Legislature(1995 - 1996)

04/23/1996 03:10 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE RESOURCES STANDING COMMITTEE                              
                         April 23, 1996                                        
                           3:10 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative William K. "Bill" Williams, Co-Chairman                        
 Representative Joe Green, Co-Chairman                                         
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative John Davies                                                    
 Representative Don Long                                                       
 Representative Irene Nicholia                                                 
 Representative Ramona Barnes                                                  
 MEMBERS ABSENT                                                                
 Representative Pete Kott                                                      
 COMMITTEE CALENDAR                                                            
 HOUSE BILL NO. 406                                                            
 "An Act relating to waste and use of salmon and parts of salmon;              
 relating to permits for and operation of a salmon hatchery; and               
 providing for an effective date."                                             
      - HEARD AND HELD                                                         
 HOUSE BILL NO. 548                                                            
 "An Act authorizing, approving, and ratifying the amendment of                
 Northstar Unit oil and gas leases between the State of Alaska and             
 BP Exploration (Alaska) Inc.; and providing for an effective date."           
      - SCHEDULED BUT NOT HEARD                                                
 SENATE BILL NO. 199                                                           
 "An Act relating to environmental audits and health and safety                
 audits to determine compliance with certain laws, permits, and                
 regulations; and amending Alaska Rules of Appellate Procedure 202,            
 402, 602, 603, 610, and 611."                                                 
      - SCHEDULED BUT NOT HEARD                                                
 (* First Public Hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 406                                                               
 SHORT TITLE: WASTE & USE OF SALMON; HATCHERIES                                
 SPONSOR(S): REPRESENTATIVE(S) WILLIAMS                                        
 JRN-DATE     JRN-PG                  ACTION                                   
 01/09/96      2392    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/09/96      2393    (H)   FISHERIES, RESOURCES                              
 04/15/96      3782    (H)   FSH REFERRAL WAIVED                               
 04/15/96      3782    (H)   REFERRED TO RESOURCES                             
 04/17/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 04/17/96              (H)   MINUTE(RES)                                       
 04/23/96              (H)   RES AT  3:00 PM CAPITOL 124                       
 WITNESS REGISTER                                                              
 CHERYL SUTTON, Legislative Assistant                                          
   to Representative Bill Williams                                             
 Alaska State Legislature                                                      
 Capitol Building, Room 128                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-3424                                                    
 POSITION STATEMENT:  Gave sponsor statement for CSHB 406(RES).                
 FRANK RUE, Commissioner                                                       
 Department of Fish and Game                                                   
 P.O. Box 25526                                                                
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-6141                                                    
 POSITION STATEMENT:  Answered questions on CSHB 406(RES).                     
 GERON BRUCE, Legislative Liaison                                              
   and Special Assistant                                                       
 Office of the Commissioner                                                    
 Department of Fish and Game                                                   
 P.O. Box 25526                                                                
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-6143                                                    
 POSITION STATEMENT:  Answered questions on CSHB 406(RES).                     
 STEVEN DAUGHERTY, Assistant Attorney General                                  
 Natural Resources Section                                                     
 Civil Division                                                                
 Department of Law                                                             
 P.O. box 110300                                                               
 Juneau, Alaska 99811-0300                                                     
 Telephone:  (907) 465-3600                                                    
 POSITION STATEMENT:  Answered questions on CSHB 406(RES).                     
 KAY ANDREW                                                                    
 United Southeast Alaska                                                       
   Gillnetters Association                                                     
 P.O. Box 7211                                                                 
 Ketchikan, Alaska 99901                                                       
 Telephone:  (907) 225-2463                                                    
 POSITION STATEMENT:  Testified in support of CSHB 406(RES).                   
 RUDY FRANULOVICH, Fisherman                                                   
 P.O. Box 23076                                                                
 Ketchikan, Alaska 99901                                                       
 Telephone:  (907) 225-6240                                                    
 POSITION STATEMENT:  Testified in support of CSHB 406(RES).                   
 DAVID LAWLER                                                                  
 P.O. Box 6533                                                                 
 Ketchikan, Alaska 99901                                                       
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Testified in support of CSHB 406(RES).                   
 JOHN CHILDS, Commercial Fisherman                                             
 2091 Yellow Snow Road                                                         
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 455-6028                                                    
 POSITION STATEMENT:  Testified against CSHB 406(RES).                         
 JERRY MCCUTCHEON                                                              
 P.O. Box 190144                                                               
 Anchorage, Alaska 99519-0144                                                  
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Testified on CSHB 406(RES).                              
 KEVIN MCDOUGALL, Commercial Fisherman                                         
 P.O. Box 240714                                                               
 Douglas, Alaska 99824                                                         
 Telephone:  (907) 364-2273                                                    
 POSITION STATEMENT:  Testified on CSHB 406(RES).                              
 JOHN GEORGE, Member                                                           
 Territorial Sportsmen;                                                        
 Member, Board of Directors                                                    
 Douglas Island Pink and Chum (DIPAC)                                          
 3328 Fritz Cove Road                                                          
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 789-0172                                                    
 POSITION STATEMENT:  Testified in support of CSHB 406(RES).                   
 RICHARD LAUBER                                                                
 Pacific Seafood Processors Association                                        
 321 Highland Drive                                                            
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3636                                                    
 POSITION STATEMENT:  Testified against CSHB 406(RES).                         
 GEOFF BULLOCK                                                                 
 United Southeast Alaska Gillnetters                                           
 204 North Franklin, Number 2                                                  
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-5860                                                    
 POSITION STATEMENT:  Testified on CSHB 406(RES).                              
 KATHRYN L. HANSEN, Commercial Gillnetter                                      
 5875 Glacier Highway, Lot 21                                                  
 Juneau, Alaska 99801                                                          
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Testified on CSHB 406(RES).                              
 ACTION NARRATIVE                                                              
 TAPE 96-63, SIDE A                                                            
 Number 000                                                                    
 CO-CHAIRMAN BILL WILLIAMS called the House Resources Committee                
 meeting to order at 3:10 p.m.  Members present at the call to order           
 were Representatives Nicholia, Long, Green, Austerman and Williams.           
 Members absent at the call to order were Ogan, Barnes, Davies and             
 HB 406 - WASTE & USE OF SALMON; HATCHERIES                                  
 Number 050                                                                    
 CO-CHAIRMAN WILLIAMS announced the first order of business would be           
 HB 406, "An Act relating to waste and use of salmon and parts of              
 salmon; relating to permits for and operation of a salmon hatchery;           
 and providing for an effective date," sponsored by Co-Chairman                
 Williams.  He said the committee members have a proposed committee            
 substitute dated April 18, 1996.  He said he would entertain a                
 motion to adopt the committee substitute for the purpose of                   
 Number 083                                                                    
 CO-CHAIRMAN JOE GREEN moved to adopt CSHB 406, Version C.                     
 CO-CHAIRMAN WILLIAMS asked if there was an objection.  Hearing                
 none, CSHB 406(RES), Version C, was before the committee.                     
 Number 167                                                                    
 CHERYL SUTTON, Legislative Assistant to Representative Bill                   
 Williams, Alaska State Legislature, came before the committee to              
 address the CSHB 406(RES).  She noted the bill has been subtitled             
 "The Heavy Roe Bill."  Ms. Sutton explained the bill was before the           
 legislature during the Hickel Administration, but didn't make it to           
 the floor of the Senate.  She read excerpts from the sponsor                  
 "House Bill 406 will allow some measure of relief and provide for             
 utilization of roe from pink and chum salmon that might otherwise             
 reap no economic return for those who have paid the costs of                  
 rearing the fish.                                                             
 "Hatchery pinks and chums along with other hatchery fish are paid             
 for by commercial fishermen through either a 2 percent or 3 percent           
 tax on the gross value of a fisherman's harvest.  These fish are              
 made available to the common property fishery for harvest                     
 "The pink and chum salmon must have originated from a hatchery; be            
 harvested in a designated area; have matured to the point that                
 their flesh cannot be marketed profitably and cannot be put to any            
 other lawful use at the hatchery site or be given away.                       
 "House Bill 406 will assist fishermen and hatchery operators as               
 they move through this difficult transition to the future.  This              
 bill should not be viewed any differently than other incentives and           
 assistance rendered by the legislature to struggling industries."             
 MS. SUTTON said she would like to review the history of HB 448,               
 which was transmitted to the legislature by Governor Hickel.  She             
 then read from Governor Hickel's transition statement:                        
 "It is anticipated that persons who would be authorized under such            
 a permit are commercial fishermen who are participating in a                  
 designated terminal fishery and, perhaps, hatchery operators or               
 fish processors."                                                             
 MS. SUTTON explained this follows along the line of the committee             
 substitute in that there are fish unfit for human consumption.                
 They're hatchery originated fish.  Ms. Sutton continued to read               
 from the transition statement:                                                
 "Because of present market conditions, it is important for the                
 fishing industry and hatchery operators to be able to recover as              
 much value as possible from salmon resources.  The bill will                  
 contribute to this goal and, at the same time, will allow the state           
 to more effectively enforce the statute on waste of salmon."                  
 MS. SUTTON informed the committee she would talk about some of the            
 things that were said in the House Resources Committee regarding              
 Governor Hickel's bill.  She explained Geron Bruce of the                     
 Department of Fish and Game testified stating that HB 448 provides            
 for an exemption to the statutory requirement that the carcass of             
 a salmon be utilized when it is harvested.  He had explained that             
 the hatchery program begins with the most important decision made             
 in hatchery development which is sighting of the hatchery which               
 goes to where these fish can be harvested.  Mr. Bruce also said the           
 bill would not jeopardize the sustained yield of any wild stock               
 because the fish are harvested in terminal areas where they have              
 separated and are returning and they are at their final point at              
 that time.  Ms. Sutton explained Mr. Bruce testified that in 1993,            
 the value of frozen red salmon exported from Alaska was $627.5                
 million and the value of salmon roe was $177 million.  She noted              
 she has some figures for 1995 relative to the pounds and they did             
 not have the value in terms of money, but stated that a comparison            
 could be made between 1993 in pounds also.                                    
