Legislature(1995 - 1996)

03/29/1995 08:15 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 29, 1995                                        
                           8:15 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Co-Chairman                                         
 Representative Bill Williams, Co-Chairman                                     
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative Ramona Barnes                                                  
 Representative Pete Kott                                                      
 Representative Irene Nicholia                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative John Davies                                                    
 Representative Eileen MacLean                                                 
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HB 207:   "An Act relating to adjustments to royalty reserved to              
           the state to encourage otherwise uneconomic production of           
           oil and gas; relating to the depositing of royalties and            
           royalty sale proceeds in the Alaska permanent fund; and             
           providing for an effective date."                                   
                                                                               
           CSHB 207(RES) PASSED OUT OF COMMITTEE                               
                                                                               
 Presentation on Stellar Sea Lions                                             
                                                                               
 HRES - 03/29/95                                                               
 HB 191:   "An Act relating to the management and disposal of state            
           land and resources; relating to certain remote parcel and           
           homestead entry land purchase contracts and patents; and            
           providing for an effective date."                                   
                                                                               
           SCHEDULED BUT NOT HEARD                                             
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG                                                
 Alaska State Legislature                                                      
 State Capitol, Room 110                                                       
 Juneau, AK   99801                                                            
 Phone:  465-4968                                                              
 POSITION STATEMENT:  Commented on proposed amendments to HB 207               
                                                                               
 KEN BOYD, Acting Director                                                     
 Division of Oil and Gas                                                       
 Department of Natural Resources                                               
 3601 C Street, Ste. 1380                                                      
 Anchorage, AK   99503                                                         
 Phone:  762-2547                                                              
 POSITION STATEMENT:  Commented on proposed amendments to HB 207 and           
                      suggested additional amendments to HB 207                
                                                                               
 ANDREW TRITES, Research Coordinator                                           
 North Pacific Universities Marine Mammal                                      
   Research Consortium                                                         
 University of British Columbia                                                
 6248 Biological Sciences Road, Room 18                                        
 Vancouver, British Columbia Canada  V62 1Z4                                   
 Phone:  (604) 822-8181                                                        
 POSITION STATEMENT:  Gave presentation on Stellar Sea Lions                   
                                                                               
 JERRY MCCUNE, President                                                       
 United Fishermen of Alaska                                                    
 211 Fourth Street, No. 112                                                    
 Juneau, AK   99801                                                            
 Phone:  586-2820                                                              
 POSITION STATEMENT:  Voiced concerns regarding number of animals              
                      needed to get off endangered list                        
                                                                               
 SUE MELLO, Representative                                                     
 National Marine Fisheries Service                                             
 709 W. 9th                                                                    
 Juneau, AK   99801                                                            
 Phone:  586-7221                                                              
 POSITION STATEMENT:  Commented on getting animals off endangered              
                      list                                                     
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 207                                                               
 SHORT TITLE: ADJUSTMENTS TO OIL AND GAS ROYALTIES                             
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 02/27/95       501    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/27/95       501    (H)   OIL & GAS, RESOURCES, FINANCE                     
 02/27/95       501    (H)   FISCAL NOTE (DNR)                                 
 02/27/95       501    (H)   2 ZERO FISCAL NOTES (DNR, REV)                    
 02/27/95       501    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 03/08/95       665    (H)   CORRECTED FISCAL NOTE (DNR)                       
 03/09/95              (H)   O&G AT 12:00 PM CAPITOL 17                        
 03/09/95              (H)   MINUTE(O&G)                                       
 03/14/95              (H)   O&G AT 10:00 AM CAPITOL 124                       
 03/14/95              (H)   MINUTE(O&G)                                       
 03/15/95              (H)   O&G AT 05:00 PM BELTZ ROOM 211                    
 03/15/95              (H)   MINUTE(O&G)                                       
 03/16/95              (H)   O&G AT 10:00 AM CAPITOL 124                       
 03/16/95              (H)   MINUTE(O&G)                                       
 03/17/95              (H)   O&G AT 05:00 PM CAPITOL 124                       
 03/17/95              (H)   MINUTE(O&G)                                       
 03/20/95              (H)   O&G AT 05:00 PM CAPITOL 106                       
 03/21/95              (H)   O&G AT 10:00 AM CAPITOL 124                       
 03/22/95       848    (H)   O&G RPT  CS(O&G) NT 4DP 1NR 2AM                   
 03/22/95       849    (H)   DP: OGAN, BRICE, ROKEBERG, B.DAVIS                
 03/22/95       849    (H)   NR: G.DAVIS                                       
 03/22/95       849    (H)   AM: WILLIAMS, FINKELSTEIN                         
 03/22/95       849    (H)   0&G LETTER OF INTENT                              
 03/22/95       849    (H)   INDETERMINATE FISCAL NOTE (REV)                   
 03/22/95       850    (H)   FISCAL NOTE (DNR) 3/8/95                          
 03/22/95       850    (H)   ZERO FISCAL NOTE (REV) 2/27/95                    
 03/22/95              (H)   RES AT 08:00 AM CAPITOL 124                       
 03/22/95              (H)   MINUTE(RES)                                       
 03/22/95              (H)   O&G AT 05:00 PM                                   
 03/23/95              (H)   O&G AT 10:00 AM CAPITOL 124                       
 03/24/95              (H)   RES AT 08:00 AM CAPITOL 124                       
 03/24/95              (H)   MINUTE(RES)                                       
 03/27/95              (H)   RES AT 08:00 AM CAPITOL 124                       
                                                                              
 BILL:  HB 191                                                                
 SHORT TITLE: MANAGEMENT OF STATE LAND AND RESOURCES                           
 SPONSOR(S): REPRESENTATIVE(S) THERRIAULT                                      
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 02/22/95       448    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/22/95       448    (H)   RESOURCES, FINANCE                                
 03/15/95       741    (H)   SPONSOR SUBSTITUTE INTRODUCED-                    
                             REFERRALS                                         
 03/15/95       741    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/15/95       741    (H)   RESOURCES, FINANCE                                
 03/22/95              (H)   RES AT 08:00 AM CAPITOL 124                       
 03/22/95              (H)   MINUTE(RES)                                       
 03/29/95              (H)   RES AT 08:00 AM CAPITOL 124                       
                                                                               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-42, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Resources Committee was called to order by Co-Chairman              
 Green at 8:15 a.m.  Members present at the call to order were                 
 Representatives Green, Austerman, and Kott.  Members absent were              
 Representatives Williams, Ogan, Barnes, Davies, MacLean, and                  
 Nicholia.                                                                     
                                                                               
 CO-CHAIRMAN JOE GREEN announced the committee would hear HB 207 and           
 a presentation on Stellar Sea Lions.  The committee will not hear             
 HB 191.                                                                       
                                                                               
 HRES - 03/29/95                                                               
 HB 207 ADJUSTMENTS OF OIL AND GAS ROYALTIES                                  
                                                                               
 CO-CHAIRMAN GREEN stated the committee would review comments and             
 suggestions presented at the previous hearing.  He discussed                  
 changes contained in the work draft committee substitute (CS),                
 version U, as they relate to the work draft CS, version K.                    
                                                                               
