                                                                                                
Representative   Gara  wanted   to  ensure   there  was   no                                                                    
contamination  of  wild  stocks.  He asked  if  all  of  the                                                                    
shellfish would be from the area.                                                                                               
                                                                                                                                
Mr. Bowers answered in the affirmative.                                                                                         
                                                                                                                                
9:02:30 AM                                                                                                                    
                                                                                                                                
Representative  Gara  stated  that   currently  one  of  the                                                                    
largest marketing  of Alaska shellfish  was the allure  of a                                                                    
wild product. He  asked what the companies would  have to do                                                                    
to market their wild product.                                                                                                   
                                                                                                                                
Mr.   Bowers   answered   that   it   was   enhancement   or                                                                    
rehabilitation of wild stocks; similar to that of salmon.                                                                       
                                                                                                                                
Representative Gara  did not know  how to analyze  the risk.                                                                    
He did  not believe they  were wild.  There was risk  in his                                                                    
mind that people  who want to undermine the sale  of wild //                                                                    
He asked about the danger.                                                                                                      
                                                                                                                                
Mr.  Rabung  answered  that the  department  utilized  local                                                                    
stock.                                                                                                                          
                                                                                                                                
Representative  Gara stated  that wild  shell fish  would be                                                                    
more concentrated. He asked about  more waste contaminate in                                                                    
the water.                                                                                                                      
                                                                                                                                
Mr.  Rabung replied  that the  project would  be limited  to                                                                    
millions  of  juveniles and  would  not  result in  a  waste                                                                    
issue.                                                                                                                          
                                                                                                                                
Representative  Gara asked  about  the danger  to any  other                                                                    
species.  The bill  contained a  provision about  destroying                                                                    
diseased shellfish.                                                                                                             
                                                                                                                                
Mr. Rabung  answered that  it was standard  and had  been in                                                                    
place  since 1974.  He announced  that regulation  pathology                                                                    
required fairly strict quarantine.                                                                                              
                                                                                                                                
9:08:30 AM                                                                                                                    
                                                                                                                                
Representative  Gara  asked  what  the danger  would  be  to                                                                    
disease of other wild shellfish.                                                                                                
                                                                                                                                
Mr.  Rabung replied  that the  department had  discussed the                                                                    
issue with its pathologist who  was not concerned as long as                                                                    
current regulations were adhered to.                                                                                            
                                                                                                                                
Representative Gara  wondered what individuals who  were not                                                                    
champions of the bill would say.                                                                                                
                                                                                                                                
Representative  Guttenberg  expressed concern  about  Alaska                                                                    
wild salmon.  He had seen  criticisms of hatchery  fish from                                                                    
competing  markets. He  was concerned  how  it would  impact                                                                    
wild  products.  He  pointed  to  a  letter  in  the  packet                                                                    
mentioned  the  mariculture  taskforce   -  he  asked  about                                                                    
criticisms.                                                                                                                     
                                                                                                                                
Mr.   Rabung  replied   that   the  governor's   mariculture                                                                    
taskforce had been  established but had not yet  met; it was                                                                    
seen as a companion bill.                                                                                                       
                                                                                                                                
9:12:28 AM                                                                                                                    
                                                                                                                                
Representative  Guttenberg   spoke  to  the   taskforce.  He                                                                    
believed it  was probably a good  thing to be doing,  but he                                                                    
would like a better picture about expanding the program.                                                                        
                                                                                                                                
GINNY  ECKERT, ASSOCIATE  DIRECTOR OF  RESEARCH, ALASKA  SEA                                                                    
GRANT  AND   PROFESSOR,  SCHOOL   OF  FISHERIES   AND  OCEAN                                                                    
SCIENCES,  UNIVERSITY  OF   ALASKA  FAIRBANKS,  thanked  the                                                                    
governor's  office and  believed the  bill served  the need.                                                                    
She  spoke to  king crab,  which were  native to  Alaska and                                                                    
were seriously  overfished. She  stated that  the population                                                                    
had not recovered. She was  conducting research to determine                                                                    
why they had not recovered.                                                                                                     
                                                                                                                                
9:16:36 AM                                                                                                                    
                                                                                                                                
Vice-Chair Saddler was given the gavel.                                                                                         
                                                                                                                                
