Legislature(2011 - 2012)CAPITOL 120

02/08/2011 05:00 PM FISHERIES


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05:01:31 PM Start
05:01:43 PM Overview(s): Division of Subsistence, Alaska Department of Fish and Game
05:21:54 PM Overview(s): Division of Habitat, Alaska Department of Fish and Game
05:35:25 PM HB121
06:25:29 PM HB59
06:34:53 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overviews by Dept. of Fish & Game: TELECONFERENCED
- Habitat Division
- Subsistence Division
*+ HB 121 LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN TELECONFERENCED
Heard & Held
*+ HB 59 COMMERCIAL FISHING LOAN ACT TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                        February 8, 2011                                                                                        
                           5:01 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Steve Thompson, Chair                                                                                            
Representative Craig Johnson, Vice Chair                                                                                        
Representative Alan Austerman                                                                                                   
Representative Bob Herron                                                                                                       
Representative Lance Pruitt                                                                                                     
Representative Scott Kawasaki                                                                                                   
Representative Bob Miller                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S):  DIVISION OF SUBSISTENCE~  ALASKA DEPARTMENT OF FISH                                                               
AND GAME (ADF&G)                                                                                                                
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
OVERVIEW(S):  DIVISION OF HABITAT~  ALASKA DEPARTMENT OF FISH AND                                                               
GAME (ADF&G)                                                                                                                    
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 121                                                                                                              
"An Act  establishing the commercial charter  fisheries revolving                                                               
loan fund,  the mariculture revolving  loan fund, and  the Alaska                                                               
microloan revolving  loan fund  and relating  to those  funds and                                                               
loans from those funds; and providing for an effective date."                                                                   
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 59                                                                                                               
"An Act relating to loans  made to commercial fishermen under the                                                               
Commercial Fishing Loan Act for  product quality improvements and                                                               
energy  efficiency  upgrades;  and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 121                                                                                                                  
SHORT TITLE: LOAN FUNDS:  CHARTERS/MARICULTURE/MICROLOAN                                                                        
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/24/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/24/11       (H)       FSH, RES, FIN                                                                                          
02/08/11       (H)       FSH AT 5:00 PM CAPITOL 120                                                                             
                                                                                                                                
BILL: HB 59                                                                                                                   
SHORT TITLE:  COMMERCIAL FISHING LOAN ACT                                                                                       
SPONSOR(s): SEATON                                                                                                              
                                                                                                                                
01/18/11       (H)       PREFILE RELEASED 1/7/11                                                                                
01/18/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/11       (H)       FSH, FIN                                                                                               
02/08/11       (H)       FSH AT 5:00 PM CAPITOL 120                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JIM SIMON, Acting Director                                                                                                      
Division of Subsistence                                                                                                         
Alaska Department of Fish & Game (ADF&G)                                                                                        
POSITION STATEMENT:  Provided an overview of the Division of                                                                  
Subsistence, for the Alaska Department of Fish and Game (ADF&G).                                                                
                                                                                                                                
MIKE DAIGNEAULT, Regional Supervisor                                                                                            
Anchorage Area Office                                                                                                           
Division of Habitat                                                                                                             
Alaska Department of Fish & Game (ADF&G)                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided an overview of the Division of                                                                  
Habitat, on behalf of the Alaska Department of Fish & Game                                                                      
(ADF&G).                                                                                                                        
                                                                                                                                
KERRY HOWARD, Director                                                                                                          
Division of Habitat                                                                                                             
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided comments in conjunction with the                                                                
overview of the Division of Habitat, on behalf of the Alaska                                                                    
Department of Fish & Game (ADF&G).                                                                                              
                                                                                                                                
CURTIS THAYER, Deputy Commissioner                                                                                              
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided comments  on HB 121, on  behalf of                                                             
the  Department of  Commerce,  Community  & Economic  Development                                                               
(DCCED).                                                                                                                        
                                                                                                                                
WANETTA AYERS, Manager                                                                                                          
Office of Economic Development                                                                                                  
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided comments  on HB 121, on  behalf of                                                             
the  Department of  Commerce,  Community  & Economic  Development                                                               
(DCCED).                                                                                                                        
                                                                                                                                
RUSSELL DICK, President and CEO                                                                                                 
Haa Aani, LLC                                                                                                                   
Sealaska Corporation                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 121.                                                                          
                                                                                                                                
RODGER PAINTER, President                                                                                                       
Alaska Shellfish Growers Association                                                                                            
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Provided   comments  and   responded  to                                                             
questions during the hearing on HB 121.                                                                                         
                                                                                                                                
RICHARD YAMADA                                                                                                                  
Vice President                                                                                                                  
Alaska Charter Association                                                                                                      
Auke Bay, Alaska                                                                                                                
POSITION STATEMENT:  Testified in support of HB 121.                                                                          
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
5:01:31 PM                                                                                                                    
                                                                                                                                
CHAIR  STEVE  THOMPSON  called the  House  Special  Committee  on                                                             
Fisheries meeting to  order at 5:01 p.m.  Present  at the call to                                                               
order  were  Representatives  Thompson,  Austerman,  Herron,  and                                                               
Pruitt.   Representatives Kawasaki,  Johnson, and  Miller arrived                                                               
while the meeting was in progress.                                                                                              
                                                                                                                                
^OVERVIEW(S):   Division  of  Subsistence,  Alaska Department  of                                                               
Fish and Game                                                                                                                   
 OVERVIEW(S):  Division of Subsistence, Alaska Department of Fish                                                           
                        and Game (ADF&G)                                                                                    
                                                                                                                                
5:01:43 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON announced that the first order of business would                                                                 
be an overview from the Division of Subsistence, of the Alaska                                                                  
Department of Fish and Game (ADF&G).                                                                                            
                                                                                                                                
5:02:34 PM                                                                                                                    
                                                                                                                                
JIM  SIMON,  Acting  Director, Division  of  Subsistence,  Alaska                                                               
Department of  Fish & Game  (ADF&G), paraphrased from  a prepared                                                               
statement, which read as  follows [original punctuation provided]                                                               
with accompanying slides:                                                                                                       
                                                                                                                                
     The  Division  of   Subsistence  became  Alaska's  lead                                                                    
     agency  in collecting  information about  customary and                                                                    
     traditional  subsistence  uses  because  of  state  and                                                                    
     federal statutes  passed as a compromise  following the                                                                    
     settlement of Alaska Native land claims.                                                                                   
                                                                                                                                
     When the legislature passed  the 1978 state subsistence                                                                    
     law, it  found that  "it is in  the public  interest to                                                                    
     clearly establish subsistence use  as a priority use of                                                                    
     Alaska's fish  and game resources and  to recognize the                                                                    
     needs,  customs, and  traditions of  Alaska residents."                                                                    
     The duties of the Subsistence  Division are laid out in                                                                    
     statute.                                                                                                                   
                                                                                                                                
     ANILCA  requires a  priority  for  subsistence uses  on                                                                    
     federal  lands,  which  make   up  about  60percent  of                                                                    
     Alaska's land  base. ANILCA also requires  a system for                                                                    
     providing  scientific support  data  to management  and                                                                    
     advisory bodies.                                                                                                           
                                                                                                                                