 Number 580                                                                    
 MS. SUTTON said Mr. Bruce further stated that the public and                  
 private players and the private nonprofit salmon program have                 
 significant investments in salmon through the salmon enhancement              
 tax and it would be wise management to try to recover all possible            
 revenue from returning fish, especially if there is no reason not             
 to.  She said Mr. Bruce replied to a question from Representative             
 Carney that it would have been the most desirable circumstance to             
 have harvested the fish and utilized the carcass and roe relative             
 to perhaps not utilizing those carcasses.  Ms. Sutton said the                
 people who support this bill have no disagreement with that                   
 statement, in fact, things were built into the bill to try by all             
 means to sell and give fish away so that we have full utilization.            
 Ms. Sutton explained Mr. Bruce went on to say that in a shallow bay           
 if all those fish would have been allowed to die, speaking of                 
 Prince William Sound, they would have caused significant                      
 environmental problems.  She stated that is yet a concern with                
 returning stocks.  Ms. Sutton said Mr. Bruce went on to say that              
 the roe market is very large and healthy and he guessed the figure            
 would probably in the tens of millions of dollars.  He added that             
 a hatchery might have a $1 million budget and if it can recover an            
 extra $200,000, it is a very significant percentage of its total              
 costs.  Ms. Sutton said the way they would recover that is through            
 the sale of roe from fish that have returned whose flesh is either            
 no longer fit for human consumption or cannot be marketed by any              
 means or given away.                                                          
 MS. SUTTON referred to the House floor vote of HB 448 on final                
 passage, and said there were 31 in favor, 1 not in favor and 1                
 absent.  Of that membership voting in favor of the bill, the                  
 members that are members currently on the House Resources Committee           
 are Representatives Barnes, Green, Kott, Williams and Davies.  It             
 passed overwhelmingly.  She noted Representative Nicholia was                 
 absent.  She said HB 448 was one of the bills that didn't make it             
 to the Senate floor.                                                          
 Number 835                                                                    
 REPRESENTATIVE DON LONG referred to Ms. Sutton saying the bill                
 relates to waste and use of salmon, and at the same time, she is              
 talking about "Heavy roe."                                                    
 MS. SUTTON noted that was sort of a joke.  She said there is "The             
 Heavy Oil Bill," HB 325, so she calls this bill "The Heavy Roe                
 Bill," because in essence the issues are the same.  We have                   
 fishermen and hatchery operators who are in a very difficult time.            
 What has happened in the world market has had a devastating effect            
 on this industry.  Ms. Sutton said she has full confidence, as a              
 commercial fisherman, that our market will recover.  She said she             
 is one of the people who pays this tax for salmon enhancement.  We            
 have new challenges ahead of us, but we are in a crises at the                
 present hour.                                                                 
 Number 924                                                                    
 REPRESENTATIVE SCOTT OGAN said, "I would like to maybe know why you           
 chose to repeal and reenact the first section of the bill and got             
 rid of some language about waste of salmon that - a little                    
 concerned it might be a little problematic in that it kind of                 
 eliminated the whole -- whole (indisc.) body eliminated the whole             
 section of - basically a crime to waste salmon that was intended              
 for sale to commercial buyer processor, consumption by humans or              
 domesticated animals or scientific educational display purposes and           
 I was kind of curious why that language was repealed and replaced             
 with the language that is in there."                                          
 MS. SUTTON explained that they didn't delete that.  She asked him             
 to look further down the bill and said it is in Section 2, Article            
 2, under "USE AND WASTE OF SALMON."  She said those sections                  
 weren't deleted.  She asked him if he was looking at the new                  
 committee substitute.                                                         
 REPRESENTATIVE OGAN indicated that he wasn't looking at the                   
 committee substitute.                                                         
 Number 1060                                                                   
 MS. SUTTON explained there are a couple of changes that will                  
 probably be of concern the department.  She then reviewed each                
 section of the bill.  Ms. Sutton said, "Section 1 refers to -- we             
 had to put somewhere in the bill -- later on in the bill we                   
 referenced that the commissioner may revoke a permit at anytime               
 that people are not doing all that they're supposed to do or that's           
 required in the statute and in order for him to do that, he had to            
 indeed have the authority which is his emergency order authority.             
 So that's why that is there.  Section 2, it's the waste of salmon             
 and there are many portions of that which are similar still to                
 what's in statute.  We go down to line 17 on page 2, "USE OF                  
 HATCHERY PINK AND CHUM," and we made this specific to pinks and               
 chums because rather than all species that are produced by                    
 hatcheries because they are the two specific species for which                
 we're having large market problems.  And also, in Southeast in                
 particular, and other areas of the state, I don't diminish the                
 other areas of the state, but in Southeastern in particular we have           
 facilities producing these species who would not - you know, they             
 would not like to waste any fish.  They would like to have full               
 utilization as much as possible and while we don't want to just               
 give a blanket authority to do these things, we thought for these             
 two species it would be timely to do it given the current                     
 situation.  So for hatchery pinks and chums, this bill would allow            
 both hatchery operators and commercial limited entry permit holders           
 who fish in these designated areas or hold permits in these                   
 designated areas to fish in specific areas where these are                    
 discretely hatchery fish and to harvest them and discard of                   
 carcasses if the fish are no longer fit for human consumption,                
 cannot otherwise be sold, cannot be given away and they must                  
 demonstrate all these things.  These things must be documented.               
 They have to do all of these things first and the attempt here is             
 to allow folks not to have total waste of fish that they've already           
 paid for -- and Representative Barnes for your benefit I earlier              
 mentioned that these are fish that commercial fishermen have paid             
 through an assessment to raise through the hatchery programs,                 
 either through a 2 percent or 3 percent assessment on their gross             
 earnings and otherwise they would be totally wasted.  They would              
 die.  They are fish that are not going to reproduce.  They are fish           
 that are just going to die in some area and have no utilization at            
 all.  And so we made it specific to chums and pinks in this                   
 section.  They have, you know, as it says here...."                           
 Number 1296                                                                   
 REPRESENTATIVE RAMONA BARNES asked Ms. Sutton if she could say how            
 many millions of dollars the state of Alaska put into those                   
 hatcheries before we ever got around to the assessment.                       
 MS. SUTTON responded, "They may have happened at the same time that           
 we were actually taxed on raising it, but there are other people              
 here who would know better than I and I'll defer to them -- but I             
 do know that when the state wanted to get out of the hatchery                 
 business per se and transferred facilities that there were private            
 nonprofit aquaculture associations who incurred debt to themselves            
 to operate these facilities and produced fish for the -- all of               
 these fish have to go through the common property fishery and are             
 available for common property harvest."                                       
 Number 1360                                                                   
 REPRESENTATIVE BARNES said she understands all of that.  She said             
 she has served in the legislature since the time of the hatcheries            
 and she knows a lot about the hatcheries.  She indicated she would            
 like to know not only how much money the state invested in those              
 hatcheries through the years, but she would also like to know what            
 the state of Alaska is getting in the way of utilization from that.           
 She said it seems to her instead of discarding fish, we could give            
 them to poor people if nothing else.                                          
 CO-CHAIRMAN WILLIAMS indicated that giving hatchery fish to the               
 poor has been done is continually being done.                                 
 MS. SUTTON pointed out that one of the provisions of the bill is              
 that they have to demonstrate and do that very thing.                         
 Number 1415                                                                   
 REPRESENTATIVE IRENE NICHOLIA asked how much fish has to be given             
 away before this bill comes into place for wasting fish.                      
 MS. SUTTON asked, "To legalize wanton waste?"                                 
 REPRESENTATIVE NICHOLIA said in her view the bill would legalize              
 wanton waste.  She said we're giving permission for a hatchery to             
 waste fish.  She referred to fish being given away to people that             
 need it and asked how much fish would be given away and how much              
 would be wasted.                                                              
 MS. SUTTON said she couldn't answer the questions because the bill            
 doesn't specify those things.  There is criteria which must be met            
 and is stringent criteria to even qualify to do this.  These are              
 fish that would not otherwise not be harvested and would be wasted            
 in terms of them dying in areas.  They do not reproduce and they              
 would die in areas where, in the past, they have demonstrated                 
 environmental problems.                                                       
 Number 1500                                                                   
 REPRESENTATIVE NICHOLIA said, "Do you have any records or have you            
 done any research on if this has happened before - how much pounds            
 of fish were given away and to what area - to which place were they           
 given to and do you have any records like that?"                              
 MS. SUTTON said she personally doesn't have records, but noted                
 there are people in attendance who could perhaps give her                     
 information about fish that they have given away.  She said she               
 knows that there was some difficulty in Cook Inlet with attorneys             
 advising the Cook Inlet Aquaculture Association that it was not               
 recommended to give away fish that were not fit for human                     
 consumption.  She said these fish are the kind of fish the bill               
 addresses where the fish have deteriorated to the point where the             
 flesh is no longer fit for human consumption because of health                
 risks involved.  Ms. Sutton said, "But I know that for other fish             
 that have not deteriorated, perhaps to that point, and we have egg            
 and nolt (Sp.?) removal for brood stock that fish have been                   
 utilized and given away, but other folks would have to speak to               
 Number 1582                                                                   
 REPRESENTATIVE JOHN DAVIES said, "I'm a little bit confused it.               
 I've been trying to follow the bill at small section (b) on page 2            
 and (c) at the top of page 3.  We're talking about giving a permit            
 and it says that the fish we're talking about would be under little           
 (b), I guess it would be line 30, that they have matured to the               
 extent that the fish can't be sold or marketed profitably; and then           
 (5) says, `cannot be given away despite reasonable efforts to do              
 so.'  Then (c) it says before disposing of these things that we're            
 giving them to food banks.  I guess I'm just confused.  It seems              
 like we're talking about fish that are perhaps not fit human                  
 consumption, but we're still going to offer to give em away.  I'm             
 confused by what we're trying to do in these two sections."                   
