Legislature(2003 - 2004)

03/08/2004 01:12 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 8, 2004                                                                                          
                           1:12 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Nancy Dahlstrom, Co-Chair                                                                                        
Representative Beverly Masek, Co-Chair                                                                                          
Representative Carl Gatto                                                                                                       
Representative Bob Lynn                                                                                                         
Representative Nick Stepovich                                                                                                   
Representative Kelly Wolf                                                                                                       
Representative David Guttenberg                                                                                                 
MEMBERS ABSENT                                                                                                                
Representative Cheryll Heinze, Vice Chair                                                                                       
Representative Beth Kerttula                                                                                                    
COMMITTEE CALENDAR                                                                                                            
CS FOR SENATE JOINT RESOLUTION NO. 26(RES)                                                                                      
Requesting the United  States Department of the  Interior and the                                                               
United States  Department of  Justice to  appeal the  decision of                                                               
the United States  Court of Appeals for the Ninth  Circuit in The                                                               
Wilderness  Society v.  United States  Fish and  Wildlife Service                                                               
and to seek  an emergency stay of the decision  pending an appeal                                                               
of the decision.                                                                                                                
     - MOVED CSSJR 26(RES) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 478                                                                                                              
"An Act relating  to the issuance of  commercial fishing interim-                                                               
use permits; and providing for an effective date."                                                                              
     - MOVED HB 478 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 444                                                                                                              
"An  Act relating  to direct  marketing fisheries  businesses, to                                                               
the  fisheries business  tax,  and to  liability  for payment  of                                                               
taxes  and  assessments  on  the  sale  or  transfer  of  fishery                                                               
resources; and providing for an effective date."                                                                                
     - MOVED CSHB 444(FSH) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 319                                                                                                              
"An Act relating to the disposal of state land by lottery; and                                                                  
relating to the disposal, including sale or lease, of remote                                                                    
recreational cabin sites."                                                                                                      
     - MOVED CSHB 319(RES) OUT OF COMMITTEE                                                                                     
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SJR 26                                                                                                                  
SHORT TITLE: SALMON ENHANCEMENT IN WILDERNESS AREAS                                                                             
SPONSOR(s): SENATOR(s) WAGONER                                                                                                  
02/06/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/04       (S)       RES                                                                                                    
02/20/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/20/04       (S)       Moved CSSJR 26(RES) Out of Committee                                                                   
02/20/04       (S)       MINUTE(RES)                                                                                            
02/23/04       (S)       RES RPT CS FORTHCOMING  5DP                                                                            
02/23/04       (S)       DP: OGAN, SEEKINS, STEVENS B, WAGONER,                                                                 
02/23/04       (S)       DYSON                                                                                                  
02/25/04       (S)       RES CS RECEIVED          NEW TITLE                                                                     
02/27/04       (S)       TRANSMITTED TO (H)                                                                                     
02/27/04       (S)       VERSION: CSSJR 26(RES)                                                                                 
03/01/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/01/04       (H)       RES                                                                                                    
03/08/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
BILL: HB 478                                                                                                                  
SHORT TITLE: COMMERCIAL FISHING INTERIM USE PERMITS                                                                             
SPONSOR(s): REPRESENTATIVE(s) WILSON                                                                                            
02/16/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/04       (H)       FSH, RES                                                                                               
02/27/04       (H)       FSH AT 8:30 AM CAPITOL 124                                                                             
02/27/04       (H)       Heard & Held                                                                                           
02/27/04       (H)       MINUTE(FSH)                                                                                            
03/01/04       (H)       FSH AT 9:00 AM CAPITOL 124                                                                             
03/01/04       (H)       Moved CSHB 478(FSH) Out of Committee                                                                   
03/01/04       (H)       MINUTE(FSH)                                                                                            
03/03/04       (H)       FSH RPT CS(FSH) 5DP 2NR                                                                                
03/03/04       (H)       DP: OGG, HEINZE, WILSON, SAMUELS,                                                                      
03/03/04       (H)       SEATON; NR: GARA, GUTTENBERG                                                                           
03/08/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
BILL: HB 444                                                                                                                  
SHORT TITLE: DIRECT MARKETING FISHERIES BUSINESS                                                                                
SPONSOR(s): REPRESENTATIVE(s) WILSON                                                                                            
02/09/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/09/04       (H)       FSH, RES, FIN                                                                                          
02/18/04       (H)       FSH AT 8:30 AM CAPITOL 124                                                                             
02/18/04       (H)       Heard & Held                                                                                           
02/18/04       (H)       MINUTE(FSH)                                                                                            
02/25/04       (H)       FSH AT 8:30 AM CAPITOL 124                                                                             
02/25/04       (H)       Moved CSHB 444(FSH) Out of Committee                                                                   
02/25/04       (H)       MINUTE(FSH)                                                                                            
02/26/04       (H)       FSH RPT CS(FSH) 2DP 3NR                                                                                
02/26/04       (H)       DP: WILSON, SEATON; NR: OGG, SAMUELS,                                                                  
02/26/04       (H)       GUTTENBERG                                                                                             
03/08/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
BILL: HB 319                                                                                                                  
SHORT TITLE: REMOTE REC.CABIN SITE SALES/LOTTERY SALE                                                                           
SPONSOR(s): REPRESENTATIVE(s) FATE                                                                                              
05/14/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/14/03       (H)       STA, RES, FIN                                                                                          
01/13/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/13/04       (H)       Heard & Held                                                                                           
01/13/04       (H)       MINUTE(STA)                                                                                            
02/03/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/03/04       (H)       Heard & Held                                                                                           
02/03/04       (H)       MINUTE(STA)                                                                                            
02/10/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/10/04       (H)       Heard & Held                                                                                           
02/10/04       (H)       MINUTE(STA)                                                                                            
02/19/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/19/04       (H)       Moved CSHB 319(STA) Out of Committee                                                                   
02/19/04       (H)       MINUTE(STA)                                                                                            
02/23/04       (H)       STA RPT CS(STA) 2DP 4NR 1AM                                                                            
02/23/04       (H)       DP: GRUENBERG, LYNN; NR: SEATON, HOLM,                                                                 
02/23/04       (H)       COGHILL, WEYHRAUCH; AM: BERKOWITZ                                                                      
03/01/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
03/01/04       (H)       Heard & Held                                                                                           
03/01/04       (H)       MINUTE(RES)                                                                                            
03/08/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
WITNESS REGISTER                                                                                                              
SENATOR THOMAS WAGONER                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of SJR 26.                                                                            
DON JOHNSON, Member                                                                                                             
Kenai River Professional Guide Association (KRPGA)                                                                              
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified in opposition to SJR 26.                                                                         
REPRESENTATIVE PEGGY WILSON                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HB 478 and HB 444.                                                                 
JON GOLTZ, Assistant Attorney General                                                                                           
Natural Resources Section                                                                                                       
Civil Division                                                                                                                  
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing on HB 478, presented                                                                        
information and answered questions.                                                                                             
IAN FISK, Staff                                                                                                                 
to Senator Bert Stedman                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As staff to the sponsor of the Senate                                                                      
companion bill, testified to the changes made to CSHB 444(FSH).                                                                 
KATHY HANSEN, Executive Director                                                                                                
Southeast Alaska Fishermen's Alliance (SEAFA)                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 444.                                                                            
CHERYL SUTTON, Staff                                                                                                            
to the Joint Legislative Salmon Industry Task Force                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During hearing on HB 444, provided                                                                         
information and answered questions.                                                                                             
KENNETH DUCKETT, Executive Director                                                                                             
United Southeast Alaska Gillnetters (USAG)                                                                                      
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 444.                                                                            
JIM POUND, Staff                                                                                                                
to Representative Hugh Fate                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     During  hearing  on   HB  319,  answered                                                               
questions on behalf of the bill sponsor, Representative Fate.                                                                   
NANCY WELCH, Special Assistant                                                                                                  
Office of the Commissioner                                                                                                      
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     During  hearing  on   HB  319,  answered                                                               
ACTION NARRATIVE                                                                                                              
TAPE 04-13, SIDE A                                                                                                            
Number 0001                                                                                                                     
CO-CHAIR  BEVERLY  MASEK  called  the  House  Resources  Standing                                                             