     Subsistence, as defined in both  state and federal law,                                                                    
     is not limited to Alaska  Natives.  In 1989, the Alaska                                                                    
     Supreme  Court   ruled  that   a  rural   priority  for                                                                    
     subsistence is a violation  of the Alaska Constitution,                                                                    
     which  led   to  the  passage  of   the  current  state                                                                    
     subsistence  law in  1992.   All Alaskan  residents are                                                                    
     eligible  to  participate  in subsistence  hunting  and                                                                    
     fishing opportunities.                                                                                                     
                                                                                                                                
     The    Subsistence    Division's    mission    is    to                                                                    
     scientifically    quantify,   evaluate,    and   report                                                                    
     information  about customary  and  traditional uses  of                                                                    
     Alaska's fish and wildlife resources.                                                                                      
                                                                                                                                
     We  accomplish  our  mission through  systematic  human                                                                    
     dimensions  research   following  international  social                                                                    
     science   research  and   ethical  standards.     These                                                                    
     standards include: systematic  data collection methods,                                                                    
     data analysis methods, and scientific reporting.                                                                           
                                                                                                                                
     The   Subsistence    Division's   professional   ethics                                                                    
     standards include  following established  community and                                                                    
     tribal  consultation  policies   to  promote  extensive                                                                    
     community involvement in our  research and adherence to                                                                    
     state  statutes  pertaining  to  confidentiality.    We                                                                    
     obtain  community   approval  prior  to   initiating  a                                                                    
     community study.  We hire  local research assistants to                                                                    
     help  conduct  household  surveys, which  provide  some                                                                    
     limited    but    much   needed    winter    employment                                                                    
     opportunities.    We   also  provide  communities  with                                                                    
     public review drafts of research reports.                                                                                  
                                                                                                                                
                                                                                                                                
     The  Subsistence  Division   has  identified  two  core                                                                    
     services to  accomplish our  mission: (1)  research and                                                                    
     publish research  results on customary  and traditional                                                                    
     uses of  fish and  wildlife resources; and  (2) provide                                                                    
     research results to the Alaska  Boards of Fisheries and                                                                    
     Game and management  programs to support implementation                                                                    
     of Alaska's subsistence law.                                                                                               
                                                                                                                                
     This slide provides an example  of some of our research                                                                    
     products   resulting  from   comprehensive  subsistence                                                                    
     research  conducted in  the  community  of Kivalina  as                                                                    
     part of  the environmental impact  statement associated                                                                    
     with expanding  the Red Dog  Mine.  The  dots represent                                                                    
     180  resource harvest  locations by  35 households  and                                                                    
     the shape represents the search  areas of those same 35                                                                    
     households.                                                                                                                
                                                                                                                                
     [NOTE: A map was projected  from the TP 354 Subsistence                                                                    
     Harvests  in  Northwest  Alaska, Kivalina  and  Noatak,                                                                    
     2007.]                                                                                                                     
                                                                                                                                
     This   slide   illustrates    our   budgetary   receipt                                                                    
     authorities from  last fiscal year and  for the current                                                                    
     fiscal  year.   This  year's increase  in General  Fund                                                                    
     stems   from  a   one-year  increment   to  study   the                                                                    
     socioeconomic  impact  of  declining returns  of  Yukon                                                                    
     River  king  salmon and  a  new  program to  develop  a                                                                    
     method   of   harvest   monitoring   by   using   index                                                                    
     communities.    This  year's  increase  in  interagency                                                                    
     receipt  authority  relates  to  expanding  subsistence                                                                    
     research  associated  with  the proposed  Donlin  Creek                                                                    
     Mine.                                                                                                                      
                                                                                                                                
     Subsistence Division  maintains staff  in six  Fish and                                                                    
     Game  offices throughout  the state,  including Juneau,                                                                    
     Anchorage, and  Fairbanks, as well as  field offices in                                                                    
     Dillingham, Kotzebue,  and once  again in Bethel.   Our                                                                    
     permanent  full-time staff  has  decreased  from 27  in                                                                    
     FY09 to 24 in FY10 to  22 in FY11.  Correspondingly, we                                                                    
     have increased  the number of both  part-time permanent                                                                    
     and  nonpermanent staff  in an  effort  to continue  to                                                                    
     provide  core  services  in  an  uncertain  competitive                                                                    
     grant environment.                                                                                                         
                                                                                                                                
     From Management Plan:                                                                                                      
                                                                                                                                
     FY11 = 22 Permanent Full Time                                                                                              
                                                                                                                                
          16 Permanent Part Time                                                                                                
                                                                                                                                
          7 Non-Permanent                                                                                                       
                                                                                                                                
     FY12 = 22 Permanent Full Time                                                                                              
                                                                                                                                
          16 Permanent Part Time                                                                                                
                                                                                                                                
          8 Non-Permanent                                                                                                       
                                                                                                                                
     The  division   conducts  field  studies   and  gathers                                                                    
     harvest  survey   information  in   communities  almost                                                                    
     entirely with  special project funding. The  funding is                                                                    
     generally  obtained  through   a  competitive  proposal                                                                    
     process to  address questions related to  customary and                                                                    
     traditional  uses of  specific  fisheries and  wildlife                                                                    
     resources to assist with  providing hunting and fishing                                                                    
     opportunities for Alaskans.                                                                                                
                                                                                                                                
     Systematic  region wide  surveys  can  occur only  when                                                                    
     relatively larger funding support  is available, a rare                                                                    
     occurrence  in  the  past  10  years,  although  recent                                                                    
     partnerships   with   industry  has   facilitated   the                                                                    
     division's efforts to meet core service targets.                                                                           
                                                                                                                                
     The target is to  have scientific information collected                                                                    
     and analyzed in each region  at a consistent level each                                                                    
     year;   and   develop   a   balance   across   regions,                                                                    
     recognizing geographic differences.   Specifically, our                                                                    
     target  is to  conduct a  minimum  of 5  studies in  at                                                                    
     least  3  of  the  six regions  at  a  5-year  average.                                                                    
     Targets  were  exceeded  only  in   2  regions  due  to                                                                    
     limitations  in  human  resources and  continuation  of                                                                    
     multi-year  studies  in  the  regions  associated  with                                                                    
     proposed  development  projects,  where  we  have  been                                                                    
     focusing our research activities.                                                                                          
                                                                                                                                
     The   division's   Technical   Paper  series   is   the                                                                    
     cornerstone   of  detailed   scientific  reporting   of                                                                    
     information to  the public and  the Board  of Fisheries                                                                    
     and Board of  Game.  These reports  provide harvest and                                                                    
     other information on customary  and traditional uses of                                                                    
     fish and  wildlife.  The  information in  these studies                                                                    
     is used by  the Board of Fisheries, Board  of Game, and                                                                    
     fisheries  and wildlife  managers for  their allocation                                                                    
     among uses  and to provide  for the sustained  yield of                                                                    
     resources regulated by the state.                                                                                          
                                                                                                                                
     In  FY10,  the  Subsistence Division  released  30  new                                                                    
     technical  reports  and  special  publications  to  the                                                                    
     public, exceeding the most recent  5-year average of 21                                                                    
     reports.  This  target has been met in all  of the five                                                                    
     prior fiscal years.                                                                                                        
                                                                                                                                
     There  are  now  330   technical  papers.    Additional                                                                    
     Technical  Papers  and  Special  Publications  will  be                                                                    
     available by June 2011.                                                                                                    
                                                                                                                                
