Legislature(1993 - 1994)

02/17/1993 08:00 AM House FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                      JOINT MEETING OF THE                                     
             HOUSE RESOURCES STANDING COMMITTEE AND                            
              HOUSE SPECIAL COMMITTEE ON FISHERIES                             
                        February 17, 1993                                      
                            8:00 a.m.                                          
                                                                               
                                                                               
  HOUSE RESOURCES COMMITTEE                                                    
  MEMBERS PRESENT                                                              
                                                                               
  Representative Bill Williams, Chairman                                       
  Representative Bill Hudson, Vice Chairman                                    
  Representative Con Bunde                                                     
  Representative Pat Carney                                                    
  Representative John Davies                                                   
  Representative Joe Green                                                     
  Representative Jeannette James                                               
  Representative Eldon Mulder                                                  
  Representative David Finkelstein                                             
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  HOUSE SPECIAL COMMITTEE ON FISHERIES                                         
  MEMBERS PRESENT                                                              
                                                                               
  Representative Carl Moses, Chairman                                          
  Representative Harley Olberg, Vice Chairman                                  
  Representative Irene Nicholia                                                
  Representative Cliff Davidson                                                
  Representative Gail Phillips                                                 
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  OTHER LEGISLATORS PRESENT                                                    
                                                                               
  Representative Fran Ulmer                                                    
  Representative Jerry Sanders                                                 
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  Joint Meeting:  Briefing on Community Development Quotas                     
  (CDQ)                                                                        
                                                                               
  Resources Only:                                                              
  EO 86:    Transferring the functions and duties of the                       
            division of fisheries rehabilitation, enhancement                  
            and development (FRED) to the Department of Fish                   
            and Game.                                                          
                                                                               
            MOVED OUT OF COMMITTEE WITH NO RECOMMENDATION                      
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Edgar Blatchford, Commissioner                                               
  Department of Community and Regional Affairs                                 
  P. O. Box 112100                                                             
  Juneau, Alaska  99811-2100                                                   
  Phone:  465-4700                                                             
  Position Statement: Testified on CDQ's                                       
                                                                               
  John Jemewouk, Executive Director                                            
  Norton Sound Economic Development Corporation                                
  P.O. Box 89                                                                  
  Elim, Alaska  99739                                                          
  Phone:  890-3071                                                             
  Position Statement:  Supported CDQ                                           
                                                                               
  Mark Snigaroff, Chairman                                                     
  Aleutian Pribilof Island Community                                           
    Development Association                                                    
  P.O. Box 47007                                                               
  Atka, Alaska  99547                                                          
  Phone: 586-3107                                                              
  Position Statement:  Supported CDQ                                           
                                                                               
  Robin Samuelson, Jr.                                                         
  Bristol Bay Economic Development Corporation                                 
  P.O. Box 412                                                                 
  Dillingham, Alaska  99516                                                    
  Phone: 842-5257                                                              
  Position Statement:  Supported CDQ                                           
                                                                               
  Perfinia Pletnikoff, Jr., President                                          
  Central Bering Sea Fishermen's Association                                   
  1500 W. 33rd St., Suite 100                                                  
  Anchorage, Alaska  99503                                                     
  Phone:  278-2312                                                             
  Position Statement:  Supported CDQ                                           
                                                                               
  Fred Phillip                                                                 
  Coastal Villages Fishing Cooperative                                         
  P.O. Box 6                                                                   
  Kwigillingok, Alaska  99622                                                  
  Phone:  588-8114                                                             
  Position Statement:  Supported CDQ                                           
                                                                               
  Laurentia Mike                                                               
  Yukon Delta Fisheries Development Association                                
  P.O. Box 20269                                                               
  Kotlik, Alaska  99620                                                        
  Phone:  899-4220                                                             
  Position Statement:  Supported CDQ                                           
                                                                               
  John Walsh, Deputy Director                                                  
  Division of Community and Rural Development                                  
  Department of Community and Regional Affairs                                 
  P.O. Box 112100                                                              
  Juneau, Alaska  99811-2100                                                   
  Phone:  465-4898                                                             
  Position Statement:  Responded to question on CDQ                            
                                                                               
