Legislature(2021 - 2022)ADAMS 519
04/20/2021 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB100 | |
| HB126 | |
| HB79 | |
| HB80 | |
| SB22 | |
| HB151 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 79 | TELECONFERENCED | |
| += | HB 80 | TELECONFERENCED | |
| += | SB 22 | TELECONFERENCED | |
| += | HB 126 | TELECONFERENCED | |
| += | HB 100 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 151 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 20, 2021
9:03 a.m.
9:03:50 AM
CALL TO ORDER
Co-Chair Merrick called the House Finance Committee meeting
to order at 9:03 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
None
ALSO PRESENT
Douglas Vincent-Lang, Commissioner, Department of Fish and
Game; Senator Josh Revak, Sponsor; Representative Ivy
Spohnholz, Chair of the House Labor and Commerce Committee,
Sponsor.
PRESENT VIA TELECONFERENCE
Dan DeBartolo, Administrative Services, Department of
Labor; Alpheus Bullard, Legislative Council, Legislative
Legal Services; Eddie Grasser, Director, Wildlife
Conservation, Alaska Department of Fish and Game; Nolan
Klouda, Executive Director, Center for Economic
Development, University of Alaska; Megan Holland, Staff,
Representative Ivy Spohnholz; Representative Ivy Spohnholz,
Chair, House Labor And Commerce Committee, Sponsor; Patsy
Westcott, Director, Employment and Training Services,
Department of Labor and Workforce Development.
SUMMARY
HB 79 SALTWATER SPORTFISHING OPERATORS/GUIDES
HB 79 was HEARD and HELD in committee for further
consideration.
HB 80 SPT FSH HATCHERY FACIL ACCT; SURCHARGE
HB 80 was HEARD and HELD in committee for further
consideration.
HB 100 EXTEND WORKFORCE INVEST BOARD ALLOCATIONS
HB 100 was REPORTED out of committee with a "do
pass" recommendation and with four new fiscal
impact notes from the Department of Labor and
Workforce Development, one new fiscal impact note
from the University of Alaska, and one previously
published fiscal impact note: FN1 (EED).
HB 126 EXTEND BOARD OF PUBLIC ACCOUNTANCY
HB 126 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN1 (CED).
SB 22 INTENSIVE MGMT SURCHARGE/REPEAL TERM DATE
SB 22 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN2 (DFG).
HB 151 UNEMPLOYMENT BENEFITS FOR COVID-19
HB 151 was HEARD and HELD in committee for
further consideration.
Co-Chair Merrick reviewed the agenda for the day. The
committee would be considering amendments on HB 79, HB 80,
HB 100, HB 126, and SB 22.
HOUSE BILL NO. 100
"An Act relating to allocations of funding for the
Alaska Workforce Investment Board; and providing for
an effective date."
9:04:38 AM
Co-Chair Merrick relayed that there were two new fiscal
notes from the Department of Labor and Workforce
Development. The first was for the Alaska Vocational
Technical Center, component number 2686. The second was for
the Workforce Investment Board, component number 2659.
There was also a fiscal note for Unemployment Insurance
(UI), component number 2276. She invited Mr. DeBartolo to
review the fiscal notes.
DAN DEBARTOLO, ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR
AND WORKFORCE DEVELOPMENT (via teleconference), explained
that the changes in the fiscal note were only technical in
nature for salary adjustments between the governor's budget
and the amended budget. There were no substantive changes.
Co-Chair Foster MOVED to report HB 100 out of Committee
with individual recommendations and the accompanying fiscal
notes.
There being NO OBJECTION, it was so ordered.
HB 100 was REPORTED out of committee with a "do pass"
recommendation and with four new fiscal impact notes from
the Department of Labor and Workforce Development, one new
fiscal impact note from the University of Alaska, and one
previously published fiscal impact note: FN1 (EED).
HOUSE BILL NO. 126
"An Act extending the termination date of the Board of
Public Accountancy; and providing for an effective
date."
9:06:48 AM
Co-Chair Foster MOVED to report HB 126 out of Committee
with individual recommendations and the accompanying fiscal
note.
There being NO OBJECTION, it was so ordered.
HB 126 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN1 (CED).
HOUSE BILL NO. 79
"An Act relating to saltwater sport fishing operators
and saltwater sport fishing guides; and providing for
an effective date."
9:07:31 AM
Co-Chair Merrick indicated there were 2 amendments for
HB 79. She noted that the commissioner and the legislative
liaison for the Department of Fish and Game (DFG) were
available for questions.
Representative Carpenter MOVED to ADOPT Amendment 1 (copy
on file):
Page 4, line 13:
Delete "saltwater"
Page 4, line 15:
Delete "saltwater"
Page 4, lines 16- 17:
Delete "saltwater"
Page 4, line 18:
Delete "saltwater"
Page 4, following line 21:
Insert a new subsection to read:
"(b) The department may limit the information it
collects from a sport fishing guide under this
section to
(1) saltwater sport fishing guide services;
(2) freshwater sport fishing guide services;
or
(3) guided sport fishing for certain
species."
Reletter the following subsections accordingly.
Page 5, line 12:
Delete "AS 16.40.282(b)"
Insert "AS 16.40.282"
Representative Josephson OBJECTED for discussion.
Representative Carpenter reviewed the amendment. He
reported that Article 8, Section 4 of the Alaska
Constitution stated that fish, forests, wildlife,
grasslands, and other replenishable resources belonging to
the state should be utilized, developed, and maintained on
the sustained yield principle subject to preferences among
beneficial uses. The bill and the amendment addressed how
the state was managing preferences of beneficial uses. With
the passage of HB 79 saltwater guides would continue to
record and report harvest data through their logbook
program. Drift and setnet commercial fishermen would
continue to record and report harvest data and was not
addressed in the bill.
Representative Carpenter explained that the freshwater
guides would be the only commercial fishing interest that
would not be required to record and report harvest data.
freshwater guides would be licensed under the bill and
would be paying for the saltwater guide program. The
amendment allowed DFG to instate a freshwater guidebook
program but did not require it. He thought it would provide
the department the ability to collect the data that was
necessary to manage to a sustained yield principle in a
fair manner amongst all of the state's commercial fishing
interests.
Representative Rasmussen asked if Commissioner Lang could
speak to the amendment.
9:09:48 AM
DOUGLAS VINCENT-LANG, COMMISSIONER, DEPARTMENT OF FISH AND
GAME, thought the Representative's intention with the bill
was to allow the department to institute stand-alone
freshwater reporting requirements if the department found
it necessary for management of the fishery. He did not
think the bill required the department to implement it
entirely for the freshwater industry. If the department saw
a need in freshwater on the Kenai Peninsula, the department
could implement just a piece of it. He asked if he was
correct. Representative Carpenter responded, "That's
correct, or any other way that you might see fit."
Commissioner Vincent-Lang provided some historical
information. He explained that the reason the department
had elected to exclude freshwater from the bill originally
was due to the department not using much data to run the
freshwater fisheries in the past. There were instances,
especially on federal lands, in which minor violations in
the number of graylings released resulted in the loss of
the concessions by freshwater guides operating in the area.
The department did not want to impose a statewide approach
to the reporting. Currently, if there was a need for data
on a case-by-case basis, there was nothing prohibiting the
department to collect the data. For instance, if DFG had a
need to collect information in freshwater, it could collect
the data through a creel survey or another type of program.
His understanding was that the amendment applied on a case-
by-case basis and would not require the department to
institute a comprehensive program.
Co-Chair Merrick relayed that the committee had been joined
by Representative Edgmon.
Representative Rasmussen was trying to establish if the
department already had the authority through regulations to
do what the amendment offered. She wondered if it was
necessary to have the provision in statute. She asked the
commissioner to speak to any specific needs of having the
issue in statute.
Commissioner Vincent-Lang suggested Representative
Rasmussen was correct that the department could already do
what the amendment was trying to do. Although the amendment
was not needed for regulatory authority, it provided
clarity and created another option in managing the fishery.
9:12:59 AM
Representative Josephson suggested guides currently on the
Kasilof or Kenai Rivers were not required to have to report
catches to the department each day. He asked if he was
correct. Commissioner Vincent-Lang responded that if the
department was concerned with the number of salmon taken by
the guide industry, the department had the ability to
perform a creel survey which was how it collected such
data.