     In addition  to our technical reports,  the Subsistence                                                                    
     Division established an  on-line searchable database in                                                                    
     2006  called  the  "Community  Subsistence  Information                                                                    
     System,"  where   the  public,  fishery   and  wildlife                                                                    
     managers,  and division  research staff,  among others,                                                                    
     can  access  community  harvest  information  from  all                                                                    
     previous Subsistence  Division research.   This  is the                                                                    
     single   largest   source    of   subsistence   harvest                                                                    
     information for Alaskan communities.                                                                                       
                                                                                                                                
     Our  target is  to update  the CSIS  with all  research                                                                    
     results  from all  studies completed  during the  year.                                                                    
     In FY10, information from  an additional 64 communities                                                                    
     was added to the CSIS, exceeding the target.                                                                               
                                                                                                                                
     The pie  chart on the slide  is an example of  the type                                                                    
     of information that  can be obtained from  the CSIS, in                                                                    
     this case, Lime Village  harvests in usable pounds from                                                                    
     2007  resulting from  research we  conducted associated                                                                    
     with the  proposed Pebble Mine.   For example,  one can                                                                    
     see here  the majority  of wild resources  harvested by                                                                    
     Lime Village residents were salmon.                                                                                        
     The  division's  highest   priority  is  reviewing  and                                                                    
     analyzing 100  percent of all fish  and game regulatory                                                                    
     change  proposals that  have subsistence  implications.                                                                    
     The  division continues  to review  all proposed  state                                                                    
     regulations  pertaining  to customary  and  traditional                                                                    
     uses of  fisheries and wildlife and  assists the Alaska                                                                    
     Boards  of  Fisheries  and  Game  in  implementing  the                                                                    
     subsistence  law   by  providing  the   best  available                                                                    
     information.   In the  past 5-year  period, 170  to 277                                                                    
     regulatory change proposals  were reviewed annually for                                                                    
     all regions  of Alaska.   In FY10, we reviewed  252 BOF                                                                    
     and BOG proposals.                                                                                                         
                                                                                                                                
     The  division is  involved  in  fisheries and  wildlife                                                                    
     management planning, as  necessary, where customary and                                                                    
     traditional  use information,  including harvest  data,                                                                    
     is required for Board of  Fisheries, Board of Game, and                                                                    
     management divisions.   Also  included are  studies and                                                                    
     plans  related to  economic  development projects  that                                                                    
     may affect  customary and traditional uses  of fish and                                                                    
     wildlife resources.                                                                                                        
                                                                                                                                
     Subsistence   Division's  regulatory   support  targets                                                                    
     include  reviewing  and  contributing to  all  relevant                                                                    
     management  plans requiring  customary and  traditional                                                                    
     use information.  On  average, the division contributes                                                                    
     to  25  plans  per  year  for  fisheries  and  wildlife                                                                    
     management.  In FY10,  we contributed information to 31                                                                    
     management plans.                                                                                                          
                                                                                                                                
     Key accomplishments by the  Subsistence Division in the                                                                    
     current fiscal year include:                                                                                               
                                                                                                                                
     (1) Completed interviews with salmon fishing                                                                               
     households in 5 Yukon River communities representing                                                                       
     the lower, middle, and upper Yukon River fishing                                                                           
     districts to evaluate the socioeconomic impact of poor                                                                     
     returns of Yukon River king salmon. (Emmonak,                                                                              
     Marshall, Nulato, Beaver, Eagle)                                                                                           
                                                                                                                                
     (2) Initiated a new study to develop a method to                                                                           
     comprehensively monitor subsistence harvests of fish                                                                       
     and wildlife in all areas of the state through a                                                                           
     system of index communities.  Data collection is                                                                           
     ongoing in Nunam Iqua, St. Marys, Marshall, Nulato,                                                                        
     Galena, and Ruby.                                                                                                          
     (3) Successfully recruited and hired a Subsistence                                                                         
     Resource Specialist to reopen the Division's Bethel                                                                        
     field office.                                                                                                              
                                                                                                                                
                                                                                                                                
5:16:16 PM                                                                                                                    
                                                                                                                                
MR. SIMON, in response to  a question from Representative Herron,                                                               
regarding the key accomplishments  around the Yukon River Chinook                                                               
salmon  disaster  research,  said data  collection  was  recently                                                               
completed and  is entering  the analysis stage.   A  final report                                                               
will be  completed by June 30,  2011, which will be  presented to                                                               
the board of fisheries and the Yukon panel.                                                                                     
                                                                                                                                
REPRESENTATIVE   HERRON  whether   the   division  will   develop                                                               
[recovery] efforts based on the research.                                                                                       
                                                                                                                                
MR. SIMON responded  that the technical reports  will be provided                                                               
to  the  board  and  panel.     The  division  is  a  source  for                                                               
information,  and   consideration  is  being  given   to  further                                                               
research regarding the Yukon Chinook salmon.                                                                                    
                                                                                                                                
5:17:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN asked  whether anything  more is  being                                                               
done regarding the disaster.                                                                                                    
                                                                                                                                
MR.  SIMON explained  that the  research specifically  focuses on                                                               
the socio-economic impacts  of the declining salmon  return.  The                                                               
investigation  is not  limited to  the subsistence  implications.                                                               
The  data  collection  process   included  lines  of  questioning                                                               
regarding the  loss of commercial  fishing opportunities  and how                                                               
that has had effects on other subsistence activities.                                                                           
                                                                                                                                
REPRESENTATIVE AUSTERMAN inquired about the cost of the study.                                                                  
                                                                                                                                
MR. SIMON answered $260,000.                                                                                                    
                                                                                                                                
5:21:19 PM                                                                                                                    
                                                                                                                                
^OVERVIEW(S):   Division  of Habitat,  Alaska Department  of Fish                                                               
and Game                                                                                                                        
 OVERVIEW(S):  Division of Habitat, Alaska Department of Fish and                                                           
                          Game (ADF&G)                                                                                      
                                                                                                                                
5:21:54 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON announced that the next order of business would                                                                  
be an overview from the Division of Habitat, of the Alaska                                                                      
Department of Fish and Game (ADF&G).                                                                                            
                                                                                                                                
5:21:56 PM                                                                                                                    
                                                                                                                                
MIKE  DAIGNEAULT,  Regional  Supervisor, Anchorage  Area  Office,                                                               
Division of  Habitat, Alaska Department  of Fish &  Game (ADF&G),                                                               
paraphrased  from a  prepared statement,  which  read as  follows                                                               
[original punctuation provided], with accompanying slides:                                                                      
                                                                                                                                
     Anadromous    fish    habitat    and    fish    passage                                                                    
     responsibilities legislated shortly after statehood.                                                                       
                                                                                                                                
     Over the years, 32  refuges, critical habitat areas and                                                                    
     sanctuaries were also established.                                                                                         
                                                                                                                                
     Functions initially distributed throughout Department.                                                                     
                                                                                                                                
     "Sections"  created  in  Sport Fish  (Access  Section),                                                                    
     Comm. Fish (Water Rights), and Game Divisions (Lands).                                                                     
                                                                                                                                
     About   1969  or   1970,   the   above  sections   were                                                                    
     consolidated into the "Habitat Section".                                                                                   
                                                                                                                                
     Division  responsibilities expanded  in late  70s-early                                                                    
     80s when state and federal planning efforts escalated.                                                                     
                                                                                                                                