Committee meeting to  order at 1:12 p.m.   Representatives Masek,                                                               
Dahlstrom,  Gatto, Lynn,  Stepovich,  Wolf,  and Guttenberg  were                                                               
present at the call to order.                                                                                                   
SJR 26-SALMON ENHANCEMENT IN WILDERNESS AREAS                                                                                 
CO-CHAIR MASEK announced  that the first order  of business would                                                               
be CS  FOR SENATE  JOINT RESOLUTION  NO. 26(RES),  Requesting the                                                               
United States  Department of the  Interior and the  United States                                                               
Department  of  Justice to  appeal  the  decision of  the  United                                                               
States Court of  Appeals for the Ninth Circuit  in The Wilderness                                                               
Society v.  United States Fish  and Wildlife Service and  to seek                                                               
an  emergency stay  of  the  decision pending  an  appeal of  the                                                               
CO-CHAIR MASEK turned the gavel over to Co-Chair Dahlstrom.                                                                     
SENATOR  THOMAS WAGONER,  Alaska State  Legislature, speaking  as                                                               
sponsor, explained  that SJR 26  involves the  salmon enhancement                                                               
project  in Tustumena  Lake.   On  December 30,  2003, the  Ninth                                                               
Circuit Court  of Appeals  made the  decision that  the Tustumena                                                               
Lake salmon  enhancement project  violates the Wilderness  Act in                                                               
two ways.   First,  he said the  court considered  [the Tustumena                                                               
Lake salmon  enhancement project]  to be a  commercial enterprise                                                               
because commercial fishermen  benefit from the project.   He said                                                               
that's true  in a  way, but commercial  fishermen do  not benefit                                                               
from  this project  within  the  wilderness area.    He said  the                                                               
salmon are  planted in Tustumena Lake,  "out-migrate," and return                                                               
four to five years later.                                                                                                       
SENATOR WAGONER said  there are three or  four different [groups]                                                               
of  people that  benefit because  of the  fish that  are planted,                                                               
which are:  Commercial fishermen,  personal use fishermen, sports                                                               
fisherman,  and sometimes  subsistence  fishermen.   Noting  that                                                               
there  is a  large  personal  use fishery  at  the  mouth of  the                                                               
Kasilof  River, he  said commercial  fishermen  that benefit  are                                                               
generally  the  setnetters  who fish  on  the  shore-based  nets,                                                               
mainly  below the  Kasilof River.   He  noted that  about 100,000                                                               
fish come back  from this project.  He said  the second objection                                                               
the  court had  is that  [the enhancement  project] might  not be                                                               
consistent with  preserving the natural  conditions of  the area.                                                               
He maintained  that [the enhancement project]  is consistent, and                                                               
said all that  would be done through  the aquaculture association                                                               
is  enhance  the ability  of  the  [salmon]  fry to  survive  and                                                               
Number 0295                                                                                                                     
SENATOR WAGONER  said SJR 26  is requesting that the  decision be                                                               
appealed and that  an emergency stay of the  decision be ordered.                                                               
He said if the  court does not stay the decision,  5 to 6 million                                                               
salmon fry are going to be  destroyed and disposed of because the                                                               
fry  cannot be  put  into another  [water]  system without  going                                                               
through  the  Alaska Department  of  Fish  and Game  (ADF&G)  and                                                               
receiving the [necessary]  permits.  He said it's  just about too                                                               
late to do  that process, and it  is very critical to  get a stay                                                               
if possible.  Noting that this  project has been in operation for                                                               
close to 30 years, he said it  started out as a state project and                                                               
when  the   state  eliminated  FRED   [Fisheries  Rehabilitation,                                                               
Enhancement  and Development],  it was  turned over  to the  Cook                                                               
Inlet Aquaculture  Association (CIAA),  which has  maintained the                                                               
project ever since.  He said it's a long-term project.                                                                          
SENATOR  WAGONER explained  that  the reason  for requesting  the                                                               
appeal is  backed up by  an email  contained in the  bill packets                                                               
from  Martin Bushman,  Legal Counsel,  Utah Division  of Wildlife                                                               
Resources,  who  points out  the  same  problems with  the  court                                                               
decision  that the  State of  Alaska does.   He  said there  is a                                                               
possibility  that with  this decision  other activities  in these                                                               
wilderness  areas are  at risk.    He said  [activities] such  as                                                               
taking guided  people [into the  area] for kayaking  or horseback                                                               
riding excursions or transporting people  into these areas may be                                                               
forbidden.   He remarked, "We  think this is where  they're going                                                               
with this ... decision."                                                                                                        
SENATOR WAGONER said the reason  [SJR 26] is being rushed through                                                               
is that the keynote speaker at  the energy council is going to be                                                               
Gail Norton,  Secretary of  the Interior, and  "we would  like to                                                               
hand her a copy of this  resolution while we're back there and go                                                               
over  it  with  her,"  because  there's  some  hesitancy  on  the                                                               
Solicitor General's part to proceed  with this suit and the State                                                               
of Alaska can't proceed with it.                                                                                                
Number 0492                                                                                                                     
REPRESENTATIVE  LYNN  stated  support  for the  resolution.    He                                                               
remarked, "To  me, it's just another  in a series of  outrages by                                                               
the Ninth Circuit Court of Appeals."   He suggested that there is                                                               
a history  of outrageous decisions  from the Ninth  Circuit Court                                                               
of  Appeals.   Representative Lynn  said he  thought this  should                                                               
bolster  "our attempts"  to  get Alaska  removed  from the  Ninth                                                               
Circuit,  so  "we  don't  have  outrages  like  this,  and  other                                                               
outrages from  that district."   He said he can't  understand why                                                               
the  [salmon] fry  can't  be put  into the  lake,  because as  he                                                               
understands it  that would not  be introducing a new  species [of                                                               
salmon].   He remarked, "It's  just enhancing what God  put there                                                               
to begin with."                                                                                                                 
SENATOR  WAGONER said  CIAA's director,  a representative  of the                                                               
Wilderness Society, and another  conservation group had a meeting                                                               
in  Anchorage and  realized that  this was  a problem,  and asked                                                               
that this be allowed.  However,  he said since the court decision                                                               
has already  been made,  there is  no way that  this can  be done                                                               
without a  stay of the  court decision.  He  said it is  not that                                                               
simple to  say a mistake  was made, ask  for it to  be rectified,                                                               
and have  the enhancement  [project] continue  for at  least this                                                               
one cycle.  That's kind of where it stands right now, he noted.                                                                 
Number 0668                                                                                                                     
REPRESENTATIVE GATTO asked if there  was someone from ACV [Alaska                                                               
Conservation  Voters]  or  the Wilderness  Society  available  to                                                               
CO-CHAIR DAHLSTROM indicated that there was not.                                                                                
Number 0684                                                                                                                     
REPRESENTATIVE   STEPOVICH  asked   if   the  state's   [federal]                                                               
delegation supports this resolution.                                                                                            
SENATOR WAGONER replied yes.                                                                                                    
REPRESENTATIVE  STEPOVICH  asked  who  is going  to  present  the                                                               
SENATOR WAGONER said  he and Senator Scott Ogan  would present it                                                               
to [Gail Norton].                                                                                                               
Number 0733                                                                                                                     
REPRESENTATIVE WOLF  asked if  CIAA has  quantified an  impact of                                                               
the  damage  that was  caused  two  years  ago when  the  [flood]                                                               
occurred at Tustumena  [Lake].  He asked how it  has impacted the                                                               
natural [salmon] run.                                                                                                           
SENATOR WAGONER said it may have,  but he had not been given that                                                               
information.  He explained that  there was a tremendous amount of                                                               
damage  done  to the  spawning  area  on  the  upper end  of  the                                                               
Tustumena system.   Senator Wagoner remarked,  "Generally, that's                                                               
what the  people would  argue; ... that's  nature's way,  and let                                                               
happen whatever  happen."   He suggested  that the  Ninth Circuit                                                               
Court of Appeals  is generally overruled about 85  percent of the                                                               
time.  Senator Wagoner said if  "we" can get this appealed to the                                                               
U.S. Supreme Court, then "we'll" have a good record.                                                                            
Number 0831                                                                                                                     
REPRESENTATIVE  GUTTENBERG  said  [language]  on  page  2  "talks                                                               
about"  the  contribution to  the  lives  and activities  of  the                                                               
residents on the  Kenai River and of the hardships.   He asked if                                                               
there   is  quantitative   number   on  the   loss  of   economic                                                               
opportunity, such as how many fish are lost.                                                                                    
SENATOR WAGONER remarked:                                                                                                       
     It's about  100,000 red  salmon ....   These  are early                                                                    
     ...  return  fish;  they're primarily  a  beach  caught                                                                    
     fish.  ...  At fifty cents a pound, times  four or five                                                                    
     pounds,  ... let's  say they're  a five-pound  average,                                                                    
     that 's two and a half  dollars times 100,000.  It just                                                                    
     depends  on where  you  want to  stop  on the  economic                                                                    
     chain.   ...  You can  say that  turns over  four times                                                                    
     into the community or two times.                                                                                           