Representative Josephson was surprised that individuals
were required to report their catch, yet freshwater sport
fishing guides were not.
Commissioner Vincent-Lang explained that the department
walked away from the mandatory system on guide was because
across much of Alaska it was not using the information for
in season management. For example, information such as the
number of graylings and rainbow trout being released was
not being used to manage those fisheries especially in
areas where there were trophy fisheries. The department
withdrew its focus on the freshwater portion focusing more
on the in season need: saltwater. Saltwater fisheries
included halibut, salmon, and rockfish fisheries. If the
department needed the information regarding freshwater on a
case-by-case basis, it could be obtained through creel
surveys.
Representative Josephson asked the commissioner to repeat
himself. Commissioner Vincent-Lang indicated the department
used a creel survey, a dockside sample.
Representative Carpenter also heard that freshwater guides
were having a difficult time filling out log books - a
reason for why it was no longer required. He asserted that
technology had come a long way and that the department
should be able to create an online reporting system which
would allow guides to enter their harvests on their phones.
He thought treating one user group differently from another
was not appropriate. He did not understand why the state
would not want reporting from freshwater guides. He thought
it was a red herring. The issues on the Kenai were numerous
regarding sport fishing. He thought it would be in the best
interest of the people and the resource to see that all of
the commercial entities were recording and reporting their
harvest numbers in order for the state to properly manage
on a sustained yield principle. He thought it was a fair
way to approach the issue when discussing preferences among
beneficial uses. He was not being heavy handed with the
language he was offering. The amendment would create in
statute a means for the state to be able to manage its
resources by collecting data.
Commissioner Vincent-Lang noted that the department
collected the harvest information. Guides provided a sports
fishing service and the information was being provided
through a mailout survey and through dockside creel surveys
by contacting anglers. It was not that the department was
not capturing the harvest information, it was capturing the
data in a way that was delineated to that sector and its
allocation. In the marine fisheries, the department had
sector allocations to the charter boat fishery that the
department needed to track for halibut and salmon. The
department did not have many sector allocations that it
needed to track in season in freshwater. He reemphasized
that the department was capturing the number of fish for
biological and sustainability purposes.
Representative Carpenter responded, "And yet we have a
decline in King Salmon on the Kenai River." He opined that
something in the previous decade was not working. He
suggested that a collection of more data might help to
better understand the problem. He found it strange that a
dockside survey would be okay for one user group but not
another. All the other commercial user groups had to report
each individual fish they caught, not just a dockside
survey. He suggested that one user group was being treated
less harshly by requiring less reporting than another.
9:19:26 AM
Representative Wool had some of the same concerns as
Representative Carpenter. He was especially concerned with
the king salmon fishery. He had taken guided trips on the
Klutina River where the King Salmon fishery had been closed
for periods. He did not always mail the surveys back to
DFG. He thought the department would want more precise data
for a delicate fishery. He asked if the department required
guides to report for a sensitive fishery in a sensitive
area.
Commissioner Vincent-Lang replied that if there was a
desire and a need for in-season management, the department
would likely implement some sort of reporting requirement.
The department had a requirement for marine fisheries
presently. The department did not have many instances where
the Board of Fisheries had given it an allocation in
freshwater that had to be tracked in-season.
Representative Wool asked if the amendment would change
anything in the commissioner's current management approach.
Commissioner Vincent-Lang commented that the amendment
would allow more flexibility in both freshwater and
saltwater on a case-by-case basis. The department would
likely continue with the saltwater piece because of treaty
and obligations under the Halibut Act and the Pacific
Salmon Act. If a need arose in freshwater, the department
would apply a program. However, he would not immediately
institute a statewide freshwater program.
Vice-Chair Ortiz asked about collecting data on freshwater
systems. He wondered what kind of coverage took place on
rivers like the Kenai River in terms of creel surveys and
whether it was consistent and thorough from day-to-day. He
inquired whether there was always a presence on the Kenai
River. He was familiar with creel surveys in saltwater.
Most of the time there was a creel survey person present
when he came into the dock. He asked for more information
about creel surveys in freshwater situations.
Commissioner Vincent-Lang answered that when the department
did a creel survey someone was not present 24/7. The
surveys were randomized so that when a person was not
present the information could be extrapolated from when
they were present. There were two purposes of a creel
survey. The first was to estimate the number of fish that
were harvested. The second and more important reason was to
collect biological samples from the fish for genetic
information that indicated where a fish was from. In
Southeast Alaska the department had to collect information
to find out what the state's treaty versus US and Alaska
allocations were between the different stocks. It was a mix
of biologic sampling and sampling to estimate the harvest
from a river system. In the Kenai, the state was still
collecting biological samples from the sport harvest.
9:23:34 AM
Vice-Chair Ortiz understood the random survey concept. He
wondered if the amount of data was useful with spotty
coverage. Commissioner Vincent-Lang was convinced that in
Southeast Alaska and on the Kenai River the creel survey
program provided sufficient information for management
purposes.
Representative LeBon spoke in support of the amendment. The
state was managing its resource for sustainability and
abundance. He suggested that having the most complete data
base possible for whatever resource, be it saltwater or
freshwater resources, made sense. He thought back to his
personal fishing activities on the Kenai River in the 80s
and 90s and recalled the guide he was with kept impeccable
records of what was taken into the boat. He also noticed
the same care taken in record keeping when fishing for
halibut out of Homer. He believed the ability to keep
records had significantly improved since the 80s and 90s.
He asked the commissioner if he agreed.
Commissioner Vincent-Lang agreed that guides were keeping
records as part of their business operations. The concern
that arose 6 years or 7 years prior was the enforcement
piece. There were minor violations resulting in businesses
receiving significant violations for things that did not
matter to the department in terms of managing the fishery.
In Southeast Alaska the state had so much at stake in
marine fisheries that it decided to continue that specific
piece because the information was needed. However, the data
was not needed on a statewide basis for many of the
freshwater fisheries for which it had been instituted.
Also, the department incurred significant costs related to
data entry for information that was not being used. The
department moved to obtaining freshwater fishery
information on a case-by-case basis. Saltwater requirements
remained in place around the state.
9:26:56 AM
Representative LeBon thought the strategy was to manage for
abundance and sustainability. He wondered if the
commissioner was able to gather enough information from
guiding services to succeed in the department's goals. He
asked if the amendment would hurt the department in any
way.
Commissioner Vincent-Lang would answer in two ways. A good
example of the utility of the state in saltwater was that
in the previous year the state had a significant drop in
tourism. The number of tourists participating in the
charter boat fisheries was significantly reduced. However,
the state had allocations through the halibut commission
for charter boat fishing for salmon and halibut. The state
was able to use the data half way through the season to
demonstrate that the state was nowhere near reaching its
allocations. The department went back to the halibut and
salmon commissions to let them know the department was
going to relax its regulations allowing more fish to be
caught. The state had never had an exercise with freshwater
fisheries where the state needed that kind of in season
management. The amendment would not interfere with the
department's efforts since the word "may" was used.
Representative LeBon was aware of an application developed
by DFG that guides could use on their smart devises to make
it easier to keep track of what was occurring. Commissioner
Vincent-Lang noted the department was trying the
application in the saltwater fisheries in Southeast Alaska.
Remote areas created a challenge with cell service, but the
department was working on the issue. He anticipated a 95
percent compliance in Southeast Alaska in the following
year.
Vice-Chair Ortiz had a follow-up question regarding the
creel survey. He was aware that the department had
experienced significant funding reductions over the past
7-8 years. He wondered if the cuts resulted in preventing
the department from being able to hire the same amount of
creel surveyors as it hired 6 years prior. He asked if the
department had less of a workforce.
Commissioner Vincent-Lang responded that the department had
been successful in getting some additional federal money to
help with the implementation of the salmon treaty. It had
not had to reduce the workforce. He added that the
department had a better program at present than 5 years
prior.
