Legislature(2015 - 2016)BARNES 124

04/04/2016 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HCS CSSB 32(RES) Out of Committee
-- Public Testimony --
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 266(RES) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 4, 2016                                                                                          
                           1:06 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Benjamin Nageak, Co-Chair                                                                                        
Representative David Talerico, Co-Chair                                                                                         
Representative Bob Herron                                                                                                       
Representative Craig Johnson                                                                                                    
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Geran Tarr                                                                                                       
Representative Mike Chenault (alternate)                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Mike Hawker, Vice Chair                                                                                          
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 266                                                                                                              
"An Act relating to the authority of the Board of Game to adopt,                                                                
amend, or repeal certain regulations."                                                                                          
     - MOVED CSHB 266(RES) OUT OF COMMITTEE                                                                                     
CS FOR SENATE BILL NO. 32(RES)                                                                                                  
"An Act relating to the sale of timber on state land; and                                                                       
providing for an effective date."                                                                                               
     - MOVED HCS CSSB 32(RES) OUT OF COMMITTEE                                                                                  
HOUSE BILL NO. 112                                                                                                              
"An  Act   repealing  the   Alaska  Commercial   Fisheries  Entry                                                               
Commission and transferring its  duties to a commercial fisheries                                                               
entry division  established in  the Department  of Fish  and Game                                                               
and the office  of administrative hearings; and  providing for an                                                               
effective date."                                                                                                                
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 266                                                                                                                  
SHORT TITLE: BOARD OF GAME REGULATION PROPOSALS                                                                                 
SPONSOR(s): REPRESENTATIVE(s) WILSON                                                                                            
01/20/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/20/16       (H)       RES                                                                                                    
02/08/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/08/16       (H)       -- MEETING CANCELED --                                                                                 
04/01/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/01/16       (H)       Heard & Held                                                                                           
04/01/16       (H)       MINUTE(RES)                                                                                            
04/04/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
BILL: SB  32                                                                                                                  
SHORT TITLE: TIMBER SALES                                                                                                       
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
01/30/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/30/15       (S)       RES, FIN                                                                                               
02/13/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/13/15       (S)       Heard & Held                                                                                           
02/13/15       (S)       MINUTE(RES)                                                                                            
02/25/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/25/15       (S)       Moved  CSSB 32(RES) Out of Committee                                                                   
02/25/15       (S)       MINUTE(RES)                                                                                            
02/27/15       (S)       RES RPT CS  5DP 2NR  SAME TITLE                                                                        
02/27/15       (S)       DP:    GIESSEL,    COSTELLO,    COGHILL,                                                               
                         MICCICHE, STEDMAN                                                                                      
02/27/15       (S)       NR: WIELECHOWSKI, STOLTZE                                                                              
03/25/15       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/25/15       (S)       Heard & Held                                                                                           
03/25/15       (S)       MINUTE(FIN)                                                                                            
03/26/15       (S)       FIN AT 1:30 PM SENATE FINANCE 532                                                                      
03/26/15       (S)       Moved  CSSB 32(RES) Out of Committee                                                                   
03/26/15       (S)       MINUTE(FIN)                                                                                            
03/27/15       (S)       FIN RPT CS(RES)  5DP 2NR                                                                               
03/27/15       (S)       DP: KELLY, MACKINNON, BISHOP, DUNLEAVY,                                                                
03/27/15       (S)       NR: MICCICHE, OLSON                                                                                    
04/17/15       (S)       TRANSMITTED TO (H)                                                                                     
04/17/15       (S)       VERSION: CSSB 32(RES)                                                                                  
04/17/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/17/15       (H)       RES, FIN                                                                                               
04/04/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
BILL: HB 112                                                                                                                  
SHORT TITLE: REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG                                                                            
SPONSOR(s): STUTES                                                                                                              
02/18/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/18/15       (H)       FSH, RES                                                                                               
03/12/15       (H)       FSH AT 10:00 AM CAPITOL 120                                                                            
03/12/15       (H)       <Bill Hearing Canceled>                                                                                