 CO-CHAIRMAN GREEN said the work draft CS, version U, contains a               
 rewritten Section 1 which is the legislative intent.  He explained            
 the word "consider" on line 6, page 1, is a change from the                   
 language in version G & K where the word "encourage" was used.  He            
 noted the commissioner had made this suggestion.  He felt the word            
 "consider" will accomplish the same purpose but not tie the hands             
 of the commissioner on a frivolous request.                                   
                                                                               
 CO-CHAIRMAN GREEN told committee members the next change is on page           
 2, line 10, of the work draft CS, version U.  He said the words               
 "for sale" are included.  He stated when talking about a production           
 from a field, it will be production that has not been offered for             
 sale, rather than any production.  He added on page 2, line 16, of            
 the work draft CS, version U, the words "price" replace the words             
 "sale value".  He stated the price of oil is a more generic,                  
 understandable, and parallel type of description when talking about           
 an income from the sale of oil.                                               
                                                                               
 CO-CHAIRMAN GREEN stated on page 2, line 31, of the work draft CS,            
 version U, the words "by making reference to a sliding scale                  
 royalty or equivalent provision that provides for adjustment of               
 royalty" were added, which the commissioner can refer to and those            
 things which he should consider.                                              
                                                                               
 CO-CHAIRMAN GREEN noted for the record that Representatives OGAN              
 and WILLIAMS had joined the committee.                                        
                                                                               
 Number 134                                                                    
                                                                               
 CO-CHAIRMAN GREEN said on page 3, lines 8-15, of the work draft CS,           
 version U, subsection (4) reintroduces a floor which restricts the            
 reduction of otherwise attainable royalty to not more than 80                 
 percent for a new, undeveloped or delineated field and not more               
 than 90 percent of what would have otherwise been available as                
 royalty under an economically strapped existing field at its                  
 economic limit.  He noted there has been discussion about having no           
 restriction and restriction on new fields only, and this change               
 reintroduces restrictions on both fields.  He pointed out some                
 royalty interest remains to the state from all leases.                        
                                                                               
 CO-CHAIRMAN GREEN explained the next change is contained on page 4,           
 line 31, in the work draft CS, version U.  He said in prior                   
 versions of the bill, there was reference to once the                         
 commissioner's determination is final, it is not subject to                   
 litigation.  He noted that language previously was a subsection by            
 itself.  Now the language is included as item (D) under subsection            
 (8).  He explained it is the same intent but is repositioned.                 
                                                                               
 Number 190                                                                    
                                                                               
 CO-CHAIRMAN GREEN said there has been a lot of struggling, both in            
 the Oil and Gas Committee (OGC) and the House Resources Committee,            
 as to the oversight of the commissioner.  He noted there are                  
 varying views from one extreme of absolutely no review, to an                 
 almost rigid type of review by various departments of state                   
 government.  Each suggestion has some negativism to them.  He                 
 explained the commissioner would be given the opportunity to                  
 proceed, get a consultant if necessary, get a fair determination of           
 the royalty reduction if it is in the best interest of the state,             
 and then have a public awareness of what has happened, and provide            
 30 days after public notice for written comments by members of the            
 public to the commissioner on their views of what has transpired.             
 The commissioner then finalizes his determination, summarizes the             
 public input, and sends both to the presiding officers of the                 
 Senate and House and Chairs of the Senate and House Resources                 
 Committee.                                                                    
                                                                               
 CO-CHAIRMAN GREEN felt this change brings the public into the                 
 picture, which is worthwhile.  He said if HB 207 passes, the state            
 will be going from a conventional safety cushion of offering land             
 for lease, knowing there is going to be a certain royalty and being           
 assured, to looking at those accumulations of resources that are              
 marginal at best and under existing conditions, which the state has           
 had for 20 years, probably would not be developed, in which case              
 the state would get nothing.  He stressed HB 207 will allow the               
 state to provide an incentive, comparable to what other countries             
 provide, saying there is a valuable product in the state, it is               
 marginal, but what can be done so both the state and the company              
 can gain.  He felt from that standpoint, it is worthwhile for the             
 public to have access during the process to make their feelings               
 known.  He stressed whatever royalty reduction is determined, it is           
 imperative that the people of the state are aware of that                     
 agreement.                                                                    
                                                                               
 Number 267                                                                    
                                                                               
 REPRESENTATIVE PETE KOTT made a MOTION to ADOPT the work draft CS,            
 version U, as CSHB 207(RES).                                                  
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 REPRESENTATIVE SCOTT OGAN made a MOTION to AMEND CSHB 207(RES) on             
 page 2, line 25, through page 3, line 7:  Delete all material and             
 insert:  "(3) shall, if preexisting economic conditions warrant, in          
 the findings, determinations, and agreement, [THE REVENUE FROM THE           
 LESSEE'S SHARE OF ALL HYDROCARBONS PRODUCED FROM THE FIELD IS AND             
 IS LIKELY TO CONTINUE TO BE INSUFFICIENT TO PRODUCE A REASONABLE              
 RATE OF RETURN WITH RESPECT TO THE LESSEE'S TOTAL INVESTMENT IN THE           
 FIELD.  THE COMMISSIONER MAY] condition the [A] royalty reduction           
 granted under this subsection in any way necessary to protect the             
 state's best interests; under this subsection, the commissioner              
 shall include provisions to increase or otherwise modify the                  
 state's royalty share by a sliding scale royalty or other                     
 mechanism; the commissioner may consider one or more relevant                 
 factors, such as a change [INTEREST, INCLUDING RESTORATION OF THE            
 STATE'S ROYALTY SHARE IN THE EVENT OF AN INCREASE] in the price of            
 oil or gas, the projected ultimate recovery of oil and gas, field            
 productivity or development costs and operating costs in the oil or           
 gas field, pool, or portion of the field or pool;".                          
                                                                               
 REPRESENTATIVE OGAN said this amendment would tighten up the                  
 language and give the commissioner the ability to increase or                 
 otherwise modify the state's royalty.  This amendment adds the word           
 "increase".                                                                   
                                                                               
 REPRESENTATIVE KOTT OBJECTED for discussion purposes.                         
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG explained on line 3 of the                     
 amendment, the additional words are "if preexisting economic                  
 conditions warrant".  He said rather than assume there is a macro             
 condition of necessity to move forward with an application, this              
 added language establishes there should be preexisting conditions             
 both on the part of the applicant and perhaps in the world market             
 place.  He explained the reason for the word "agreement" on line 4            
 of the amendment, is to make sure that all provisions of the                  
 agreement are included in the contractual negotiations which take             
 place up-front.  For example, regarding the concept of reopeners,             
 the word "agreement" is cited to make sure those discussions do               
 take place and are bargained for up-front.  This gives the                    
 applicant and the commissioner flexibility but also gives notice              
 that these things should be done up-front.                                    
                                                                               
 REPRESENTATIVE ROKEBERG stated on line 11 of the amendment, the               
 stipulation of the word "increase" is important because this                  
 specifically grants the commissioner the power to increase the                
 royalty rate on a sliding scale for whatever relevant factor or               
 event which might cause that.  He said this power could override an           
 existing, pre-bargained for bid for royalty rate.  He noted Co-               
 Chairman Green feels the word "modify" covers that but                        
 Representative Rokeberg felt making it specific and explicit is               
 helpful and will avoid any confusion in the future.                           
                                                                               