 MS. SUTTON explained it goes back to the discussion she just had              
 with Representative Nicholia.  There are folks who say they don't             
 mind taking these fish in that condition.  The overriding intent of           
 the bill is to use fish which otherwise would not be utilized and             
 would have no value reaped from these fish.  She said she thinks              
 the committee will hear some public testimony that would shed more            
 light on his question.  She noted the Department of Fish and Game             
 has issued a public notice and published regulations for public               
 comment.  They have the same language in the regulations that they            
 have published for public comment.                                            
 Number 1734                                                                   
 REPRESENTATIVE NICHOLIA questioned that if these fish were going to           
 food banks and different places where they're feeding a 100 people,           
 who is going to foot the bill.  These different places barely have            
 money to stay open.                                                           
 MS. SUTTON said there are people from food banks and other                    
 organizations who have indicated that they'd be more than glad to             
 come and retrieve these fish if they're made available to them.               
 REPRESENTATIVE NICHOLIA said Ms. Sutton had stated that some of the           
 hatcheries are in trouble or are having problems and that is why              
 the bill is before the committee.  She asked which hatcheries they            
 are and where the locations are.                                              
 MS. SUTTON said she thinks that there are hatcheries all over the             
 state that are in trouble in one form or another, no differently              
 than commercial fishermen are in trouble, processors are in                   
 trouble, people who transport our fish are in trouble.  Support               
 industries are in trouble because of the downturn in the entire               
 Number 1852                                                                   
 REPRESENTATIVE OGAN referred to page 2, line 30, and said it talks            
 about fish that have deteriorated to the extent that the flesh                
 cannot be sold or marketed profitably.  He said this bill is                  
 essentially a roe stripping bill and the roe really isn't mature to           
 make into a product until the fish are mature.  He asked if they're           
 a darker less desirable when they're caught and used for this.                
 MS. SUTTON explained, "Normally when fish move to a terminal area             
 and they are either ready to spawn or -- and this is instance these           
 fish are not spawning fish, they're sort of put and take fish and             
 designed for that purpose -- they do mature and the roe actually              
 becomes more valuable at that point or it's more recoverable at               
 that point.  It's the same in herring fisheries.  They test                   
 continually for an opening on the maturity of the roe, and so that            
 is the case.  And these fish can only -- in this bill these fish              
 can only be harvested in special areas that are hatchery special              
 harvest areas, areas set aside that are at the very terminal...."             
 REPRESENTATIVE OGAN said, "Ya, I'm aware of that.  I guess what I             
 was leading up to that I essentially just -- one of these                     
 hatcheries or one of these areas could essentially hold off on                
 harvesting these fish and let them mill around out there in the               
 pond or out in the bay till they ripe enough to strip roe and then            
 essentially not harvest.  Just essentially manipulate it so that              
 they just would simply harvest the roe and dump the fish.  Is that            
 MS. SUTTON said that is not the intent of the bill.  There are                
 circumstances that happen.  We have no control over what happens in           
 nature.  There are years when fish return all at once.  No one                
 knows why.  There are years when they come in over short periods of           
 time.  It is certainly the desire of anyone who is involved in                
 fisheries to harvest these fish in a more orderly manner.  She said           
 that is not the intent of the bill and to her knowledge, there is             
 no one that she has spoke with who has that intent either.                    
 Number 1994                                                                   
 CO-CHAIRMAN WILLIAMS said, "The answer is that this isn't a bill to           
 do just that.  In fact, today the department can do what we're                
 saying through regulations and we will have the commissioner here             
 to talk about just that.  Maybe some of the questions can be                  
 directed to the commissioner on this."                                        
 Number 2017                                                                   
 REPRESENTATIVE BARNES said, "I want you to tell me again that the             
 department is promulgating regulations that would do what this bill           
 is doing and I want you to tell me under what authority that the              
 department has to do this."                                                   
 MS. SUTTON said, "We asked the same question of our legal services,           
 in terms of under what authority.  Their regulations that they're             
 attempting to promulgate do not exactly mirror the bill here, but             
 have very similar elements and I'm sure Commissioner Rue could                
 speak to that."                                                               
 REPRESENTATIVE BARNES said the bill is perhaps one of the worst               
 bills she has ever seen and to think that the department is trying            
 to promulgate regulation that we carry out the intent of the bill             
 is beyond her.  She said she doesn't think the department has, in             
 any way whatsoever, the power to promulgate such regulations.                 
 Number 2069                                                                   
 CO-CHAIRMAN WILLIAMS informed Representative Barnes the legislature           
 voted on this bill two years ago and it passed the House.                     
 REPRESENTATIVE BARNES indicated she didn't remember.                          
 Number 2100                                                                   
 FRANK RUE, Commissioner, Department of Fish and Game, was next to             
 address the committee members.  He said he would talk about the               
 philosophical underpinnings of the bill and where the department              
 would like to go.  Commissioner Rue explained there currently is an           
 existing statute on waste and it is very much more open for abuse             
 than HB 406.  He said the regulations the department is proposing             
 would tighten up the ability to waste fish.  Commissioner Rue                 
 indicated the department appreciates the attempt to tighten down              
 abuses of waste and waste of fish.  They think that is important              
 and conceptually, our fisheries throughout the state and in the               
 offshore areas needs to reduce waste.  He stated they are working             
 hard, through the Magnuson Act and other arenas, to reduce the                
 waste of fish.  Conceptually, he thinks it is very important, as a            
 state, that we reduce waste of fish and realize full utilization of           
 fish.  It is a resource that if we're creative we can find ways to            
 use heads, tails, etc., and make a profit.  Commissioner Rue said             
 he would suggest that there be more limited circumstances than the            
 current version of HB 406 would allow for - an exemption to a waste           
 statute.  He stated that is one area where he thinks the department           
 and the Administration would have a difference with this committee            
 bill.  Commissioner Rue said another area is he thinks that any               
 language for the commissioner allowing for an exemption to a waste            
 statute ought to be "may" for the very reasons that Representative            
 Ogan mentioned.  If there is a "shall," he has to give a permit,              
 but somebody sitting there letting fish mill around and they have             
 this permit, they may be abusing the statute.  He stated he thinks            
 there ought to be very limited circumstances and it should be, "May           
 authorize the disposal of carcasses."  Commissioner Rue said he               
 believes the enforcement provisions would be difficult to enforce             
 if someone were wasting fish.  He said the concept that they have             
 talked about is that for hatcheries, they would like to phase the             
 need to have to dispose of any carcasses.  He stated that as they             
 would like to phase out the need to have to dispose of any                    
 carcasses, they think that we need to find ways to use that                   
 product.  Commissioner Rue pointed out that there are circumstances           
 that hatcheries, because they are limited to very specific                    
 geographic areas and they can only harvest in those terminal areas,           
 they may not have a way to actually sell the fish.  The department            
 thinks that for hatcheries who can't fish out in the open water as            
 they aren't part of a common property fishery, they can't make                
 their cost recovery needs in that common property fishery.  They're           
 forced to fish in these terminal areas to get their cost recovery             
 back.  There may be circumstances where they can't sell the flesh;            
 however, the department thinks that they ought to be required to              
 try and sell the flesh and ought to be required to handle the fish            
 and offer it for use by the public.                                           
 Number 2280                                                                   
 REPRESENTATIVE ALAN AUSTERMAN said the original concept behind                
 hatcheries was to do an assessment on fishermen to (indisc.)                  
 hatcheries.  So the idea of taking of extra fish to pay for the               
 operation of the hatchery is something that has come up because of            
 the cost recovery aspect that was brought on because there was not            
 enough money from the assessments.  He asked if this is why we're             
 having to deal with the carcasses.                                            
 COMMISSIONER RUE noted Mr. Bruce was in attendance to help him with           
 that question.  He said the history of the hatchery cost recovery             
 goes past his experience as to when that first began because there            
 is an assessment.  Commissioner Rue asked Mr. Bruce when the cost             
 recovery kicked in.                                                           
 Number 2306                                                                   
 GERON BRUCE, Legislative Liaison and Special Assistant, Office of             
 the Commissioner, Department of Fish and Game, explained the cost             
 recovery portion was always a part of the nonprofit private                   
 hatchery program.  When the program was developed the intention of            
 it was to fund this program without it requiring general fund                 
 support.  There were two parts of that.  One part involved a salmon           
 enhancement tax which only some corporations get.  Other                      
 corporations do not get any of the salmon enhancement tax and those           
 corporations depend entirely on the cost recovery portion on their            
 cost recovery receipts to pay the cost of their operations.  It has           
 always been a part of the concept of this program.  It had three              
 funding sources.  Representative Barnes is correct as there were              
 very generous contributions from the state treasury that went into            
 establishing these programs.                                                  
 REPRESENTATIVE BARNES questioned how much in contributions where              
 there in state treasury contributions.                                        
 MR. BRUCE indicated he couldn't currently answer that question, but           
 he could generate some figures.  He noted it would be a hefty                 
 Number 2351                                                                   
 CO-CHAIRMAN WILLIAMS added that the fishermen did take those                  
 hatcheries out of the state's hands and are making them work.                 
 COMMISSIONER RUE said their concept is to narrow the times when               
 they would have to use this.  He said they do not condone the idea            
 of waste and they do not want to go in that direction.                        
 Commissioner Rue noted the department is not running any commercial           
 hatcheries, just sport fish hatcheries at this point.  It is the              
 nonprofit organizations that are contributing to the common                   
 property fishery.  Commissioner Rue said there should be some                 
 limited situations where you might allow a hatchery operator to               
 dispose of fish and that would be after they tried to sell or give            
 them away.  There is the fact that they do benefit the common                 
 property fishery.                                                             
 Number 2395                                                                   
 REPRESENTATIVE DAVIES asked if the nonprofit corporations are                 
 forbidden from operating common property fisheries.                           