Representative  Kawasaki  expressed concern  about  ensuring                                                                    
that the stock would not harm the ecology.                                                                                      
                                                                                                                                
Ms. Eckert answered that they  were valid concerns. The goal                                                                    
of the bill was to take stocks  from an area as close to the                                                                    
area where  rehabilitation would  occur. She stated  that if                                                                    
the native  stock was  not available, they  would go  to the                                                                    
next  closest  source.    She   stressed  that,  with  crab,                                                                    
everything  was   much  more  localized  with   salmon  than                                                                    
shellfish.                                                                                                                      
                                                                                                                                
Representative  Kawasaki asked  Ms.  Eckert  to address  the                                                                    
concern about mixing,  because he did not  want to introduce                                                                    
something new that may damage the ecology.                                                                                      
                                                                                                                                
Ms.  Eckert replied  that there  were  criticisms of  salmon                                                                    
hatcheries.  She  stated it  was  necessary  to think  about                                                                    
where the bottleneck occurred. There  were not enough adults                                                                    
to produce  the offspring to  rehabilitate the stock  on its                                                                    
own.                                                                                                                            
                                                                                                                                
9:21:46 AM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  spoke  to  overharvesting  in  the                                                                    
1980s - he wondered why  the solution was not harvesting for                                                                    
some time. He  recognized a commercial fleet  depended on it                                                                    
for money.                                                                                                                      
                                                                                                                                
Ms. Eckert replied  that the industry had  been closed since                                                                    
the early 1980s, but it had not been effective.                                                                                 
                                                                                                                                
Representative  Guttenberg addressed  the moratorium  on the                                                                    
fisheries.  He  asked if  there  had  been any  research  on                                                                    
something that had replaced the species.                                                                                        
                                                                                                                                
Ms. Eckert  did not know  that enough about the  ecology was                                                                    
known to know if something had replaced them.                                                                                   
                                                                                                                                
Representative Guttenberg  asked if someone had  studied the                                                                    
ecology of the regions. He  wondered why the species had not                                                                    
come  back. He  wondered  if  there was  a  reason that  the                                                                    
species could  not live  in the  areas any  longer due  to a                                                                    
habitat change.                                                                                                                 
                                                                                                                                
Ms. Eckert  answered that  it was  necessary to  think about                                                                    
the bottleneck  in the fishery.  He stated that  habitat was                                                                    
not  limiting, the  ocean was  compatible for  king crab  to                                                                    
live in regions, but overfishing  had caused the decrease in                                                                    
king crab.                                                                                                                      
                                                                                                                                
Representative  Edgmon  supported   the  bill.  He  believed                                                                    
concerns had been assuaged by the expert testimony                                                                              
                                                                                                                                
9:25:58 AM                                                                                                                    
                                                                                                                                
HEATHER    MCCARTY,   CENTRAL    BERING   SEA    FISHERMEN'S                                                                    
ASSOCIATION,  ANCHORAGE  (via teleconference),  she  relayed                                                                    
that the group was comprised of different stakeholders.                                                                         
                                                                                                                                
Vice-Chair Saddler asked if the  testifier was in support of                                                                    
the bill.                                                                                                                       
                                                                                                                                
Ms. McCarty  replied that they strongly  supported the bill.                                                                    
They had been  working with the Department of  Fish and Game                                                                    
and  believed they  were superb  guardians of  the fisheries                                                                    
resources of Alaska.                                                                                                            
                                                                                                                                
JULIE   DECKER,   EXECUTIVE   DIRECTOR,   ALASKA   FISHERIES                                                                    
DEVELOPMENT   FOUNDATION,  WRANGELL   (via  teleconference),                                                                    
spoke  in  support  of  the  bill. She  spoke  to  a  recent                                                                    
taskforce established by a governor order.                                                                                      
                                                                                                                                
9:32:21 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler  asked  Ms. Decker  to  provide  written                                                                    
testimony if available.                                                                                                         
                                                                                                                                