SENATOR  WAGONER said  it's an  indeterminable  number, but  it's                                                               
part of  the overall  economic part  of the fishery.   He  said a                                                               
substantial number  of those  [fish] are  caught in  the personal                                                               
use fishery, which  takes place for several days at  the mouth of                                                               
the Kasilof  River.  He  said a lot of  people take part  in that                                                               
Number 0921                                                                                                                     
REPRESENTATIVE GUTTENBERG asked  how long the stay  would have to                                                               
be in order to release the fish from the hatchery into the lake.                                                                
SENATOR WAGONER said  any stay would have to run  past the end of                                                               
June.   He said the  [salmon fry] are  loaded into a  float plane                                                               
near  Seward  and flown  directly  over  and deposited  into  the                                                               
Tustumena Lake, which probably happens in June.                                                                                 
Number 0980                                                                                                                     
DON JOHNSON,  Member, Kenai River Professional  Guide Association                                                               
(KRPGA), testified.   He  said KRPGA  is opposed  to SJR  26, and                                                               
although [KRPGA] is  basically against most of  the Ninth Circuit                                                               
Court  of Appeals  decisions,  it  tends to  go  along with  this                                                               
decision.   He said  there have  been a  lot of  general problems                                                               
with stocking  in Tustumena Lake.   Mr. Johnson said there  are a                                                               
few  parts   of  the   [resolution]  that   appear  to   be  pure                                                               
misinformation, for  example, he  said the part  about commercial                                                               
activities.   He  said he  went  through the  Wilderness Act  and                                                               
didn't see  that kind of  thing in it, in  fact, there are  a few                                                               
clauses in  there that specifically  exempt that stuff.   He said                                                               
the  actual  statements  that  are coming  out  and  saying  this                                                               
attempt of the  Ninth Circuit Court of Appeals is  aimed at going                                                               
after tourism,  kayaking, guiding,  outfitting, and that  kind of                                                               
thing is not seen in the Wilderness Act.                                                                                        
MR.  JOHNSON said  apparently there  are a  bunch of  people that                                                               
want these  fish to go into  the [Tustumena Lake] and  are trying                                                               
to use misinformation  "in order to keep it there."   Mr. Johnson                                                               
said if those  people want to keep it there  on their own merits,                                                               
but  are trying  to  drag a  bunch  of other  things  into it  to                                                               
somehow justify  getting this  case appealed  again, is  not what                                                               
"we're really looking to do."   He said [the resolution] makes it                                                               
look  like  there  is  100  percent agreement  to  get  the  case                                                               
appealed, but  "we don't see  it."   Mr. Johnson said  there have                                                               
been a  lot of problems up  there with the planning  of fish, and                                                               
it  is not  particularly  in  the same  area  as the  "wilderness                                                               
people are  going with this thing."   He suggested that  a lot of                                                               
the people  who are trying to  keep that project going  are using                                                               
what he sees as misinformation to  dilute what is going on in the                                                               
Wilderness Act "to  say that it's doing something  and it's not."                                                               
Mr.  Johnson  said  unless  someone  is going  to  come  up  with                                                               
specifics and  point it out and  say exactly what it  is going to                                                               
do, he  can't see it  "doing that."   He said he  was referencing                                                               
sections "4(d)(1) and 4(d)(6)" of  the Wilderness Act, which both                                                               
specifically allow  aircraft, motorboats,  kayaking, recreational                                                               
commercial activities, and so forth.                                                                                            
REPRESENTATIVE WOLF  said he believes the  entire Kenai Peninsula                                                               
delegation  understands the  impacts that  have taken  place with                                                               
the  flood and  the slide,  which impacted  the systems  draining                                                               
into the  Tustumena Lake.   He said his  concern is that  what is                                                               
being  talked  about is  an  event  that  took place  by  "mother                                                               
nature" that has  decimated part of the salmon run.   He said now                                                               
"we're"  having  the  court  system  do the  same  thing  by  not                                                               
allowing  the CIAA  to deposit  the [salmon  fry] into  the lake;                                                               
"we're"  affecting an  economy twice  -  the commercial  fishery,                                                               
sport fishery,  personal use fishery, and  subsistence [fishery].                                                               
Representative  Wolf said  "we"  can't do  anything about  mother                                                               
nature, but "we"  can do something about the  Ninth Circuit Court                                                               
of Appeals.  He stated his support.                                                                                             
Number 1256                                                                                                                     
REPRESENTATIVE GATTO  asked Mr.  Johnson about the  definition of                                                               
the words "commercial enterprise".                                                                                              
MR. JOHNSON said he believed that was in the Wilderness Act.                                                                    
REPRESENTATIVE   GATTO  asked   Mr.  Johnson   if  he   knew  the                                                               
MR. JOHNSON indicated he didn't.                                                                                                
REPRESENTATIVE GATTO said  it is an important term as  far as the                                                               
[resolution] is  concerned.  He  said he  thought it was  of real                                                               
value to  establish ahead of  time what those two  words actually                                                               
mean.   He said if  this language is going  to be referred  to in                                                               
some  of  the  supporting  documents,  he  thinks  it  is  pretty                                                               
valuable to  him to know  exactly what it means.   Representative                                                               
Gatto suggested  that something  as simple  as taking  a relative                                                               
who is not  a resident of the state  on a trip in the  state is a                                                               
minor form of  some sort of a commercial enterprise.   He said if                                                               
he operates  a business,  that is  a major  form of  a commercial                                                               
enterprise.   Representative Gatto asked  if there is  a dividing                                                               
line, so that he can  understand [what actions] violate the Ninth                                                               
Circuit  Court  of  Appeals  ruling  or  the  Wilderness  Act  or                                                               
anything else.                                                                                                                  
MR.  JOHNSON  said  section "4(d)(6)"  [of  the  Wilderness  Act]                                                               
specifically allows  commercial services.  He  remarked, "You can                                                               
read whatever you want into that."                                                                                              
Number 1368                                                                                                                     
SENATOR  WAGONER  said  he  believes  the  commercial  enterprise                                                               
referred  to in  this  bill  takes place  outside  of the  entire                                                               
wilderness  area, which  is one  of the  problems, and  the other                                                               
commercial enterprise referred to takes place inside the area.                                                                  
REPRESENTATIVE  GUTTENBERG  asked  Mr.  Johnson  if  there  is  a                                                               
problem mixing hatchery fish with wild stock in that area.                                                                      
MR. JOHNSON said  absolutely; a big problem.  He  said when those                                                               
hatchery fish  are dropped into  the Tustumena Lake and  mix with                                                               
the wild  fish, it produces a  massive effort in Cook  Inlet with                                                               
gillnetters  who basically  end up  intercepting every  wild fish                                                               
that  could possibly  be trying  to get  into the  system on  the                                                               
Kasilof  River, which  runs out  of  Tustumena [Lake].   He  said                                                               
every time "stock  fish" are thrown into a system  that flows out                                                               
into saltwater, it  causes an extra increased  effort [to harvest                                                               
the fish]  by gillnetters, and  that extra effort  actually comes                                                               
down to  taking a disproportionate  amount of  fish.  He  said if                                                               
more stock  fish come back than  wild fish, it will  [produce] an                                                               
extra effort to harvest the  stock fish, [because] in the process                                                               
of trying to  harvest the stock fish, a higher  percentage of the                                                               
wild fish are going to be taken.                                                                                                
MR. JOHNSON said after years of  doing that, it degrades the wild                                                               
stock  down to  nothing and  results in  nothing but  stock fish,                                                               
which have  been planted there year  after year.  He  said that's                                                               
been going on  in the Tustumena drainage and is  the real problem                                                               
up there.   He  said it's  been going  on for  quite a  while and                                                               
"we've" been  trying to get the  program shut down just  for that                                                               
reason, because it's been hard on the  wild stock.  He said it is                                                               
one  of  the   major  reasons  "we've"  not  tried   to  put  any                                                               
"stockings"  into the  Kenai  River because  "we"  don't want  to                                                               
damage any  of the genetics of  the stocks that are  in the Kenai                                                               
River.   He  said the  Tustumena Lake  [enhancement project]  has                                                               
been going on  for such a long  time that it's been  very hard to                                                               
do anything  about it.   He  said it  is most  of the  reason for                                                               
addressing the  resolution at  this time,  and the  Ninth Circuit                                                               
Court of  Appeals has  come in  and put the  "shut down"  on this                                                               
[project] for wilderness reasons.                                                                                               
MR. JOHNSON said  it is the "wild factor" that's  really got this                                                               
thing  going for  [KRPGA], because  it does  not [want]  the wild                                                               
fish wiped out  for a bunch of  [stocked fish].  He  said this is                                                               
even bigger  than what was  suggested.  He  said when a  bunch of                                                               
fish are stocked in the Kasilof  River, it causes extra effort at                                                               
the mouth  of the Kasilof  River, which impacts the  Kenai River,                                                               
and that's a huge issue.                                                                                                        
Number 1550                                                                                                                     
SENATOR  WAGONER  said these  fish  are  genetically exactly  the                                                               
same.  He explained that the  egg take for these fish takes place                                                               
in Tustumena Lake;  the eggs are taken, fertilized,  taken to the                                                               