     Habitat granted "Division" status in 1981.                                                                                 
                                                                                                                                
     In  2003, Habitat  was moved  to DNR,  and renamed  the                                                                    
     "Office  of Habitat  Management and  Permitting."   The                                                                    
     division  also  sustained  an  18percent  reduction  in                                                                    
     staff and an 11percent reduction in budget.                                                                                
                                                                                                                                
     In  2008, Habitat  was  moved back  to  ADF&G, and  re-                                                                    
     established as the "Habitat Division".                                                                                     
                                                                                                                                
     The  Division currently  has 49  positions, 3  Regional                                                                    
     Offices, and 3 Area Offices.                                                                                               
                                                                                                                                
5:24:33 PM                                                                                                                    
                                                                                                                                
MR. DAIGNEAULT provided the mission statement, which is:                                                                        
                                                                                                                                
     To protect Alaska's valuable  fish & wildlife resources                                                                    
     and their  habitats as Alaska's population  and economy                                                                    
     continue to expand.                                                                                                        
                                                                                                                                
MR. DAIGNEAULT cited the division's statutory authority, to wit:                                                                
                                                                                                                                
     AS 16.05.841 Fish Passage                                                                                                  
                                                                                                                                
     AS 16.05.871 Fish Habitat                                                                                                  
                                                                                                                                
     AS 16.20                                                                                                                   
     Legislatively Designated Special Areas                                                                                     
                                                                                                                                
5:25:23 PM                                                                                                                    
                                                                                                                                
MR. DAIGNEAULT established the division's core services, which                                                                  
are [original punctuation provided]:                                                                                            
                                                                                                                                
     Review  applications and  issue permits  for activities                                                                    
     in anadromous water bodies  and fish-bearing waters and                                                                    
     legislatively  designated  Special  Areas  (Title  16);                                                                    
     provide  expertise   to  protect  important   fish  and                                                                    
     wildlife  habitat;  monitor   authorized  projects  and                                                                    
     conduct compliance actions.                                                                                                
                                                                                                                                
     Maintain  and revise  the Catalog  of Waters  Important                                                                    
     for the  Spawning, Rearing, or Migration  of Anadromous                                                                    
     Fishes.                                                                                                                    
                                                                                                                                
     Manage  Alaska's  Special   Areas  in  accordance  with                                                                    
     legislative guidelines;  prepare and  update management                                                                    
     plans for these areas.                                                                                                     
                                                                                                                                
     Review  proposed  timber  harvest  activities;  conduct                                                                    
     field  inspections;  work   cooperatively  with  timber                                                                    
     operators and other governmental agencies.                                                                                 
                                                                                                                                
     Review development  projects (e.g., oil and  gas, hard-                                                                    
     rock   mining,  roads,   T16  elements   of  hydropower                                                                    
     projects)    authorized     under    other    agencies'                                                                    
     authorities.                                                                                                               
                                                                                                                                
     Conduct applied  research to develop methods  and means                                                                    
     to  minimize impacts  of development  projects on  fish                                                                    
     and wildlife resources.                                                                                                    
                                                                                                                                
5:26:23 PM                                                                                                                    
                                                                                                                                
MR.  DAIGNEAULT  said  the  end result  is  to  protect  Alaska's                                                               
valuable fish  and wildlife resources  and their  habitats during                                                               
resource development  activities.   The first  target is  to have                                                               
100 percent  of resource developers meet  agency requirements for                                                               
protection of fish,  wildlife, and their habitats;  in FY10, 99.6                                                               
percent of  all developers  were in  compliance with  issued Fish                                                               
Habitat and Special Area permits.                                                                                               
                                                                                                                                
5:26:53 PM                                                                                                                    
                                                                                                                                
MR. DAIGNEAULT  continued, explaining  the three  strategies that                                                               
the  division has  developed, the  associated targets  and status                                                               
updates.   Beginning  with strategy  A1 and  the four  associated                                                               
targets, he paraphrased [original punctuation provided]:                                                                        
                                                                                                                                
     Enhance  our  Fish  Habitat  and  Special  Area  review                                                                    
     processes  by reviewing  projects in  a timely  manner,                                                                    
     adding  appropriate  conditions to  protect  resources,                                                                    
     and monitoring, as needed.                                                                                                 
                                                                                                                                
     Target 1:  8.2-day  average permit review timeframe for                                                                    
     Fish Habitat Permits                                                                                                       
                                                                                                                                
     Status 1:  In FY10,  Fish Habitat permits were reviewed                                                                    
     and  issued  in  an  average of  9.1  days,  statewide,                                                                    
     almost meeting the performance target.                                                                                     
                                                                                                                                
     Target   2:     100percent  of   Fish  Habitat   permit                                                                    
     applications  received are  reviewed  and  acted on  by                                                                    
     either:   1) approving as proposed;  2) approving after                                                                    
     modification  with  appropriate conditions  to  protect                                                                    
     resources;  or 3)  denying if  resources  could not  be                                                                    
     protected.                                                                                                                 
                                                                                                                                
     Status 2:  In FY10,  100percent of Fish Habitat permits                                                                    
     were reviewed and completed, meeting the target.                                                                           
                                                                                                                                
     Target  3:   15  day  average  permit review  time  for                                                                    
     Special Area permits.                                                                                                      
                                                                                                                                
     Status 3:   In FY10 Special Area  permits were reviewed                                                                    
     and  issued  in an  average  of  12.4 days,  statewide,                                                                    
     exceeding  the  15  day   average  permit  review  time                                                                    
     performance target.                                                                                                        
                                                                                                                                
     Target  4:     100  percent  of   Special  Area  Permit                                                                    
     applications  received are  reviewed  and  acted on  by                                                                    
     either:   1) approving as proposed;  2) approving after                                                                    
     modification  with  appropriate conditions  to  protect                                                                    
     resources;  or 3)  denying if  resources  could not  be                                                                    
     protected.                                                                                                                 
                                                                                                                                
     Status  4:    In  FY10, 100  percent  of  Special  Area                                                                    
     permits  were  reviewed   and  completed,  meeting  the                                                                    
     performance target.                                                                                                        
                                                                                                                                
5:28:24 PM                                                                                                                    
                                                                                                                                
MR. DAIGNEAULT continued with strategy A2, and the two                                                                          
associated targets, he paraphrased [original punctuation                                                                        
provided]:                                                                                                                      
                                                                                                                                
     Actively and timely  participate in coordinated project                                                                    
     reviews to  ensure appropriate protection  of important                                                                    
     habitats.                                                                                                                  
                                                                                                                                
     Target   1:     11.5  day   average  timeframe   for  a                                                                    
     coordinated project review.                                                                                                
                                                                                                                                
     Status 1:   In FY 10, coordinated  project reviews were                                                                    
     completed in  an average of 12.9  days, statewide, just                                                                    
     short  of   the  11.5  day  average   timeframe  for  a                                                                    
     coordinated project review performance target.                                                                             
                                                                                                                                
     Target 2:   93.2 percent  of projects in  a coordinated                                                                    
     process are  reviewed to ensure  appropriate protection                                                                    
     of important habitat.                                                                                                      
                                                                                                                                