NANCY HILLSTRAND,  PIONEER ALASKAN FISHERIES,  SELDOVIA (via                                                                    
teleconference),  was  worried  that  the  state  was  using                                                                    
legislation that was  40 years old. She felt  that there was                                                                    
not  enough monitoring  in the  hatcheries. She  shared that                                                                    
there  was one  stream  that had  90  percent hatchery  fish                                                                    
replacing the wild  stocks, and 87 percent  were from Prince                                                                    
William Sound  traveling all  the way  to Kachemak  Bay. She                                                                    
stressed  that there  were many  problems with  the hatchery                                                                    
system, even  with the help  of pathology and  genetics. She                                                                    
felt  that there  should  be a  pilot  program, because  the                                                                    
legislation proposed  was still  in the research  phase. She                                                                    
remarked that  the interaction  between species.  She stated                                                                    
that  in  the  1960s,  in  the Bering  Sea,  king  crab  was                                                                    
introduced;  but king  crab was  now considered  an invasive                                                                    
species.  She stressed  that  the  American Fishery  Society                                                                    
must be contacted.  She urged the committee  to research the                                                                    
issue further.                                                                                                                  
                                                                                                                                
9:35:33 AM                                                                                                                    
                                                                                                                                
Vice-Chair Saddler CLOSED public testimony.                                                                                     
                                                                                                                                
Mr. Brooks  appreciated the public  testimony and  had noted                                                                    
Ms. Hillstrand's  concerns. The  department believed  it had                                                                    
the safeguards in place to address concerns.                                                                                    
                                                                                                                                
Representative  Wilson  believed  the testifier  had  raised                                                                    
serious issues.                                                                                                                 
                                                                                                                                
Mr.  Bowers  answered  that the  department  had  heard  the                                                                    
issues in the past. He was  not trying to discount them, but                                                                    
the  department believed  the safeguards  were in  place. He                                                                    
pointed to  examples in different  regions. He spoke  to the                                                                    
commercial fishery  on the Russian  side of the  Bering Sea,                                                                    
and that he did not view the project as a failure.                                                                              
                                                                                                                                
Representative Gara wondered if  there were dissenting views                                                                    
from biologists regarding safety.                                                                                               
                                                                                                                                
Mr. Bowers replied  that the same request had  been given in                                                                    
the  prior  committee. He  stated  that  a small  group  had                                                                    
developed the bill. He shared  that not all staff biologists                                                                    
were not  consulted on the bill.  He felt that there  may be                                                                    
individuals who may be against the bill.                                                                                        
                                                                                                                                
Representative  Guttenberg requested  a  written comment  in                                                                    
reply  to  Ms.  Hillstrand's  testimony. He  felt  that  Mr.                                                                    
Brooks seemed flippant.                                                                                                         
                                                                                                                                
Mr.  Brooks  answered  that  there   was  no  intent  to  be                                                                    
flippant. He stated that he would provide written answers.                                                                      
                                                                                                                                
Representative  Kawasaki  wanted  to ensure  that  the  bill                                                                    
would not destroy the ecology of a specific area.                                                                               
                                                                                                                                
9:42:27 AM                                                                                                                    
                                                                                                                                
Mr. Rabung replied  that, in the event that  local stock was                                                                    
extirpated, no  longer existed,  or in  insufficient numbers                                                                    
to  provide  adequate root  stock  to  meet genetic  minimum                                                                    
effective  population  numbers,  the  nearest  stock  to  be                                                                    
sought to be the most compatible.                                                                                               
                                                                                                                                
Vice-Chair Saddler agrees.                                                                                                      
                                                                                                                                
Mr. Brooks added  that it had been a concern  in the Senate.                                                                    
He announced that  the language had been  removed to address                                                                    
the concern.                                                                                                                    
                                                                                                                                
Representative  Edgmon supported  the  bill  and viewed  the                                                                    
legislation as economic development. He  did not find any of                                                                    
the department's comments to be  dismissive. He believed the                                                                    
bill had been vetted. He  felt any hiccups or problems along                                                                    
the way would be noted by the department.                                                                                       
                                                                                                                                
Co-Chair Neuman  spoke to  the funding  issues. He  asked if                                                                    
there would be federal funds coming in.                                                                                         
                                                                                                                                
Mr. Brooks  replied that the  program would pay  for itself.                                                                    
He  explained that  there  was a  contract  that brought  in                                                                    
federal funds for managing crab.                                                                                                
                                                                                                                                
Co-Chair Neuman  remarked that  management would  be reduced                                                                    
in the state because of  budget reductions. He felt that the                                                                    
program would  have a good  benefit to the state,  but noted                                                                    
the current programs that require  funds. He wondered if any                                                                    
of  the  funds   for  the  project  must   be  dedicated  to                                                                    
shellfish.                                                                                                                      
                                                                                                                                