 Number 362                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG said the balance of the amendment reflects            
 Co-Chairman Green's language also.  He stated the one point of                
 distinction is the mandate of oil price.  He noted in CSHB 207(RES)           
 and the prior versions that is permissive because there are certain           
 circumstances where price may not be a determining factor.  This              
 allows the commissioner to have a little more flexibility.                    
                                                                               
 REPRESENTATIVE ROKEBERG felt Co-Chairman Green's language and this            
 amendment are very similar in intent.  He urged support for                   
 Representative Ogan's amendment.                                              
                                                                               
 (Representative BARNES joined the committee.)                                 
                                                                               
 CO-CHAIRMAN GREEN said he preferred the language contained in CSHB
 207(O&G).  He stated that which is a preexisting condition is                 
 implicit because this issue would not even be on the table if it              
 were not.                                                                     
                                                                               
 Number 386                                                                    
                                                                               
 KEN BOYD, ACTING DIRECTOR, DIVISION OF OIL AND GAS, DEPARTMENT OF             
 NATURAL RESOURCES (DNR), testified via teleconference and stated he           
 agrees with the amendment to add the word "increase".                         
                                                                               
 CO-CHAIRMAN GREEN asked Mr. Boyd to also comment on adding the                
 words "if preexisting economic conditions warrant".                           
                                                                               
 MR. BOYD said he did not understand that part and would like to see           
 it in writing.  He stated he is not sure what a preexisting factor            
 is meant to mean.                                                             
                                                                               
 CO-CHAIRMAN GREEN clarified that Mr. Boyd would prefer to have the            
 words "increase or otherwise modify".                                         
                                                                               
 MR. BOYD replied yes.  He felt it gives certainty to the word                 
 "modify" and the word "increase" says one can increase.  Therefore,           
 there is no possibility of misunderstanding.                                  
                                                                               
 CO-CHAIRMAN GREEN felt the word "modify" meant increase or decrease           
 in reference to a sliding scale, which goes either way.  He                   
 wondered if Mr. Boyd would like to include the words "increase or             
 decrease".                                                                    
                                                                               
 MR. BOYD said that would be fine.                                             
                                                                               
 Number 450                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG said he would not object to deleting "if              
 preexisting economic conditions warrant," on line 3 of the                    
 amendment and deleting the words "otherwise modify" and inserting             
 the word "decrease".                                                          
                                                                               
 REPRESENTATIVE BILL WILLIAMS asked if the committee is making any             
 changes to the bill with all this language.                                   
                                                                               
 CO-CHAIRMAN GREEN replied probably not.                                       
                                                                               
 REPRESENTATIVE BARNES asked since there has been a proposed                   
 language change to the amendment, and since it is a minor                     
 adjustment to the language contained in CSHB 207(RES), would it be            
 better to not adopt the amendment and just put the words in the               
 existing draft.                                                               
                                                                               
 REPRESENTATIVE OGAN WITHDREW his MOTION.                                      
                                                                               
 CO-CHAIRMAN GREEN made a MOTION to AMEND CSHB 207(RES), on page 3,            
 line 3, delete the word "modify" and insert after the word "to" the           
 words "increase or decrease".                                                 
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 REPRESENTATIVE OGAN asked for a brief at ease.                                
                                                                               
 CO-CHAIRMAN GREEN reconvened the meeting at 8:55 a.m.                         
                                                                               
 REPRESENTATIVE BARNES made a MOTION to MOVE CSHB 207(RES) as                  
 amended, with a zero fiscal note, out of committee with individual            
 recommendations.                                                              
                                                                               
 REPRESENTATIVE KOTT OBJECTED because he would like to hear Mr.                
 Boyd's testimony first.                                                       
                                                                               
 MR. BOYD stated he had a few suggestions which might clarify the              
 bill better.  He said on page 2, line 10, of CSHB 207(RES), the               
 word "quantities" is not necessary because it is a word that was              
 left over when the word "commercial" was deleted.  On line 25, page           
 2, he noted the language contemplates a second document when in               
 fact this is still the commissioner's finding and determination.              
 He felt for consistency, the language should say, "shall, as part             
 of the commissioner's finding and determination".                             
                                                                               
 MR. BOYD said on page 2, line 31, of CSHB 207(RES), the words                 
 "sliding scale royalty or equivalent provision" are too restrictive           
 in that other mechanisms cannot be used.  He suggested the words              
 "sliding scale royalty or other mechanisms" be used.  He felt the             
 words "equivalent provision" means the commissioner cannot use                
 anything else.  He thought it was important to keep flexibility for           
 the commissioner to modify the royalty in any way he or she seems             
 appropriate.                                                                  
                                                                               
 MR. BOYD stated on page 3, line 4, it says "economic factors                  
 including".  He expressed concern that it appears the factors only            
 include those terms listed.  He suggested the words "may include"             
 be used instead of "including".  He mentioned page 3, lines 8-15,             
 of CSHB 207(RES), and stressed there still is a desire to keep a              
 floor of 25 percent.  On page 3, line 17, it says "lessee or                  
 lessees to submit, with the application for the royalty reduction,"           
 and he felt that language is redundant with the language on the               
 prior line 16.  He felt one of the clauses needs to be removed.               
                                                                               
 Number 570                                                                    
                                                                               
 MR. BOYD said on page 4, line 8, the language says, "make final               
 written findings and a written determination".  He suggested                  
 deleting the words "a written".  He stated on page 4, line 31, the            
 language says "the commissioner's written determination of                    
 royalty".  He pointed out if the commissioner did not decide to               
 give a royalty reduction, this language implies a different                   
 standard which could be appealed.  He suggested the word                      
 "regarding" be used after the word "determination".                           
                                                                               
 REPRESENTATIVE BARNES felt Mr. Boyd's words did not have much                 
 substance but since Co-Chairman Green had spent a lot of time on              
 the work draft, she requested he comment on Mr. Boyd's suggestions.           
                                                                               
 CO-CHAIRMAN GREEN said in regard to page 2, line 25, he could                 
 understand Mr. Boyd's comments since there may be a finding which             
 does not allow for a reduction.  He stated the word "agreement" was           
 used because there was a desire to have it as part of the agreement           
 not a separate document.  He felt the word "agreement" should                 
 remain in the language.                                                       
                                                                               
 CO-CHAIRMAN GREEN stated in regard to page 2, line 31, and the                
 words "or equivalent provision".  He recalled Mr. Boyd suggested              
 the words "or other mechanisms".  He said, "we wanted to include              
 the fact that the commissioner would reference the sliding scale as           
 a `yardstick' and whatever he did would not have to have that but             
 it should be something akin to that.  So if they can come to a                
 different agreement that does provide for the state to have an                
 increase if oil goes to $75 a barrel, that we would reap some of              
 that benefit as well or if it drops to a nickel, that we would                
 reduce the royalty.  If they come to another method of doing that,            
 that is fine as long as it is in the same...so we have some idea              
 what is coming.  I would prefer to leave it the way it is."                   
                                                                               