 COMMISSIONER RUE answered in the affirmative.  He said the                    
 fishermen provide fish to the common property fishery, but they are           
 benefitting and selling hatchery caught fish.  The hatchery                   
 operators are not out there.  They are making their money from the            
 enhancement tax.                                                              
 REPRESENTATIVES DAVIES asked if they are forbidden from doing that.           
 COMMISSIONER RUE answered in the affirmative.  He noted the                   
 department restricts them to terminal areas so they're not fishing            
 on wild stocks.  He said you don't want the cost recovery to be               
 interfering with the wild stocks.  You want the hatcheries to be              
 harvesting hatchery stocks and not wild stocks.                               
 CO-CHAIRMAN WILLIAMS said, "For the information of the committee              
 members, this bill was introduced to help the fishermen.  We've               
 been helping the oil people, in fact we're having North Star oil              
 right after this bill is taken care of.  As you all know what the             
 fishermen are up against today and we have to find ways to help the           
 fishermen.  Give em incentives to go out there.  We probably will             
 not have a fishery this year if it keeps up the way it is.  This              
 type of bill is to help the fishermen.  If we can get away from who           
 put the most money into it and why, and focus on the direction that           
 we're trying to go with this - to help the fishermen gain more out            
 of the fish that is dying and dead and not helping the industry in            
 any way.  I would hope that this committee can do that."                      
 TAPE 96-63, SIDE B                                                            
 Number 001                                                                    
 COMMISSIONER RUE responded to a question asked by Representative              
 Barnes.  He said he agrees that we need to help fishermen, but he             
 isn't sure that allowing the fishermen as opposed to the hatchery             
 operators, to get exemptions for wasting fish is a good idea.  One            
 reason is they do get to fish in the common property fishery                  
 outside the terminal areas.  Commissioner Rue noted the state is              
 looking at ways to get through this year where the prices are low             
 by working with processors and having the department's management             
 help to make sure that the fishermen get fish that are marketable.            
 He said he thinks by keeping the hatcheries alive, it will help the           
 fishermen in Southeast and Southcentral Alaska because they do put            
 fish out into the common property fishery.                                    
 CO-CHAIRMAN WILLIAMS said this is a transition and he believes we             
 have to look for ways to get the fish (indisc.) and look for other            
 creative ways to use the carcasses that are not marketable.  He               
 said today we have 4 million cases of salmon in storage areas and             
 by June 1, we'll have 1.5 or 1.7 million.  The processors are                 
 telling us that they are not going to buy pink salmon.  He asked              
 what we are going to do with them.  He said if we can help the                
 fishermen through this crises the bill should be passed.                      
 Number 097                                                                    
 REPRESENTATIVE DAVIES referred to river fisheries and said we have            
 commercial fishers who harvest fish.  He asked if we allow any                
 waste of these fish.                                                          
 COMMISSIONER RUE responded that we don't.  We allow the taking of             
 roe, but they have to use the carcass for food.                               
 REPRESENTATIVE DAVIES asked why we don't make the same requirement            
 for the hatcheries.  If they're going to use the roe, why don't we            
 require them to utilize fish in the same way it is required for the           
 up river fishermen.                                                           
 COMMISSIONER RUE said, "I would not have fishermen given an                   
 exemption for a couple of reasons.  One, I wouldn't want to create            
 a group of folks at that gets larger and larger and demands that              
 they'd be allowed to discard carcasses and just harvest the roe.              
 It's not the direction we want to go with all our fisheries.  But             
 with the hatcheries, they're somewhat different than the river                
 Number 139                                                                    
 CO-CHAIRMAN WILLIAMS asked him to explain why he doesn't want to              
 get the fishermen involved in this.                                           
 COMMISSIONER RUE said he believes that currently there are                    
 approximately 40 fishermen who have, as processors under the                  
 present law which allowed a potential exemption to processors under           
 an earlier interpretation of the currently law, who have done this            
 in the past - who have used the roe and discarded the carcasses.              
 He said he believes that if you allow too broad of an exemption,              
 you will have more fishermen participating.  If said he would be              
 concerned if we created a large group of fishermen who depend on              
 the sale of roe and are allowed to discard the carcasses.                     
 Commissioner Rue said he thinks we need to use the carcasses.  He             
 pointed out that the only difference between the river fishermen              
 and the hatcheries is the fact that the hatcheries can only catch             
 fish from a very constricted area where the fish are way at the end           
 of their life cycle when they have been milling for a long time, as           
 opposed to a river fishermen who can still catch them when there in           
 good shape and marketable.  He noted they are going to have trouble           
 finding markets as well.                                                      
 Number 200                                                                    
 REPRESENTATIVE DAVIES referred to the fish that mill around in                
 terminal areas and asked what happens to them if the hatcheries               
 don't take them.                                                              
 COMMISSIONER RUE explained they would die and be eaten by crabs or            
 whatever.  He noted the hatcheries have to try and sell them.  He             
 said in the regulations the department is proposing under the                 
 current law, hatcheries would have to handle the fish, try and sell           
 them and if they couldn't sell them they would have to try and give           
 them away.  He said the department wants to encourage the                     
 utilization of these fish.                                                    
 REPRESENTATIVE DAVIES asked how the fish carcasses would be                   
 disposed of.                                                                  
 COMMISSIONER RUE said he would imagine that they would be barged              
 out or taken out on a tender offshore under the Department of                 
 Environmental Conservation (DEC) regulations.  They would need to             
 get a permit from DEC to discard the carcasses.                               
 Number 253                                                                    
 REPRESENTATIVE OGAN said he is hearing a couple of different                  
 things.  He is hearing that this bill was introduced just in case             
 there is some fish they can't get rid of.  He said, "I'm hearing              
 another thing saying that well it's because we're not going to be             
 selling any fish that we're letting them do this.  So it appears to           
 me that the intent is to, with this year's harvest at least - you             
 know allow this procedure.  We also heard testimony that you are              
 currently drafting regulations to do this and this statute was                
 pretty much taken out of regulation.  Do you have the authority I             
 guess, you know -- Representative Barnes was asking do you have the           
 authority to do this and if you do have the authority, then why               
 don't we just draft some emergency regulations for a year or two to           
 - you know, allow this roe stripping to go on and, you know, on               
 hatchery fish only and -- it's a long question but....                        
 Number 301                                                                    
 COMMISSIONER RUE said he thinks the reason for a statute, whether             
 or not we agree on all the parts of it, is the current statute is             
 ambiguous.  The Department of Law, at one point, gave an informal             
 opinion that processors were exempt from the waste law.  They later           
 interpreted it that you can bring processors under it.  Fishermen             
 were getting processor licenses and discarding the carcasses.                 
 Commissioner Rue said the department doesn't want that to happen.             
 He said it needs to be tightened down.  So a statute that tightens            
 down the current waste law is needed.  It also needs some other               
 housekeeping fixes to allow, for instance, to use some salmon for             
 bait.  If a hatchery has the fish that they use for egg take, that            
 because they've handled they might not be able to sell them.                  
 Technically you're not allowed to use them for bait, but in Alaska            
 people have been using them for bait forever.  He stated there are            
 some technical reasons why we need a law that's better.                       
 Commissioner Rue said the promulgation of regulations would be one            
 way to handle this.                                                           
 Number 391                                                                    
 STEVEN DAUGHERTY, Assistant Attorney General, Natural Resources               
 Section, Civil Division, Department of Law, came before the                   
 committee.  In referring to the authority issue, Mr. Daugherty said           
 under AS 16.05.831 (c) it states "A person who violates this                  
 section or regulation adopted under it is punishable by a fine of             
 not more than $10,000 or imprisonment for not more than six months            
 or by both..."  He said there isn't a direct statement that says              
 the commissioner has authority to adopt regulations.  This is an              
 implied authority because it says that a person who violates this             
 section or regulation adopted under it.  That gives the                       
 commissioner implied authority to adopt regulations to implement              
 and interpret this section.  Mr. Daugherty pointed out that is a              
 rather old statute and does not have the language that we use today           
 directly granting the authority, but that authority is implied in             
 the existing statute.  The commissioner is also relying on the                
 general authority of the commissioner to do things that are                   
 necessary to implement the statutes, etc., under AS 16.05.020,                
 which is the general grant authority and the functions of the                 
 commissioner to manage, protect, maintain and improve the fish and            
 game and aquatic resources of the state for the interest of the               
 economy and general well-being of the state.  Mr. Daugherty said              
 the Department of Law believes that the commissioner does have the            
 authority to adopt regulations to implement and interpret this                
 section.  They believe these regulations are necessary because of             
 enforcement problems with the current statute, which is very                  
 ambiguous.  The Department of Law has issued an opinion on the                
 interpretation of this.                                                       
 Number 509                                                                    
 REPRESENTATIVE AUSTERMAN asked Mr. Daugherty if he is saying that             
 the Department of Law is interpreting AS 16.05.831 (c) as the                 
 authority to change the existing statute by regulation.                       
 MR. DAUGHERTY indicated that is incorrect.  He said they are saying           
 that the commissioner has authority to implement and interpret the            
 existing statute.  The commissioner does not have authority to do             
 anything that is inconsistent with the existing statute.                      