                                                                                                                                
     Status  2:    In  FY10,  92.2  percent  projects  in  a                                                                    
     coordinated   process    were   reviewed    to   ensure                                                                    
     appropriate  protection  of important  habitat,  almost                                                                    
     meeting the  performance target to review  93.2 percent                                                                    
     of projects in a coordinated process.                                                                                      
                                                                                                                                
5:29:19 PM                                                                                                                    
                                                                                                                                
MR. DAIGNEAULT continued with strategy A3, and the associated                                                                   
target, he paraphrased [original punctuation provided]:                                                                         
                                                                                                                                
      Continue to actively manage legislatively designated                                                                      
      Special Areas by developing and updating management                                                                       
     plans.                                                                                                                     
                                                                                                                                
     Target 1:  One Special Area management plan completed                                                                      
     or revised each fiscal year.                                                                                               
                                                                                                                                
      Status 1:  No new Special Area management plans were                                                                      
     completed in FY10; target not met.                                                                                         
                                                                                                                                
5:29:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  noted  that  the division  has  a  timely                                                               
turnaround time  for permits, and  asked how they are  handled in                                                               
such an efficient manner.                                                                                                       
                                                                                                                                
MR.  DAIGNEAULT  responded that  the  permit  applications are  a                                                               
focus, and are prioritized as they are received.                                                                                
                                                                                                                                
5:30:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN, referred to  strategy A3, targeting one                                                               
Special  Area management  plan for  completion and  revision each                                                               
year, and asked how many Special Area management plans exist.                                                                   
                                                                                                                                
MR.  DAIGNEAULT  answered  six,   which  are  in  the  management                                                               
planning development  process.   He said  that given  the various                                                               
stakeholder groups,  planning teams, and public  involvement, the                                                               
process time  is lengthy.   The division is currently  engaged in                                                               
the planning  process for five  Special Areas in the  Bristol Bay                                                               
region  and one  for a  critical  habitat area  in the  southeast                                                               
region.                                                                                                                         
                                                                                                                                
REPRESENTATIVE AUSTERMAN asked  how many legislatively designated                                                               
Special Areas exist.                                                                                                            
                                                                                                                                
MR. DAIGNEAULT said there are a total  of 32; six of which are in                                                               
the active management plan process.                                                                                             
                                                                                                                                
5:31:57 PM                                                                                                                    
                                                                                                                                
MR. DAIGNEAULT  presented the FY12 proposed  fiscal authority, in                                                               
the  form  of a  pie  chart.   The  majority  of  the funding  is                                                               
received from state  general funds, and interagency  receipts.  A                                                               
small percentage is received from four other funding sources.                                                                   
                                                                                                                                
5:32:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN asked  for  an  example of  interagency                                                               
receipts.                                                                                                                       
                                                                                                                                
MR. DAIGNEAULT  explained that funds  may be received  from other                                                               
agencies,  such as  the Department  of  Natural Resources  (DNR).                                                               
The  funds are  received at  DNR directly  from an  industry, for                                                               
example  mining, and  remitted  to the  Division  of Habitat  for                                                               
permit review and related research projects.                                                                                    
                                                                                                                                
5:33:42 PM                                                                                                                    
                                                                                                                                
KERRY HOWARD,  Director, Division  of Habitat,  Alaska Department                                                               
of Fish  & Game (ADF&G),  interjected that the division  has been                                                               
relocated  to ADF&G,  but no  operating policies,  or priorities,                                                               
have been changed.                                                                                                              
                                                                                                                                
        HB 121-LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN                                                                    
                                                                                                                                
5:35:25 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON  announced that the  next order of  business would                                                               
be  HOUSE  BILL NO.  121,  "An  Act establishing  the  commercial                                                               
charter fisheries revolving loan  fund, the mariculture revolving                                                               
loan  fund, and  the  Alaska microloan  revolving  loan fund  and                                                               
relating  to  those  funds  and   loans  from  those  funds;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
5:35:46 PM                                                                                                                    
                                                                                                                                
CURTIS  THAYER,  Deputy  Commissioner,  Department  of  Commerce,                                                               
Community and  Economic Development  (DCCED), paraphrased  from a                                                               
prepared statement,  which read as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     The  Department  of  commerce, Community  and  Economic                                                                    
     Development  (DCCED)  is  on  a  mission  to  foster  a                                                                    
     business  climate in  this state  that is  conducive to                                                                    
     job  creation  and  economic  growth.    We  have  been                                                                    
     actively and  introspectively engaged in  examining how                                                                    
     we operate, in  an effort to be more  responsive to the                                                                    
     needs of  the business  community and  deliver services                                                                    
     that  are relevant  and useful  to the  private sector.                                                                    
     Recent  realignment of  resources  and services  within                                                                    
     the  department  has  bolstered  the  state's  economic                                                                    
     development  toolbox  and  is helping  us  aggressively                                                                    
     reassert  the  state's  role in  creating  a  business-                                                                    
     friendly environment in Alaska.                                                                                            
                                                                                                                                
     We have  spent a lot  of time listening to  the private                                                                    
     sector.    The   governor's  recently  formed  Economic                                                                    
     Advisory  Council, comprised  of industry  leaders from                                                                    
     around  the state,  has  been  instrumental in  helping                                                                    
     this  administration   plot  a  productive   course  to                                                                    
     economic  development.     Additionally,  we  solicited                                                                    
     input  from  NGOs   and  trade  associations,  regional                                                                    
     development   organizations   (ARDORs),   CDQs,   ANSCA                                                                    
     corporations and  legislators.  A commonly  heard theme                                                                    
     has  been  to  increase  financing  options  for  small                                                                    
     businesses.   Access to  critically needed  capital can                                                                    
     be  the  difference  between   simply  getting  by  and                                                                    
     thriving.                                                                                                                  
                                                                                                                                
     House Bill 121  is a step in the right  direction.  The                                                                    
     proposed legislation would create  a suite of three new                                                                    
     revolving loan  funds:   to incentivize  development of                                                                    
     the  shellfish mariculture  industry; to  assist Alaska                                                                    
     charter  operators  in  acquiring  halibut  permits  to                                                                    
     transition to the new  regulatory and management regime                                                                    
     instituted  by   NOAA;  and  to   seed  microenterprise                                                                    
     development across the state.                                                                                              
                                                                                                                                
     The  Commercial Fisheries  Revolving  Loan Fund  would:                                                                    
     provide access  to capital for  Alaskan-owned charters;                                                                    
     repatriate   permits  to   Alaska;  increase   economic                                                                    
     benefits to Alaska from  this sector from recirculation                                                                    
     of earnings.                                                                                                               
                                                                                                                                
     The Mariculture  Revolving Loan Fund would:   provide a                                                                    
     spark  to the  growing industry  with great  year-round                                                                    
     potential   for   coastal    Alaska   communities   and                                                                    
     entrepreneurs.    (Currently,  there are  67  permitted                                                                    
     farms in  the state, but  only 25 producing farms  - 10                                                                    
     in Southeast, 15 in Southcentral.)                                                                                         
                                                                                                                                
     The Microloan  Revolving Loan Fund  would:   Help small                                                                    
     businesses grow by providing  loans for start-up costs,                                                                    
     working capital,  inventory expansion, or a  variety of                                                                    
     other   commercial  purposes;   -Alaska   one  of   few                                                                    
     remaining states  without a microloan  program, -Proven                                                                    
     track record in other states and through SBA.                                                                              
                                                                                                                                