03/19/15       (H)       FSH AT 10:00 AM CAPITOL 120                                                                            
03/19/15       (H)       Heard & Held                                                                                           
03/19/15       (H)       MINUTE(FSH)                                                                                            
03/26/15       (H)       FSH AT 10:00 AM CAPITOL 120                                                                            
03/26/15       (H)       Moved  CSHB 112(FSH) Out of Committee                                                                  
03/26/15       (H)       MINUTE(FSH)                                                                                            
03/27/15       (H)       FSH RPT CS(FSH) 3DP 3NR                                                                                
03/27/15       (H)       DP: MILLETT, JOHNSON, STUTES                                                                           
03/27/15       (H)       NR: HERRON, FOSTER, KREISS-TOMKINS                                                                     
03/27/15       (H)       FIN REFERRAL ADDED AFTER RES                                                                           
04/08/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/08/15       (H)       <Bill Hearing Postponed>                                                                               
04/04/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
WITNESS REGISTER                                                                                                              
REPRESENTATIVE TAMMIE WILSON                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As the sponsor of HB 266, introduced the                                                                 
proposed committee substitute for the bill, Version P.                                                                          
KEVIN BROOKS, Deputy Commissioner                                                                                               
Office of the Commissioner                                                                                                      
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions related to HB 266.                                                                    
JULIE MORRIS, Staff                                                                                                             
Representative David Talerico                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During the hearing on CSSB 32(RES),                                                                      
presented the proposed House committee substitute, Version N.                                                                   
JOHN "CHRIS" MAISCH, Director & State Forester                                                                                  
Division of Forestry (DOF)                                                                                                      
Department of Natural Resources (DNR)                                                                                           
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Provided testimony on CSSB 32(RES) and on                                                                
the proposed House committee substitute, Version N.                                                                             
REBECCA KNIGHT                                                                                                                  
Petersburg, Alaska                                                                                                              
POSITION STATEMENT:  Testified in opposition to CSSB 32(RES).                                                                 
DAVID BEEBE                                                                                                                     
City of Kupreanof                                                                                                               
Kupreanof, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to CSSB 32(RES).                                                                 
OWEN GRAHAM, Executive Director                                                                                                 
Alaska Forest Association                                                                                                       
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of CSSB 32(RES).                                                                    
CARL PORTMAN, Deputy Director                                                                                                   
Resource Development Council of Alaska (RDC)                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of CSSB 32(RES).                                                                    
REPRESENTATIVE LOUISE STUTES                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as the sponsor of HB 112.                                                                      
REID HARRIS, Staff                                                                                                              
Representative Louise Stutes                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Stutes,                                                                      
sponsor, discussed the proposed committee substitute for HB 112,                                                                
Version N.                                                                                                                      
MARTIN LUNDE                                                                                                                    
Southeast Alaska Seiners Association                                                                                            
(No address provided)                                                                                                           
POSITION STATEMENT:  Testified in opposition to HB 112 as well                                                                
as the proposed committee substitute for HB 112, Version N.                                                                     
ROBERT THORSTENSON, Executive Director and Lobbyist                                                                             
Southeast Alaska Seiners Association                                                                                            
Lobbyist, Kenai Peninsula Fishermen's Association                                                                               
Lobbyist, Alaska Bering Sea Crabbers                                                                                            
Lobbyist, Armstrong-Keta, Inc.                                                                                                  
Lobbyist, Alaska Pacific Environmental Services, LLC                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 112.                                                                       
BEN BROWN, Commissioner                                                                                                         
Commercial Fisheries Entry Commission (CFEC)                                                                                    
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  in  support  of  the  proposed                                                             
committee substitute for HB 112, Version N.                                                                                     
JERRY MCCUNE, President                                                                                                         
United Fishermen of Alaska (UFA)                                                                                                
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:   Testified in  opposition to HB 112  as well                                                             
as the proposed committee substitute for HB 112, Version N.                                                                     