  Mark Springer                                                                
  Yukon Delta Fisheries Development Association                                
  General Delivery                                                             
  Hooper Bay, Alaska  99604                                                    
  Phone:  758-4535                                                             
  Position Statement:  Supported CDQ                                           
                                                                               
  Clem Tillion, Adviser                                                        
  Office of the Governor                                                       
  State Capitol                                                                
  Juneau, Alaska  99811                                                        
  Phone:  465-3500                                                             
  Position Statement:  Supported CDQ                                           
                                                                               
  Geron Bruce, Special Assistant                                               
  Alaska Department of Fish & Game                                             
  P.O. Box 25526                                                               
  Juneau, Alaska  99802-5526                                                   
  Phone:  465-4100                                                             
  Position Statement:   Testified on EO 86                                     
                                                                               
  Jeff Koenings, Director                                                      
  FRED Division                                                                
  Alaska Department of Fish & Game                                             
  P.O. Box 25526                                                               
  Juneau, Alaska  99802-5526                                                   
  Phone:  465-4100                                                             
  Position Statement:  Testified on EO 86                                      
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-19, SIDE A                                                           
  Number 000                                                                   
                                                                               
  The joint meeting of the House Resources Committee and House                 
  Special Committee on Fisheries was called to order by                        
  Fisheries' Chairman Carl Moses at 8:08 a.m.  Resources                       
  Committee members present at the call to order were                          
  Representatives Williams, Hudson, Bunde, Carney, Davies,                     
  James, Finkelstein and Mulder.  Absent was Representative                    
  Green.  Fisheries Committee members present at the call to                   
  order were Representatives Moses, Olberg, Nicholia,                          
  Davidson, and Phillips.  No Fisheries Committee members were                 
  absent at the call.                                                          
                                                                               
  CHAIRMAN CARL MOSES announced the purpose of the joint                       
  meeting would be to hear a briefing on the Community                         
  Development Quota (CDQ) program.  After the briefing, he                     
  explained, the Fisheries Committee would reconvene in its                    
  regular meeting place, and the Resources Committee would                     
  also reconvene to hear regular business.                                     
                                                                               
  Number 059                                                                   
                                                                               
  EDGAR BLATCHFORD, COMMISSIONER, DEPARTMENT OF COMMUNITY AND                  
  REGIONAL AFFAIRS, explained that the CDQ program had grown                   
  from a joint effort with himself, Commissioners Paul Fuhs of                 
  the Department of Commerce and Economic Development, Carl                    
  Rosier of the Alaska Department of Fish and Game (ADF&G),                    
  and Clem Tillion, who served as an advisor on the project                    
  for the Governor's Office.  The purpose of the program, he                   
  said, was to strengthen local economies by bringing                          
  opportunities for commercial fishing home.                                   
                                                                               
  MR. BLATCHFORD remarked on opposition to the CDQ program by                  
  outside interests, such as the Washington state fishing                      
  industry and foreign markets, who perceived the CDQs as a                    
  threat to their own jobs and profitability.  He mentioned                    
  editorials against the CDQs that had appeared in Seattle                     
  area newspapers.  He reported that in the view of the Alaska                 
  administration, the program did not take jobs away from                      
  anyone; it simply created new jobs.  He said the burden to                   
  show the program worked was on the six applicant groups                      
  which comprised 55 communities.                                              
                                                                               
  Number 150                                                                   
                                                                               
  MR. BLATCHFORD described the initial success of the new                      
  program, and noted the CDQs had generated $20 million in its                 
  first month, December, 1992, in economically depressed                       
  areas.  He told the committee Governor Hickel was behind the                 
  effort and had instructed the commissioners to move forward.                 
  The cost to the state for the program, he said, included an                  
  initial investment of $300,000 late in the 1992 legislative                  
  session.  Those funds were intended to monitor the program,                  
  he added.  The applicant groups have received maximum grants                 
  of $5,000.  He equated the success and importance of the                     
  CDQs in the coastal communities of Southwest Alaska to the                   
  economic impact of Prudhoe Bay to the North Slope.                           
                                                                               