     These  programs  would  complement two  existing  small                                                                    
     business loan programs administered  by DED - the Small                                                                    
     Business Economic  Development Revolving Loan  Fund and                                                                    
     the Rural  Development Initiative  Fund, both  of which                                                                    
     are   geared  toward   long-term   financing.     Small                                                                    
     businesses  are the  No.  1  creator of  private-sector                                                                    
     jobs.  So  this legislation, which will help  us in our                                                                    
     efforts to spur sustainable  economic growth in Alaska,                                                                    
     will be good for our economy and for Alaska families.                                                                      
                                                                                                                                
5:39:02 PM                                                                                                                    
                                                                                                                                
MR. THAYER pointed  out that the microloan bill  passed the house                                                               
in 2010,  but failed to win  approval in the waning  hours of the                                                               
senate.                                                                                                                         
                                                                                                                                
5:39:41 PM                                                                                                                    
                                                                                                                                
WANETTA   AYERS,  Manager,   Office   of  Economic   Development,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  said  that  the  role of  economic  development  is  to                                                               
address  the  underserved  sectors  of  the  state,  where  local                                                               
banking facilities  may not exist,  as well as support  high risk                                                               
professions, such as commercial fishing.   The loan funds in this                                                               
bill  are  geared towards  these  types  of opportunities.    The                                                               
capitalization  levels, loan  limits,  repayment terms,  interest                                                               
rates, and special features of  the various funds, were developed                                                               
in  consultation  with   stakeholders  including  nongovernmental                                                               
organizations  (NGOs),  government   agencies,  and  the  private                                                               
sector.   She explained  that HB  121 proposes  a suite  of three                                                               
loan   funds  for   commercial  charter   fisheries,  mariculture                                                               
development,  and microloans.   The  loan commonalities  include:                                                               
set up  as revolving loans;  earnings, loan repayments,  and fees                                                               
to  be retained  by  the  fund for  future  loans; and  operating                                                               
expenses are also to be paid from earnings of the fund.                                                                         
                                                                                                                                
5:42:44 PM                                                                                                                    
                                                                                                                                
MS.  AYERS  explained  that  each fund  has  key  functions,  and                                                               
described  the current  situation  faced by  the halibut  charter                                                               
industry;  paraphrasing from  a  prepared  statement, which  read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Effective  February 1,  2011, all  vessel operators  in                                                                    
     Areas 2C  and 3A with charter  anglers onboard catching                                                                    
     and retaining  Pacific halibut  must have  an original,                                                                    
     valid  Charter  Halibut Permit  (CHP).    Based on  log                                                                    
     books NOAA  estimates 532 Eligible Permitees;  some 800                                                                    
     applications were  received.   Permit prices  are still                                                                    
     being established  in the marketplace.   Current asking                                                                    
     prices range  from $40,000  to over  $100,000 depending                                                                    
     on the number of fishermen the permit allows.                                                                              
                                                                                                                                
     Commercial  Charter   Fisheries  Revolving   Loan  Fund                                                                    
     [will]:                                                                                                                    
                                                                                                                                
                                                                                                                                
     -Provide access to capital for Alaskanowned Charters                                                                       
                                                                                                                                
                                                                                                                                
     -Repatriate permits to Alaska                                                                                              
                                                                                                                                
     -Increase economic benefits from this sector                                                                               
                                                                                                                                
     By  offering  a  loan   program  to  Alaska  residents,                                                                    
     business  owners will  have greater  access to  capital                                                                    
                                                                                                                                
                                                                                                                                
     when purchasing permits over nonresidents.                                                                                 
                                                                                                                                
                                                                                                                                
     This  in turn  should allow  Alaska business  owners to                                                                    
     repatriate   more   permits    than   otherwise   using                                                                    
     traditional  financing.   Additionally,  with  Alaska's                                                                    
                                                                                                                                
                                                                                                                                
     yearround  residents  owning permits,  Alaska's economy                                                                    
                                                                                                                                
                                                                                                                                
     will realize  more of the benefits  associated with the                                                                    
     sport/charter  industry.   Resident's  contribution  to                                                                    
     the  local economy  will  be  greater than  nonresident                                                                    
     permit holders  as they circulate funds  in the economy                                                                    
     year round.                                                                                                                
                                                                                                                                
     Loan Fund Features:                                                                                                        
                                                                                                                                
     Capitalization $5 million                                                                                                  
     Loan Limit $100 thousand                                                                                                   
     Term 15 years                                                                                                              
     Interest may not exceed prime + 2                                                                                          
     Floor/Ceiling 3-10.5 percent                                                                                               
                                                                                                                                
5:44:36 PM                                                                                                                    
                                                                                                                                
MS. AYERS said the mariculture  revolving loan fund will serve 67                                                               
permitted farms, and  25 producing farms, that are  governed by a                                                               
number  of  agencies  including:     ADF&G  Commercial  Fisheries                                                               
Division/Mariculture  Program;  Department of  Natural  Resources                                                               
(DNR)  Aquatic Farm  Lease Program;  Department of  Environmental                                                               
Conservation (DEC)  Food Safety and  Sanitation Program/Shellfish                                                               
Section; and  the Alaska  Coastal Management  Program.   The 2009                                                               
performance  report,  from  the  existing  mariculture  activity,                                                               
indicates a value of approximately $473,000.                                                                                    
                                                                                                                                
5:45:46 PM                                                                                                                    
                                                                                                                                
MS.  AYERS  pointed  out  that  the  bill  contains  an  industry                                                               
specific  training requirement.    Training  resources that  have                                                               
been funded  in recent  years include:   Alaska  Sea Grant/Marine                                                               
Advisory program  - mariculture research education  and extension                                                               
and  the  NOAA  mariculture initiative;  collaborative  research;                                                               
Alaska  Shellfish  Growers  Association  - grant  to  write  best                                                               
management practices for the industry.                                                                                          
                                                                                                                                
5:46:20 PM                                                                                                                    
                                                                                                                                
MS. AYERS reviewed the suggested  mariculture loan fund features,                                                               
which are:                                                                                                                      
                                                                                                                                
     Capitalization $3 million                                                                                                  
     Loan Limit $100 thousand                                                                                                   
     Term 20 years                                                                                                              
     Interest may not exceed prime + 1                                                                                          
     Floor/Ceiling 5-9 percent                                                                                                  
     Delayed repayment and accrual                                                                                              
                                                                                                                                
MS.  AYERS  explained  that the  delayed  repayment  and  accrual                                                               
feature  is unique  to  the program  to allow  for  the six  year                                                               
product growing time.                                                                                                           
                                                                                                                                
5:47:20 PM                                                                                                                    
                                                                                                                                
MS.  AYERS proceeded  to describe  the  microloan revolving  loan                                                               
fund,  stating that  the  2010  bill, HB  412,  passed the  house                                                               
unanimously; however, it failed to  pass the senate.  Many states                                                               
offer  microloans as  a means  to  seed new  businesses, and  she                                                               
stressed the  important to  have this available  in Alaska.   The                                                               
suggested loan features are:                                                                                                    
                                                                                                                                
     Capitalization $3.5 million                                                                                                
     Loan Limit $35/$70 thousand                                                                                                
     Term 6 years                                                                                                               
     Interest prime + 1                                                                                                         
     Floor/Ceiling 6-8 percent                                                                                                  
                                                                                                                                