Mr. Brooks replied  none of the programs  would be displaced                                                                    
to manage  the program. He  stated that primary  funding for                                                                    
shellfish management was federal receipts.                                                                                      
                                                                                                                                
Co-Chair Neuman  stated that  his concern  was that  it took                                                                    
department staff,  and the  department was  already extended                                                                    
thin. He  would like to  see the funds coming  from industry                                                                    
to support it.                                                                                                                  
                                                                                                                                
Co-Chair Neuman addressed the three zero fiscal notes.                                                                          
                                                                                                                                
9:48:54 AM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  MOVED  to  REPORT  CSHB  300(FSH)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative  Gara  OBJECTED.  He  wanted  to  know  about                                                                    
dissenting biologists  who were  concerned about  the safety                                                                    
of the  program. He wanted  to ensure  that he was  not only                                                                    
hearing one side of the  story. Representative Gara WITHDREW                                                                    
his OBJECTION.                                                                                                                  
                                                                                                                                
Representative  Wilson OBJECTED.  She felt  that the  people                                                                    
who  had  offered  concerns,  were  valid  individuals.  She                                                                    
wanted  to further  understand  the process.  Representative                                                                    
Wilson WITHDREW her OBJECTION.                                                                                                  
                                                                                                                                
Vice-Chair  Saddler  stressed  that   there  was  never  100                                                                    
percent unanimity.                                                                                                              
                                                                                                                                
Representative  Gattis believed  everyone was  aware of  the                                                                    
"fish wars" but  she believed it was  important to recognize                                                                    
the underlying problem.                                                                                                         
                                                                                                                                
Co-Chair  Neuman also  had  concerns  with the  department's                                                                    
actions. He believed  it was incumbent on  the department to                                                                    
visit  members to  discuss the  matter. He  stated that  the                                                                    
committee would watch the issue.                                                                                                
                                                                                                                                
9:53:55 AM                                                                                                                    
                                                                                                                                
Representative  Edgmon  remarked   that  the  department  no                                                                    
longer  had  a  legislative   liaison.  He  recommended  the                                                                    
department to visit committee offices.                                                                                          
                                                                                                                                
CSHB  300(FSH) was  REPORTED  out of  committee  with a  "no                                                                    
recommendation"  recommendation  and  with  one  new  fiscal                                                                    
impact note  from the Department  of Fish and Game,  one new                                                                    
zero fiscal note from the Department of Revenue, and one                                                                        
previously published zero fiscal note: FN2 (DFG).                                                                               
                                                                                                                                
9:54:45 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:56:50 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 32(RES)                                                                                                
                                                                                                                                
     "An Act relating  to the sale of timber  on state land;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
9:57:17 AM                                                                                                                    
                                                                                                                                
CHRIS MAISCH, DIRECTOR, DIVISION  OF FORESTRY, DEPARTMENT OF                                                                    
NATURAL RESOURCES,  provided a  quick overview of  the bill.                                                                    
The  bill  would  change the  authority  process  of  timber                                                                    
sales:                                                                                                                          
                                                                                                                                
     The  bill would  amend  AS 38.05.110  and 38.05.118  to                                                                    
     expand  the  authority  of the  Commission  of  Natural                                                                    
     Resources to negotiate the sale  of timber at appraised                                                                    
     value.                                                                                                                     
                                                                                                                                