9:29:36 AM
Representative Carpenter appreciated the discussion. He was
thinking the amendment was not strong enough considering
over the prior decade the state had lost both size and
quantity of King Salmon out of the river. He was
disheartened to know that the state was collecting data but
not using it. The amendment would solve the problem. If the
state was collecting data currently that it had been
collecting before, the state would better understand what
was going on within the river. However, the state was no
longer collecting the data. The information was obtained
through samples and extrapolation adding human error and
inconsistency. The bill did not force anything to change.
It simply provided the department with the ability to
create a program and manage the state's resource. The
expectation was that the state would manage its resource
effectively. There were plenty of old-timers that had seen
a change in fishery numbers and would argue the freshwater
fisheries were not being managed properly. He reiterated
that collecting data was the most important thing the state
could do to manage the sustained yield principle.
Representative Wool referred back to the comments made
about getting freshwater data and many people being out of
compliance. Violations went out that were unnecessary and
burdensome. He thought the department had the flexibility
of targeting certain areas. Whereas, if there was something
in the King Salmon fishery of concern, the department could
focus in on that instead extracting more data. He wondered
if the data could be targeted while letting other fisheries
conduct their businesses with less constraints.
Commissioner Vincent-Lang responded that under the former
logbook program the department did not have flexibility. If
the amendment was adopted, the department would have the
flexibility to act on a case-by-case basis. He reiterated
the word "may" being used in place of "shall."
Representative Josephson asked the commissioner about how
there was less logbook focus on sports guides because they
were losing concessions over technical infractions. In
reviewing the bill, a bunch of new sections were being
added in Title 16 regarding general liability and
licensure. There was a number of new regulations for guided
fishing in the bill. He wondered if it was regulatory
before and was being changed to statute.
Commissioner Vincent-Lang answered that it was originally
statutory language then became regulatory language when it
sunsetted. The bill would change it back to statutory
language.
9:34:19 AM
AT EASE
9:38:20 AM
RECONVENED
Representative LeBon asked about an application that could
be used for reporting to DFG. He supposed the department
was receiving real time data every day, whether on
freshwater or saltwater. He asked if he was accurate.
Commissioner Vincent-Lang indicated the department was
moving in the direction of technology. However, he was not
sure if it was a true statement that the technology was
willingly accepted by all. Change was difficult for some,
especially regarding business models in remote areas of
Alaska. The more remote of an area, the more difficult it
was for guides to use the technology. He felt the
department was moving in that direction and, there was a
general willingness by the majority of guides in the
saltwater logbook program to go to the electronic format.
The department's goal was to have immediate reporting in
areas where there was cell phone coverage. He did not think
electronic reporting would reach the level of 100 percent
due to the vast size and remoteness in certain areas of the
state.
Representative LeBon relayed a fishing experience out of
Hoonah. The guide kept a log, and every time a person on
the boat caught a fish, he took a picture.
Representative Thompson spoke in favor of the amendment. He
thought it provided another tool in the tool box. He
clarified that the amendment did not hinder the department.
Commissioner Vincent-Lang indicated the department would
not be hindered with the amendment, as the use of the word
"may" provided flexibility.
Representative Josephson WITHDREW his OBJECTION.
Representative Johnson OBJECTED. She thought it was
additional data collection with no benefit.
Commissioner Vincent-Lang replied that if the program was
instituted on a statewide basis, he would agree with
Representative Johnson. He would also have strong objection
if the amendment was predicated on the department having to
collect the data on a statewide basis. The way the
amendment was written the department would only collect the
data if it deemed it necessary.
Representative Johnson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Thompson, Wool, Carpenter, Edgmon, Johnson,
LeBon, Ortiz, Foster, Merrick
OPPOSED: Johnson, Rasmussen
The MOTION PASSED (9/2). Amendment 1 was ADOPTED.
9:43:22 AM
Representative Wool MOVED to ADOPT Amendment 2 (copy on
file):
Page 1, line 5:
Delete "a new paragraph"
Insert "new paragraphs"
Page 1, line 6:
Delete "Fishing"
Insert "Resident fishing"
Page 1, line 7:
Delete "Sport"
Insert "Resident sport"
Page 1, line 8:
Delete "Sport"
Insert "Resident sport"
Page 1, line 9:
Delete "Sport"
Insert "Resident sport"
Page 1, following line 9:
Insert a new paragraph to read:
"(29) Nonresident fishing services licenses
(A) Nonresident sport fishing operator
license... 400
(B) Nonresident sport fishing guide
license... 200
(C) Nonresident sport fishing operator
and guide combined license... 400."
Page 3, line 26, following "(C)":
Insert "or 16.05.340(a)(29)(B) or (C)"
Page 4, line 2, following "(C)":
Insert "or 16.05.340(a)(29)(A) or (C)"
Page 4, line 3, following "(C)":
Insert "or 16.05.340(a)(29)(A) or (C)"
Co-Chair Merrick OBJECTED for discussion.
Representative Wool explained that the amendment kept
parody with other types of guide licenses for in-state and
out-of-state residents. Fishing, hunting, and hunting guide
licenses for out-of-state residents cost more than for
in-state residents. The amendment aligned the fees for
out-of-state fishing guides and operators to pay more for
their licenses than for in-state guides and operators by a
factor of two.
Representative Josephson asked what the commissioner would
do with the extra revenue provided with the amendment.
Commissioner Vincent-Lang replied that the money would
fully pay for the saltwater logbook program. He would also
institute the use of freshwater logbooks in areas deemed
necessary by the department. Currently, the department had
to pay for the saltwater logbook program. He continued that
based on the prior amendment, the department would be
required to have freshwater guide licensing and operator
requirements in place. The department would have to
reinstitute that portion of the program. The monies could
be used for both.
Representative Rasmussen asked if anyone from Legislative
Legal Services was available online. She wanted to confirm
that there were no conflicts at the federal level regarding
commerce across state lines. Co-Chair Merrick indicated
Alpheus Bullard from Legislative Legal Services was
available for questions.
9:45:27 AM
ALPHEUS BULLARD, LEGISLATIVE COUNCIL, LEGISLATIVE LEGAL
SERVICES (via teleconference), responded that perhaps there
might be issues with the privilege and immunities clause.
He expounded that the particular piece of legislation
should not be analogized to hunting or fishing licenses
with a license to access Alaska's resources. He suggested
that when it came to a profession like a sport fishing
guide, care needed to be taken under the federal
constitution to ensure that the state was not making it
difficult for people to cross state lines and practice
their professions in the state. He reported that in a
series of cases the Alaska Supreme Court found that it was
possible for the State of Alaska to charge non-residents
more for commercial fishing licenses and other licenses.
However, the additional expense charged to non-residents
needed to be justified by some added expense or management
concern presented by out-of-state licensees, or that
residents were making some sort of contribution to the
health of the resource while non-residents were not. He
continued that in the current case he could not say there
was a justification for a 2-to-1 differential for
non-residents.
Co-Chair Merrick asked if Mr. Bullard was speaking to the
legality of the bill or the amendment. Mr. Bullard
responded that he was speaking to the amendment.
Representative Rasmussen asked Mr. Bullard if he was aware
of any other states that charged a higher fee to a
non-resident for a license to do business in the state. She
wondered if there had been any court cases brought forward
for such an issue. Mr. Bullard replied that he had not
conducted a comprehensive survey of what other states did
or did not do. The most perinate cases and precedent on the
topic were cases having to do with commercial fishing
residences. The cases in Alaska where the state charged
non-residents more for commercial fishing licenses were the
Carlson Cases.
9:49:04 AM
Representative Rasmussen asked if the commissioner could
cite a situation in which non-residents would pose a need
for higher fees than resident guides or licensees.
Commissioner Vincent-Lang responded that his area of
expertise was not in law and the constitutionality of
higher fees for residents versus non-residents. He was
aware of the state having higher fees for residents versus
non-residents for sport fishing and hunting. The state
could justify the higher fees because residents were paying
through other mechanisms for access, infrastructure, and a
variety of other things. On the business side the
non-residents were paying higher licensure fees themselves
to participate. He did not have a good answer as to whether
a non-resident guide would have higher costs. His clients
were paying a higher cost, but he was unsure about the
guide paying higher costs.