5:49:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN  directed attention to the  bill page 3,                                                               
[line 13], noting that it states  funds may be used to purchase a                                                               
charter halibut fishing vessel.                                                                                                 
                                                                                                                                
MS. AYERS said yes, that would be an eligible use of the funds.                                                                 
                                                                                                                                
REPRESENTATIVE AUSTERMAN  expressed disagreement for  this aspect                                                               
of  the bill,  stating that  it should  support existing  halibut                                                               
charter operations,  not assist  someone to  purchase a  boat and                                                               
begin a halibut  fishing venture.  Moving to page  6, line 16, he                                                               
read "have  experience or training in  the mariculture industry,"                                                               
and   suggested   the   language    include   a   definition   of                                                               
experience/training; it is a vague statement.                                                                                   
                                                                                                                                
MS.   AYERS  said   that  the   requirement   for  training   was                                                               
specifically  requested by  existing operators  in the  industry,                                                               
who are willing  to provide training and  mentorship to entrants;                                                               
it is  not meant  to be  an onerous  requirement.   She indicated                                                               
that the regulation process might provide further details                                                                       
                                                                                                                                
5:53:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN  referred to page  9, line 26,  to state                                                               
that a definition for "reasonable amount" would be helpful.                                                                     
                                                                                                                                
MS.  AYERS  suggested  that  specifics  would  be  set  forth  in                                                               
regulation rather than statute.                                                                                                 
                                                                                                                                
5:55:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HERRON  paraphrased   questions  that   will  be                                                               
provided  to   the  sponsor  for  written   comment,  which  read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
        Does the production from aquatic shellfish farms                                                                        
     contribute to common property fishery harvests?                                                                            
                                                                                                                                
     There has  been controversy relative to  Geoduck farms,                                                                    
     having  been   a  "grab  of   the  resource"   in  some                                                                    
     locations.    Are  there similar  concerns  with  other                                                                    
     mariculture  activities  such   as  mussel  and  oyster                                                                    
     farming?                                                                                                                   
                                                                                                                                
     Salmon farms  have been  opposed in  this state  due to                                                                    
     the  conflicts  that  they  potentially  pose  to  wild                                                                    
     stocks and  the direct  competition they  represent for                                                                    
     existing historical  fisheries.  Along the  same lines,                                                                    
     have we been able to  demonstrate that the expansion of                                                                    
     shellfish farms does not present  similar risks such as                                                                    
     potentially  lending to  the  spread  of disease  among                                                                    
     existing wild stocks?                                                                                                      
                                                                                                                                
5:56:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON directed  attention to  page 7,  line 17,                                                               
and read:                                                                                                                       
                                                                                                                                
     The  department  may  not   require  the  repayment  of                                                                    
     principal on  a loan  made under  AS 16.10.910  for the                                                                    
     initial period of the loan.                                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON asked, "Does this  mean they don't have to                                                               
pay anything, or any interest, for six years."                                                                                  
                                                                                                                                
MS. AYERS  answered yes; the  intent is to allow  the mariculture                                                               
producer to have three to six years to produce a revenue stream.                                                                
                                                                                                                                
5:58:13 PM                                                                                                                    
                                                                                                                                
CHAIR  THOMPSON turned  to bill  page 7,  line 1,  and asked  for                                                               
clarification of having a loan  amount specified per year, versus                                                               
the other loans that specify a total loan limit.                                                                                
                                                                                                                                
MS. AYERS  said that it is  a feature of the  mariculture loan to                                                               
allow a yearly amount of not more than $100,000 to be borrowed.                                                                 
                                                                                                                                
5:59:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLER  inquired  how the  mariculture  revolving                                                               
loan program  would have funds  replenished, given the  fact that                                                               
the  initial  borrowers would  not  be  making payments  for  six                                                               
years; how will the fund be recapitalized during the interim.                                                                   
                                                                                                                                
MS. AYERS  confirmed that  the fund  may become  fully subscribed                                                               
and until repayment occurs, no more loans would be available.                                                                   
                                                                                                                                
REPRESENTATIVE MILLER turned  to page 9, line 3,  and read, "make                                                               
loans to  eligible applicants under AS  44.33.950-44.33.990 to be                                                               
used  for  working  capital, equipment,  construction,  or  other                                                               
commercial  purposes by  a business  located in  the state,"  and                                                               
asked  whether this  applies to  any commercial  business in  the                                                               
state.                                                                                                                          
                                                                                                                                
MS. AYERS responded yes.                                                                                                        
                                                                                                                                
REPRESENTATIVE MILLER asked, "Is that what is intended."                                                                        
                                                                                                                                
MS. AYERS answered yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE  MILLER  inquired  how defaulted  loans  would  be                                                               
handled.                                                                                                                        
                                                                                                                                
MS.  AYERS  indicated that  seizure  of  property and  resale  is                                                               
handled through the  financing office; measures are  in place for                                                               
inevitabilities of this kind.                                                                                                   
                                                                                                                                
6:03:26 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON opened public testimony                                                                                          
                                                                                                                                
6:03:45 PM                                                                                                                    
                                                                                                                                
RUSSELL  DICK,  President  and   CEO,  Haa  Aani,  LLC,  Sealaska                                                               
Corporation,  stated  support  for  HB  121,  and  applauded  the                                                               
efforts  for removing  the barriers  of  entrepreneurs to  attain                                                               
affordable  capital.     Communities   are  being   targeted  for                                                               
mariculture development  and this  type of support  is essential,                                                               
he stressed,  and said that  apprentice oyster farmers  will also                                                               
benefit.   Pioneering  new  industry is  always  a challenge  and                                                               
gaining  experience and  training is  important, and  requires an                                                               
innovative approach, he said.                                                                                                   
                                                                                                                                
6:08:18 PM                                                                                                                    
                                                                                                                                
RODGER PAINTER, President,  Alaska Shellfish Growers Association,                                                               
said  that the  terms  of the  loans are  very  important, as  it                                                               
requires a minimum  of three years to generate income  from a new                                                               
mariculture farm; up to eight  years for certain species.  Annual                                                               
expenses will  need to be  met, in  the interim years,  which can                                                               
range from  $125,000 to  $150,000.   Many costs  accrue annually,                                                               
including  the purchase  of  seed,  state fees,  and  labor.   He                                                               
observed  that  the mariculture  loan  program  is based  on  the                                                               
successful  private  salmon  hatchery   non-profit  model.    The                                                               
mariculture  industry may  not match  the economic  gains of  the                                                               
salmon  hatcheries;   however,  he  reported,  Canada   has  seen                                                               
industry  growth  with  the  private  farms  that  have  received                                                               
government  support.   He  stated his  belief  that the  economic                                                               
demographics,  particularly in  the southeast  region of  Alaska,                                                               
require the  stimulus that  will be encouraged  by passage  of HB                                                               
121.  Regarding the industry  training that the bill requires, he                                                               
said that the association is in  favor of the stipulation, and is                                                               
working  with the  UA  to provide  the  appropriate course  work.                                                               
Shellfish  farms  do  not  contribute   to  the  common  property                                                               
resources with  the exception  of geoducks;  a minimal  amount of                                                               
spawn may  tend to drift.   In response to a  committee question,                                                               
he said that  the existing farms started up through  a state loan                                                               
guarantee program.   The newest farms are a  result of Sealaska's                                                               
efforts  to  promote  mariculture,  and grants  from  the  United                                                               
States Department of Agriculture.                                                                                               
                                                                                                                                