     The Department  of Natural  Resources may  offer timber                                                                    
     sales  either   through  competitive  bid   or  through                                                                    
     negotiation.   Currently   under  AS   38.05.118,   the                                                                    
     Commissioner  of Natural  Resources  may negotiate  the                                                                    
     sale  of timber  to a  local manufacturer  at appraised                                                                    
     value.  However, negotiated  sales larger  than 500,000                                                                    
     board  feet  may  only  be offered  in  areas  of  high                                                                    
     unemployment,  excess  manufacturing capacity,  and  an                                                                    
     underutilized allowable  cut of timber.  These criteria                                                                    
     prohibit larger  negotiated timber sales in  many areas                                                                    
     of the  state that  are actively managed  for forestry,                                                                    
     and  where there  is high  demand for  wood for  timber                                                                    
     products and  biomass energy.  The proposed  bill would                                                                    
     provide   that,  in   addition   to   sales  to   local                                                                    
     manufacturers  of  wood  products, sales  may  also  be                                                                    
     negotiated  with  users  of  wood  fiber.  This  change                                                                    
     clarifies that negotiated sales  may be used to support                                                                    
     wood   energy  production   as   well  as   traditional                                                                    
     products.  In addition,  the bill  would eliminate  the                                                                    
     current  limitations that  negotiated  timber sales  be                                                                    
     based on a  finding that in the area of  the sale there                                                                    
     is  a  high  level of  unemployment,  an  underutilized                                                                    
     manufacturing capacity, and  an underutilized supply of                                                                    
     timber   that  will   lose  value   if  not   cut.  The                                                                    
     requirement   that   al   three   conditions   be   met                                                                    
     substantially  limits   the  Commissioner   of  Natural                                                                    
     Resources'   authority  and   flexibility  to   approve                                                                    
     negotiated sales that would be  in the best interest of                                                                    
     the State.                                                                                                                 
                                                                                                                                
     Competitively bid  timber sales are the  preferred sale                                                                    
     method  under  most   conditions.  However,  negotiated                                                                    
     sales provide the  ability to tailor some  sales to the                                                                    
     needs   of  local   processors  in   areas  that   lack                                                                    
     competitive  interest  or  where there  is  competition                                                                    
     from  round  log export  markets  in  a region  with  a                                                                    
     constrained timber supply.  The latter situation exists                                                                    
     in Southern Southeast Alaska where  the State of Alaska                                                                    
     is  small landowner  compared to  the Tongass  National                                                                    
     Forest, and  the State of  Alaska's full  allowable cut                                                                    
     is  a  critical  source  of   logs  for  the  remaining                                                                    
     sawmills.                                                                                                                  
                                                                                                                                
10:04:26 AM                                                                                                                   
                                                                                                                                
Representative Wilson  relayed that the pellet  plant was in                                                                    
North Pole.                                                                                                                     
                                                                                                                                
Representative  Kawasaki  remarked  that there  was  concern                                                                    
about the ability  of the commissioner to engage  in the 25-                                                                    
year  process. He  requested an  explanation  of the  5-year                                                                    
appraisal process.                                                                                                              
                                                                                                                                
Mr. Maisch replied  that sales occurred at a  base rate. The                                                                    
rate was  determined by an  appraisal that covered  the cost                                                                    
of  the  division  to  offer  and  administer  a  sale.  The                                                                    
division negotiated  from the base  rate point.  He stressed                                                                    
that  the 25  years was  the maximum,  and the  commissioner                                                                    
determined  the best  interest for  the  state. He  remarked                                                                    
that  financing was  the most  important  reason for  longer                                                                    
term sales. He explained that  there were no restrictions in                                                                    
the 120  sales to any  particular length of time.  He stated                                                                    
that, as  a matter of  practice, those sales  were typically                                                                    
three  to  five   years.  He  remarked  that   there  was  a                                                                    
reappraisal clause in both the contact and legislation.                                                                         
                                                                                                                                
Representative   Kawasaki   wondered  whether,   under   the                                                                    
reappraisal, there would be  another submitted best interest                                                                    
finding.                                                                                                                        
                                                                                                                                
Mr.  Maisch replied  in  the negative,  and  stated that  it                                                                    
would be a part of the contract.                                                                                                
                                                                                                                                
Co-Chair  Neuman  noted   that  the  legislation  considered                                                                    
negotiated  sales with  areas  with  high unemployment,  and                                                                    
wondered how those areas were identified.                                                                                       
                                                                                                                                
Mr. Maisch replied that it  was 125 percent of the statewide                                                                    
average. He shared that the  statewide average was published                                                                    
by the  DLWD was currently  6.5 percent. He stated  that the                                                                    
level must  be above  7.6 percent  to employ  the authority.                                                                    
The current unemployment rate in Ketchikan was Ketchikan.                                                                       
                                                                                                                                
Co-Chair  Neuman  asked  whether the  Fairbanks  and  Mat-Su                                                                    
boroughs qualified for the sales.                                                                                               
                                                                                                                                
Mr. Maisch  answered that currently  the areas did  not, but                                                                    
the  bill   would  allow  for  the   authority  consistently                                                                    
statewide.                                                                                                                      
                                                                                                                                