STEVEN SAMUELSON                                                                                                                
Petersburg, Alaska                                                                                                              
POSITION STATEMENT:  Testified in opposition to HB 112.                                                                       
ACTION NARRATIVE                                                                                                              
1:06:35 PM                                                                                                                    
CO-CHAIR  DAVID  TALERICO  called the  House  Resources  Standing                                                             
Committee meeting  to order at  1:06 p.m.   Representatives Tarr,                                                               
Herron, Johnson,  Olson, Seaton, Josephson, Nageak,  and Talerico                                                               
were  present at  the  call to  order.   Representative  Chenault                                                               
(alternate) arrived as the meeting was in progress.                                                                             
           HB 266-BOARD OF GAME REGULATION PROPOSALS                                                                        
1:07:31 PM                                                                                                                    
CO-CHAIR TALERICO announced  that the first order  of business is                                                               
HOUSE BILL  NO. 266,  "An Act  relating to  the authority  of the                                                               
Board of  Game to adopt,  amend, or repeal  certain regulations."                                                               
[Before the committee was the  proposed committee substitute (CS)                                                               
for  HB 266,  Version 29-LS1205\N,  Bullard, 3/31/16,  adopted as                                                               
the working document on 4/1/16.]                                                                                                
CO-CHAIR NAGEAK moved to adopt  the proposed committee substitute                                                               
(CS),  Version  29-LS1205\P,  Bullard,  4/4/16,  as  the  working                                                               
document.   There being  no objection, Version  P was  before the                                                               
REPRESENTATIVE TAMMIE  WILSON, Alaska  State Legislature,  as the                                                               
sponsor of  HB 266,  introduced Version P  and explained  the two                                                               
changes that  Version P makes to  Version N.  She  said the first                                                               
change  to Version  N is  on page  3, lines  17-19, which  state:                                                               
"(ii) the subject matter of the  proposal would not be before the                                                               
board for one calendar year  but for the board member's proposal;                                                               
and".   Version  P  changes this  language to  read:   "(ii)  the                                                               
subject  matter of  the proposal  would not  be before  the board                                                               
during  the current  period  in which  the  board is  considering                                                               
proposals solicited under (c) of  this section, but for the board                                                               
member's proposal;  and".   She noted the  second change  is that                                                               
Version  P adds  subsection (m)  [to  Section 3].   However,  she                                                               
pointed out,  (m) is  not right  as written and  there may  be an                                                               
amendment through the committee to get it right.                                                                                
CO-CHAIR TALERICO  stated he has  a conceptual amendment  that he                                                               
plans to offer that would correct (m).                                                                                          
REPRESENTATIVE WILSON  explained subsection  (m) makes it  so the                                                               
Board of Game can amend a proposal, but only amend to clarify.                                                                  
1:09:47 PM                                                                                                                    
REPRESENTATIVE SEATON drew attention to  Version P, page 3, lines                                                               
6-7,  which state  "at least  60  days' notice  before the  board                                                               
considers the proposal."  He asked  whether that 60 days would be                                                               
at all restrictive on the board's ability to do its work.                                                                       
REPRESENTATIVE WILSON replied that the  reason for the 60 days is                                                               
because there must be enough time  for [a proposal] to go back to                                                               
the  advisory councils  and  the  councils must  put  it out  for                                                               
public  comment before  the  councils have  their  agenda.   This                                                               
provision  would ensure  that the  councils are  not forced  into                                                               
having special meetings to be able to hear these proposals.                                                                     
1:10:45 PM                                                                                                                    
CO-CHAIR  TALERICO moved  to adopt  Conceptual Amendment  1 which                                                               
would  delete  the  language  on   page  3,  lines  27-29,  under                                                               
subsection (m) and insert the following language:                                                                               
     Nothing in this section restricts the board's ability                                                                      
     to amend language to clarify proposals noticed in the                                                                      
     same manner as provided under (c) of this section.                                                                         
CO-CHAIR TALERICO explained Conceptual  Amendment 1 would clarify                                                               
that  the board  would have  the ability  to improve  or amend  a                                                               
proposal live at its meeting.                                                                                                   
REPRESENTATIVE SEATON  objected to  the conceptual  amendment for                                                               
discussion purposes.                                                                                                            
CO-CHAIR TALERICO reiterated that  the conceptual amendment would                                                               
clarify for  the public and the  board that the board  would have                                                               
the ability to work on proposals.                                                                                               