  Number 233                                                                   
                                                                               
  JOHN JEMEWOUK, EXECUTIVE DIRECTOR, NORTON SOUND ECONOMIC                     
  DEVELOPMENT CORPORATION, introduced representatives of the                   
  CDQ applicant groups.  In Norton Sound, he said, there had                   
  been a dramatic interest in developing the fisheries as a                    
  means of boosting local economies.  The CDQs were planned to                 
  continue through 1995, he said, but recommended extending                    
  the program indefinitely, and expanding it to include other                  
  fisheries, such as crab, cod, sablefish, and halibut.  He                    
  added the CDQ applicant groups have worked closely with the                  
  state in development of the regulations for the program, and                 
  with the state acting as liaison with the U.S. Department of                 
  Commerce.  He asked for the committees' support in expanding                 
  the program to other fisheries, and concluded his remarks                    
  with a comment on how much the program had benefitted many                   
  user groups.                                                                 
                                                                               
  Number 350                                                                   
                                                                               
  MARK SNIGAROFF, CHAIRMAN, ALEUTIAN PRIBILOF ISLAND COMMUNITY                 
  DEVELOPMENT ASSOCIATION (APICDA), referred members'                          
  attention to a handout in their files, an overview of APICDA                 
  and its role in the CDQ program.  He reported the fishery                    
  had been successful in 1992, and the profits were placed in                  
  escrow for the 1994 fishery.  Programs underway now, he                      
  said, would be completed by 1995.  He urged extension of the                 
  program.                                                                     
                                                                               
  Number 380                                                                   
                                                                               
  ROBIN SAMUELSON, JR. spoke on behalf of the BRISTOL BAY                      
  ECONOMIC DEVELOPMENT CORPORATION (BBEDC).  He said BBEDC's                   
  partner in the CDQ venture was Ocean Trawl.  Regarding the                   
  program's successful December start-up, Mr. Samuelson said                   
  it was rare for government to work that fast.  He                            
  anticipated approximately 60 people would be employed                        
  through BBEDC's participation in the CDQ program, including                  
  those participating in vocational education programs related                 
  to the fishery.  He also reported the BBEDC was working with                 
  the Internal Revenue Service (IRS) to save limited entry                     
  permits in jeopardy of being seized by the IRS.                              
                                                                               
  Number 400                                                                   
                                                                               
  MR. SAMUELSON claimed the BBEDC expected to go into the                      
  bottom-fish fishery and use a percentage of profits for                      
  scholarships and further investments.  He noted their                        
  participation in the CDQ program was structured to be                        
  carried into the 21st century.  The December CDQ activities,                 
  he said, added two million dollars to the economy of Bristol                 
  Bay.  Employment was the number one objective of the                         
  program, he concluded.                                                       
                                                                               
  Number 420                                                                   
                                                                               
  PERFINIA PLETNIKOFF, JR., PRESIDENT, CENTRAL BERING SEA                      
  FISHERMEN'S ASSOCIATION (CBSFA), said a result of the CDQ                    
  program had been to "Alaskanize" the fishery.  He expressed                  
  hope that the program might be extended to fisheries in                      
  other species.                                                               
                                                                               
  Number 440                                                                   
                                                                               
  FRED PHILLIP from Kwigillingok, represented THE COASTAL                      
  VILLAGES FISHING COOPERATIVE (CVFC), comprised of 17                         
  participating villages along the Yukon/Kuskokwim Delta.  Of                  
  the 5,000 people in the area comprising the CVFC, he                         
  reported that 3,500 were of employment age.  Over 50% of                     
  those employable were not in the work force, he reported.                    
  Through the CDQ program, 30 people were employed in 1992,                    
  and the plan for 1993 was to have at least 50 people                         
  employed.  If a fish processing operation were started in                    
  the area, he anticipated even higher employment.  The                        
  Cooperative became a profit-making company in order to enter                 
  fisheries as a fishing company and not as a granting agency.                 
                                                                               
                                                                               
  MR. PHILLIP referred to a planned training facility for                      
  local residents to become salmon roe technicians, which                      
  would allow local residents to replace Japanese technicians.                 
  They also were looking into internships and apprenticeship                   
  programs to increase employment in the villages, he added.                   
                                                                               