hatchery, hatched,  and fed.   He said  those fish have  a better                                                               
survival rate  by far than  those in  the wild.   Senator Wagoner                                                               
said there is  genetically no difference between  a salmon that's                                                               
reared for the  first two years in the hatchery  versus the wild.                                                               
He  stated that  the  genetic strain  is exactly  the  same.   He                                                               
turned attention  to the last paragraph  of a letter in  the bill                                                               
packet from  Attorney General Gregg Renkes,  which read [original                                                               
punctuation provided]:                                                                                                          
     If allowed to stand, the Ninth Circuit's decision may                                                                      
         be used to burden or eliminate legitimate non-                                                                         
     commercial  activities  in   wilderness  that  Congress                                                                    
     never meant  to bar.   We  urge you  to take  action to                                                                    
     correct the  Ninth Circuit's overreaching.   Please let                                                                    
     me  know  if we  can  be  of  any other  assistance  or                                                                    
SENATOR WAGONER  said to keep in  mind that the director  of this                                                               
wilderness area  had no problem  with this fish  stocking effort.                                                               
He remarked,  "We even won,  until it was appealed,  on a 2  to 1                                                               
vote at  the Ninth  Circuit Court."   He said it  is a  matter of                                                               
keeping  it  going  to  a  higher court,  which  is  what's  been                                                               
happening.   Senator  Wagoner remarked,  "Every  place else,  the                                                               
decision's   been   in   favor    of   Cook   Inlet   Aquaculture                                                               
Number 1668                                                                                                                     
CO-CHAIR MASEK moved  to report [CSSJR 26(RES)]  out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes,  and  asked  for  unanimous   consent.    There  being  no                                                               
objection, CSSJR  26(RES) was reported  from the  House Resources                                                               
Standing Committee.                                                                                                             
HB 478-COMMERCIAL FISHING INTERIM USE PERMITS                                                                                 
CO-CHAIR  DAHLSTROM announced  that  the next  order of  business                                                               
would be HOUSE BILL NO. 478,  "An Act relating to the issuance of                                                               
commercial  fishing interim-use  permits;  and  providing for  an                                                               
effective date."                                                                                                                
Number 1715                                                                                                                     
REPRESENTATIVE PEGGY  WILSON, Alaska State  Legislature, speaking                                                               
as sponsor, explained  that HB 478 provides for an  issuance of a                                                               
commercial  fishing  interim-use permit.    The  Alaska Court  of                                                               
Appeals  recently  held  that   the  Commercial  Fisheries  Entry                                                               
Commission (CFEC)  lacked the authority to  issue the interim-use                                                               
permits (IUP) in fisheries that  it doesn't have the authority to                                                               
limit.  This bill is a  house keeping measure that clarifies that                                                               
CFEC does indeed have the  authority to issue interim-use permits                                                               
in these  fisheries.  She  said this clarification  is consistent                                                               
with  the original  intent and  purpose of  the current  statute,                                                               
which has been in use for 30 years.                                                                                             
Number 1793                                                                                                                     
FRANK HOMAN, Commissioner,  Commercial Fisheries Entry Commission                                                               
(CFEC), testified.   He  explained that  HB 478  is a  measure to                                                               
clarify that  CFEC does have  the authority to  issue interim-use                                                               
permits for  fisheries that  it may never  limit, which  has been                                                               
the practice  for 30 years,  since the beginning of  the program.                                                               
He said  Assistant Attorney General  John Goltz is  handling this                                                               
appeal in the courts.   He explained that three halibut fishermen                                                               
came in  from the Exclusive Economic  Zone (EEZ) to sell  fish in                                                               
Alaska and  did not  have a  permit from the  State of  Alaska to                                                               
sell those  fish.  Those fishermen  were cited and the  case went                                                               
to court.   In the  court's reading  of the original  statute, it                                                               
took  a very  narrow reading  to say  if CFEC  could not  limit a                                                               
fishery, it could not issue an  interim-use permit.  He said CFEC                                                               
only issues two permits, which  are entry permits and interim-use                                                               
permits.   Every  fishery  that is  not limited  gets  an IUP  to                                                               
authorize  it to  fish  or to  have  fish in  state  waters.   He                                                               
     Their narrow reading of the  original language, it said                                                                    
     "pending  the  establishment"   of  a  maximum  number.                                                                    
     Pending the establishment means  ... we had not limited                                                                    
     the fishery,  where it says  "maximum number,"  you can                                                                    
     just  put   a  parenthesis  around  that   and  say  "a                                                                    
     limitation"  because ...  when we  establish a  maximum                                                                    
     number, that means we limited the fishery.                                                                                 
     "Pending" means  we may never  do it, and  there's some                                                                    
     fisheries, probably, we  will ... never do.   So, we've                                                                    
     always understood that broadly,  and the [Alaska] Court                                                                    
     of Appeals understood it narrowly.   ... The Department                                                                    
     of Law (DOL)  has appealed this decision  to the Alaska                                                                    
     Supreme Court  to clarify that the  original intent was                                                                    
     to issue  interim-use permits in  any fishery  that was                                                                    
     not limited.                                                                                                               
     That's  in the  court now,  and this  clarification, as                                                                    
     Mr. Goltz  may testify,  will help in  his presentation                                                                    
     to say that  the legislature really did  mean that they                                                                    
     could   issue  interim-use   permits   from  the   very                                                                    
     beginning,  so  that's in  essence  ...  what the  bill                                                                    
Number 1988                                                                                                                     
CO-CHAIR MASEK  said the  bill is very  straightforward and  is a                                                               
"housekeeping"  bill to  ensure that  the language  is consistent                                                               
with  the intent  of  the original  statute.   She  said as  many                                                               
members know  from experience, sometimes  the legislature  has to                                                               
go back  and do housekeeping.   She said  she would like  to move                                                               
this bill forward.                                                                                                              
Number 2004                                                                                                                     
REPRESENTATIVE GATTO asked if this bill is retroactive.                                                                         
MR. HOMAN  replied no.   The purpose of  the initial bill  was to                                                               
change the  language of  the bill  to clarify  that the  CFEC did                                                               
have the  authority to issue  the IUP, which  it has done  for 30                                                               
years.   He said the  House Special Committee on  Fisheries added                                                               
the retroactivity section  to further support DOL  in its appeal,                                                               
by saying  the legislature understands  and authorizes  that CFEC                                                               
has  always had  that ability.    He said  the retroactivity  was                                                               
included to  support that position,  but he thought  the attorney                                                               
would say  that it probably won't  have a major impact.   He said                                                               
[the legislature] couldn't go back  30 years and change laws, but                                                               
it  does give  the  "flavor" of  the legislature  as  far as  its                                                               
opinion of this bill.                                                                                                           
REPRESENTATIVE GATTO  commented that this  is very hard  for him.                                                               
He remarked,  "Somebody wants to say  something's retroactive 30-                                                               
plus  years,  and you're  saying  we're  only talking  about  the                                                               
flavor, well, I think maybe we  can talk about the flavor without                                                               
putting it into statute ...."                                                                                                   
REPRESENTATIVE GATTO  asked if  this was a  part of  the original                                                               
bill or if it was an amendment.                                                                                                 
MR.  HOMAN said  an  amendment  was added  in  the House  Special                                                               
Committee  on  Fisheries  to show  legislative  support  for  the                                                               
state's position.                                                                                                               
REPRESENTATIVE GATTO said this is  a 31-year retroactivity clause                                                               
and   "anyone  would   raise  their   eyebrows  as   to  anything                                                               
retroactive," but 31  years is a generation backwards.   He asked                                                               
if it is  imperative that the [retroactivity  clause be included]                                                               
or whether it  is just to add  some flavor to the bill.   He said                                                               
he is  not in favor  of usually adding flavor  to a statute.   He                                                               
asked Mr. Goltz to comment about  how valuable or important it is                                                               
to be retroactive.                                                                                                              
Number 2126                                                                                                                     
JON   GOLTZ,  Assistant   Attorney  General,   Natural  Resources                                                               
Section,  Civil  Division, Department  of  Law,  testified.   Mr.                                                               
Goltz  said he  understands  there  to be  two  purposes for  the                                                               
retroactivity  provision  that was  added  in  the House  Special                                                               
Committee on  Fisheries.  He  explained that the first  reason is                                                               
to  essentially ratify  the  interpretation  and the  application                                                               
that  CFEC had  adhered to  the  statute since  it first  started                                                               
issuing interim  use and entry permits  in 1974.  Mr.  Goltz said                                                               
CFEC  has  always  interpreted  this  statute,  as  it  currently                                                               
exists, to  essentially mean that  it has the authority  to issue                                                               
IUPs in  every Alaskan  fishery that  has not  been limited.   He                                                               
said  a narrower  reading  was  reached by  the  Alaska Court  of                                                               
Appeals   that   creates   some  question   about   whether   the                                                               