 REPRESENTATIVE AUSTERMAN asked if the ability of a fisherman right            
 now to get a processors license and strip roe is strictly in                  
 MR. DAUGHERTY explained that there currently is nothing that                  
 authorizes a fisherman to get a processing license and go out and             
 strip roe.  He said the opinion that the Department of Law issued             
 on the interpretation of this statute, as it currently exists, is             
 applicable to all persons including processors.  There is a                   
 possibility under the existing law for the commissioner to                    
 authorize roe striping.  There have been some authorizations in the           
 past for hatcheries.  There may have been other authorizations, but           
 AS 16.05.831 (b) provides that the commissioner, upon request, may            
 authorize other uses of salmon that would be consistent with the              
 maximum and wise use of the resource.  Mr. Daugherty explained this           
 is the section that has been used in the past to authorize some roe           
 striping by hatcheries under conditions similar to those that the             
 commissioner has talked about attempting to sell the fish,                    
 attempting to give the fish away and then having to dispose of the            
 carcasses in compliance with all the applicable federal and state             
 regulations.  At this time there is nothing in regulation or                  
 statute that would allow someone to go out and get a processing               
 license and strip roe.                                                        
 REPRESENTATIVE AUSTERMAN said he thought that was what was                    
 currently happening.                                                          
 MR. DAUGHERTY explained at one point, the Department of Fish and              
 Game was telling people that they did not believe that this law               
 applied to processors, so fishermen were going out and getting                
 these processing licenses and were stripping roe.                             
 REPRESENTATIVE AUSTERMAN asked if we currently have a different               
 MR. DAUGHERTY indicated that is correct.  He said the department              
 went back and looked at the legislative history for this bill and             
 that history indicated that is law was intended to prevent waste of           
 salmon.  It wasn't intended to allow someone to go out and waste              
 salmon just because they had a processing license.                            
 REPRESENTATIVE AUSTERMAN said depending on which lawyer you're                
 talking to, you get one interpretation or another.                            
 Number 645                                                                    
 COMMISSIONER RUE explained the current law is ambiguous and people            
 read it differently.  He said he would applaud any effort to try              
 and clarify that statute and make it clear as to what the intent              
 Number 667                                                                    
 REPRESENTATIVE LONG said he has a problem with some of the                    
 statements that have been made.  He said his reading of the bill              
 indicates that Commissioner Rue will be issuing a permit to discard           
 carcasses of pink or chum salmon.  He said there is not authority             
 to strip roe from those carcasses other than the commissioner would           
 issue another permit on top of a salmon permit, interim use permit            
 or even hatchery permit, just to discard those fish.                          
 COMMISSIONER RUE said he has taken a quick look at the bill, but              
 they haven't done a detailed analysis of some of those specific               
 questions.  He said he has talked about some of the concepts the              
 department agrees with in the idea of tightening down the waste               
 statute and some of the concepts that he thought the department               
 didn't disagree with which was the broadness and enforceability of            
 it.  He stated he has not looked at the details of the bill and how           
 it is structured.  Commissioner Rue referred to the requirement               
 that he has to issue a permit if someone meets all the                        
 qualifications and said that is another conceptual issue for him.             
 REPRESENTATIVE LONG said he was trying to get to Commissioner Rue's           
 interpretation of the reading of the bill and what the sponsor's              
 intent is.                                                                    
 Number 736                                                                    
 COMMISSIONER RUE explained his interpretation is that it is trying            
 to allow for the use of the roe when you can't sell or give away              
 the carcass.  He said that is his understanding of the intent of              
 the bill.                                                                     
 CO-CHAIRMAN WILLIAMS stated that is the intent of the bill.  He               
 said, "You keep saying you don't want anymore fishermen involved in           
 this roe stripping.  Maybe if you could say it a different way                
 maybe it might come in this time commissioner.  You haven't given             
 me reason yet - at least I haven't heard it."                                 
 COMMISSIONER RUE said, "Here is why I would limit it to just                  
 hatcheries rather than fishermen.  Fishermen have the opportunity             
 to fish in the common property fishery outside of these terminal              
 harvest areas.  We are trying to reduce the waste of the resource,            
 not encourage the discarding of salmon carcasses as opposed to                
 hatcheries who are very limited in where they can get their fish              
 plus our nonprofit organizations that contribute a lot to the                 
 common property fishery.  So I see fishermen as a different kill of           
 fish, if you will, not that they  aren't having trouble this year             
 and we were doing what we can to help.  The other thing is I think            
 for fishermen, right now, when we're trying to change the Magnuson            
 Act to sustain offshore fisheries and reduce waste, we don't need             
 salmon fishermen accused of wasting fish.  The Canadians would love           
 more excuses to beat up on us - to, you know, cut back our harvest            
 of fish by using `Gee whiz, they're just throwing fish away,' but             
 we're not talking about the same fish and it's not the same issue,            
 but I don't think the fishermen need that perception thrown at them           
 either.  And I also am concerned that we would start creating a               
 larger class of people who have come to depend on just using the              
 roe and not using the carcass, and the pressure would be to                   
 continue that practice rather than the pressure there to try and              
 find a good use for those carcasses.  I would rather see the                  
 pressure on finding a use for the carcass, whether it be fishmeal,            
 protein, you know, different processing techniques.  There are lots           
 of different ways that that raw resource can be used.  So I'd                 
 rather have the pressure that direction than the pressure the other           
 Number 862                                                                    
 CO-CHAIRMAN GREEN said we've heard that the roe is enhanced the               
 older the fish get, yet by the same token, the fish meat is at or             
 beyond its peak.  He asked what amount of time there is so that the           
 carcasses could be utilized in some other fashion.                            
 COMMISSIONER RUE explained it is a continuing scale.  At some                 
 point, the marketability is going to go way down and at some point,           
 people's willingness to accept the fish will go down.  You would              
 have to look a the individual situation and that's part of the                
 reason he thinks it shouldn't be mandatory situation where he has             
 to give them a permit.                                                        
 CO-CHAIRMAN GREEN said at some period of this roe harvest, the                
 value of the fish would go beyond "can able" to something that                
 would have to be used as fishmeal or fertilizer or something other            
 than edible.  He asked if the canning of the fish would even be a             
 COMMISSIONER RUE stated that at some point it does not do well in             
 a can.                                                                        
 CO-CHAIRMAN GREEN asked if that would be right in the middle of               
 this roe harvesting period.                                                   
 COMMISSIONER RUE explained there are probably other people in                 
 attendance that could probably answer that question better than he            
 could, but at some point towards the tail end when the fish had               
 been there for a long time, at some point they will not be suitable           
 for a can.                                                                    
 Number 961                                                                    
 REPRESENTATIVE AUSTERMAN said one of his concerns with the bill is            
 at what point in time do you allow those fish to get to where                 
 they're prime roe fish and when they become prime roe fish, they              
 are no longer good fish.  He said with a bill that is geared toward           
 roe fishing, his concern is do you let those fish come in at $5.50            
 a pound for roe or 20 cents a pound for fish.  There will be some             
 tendency to take the roe.  Once the roe is really prime, the fish             
 are no good.                                                                  
 CO-CHAIRMAN WILLIAMS said his concern is that it isn't going to be            
 an ongoing process and we know that.  It can stop at any time.  He            
 said to tell when it is a prime roe fish is could be you pick it up           
 and in the middle it bends down and touches it's tail to the head.            
 It's soft and they're going to die.  As the commissioner said, some           
 of the fish die in the terminal areas today and that's rotten                 
 waste.  Co-Chairman Williams said he has been talking to the                  
 commissioner for about two months about this issue.  He said he               
 still doesn't by the commissioner's argument about not letting the            
 fishermen go into the terminal areas for this season.  Co-Chairman            
 Williams referred to the Pacific Salmon Treaty and said he believes           
 it is probably the commissioner's best argument.  He said he still            
 hasn't bought the argument on why the fishermen can't be a part of            
 this process.                                                                 
 Number 1094                                                                   
 REPRESENTATIVE OGAN read from page 3, line 8, "A permittee is not             
 required under this subsection to transport the salmon to a                   
 location other than the permittee's normal place of business; or a            
 point of landing in the vicinity of the place where the salmon are            
 harvested; or preserve or process the salmon."  He said it seems to           
 him that there would be no incentive or motivation.  Essentially              
 what they've got to do is notify the public that they can jump in             
 their boat and come out to the area where they're harvesting these            
 fish at the hatcheries and pick up the fish if they want them.                
 They don't have to be delivered.  They would have to arrange                  
 transportation from the hatchery if they want these fish.                     
 CO-CHAIRMAN WILLIAMS said the hatchery located in downtown                    
 Ketchikan puts out the word that there will be these carcasses                
 available and people come and get them.  He noted these are black             
 king salmon.                                                                  
 REPRESENTATIVE OGAN said some of the hatcheries are only accessible           
 by a boat or seaplane.                                                        
 CO-CHAIRMAN WILLIAMS stated what he is trying to do with the bill             
 is help the fishermen.                                                        
 Number 1248                                                                   
 REPRESENTATIVE AUSTERMAN explained the original concept behind the            
 hatcheries was (indisc.), they catch them and they take eggs and              
 milt and then let more fish come back.  He referred to the                    
 carcasses from that process and asked if those carcasses are dumped           
 at sea with a DEC permit.                                                     
 MR. BRUCE referred to the brood stock carcasses and said there is             
 a specific exemption in regulation for them and they do not have to           
 be consumed or used.  They can be disposed of considering the                 
 advanced state of sexual maturity and deterioration that they are             
 in.  Mr. Bruce said that they are offered for bait and one or two             
 hatchery corporations, over the course of time, have actually tried           
 to can them.  They actually ran into concerns from the canning                
 industry and regulators in that they were putting up a product that           
 wasn't unwholesome, but was a product that was so altered from what           
 you think of when you think of canned salmon.  It almost consisted            
 of misrepresentation of the product as it was almost more like a              
 juice, so they stopped doing that.                                            
 Number 1322                                                                   
 REPRESENTATIVE AUSTERMAN asked if there has been any current                  
 requests from the hatcheries to process any of these fish for                 
 canning or freezing them for resale.                                          
 COMMISSIONER RUE said he doesn't think there would need to be a               
 request.  If they want to use them, they can use them.  They could            
 can them as part of their cost for (indisc.) effort.                          