  Number 490                                                                   
                                                                               
  LAURENTIA MIKE spoke for the YUKON DELTA FISHERIES                           
  DEVELOPMENT ASSOCIATION (YDFDA).  She reported on the                        
  success of the CDQ in employing residents in the area, and                   
  in training a number of individuals.  She said the YDFDA was                 
  able to purchase three longline vessels, and upgrade                         
  facilities of the Yukon Delta Fish Marketing cooperative,                    
  which was the oldest Alaska Native-owned facility in the                     
  state.  At least 20 new jobs had been created in the                         
  communities of the YDFDA because of the CDQ program, she                     
  concluded.                                                                   
                                                                               
  Number 520                                                                   
                                                                               
  MR. JEMEWOUK resumed his testimony, referring to a hand-out                  
  on the Norton Sound Economic Development Corporation's                       
  (NSEDC's) programs.  The NSEDC included 15 villages from                     
  Wales to Stebbins, he said, and was incorporated in 1989 by                  
  the Northwest Mayors Conference to be an economic                            
  development vehicle for the Norton Sound area.  The                          
  organization's fishing partner is Glacier Fish Company,                      
  selected because of the company's structure and its success                  
  in the bottom fishery of the Bering Sea.  A goal of the                      
  NSEDC is to develop a new market for salmon and herring.                     
                                                                               
  MR. JEMEWOUK said Norton Sound was not able to participate                   
  in the herring fishery last spring because of late ice pack.                 
  He said this was disastrous for the economy.  He reported                    
  Norton Sound received 20% of the allocation of the CDQ                       
  pollack reserve, or 25 metric tons, and harvested just under                 
  the amount allocated.  Among the programs of the NSEDC is a                  
  low-interest loan program to help fishermen start up.  He                    
  said the NSEDC's CDQ program is set up to employ 80                          
  residents of the region each year.  They were also planning                  
  on-shore capabilities for handling salmon products in Norton                 
  Sound, and have set up a scholarship program, he noted.                      
                                                                               
  MR. JEMEWOUK said the NSEDC was trying to work with the                      
  state on developing a salmon incubation and hatchery                         
  program.  An infrastructure for fish processing was                          
  anticipated to create more jobs for the local economy, he                    
  added, and long-term plans included the purchase of a                        
  vessel.  He noted the December pollack fishery harvested                     
  20,183 metric tons of product, generating approximately $4.5                 
  million in the Norton Sound area, and 45 Bering Straits'                     
  residents had been trained in entry level fisheries jobs.                    
  The Board of Fisheries, he said, approved a super-exclusive                  
  red king crab fishery that allowed fishermen to use their                    
  boats for more than just the short herring opening.                          
                                                                               
  MR. JEMEWOUK advised that a loan program made gear                           
  available, and encouraged opening new markets for products.                  
  He remarked on an agreement with the ADF&G to conduct a                      
  salmon rehabilitation enhancement program, with matching                     
  funds requested from Western Alaska Salmon Restoration                       
  Initiative.                                                                  
                                                                               
  Number 622                                                                   
                                                                               
  REPRESENTATIVE BILL HUDSON expressed concern over the IRS                    
  problem with the attachment of permits.  He suggested the                    
  CDCDQ process be used to gain collective permits, maintained in              
  each CDQ area.                                                               
                                                                               
  MR. JEMEWOUK responded that Norton Sound had established a                   
  loan program to give more access and flexibility in funding                  
  to obtain and retain permits.  Educational programs to train                 
  participants in good business practices had also been a                      
  focus of the CDQ group, in order to avoid situations where                   
  taxes became delinquent.                                                     
                                                                               
  Number 656                                                                   
                                                                               
  MR. SAMUELSON said his group had contacted the IRS, and said                 
  the board was not in a position to loan money to bail out                    
  fishermen at risk of losing permits.  They offered financial                 
  consulting, and devised payment schedules that the IRS would                 
  agree with, as well as matching people with jobs to generate                 
  income in the non-fishing season.  He spoke of the need for                  
  more intervention to work out problems between fishermen and                 
  the IRS.                                                                     
                                                                               
  Number 671                                                                   
                                                                               
  REPRESENTATIVE GAIL PHILLIPS asked about the owner of                        
  Glacier Fish Company.                                                        
                                                                               
  MR. JEMEWOUK answered that the company was owned by                          
  individuals who live in Seattle.                                             
                                                                               