interpretation and  application CFEC has been  giving the statute                                                               
has been incorrect in other  instances, and it raised the concern                                                               
about potential  suits against  the state  arguing that  CFEC has                                                               
issued permits  and therefore requires  permit fees  in instances                                                               
where  it  lacks the  statutory  authority.    He said  that  has                                                               
actually come to pass and there  have been two class action suits                                                               
that have been filed on the  basis of the holding of the [Alaska]                                                               
Court of Appeals  decision asking for reimbursement  of fees that                                                               
the fishermen paid for IUPs.                                                                                                    
Number 2271                                                                                                                     
MR.  GOLTZ said  the feeling  of the  House Special  Committee on                                                               
Fisheries  members  who  supported  the amendment  was  that  the                                                               
retroactivity  provision would  help  give  further assurance  of                                                               
protection and ensure that interpretation  of the current statute                                                               
by the [Alaska]  Court of Appeals was not for  the use to subject                                                               
the state  for liability in  other instances.  He  explained that                                                               
the  other  purpose  for  the   retroactivity  provision,  as  he                                                               
understands  it,  is to  provide  any  additional arguments  that                                                               
might  be made  available  to the  state in  the  context of  the                                                               
currently filed  court cases.  He  said there's supposed to  be a                                                               
criminal case  that the  [Alaska] Court of  Appeals has  ruled on                                                               
that has been  appealed to the supreme court, but  it is still in                                                               
court and has not been decided  yet, in addition to the two class                                                               
action cases that he'd mentioned.                                                                                               
MR. GOLTZ said the [House  Special Committee on Fisheries] seemed                                                               
to understand  that there would be  some potential constitutional                                                               
restrictions on  whether or  not this change,  if adopted  by the                                                               
legislature, could  be applied retroactively in  those cases that                                                               
are already in  progress.  He said he testified  before the House                                                               
Special Committee  on Fisheries that  there would be  some strong                                                               
arguments he thought he could make  on the basis of a retroactive                                                               
bill to show  that the CFEC has had the  authority to issue these                                                               
permits all  along.  Mr.  Goltz said  even though there  was some                                                               
question  about  whether that  would  ultimately  prevail in  the                                                               
courts (indisc.) that could be worthwhile arguments for him.                                                                    
REPRESENTATIVE GATTO remarked:                                                                                                  
     With   the  understanding   that   the  criminal   case                                                                    
     currently before  the supreme court, and  the potential                                                                    
     for reimbursement of past  fees paid, and retroactivity                                                                    
     might not be  allowed in all cases, I have  to tell you                                                                    
     that  short  of  some compelling  reason  and  absolute                                                                    
     necessity for  retroactivity of 31  years, I  find that                                                                    
     section of this bill very difficult to support.                                                                            
REPRESENTATIVE  GATTO  asked  Mr.  Goltz if  he  would  agree  or                                                               
MR. GOLTZ  said in his  view the retroactivity provision  in this                                                               
bill  is   not  problematic  because  the   bill  is  essentially                                                               
conforming the  language of  the statute to  the way  the current                                                               
statute  has  always  been  interpreted   and  applied  by  state                                                               
agencies.  He said to the  best of his reading of the legislative                                                               
history of the  bill, it is also consistent with  what the intent                                                               
of the  legislature has  been since  this language  was initially                                                               
adopted  in 1973.   Mr.  Goltz said  with that  understanding, he                                                               
didn't  think that  any new  requirements or  provision is  being                                                               
added retroactively  by this bill.   He said it is  essentially a                                                               
clarifying  amendment   in  the   sense  that  it   ratifies  the                                                               
interpretation that's  always been  given to  the statute  in the                                                               
past.  Mr. Goltz said it is also  a curative in the sense that it                                                               
is made  in response  to and disapproval  of the  [Ninth Circuit]                                                               
Court of  Appeals decision.   He  said the  arguments that  he is                                                               
making on behalf  of the state to the supreme  court are that the                                                               
current  statute   essentially  means   what  this   bill  better                                                               
expresses, so in light of that  he doesn't think there is any new                                                               
requirement being imposed retroactively by this bill.                                                                           
Number 2373                                                                                                                     
REPRESENTATIVE GATTO  asked how that  would change anything.   He                                                               
remarked, "If  we say today,  this is  what we firmly  believe is                                                               
true and what was intended by  the past, that still holds whether                                                               
or not we make it retroactive to the past, doesn't it?"                                                                         
MR. GOLTZ  said he would agree  that there is an  issue there and                                                               
there are some  arguments that could be made on  both sides about                                                               
the extent to which this  legislature could do anything to change                                                               
what a previous legislature meant when  it adopted a statute.  He                                                               
said  he  thought  the  effect   that  that  would  have  in  the                                                               
application of the  law in any particular instance  would best be                                                               
decided  by the  court.   He said  he didn't  feel like  he could                                                               
express  the  wishes  about  what  would  be  resolved  in  every                                                               
possible circumstance.                                                                                                          
Number 2503                                                                                                                     
REPRESENTATIVE  WOLF asked  Mr. Goltz  if the  retroactive clause                                                               
would cost the state any money.                                                                                                 
MR. GOLTZ  said he thought there  was a reasonable basis  for the                                                               
decision that was  made to apply this retroactively,  which is to                                                               
essentially  ratify  the  interpretation  that's  been  given  to                                                               
(indisc.) historically.   Mr. Goltz  said he does  recognize that                                                               
there  are  some  instances  in   which  the  application  of  it                                                               
retroactively  could be  problematic constitutionally.   He  said                                                               
this bill would initially present  that it was intended simply to                                                               
give CFEC  the ability to  continue to apply  the law the  way it                                                               
always  has in  the past,  not withstanding  the [Ninth  Circuit]                                                               
Court  of  Appeals   decision,  but  to  the   extent  that  this                                                               
legislature can  apply the law retroactively  to basically remove                                                               
the lack  of authority that might  be argued for the  issuance of                                                               
other permits.   Mr. Goltz  said he  thought it was  a reasonable                                                               
thing  to do,  although  he  recognized that  there  can be  some                                                               
dispute about the applicability of that.                                                                                        
REPRESENTATIVE WOLF suggested there would be a fiscal note.                                                                     
MR. GOLTZ  disagreed.  He  said he was  not aware how  this bill,                                                               
even applied retroactively, would  cause any appropriations to be                                                               
REPRESENTATIVE WOLF asked if the  retroactive clause was going to                                                               
"feed the fire" of the class action lawsuits.                                                                                   
MR. GOLTZ said in his judgment it would not.                                                                                    
Number 2641                                                                                                                     
REPRESENTATIVE GUTTENBERG asked if it  would "damper the fire" of                                                               
the lawsuits.                                                                                                                   
MR. GOLTZ  said arguably  yes, but  he was not  sure that  it was                                                               
going to  have a strong  effect one way or  the other, but  if it                                                               
had  any effect,  it would  be to  discourage anybody  seeking to                                                               
bring a claim  making the argument that CFEC  lacks the authority                                                               
to issue  permits in the past.   He said because  the retroactive                                                               
provision would allow DOL to argue  that, if that were true under                                                               
a previous version of the law,  that was effectively cured by the                                                               
retroactive  adoption  of that  authority  in  order to  bring  a                                                               
wording  of the  statute  into  line with  the  practice and  the                                                               
intent all along.                                                                                                               
REPRESENTATIVE GUTTENBERG  said the courts  are going to  rule on                                                               
the original  lawsuit as  it is.   He asked  how much  weight the                                                               
courts are going to place on  this bill with the retroactive date                                                               
on those current standing cases.                                                                                                
MR. GOLTZ said  he didn't know for  sure.  He said  because he is                                                               
the person  who is  advocating on  behalf of  the state  in these                                                               
cases he  is not in  a good position to  make that argument  in a                                                               
strong fashion, because  it would essentially run  counter to the                                                               
goal he is serving for the state.                                                                                               
Number 2736                                                                                                                     
REPRESENTATIVE LYNN asked if changing  it to be retroactive would                                                               
make it effective as of 30 years  ago and if the court would have                                                               
to base it upon the bill with it being retroactive.                                                                             
CO-CHAIR DAHLSTROM asked if the  original version of the bill did                                                               
not include  the language adding  the uncodified law  by amending                                                               
the  new section  for retroactivity.    She asked  Representative                                                               
Wilson to  comment on how and  why it was necessary  to add that.                                                               
She said  she thought there  is a general feeling  from committee                                                               
members  that they  might  be more  comfortable  in adopting  the                                                               