Co-Chair  Neuman  remarked that  the  timber  sales must  be                                                                    
added value sales, where they process the log.                                                                                  
                                                                                                                                
Mr. Maisch  answered in the  affirmative. He shared  that it                                                                    
had long been the  department's policy to encourage managing                                                                    
in Alaska.                                                                                                                      
                                                                                                                                
10:09:28 AM                                                                                                                   
                                                                                                                                
Co-Chair  Neuman wondered  if  the funds  would be  directed                                                                    
into forestry management in Southeast Alaska.                                                                                   
                                                                                                                                
Mr. Maisch  replied in the  affirmative, and  explained that                                                                    
currently  all the  forestry positions  in Southeast  Alaska                                                                    
were funded under the timber sale receipt authority.                                                                            
                                                                                                                                
Vice-Chair  Saddler  queried  what  would  occur  without  a                                                                    
timber source for the Viking Mill.                                                                                              
                                                                                                                                
Mr.  Maisch replied  that the  mill was  currently operating                                                                    
one forest service  sale to big foreign sales,  so there was                                                                    
roughly one  year of timber  under contract. He  stated that                                                                    
it was likely that there would  not be enough timber to keep                                                                    
the mill open, without the ability to negotiate sales.                                                                          
                                                                                                                                
OWEN  GRAHAM,  ALASKA  FOREST  ASSOCIATION,  KETCHIKAN  (via                                                                    
teleconference), spoke  in support of the  bill. He remarked                                                                    
that it was very difficult to have two operators operating.                                                                     
                                                                                                                                
10:12:52 AM                                                                                                                   
                                                                                                                                
CARL PORTMAN,  RESOURCE DEVELOPMENT COUNCIL,  ANCHORAGE (via                                                                    
teleconference),  testified  in  support of  the  bill.  The                                                                    
basic  premise of  the  bill was  to  allow long-term  sales                                                                    
where appropriate.                                                                                                              
                                                                                                                                
Vice-Chair Saddler CLOSED public testimony.                                                                                     
                                                                                                                                
Representative Kawasaki had originally  thought the bill may                                                                    
have  been related  to  special interest,  but  he had  come                                                                    
around and believed it was good policy.                                                                                         
                                                                                                                                
10:16:28 AM                                                                                                                   
                                                                                                                                
Representative Wilson supported the  bill. She remarked that                                                                    
the bill provided another way to best utilize the timber.                                                                       
                                                                                                                                
Co-Chair  Neuman  remarked  that   the  department  had  the                                                                    
opportunity  to offer  the high  value processing  timber or                                                                    
logging  companies to  enter into  contracts for  up to  $10                                                                    
million board of feet a  year consistent with principles for                                                                    
a  term of  up to  ten years.  He did  not believe  that the                                                                    
department had every utilized that allowance.                                                                                   
                                                                                                                                
Representative  Guttenberg  remarked  that  it  occasionally                                                                    
paid off to "not be first."                                                                                                     
                                                                                                                                
Co-Chair Thompson  addressed the  zero fiscal note  from the                                                                    
Department of Natural Resources (DNR).                                                                                          
                                                                                                                                
Co-Chair  Neuman MOVED  to REPORT  HCS CSSB  32(RES) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
HCS CSSB  32(RES) was REPORTED  out of committee with  a "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal impact note: FN2 (DNR).                                                                                                  
                                                                                                                                
10:21:21 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:22:46 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 145(FIN)                                                                                               
                                                                                                                                
     "An Act relating to benefits for public assistance                                                                         
     programs administered by the Department of Health and                                                                      
     Social Services; and providing for an effective date."                                                                     
                                                                                                                                