  REPRESENTATIVE PHILLIPS then asked about the potential for a                 
  halibut fishery in Norton Sound, and what products would                     
  come out of such a fishery.                                                  
                                                                               
  MR. JEMEWOUK responded that surveys were conducted in Norton                 
  Sound last summer and would be continued next spring, which                  
  found there was a lot of halibut.                                            
                                                                               
  REPRESENTATIVE PHILLIPS mentioned Mr. Jemewouk's previous                    
  comments on salmon rehabilitation and enhancement programs,                  
  and asked whether the NSEDC was looking into putting in a                    
  hatchery.                                                                    
                                                                               
  MR. JEMEWOUK answered that this was being studied to see                     
  what kind of methods would best serve enhancement goals.                     
  REPRESENTATIVE PHILLIPS commented that villages in her                       
  district were interested in finding out how they could get                   
  into the program, because of the success in the areas the                    
  program had been implemented.  She then asked for figures on                 
  individuals being trained at the Seward vocational technical                 
  training facility.                                                           
                                                                               
  MS. MIKE answered that from the Yukon Delta region there                     
  would be six or seven who would be graduating.                               
                                                                               
  MR. JEMEWOUK estimated a total of 38-40 had been trained.                    
                                                                               
  TAPE 93-19, SIDE B                                                           
  Number 000                                                                   
                                                                               
  JOHN WALSH, DEPUTY DIRECTOR, DEPARTMENT OF COMMUNITY AND                     
  REGIONAL AFFAIRS, said he had been assisting with the                        
  efforts to get people trained.  He estimated approximately                   
  140-160 people were trained in 1992, through various                         
  programs associated with the CDQs.  The target for 1993, he                  
  said, was to have 300 people trained.  A requirement of the                  
  CDQ program was direct employment and training, he                           
  explained.                                                                   
                                                                               
  Number 050                                                                   
                                                                               
  REPRESENTATIVE IRENE NICHOLIA noted the cooperative                          
  extension program was doing fisheries enhancement program                    
  training in the Interior, and that might be another                          
  opportunity for the CDQ applicant groups to look into.                       
  Regarding the potential extension of the CDQ program, she                    
  asked how long they had in mind.                                             
                                                                               
  MR. JEMEWOUK responded that they would like to extend the                    
  program indefinitely.                                                        
                                                                               
  Number 063                                                                   
                                                                               
  CHAIRMAN MOSES noted Representative Joe Green had joined the                 
  meeting.                                                                     
                                                                               
  Number 078                                                                   
                                                                               
  REPRESENTATIVE CON BUNDE commented his experience had shown                  
  that students with a personal commitment were more apt to                    
  succeed, and any training should encourage personal pride                    
  and commitment.                                                              
                                                                               
  Number 093                                                                   
                                                                               
  REPRESENTATIVE NICHOLIA asked whether the University of                      
  Alaska's rural education program had been contacted as an                    
  opportunity for training.                                                    
                                                                               
  MR. PHILLIP responded that the training efforts had not                      
  included that yet.                                                           
                                                                               
  REPRESENTATIVE NICHOLIA suggested the CDQ groups consider                    
  contacting the University of Alaska's rural education                        
  program.                                                                     
                                                                               
  Number 113                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked for a description of how the                     
  product flowed, from harvest to processing to market.                        
  MR. JEMEWOUK answered that the product was delivered to the                  
  offshore trawler partner and processed on the boats, then                    
  some of it was off-loaded at Dutch Harbor, with some shipped                 
  to Seattle for distribution to various food chains,                          
  restaurants, and other outlets.  Some product was sent to                    
  Japan, he said, and much of it was processed into fillets.                   
                                                                               
  REPRESENTATIVE HUDSON asked whether some of the fish was                     
  processed into surimi.                                                       
                                                                               
  MR. JEMEWOUK said that within his company, they had not                      
  looked into surimi because of the depressed market.  Instead                 
  they looked at fillets and roe.                                              
                                                                               
  Number 150                                                                   
                                                                               
  MARK SPRINGER, a Hooper Bay resident and consultant to the                   
  YUKON DELTA FISHERIES DEVELOPMENT ASSOCIATION, said the                      
  majority of their product was processed into surimi paste                    
  for the Japanese market.                                                     
                                                                               