original version.                                                                                                               
REPRESENTATIVE WILSON  said the intent of  the legislation itself                                                               
was  for  clarification,  and  the  [uncodified  law]  was  added                                                               
because  of Mr.  Goltz's  testimony that  there  were some  class                                                               
action lawsuits  ready to happen because  of this.  She  said the                                                               
amount of the  permit is $150 and she thought  the fishermen were                                                               
probably not going to gain  from that, but the attorneys probably                                                               
would.  She said [the committee]  thought that the there might be                                                               
a possibility that  it would help the class action  lawsuit.  She                                                               
said she was not "locked in" to  that part of it, but it could be                                                               
a possibility that it might help.                                                                                               
Number 2841                                                                                                                     
REPRESENTATIVE  GATTO moved  to report  HB 478  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 478 was reported  from the                                                               
House Resources Standing Committee.                                                                                             
HB 444-DIRECT MARKETING FISHERIES BUSINESS                                                                                    
[Contains discussion of SB 286, the companion bill.]                                                                            
CO-CHAIR  DAHLSTROM announced  that  the next  order of  business                                                               
would  be  HOUSE  BILL  NO.  444,  "An  Act  relating  to  direct                                                               
marketing fisheries  businesses, to  the fisheries  business tax,                                                               
and  to liability  for payment  of taxes  and assessments  on the                                                               
sale  or transfer  of  fishery resources;  and  providing for  an                                                               
effective date."  [Before the committee was CSHB 444(FSH).]                                                                     
Number 2890                                                                                                                     
REPRESENTATIVE PEGGY  WILSON, Alaska State  Legislature, speaking                                                               
as sponsor, explained  that HB 444 is about  a fisheries business                                                               
tax (FBT) and how that tax  relates to a sector of the commercial                                                               
fishing industry known as  direct marketing fisheries businesses.                                                               
She said  in 1913, when the  territory of Alaska decided  to gain                                                               
revenue for  the fishing industry,  this tax was put  into place.                                                               
It  is the  oldest tax  in Alaska  and was  levied on  processing                                                               
companies.     The  percentage  was  3   percent  on  shore-based                                                               
processors and  5 percent on floating-fisheries  processors.  She                                                               
said  the   floating  businesses   are  primarily   large  mobile                                                               
processing  facilities, and  are  assessed at  a  higher rate  to                                                               
compensate for  the fact that they  do not operate like  a shore-                                                               
based  plant does.    This bill  focuses on  a  group of  fishing                                                               
businesses that  do not fit the  old definition of the  FBT.  She                                                               
explained that this bill is a companion  bill to SB 286, and is a                                                               
bill that  took years  of negotiations  between the  industry and                                                               
government.  She said the  Joint Legislative Salmon Industry Task                                                               
Force  endorses this  bill unanimously.    She said  the bill  is                                                               
about fairness and "leveling the playing field."                                                                                
CO-CHAIR MASEK asked for a brief  overview of the changes made to                                                               
CSHB 444(FSH).                                                                                                                  
TAPE 04-13, SIDE B                                                                                                            
Number 2990                                                                                                                     
IAN   FISK,  Staff   to  Senator   Bert  Stedman,   Alaska  State                                                               
Legislature, testified.   [Senator Stedman was sponsor  of the SB                                                               
286,  the companion  bill.]   Speaking  to changes  made in  CSHB                                                               
444(FSH), he turned attention to page  4, line 5, and he said the                                                               
word   "unprocessed"   was  added   into   the   language  as   a                                                               
clarification  to ensure  that the  [tax] is  on the  unprocessed                                                               
value [of the  catch].  He explained that one  of the things this                                                               
bill  does  is  it  clarifies  the  value  of  fish  that  direct                                                               
marketing fisheries  are supposed to pay  tax on.  Mr.  Fisk said                                                               
the  bill  changes the  tax  rate  for  direct marketers  from  5                                                               
percent to 3  percent because in existing law many  of the direct                                                               
market  fisheries  businesses  who  do processing  on  board  are                                                               
basically  considered  to  be  the  same  as  floating  fisheries                                                               
business.  He clarified that these are small vessels.                                                                           
Number 2912                                                                                                                     
MR. FISK explained  that this is the oldest tax  in the state and                                                               
as  it has  evolved  over  the years,  it  hasn't  really made  a                                                               
distinction between small boat vessels,  which do some processing                                                               
on  board, and  large  floating processors,  which are  basically                                                               
floating canning  lines.  He said  this is a fair  distinction to                                                               
make for  small boats  that are operating  out of  Alaskan towns.                                                               
He said  the bill changes  the point  of taxation; the  "raw fish                                                               
tax" -  the nickname for fisheries  business tax - is  applied to                                                               
the raw fishery resource as  it's delivered to a processor, which                                                               
is the way a vast majority of  fish are delivered, and is kind of                                                               
the first  point of sale.   Mr. Fisk said  the point that  one is                                                               
taxed on  in the direct market  business is often a  retail point                                                               
of  sale, so  [the  bill] rectifies  that  problem, and  provides                                                               
fairness  and  a  level  playing  field.    He  said  [the  bill]                                                               
rectifies  the due  dates  for  all taxes  that  a direct  market                                                               
business would pay to April 1.   There are a few other taxes that                                                               
the businesses have to pay if  handling salmon such as a hatchery                                                               
and marketing tax.  He said  instead of paying the taxes monthly,                                                               
it would  be paid once  a year, which  makes it easier  for small                                                               
businesses to do the bookkeeping.                                                                                               
MR.  FISK said  [the bill]  is a  tightly woven  compromise [that                                                               
resulted] from  the Joint Legislative Salmon  Industry Task Force                                                               
process.  He  said the definition of a "direct  market vessel" is                                                               
[a  vessel] that  is 65  feet or  under, which  made some  of the                                                               
larger processors more comfortable with  the bill, and it applies                                                               
only  to  the  product  that   is  caught  and  marketed  by  the                                                               
fisherman.   He  said a  direct market  vessel can't  buy product                                                               
from other  vessels.  Mr.  Fisk explained that the  Department of                                                               
Revenue (DOR) will be revenue  neutral to the state because there                                                               
are some provisions  of the bill that bring  in better compliance                                                               
with  the FBT  and  close a  few loopholes  on  certain types  of                                                               
direct market vessels.                                                                                                          
MR. FISK said  this bill is helping out  small Alaskan businesses                                                               
and  because of  current market  conditions fishermen  are losing                                                               
their markets  and don't  have any  other options  but to  try to                                                               
sell their own  product.  He suggested the bill  would help small                                                               
Alaskan businesses.   Mr. Fisk  noted that this is  a compromised                                                               
bill  that a  lot  of work  had  been  put into.    He urged  the                                                               
committee to pass the bill.                                                                                                     
CO-CHAIR DAHLSTROM asked Mr. Fisk  to comment on the $25,000 that                                                               
is going to come out of the general fund.                                                                                       
MR. FISK said  the requested position for DOR is  the only fiscal                                                               
impact that this  bill will have.   He said the point  is to give                                                               
DOR the extra ability to check the compliance with the tax.                                                                     
CO-CHAIR  DAHLSTROM   asked  Mr.  Fisk  if   he  anticipated  one                                                               
additional  position in  2006 and  two  positions in  2007.   She                                                               
noted that the  [amount of funding requested in  the fiscal note]                                                               
doubles in 2007.                                                                                                                
MR. FISK  said he is  not certain why  there is a  difference [in                                                               
funding]  between the  two  years.   He said  he  thought it  was                                                               
because there won't really be  any tax returns for the department                                                               
to go over for  the first part of the [2006]  fiscal year, and it                                                               
wouldn't be until the middle or the  end of the year.  He said in                                                               
the long  run, [DOR] will  end up  with a $50,000  estimate every                                                               
Number 2745                                                                                                                     
REPRESENTATIVE GATTO  asked about  the definition  of unprocessed                                                               
MR. FISK said  in some cases a  troller can gut and  gill a fish,                                                               
which  is kind  of the  industry standard  for trollers,  and the                                                               
fish is not considered processed.                                                                                               
REPRESENTATIVE GATTO  said a fish  can be finned, gutted,  and it                                                               
remains unprocessed because the flesh is  not exposed to air.  He                                                               
said he wanted to ensure that  was clear to the committee because                                                               
it  wasn't clear  to him.   Representative  Gatto noted  that the                                                               
head of  the fish  has to  stay on otherwise  the flesh  would be                                                               
Number 2666                                                                                                                     
KATHY  HANSEN, Executive  Director, Southeast  Alaska Fishermen's                                                               
Alliance  (SEAFA), testified.   Ms.  Hansen  said [HB  444] is  a                                                               
compromised bill that's  been worked through in  a public process                                                               
for over two years through  the Joint Legislative Salmon Industry                                                               
Task  Force;  it  has  agency  support,  processor  support,  and                                                               
industry support.  She noted  that direct marketers had testified                                                               