1:12:09 PM                                                                                                                    
REPRESENTATIVE SEATON  posed a scenario  in which  five proposals                                                               
come to  the board  with varying  time and  varying numbers.   He                                                               
surmised  that as  Co-Chair Talerico  is interpreting  Conceptual                                                               
Amendment 1,  the Board of  Game could go anywhere  between those                                                               
numbers  and modify  a proposal  in that  way such  that it  is a                                                               
balancing  of several  proposals that  might have  come in  after                                                               
public  testimony, similar  to the  way things  are amended  in a                                                               
legislative committee.                                                                                                          
CO-CHAIR TALERICO believed that is  the intent.  Occasionally, he                                                               
said, proposals are  received that are not mirror  images of each                                                               
other  but address  the same  topics and  are very  close to  the                                                               
same.  This would give the  board the ability to address an issue                                                               
that is  included in  a multitude of  proposals and  massage that                                                               
into  one workable  proposal that  is moved  forward.   The board                                                               
would not be  "handcuffed" into voting a proposal up  or down; it                                                               
would  have the  ability to  amend some  language or  potentially                                                               
utilize one  section of one  proposal and insert it  into another                                                               
in an amendment form.                                                                                                           
1:14:30 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON,  regarding subsection (m)  as currently                                                               
written in  Version P, noted that  the focus is on  amendments or                                                               
clarification made to changes offered  by the board itself, which                                                               
is the  putative cause of  HB 266.   The amendment does  not talk                                                               
about  the   board's  own  proposals,  it   is  about  clarifying                                                               
proposals generally.   He  inquired as  to how  Co-Chair Talerico                                                               
perceives the difference there.                                                                                                 
CO-CHAIR TALERICO  replied he thinks  it is any  proposal brought                                                               
before  the board,  whether from  a board  member or  the public.                                                               
Occasionally board proposals and  public proposals cover the same                                                               
topics and  can be  very similar.   He said he  does not  want to                                                               
limit it or categorize the  proposals from particular user groups                                                               
or different  regions, so he  hopes the amendment will  work with                                                               
all proposals.                                                                                                                  
REPRESENTATIVE JOSEPHSON  related that  in a  memo or  email from                                                               
Matt Gruening  it appears the  deputy commissioner of  the Alaska                                                               
Department of Fish  & Game (ADF&G) has worked  with Mr. Gruening.                                                               
He surmised  [ADF&G] wanted  subsection (m) to  be as  written in                                                               
Version P to give the board  some liberty to, at a board meeting,                                                               
make changes on  its own initiative, which is  a very contentious                                                               
thing for  the board to do.   He asked whether  ADF&G would still                                                               
be satisfied if subsection (m) [is amended].                                                                                    
KEVIN BROOKS,  Deputy Commissioner,  Office of  the Commissioner,                                                               
Alaska   Department  of   Fish  &   Game  (ADF&G),   offered  his                                                               
appreciation  to the  sponsor for  allowing  the opportunity  for                                                               
some  interaction on  the  language  of the  bill  to  make it  a                                                               
workable  product for  the board  and get  to the  intent of  the                                                               
sponsor.   He explained that the  intent of subsection (m)  is to                                                               
recognize that a  call for proposals is identified  in Section 2,                                                               
which is why  this subsection references AS  16.05.255(c).  These                                                               
proposals have  been properly noticed  and lots of  time provided                                                               
for folks  to weigh in.   Under subsection (m) the  department is                                                               
trying to  have the board members  retain an ability to  take all                                                               
of those  properly noticed proposals and  wordsmith them, combine                                                               
them, and make improvements, as  is the board's custom and common                                                               
practice now; the understanding being  that the sponsor is trying                                                               
to identify something that is new  that no one has had any chance                                                               
to  see  from  just  getting  dropped   in  and  acted  on.    It                                                               
distinguishes  all the  other proposals  that have  been properly                                                               
noticed  and  allows  the  board   to  work  on  those  and  make                                                               
improvements as the board sees fit.                                                                                             
MR. BROOKS,  in response to  Representative Tarr,  clarified that                                                               
he was referring to Version P, subsection (m) within Section 3.                                                                 
1:19:02 PM                                                                                                                    
REPRESENTATIVE  SEATON removed  his  objection.   There being  no                                                               
further objection, Conceptual Amendment 1 was adopted.                                                                          