  Number 170                                                                   
                                                                               
  REPRESENTATIVE HUDSON commented that surimi was one of the                   
  highest value-added products in Alaska.  He commented on                     
  modifying the tax laws to call for a landing tax, so when                    
  the product was landed Alaska would receive revenues as it                   
  did for salmon.                                                              
                                                                               
  Number 185                                                                   
                                                                               
  CLEM TILLION, ADVISER TO THE GOVERNOR'S OFFICE on the CDQ                    
  program, addressed the remarks regarding landing taxes.  He                  
  said they were now looking into that issue, and the intent                   
  was to avoid ear-marked or designated funding, because that                  
  led to extra layers of bureaucracy.  He noted places like                    
  Peter Pan Seafoods in King Cove was even doing "boil-in-the-                 
  bag" secondary processing for shipping to the Japanese                       
  household.                                                                   
                                                                               
  Number 212                                                                   
                                                                               
  MR. TILLION continued his testimony, noting that the CDQ                     
  program varied among the applicant groups, and was just one                  
  step in the overall process to make the participating areas                  
  independent and self-supporting.  The pollack fishery, for                   
  example, was seen as a way to get cash for some of the other                 
  efforts, and the halibut fishery saw 50% of the quota made                   
  available to people in the area.  Another goal was to                        
  reinvest earnings so that the economic benefit was brought                   
  home to the villages as earnings.                                            
                                                                               
  MR. TILLION stressed the CDQ program was not a welfare                       
  program, and its success depended entirely on the efforts of                 
  the participating applicant groups.  Any groups that did not                 
  succeed would be cut and their portion parcelled out to the                  
  other participants.  He said the program was flexible to fit                 
  the resources and needs of the different areas.                              
                                                                               
  Number 280                                                                   
                                                                               
  MR. TILLION explained the CDQ program had input from the                     
  Limited Entry Commission in setting up brokerages to help                    
  stem the outflow of limited entry permits.  He said a fund                   
  was established for purchase or loan of Individual                           
  Transferrable Quotas (ITQ).  Under the ITQ system, he said,                  
  the property right was forecloseable, so loans could be made                 
  safely.  He said the CDQ administrators were also working on                 
  such issues as landing taxes.  He said they were working                     
  with factory trawlers, and had not dodged the legislative                    
  appropriations system.                                                       
                                                                               
  Number 340                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked Mr. Tillion to explain the flow                  
  of revenues generated by the CDQ program; specifically, how                  
  they were collected and accounted for.                                       
                                                                               
  MR. TILLION described the process, and said the CDQ monies                   
  came directly to the organizations that were given an                        
  allocation by the Secretary of Commerce.  All CDQ programs                   
  must be approved under criteria set out by the Governor.                     
  The money flowed directly to the village organizations from                  
  their contractors, and the state oversees the process.  The                  
  money was regulated through the state's Banking and                          
  Securities Division, who audited the accounting records to                   
  assure that funds were used for purposes approved under                      
  regulations.  An educational grant, for example, must be                     
  used for education purposes, he pointed out.                                 
                                                                               
  Number 370                                                                   
                                                                               
  REPRESENTATIVE JOHN DAVIES asked Mr. Tillion if he could                     
  identify the main obstacles to the program's success from                    
  region to region.  He also asked what the state could do to                  
  help assure success for the CDQ program.                                     
                                                                               
  MR. TILLION told the committee the state could help assure                   
  success by making sure the criteria and the plan laid out by                 
  each group were adhered to.                                                  
                                                                               
  Number 395                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked about the level of general fund                   
  support for the program.                                                     
                                                                               
  MR. TILLION said the program would have its own funding                      
  sources, and the only expense to the state would be for                      
  costs of enforcement by the ADF&G and the State Troopers,                    
  from programs already funded for general enforcement                         
  activities.  Funds for those purposes could come from a raw                  
  fish tax or landing tax, so the funds came from the fishing                  
  industry.                                                                    
                                                                               
  Number 415                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked about former Governor Hammond's                   
  suggestion to have a fish excise tax.                                        
                                                                               