Representative Rasmussen was in support of the concept. She
favored any opportunity to provide Alaska the lowest fees
possible to access the state's resources. She was concerned
with the possibility of a law suit with a non-resident
trying to do business across state lines.
Representative Carpenter asked if the fees resulting from
the amendment would fully support the saltwater logbook
program. Commissioner Vincent-Lang had not run the numbers.
Representative Carpenter thought it was important for the
committee to know whether the fees would cover the total
cost of the logbook program. He had a question for Mr.
Bullard concerning fairness and what the courts might take
into consideration. In terms of interstate commerce, if the
State of Alaska was already charging non-resident guides a
different fee than resident guides, he wondered if the
court would look at whether the state was fairly singling
out guides from out-of-state. He suggested that at least
one user group did not have to pay higher out-of-state
rates while the ones the committee discussed did. He was
curious how the courts would view the fairness.
Mr. Bullard responded that if someone was challenging the
statute under the federal privilege and immunities clause,
the clause provided a fundamental right for a person to be
able to travel and engage in their profession in another
state. The clause did not permit the state to discriminate
unless there was legally a substantial reason which had to
be closely related to the interest served by the statute.
He was unsure if the courts would look to other licensing
groups because the context for sport fishing guides might
be unique to them. The courts would definitely look at
whether the additional expense was justified by some
substantial state reason.
9:53:51 AM
Representative Wool noted the question had arisen
previously. He had talked with the Department of Law who
had a different opinion than Mr. Bullard. He mentioned that
in statute or regulation an out-of-state hunting guide paid
twice as much as an in-state hunting guide. He asked Mr.
Bullard if he was saying that it was also questionably
legal and that it could be challenged through federal
statute. He was unsure if anyone had struck a challenge.
Mr. Bullard responded that there was no statute that
permitted the Board of Big Game Services to deal with a
challenge. If there was a Board of Big Game Services, he
was unsure if there had ever been a challenge instigated.
It could be challenged under the privileges and immunities
clause. He was aware of license fees for non-residents that
were charged and challenged in Alaska and how those cases
were resolved.
Representative Wool thanked Mr. Bullard for his answer. He
thought he would have researched and found out there was a
statute or regulation for hunting guides. His office had
found out that out-of-state hunting guides were charged
more for their licenses. That was why he felt doing the
same for fishing would not be a stretch. He was part of a
legislature that passed a law increasing fees for
out-of-state hunters for certain kinds of game. In some
cases, the fees were many-fold higher than for an in-state
resident. He was unsure if the justification was because
the in-state resident paid several other fees that went
towards the management of game. Other than the license he
was unsure what was paid. There were no statewide taxes. He
was reassured based on the commissioner's comments about
the increase in the license fees going towards the logbook
program. He thought it would be a good use of the funds. He
indicated that the Department of Law supported the
amendment. He had just received a note that the Department
of Law's opinion was not definitive. He would stand by the
fish and game parody.
Representative Johnson asked how many non-resident sport
fishing guides had licenses in the state. Commissioner
Vincent-Lang answered that he did not have the information
on hand.
9:58:00 AM
Representative Johnson asked whether a new system would
have to be created to track the sport fishing guides if the
legislature were to implement the amendment.
Commissioner Vincent-Lang thought it would be critical for
the state to identify the meaning of residency. He provided
some examples of what residency could mean. The department
would struggle with trying to define the residency of a
business and of a guide. He wondered if a person's
eligibility to receive a PFD could be used to prove
residency or whether there was something else that could be
used.
Representative Johnson thought the state would incur
additional costs to implement the program. Commissioner
Vincent-Lang indicated there would be some additional costs
associated with determining a person's residency. He posed
the question of whether residency of a business had to do
with the location of the business or where the business was
licensed. It was more difficult to determine the residency
of a business versus the residency of an individual. Alaska
statute clearly defined the payment of a non-resident
hunting or license fee and a resident hunting or license
fee.
Representative Johnson asked if the additional fees would
be taken from sport fish users but used for the saltwater
logbook program. Commissioner Vincent-Lang reported that
the original bill would institute a licensing requirement
for saltwater guides and operators to pay for the saltwater
reporting requirement. The bill was amended in the House
Fisheries Committee to include the requirement for
freshwater guides and operators to get licensed and would
provide the department the option of using the fees on a
case-by-case basis to implement reporting requirements in
saltwater or freshwater.
Representative Johnson could not support the amendment
although she liked the concept. She thought it would be
added bureaucracy without significant return.
Representative Rasmussen clarified that there seemed like
there was confusion between an individual sport fishing
license or an individual hunting guide license versus an
operator/business license. She asked the commissioner to
provide clarification regarding fish and game licenses.
Commissioner Vincent-Lang responded that a person had to be
a resident of the state for 12 months to qualify for a
resident sport fishing license or a resident hunting
license and to apply for tags as a resident. However, when
a person was operating a business, the terms were somewhat
different. A person could get a business license in Alaska
immediately upon arrival which would make them a resident
of Alaska for business purposes. However, it would not make
a person a resident for fish and game purposes. The
amendment addressed a business license for a sport fish
operator or guide. Whether a person was a resident or a
non-resident depended on how much time they spent living in
Alaska. The department would need some further guidance.
10:03:18 AM
Representative Rasmussen thought she heard from Mr. Bullard
that a state could charge a higher fee to a non-resident
guide or operator, but the state needed to have substantial
cause to support a higher fee for that business. She asked
if out-of-state residents or non-residents incurred any
higher fees. She was trying to understand if there was any
reason to substantiate a difference between a resident and
a non-resident guide. She asked about additional risks or
costs to the department.
Commissioner Vincent-Lang suggested that Representative
Rasmussen's question had a complex answer. He explained
that the clients of the non-resident guides were paying
higher fees through the purchase of a non-resident sport
fishing or hunting license. He had not done the math to
figure out whether fees from business licenses for
non-residents had a higher impact to state coffers than
business licenses for residents. He was unaware of how the
big game guide services board came to the conclusion of
having a rate of 2 to 1. He had not been part of any
discussions.
Representative Wool read from a section of the bill
beginning on Page 2, line 31. He suggested that in order to
be a guide a person had to buy a sport fishing license. To
buy a sport fishing license the person had to declare their
residency. He recalled being told in committee that 80
percent of the fees collected from fishing licenses were
from out-of-state people. He did not think it meant that
there were 4 times as many out-of-state people fishing.
Rather, he thought it meant they were paying significantly
more for their licenses. If the same person wanted to get a
guide license in Alaska, it seemed simple that a person
with an out-of-state fishing license would get an out-of-
state guide license.
Commissioner Vincent-Lang responded that the issue was two-
fold. First was the issue of the guide. He concurred with
the representative's perspective. The operator was not
necessarily doing the guiding but was running the business.
He meant to focus on how to define the residency of an
operator who was not guiding. There were cases where
operators were different from its guides.
Representative Wool was aware of a license fee if a person
was an operator and guide. He wondered if an operator had
to have a separate license.
Commissioner Vincent-Lang did not think a person had to
have a sport fishing license to become an operator.
Representative Wool understood the distinction the
commissioner was trying to make between an operator and a
guide. He still supported the amendment but would look into
the issue in further detail.
10:07:27 AM
AT EASE
10:08:50 AM
RECONVENED
Co-Chair Merrick indicated the committee would come back to
HB 79 at a later date.
HB 79 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 80
"An Act establishing the sport fishing hatchery
facilities account; establishing the sport fishing
facility surcharge; and providing for an effective
date."
10:09:10 AM
Vice-Chair Ortiz MOVED to ADOPT Amendment 1 (copy on file):
Page 1, line 10:
Delete "fisheries management,"
Insert "sport fisheries management, sport"
Page 1, line 11:
Delete "research,"
Insert "research, and"
Delete ", and habitat restoration"
Page I, lines 12 - 14:
Delete all material and insert:
"(2) the remainder of each surcharge
collected to the department's sport fishing
hatchery facilities, allocated equally to
each facility, for the operations,
maintenance, and sport fishing stock
enhancement projects of the facilities."
Co-Chair Merrick OBJECTED for discussion.
Vice-Chair Ortiz MOVED to ADOPT Conceptual Amendment 1 to
Amendment 1 (copy on file).