 CO-CHAIRMAN GREEN said in regard to page 3, line 4, of CSHB
 207(RES) and Mr. Boyd's suggestion to change the word "including"             
 to "may include", at one time different words were considered.  He            
 explained the bill drafter assured him on three separate occasions            
 that by using the word "including", that does mean this is a basket           
 the commissioner can pluck anything he wants to from.                         
                                                                               
 CO-CHAIRMAN GREEN said, "We have addressed the 25 percent floor,              
 which the commissioner wishes versus the need, in my estimation,              
 that he does need a little bit larger latitude because there may              
 be, especially in the older fields, some that 25 percent may not be           
 adequate.  As far as being a potential for encouraging others to              
 come and say, hey we can go to Alaska, explore and if for some                
 reason we find a puddle but the puddle is not quite big enough, we            
 know that they are in favor of us developing and will make an                 
 opportunity for us to do that rather than a rigid hard 25 percent."           
                                                                               
 Number 622                                                                    
                                                                               
 REPRESENTATIVE OGAN said on page 3, line 13, of CSHB 207(RES), it             
 indicates on older fields, up to 90 percent can be taken off.  He             
 recalled that Co-Chairman Green had said in the case of older                 
 fields, there may be a need for more latitude.  He felt they have             
 that latitude.  He noted if Representative Barnes would withdraw              
 her motion, he has an amendment to offer, changing the 80 percent             
 on line 10 to 75 percent.                                                     
                                                                               
 CO-CHAIRMAN GREEN recalled that Mr. Boyd said the language on page            
 3, lines 16 and 17, is redundant.  He said the language may appear            
 redundant but the thought was one would be an accompanying                    
 document, not something that would be floating around somewhere               
 else.  He felt the language should be left as is.  He stated in               
 regard to Mr. Boyd's comments on page 4, line 9, he does not object           
 to deleting the words "a written".                                            
                                                                               
 REPRESENTATIVE BARNES WITHDREW her MOTION.                                    
                                                                               
 REPRESENTATIVE BARNES made a MOTION to AMEND CSHB 207(RES) on page            
 4, line 8, delete the words "a written".                                      
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 REPRESENTATIVE BARNES made a MOTION to AMEND CSHB 207(RES) on page            
 4, line 31, delete the word "of" and insert the word "regarding".             
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 Number 660                                                                    
                                                                               
 REPRESENTATIVE OGAN made a MOTION to AMEND CSHB 207(RES) on page 3,           
 line 10, delete the number "80" and insert the number "75".                   
                                                                               
 REPRESENTATIVE OGAN felt the state is going to have a                         
 constitutional problem because the state is required to protect the           
 resources which belong to the people, not to the state.  He thought           
 the minimal amount from the state's resource development should be            
 put into the permanent fund.  He stated the legislature has a moral           
 and legal obligation to do that.                                              
                                                                               
 CO-CHAIRMAN GREEN stated there is no legal obligation.  He said,              
 "the amount `75' was arbitrary because I think it ties to the                 
 earlier version of leases that said 25 percent of the royalty                 
 received from that lease would go to the permanent fund, 1980 or              
 1979, it was up to 50 percent of whatever was received not that it            
 would be of 12.5 percent or 16 percent or 20 percent, which numbers           
 of royalties have been in other leases.  That 75 to me is an                  
 arbitrary figure."                                                            
                                                                               
 CO-CHAIRMAN GREEN continued, "There is no change that what is                 
 received, whether it be only 20 percent of the 12.5 percent,                  
 roughly 2.4 percent...still 50 percent of the leases since 1981               
 will still go to the permanent fund and if it is prior to that, 25            
 percent will still go to the permanent fund and the 12.5 percent,             
 I submit to you is a historic number, one-eighth and there is no              
 real justification for that--that is an agreement struck between              
 the lessor, in this case the state, and the lessee which is the               
 company.  We still protect the permanent fund.  We are saying we              
 would like a smaller piece but have something of that rather than             
 a big piece of nothing."                                                      
                                                                               
 REPRESENTATIVE BARNES OBJECTED to the motion.                                 
                                                                               
 CO-CHAIRMAN GREEN asked for a roll call vote.  Voting in favor of             
 the amendment were Representatives Kott, Nicholia, and Ogan.                  
 Voting against the amendment were Representatives Austerman,                  
 Barnes, Williams and Green.  The MOTION FAILED 4-3.                           
                                                                               
 TAPE 95-42, SIDE B                                                            
 Number 000                                                                    
                                                                               
 REPRESENTATIVE OGAN made a MOTION to AMEND CSHB 207(RES), on page             
 4, lines 2-9 inserting the language contained in the earlier work             
 draft, version K, page 4, lines 3-26.                                         
                                                                               
 CO-CHAIRMAN GREEN OBJECTED.                                                   
                                                                               
 REPRESENTATIVE BARNES noted that this section had been modified as            
 a result of Mr. Boyd's suggestion.                                            
                                                                               
 Number 052                                                                    
                                                                               
 REPRESENTATIVE OGAN felt proper oversight of the process was not              
 being provided.  He said public comment is a good thing to do but             
 stressed the public has no leverage over the commissioner.  He                
 stated the Alaska Oil and Gas Conservation Commission has the                 
 expertise to determine whether or not royalty reductions are a good           
 idea and would provide some legislative oversight.                            
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN OBJECTED.                                       
                                                                               
 CO-CHAIRMAN GREEN asked for a roll call vote.  Voting in favor of             
 the amendment were Representatives Nicholia, Ogan, and Kott.                  
 Voting against the amendment were Representatives Barnes,                     
 Austerman, Williams, and Green.  The MOTION FAILED 4-3.                       
                                                                               
 REPRESENTATIVE BARNES made a MOTION to MOVE CSHB 207(RES), as                 
 amended, with a zero fiscal note out of committee with individual             
 recommendations.                                                              
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 HRES - 03/29/95                                                               
 PRESENTATION ON STELLAR SEA LIONS                                           
                                                                               
 Number 148                                                                    
                                                                               
 DR. ANDREW TRITES, RESEARCH COORDINATOR, NORTH PACIFIC UNIVERSITIES           
 MARINE MAMMAL RESEARCH CONSORTIUM, stated the consortium is a group           
 of university researchers who are being funded by the fishing                 
 industry to look into the interactions between marine mammals and             
 commercial fisheries.  He said he would give an overview of some of           
 the marine mammal issues the consortium and the fishing industry              
 are concerned with.                                                           
                                                                               
 DR. TRITES stated most people in Alaska do not appreciate how                 
 important commercial fisheries are to the state.  Commercial                  
 fishing is the largest private employer in Alaska, employing 23               
 percent of the state's work force.  He said commercial fisheries              
 provide 24 percent of the state's basic industry payroll, and is              
 second only to the oil industry in its contributions to state                 
 government.  Over the last 5 years, the Alaska seafood harvest has            
 stabilized at record levels of over 5 billion pounds per year.                
 This represents more than half of all the seafood harvested in the            
 U.S., now making this fishery the largest fishery in the world.               
                                                                               