in other committees but it is the  time of year when most of them                                                               
have started  to go back out  fishing and aren't available.   Ms.                                                               
Hansen urged the committee to pass the bill.                                                                                    
REPRESENTATIVE GATTO  asked if  a [fisherman]  can buy  fish from                                                               
MS. HANSEN said a fisherman cannot  buy fish from others and be a                                                               
direct marketer.                                                                                                                
REPRESENTATIVE  GATTO  asked if  a  fisherman  can carry  another                                                               
fisherman's fish into [town] to save that person a trip.                                                                        
MS.  HANSEN said  she would  have to  take a  look at  the Alaska                                                               
Department of Fish  & Game's [ADF&G] transporter bills  to see if                                                               
a fisherman  can carry in  another fisherman's  unprocessed fish.                                                               
She said she did not know the answer.                                                                                           
Number 2597                                                                                                                     
REPRESENTATIVE GUTTENBERG asked if  this bill allows fishermen to                                                               
get together and form a co-op or a processing conglomeration.                                                                   
MS. HANSEN said "roundaboutly" that  is permissible under current                                                               
state law.   She  said those  activities can  still be  done even                                                               
with this legislation passing.  Ms. Hansen remarked:                                                                            
     They'll have  to go back  to the current laws  that are                                                                    
     in statute right now and  meet those definitions of ...                                                                    
     what  requirements   they'll  have  to  meet   for  DEC                                                                    
     [Department  of Environmental  Conservation] processing                                                                    
     standards [and] what requirements  they'll have to meet                                                                    
     for Department of Revenue.                                                                                                 
MS.  HANSEN said  it  can still  be  done, but  not  as a  direct                                                               
marketer dealing with one's own product.                                                                                        
REPRESENTATIVE GATTO asked if fishermen  will be paying 5 percent                                                               
instead of 3 percent.                                                                                                           
MS. HANSEN answered in the affirmative.                                                                                         
Number 2546                                                                                                                     
REPRESENTATIVE  WOLF  noted  that   the  committee  had  heard  a                                                               
transporter bill  last year.   He asked if  one boat can  haul in                                                               
several other fishermen's unprocessed fish.                                                                                     
MS.  HANSEN said  without  looking at  the  transporter bill  she                                                               
didn't remember  if there  were any  restrictions on  whether the                                                               
fish had to be processed or  unprocessed and she could not answer                                                               
the question.                                                                                                                   
REPRESENTATIVE  GATTO  said  he specifically  remembered  hearing                                                               
that  bill in  committee last  year, which  [allowed one  boat to                                                               
haul   several   fishermen's   fish   into  town].      He   said                                                               
Representative Gatto  [brought attention  to the question]  of at                                                               
what point  does it become  a co-op, and  he said he  didn't know                                                               
that the question was ever addressed.                                                                                           
Number 2463                                                                                                                     
CHERYL  SUTTON, Staff  to the  Joint Legislative  Salmon Industry                                                               
Task Force,  Alaska State Legislature,  testified.  She  said the                                                               
transporter  bill that  was  passed last  year  only created  the                                                               
opportunity  for  harvesters  to offload  unprocessed  fish  onto                                                               
another  vessel  that  acted  as   a  transporting  vessel  to  a                                                               
processing plant or a point on land.  Ms. Sutton remarked:                                                                      
     This bill has nothing  to do with transporting anyone's                                                                    
     processed fish ....   It does not increase  any of that                                                                    
     activity; it's  a direct marketer,  they're responsible                                                                    
     for their own  vessel.  They fall under a  set of rules                                                                    
     that are very  stringent and very well  defined, and if                                                                    
     you get into any kind  of a processing activity, and we                                                                    
     dealt  very  closely with  all  the  processors in  the                                                                    
     state on this issue, then  you ... come under an entire                                                                    
     set  of different  regulations, and  these folks  don't                                                                    
     want to fall  under those regulations, they  want to do                                                                    
     this   activity,  try   to   just   expand  their   own                                                                    
     businesses,  and  perhaps  expand  their  own  personal                                                                    
     incomes by doing direct marketing,  and that's the pure                                                                    
     and simple of the bill.                                                                                                    
REPRESENTATIVE GATTO said he didn't  want to pass legislation and                                                               
somehow be in  conflict [with legislation passed last  year].  He                                                               
said he thought it was great for  a person to sell his or her own                                                               
fish.  Representative Gatto asked  if [the bill] defeats what was                                                               
passed last year.                                                                                                               
MS.  SUTTON said  no;  the bill  passed last  year  is a  totally                                                               
separate issue.  She said she  believed there are only 12 vessels                                                               
in  the entire  state that  applied for  a transporter  permit of                                                               
which only 4 vessels were in  salmon fisheries, so there wasn't a                                                               
huge use  of that piece of  legislation to this point.   She said                                                               
the [two  bills] do not  cross boundaries  in any section  of the                                                               
law.  She remarked:                                                                                                             
     The  transporter  bill simply  would  allow  me as  [a]                                                                    
     fisherman -  if I  were out  on the  west side  of Cook                                                                    
     Inlet  harvesting  fish  and I'd  had  no  capacity  to                                                                    
     offload my fish to a  processor, but there was a vessel                                                                    
     that was transporting and he  had a transporter license                                                                    
     and I had the proper licensing  - he could take my fish                                                                    
     to  the east  side of  the  inlet and  sell those  fish                                                                    
     under  my authority,  so that  they're  not mixing  the                                                                    
     issues at all.                                                                                                             
REPRESENTATIVE  GATTO  asked if  the  fishermen  whose fish  were                                                               
being  transported would  still retain  ownership of  his or  her                                                               
MS. SUTTON said correct.                                                                                                        
REPRESENTATIVE  GATTO  indicated  that  if  the  fish  were  kept                                                               
separately,  then there  would  really be  no  question that  the                                                               
transporter  was  simply helping  by  transporting  fish for  the                                                               
other fishermen.   He  said if  the fish  were kept  together, he                                                               
would  have a  different question  that  has to  do with  whether                                                               
"we're overstepping  the intent  here in saying  this is  a co-op                                                               
now, rather than would you mind carrying my fish for me."                                                                       
MS.  SUTTON said  she  was  going to  step  back  from the  issue                                                               
because that's a piece of  legislation that was passed last year,                                                               
is in  law, and has absolutely  nothing to do with  this piece of                                                               
legislation.  She remarked:                                                                                                     
     I  guess that  was the  only point  I really  wanted to                                                                    
     make  clear was  that ...  you were  very clear  in the                                                                    
     questions that you  asked last year about  how ... they                                                                    
     would  be accountable.   They  spent considerable  time                                                                    
     with  the  [Alaska]  Department  of  Fish  &  Game  ...                                                                    
     ticketing,  ... formatting,  and making  sure that  the                                                                    
     individual's  fish  were  clearly  accounted  for,  ...                                                                    
     registered,  and  certified,  but  this  is  a  totally                                                                    
     separate issue.   This is a direct  marketing bill that                                                                    
     deals with  commercial fishing  vessels that  are under                                                                    
     65 feet,  and their  regulations are  totally different                                                                    
     from the transporter regulations.                                                                                          
Number 2233                                                                                                                     
KENNETH  DUCKETT,  Executive  Director, United  Southeast  Alaska                                                               
Gillnetters (USAG),  testified, and he stated  that USAG strongly                                                               
supports  this legislation  and  has submitted  a  letter to  the                                                               
committee expressing its support.                                                                                               
CO-CHAIR DAHLSTROM noted  that the next committee  of referral is                                                               
the House Finance  Committee, which will have  the opportunity to                                                               
view  the  fiscal note  and  make  determinations [regarding  the                                                               
fiscal impact of the bill].                                                                                                     
Number 2189                                                                                                                     
CO-CHAIR MASEK  moved to  report CSHB  444(FSH) out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes, and asked for unanimous consent.                                                                                         
Number 2173                                                                                                                     
REPRESENTATIVE  GUTTENBERG objected  for purposes  of discussion.                                                               
He remarked:                                                                                                                    
     I  think  Representative Gatto  and  I  have a  similar                                                                    
     concern that the salmon task  force has come to us with                                                                    
     a series  of recommendations  and we've passed  most of                                                                    
     them.  But I think, ...  and I don't know how real this                                                                    
     is, but ...  certainly a concern ... [of]  mine is that                                                                    
     we're  changing situations  and there  are going  to be                                                                    
     ... new processes.   And people are going  to be taking                                                                    