 Number 1366                                                                   
 CO-CHAIRMAN WILLIAMS informed the committee the department does               
 have management control over the issue of where the opportunities             
 may be.  He said he hopes the department keeps in consideration               
 what fish die in the terminal areas.                                          
 REPRESENTATIVE OGAN asked Commissioner Rue what the department's              
 position is on the bill.                                                      
 COMMISSIONER RUE said the department appreciates the effort to                
 narrow the current ambiguous waste law because they think it can be           
 abused in more ways than the public would want.  He said they                 
 appreciate the effort, but there is three areas where the                     
 department would have a difference.  One is to include fishermen as           
 being eligible for an exemption.  The second would be the mandatory           
 nature of giving a permit if someone met the criteria and then                
 having to do an executive order to stop the waste or discard from             
 happening.  The third is the enforceability language.  Currently,             
 you would have to knowingly and wantonly, etc., which would be more           
 difficult to prosecute a waste with that kind of language in it.              
 Commissioner Rue explained the biggest issue is including the                 
 larger arena of fishermen as also being able to discard fish.                 
 Number 1455                                                                   
 CO-CHAIRMAN WILLIAMS said he wishes Commissioner Rue would come up            
 with a stronger argument as to why the fishermen can't be included            
 in this.                                                                      
 COMMISSIONER RUE noted another reason is that he is sure that the             
 sports fishermen, who are pushing the fish initiative, would love             
 to use this as another reason to bash on the commercial fishermen.            
 Number 1545                                                                   
 KAY ANDREW, United Southeast Alaska Gillnetters Association,                  
 testified via teleconference from Ketchikan in support of CSHB
 406(RES).  She said she would like to speak in favor of the bill              
 because of the proposed regulating by the Department of Fish and              
 Game.  Ms. Andrew said the fishermen would be left out of the                 
 ability to market their eggs taken from terminal fisheries that are           
 possibly not fit for human consumption.                                       
 MS. ANDREW explained she doesn't feel the state should play the               
 game that it is O.K. for some people to do egg roe, but not others            
 including processors, fishermen, hatcheries, etc.  This is a ploy             
 by the processors to limit the egg market.  She said fishermen pay            
 3 percent of their gross to raise hatchery fish and they should be            
 allowed to market these fish in whatever manner they can get.  If             
 the fishermen cannot compete on the market for their fish, they               
 cannot expect to get any kind of a price for the product.  We need            
 to remember that the fishermen are responsible for whatever the               
 state has loaned the hatchery programs and if these hatcheries                
 close tomorrow, the fishermen would still have to pay 3 percent               
 until these debts are paid.  So (indisc.) are getting something for           
 free from the state is unfounded.  These fish are not left to mill            
 outside the terminal area until these fish are roe ready.  These              
 fish are caught going through all fisheries, commercial, sport,               
 subsistence and personal use fisheries, before they reach the                 
 terminal area.                                                                
 MS. ANDREW said, "According to Mr. Rue, we should not be able to              
 utilize our own fish.  The Governor seems to be saying he is                  
 against commercial fishermen.  What difference would it make if               
 these fish are not marketable to let us take the roe?  Well I'll              
 tell you, the processors don't want us competing with them.  The              
 governor, through the commissioner, is telling us he is favoring              
 the processors.  Does the state not have a limited entry fishery on           
 the Yukon River that allows these fish to be supposedly used for              
 dog food?  I'm sure some of them argues for dog food.  In sitting             
 on the Board of Fisheries a few years ago I heard testimony from              
 the people along the Yukon River of the carcasses packed high along           
 this river bank simply striped of roe.  So there is waste there.              
 And why is it?  Because they can't sell those carcasses.  They're             
 not marketable.  They're not fit for human consumption.  What would           
 the commissioner suggest we do with the terminal fisheries areas if           
 there is no right cost recovery in.  He stated that we have the               
 ability to fish in the common property fishery to catch these                 
 hatchery fish, but not all terminal harvest fisheries are utilized            
 by the hatcheries for cost recovery.  What a (indisc.).  They die             
 and they become, as he stated, crab food.  So why can't we be                 
 allowed to take fish and utilized what we can out of this crab food           
 and feed the crab with what's left that's not fish for human                  
 consumption.  I think this would be a waste to let them all die in            
 a terminal harvest area not be able to utilize them.  I don't                 
 believe that it's fair to the fishermen in the state of Alaska to             
 not utilize fish to its fullest extent and, therefore, I don't                
 think it's fair to shove the fishermen out of a way to market that            
 fish that we pay for.  In closing, I'm sure that the fish                     
 initiative would like to use this.  I'm sure U.S./Canada would like           
 to use this, but I don't think it has anything to do with                     
 U.S./Canada or the fish initiative - either one.  We're talking               
 about hatchery fish that are paid through a program of 3 percent              
 that the commercial fishermen pay for.  So I would like you to very           
 carefully to think about this CS.  It is right in line with what              
 the department is going to present to you as regulation.  The only            
 difference is it includes the fishermen instead of excluding the              
 fishermen.  Thank you very much for your time."                               
 Number 1840                                                                   
 RUDY FRANULOVICH, Fisherman, was next to testify via teleconference           
 from Ketchikan.  He said he has gillnetted salmon in Southeast                
 Alaska for 27 years.  Mr. Franulovich said he believes CSHB
 406(RES) is a good bill.  It addresses hatchery fish only.  No                
 common property wild stock salmon can be wasted with this bill.               
 Fishermen fish in terminal areas only for these salmon and when the           
 salmon arrive in terminal areas, the quality is so poor that many             
 processors refuse to purchase them.  He stated he fishes for EC               
 Phillips in Ketchikan and for the last seven years, they have                 
 refused to purchase terminal hatchery fish from him.  Mr.                     
 Franulovich said he is in favor of the legislation because it gives           
 him and others the opportunity to utilize these hatchery (indisc.)            
 fish.  He thanked the committee for listening to his testimony.               
 Number 2183                                                                   
 DAVID LAWLER testified via teleconference from Ketchikan.  He said            
 he gathers that many of the committee members really don't                    
 understand what is happening with the salmon market this season and           
 said he would like to inform them about that.                                 
 MR. LAWLER said, "During 1996, we've set to harvest about ten                 
 million chums in Southeastern Alaska alone.  Most of these are                
 hatchery produced chums.  Tradition chum production is only about             
 nine million statewide.  Because of this the market for dark red              
 meat in chums, frozen, has declined to below 40 cents a pound which           
 is also below the cost of production.  No value whatsoever                    
 particularly exists for small (indisc.) chums.  Our local fall                
 chums from (indisc.) are 80 percent or more pale meated even in the           
 common property fishery.  I know this because I do meat color                 
 analysis.  I'm a processor and I've air freighted and trucked fish            
 to Seattle for about 12 years now.  Waste is an issue of biology              
 and economy.  (Indisc.) to find that allowing fish surplus                    
 (indisc.) allowing them to die and rot at the terminal area.  How             
 can fertilization and addition of nutrients to the food chain be              
 called a waste?  I don't understand that.  When buyers for salmon             
 do not exist, we should utilize as much of the salmon as possible             
 where conservation and good management allows and dictates the need           
 to harvest those fish.  At this time, two out of three of the                 
 buyers of our local salmon at Tree Point do not buy any terminal              
 area chums.  What I want the committee to answer to me is `Where              
 are the boats going to sell their fish?'  They can't fish.  The               
 state law allowing striping only by licensed processors should be             
 kept in tact.  ADF&G (Alaska Department of Fish and Game) reporting           
 and raw fish reporting and required this.  I believe, however, that           
 catcher vessels should be allowed to scatter carcasses and be                 
 exempted from grinding.  What harm does dumping of undesirable                
 salmon cause.  Who stands to gain by this new law.  I (indisc.)               
 small business (indisc.) the fishermen as well as certain                     
 processors.  The supply of salmon is bountiful.  Let waste be                 
 defined or define itself in the marketplace.  What cannot be                  
 marketed should not be totally wasted.  Harvestable salmon left               
 uncaught are a waste.  The salmon egg market is drawing and prices            
 are rising.  The egg (indisc.) should not be wasted.  It is the               
 (indisc.) chum salmon (indisc.) price.  In Southeastern Alaska, the           
 chums will pay the 1996 season.  I want the commissioner to tell me           
 does he expect the fishermen to go broke?  Maybe we should make it            
 unprofitable to be a commissioner of Fish and Game.  Times are bad            
 enough in the salmon industry without further (indisc.--coughing)             
 restriction where no harm is being done.  The status quo should be            
 maintained and I want to reiterate that I don't see where any harm            
 is being done.  You can't sell those salmon now if you want to sell           
 them.  If the commissioner wants to adopt a regulation compelling             
 salmon marketers to by salmon for a profitable price, he certainly            
 can try and do it but it won't work.  There is no market for those            
 fish.  I repeat `There is no market for chum salmon.'  Thank you."            
 Number 2177                                                                   
 REPRESENTATIVE AUSTERMAN said if there is no market, why are we               
 raising them in hatcheries?                                                   
 MR. LAWLER said he appreciates that question.  He explained supply            
 and demand dictates markets.  Back when the hatcheries were                   
 promulgated and put into being, this situation did not exist.  Now            
 this situation exists.  He said he appreciates the commissioner's             
 viewpoint on the utilization of salmon.  We all would like to                 
 utilize salmon.  Mr. Lawler said we're not against utilization of             
 salmon, but at this time no market exists for dark chum salmon.  It           
 is a very very bad market situation.  The market for pink salmon is           
 saturated and numerous processors have put their fleet on notice              
 that they're not going to buy pink salmon for the prices that they            
 usually pay.  In fact, the price of pink salmon this year is                  
 projected to be less than what he believes is profitable for the              
 local seiners to fish for - about 6 cents to 8 cents.                         
 Number 2269                                                                   
 JOHN CHILDS, Commercial Fisherman, testified via teleconference               
 from Fairbanks.  He said he is a commercial fisherman on the Tanana           
 River.  The price of their roe dropped drastically last year do to            
 the roe striping in Southeast Alaska.  He said he was told that               
 over 485,000 pounds of roe was striped in the hatchery located in             
 Ketchikan and 100,000 pounds of roe was striped in the Juneau area.           