 DR. TRITES felt everyone would agree that is a glowing report card            
 for commercial fisheries in Alaska.  He pointed out it hides the              
 fact that all is not well in the North Pacific.  He stated while              
 the amount of fish landed has risen to all time highs, the numbers            
 of some marine mammals in Alaska have declined.  Many people assume           
 that commercial fisheries are to blame for their demise, and they             
 would like to see it stopped.                                                 
                                                                               
 DR. TRITES told committee members marine mammals are protected                
 under two pieces of legislation:  The Marine Mammal Protection Act            
 (MMPA) and the Endangered Species Act (ESA).  He said both Acts               
 became law in the early 1970s when the abundance of many marine               
 mammals was high.  It was also a time when urban America felt                 
 outraged over the Japanese whale harvest, the Canadian harp seal              
 hunt, and the dolphin/tuna kill in the tropical Pacific.  He stated           
 the MMPA prohibits the taking of any marine mammal unless an                  
 exception has been made.  The ESA protects animals whose survival             
 is in jeopardy by prohibiting the harassment, injury or death of              
 endangered or threatened species.  He noted that critical habitat             
 must be designated and federal agencies must ensure that their                
 actions are not likely to adversely modify the critical habitat.              
                                                                               
 DR. TRITES stated there are currently 15 species of whales and                
 dolphins in Alaska and 7 species of seals and sea lions.  As far as           
 is known, dolphin populations remain healthy and the great whales             
 are slowly recovering from the over-exploitation that ended in the            
 1960s.  He said many of the pinnipeds that were once so abundant              
 are now in decline in many parts of Alaska.  He explained the                 
 northern fur seal, which breeds on the Pribilof Islands in the                
 middle of the Bering Sea, numbered about 2.5 million in 1950.                 
 Today, about 1 million remain and the specie has been declared                
 depleted under the MMPA.  He noted it is not clear why this                   
 population declined, nor why it has failed to recover.                        
                                                                               
 Number 199                                                                    
                                                                               
 DR. TRITES said harbour seals are also declining in many parts of             
 Alaska.  On Tugidak Island, the world's largest population of                 
 harbour seals dropped from 12,000 in 1976 to under 2,000 in 1988.             
 Only in Bristol Bay and Southeast Alaska have their numbers                   
 remained healthy.  He stated the third and greatest concern is over           
 the disappearance of stellar sea lions from Alaska.  He noted that            
 many feel this species is destined to become the spotted owl of the           
 North Pacific.  Stellar sea lions are now classified as threatened            
 with extinction and may soon be reclassified as endangered if                 
 recommendations made to the National Marine Fisheries Service are             
 followed.                                                                     
                                                                               
 DR. TRITES told committee members based on sporadic census counts,            
 it appears that the total sea lion population in six regions of               
 Alaska rose from 185,000 in 1956 to 200,000 in the 1970s.  The                
 population peaked at 225,000 in 1980 and fell to under 85,000 in              
 1990.  He noted this decline has continued to the present and is              
 underway currently.  The only exception to the trend is in                    
 Southeast Alaska and British Columbia where the small populations             
 have been increasing.  He stated the population declines of all               
 three species, harbour seals, northern fur seals and stellar sea              
 lions, appear to be geographically related to the Gulf of Alaska.             
                                                                               
 Number 224                                                                    
                                                                               
 DR. TRITES stated many people assume that commercial fisheries are            
 ultimately responsible for the population declines.  He noted that            
 the total catch of salmon, herring, groundfish, shrimp and crabs              
 rose from 100,000 metric tons to 500,000 in 1980.  This represents            
 over one billion pounds of seafood.  He said most of the catch is             
 salmon and pollock.  He pointed out at the same time catches have             
 risen, there has been a dramatic rise in the number of licenses               
 issued and vessels involved in each of the fisheries.  Thus, large            
 amounts of fish are being removed, while sea lions continue to                
 decline.                                                                      
                                                                               
 DR. TRITES noted there is considerable nervousness among sectors of           
 the fishing industry over marine mammals and what the future might            
 hold.  He said there are those who claim it will be business as               
 usual, while others are predicting the closure of Alaskan                     
 fisheries.  No one knows how the legislation will be applied to               
 protect stellar sea lions and their habitat, nor how the story is             
 going to ultimately unfold.                                                   
                                                                               
 DR. TRITES said in the summer of 1992, John Roos from the Pacific             
 Seafood Processors Association wrote to Northwest universities on             
 behalf of a group of representatives from the fishing industry and            
 asked for proposals to study the decline of stellar sea lions.                
 From that initial request, the North Pacific Universities Marine              
 Mammal Research Consortium was formed with four members:  The                 
 University of Alaska, the University of British Columbia, the                 
 University of Washington, and Oregon State University.  He stated             
 the consortium's mandate is to undertake a long term program of               
 research on the relation between fisheries and marine mammals in              
 the North Pacific.  He noted that most of the initial focus is on             
 the stellar sea lion.                                                         
                                                                               
 Number 258                                                                    
                                                                               
 DR. TRITES told committee members the consortium has built on the             
 foundation of research conducted by the National Marine Fisheries             
 Service and the Alaska Department of Fish and Game, and has                   
 developed a research program to address the major hypotheses put              
 forward to explain the cause of the stellar sea lion population               
 decline.  He said ten hypotheses have been proposed, of which five            
 have largely been discredited.  These include storms, pollution,              
 toxins, and entanglement and shooting.  He stated the consortium's            
 research program is addressing the remaining five.                            
                                                                               
 DR. TRITES said a parasitologist at the University of British                 
 Columbia is examining parasites from sea lion stomachs and feces,             
 while the leading world expert on sea lion diseases from Oregon               
 State University has proposed a long term study to evaluate the               
 contributing role of disease to the population decline.  He stated            
 the predation hypothesis is intriguing.  A dead killer whale washed           
 ashore in Prince William Sound in the summer of 1992.  Its stomach            
 contained 14 flipper tags from stellar sea lions.  He noted a study           
 was started at the University of British Columbia to determine                
 whether killer whale predation could significantly affect sea lion            
 numbers.                                                                      
                                                                               
 DR. TRITES stated the stomach contents collected over the past 20             
 years were compiled from eight stranded killer whales in Alaska and           
 14 in British Columbia.  They support the view that there are two             
 distinct killer whale races in the eastern North Pacific with non-            
 overlapping diets.  In all, 258 of the marine mammal eating                   
 transient whales were identified between Washington and western               
 Alaska.  He said a computer simulation model found that killer                
 whale predation may currently account for a significant portion of            
 the total annual mortality of sea lions in Alaska.  When sea lion             
 populations exceed 100,000, the effects of killer whale predation             
 on sea lion dynamics appear minimal.  However, at levels of 50,000            
 sea lions or less, the effects are more significant, and may be               
 sufficient to drive a population decline.                                     
                                                                               
 REPRESENTATIVE AUSTERMAN wondered of the percentage of sea lions              
 tagged, is there a way to extrapolate out what the 14 tags found in           
 the whale's stomach mean.                                                     
                                                                               