     advantage of things that are unseen at this point.                                                                         
     ...  I support  this legislation  and I  think it  does                                                                    
     good things,  but ... the  more we do of  these things,                                                                    
     the  more things  that are  changing and  opportunities                                                                    
     are changing and the whole  shape of the business, so I                                                                    
     am concerned  about that in the  long run.  I  am not a                                                                    
     commercial fishermen  but I think  the dynamics  of the                                                                    
     industry is going to be changing.                                                                                          
REPRESENTATIVE WOLF  said he had  some reservations about  HB 444                                                               
as well.   He indicated that  he thought HB 444  ties directly to                                                               
the transporter bill passed last year.                                                                                          
Number 2101                                                                                                                     
REPRESENTATIVE GUTTENBERG removed his objection.                                                                                
CO-CHAIR DAHLSTROM asked  if there was further  objection.  There                                                               
being no  objection, CSHB  444(FSH) was  reported from  the House                                                               
Resources Standing Committee.                                                                                                   
HB 319-REMOTE REC.CABIN SITE SALES/LOTTERY SALE                                                                               
CO-CHAIR  DAHLSTROM announced  that the  final order  of business                                                               
would be HOUSE BILL NO. 319,  "An Act relating to the disposal of                                                               
state land  by lottery; and  relating to the  disposal, including                                                               
sale or lease, of remote  recreational cabin sites."  [Before the                                                               
committee was Version S, adopted as a work draft on 3/01/04.]                                                                   
Number 2067                                                                                                                     
JIM  POUND,  Staff  to Representative  Hugh  Fate,  Alaska  State                                                               
Legislature, noted  that the  bill had  been previously  heard in                                                               
committee.  He said he was available to answer questions.                                                                       
CO-CHAIR DAHLSTROM said she had  heard some concerns raised about                                                               
services that people  may or may not request or  feel entitled to                                                               
in particular areas, such as  schools, roads, emergency services,                                                               
and so forth.                                                                                                                   
MR. POUND  said there  is specific  language in  existing statute                                                               
that deals with that issue and  basically says [the state] is not                                                               
responsible for those things in  remote cabin locations.  He said                                                               
he didn't have a copy of that section of statute with him.                                                                      
Number 1970                                                                                                                     
NANCY  WELCH,  Special  Assistant, Office  of  the  Commissioner,                                                               
Department of Natural  Resources (DNR), testified.   She said the                                                               
statute being asked about is AS 38.04.010(b).                                                                                   
The committee took an at-ease from 2:21 p.m. to 2:26 p.m.                                                                       
CO-CHAIR  DAHLSTROM  asked Mr.  Pound  for  clarification on  the                                                               
MR. POUND  directed attention to  AS 38.04.010(b), which  read in                                                               
     State  land  that  is  located   beyond  the  range  of                                                                    
     existing schools  and other necessary  public services,                                                                    
     or  that is  located  where development  of sources  of                                                                    
     employment  is improbable,  may be  made available  for                                                                    
     seasonal  recreational  purposes  or  for  low  density                                                                    
     The seasonal  recreation use or  low-density settlement                                                                    
     shall have sufficient  separation between residences so                                                                    
     that  public   services  will   not  be   necessary  or                                                                    
     expected.   The availability  of timber,  firewood, and                                                                    
     water  resources  shall  be considered  in  determining                                                                    
     separation between residences.                                                                                             
CO-CHAIR DAHLSTROM said the bill  has a rather large fiscal note.                                                               
She  said the  next committee  of referral  is the  House Finance                                                               
Committee, and she  is confident "that they will  go through this                                                               
with a fine-tooth comb."                                                                                                        
Number 1839                                                                                                                     
CO-CHAIR  MASEK moved  to report  CSHB 319,  Version 23-LS0477\S,                                                               
Bullock,    2/25/04,   out    of   committee    with   individual                                                               
recommendations and the accompanying  fiscal notes, and asked for                                                               
unanimous consent.                                                                                                              
Number 1818                                                                                                                     
REPRESENTATIVE  GATTO objected  for purposes  of discussion.   He                                                               
called attention  to the following  language in  AS 38.04.010(b):                                                               
"The  seasonal recreation  use or  low  density settlement  shall                                                               
have  sufficient separation  between  residences  so that  public                                                               
services will not  be necessary or expected."  He  said he didn't                                                               
know how  the [legislature]  could even  determine what  would be                                                               
expected,  and that  people always  expect things  once they  are                                                               
there.   He  asked, "Have  you ever  found a  place where  people                                                               
didn't  expect you  to  stay away  or government  to  come in  or                                                               
somebody take  care of me  one way or  another?"  He  stated that                                                               
that hasn't happened in his experience.                                                                                         
MR. POUND  said he is  inclined to say that  Representative Gatto                                                               
is  correct  in  his  assessment,   but  he  believes  that  this                                                               
statutory language does  protect the state and  ultimately if the                                                               
site  is within  a municipality  or borough,  that it  would also                                                               
protect "them" as well.                                                                                                         
REPRESENTATIVE  GATTO asked  if  it is  known  or suspected  that                                                               
that's the situation.                                                                                                           
MR. POUND said  past experience is that no one  in a remote cabin                                                               
site has  expected to have any  support from the state  as far as                                                               
utilities and/or schools.                                                                                                       
REPRESENTATIVE  GATTO asked  if it  is clear  in the  bill or  in                                                               
regulation that "you  sign away your right to  having the borough                                                               
or the community  or somebody establish schools  or fire stations                                                               
...."  He  said he can foresee the state  getting "hung up pretty                                                               
bad" as  soon as 10  kids show up and  "somebody says I  think we                                                               
have a right to a high school here."                                                                                            
MR. POUND noted that he had not  seen all of the language that is                                                               
involved  in the  state  contract.   He said  the  little bit  of                                                               
contractual  language in  this bill  is correcting  some of  that                                                               
contract  and he  would suspect  that the  department would  have                                                               
that language within its contract.                                                                                              
Number 1674                                                                                                                     
MS.  WELCH  directed  attention to  AS  38.95.300,  a  disclaimer                                                               
applicable to state land disposals, which read:                                                                                 
     Except as  otherwise specifically provided,  nothing in                                                                    
     this title                                                                                                                 
          (1) obligates the state to provide services to                                                                        
     land that is  disposed of by the state,  or any grantee                                                                    
     of  the  state,  or  is the  subject  of  any  disposal                                                                    
          (2) limits the authority of the state to dispose                                                                      
     of land  or any  interest in land  or resources  in the                                                                    
     area of  the current  disposal, provides  any exclusive                                                                    
     right  or interest  in  the area  of  the disposal,  or                                                                    
     implies  or requires  that any  disposals made  will be                                                                    
     limited in type or any other manner.                                                                                       
MS. WELCH said it is a  broad exclusion, but it doesn't mean that                                                               
people won't  come in and  ask.  She  said she believes  it gives                                                               
the legislature the authority to "go  back and say but here's the                                                               
REPRESENTATIVE GATTO  asked what  happens when it  conflicts with                                                               
existing law  that says  if a  community has  10 children,  it is                                                               
entitled  to  a  school.    He  asked  if  [AS  38.95.300]  would                                                               
supercede that law  or if it would take  precedence over previous                                                               
law because it was signed into law later.                                                                                       
MS.  WELCH  said she  could  not  provide  legal advice  on  that                                                               
question; it would  be something that the  legislature would have                                                               
to work  out.   She explained  that in  past land  disposals most                                                               
subdivisions have been located close  to existing communities, so                                                               
the schools expand or adapt according  to the type of use that is                                                               
occurring  there.   She said  most of  the remote  parcel program                                                               
areas would  not see many  schools go up  in those areas,  so she                                                               
would assume that it would still be the same.                                                                                   
REPRESENTATIVE GATTO asked if there were some that did.                                                                         
MS. WELCH replied  that she did not have  first-hand knowledge of                                                               
it, but it is "kind of one of those disclaimers."                                                                               
Number 1537                                                                                                                     
REPRESENTATIVE GATTO withdrew his objection.                                                                                    
CO-CHAIR DAHLSTROM asked if there was further objection.  There                                                                 
being no further objection, CSHB 319(RES) was reported from the                                                                 
House Resources Standing Committee.                                                                                             
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 2:36 p.m.                                                                 

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