Strike lines 5-8
On line 13: strike "each facility" and replace with
"the Southeast region hatchery facilities, William
Jack Hernandez Hatchery, Ruth Burnett Hatchery,"
Representative Ortiz requested an at ease to pass out the
conceptual amendment.
10:09:53 AM
AT EASE
10:16:26 AM
RECONVENED
Vice-Chair Ortiz restated his motion to adopt Conceptual
Amendment 1 to Amendment 1.
Representative LeBon OBJECTED for discussion.
Vice-Chair Ortiz explained that his original amendment was
to help put money back. It was specifically designed to put
money where it had been generated - in Southeast Alaska.
Just shy of one-third sport fish license surcharge revenue
($1.9 million) was generated from sport fish license sales.
The first part of his original amendment further specified
that the surcharge was meant to benefit sport fish.
However, given the way his amendment was currently written
he was offering Conceptual Amendment 1 to Amendment 1. The
conceptual amendment on line 13 would strike the words
"each facility" and replace it with "the Southeast Region
Hatchery facilities: William Jack Hernandez Hatchery and
Ruth Bernett Hatchery." The conceptual amendment would also
strike lines 5-8 of the amendment because upon further
review it was something that was adopted in the House
Fisheries Committee.
Representative Rasmussen asked if currently the surcharge
was only impacting the Southeast fisheries rather than it
being a statewide surcharge on all licenses.
Commissioner Vincent-Lang replied that the surcharge did
two things. First, it paid for the repayment of bonds for
the Fairbanks and Anchorage hatcheries. It also took
$500,000 off the top for enhancement projects in Southeast
Alaska in recognition that the state did not build a
hatchery there. The surcharge ended in the prior December
when the bonds were paid off. When the surcharge went away,
the $500,000 for Southeast Alaska was lost. Currently there
was no surcharge. The bill would reinstate the surcharge at
a reduced rate to pay for long-term state obligations for
the maintenance of the Fairbanks and Anchorage Hatcheries.
It would also reinstate the $500,000 payments to Southeast
Alaska non-profit hatcheries that provided sport fishing
opportunities.
10:20:14 AM
Representative Rasmussen asked if the specific hatcheries
mentioned in the conceptual amendment included Anchorage,
Fairbanks, and Southeast Alaska. Commissioner Vincent-Lang
did not have the amendment in front of him.
Vice-Chair Ortiz answered Representative Rasmussen's
question. The conceptual amendment changed the amendment to
a regional distinction because in Southeast Alaska some of
the resources taken from the surcharge went to two
different facilities one in Juneau and one in Petersburg.
He further explained that the original amendment looked
like he was trying to get equal distribution amongst each
facility. That was not his intent. His intent was to give
equal distribution to each region. The original amendment
intent was that each region would receive and equal
distribution since the bonds had been paid in full. Prior
to the amendment, significantly more resources had gone
towards the facilities in Fairbanks and Anchorage to pay
off the bonds.
10:22:38 AM
Representative Rasmussen wanted to double check that the
amendment would distribute one-third to the Southeast
Region hatchery facilities, one-third to the William Jack
Hernandez Hatchery, and one-third to the Ruth Bernett
Hatchery.
Mr. Bullard replied that, if the intent of the conceptual
amendment was to ensure that the funds were distributed
regionally, it would be best for the amendment to provide
that they should be distributed regionally rather than
naming specific facilities. He thought there could be a
potential challenge Under Article 2, Section 129 of the
Alaska Constitution that prohibited local and special acts.
Vice-Chair Ortiz noted that the purpose of the conceptual
amendment was to speak regionally rather than to specific
facilities. Representative Rasmussen was confused because
certain hatcheries were named. Vice-Chair Ortiz was fine
with making a change to the wording. He was happy to
reflect equal distribution within the 3 regions. He asked
the department if there were any other facilities in
Anchorage or Fairbanks that the state owned that would
benefit from the surcharge that was being levied.
Commissioner Vincent-Lang clarified that the two primary
sport fisheries in Alaska were the Ruth Burnett Sport Fish
Hatchery in Fairbanks and the Williom Jack Hernandez Sport
Fush Hatchery in Anchorage. In Southeast Alaska there were
state-owned hatcheries that were owned and operated by a
private nonprofit (PNP) in Southeast. Currently, the state-
owned programs at Crystal Lake which produced fish for
sport fishing as well as the DIPAC Hatchery which produced
fish for King Slamon. His intent was to continue to partner
with people in Southeast Alaska to provide for some long-
term maintenance associated with those facilities owned by
the state. In interior Alaska, the state did not have any
other PNP hatcheries in which it was subcontracting out
those services.
Commissioner Vincent-Lang also noted that one of the things
he had discussed with Vice-Chair Ortiz was that the expense
was allocated equally across a timeframe. He provided an
example. The goal was not to distribute equally on an
annual basis.
10:26:56 AM
AT EASE
10:30:54 AM
RECONVENED
Vice-Chair Ortiz WITHDREW Conceptual Amendment 1 to
Amendment 1.
Representative Wool touched on the comments by the
commissioner about the different facilities being managed
differently. He assumed they likely had different fiscal
needs. He asked the commissioner to elaborate.
Commissioner Vincent-Lang offered that the Fairbanks and
Anchorage hatcheries were benefiting sport fishermen at 100
percent. The hatcheries in Southeast Alaska were providing
a mix of sport and commercial opportunities. He used
Crystal Lake as an example, a state-owned facility. The
state contracted with the PNP to provide fish for sport
fisheries that were important in the Juneau area. It was
important since the treaty had become more constraining
with southern bound fish. The department had done a
significant amount of replacement with fish hatchery stock.
The state would use some of the surcharge revenue to
replace the raceways at Crystal Lake which were in bad need
of repair. The state could not keep up its current
production levels up much less expand production levels to
provide those opportunities. The department would continue
to pay to support the PNPs to provide sport fishing
opportunities at the hatcheries.
10:33:01 AM
Representative Wool understood the concept of spreading the
wealth to different regions and not focusing on a single
area. He also understood that the legislature could not
dedicate funds. Even though a fee might be slated for
something specific, it could be used for something else. He
asked if there was a crisis or shortage in which the
department could not pay for maintenance for one facility
because of a constraint of money for another facility. He
asked if there were facilities that were not being
maintained or were being neglected because of regional
funding considerations.
Commissioner Vincent-Lang raised the concern regarding the
verbiage "allocated equally" because a future legislator
might claim that in any given year the legislature did not
give any money to Southeast Alaska. For example, in one
year the department might spend $2.5 million for
maintenance at Crystal Lake exceeding the relative
allocation equally. He was looking for some additional
guidance to ensure that, overtime, the contributions were
based on the number of licenses purchased in a specific
region.
Representative Wool referred to the chart showing the
number of licenses purchased and commented that it had some
relevance. He heard that 80 percent of them came from out
of state. There were also online purchases which did not
show a location, but the information was extrapolated from
previous data prior to heavy usage online. He was somewhat
concerned about using the location where the licenses were
purchased to determine where the money was spent. He noted
the importance of maintaining all of the state's
facilities. He did not want to constrain the department
with any "use it or lose it" parameters.
Co-Chair Merrick set HB 80 aside. She thanked the
commissioner for being at the meeting.
HB 80 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 22
"An Act repealing the termination date for the
intensive management hunting license surcharge."
10:35:28 AM
Representative Josephson MOVED to ADOPT Amendment 1 (copy
on file):
Page 1, line 1:
Delete "repealing"
Insert "extending"
Page 1, line 4:
Delete all material and insert:
"* Section 1. Section 33, ch. 18, SLA 2016, is amended
to read:
Sec. 33. AS 16.05.130(g) and 16.05.340(k) are
repealed December 31, 2026 [2022]."
Co-Chair Merrick OBJECTED for discussion.
Representative Josephson relayed that the Intensive
Management (IM) Program was a hotly disputed and
contentious program. The commissioner and the department's
Wildlife Conservation director, Eddie Grasser had
concurred. Their testimony, when the bill was introduced,
was that they applied a sunset date rather than making the
program permanent because of its controversy. The concept
of the bill had some merit because it broadly helped the
state's general fund. However, he had concerns with the IM
Program. He reminded members that in 1996 the voters of
Alaska passed an initiative to outlaw aerial hunting. The
legislature reversed part of the 1996 initiative in 1998.