 DR. TRITES responded in that year, approximately 400 animals were             
 tagged.  Therefore, for this one animal to have such a high                   
 proportion of plastic in its stomach indicates it either had a                
 taste for plastic, it was homing in on animals with tags or it is             
 representative of a high rate of predation.  He said a report is              
 being prepared that looks at those various possibilities.                     
                                                                               
 REPRESENTATIVE AUSTERMAN clarified with the 14 tags, it is                    
 difficult to determine if there were more sea lions being eaten.              
                                                                               
 DR. TRITES replied there is no doubt there would have been other              
 animals eaten, as the 14 tagged sea lions were a small proportion             
 of those marked.  He said the fact that one animal had that many              
 tags in its stomach is very significant.                                      
                                                                               
 Number 327                                                                    
                                                                               
 DR. TRITES explained three other possible explanations for the sea            
 lion decline are human disturbance, abherrent behavioral changes,             
 and the hypothesis that everyone is looking at the hardest,                   
 nutritional stress.  He said the consortium proposed a 5-year                 
 research plan in 1993 with three major components designed to test            
 these hypotheses:  Field studies, captive studies, and laboratory             
 and data analyses.  He stated the essence of the field program is             
 to compare a healthy rookery with a declining rookery.  The                   
 consortium began work at Forrester Island in Southeast Alaska where           
 sea lions are healthy, and at Sugarloaf near Kodiak where sea lions           
 are declining.                                                                
                                                                               
 DR. TRITES told committee members the consortium's field studies              
 are being done with the collaboration and financial support of the            
 Alaska Department of Fish and Game and involves many people.  At              
 the study sites, the consortium has access to animals to make                 
 direct behavioral observations, and to capture and track them at              
 sea using satellites.  He said the consortium is also collecting              
 sea lion scats to identify diet from the remaining fish bones and             
 would like to sample fish from around the study sites.  One                   
 interesting finding is the diet of sea lions at the healthy site              
 appears to be very similar to that at the declining site.  The                
 number one item on the sea lion menu in both areas appears to be              
 pollock.                                                                      
                                                                               
 DR. TRITES stated a major question is how much food do sea lions              
 need to eat.  To answer that question, the consortium captured sea            
 lion pups and brought them to the Vancouver Aquarium.  They are now           
 one and one-half years old and weigh over 200 pounds each.  He said           
 from the six animals, the consortium is finding that their basal              
 energy needs are not constant, but cycle over the course of a year.           
 With a grant from the Alaska Science and Technology Foundation, the           
 consortium will be building a swim mill to measure the energetic              
 needs of the sea lions while swimming at different speeds.                    
                                                                               
 DR. TRITES said the consortium is also measuring the sea lions                
 digestive efficiency to determine whether for example, pollock is             
 as good a food source as for example herring.  They are also trying           
 to identify what and how much sea lions are eating in the wild by             
 feeding the captive animals different foods and observing which               
 bony hard bits survive the digestive process.  He explained the               
 culmination of these studies will be a calculation which considers            
 seasonal and annual activity budgets for sea lions at both the                
 individual and population levels, and makes predictions about the             
 amount of food they need.  He told committee members other                    
 consortium studies include an analysis of fishing activities around           
 sea lion rookeries which is being done at Oregon State University.            
 He noted this is the most thorough analysis of its kind to date.              
                                                                               
 Number 363                                                                    
                                                                               
 DR. TRITES added that two novel studies at the University of Alaska           
 are considering whether the population decline is related to an               
 ecosystem shift.  One is examining whiskers from sea lions                    
 collected over the past 40 years.  What sea lions ate can be                  
 identified from the ratios of carbon and nitrogen isotopes present            
 in their whiskers.  He said carbon and nitrogen isotopes are                  
 concentrated up through the food chain.  It is therefore possible             
 to tell from what level of food chain the sea lions ate by simply             
 measuring the isotopic ratio in the whiskers.  He noted that                  
 identifying a shift in isotope levels would support the hypothesis            
 that sea lions have changed their diet.                                       
                                                                               
 DR. TRITES said the second study is considering whether whaling is            
 responsible for the decline of sea lions.  The removal of whales in           
 the eastern Bering Sea and Gulf of Alaska that ended in the 1960s             
 left thousands of tons of euphausids and fish larvae for other                
 predators to eat.  He noted that an initial calculation indicates             
 approximately 100,000 tons per day of additional biomass was made             
 available to other consumers by the removal of fin, sei, and sperm            
 whales from the Bering Sea alone.  This amount is about the same as           
 the daily consumption of 5 million tons of fish.  He stated this              
 may mean that today's abundance of pollock may be linked to the               
 removal of whales, and may have restructured the food base                    
 available to sea lions and other seals.                                       
                                                                               
 Number 394                                                                    
                                                                               
 DR. TRITES told committee members that solving the mystery of the             
 disappearing sea lions is not a trivial task, but one that requires           
 a concerted effort and an open mind.  He said university resources            
 are being put to the task with the support of the industry.  The              
 Marine Mammal Research Consortium was formed with industry support            
 to address issues related to marine mammal/fishery interactions in            
 the North Pacific.  He stated with that in mind, the consortium has           
 undertaken a solid field program, a strong captive research                   
 program, and a major analytical research initiative.                          
                                                                               
 DR. TRITES noted that concern about interactions between marine               
 mammals and commercial fisheries in Alaska is receiving more and              
 more attention from the public.  He stressed it is an issue that is           
 not likely to go away, but one that needs good scientific research            
 to be resolved.                                                               
                                                                               
 CO-CHAIRMAN GREEN recalled that Dr. Trites had mentioned that one             
 of the concerns might be the food supply, which includes salmon.              
 He noted that a large amount of salmon are returning.  He asked if            
 it is possible that salmon have changed their normal migration due            
 to the fact they might be eaten by sea lions in that normal                   
 migration route.                                                              
                                                                               
 DR. TRITES said there has been a study looking at the changes in              
 ocean circulation and atmospheric pressure.  He noted there is                
 something called the 18.6 year cycle where it appears that                    
 something changed in 1976, which seems to correlate with the strong           
 abundance of salmon and the high record catches of salmon.  He                
 noted that pollock was not an abundant specie until recently.                 
                                                                               
 CO-CHAIRMAN GREEN asked if the major change in the whale population           
 occurred at the turn of the century.  He thought there had not been           
 that great of a change during the period when the pollock numbers             
 increased.                                                                    
                                                                               
 DR. TRITES replied there would be a time lag involved but added the           
 whaling ended in the late 1960s basically when the whales had been            
 depleted and it was no longer economically feasible to hunt whales.           
 He said the consortium has been putting together maps to see where            
 these concentrations of whales were removed, along the Aleutians              
 and in the Bering Sea.  He noted those areas correspond to where              
 some of the major concentrations of sea lions have been.                      
                                                                               
 CO-CHAIRMAN GREEN recalled that Dr. Trites had mentioned trauma as            
 one of the ten hypotheses explaining the decline in stellar sea               
 lions but noted that the consortium is using captive animals.  He             
 wondered if there was a possibility of trauma with captive animals.           
                                                                               