10:23:10 AM                                                                                                                   
                                                                                                                                
SEAN  O'BRIEN,  DIRECTOR,  DIVISION  OF  PUBLIC  ASSISTANCE,                                                                    
DEPARTMENT   OF  HEALTH   AND   SOCIAL  SERVICES,   provided                                                                    
information about  the bill. He  stated that the  bill would                                                                    
extend  the   ability  for  the   division  to   collect  on                                                                    
overpayments   through   Permanent   Fund   Dividend   (PFD)                                                                    
garnishment. He  shared that the bill  was initiated because                                                                    
of  the  child  care  assistance block  grant  changes  that                                                                    
required   more   aggressive   attempts   to   collect   the                                                                    
overpayments. He stated that there  was a recognition of the                                                                    
opportunity  to  see that  the  PFD  garnishment option  was                                                                    
available  for all  of the  division's  programs. He  stated                                                                    
that  the  bill  allowed  for the  ability  to  utilize  the                                                                    
garnishment  option,  to provide  that  the  funds would  be                                                                    
returned.  He stressed  that without  the garnishment  tool,                                                                    
general funds  would be  used. He  remarked that  the fiscal                                                                    
note allowed  for collection of  the PFD  garnishment funds,                                                                    
and allow for the receipt of the funds to the division.                                                                         
                                                                                                                                
Representative Wilson  wondered if  there was  $500,000 that                                                                    
had not yet been collected.                                                                                                     
                                                                                                                                
Mr.  O'Brien replied  that $500,000  was  established as  an                                                                    
estimate of how much was needed  to allow for receipt of PFD                                                                    
remittance.  He stated  that there  was no  plan to  ask for                                                                    
general funds.                                                                                                                  
                                                                                                                                
Representative Wilson queried the outstanding balance.                                                                          
                                                                                                                                
Mr.  O'Brien  replied  that   the  division  had  calculated                                                                    
approximately $331,578 in overpayments  in state fiscal year                                                                    
2015, which were in various stages of repayment.                                                                                
                                                                                                                                
Representative  Wilson   wondered  if  the   bill  addressed                                                                    
providers, those who received the benefit, or both.                                                                             
                                                                                                                                
Mr. O'Brien  answered that the bill  addressed providers who                                                                    
were  receiving child  care assistance  funds  on behalf  of                                                                    
parents;  and child  care grants  paid to  license providers                                                                    
for specific purposes.                                                                                                          
                                                                                                                                
Representative Kawasaki wondered whether  there was an order                                                                    
in which PFD garnishments operate.                                                                                              
                                                                                                                                
Mr. O'Brien replied  in the affirmative. He  stated that the                                                                    
bill would fall into 9th in  the order. He stressed that the                                                                    
bill depended  on the demands  on PFD garnishment  that were                                                                    
ranked at a higher level.                                                                                                       
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Mr. O'Brien appreciated the committee's support.                                                                                
                                                                                                                                
Co-Chair Neuman addressed the fiscal notes.                                                                                     
                                                                                                                                
Co-Chair  Neuman  MOVED  to  REPORT  CSSB  145(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSSB  145(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal note: FN2 (REV); and  one previously published fiscal                                                                    
impact note: FN3 (DHS).                                                                                                         
                                                                                                                                
Co-Chair Thompson  discussed the schedule for  the following                                                                    
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:33:52 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:33 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 254 NEW FN DCCED CBPL 4-1-16.pdf HFIN 4/4/2016 1:30:00 PM
HFIN 4/12/2016 8:30:00 AM
HB 254
HB300 Letters of Support.pdf HFIN 4/12/2016 8:30:00 AM
HB 300
CSHB300(FSH)- Sectional Analysis.pdf HFIN 4/12/2016 8:30:00 AM
HB 300
CSHB300(FSH) Explanation of Changes 4-4-16.pdf HFIN 4/12/2016 8:30:00 AM
HB 300
HB300 Sponsor Statement - Governor's Transmittal letter.pdf HFIN 4/12/2016 8:30:00 AM
HB 300
CS SB 32 Briefing Paper.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support AFA.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support BOF.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support Denali Log.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
SB145 Summary of Changes 041116.pdf HFIN 4/12/2016 8:30:00 AM
SB 145
CS SB 32 Letter of Support Logging and Milling Tok.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support Matanuska-Susitna Borough Support Resolution.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support RDC.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support SEC.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support TVSFCAC.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
SB145 Sectional Analysis 041116.pdf HFIN 4/12/2016 8:30:00 AM
SB 145
SB145 Governor Transmittal Letter.pdf HFIN 4/12/2016 8:30:00 AM
SB 145
CS SB 32 Sponsor Statement.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Sectional Analysis.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support Viking.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support Superior Pellets.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
CS SB 32 Letter of Support Summary.pdf HFIN 4/12/2016 8:30:00 AM
SB 32
SB32_ 2016 Testimony _Knight.pdf HFIN 4/12/2016 8:30:00 AM
SB 32