In 2000, Alaska rebuked the institution voting to allow
aerial hunting through a ballot initiative. The Intensive
Management Program encompassed much more which he would
discuss.
Representative Josephson continued that presently, the
state allowed for the targeted hunting of APEX predators
for the express goal of increasing undulate populations for
human consumption. He suggested that with an eye on the
narrow policy goal of increasing undulates for humans to
eat, there were other concerns that arose. The state had
spent millions of dollars to artificially deflate the
population of wolves and bears around Alaska. The results
had been mixed. The science also suggested that results had
been incredibly mixed. Out of six distinct areas in which
IM had occurred frequently in the last 10 years to 20
years, the state had spent in excess of $5.7 million on IM
specifically and $10.6 million in total. The money was used
to kill approximately 4,100 animals, most of which were
wolves. Based on DFG spending over the last 8 years to 9
years and data on animals taken over the last 11 years to
17 years, the cost per animal killed under the program was
about $2,600. Because the analysis included den animals
during years without spending data, the average cost per
animal was likely higher, potentially by hundreds or
thousands of dollars.
Representative Josephson reiterated that the goal of the IM
Program was to increase undulate population. The forty-mile
caribou heard that was near Alaska's border with the Yukon
had increased but remained below the upper bounds for
population and harvest objectives. Predator control had
been suspended. The moose population around McGrath had
increased, and the moose population in the Denali Highway
area had generally increased. However, the population might
have peaked in 2015. On the other hand, the Mulchatna
caribou herd had continued to decline, and moose population
in the Upper Kuskokwim was still low but was increasing. As
mentioned previously, the program had spent a great amount
of money with significantly variable results. The specifics
of predator control were often controversial. He recalled
photos that were spread on social media in 2017 depicting a
single hunter legally taking an entire wolf pack in one
day.
Representative Josephson suggested that the IM Program was
distinct from very liberalized hunting practices which DGF
and the Board of Game had encouraged. He thought
maintaining a sunset provision for the IM surcharge
guaranteed the legislature the opportunity to review the
program anew in a number of years. He was recommending an
extension of 5 years. While there was some fiscal policy
behind reducing the state's general fund, abolishing a
sunset provision reduced the likelihood that future
legislatures would review the policy behind the IM Program.
Given the controversy, he thought it would be unfortunate.
Representative Josephson commented that predator control
was a subset of the overall expense of the IM Program. He
claimed that the department deputized people by authorizing
them to do land-and-shoot, the true purpose of predator
control. He suggested that when the department was talking
about predator control, it was really talking about DFG
workers doing the controlling. However, he argued that the
program was much more expansive, and the legislature needed
to be aware of that. He had been in contact with Dr.
Sterling Miller who worked for DFG for 20 years. Mr. Miller
noted that IM was spread throughout 91 percent of the state
and thought the department's comment about it not occurring
on federal land was laughable. Mr. Miller stated, "In
essentially none of these areas has there been any
meaningful research done showing that IM has actually
resulted in the harvest of more wild ungulates on any but
the very short term."
Representative Josephson continued that part of the issue
was that almost annually there were reports provided to the
Board of Game from the department about the efficacy of IM.
He thought part of the reason to continue with the sunset
was so that the legislature could participate in fact-
finding relative to the reports. He also commented that the
department had produced a brochure called, "Intensive
Management: Stories of Success." A review by Dr. Miller
supported that the stories of success did not hold up, and
the facts were cherry-picked. They failed to report illegal
and unreported kills, the effect of which the kills were
blamed on predators. However, human beings made the kills.
He provided another example of how predator control bled
into liberalized hunting practices. Dr. Miller reported
that in Unit 13, northeast of Anchorage, bears might not be
designated as predator control area target species, but the
management objectives for brown bears in Unit 13 was to
reduce them to 350 individuals, a 70 percent reduction. He
was astounded guides had not questioned why wolves and
bears were being taken through predator control. He
suggested that wolves might be part of the liberalized
take.
Representative Josephson relayed that when the department
discussed how small the sliver was for predator control,
they were doing so in a very constrained, narrow, and
technical way. However, the program was much more
widespread. He thought that the legislature should keep an
eye on the issue. Dr. Miller noted that a Fairbanks
biologist who currently worked for the department was
working on a report on the efficacy of the IM Program that
was not yet completed another reason to maintain a sunset
date.
Representative Josephson agreed that the legislature had
not received significant testimony from the people of
Alaska but suggested it was due to fatigue. He hypothesized
that Alaskans and tourists who enjoyed seeing wildlife
thought the system was rigged against them. If there was a
greater understanding of the practices that the state
authorized, quasi predator control, people would be
astounded by the creative ways in which the state found
ways to kill predators. They were not fair chases or the
North American model.
10:44:45 AM
Representative LeBon asked for the bill sponsor to comment
on the amendment.
SENATOR JOSH REVAK, SPONSOR, appreciated the sentiment of
the amendment maker. However, he disagreed with the
amendment because it created an unfunded mandate. It had
come before the legislature a couple of times over the past
10 years. He thought that if the legislature wanted to
address the issue of an unfunded mandate, it should be
addressed in legislation. The idea behind the bill was to
remove the sunset date completely because every time the
issue was reviewed it cost the state time and money. He
suggested that since the issue had been reviewed a few
times and had overwhelming support, the sunset date should
be removed. Ultimately, it would be up to the will of the
committee.
10:46:50 AM
Representative Rasmussen asked, if the legislature were to
sunset the board as originally put forward, whether it
would remove the legislature's statutory authority to
change the predator control statutes in the future. Mr.
Bullard replied that nothing would constrain a future
legislature from making a change at a later time.
Representative Rasmussen clarified that if the legislature
repealed the sunset date on the bill, it would still have
the authority in the future to revise the predator control
statute. Mr. Bullard responded in the positive.
Representative Rasmussen noted that there was broad support
across the state from user groups including some
conservation groups and hunters. She suggested it was a
strong testimony to support the legislation as it stood
because resident hunters of Alaska supported the
termination date of the hunting license surcharge. In other
words, they were asking the state to continue a surcharge
with no end date in the future. She continued that the
Alaska Professional Hunters Association supported the bill.
She thought the amendment was unnecessary since there was
support from the Safari Club, the Alaska Wild Sheep
Foundation, the Territorial Sportsman Group, and many
individual Alaskans that had weighed in on the matter.
Representative Rasmussen argued that the predator control
component was only two-tenths of a percent of the funding
that went into IM activities. Whereas, research management
made up 98 percent of the funding. She added that research
management included surveys to determine abundance,
assessments of nutritional conditions including calf
weights, measurements, brows use, twining surveys, and
investigating causes of mortality. The majority of the
funding went to benefiting the various animals across the
state. She would not be supporting the amendment. She
looked forward to having a specific discussion on predator
control if it was the will of the group and if a bill was
put forth.
Representative Wool noted a number of sunset cycles had
occurred. He wondered how many there had been. Senator
Revak replied 10 years. Representative Wool clarified that
the sunset had been set 10 years prior and it was now
coming up for review. He wondered if it had occurred
previously. Senator Revak responded that it had been in
effect for 10 years. He wondered whether the Department of
Law or DFG were online to offer further clarification.
Representative Merrick indicated Mr. Grasser from Wildlife
Conservation was online. She invited him to respond to
Representative Wool's question.
EDDIE GRASSER, DIRECTOR, WILDLIFE CONSERVATION, ALASKA
DEPARTMENT OF FISH AND GAME (via teleconference), replied
that the IM surcharge was part of the bill package that
passed in 2016. It would be the first time that the
surcharge was up for sunset review.
Representative Wool commented that based on the comments by
Representative Rasmussen and the letters of support she
received, it appeared that various hunting groups supported
eliminating the sunset provision. He argued that although
he understood the sentiment of reauthorizing a good program
into perpetuity, he thought that it was good to reexamine a
program every 3 or 4 years. He used the Technical and
Vocational Education Program (TVEP) as an example. He
thought it was important to look at the recipients and
allocations every few years. In the case of the IM Program
the allocation was .2 of 1 percent. However, in FY 18 the
allocation was 4 percent.