 That is more than the entire Yukon River drainage.  Mr. Childs                
 explained their permits are becoming worthless because of this                
 practice.  He said he sells all of his carcasses to dog mushers.              
 Mr. Childs noted he lost a few of his customers last year because             
 the mushers got fish for free from the hatchery stocks.  The                  
 practice of striping roe and throwing fish away is very wasteful.             
 It was stopped in the pollack fishery and should not be allowed in            
 the salmon fishery.                                                           
 Number 2375                                                                   
 JERRY MCCUTCHEON was next to testify via teleconference from                  
 Anchorage.  He stated he thinks fish should be totally processed.             
 Mr. McCutcheon said he thinks it is hilarious that the hatchery               
 people are looking for special privileges.  He said the committee             
 should take a look at the law and see how the hatchery section has            
 been designed by the people.  Mr. McCutcheon informed the committee           
 if he could get into the hatchery business, he would love to fully            
 utilize the fish, but he doesn't want to fight the politics that is           
 involved in it.  Mr. McCutcheon said the state, the hatchery people           
 and the fishermen's hatchery people are equally incompetent.  The             
 state has had approximately 30 hatcheries and only three of them              
 every made any economic....[END OF TAPE]                                      
 TAPE 96-64, SIDE A                                                            
 Number 001                                                                    
 MR. MCCUTCHEON said, "....it's like Exxon having to go get                    
 permission from Arco to operate in Alaska.  It's exactly it because           
 you've got (indisc.) and those people and you got to go before them           
 to do anything at all and they'll absolutely screw you every way              
 (indisc.), yet they can't operate their own hatchery.  You should             
 have no problems with the hatchery that they have down there at               
 Ester Island.  That shouldn't be a problem.  Ladd McCauley was                
 selling his spawned out fish out of Sheep Creek for more money than           
 the fishermen were getting for their brights.  You gotta know what            
 your doing and they just don't and you shouldn't give them any                
 special privileges - none.  You really need to go back and look at            
 the section having to with hatcheries and the licensing of                    
 hatcheries and get the Fishermen's Association completely out of it           
 and limit it to the state.  The same, you ought to get the state              
 out of it as much as you can because you have a nest of people who            
 don't want anybody to get anything.  For example, a hatchery pond,            
 Warm Springs Bay.  The state had a big grand proposal, I looked at            
 it and they didn't want it anymore - that's it."                              
 Number 147                                                                    
 KEVIN MCDOUGALL, Commercial Fisherman, came before the committee to           
 give his testimony.  He explained he is a commercial fisherman in             
 Southeast Alaska, he pays the 3 percent enhancement tax, he does              
 catch hatchery fish and has been involved and around this issue for           
 about five years.  Mr. McDougall explained the reason he got                  
 involved with this whole process is that he started out five years            
 ago catching chum salmon in a common property fishery and when he             
 went to deliver them to the local processor, and when he looked at            
 his check after delivering 10,000 pounds of fish, he realized he              
 couldn't do this the following week.  Mr. McDougall said he made              
 phone calls to markets in the Lower 48 and found markets for chum             
 salmon.  He said he then found out that there was a byproduct,                
 salmon roe, and sold that also.  That worked great for several                
 years until the market for the chum salmon collapsed.  At this                
 point, he can go out and catch a chum salmon at any location, clean           
 it and send them to Seattle and not make a profit on it.  Mr.                 
 McDougall said there will be processors buying chum salmon and we             
 don't what the price will be.  At a low ball price of 15 cents a              
 pound that will be paid to the fishermen, the processors will lose            
 money on those salmon marketing them fresh into the marketplace.              
 MR. MCDOUGALL informed the committee he is in support of CSHB
 406(RES) because it doesn't deal with wild stock.  It is anadromous           
 fish that is coming back to a remote release site.  These fish are            
 supposed to be harvested at a rate of 100 percent.  Mr. McDougall             
 explained that in Sitka, there is a remote release site that will             
 have fish coming back this summer.  He said, "I have paid for these           
 fish when I arrive there.  I will not have a market as I did not in           
 1994.  I will not be able to sell to any of the traditional                   
 processors because they will have a processing glut like they did             
 two years ago.  I am also trying to be excluded from being able to            
 access the roe.  This is the only opportunity I have to make any              
 money on these fish that I have been taxed to raise."                         
 Number 431                                                                    
 REPRESENTATIVE AUSTERMAN said he is a lifetime resident of Alaska,            
 has been involved in the industry and understands the industry very           
 well.  He stated he totally supports the industry, but there                  
 becomes a limit in time when even the grocery store owner doesn't             
 order in bananas anymore because nobody is buying them.                       
 Representative Austerman said he guesses that is what his point is            
 on when he asked Mr. Lawler why we're still producing chums.                  
 MR. MCDOUGALL said he is glad Representative Austerman is asking              
 him that question because he thinks that the issue there is still             
 a great economic value here for the hatcheries and for the salmon             
 at this point.  He said he agrees with what Ms. Sutton stated                 
 earlier.  Mr. McDougall said he thinks we are in very much of a               
 crises now and that he hopes we can come out of it.  Currently,               
 there is great value in these fish, but it's not in the flesh, it's           
 in the roe.  He said the processors will buy a male chum salmon               
 from him, they need to have access to the roe.  There is great                
 value there.                                                                  
 Number 555                                                                    
 REPRESENTATIVE AUSTERMAN pointed out that a gallbladder of a brown            
 bear has great value, but we don't raise brown bears to get their             
 gallbladders and yet we're raising salmon to get their eggs.  There           
 is a little bit of a difference there, but there is some                      
 MR. MCDOUGALL said he thinks it was never intended that we were               
 going to raise fish for eggs, but we've come to this crises in the            
 marketplace and now we have an opportunity to extract something.              
 He said he understands all the issues regarding the waste and he              
 sympathizes with those things, but it is hard to listen to the                
 commissioner and the Administration to say that it's going to be              
 legal to take a salmon and grind it into fertilizer or fishmeal,              
 but if we put it in the water then it becomes waste.  The fishermen           
 needs some help here.  The industry needs help, he concluded.                 
 Number 653                                                                    
 CO-CHAIRMAN WILLIAMS said these hatcheries were put in when there             
 was a demand for fish.  Today the markets have gone because the               
 farmed fish took over a lot of the market.  Co-Chairman Williams              
 said what we're trying to do today is help the fishermen through              
 this short period of time so that the fishermen might adjust to the           
 changing market.  Co-Chairman Williams said about six years ago,              
 humpies were going for about $1.05 per pound and the sockeye were             
 going for $5 or $6 per pound.                                                 
 Number 710                                                                    
 REPRESENTATIVE BARNES said she would submit to the committee that             
 there is no lack of a market for the fish as she knows there are              
 people in Taiwan and China who are just dying to buy our fish.  The           
 problem is she can't find anybody to sell the fish to them.                   
 Number 742                                                                    
 JOHN GEORGE, Member, Territorial Sportsmen, came before the                   
 committee to give his testimony.  He informed the committee he also           
 sits on the Board of Directors for Douglas Island Pink and Chum               
 (DIPAC).  Mr. George explained the sports fishermen will support              
 this bill because they support commercial fishermen making money              
 and making a living.  Right now, this is a good way to do it.  Mr.            
 George said DIPAC also needs to have a cost recovery and they would           
 like to be able to do something with the chum salmon.  For years,             
 DIPAC has offered fish to food banks, Native organizations and                
 anyone else that wants it.  He said they have spent their own money           
 to load fish into totes, ice them and loan trucks to people to                
 distribute those fish.  He said they were instrumental in starting            
 Health Sea, Incorporated, in making salmon ham and salmon products            
 out of dark chum.  Mr. George said they utilize a lot of dark chum            
 in that and some day maybe they can use it all, but currently, that           
 market isn't big enough so that they can.  In the mean time we need           
 to do something with their cost recovery fish to make sure they get           
 a cost recovery so they may continue paying on their loans from the           
 state.  He noted they have never missed a loan payment.  They make            
 the payments sometimes with their king salmon and silver salmon.              
 He noted they are basically out of the pink salmon business.  Mr.             
 George explained 50 percent of the floor space in the DIPAC                   
 hatchery is utilized for raising king and coho salmon.  He added 50           
 percent is designated to pink and chum salmon.  Mr. George                    
 explained roe does not compete with fish.  So if DIPAC were to dump           
 all of its dark chums on the market, then they would be competing             
 against the commercial fishermen who are also trying to sell fish.            
 That's a problem.  He said he has been told that there is no glut             
 on world market.  He said he differs with the testimony that came             
 from the Yukon-Kuskokwim area that roe striping in Southeast has              
 deteriorated their market.  He said he believes that there is                 
 plenty of market if you can deliver a good product.  Roe is a very            
 sensitive market as you have to get it at the right stage, you have           
 to take very good care of it.  You have to get it striped and get             
 it to where it's going.  DIPAC does support CSHB 406(RES) from the            
 standpoint that they will be able to harvest these dark chums and             
 utilize the flesh that they can for whatever purpose they can.  He            
 noted he is proposing that they go on the internet.  If somebody              
 wants to come in and put in a fishmeal plant or anything else, they           
 can have the fish.                                                            
 Number 1388                                                                   
 RICHARD LAUBER, Pacific Seafood Processors Association, was next to           
 come before the committee.  He said, "Let me bring this debate back           
 to where I think it ought to be, and focus on the fact that what              
 this legislation would do, and quite frankly my understanding what            
 the department's regulation would do, is make a major major policy            
 change in the state of Alaska.  The state of Alaska has                       
 consistently had a policy in all areas of fish and game against               
 wanton waste.  We have statute after statute after statute on the             
 books that opposes wanton waste.  Certainly, while I'm not any                
 expert in the game laws or the fowl laws - bird laws in this state,           
 I understand that there are statutes, criminal penalties, etc., for           
 wanton waste.  I have personally - I have been involved in most of            
 the legislation regarding fisheries.  As you're aware there is a              
 bill - legislation - a law regarding herring roe stripping.  This             
 was a monumental battle in this legislature and the reason for it             
 was that many other reasons -- many other reasons that you heard              
 today were voiced at that time.  The legislature had repeatedly               
 said, `No roe striping,' even though it had economic impacts, it              
 made good sense in some cases, but `No roe striping.'  Many of you            
 are aware more recently of the pollack roe striping issue in the              
 Gulf of Alaska and in the Bering Sea, but particularly in the Gulf            
 of Alaska.  Factory trawlers came in and found it economic to strip           
 the roe and discard the carcasses.  That was a battle that Alaska             
 fought.  In fact, the current governor was on the North Pacific               
 Fishery Management Council at that time and that was a high water             
 mark, apparently in his concern, because his resume on the internet           
 includes the statement that he was a prime sponsor and supporter of           
 no roe striping of pollack.  The current law regarding salmon                 
 prohibits the waste of salmon.  That law was originally passed in             
 1975 and was amended in 1984 to make it more specific.  And that              
 law basically, and portions of it are contained in this statute               
 under another section that it must go to sale to a commercial                 
 buyer, must be consumed by human or domestic animals or must be               
 used for scientific educational display purposes.  And then it says           
 that the commissioner, upon request, may authorize other uses of              
 salmon that would be consistent with the maximum and wise use.                