  MR. TILLION noted when he was in the state senate, the                       
  legislature raised fish taxes 300%.                                          
                                                                               
  Number 434                                                                   
                                                                               
  REPRESENTATIVE JOE GREEN asked Mr. Tillion to comment on the                 
  possibility of a situation arising where a CDQ participant                   
  might fail because of the restrictions and allotments of the                 
  program.                                                                     
                                                                               
  Number 446                                                                   
                                                                               
  MR. TILLION noted the participants agreed to the criteria                    
  when they joined the program, and as long as they did not                    
  deviate from the plan, the program should run smoothly and                   
  avoid failure.  He said avoiding litigation was a goal of                    
  the program.                                                                 
                                                                               
  Number 455                                                                   
                                                                               
  REPRESENTATIVE GREEN asked about the effect of bad catch                     
  years for fishing on the CDQ participants.                                   
                                                                               
  Number 470                                                                   
                                                                               
  MR. TILLION answered that the Board of Fish had tried to                     
  open up other fisheries and spread out the risk so there                     
  were options available.  He said they could not cover                        
  natural obstacles such as the ice-block in Norton Sound last                 
  year.  The yearly income would fluctuate, he noted.                          
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  Number 488                                                                   
                                                                               
  CHAIRMAN MOSES adjourned the joint meeting and said the                      
  Fisheries Committee would reconvene in Room 17.                              
  EO 86:  TRANSFER OF FRED DIVISION FUNCTIONS TO THE ADF&G                     
                                                                               
  CHAIRMAN BILL WILLIAMS announced the Resources committee                     
  would take a brief break and then reconvene to hear EO 86.                   
                                                                               
  CHAIRMAN WILLIAMS reconvened the meeting of the House                        
  Resources Committee at 9:25 a.m., and noted a quorum was                     
  present.  He announced the committee would take up EO 86,                    
  which was heard previously in committee, on January 29,                      
  1993.  At the previous hearing, he said, questions arose to                  
  which the committee had asked for a written response.  The                   
  response had since been received, he noted.                                  
                                                                               
  Number 520                                                                   
                                                                               
  GERON BRUCE, SPECIAL ASSISTANT, ADF&G, referred to the                       
  written responses to previous questions, and told the                        
  committee he would answer any questions they might have.  He                 
  noted representatives of the divisions of Sport Fish, FRED                   
  and Commercial Fisheries were also in attendance at the                      
  meeting and would answer questions if required.                              
                                                                               
  Number 530                                                                   
                                                                               
  REPRESENTATIVE DAVIES commented that he previously had                       
  questions about the process of reorganization in the ADF&G.                  
  He asked how far the ADF&G was in the process.                               
                                                                               
  Number 540                                                                   
                                                                               
  MR. BRUCE said the ADF&G's Commissioner had appointed a                      
  planning team leader, Jeff Koenings, and a core planning                     
  group, who met to exchange ideas on an informal basis.  That                 
  was as far into the process as the ADF&G had gone, he                        
  reported.  He noted EO 86 became effective March 13, so the                  
  ADF&G needed to act quickly.                                                 
                                                                               
  Number 559                                                                   
                                                                               
  REPRESENTATIVE HUDSON called the members' attention to a                     
  February 4, 1993 letter from the ADF&G's Commissioner.  He                   
  expressed the concern that any reorganizational flexibility                  
  not be at the expense of the forward progress of the                         
  enhancement of sports fisheries.  He believed page two of                    
  the letter assured the functions and essential services of                   
  the FRED Division would be performed.  After receiving the                   
  packet of information from the ADF&G, Representative Hudson                  
  said he felt comfortable with EO 86.                                         
                                                                               
  Number 587                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked Mr. Bruce to confirm that the                     
  reorganization of the ADF&G would not diminish the role of                   
  the Division of Sport Fish.                                                  
                                                                               
  MR. BRUCE replied in the affirmative.                                        
                                                                               
  REPRESENTATIVE BUNDE then asked about the disposition of the                 
  remaining functions of the FRED Division.                                    
                                                                               
  Number 601                                                                   
                                                                               
  MR. BRUCE said three facilities in the Anchorage area would                  
  be transferred to the Division of Sport Fish.  Other                         
  facilities would remain with the combined Commercial                         
  Fisheries and Development and Management Division.                           
                                                                               