Representative Wool continued that if the facts presented
by Representative Josephson were accurate, much of the
predator control was outsourced. Therefore, individuals
were allowed to trap, shoot, or kill some predators under
the IM Program that would not necessarily be directly
funded by the department. He supported the timeline and
thought it would be helpful to have another conversation
about the issue in a few years. He also believed that some
of the controversial issues should come up before future
legislatures and different administrations, as they would
have different goals. He believed it would force a
conversation. He would be supporting the amendment.
Co-Chair Merrick MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Wool, Edgmon, Josephson, Ortiz, Foster
OPPOSED: Thompson, Carpenter, Johnson, LeBon, Rasmussen,
Merrick
The MOTION FAILED (5/6). Amendment 1 FAILED to be ADOPTED.
Co-Chair Foster MOVED to report SB 22 out of Committee with
individual recommendations and the accompanying fiscal
note.
Representative Josephson OBJECTED.
Representative Josephson MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Edgmon, Johnson, LeBon, Ortiz,
Rasmussen, Thompson, Wool, Foster, Merrick
OPPOSED: Josephson
The MOTION PASSED (10/1).
SB 22 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN2 (DFG).
10:56:08 AM
AT EASE
10:58:59 AM
RECONVENED
HOUSE BILL NO. 151
"An Act relating to unemployment benefits during a
period of state or national emergency resulting from a
novel coronavirus disease (COVID-19) outbreak; and
providing for an effective date."
Co-Chair Merrick indicated that Mr. Klouda would provide
his testimony regarding HB 151.
10:59:27 AM
NOLAN KLOUDA, EXECUTIVE DIRECTOR, CENTER FOR ECONOMIC
DEVELOPMENT, UNIVERSITY OF ALASKA (via teleconference),
reported he had been invited to make a few comments related
to the state's economic situation and unemployment benefits
related to HB 151. He reported that in March, the state was
still down about 22,000 jobs. He highlighted that the state
had not experienced much real employment recovery happen
since the previous November when the state had experienced
much higher job losses related to seasonality. He was not
seeing clear improvement in the employment market, and
Alaska was lagging slightly from some of the U.S.
employment numbers and U.S. job reports. He and many of the
economists in the state thought it would not return to
previous 2019 employment levels for 3 years to 5 years. He
suggested the state was looking at a prolonged period of
many jobless individuals well into the future.
Mr. Klouda indicated he had also been asked to speak about
the unemployment benefits provided during the pandemic
through a couple of acts of congress that made the
unemployment benefits more generous. They had sparked some
controversy around the question of whether they had
disincentivized work whether they were encouraging people
not to return to the workforce when they were able to.
There had been several studies that spoke to the issue at
the national level, none specific to Alaska. However, he
thought they were pretty important and illuminating. Most
studies indicated that the more generous pandemic
unemployment benefits, especially the extra $600 from the
Coronavirus Aid, Relief, and Economic Security (CARES) Act
that expired last summer, did not decrease employment (the
number of people who were actually employed). There were
several studies that looked at how there were different
levels of generosity in those benefits. Some people had
more than 100 percent of their prior wage replaced and some
that had less than that depending on what they were making.
In theory, those people who were receiving more on
unemployment had less reason to go back into the workforce
when they were able to. However, studies did not show that
to be the case. Generally, it did not have an effect
overall on employment numbers.
Mr. Klouda continued that there had also been some research
done when the benefits expired at the end of July. The
economists looked for an effect where employment might
increase if those benefits expired which they did not. Some
states were more generous than others and vice versa. The
less generous states did not see employment rebound any
faster than anywhere else. States that were paying slightly
less in UI benefits did not see people returning to the
workforce in any greater numbers. Some studies found that
job search intensity decreased slightly. In other words,
there was a small decline in people looking for work.
However, it was generally dwarfed by the fact that fewer
jobs were available. Early in the pandemic one study
reported that job openings decreased by about 64 percent
but job applications had only fallen about 20 percent (job
openings decreased approximately 3 times as fast as
searching for work).
11:03:41 AM
Mr. Klouda also noted that the more generous UI benefits
seemed to have a strong stimulative affect on spending. The
money paid to unemployed individuals was typically spent
quickly into local economies. One report found that
individuals who were unemployed were spending about 44
percent more in their local economies as a result of the
benefits. It was money that circulated to local businesses
and probably helped local economies by spending,
circulating money, and creating jobs. He was happy to
answer any questions.
Representative Wool heard from several business owners
about their difficulty in hiring employees due to the
additional unemployment benefits of $600 per week paid with
CARES Act funding. He suggested that if a person worked in
a higher paying job they might not be influenced. However,
for individuals working for lower wages, finding employees
had been an issue. He had spoken with several people in the
restaurant and hospitality industries who paid their
employees under $15 per hour. He made some computations and
speculated that for those employees on unemployment with
the addition of CARES Act funding they might receive around
$800 per week or about $20 per hour, more than they had
ever made per hour. Waitresses and bartenders received tips
but those were down due to Covid. In the lower salary
range, it had been difficult to find a workforce. He
wondered if industry specific studies had been done.
Mr. Klouda had heard the same feedback from business
owners. Much of the work his center did was focus on
helping businesses and implementing programs. It seemed
pervasive in the state. Even though it was anecdotal, he
had a difficult time completely discounting it because of
how common the concerns were. He thought it was a reality
for many individual businesses. However, he could not speak
to how many, how common, or across what sectors it applied.
No one had done the research. Some of the economists were
talking about how they would like to see more of a sector
breakdown. There might be more of an effect on one industry
versus another. He did not think there was enough data to
be able to look at it. He brought up another issue
regarding the pandemic. The current pandemic employment
benefits were an extra $300 per week. Whereas, it had been
$600 per week at the beginning of the pandemic under the
CARES Act. If there was a disincentive effect, he thought
the $300 amount would have less of a disincentive than
$600. He relayed that it was an area where there was a
shortage of data.
11:08:47 AM
MEGAN HOLLAND, STAFF, REPRESENTATIVE IVY SPOHNHOLZ, noted
that one of the national studies that Mr. Klouda had
brought to her attention was in the data and sampling. Half
of the business owners were in the hospitality and food and
drink industry. The finding was that the additional
unemployment benefits did not disincentivize work. The
conclusion was if there was any moral hazard (a temptation
not to go back to work because of exceptionally high
benefits), it would be in this group. The study found that
it was not the case.
Representative Rasmussen reported speaking to several
business owners in Anchorage to get a better understanding
about the need for employees. She reviewed a list of
businesses and individuals she had spoken with. She talked
to Alaska Mill and Feed, a local garden and pet supply
store. She talked with the Anchorage School District who
was having a difficult time filling teacher's assistant,
kitchen staff, and noon duty positions. Bread and Brew, a
local restaurant in Anchorage, was offering a $300 signing
bonus and a $22 per hour wage. They had not been able to
fill their positions. Other restaurants having problems
filing positions included La Mex and the Little Dipper
Diner. Pivot Maintenance was looking for a handyman and a
bookkeeper. A local cleaning crew small business started
employees out at $22 per hour with a $5 increase after 6
months and could not find anyone to go to work. She
continued to list several other businesses that were having
trouble hiring employees.
Representative Rasmussen reported that other small
businesses had reached out to her reporting that in prior
years they would see upwards of 100 applications for
positions open at their companies. Currently, they were
lucky to receive 5 applications. It was evident that there
was a lack of employment opportunities for more skilled
workers such as architects and engineers.
Representative Rasmussen had an additional concern. She
received an email that had been forwarded to her from an
individual. She read a portion of the email:
"The decision regarding eligibility for unemployment
insurance is based on the following facts, laws, and
regulations. You've quit your job with blank on
10/15/20 because you were concerned about contracting
Covid-19 and possibly spreading it to your family.
Under Alaska Statute 23.20.379 an individual is
disqualified for waiting week credit or benefits for
the first week in which the individual is unemployed
and for the next 5 weeks that the individual last left
a suitable work voluntarily without good cause. The
maximum potential benefit will be reduced by 3 times
the weekly benefit amount.