 Uses, I do not consider and I think that there is strong feeling,             
 no doubt the Department of Law has spotted this, that you cannot              
 consider throwing a product away as a use.  Yes, Mr. Chairman, I'll           
 try to speed up, but I - basically about the only one that                    
 testified today.  I'd be happy to stop and then come back at a                
 later time if you'd like me to do that."                                      
 CO-CHAIRMAN WILLIAMS asked Mr. Lauber if he could speak to the                
 current regulations.                                                          
 MR. LAUBER said, "I believe that the statute, which of course the             
 regulations must be based upon, talks about uses and if you look at           
 the three uses that are currently contained in the statute it                 
 states that a use would be by a commercial buyer, that it would be            
 for human consumption or domestic use and/or by domestic animals or           
 scientific educational or display purposes.  It seems logical that            
 there could be an interpretation, and I have all the great faith in           
 the attorney generals office and their lawyers, but I have had to             
 tell you and I'm sure, Mr. Chairman, you and other members have               
 known many instances where the courts have not borne out the advise           
 of the attorney generals office.  So it's possible - just possible,           
 remotely so, that this is not legally considered a use, and                   
 therefore, the commissioner would not be allowed to do that."                 
 Number 1307                                                                   
 CO-CHAIRMAN WILLIAMS said, "I have a couple of questions and we've            
 been talking about what the fishermen are going to do.  I think you           
 just heard one of the fishermen up here saying that he takes the              
 fish to the processors and the processors refuse to buy the fish.             
 You might even talk a little bit about what Representative Barnes             
 said here that there is a big demand in Asia or the process of                
 looking at that market.  Maybe you could talk a little bit about              
 what's going on."                                                             
 MR. LAUBER said, "The bill - the substitute, as I understand it,              
 would allow hatcheries and fishermen that receive permits to fish             
 in terminal harvest areas.  To hold this bill out as a great                  
 beneficial bill for fishermen of the state of Alaska I think would            
 be doing a disservice because it would be a limited number of                 
 fishermen that would be able to participate in the terminal harvest           
 area and, of course, the hatcheries.  So basically, what this is a            
 hatchery bill that would benefit and a bail out, if you like, of              
 CO-CHAIRMAN WILLIAMS asked Mr. Lauber to talk about why the                   
 processors won't buy fish.                                                    
 MR. LAUBER said he believes all of this is market driven and the              
 situation may get worse.  He said you don't improve that situation            
 by allowing hatcheries or a limited number of fishermen to go into            
 a terminal harvest area and strip roe.  When processors or anyone             
 else buys salmon, they buy the whole salmon.  The price of that is            
 based on the flesh and on the eggs.  If you allow someone to dump             
 a lot of eggs on the roe market, it's bound to have an affect on              
 the overall price of salmon.  So in the interest of helping the               
 fishermen, this legislation likely will hurt the bulk of the                  
 fishermen because the fishermen will likely receive a very price              
 for chum and pink salmon.  This will drive the overall price                  
 further down which is going to hurt the vast majority of them.  It            
 may help a few fishermen, but the bulk of fishermen it will hurt.             
 It may help a few fishermen in the areas where there are hatcheries           
 where they can roe strip.  He said there was testimony from                   
 Fairbanks and there are many other places where there will be no              
 market for their fish because of the availability of cheap roe and            
 chum salmon from the hatchery area.  This will exasperate that                
 Number 1474                                                                   
 CO-CHAIRMAN WILLIAMS said, "I don't think that the a -- and I may             
 be wrong, you're the processor expert in this area, but the fish              
 that are caught on the Yukon there is a lot of problems we have as            
 you know in getting that fish to the marketplace and the cost is              
 part of the factor in that fish.  I know as far as selling timber             
 in Ketchikan and (indisc.) you remember when the spruce mill was              
 operating there and we were (indisc.) drying the timber in that               
 area and we had to market it outside of Alaska and it just cost too           
 MR. LAUBER said, "I understand that, Mr. Chairman, they have other            
 problems, but when you have roe technicians that leave those                  
 processors on the Yukon and up and down those rivers and go to the            
 hatchery sites or places that are using hatchery fish for roe, the            
 person that is processing those fish up there has no market and,              
 therefore, since they have no market then the fishermen have no               
 market.  So it has an impact.  It's a demonstrated impact and                 
 that's before the impact of this legislation which would be                   
 Number 1530                                                                   
 CO-CHAIRMAN WILLIAMS asked Mr. Lauber to talk a little bit about              
 why they aren't marketing overseas.  He noted Representative Barnes           
 said there is a big market in Asia.                                           
 MR. LAUBER said he thinks that Asia is a market.  He said Asia is             
 a market for light fleshed chum salmon.  Unfortunately, the problem           
 is that between us and that market there happens to be a large                
 hatchery area of Japan and they raise chum salmon.  They are                  
 shipping some chum salmon to China.  Their shipping costs are much            
 lower than a buyer in Alaska would have.  They have a competitive             
 edge.  Mr. Lauber said he thinks that in the future, there is a               
 market for those chums in Asia.  Mr. Lauber said, "If you set a               
 policy that allows people to make money at striping the roe, you're           
 going to hurt that market - the development of that market because            
 those people are not going to be forced to find these other                   
 sources.  And that's what we should be doing, we should be taking             
 this product off of the market to improve the price to the                    
 fishermen who catch it in the common property resource, not by                
 allowing people to strip the roe, hurt the market, hurt the                   
 fishermen that are in the common property resource and hurt the               
 processors who are trying to survive in order to buy all kinds of             
 salmon, not just these chums and pink salmon that are largely                 
 spawned in hatcheries.  We have a very very crucial situation, Mr.            
 Chairman, in this state today.  The largest employer in the state             
 is the seafood industry and I can tell you the processors are in              
 dyer straights, as you are aware - you've read in the papers about            
 people going bankrupt, people not opening canneries.  It is going             
 to be a very difficult situation and this is not going to help us,            
 and it won't help us with the fishermen that we're desperately                
 trying to buy fish from."                                                     
 Number 1634                                                                   
 CO-CHAIRMAN WILLIAMS said, "I'd like to make a comment though that            
 1995 salmon roe for pink and chum, statewide, weight was 416,025              
 and the processors were the largest of that and then the Yukon was            
 the rest.  Thank you Your Honor."                                             
 MR. LAUBER said, "Could I add just one statement and that is there            
 was a statement made earlier regarding the vote of this committee             
 and the legislature - the House of Representatives on that.  I                
 would like to go on the record to the fact that there was no                  
 testimony in opposition to that bill at that particular time.                 
 There were various reasons for it.  Most of them had to do with the           
 conflict in timing that people not being in the capital at the time           
 and there was opposition in the other body, but I wanted to put               
 that in the record that the legislators that voted for that did not           
 have the benefit of those speaking in opposition to the                       
 Number 1712                                                                   
 GEOFF BULLOCK, United Southeast Alaska Gillnetters, came before the           
 committee to give his testimony.  He said this isn't an issue on              
 hatcheries so much as it is an issue on the fishermen.  There are             
 problems out there and everybody would admit that, but to say to              
 the fishermen "You're not gunna be allowed to continue to make a              
 living like you have the previous one or two years," is unfair.               
 It's a shame, it's tragic and it's too bad that there is going to             
 be a large number of fishermen, not a large industry, who are going           
 to be curtailed in the way they make a living based on the money              
 they pay into those fish.                                                     
 Number 1800                                                                   
 KATHRYN HANSEN, Commercial Gillnetter, came before the committee              
 members to give her testimony.  She said she and her husband both             
 have limited entry gillnet permits.  Ms. Hansen said one of the               
 things that she hasn't heard is that there are 41 fishermen who               
 have been doing marketing of their own fish out of 465 permits.               
 That is less than 10 percent.  Those 41 people bring the price up             
 to those who are fishing fish in the round for the processors.  She           
 said because they are able to market their fish and go after roe,             
 the processors have to pay the fishermen closer to a fair price.              
 Ms. Hansen said she doesn't want to have to put in the work to                
 market fish, clean fish and take care of the roe.  She said she               
 would much rather go out catch fish and sell them to a processor.             
 If the processors don't have any competition, the fishermen won't             
 get any kind of price for the fish.  Ms. Hansen said by being able            
 to market and process roe, it's the one guarantee that those few              
 guys out there that are doing it keeps the price up so that they              
 can almost make a living.                                                     
 There being no further testimony, the bill was held.                          
 CO-CHAIRMAN WILLIAMS adjourned the House Resources Standing                   
 Committee meeting at 5:15 p.m.                                                

Document Name Date/Time Subjects