  Number 605                                                                   
                                                                               
  REPRESENTATIVE DAVIES still had questions on the nature of                   
  any savings that might be achieved through the                               
  reorganization.  He asked what the ADF&G's highest                           
  priorities would be.                                                         
                                                                               
  Number 618                                                                   
                                                                               
  MR. BRUCE said he could not at that time report on the                       
  ADF&G's Commissioner's priorities, but said the Commissioner                 
  had stressed that one of the highest priorities was to                       
  protect the basic data gathering and stock assessment                        
  functions, and in-season management capabilities of the                      
  ADF&G.  Other priorities would be identified more clearly as                 
  the reorganization plan moved further along, he said.  One                   
  plan was to develop an enhancement program in the Arctic and                 
  Northwest areas of the state.                                                
                                                                               
  Number 647                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked whether the CDQ program might                     
  pick up where the ADF&G left off with the hatchery business.                 
                                                                               
  MR. BRUCE replied the ADF&G would maintain its technical                     
  support through research and development, but the private                    
  sector would take the lead.  He added the ADF&G would be                     
  involved in planning and protection of wild stocks.  He                      
  assured Representative Bunde the ADF&G would still work in                   
  partnership with the private sector.  He also clarified that                 
  the ADF&G would not be involved in developing any new                        
  hatcheries.                                                                  
                                                                               
  Number 675                                                                   
                                                                               
  JEFF KOENINGS, DIRECTOR, FRED DIVISION, ADF&G, addressed the                 
  question on the ADF&G's involvement in the hatchery                          
  business.  Two out of every three hatcheries, he said, were                  
  operated by the private non-profit sector, who took                          
  advantage of the technology and planning developed by the                    
  state.  He added that it was not now in the state's plans to                 
  build new facilities.                                                        
                                                                               
  Number 701                                                                   
                                                                               
  REPRESENTATIVE GREEN discussed the ADF&G's intent to avoid                   
  the reorganization having an adverse effect on the                           
  sportfishing industry.  He asked whether decisions related                   
  to the reorganization would be irreversible, in case it did                  
  not work.                                                                    
                                                                               
  TAPE 93-20, SIDE A                                                           
  Number 000                                                                   
                                                                               
  MR. KOENINGS commented on the controls on the private                        
  sector, which were getting tighter.  The goal of the program                 
  has been to supplement, not supplant, wild stocks, he                        
  explained.  In some cases, if the reorganization plan did                    
  not work out, the ADF&G might be able to go back.                            
                                                                               
  Number 038                                                                   
                                                                               
  REPRESENTATIVE GREEN was concerned that the changes might                    
  ruin the sport fishing, which was the reason many people                     
  moved to Alaska.                                                             
                                                                               
  Number 045                                                                   
                                                                               
  MR. KOENINGS responded that the basis for the program was to                 
  have oversight to be sure that did not happen.                               
                                                                               
  Number 048                                                                   
                                                                               
  CHAIRMAN WILLIAMS asked if anyone else was present to                        
  testify or had questions.  No one came forward.                              
                                                                               
  Number 049                                                                   
                                                                               
  REPRESENTATIVE HUDSON MOVED to PASS EO 86 out of the                         
  committee with individual recommendations, and ADOPT the                     
  zero fiscal note, with unanimous consent.                                    
                                                                               
  CHAIRMAN WILLIAMS asked members to indicate their approval                   
  of the motion.  No members were opposed and the MOTION                       
  CARRIED.                                                                     
                                                                               
  ANNOUNCEMENTS                                                                
                                                                               
  CHAIRMAN WILLIAMS announced the next meeting of the House                    
  Resources Committee would be on Friday, February 17, 1993,                   
  at 8 a.m., to hold confirmation hearings for Bruce Twomley's                 
  reappointment to the Commercial Fisheries Entry Commission.                  
  Also on Friday's agenda, he announced, would be HB 116,                      
  related to the state's share of federal gas lease royalties.                 
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  There being no further business to come before the House                     
  Resources Committee, Chairman Williams adjourned the meeting                 
  at 9:45 a.m.                                                                 

Document Name Date/Time Subjects