Conclusion of facts: You voluntarily left your work.
The circumstances involved in your leaving established
good cause for voluntarily leaving work. Benefits are,
therefore, allowed beginning 10/18/2020 if you are
otherwise eligible."
Representative Rasmussen was concerned because she thought
the state had a fine balance ahead with medical necessity.
She did not want somebody being forced into a workforce and
possibly being exposed to Covid-19. However, the way the
program currently worked, somebody could say they were
afraid of contracting Covid whether or not they had any
medical conditions or cause for greater concern for
contracting the virus. She questioned whether it was enough
for a person to leave their job and qualify for
unemployment. She referred back to the national study that
was mentioned. She asked how much information for the study
came from Alaska specifically. She believed it was possible
Anchorage might be an anomaly. She found it alarming that
so many small businesses were struggling to find employees
and looking at having to close their doors as a result.
11:13:43 AM
REPRESENTATIVE IVY SPOHNHOLZ, CHAIR OF THE HOUSE LABOR AND
COMMERCE COMMITTEE, SPONSOR, deferred to Patsy Westcott
regarding Representative Rasmussen's first question and to
Megan Holland to answer her second question.
PATSY WESTCOTT, DIRECTOR, EMPLOYMENT AND TRAINING SERVICES,
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (via
teleconference), explained that a general fear of
contracting COVID was not a sufficient reason to refuse an
offer of work, not return to work, or to quit a job. It was
unfortunate that the determination that Representative
Rasmussen read was very brief in its description of why
benefits were being allowed. She indicated that the program
conducted a very thorough investigation looking at all of
the mitigation factors related to an individual prior to
making a determination of whether or not to allow benefits.
Some of those factors included an individual's personal
health circumstances and the protections in place at the
workplace to ensure workers' safety. She reiterated that a
general fear of contracting Covid was not considered good
cause.
Ms. Holland had not seen any studies that spoke to
Alaska-specific data. She was working with the information
that was available. She thought the bill sponsor would be
interested in continuing the outreach with members of the
tourism industry small businesses digging into the topic
further. She thought Representative Rasmussen was asking
why there were so many unfiled jobs and why businesses were
having such a difficult time finding workers. She wondered
if there was a correlation between increased unemployment
benefits and the issue of businesses not being able to fill
positions. She indicated that with the information that was
currently available, she was not seeing the correlation
even though it potentially deserved additional outreach.
Representative Rasmussen thought it was good to see what
was happening at the national level. However, Alaska and
its economy could be very unique. It seemed Alaska lagged
behind the lower 48 sometimes with certain trends. She
thought it was very important for legislators to fully
understand the impacts of the policies they were putting
into place before making certain decisions, especially ones
specific to Alaska small businesses. She did not want a
snowball effect to occur where businesses begin to close
their doors due to a lack of personnel.
11:17:33 AM
Representative Spohnholz thought it was important to note
that the bill did not substantially change wage replacement
value in the State of Alaska. Alaska's wage replacement
value as a percentage of income was the lowest in the
entire country. The cost of living was very high in Alaska.
The minimum benefit an Alaskan could receive was $56 per
week. If $56 and $300 was added together it would not be
enough for Alaskans to avoid going to work. She emphasized
the importance of knowing what the bill did and did not do.
The American Rescue Plan Act wage replacement that would
supplement the State of Alaska's expired in September 2021.
All she was attempting to do was to give the department
some continued flexibility and allow people who had
children an extension of the modest increase while the
state did a deeper dive into what unemployment updates
should be made over the longer-term.
Representative Wool did not think the benefits offered in
the bill would substantially change people's incentives. He
thought the bill did good things. The wage increase that
Representative Rasmussen mentioned that some of the
businesses offered reminded him of a friend who owned a
restaurant in Anchorage. Shortly after the pandemic he was
desperate to hire people and had to offer at least more
than a person was receiving on unemployment. He imagined
that some of the job numbers that might have shown
non-stagnation or improvement might have correlated with a
higher wage. He brought up that he believed there was a
wage disparity but admitted it was not the time to discuss
the topic. However, he asked if wage changes had been
considered with some of the studies.
Ms. Holland did not recall but was happy to share the
studies that Mr. Klouda had shared with her office with
members of the finance committee.
11:20:36 AM
Representative Josephson was surprised to hear Ms. Westcott
report that COVID-19 was not enough of an excuse to claim
unemployment. He wondered if the department would have had
the flexibility to qualify a person for benefits if they
were more vulnerable to Covid.
Ms. Westcott responded that the department would have
flexibility to determine whether someone was at a higher
risk. The department would consider individual mitigating
circumstances to determine a person's eligibility. For
example, a person would be given special consideration if
they had a preexisting condition that would put them at a
higher risk of contracting Covid-19.
Co-Chair Merrick thanked Mr. Klouda for his testimony.
Representative Spohnholz asked for time for Mr. Klouda to
respond to a question from Representative Wool.
Mr. Klouda responded to the question about different wage
replacement rates. For instance, for some people the
unemployment benefits replaced more than 100 percent of
their wage. For others, the amount was less than they were
making before. The studies that he mentioned accounted for
that factor. They found that it did not influences people's
decision to go back to work in the data that they reviewed.
The higher wage replacement rate did not deter people to
return to work when they had the opportunity. He pointed
out there was also the issue of childcare when it came to
someone getting back into the workforce. He reported that
41 percent of unemployed parents who wanted to return to
the workforce during 2020 were unable or uncertain they
could because of childcare availability.
Representative Spohnholz appreciated all of the great
questions and the robust discussion about the bill. She
thought it was important to consider all of the details
about extending unemployment benefits. Moving forward the
state continued to have record unemployment. She wanted to
ensure that the legislature was eliminating unnecessary
bureaucracy. She hoped to provide some flexibility in
waving work search requirements if they deemed it
appropriate on a case-by-case basis. She had stated in the
previous day that potentially eliminating the work search
requirement was something she would consider. Ms. Westcott
had made a comment that they were not universally applying
that measure. However, in the future it might be waived on
a case-by-case basis. She noted that sometimes there were
reasons that might mitigate someone's ability to go back to
work including an underlying health condition and certain
work environments that would place them at higher risk of
contracting Covid.
Representative Spohnholz indicated that Mr. Klouda also
referenced childcare issues. She thought it was important
the department was given a little flexibility to administer
unemployment benefits presently while the state continued
to be in a sticky situation despite the fact the economy
was reopening. She hoped it would continue to do so and
that everyone could get back to work. She would not support
the waiver of the work search requirement, as she wanted to
give the department some flexibility.
11:25:27 AM
Representative Edgmon would like to hear from the
department to demonstrate the benefits of the bill.
Anecdotally, he knew of people benefiting from the bill
such as the single mother living in a motor home in
Muldoon. He asked the department to argue why the bill was
not necessary. He commented that the state was down 22,000
jobs, many of which were tied to the unemployment rate. He
would like to know why the bill would not benefit Alaskans.
In other sectors of the economy were getting benefits via
legislation this committee was going to pass with federal
funds. He wanted a clear explanation from the department.
HB 151 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick reviewed the agenda for the afternoon
meeting.
ADJOURNMENT
11:27:02 AM
The meeting was adjourned at 11:27 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 80 Amendment 1 Ortiz 041721.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 80 |
| SB22 Amendment 1 Josephson 041721.pdf |
HFIN 4/20/2021 9:00:00 AM |
SB 22 |
| HB 79 Amendment 1 Carpenter 041921.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 79 |
| HB 80 Amendment 2 Carpenter 041921.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 80 |
| HB 79 Amendment 2 Wool 041921.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 79 |
| HB 100 Response to Co Chair Merrick 041921.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 100 |
| HB 80 KRSMA Letter 4-19-2021.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 80 |
| HB 80 Conceptual Amendment 1 to Amendment 1 Ortiz 042021.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 80 |
| HB 151 Supporting Document - Employment Effects of Unemployment Insurance Generosity During the Pandemic, 7.14.20.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 151 |
| HB 151 Supporting Document - NBER Paper, 2021.pdf |
HFIN 4/20/2021 9:00:00 AM |
HB 151 |