6:19:12 PM                                                                                                                    
                                                                                                                                
RICHARD  YAMADA,  Vice  President,  Alaska  Charter  Association,                                                               
stated  support for  HB 121,  saying that  it will  allow current                                                               
charter captains to  stay in business or to  purchase permits and                                                               
maintain  operation.   He predicted  that, in  the long  term, it                                                               
will allow new  entrance into the halibut charter  industry.  The                                                               
halibut  industry   has  been  an  economic   resource  for  many                                                               
communities,  and  increases access  for  the  public to  fishing                                                               
resources.  He  suggested a change to the name  of the loan fund,                                                               
removing the word "commercial" and inserting "sport".                                                                           
                                                                                                                                
REPRESENTATIVE  AUSTERMAN  asked  whether  the  term  "commercial                                                               
sport charter" would be applicable.                                                                                             
                                                                                                                                
MR.  YAMADA  said the  term  "sport"  defines the  business  more                                                               
accurately than "commercial."                                                                                                   
                                                                                                                                
REPRESENTATIVE  AUSTERMAN   inquired  whether  a   sport  charter                                                               
operator is not technically considered a commercial business.                                                                   
                                                                                                                                
MR. YAMADA responded, according to the business license, yes.                                                                   
                                                                                                                                
6:23:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN   referred  to  the   loan  eligibility                                                               
allowances, and asked if the  loan program would not be primarily                                                               
for operators to purchase a permit, versus as boat.                                                                             
                                                                                                                                
MR.  YAMADA stated  his belief  that  the cost  for entering  the                                                               
industry may  be prohibitive considering  the requirement  for an                                                               
expensive permit, along with the purchase of a boat.                                                                            
                                                                                                                                
CHAIR THOMPSON announced that the bill would be held over.                                                                      
                                                                                                                                
               HB 59-COMMERCIAL FISHING LOAN ACT                                                                            
                                                                                                                                
6:25:29 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON announced  that the final order  of business would                                                               
be  HOUSE  BILL  NO.  59,  "An Act  relating  to  loans  made  to                                                               
commercial fishermen  under the  Commercial Fishing Loan  Act for                                                               
product quality improvements and  energy efficiency upgrades; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
6:25:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON paraphrased  from  the sponsor  statement,                                                               
which read as follows:                                                                                                          
                                                                                                                                
     HB 59  allows the Department of  Commerce Community and                                                                    
     Economic  Development to  give Commercial  Fishing Loan                                                                    
     Fund  borrowers a  reduction in  the  interest rate  on                                                                    
     their loan  if 50  percent of  the loan  is spent  on a                                                                    
     product  produced  or  manufactured  in  the  State  of                                                                    
     Alaska.   The Commercial Fishing Loan  Fund was created                                                                    
     by the State  of Alaska to aid  commercial fishermen in                                                                    
     securing new  equipment, quota  shares and  upgrades to                                                                    
     their   vessels.     The   Department  already   allows                                                                    
     reductions in  interest rates for borrowers  who pay on                                                                    
     time, and  make engine and fuel  efficiency upgrades or                                                                    
     product quality improvements.                                                                                              
                                                                                                                                
     To be  eligible for the  rate reduction under HB  59 at                                                                    
     least 50 percent of borrower's  purchases with the loan                                                                    
     fund have  to be manufactured  in the State  of Alaska.                                                                    
     The   definition   of   manufacture   is   "processing,                                                                    
     developing, or  making an item  into a new item  with a                                                                    
     distinct character and use."                                                                                               
                                                                                                                                
     HB  59  does  not  make the  rate  reduction  mandatory                                                                    
     because the Department needs to  have the discretion to                                                                    
     institute it when  the market allows.   For example, in                                                                    
     today's market  the interest rates  are so low,  if the                                                                    
     Department  were required  to issue  the interest  rate                                                                    
     discount it would create a loss for the fund.                                                                              
                                                                                                                                
     HB  59  promotes  economic  development  in  Alaska  by                                                                    
     encouraging  Alaska  fisherman  to  purchase  equipment                                                                    
     manufactured  in   the  State  of  Alaska   when  using                                                                    
     Commercial Fishing Loan Fund dollars.                                                                                      
                                                                                                                                
6:29:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLER directed  attention to  the bill,  page 1,                                                               
line 7,  to read  "the department may,"  and asked  what criteria                                                               
the department would use to accept or reject an application.                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  answered that  the financial  condition of                                                               
the fund would be the guiding  factor; it is necessary that prime                                                               
interest rates be  high enough to generate an  income that covers                                                               
the service cost  of the loan.  All applicants  would be eligible                                                               
during times of a healthy economy.                                                                                              
                                                                                                                                
6:30:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PRUITT inquired  whether competition,  within the                                                               
industry, is being served by passage of HB 59.                                                                                  
                                                                                                                                
REPRESENTATIVE   SEATON   stated   his  understanding   that   no                                                               
discrimination  is  being  made  regarding  new  versus  existing                                                               
businesses; nothing  that would advantage a  current manufacturer                                                               
over someone  new to the  industry.   The difference is  that the                                                               
loan would provide an incentive  to purchase locally.  The intent                                                               
of the bill is to create and sustain jobs in Alaska, he said.                                                                   
                                                                                                                                
REPRESENTATIVE  PRUITT queried  what constitutes/defines  made in                                                               
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE SEATON referred  to the bill page 1,  line 13, and                                                               
read:                                                                                                                           
                                                                                                                                
     In  this subsection,  'manufactured or  produced' means                                                                    
     processing  developing, or  making an  item into  a new                                                                    
     item with a distinct character and use.                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said the Department of Commerce, Community                                                                
& Economic Development contributed to the bill language, to                                                                     
ensure an accurate, and adequate, definition.                                                                                   
                                                                                                                                
6:34:53 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON opened public testimony and announced that the                                                                   
bill would be held in committee for further consideration.                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 6:36                                                                    
p.m.                                                                                                                            

Document Name Date/Time Subjects
HB 121 - Version A.pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB 121 - Sponsor Statement.pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB 121 - Sectional Analysis Version A.pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB 121 - Alaskan Shellfish Grower’s Association - Support.pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB 59 - Sponsor Statment.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Version A.PDF HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Hearing Request.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Common Questions.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Commercial Fishing Loan Fund home page.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Loan Servicing Stats - 12-31-10.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Product Quality Improvement Loans - 12-31-2010.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
HB 59 - Fiscal Note - CCED - DED - 02-04-11.pdf HFSH 2/8/2011 5:00:00 PM
HB 59
ADF&G Overview - Habitat Division.pdf HFSH 2/8/2011 5:00:00 PM
ADF&G Overview - Subsistence Division - 2-8-11.pdf HFSH 2/8/2011 5:00:00 PM
HB 121 - Power Point Presentation - DCCED.pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB 121 - CCED - Letter of support - SWAMC.pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB121-CCED-DED-02-03-11(A).pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB121-CCED-DED-02-03-11(B).pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB121-CCED-DED-02-03-11(C).pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB121-CCED-DED-02-03-11(D).pdf HFSH 2/8/2011 5:00:00 PM
HB 121
HB 59 - RDC Support Ltr.pdf HFSH 2/8/2011 5:00:00 PM
HB 59