 DR. TRITES replied there is always a concern with trying to                   
 extrapolate from a captive situation to the wild.  He noted it is             
 very difficult to capture animals in the wild and is also difficult           
 to get enough measurements to say anything meaningful.  He stated             
 very intensive studies are done with captive animals and at the               
 same time, a controlled study is done, where for example in                   
 measuring metabolic rates, animals are injected with a chemical               
 called doubly labeled water.  By drawing a blood sample, it can be            
 determined how much (indiscernible) the animals have used over a              
 period of time.  Therefore, the animals are caught, injected, and             
 then recaptured a week later.                                                 
                                                                               
 DR. TRITES explained it can then be determined in the wild what an            
 animal is using, which then can be compared to the weekly or                  
 monthly measurements being taken in captivity.  He felt the                   
 comparisons are close but there are always uncertainties.  He did             
 not think any better data could be achieved than what is being                
 achieved with the captive animals.                                            
                                                                               
 Number 458                                                                    
                                                                               
 DR. TRITES told committee members there is a hypothesis called the            
 junk food hypothesis.  It has been suggested that one of the                  
 problems the sea lions are having is they are eating too much                 
 pollock.  He said pollock compares to humans trying to exist on               
 popcorn--it fills your stomach but does not give you the proper               
 nutrition.  Therefore, the consortium is doing controlled feedings            
 with the captive animals where the animals are fed pollock and the            
 it is determined how well the animals can assimilate pollock as               
 compared to herring, cod, salmon, squid, octopus, etc.                        
                                                                               
 CO-CHAIRMAN GREEN recalled that Dr. Trites had mentioned taking               
 clippings off of the sea lions whiskers and by isotope analysis               
 could determine what the sea lions diet had been.  He wondered if             
 whiskers stay with the animal or do they change as the diet                   
 changes.                                                                      
                                                                               
 DR. TRITES replied it is not known how long the sea lions whiskers            
 grow.  He noted the captive animals' whiskers are being measured.             
 He said the results of the isotope analyses are suggesting the                
 whiskers are five to six years in length and are showing five year            
 cycles.  He said it looks as though the sea lions somehow change              
 their diet over the course of a year.  He added that from the scat            
 samples collected in Southeast, it appears the summer-time salmon             
 are quite important but in the winter time, it is herring and                 
 pollock.  He stressed there are changes seasonally in terms of what           
 these animals are eating.  Therefore, that in turn reflects what              
 those prey species have been consuming, as these isotopes are                 
 concentrated up through the food chain.                                       
                                                                               
 CO-CHAIRMAN WILLIAMS asked Dr. Trites about incidental take.                  
                                                                               
 DR. TRITES responded a simulation model was put together to try and           
 reconstruct what had happened in the past--how many sea lions were            
 taken.  He noted there are many stories, mostly anecdotal stories,            
 that tell during the joint venture fisheries, as the trawls were              
 being brought to the surface, there was competition as to who could           
 shoot the most sea lions before noon or else the sea lions were               
 being caught as the nets were being pulled to the surface.                    
                                                                               
 DR. TRITES noted at the peak it is estimated there were                       
 approximately 5,000 sea lions per year being destroyed through                
 either intentional shooting or through incidental catches and                 
 entanglement.  He pointed out the industry saw the writing on the             
 wall through the early 1980s.  There was an initiative in the mid-            
 1980s to put a stop to it by informing people they were cutting               
 their own throats--by contributing to the decline, the fishery                
 could end up being closed.  He said the incidental catch has gone             
 from a very high level, to a level now where it is estimated the              
 number of sea lions caught incidentally this year will be less than           
 50.  He noted even when the maximum numbers are looked at, which              
 are based on observers and interviews with fishermen based on the             
 number of vessels, the numbers are not enough to account for the              
 decline.                                                                      
                                                                               
 Number 507                                                                    
                                                                               
 CO-CHAIRMAN GREEN wondered if the consortium is also looking at sea           
 lion pups to make sure there is nothing happening with them.                  
                                                                               
 DR. TRITES replied one of the studies being supported by the                  
 consortium through the University of Alaska is looking at blood               
 hormones and proteins in the blood, trying to determine whether or            
 not the animals appear stressed or compromised.  He noted there is            
 a student at Cape St. Elias who is watching animals and they seem             
 to look great.  However, the consortium does not find the animals             
 who are missing, yet they know they are missing each year.                    
                                                                               
 CO-CHAIRMAN GREEN said as an adult, we might have the ability to              
 fend off a disease but a two month baby may not be able to.  He               
 asked if there might be something killing the pups which does not             
 affect the larger animals.                                                    
                                                                               
 DR. TRITES stated it is possible.  He noted not much is known about           
 disease and added that studying disease is very expensive.  He said           
 during a trip in January, he was on a site that did not have many             
 animals on it--perhaps 100 animals--but in the 3 days there, he               
 found 4 fetuses the animals had aborted.  Therefore, the question             
 becomes is there some sort of disease or viral infection involved.            
 He pointed out in the end, things will be crossed off the list and            
 hopefully the cause will be left.  He added it may not be a single            
 factor but a combination of a number of things--each piece                    
 contributing something, with a final outcome of a declining                   
 population.                                                                   
                                                                               
 Number 538                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN felt it was very sad to see the decline in           
 the sea lion population but added that the good outcome of the                
 decline is the realization of the negligence in ongoing research              
 abilities and what is done to look after the resources in the North           
 Pacific.  He noted the state is in the same position, as each year            
 the fish and game budget is being reduced and the ability to                  
 research is being reduced--research to make sure what is being done           
 is not causing something like this population decline to happen.              
                                                                               
 CO-CHAIRMAN GREEN asked Dr. Trites what the state can do, other               
 than funding research, in connection with the decline of stellar              
 sea lions.                                                                    
                                                                               
 DR. TRITES replied awareness would be helpful.  He said most people           
 do not realize what potentially is at stake or even aware there is            
 a problem with sea lions.  He added that the industry has taken an            
 important step in approaching university researchers and forming a            
 coalition in terms of trying to determine what is happening.  He              
 felt that is an important step which is ground breaking.  From the            
 industry's standpoint, they feel it is better to be part of the               
 solution than to be seen as the problem.  He pointed out the                  
 relationship with fishermen also gives the researchers the                    
 opportunity to talk directly to fishermen and hear what their ideas           
 might be and to also learn about what is going on in places the               
 researchers never see or hear about.                                          
                                                                               
 DR. TRITES said the researchers have also developed good contacts             
 with the Native community who provide samples from the subsistence            
 hunts.  He reiterated the more people aware of the problem, the               
 more interest there will be in helping find a solution.                       
                                                                               
 CO-CHAIRMAN GREEN asked if there is a possibility that these sea              
 lions migrate as far over as the former Soviet Union and there may            
 be something happening there causing the problem.                             
                                                                               
 DR. TRITES responded the animals are also declining in the former             
 Soviet Union.  He said not a lot is known about the movements of              
 animals.  He stated several animals have been branded, tagged or              
 are being satellite tracked.  Essentially, it seemed the animals do           
 not undertake a migration by a seasonable movement.  In the                   
 summertime, the animals stay quite close to their rookeries and               
 appear to come back to their rookery of birth.  He explained the              
 animals stay close to the rookeries in the summer, and disperse in            
 the winter--perhaps 300 or 400 miles.                                         
                                                                               
 Number 577                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN asked how far back the data goes on                  
 stellar lion research.                                                        
                                                                               
 DR. TRITES replied the consortium began two years ago.  He said the           
 captive animals being held are the first time captive sea lions               
 have been kept for research purposes.  Therefore, the work being              
 done with the industry's support is really ground breaking.  He               
 stated in terms of what is known from far back, often times what              
 happens is you wait until the problem is there before you start to            
 study it.  He noted the National Marine Fisheries Service and the             
 Alaska Department of Fish and Game have conducted sea lion census             
 which go back to 1956.  He added the census are quite sporadic and            
 the counts were not done every year.  They also did a little                  
 research on stomach contents but not a whole lot.                             
                                                                               
 REPRESENTATIVE AUSTERMAN wondered if the research could be equated            
 with the population of whales.                                                
                                                                               
 DR. TRITES said the consortium has not looked specifically at whale           
 numbers.  He noted they started to put those numbers together but             
 then it was reported that the Russian researchers indicated many              
 more whales were killed than what was reported.  The Russians then            
 offered to sell this data to researchers to see how many whales               
 were actually taken out of the North Pacific and the Antarctic.  He           
 noted there is now an attempt being made to put those numbers                 
 together.  He added the numbers are huge.                                     
                                                                               
 REPRESENTATIVE AUSTERMAN asked the status of classifying the                  
 stellar sea lions as endangered.                                              
                                                                               
 Number 612                                                                    
                                                                               
 DR. TRITES responded a recovery team was appointed by the National            
 Marine Fisheries Service which met the end of November.  That team            
 made two major recommendations.  First, the team recommended the              
 sea lion population be divided into two populations with the                  
 dividing line being above Prince William Sound.  He stated that               
 recommendation was based on genetic results which said there                  
 appears to be two genetically distinct stocks.  He noted the stock            
 in Southeast appears to be the healthy one, which is different than           
 the one declining and whether there is some relationship to                   
 genetics is questionable.                                                     
                                                                               
 DR. TRITES said the second recommendation of the team was the                 
 status of the stellar sea lions should be changed from threatened             
 to endangered.  He stated that recommendation has been forwarded to           
 the head of the National Marine Fisheries Service and is now                  
 waiting to be put on the Federal Register at which point there                
 would be a 90 day period for the public to respond for comment, and           
 then it could be a year after that before the sea lions would                 
 actually be put on the list.                                                  
                                                                               
 DR. TRITES noted the Endangered Species Act is up for                         
 reauthorization and it is not clear whether or not the Act might be           
 changed.  He said rumor is there will not be any additional species           
 put on the list for as long as five years.  It is not clear how               
 Congress is going to handle the Act and how the stellar sea lions             
 will fit into that situation.                                                 
                                                                               
 CO-CHAIRMAN GREEN noted the commercial fleets from Alaska are                 
 coming under a lot of attack because people think the fleets should           
 allow more escapement, meaning a reduction in the fleet's harvest.            
 He asked with the potential stellar sea lion problem, will there be           
 a further impact on the Alaskan fishing fleet, as opposed to total            
 fishing, because other flags are fishing the waters.  He questioned           
 if this population decline is an international problem being                  
 addressed or is it only the U.S. or just Alaska.                              
                                                                               
 DR. TRITES replied most of the effort is focused in Alaska because            
 there is a lot more at stake plus Alaska is where the biggest                 
 problem is.  He added that Alaska is the center of the sea lion               
 range and Alaska is where the sea lions are disappearing from.                
 Therefore, Alaska is where the greatest concern is.                           
                                                                               
 Number 650                                                                    
                                                                               
 JERRY MCCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA (UFA), stated             
 UFA has contributed to the efforts Dr. Trites has discussed.  He              
 said as the decline of stellar sea lions is studied, the problem              
 faced is the question of where was the population 20 years ago and            
 where is the population supposed to be today.  He questioned if the           
 stellar sea lion is put on the endangered list, then what number              
 does the population have to get back to, to get it off the                    
 endangered list.  He stressed no one knows what the number of that            
 population is supposed to be.  He felt the state should encourage             
 the federal government to get a scientific team to determine where            
 the numbers are at.                                                           
                                                                               
 TAPE 95-43, SIDE A                                                            
 Number 000                                                                    
                                                                               
 DR. TRITES agreed.  He said it is easy to get on the endangered               
 list but very difficult to get off it.  He stated the consortium              
 has a proposed project this year to look at that question as to how           
 criteria is applied.  He noted one of the unfortunate things in               
 legislation is it works with the idea there is a fixed number--an             
 optimum population size--and does not take into account the fact              
 that if there is an ecosystem shift, there may be different levels            
 of equilibrium than what was there previously.  Yet many look back            
 to the date legislation was enacted and that is the magic number              
 which should be there today.  He stressed that does not work in               
 reality because it is a system in constant motion.                            
                                                                               
 SUE MELLO, REPRESENTATIVE, NATIONAL MARINE FISHERIES SERVICE, said            
 in regard to the concern about there being a number for delisting,            
 in 1988 when the ESA was amended, that was one of the changes                 
 because of concerns about there being no numbers for getting                  
 animals off the list.  She stated the recovery team has defined the           
 number for delisting the stellar sea lions but she could not                  
 remember the number but could get the information for the                     
 committee.                                                                    
                                                                               
 CO-CHAIRMAN GREEN asked what the team based the number on.                    
                                                                               
 MS. MELLO replied it was based on the count in the 1970s which was            
 looked at as a healthy population and she thought the number was 40           
 percent of the count to get off the list.                                     
                                                                               
 DR. TRITES felt the number for delisting is an area which needs               
 more in-depth thinking than what it has been given thus far.                  
                                                                               
 MS. MELLO stated the recovery plan is going to need revising by               
 1997.  Currently, the U.S. Fish and Wildlife Service and the                  
 National Marine Fisheries Service have come up with a more                    
 stringent approach to recovery plans than used in the past.  She              
 felt the recovery plan will be much more detailed than the first go           
 around.                                                                       
                                                                               
 CO-CHAIRMAN GREEN asked what she meant by stringent.                          
                                                                               
 MS. MELLO replied stringent in the requirements that the agency be            
 very clear in defining all the considerations in the ecosystem                
 which may be affecting the species, more details in the plans and             
 more involvement of the public.                                               
                                                                               
 Number 067                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN thought it was amazing how the different             
 species are changing in populations.                                          
                                                                               
 DR. TRITES agreed and added that the more one looks into it the               
 more one realizes it is not a simple story.  For example in the               
 case of pollock, the size the fisheries are taking is bigger than             
 what the sea lions eat and so it has been proposed that is good for           
 the sea lions because the biggest predator on pollock is pollock              
 itself.                                                                       
                                                                               
 REPRESENTATIVE OGAN clarified that trawlers are not selective on              
 what size they take--they take it all, process by size, and then              
 dump the rest.                                                                
                                                                               
 CO-CHAIRMAN GREEN thanked Dr. Trites for his presentation.                    
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House Resources            
 Committee, Co-Chairman Green adjourned the meeting at 9:58 a.m.               
                                                                               

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