1:19:29 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  stated  he cares  greatly  about  this                                                               
issue.   He  said he  listened to  the Board  of Game  hearing on                                                               
Proposal 19  that Representative  Wilson brought forth  and heard                                                               
most  of that  testimony, including  advice offered  by assistant                                                               
attorney general Cheryl  Brooking on the question  of moving from                                                               
30 days' notice to 60 or 65 days.   He has talked about this with                                                               
a Board  of Game member  and a big  game commercial guide  and he                                                               
has  read Mr.  Ted  Spraker's  letter that  was  provided to  the                                                               
committee today.  His sense of  the history of this is that there                                                               
was more  than a lot of  public opportunity and in  this instance                                                               
there really was  60 days' notice in 2015.   The testimony before                                                               
the Board  of Game  was that  it was brought  up in  January, the                                                               
board took comments in January  and February, this was an ongoing                                                               
issue raised repeatedly,  the board bringing up  proposals on its                                                               
own  has  not  been abused,  and  it  has  had  four in  a  year.                                                               
Chairman  Spraker  notes the  board  has  done  it this  way  for                                                               
decades.   Something  unique is  that there  was a  sheep working                                                               
group to  which just about everybody  was invited and he  is told                                                               
that  a  majority  of  the  sheep  working  group  wanted  to  do                                                               
something  about aerial  hunting.   So, he  sees this  bill as  a                                                               
contest over  the efficacy of  aerial hunting and the  concern is                                                               
that aerial hunting is very effective.                                                                                          
REPRESENTATIVE  JOSEPHSON continued,  stating  that he  is not  a                                                               
champion of the Board of Game  and is someone who scrutinizes the                                                               
board's work and he  does not think it is a  diverse body.  There                                                               
is  a  dispute now  about  that  very  issue between  guides  and                                                               
whether there are too many guides  and others.  Mr. Spraker notes                                                               
that the  people who were  really hurt  by Proposal 207  are non-                                                               
residents and  their guides who  fly more.   Some people  play by                                                               
one rule out  of a sense of  duty and other people  play by other                                                               
rules.  Representative  Josephson posited that the  Board of Game                                                               
acted  properly  and  got  it  right.   His  sense  is  that  the                                                               
committee is going  to move the bill and he  will not object, but                                                               
he will  vote "do not pass".   He added that  there was testimony                                                               
about whether  sheep populations are  healthy and he  is reminded                                                               
that in  the western Brooks  Range the populations  are decidedly                                                               
not healthy.   There is also concern about  taking full-curl rams                                                               
and what that does to the genetics of the future population.                                                                    
1:23:21 PM                                                                                                                    
REPRESENTATIVE  SEATON  said  that  the  adoption  of  Conceptual                                                               
Amendment  1 makes  it clear  that  amendments can  be taken  and                                                               
proposals can  be massaged  by the  board so  that the  board can                                                               
then function in  its duties.  Without that he  could not support                                                               
moving  the  bill  forward  and   therefore  he  is  pleased  the                                                               
amendment was unanimously adopted.                                                                                              
1:23:47 PM                                                                                                                    
CO-CHAIR  NAGEAK moved  to report  the  proposed CS  for HB  266,                                                               
Version  29-LS1205\P,   Bullard,  4/4/16,  as  amended,   out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  266(RES)  was                                                               
reported from the House Resources Standing Committee.                                                                           
1:24:16 PM                                                                                                                    
The committee took an at-ease from 1:24 p.m. to 1:24 p.m.                                                                       
                       SB 32-TIMBER SALES                                                                                   
1:27:43 PM                                                                                                                    
CO-CHAIR TALERICO  announced that the  next order of  business is                                                               
CS FOR SENATE  BILL NO. 32(RES), "An Act relating  to the sale of                                                               
timber on state land; and providing for an effective date."                                                                     
CO-CHAIR  NAGEAK  moved to  adopt  the  proposed House  committee                                                               
substitute  (HCS)  for  CSSB 32,  Version  29-GS1022\N,  Bullard,                                                               
3/29/16, as the working document.                                                                                               
REPRESENTATIVE TARR objected for discussion purposes.                                                                           
JULIE MORRIS, Staff, Representative  David Talerico, Alaska State                                                               
Legislature, presented  the proposed  House CS to  the committee.                                                               
She  explained that  the only  change made  by Version  N is  the                                                               
addition of  the following  language to Section  1:   "Subject to                                                               
appropriation, the  commissioner shall provide 25  percent of the                                                               
revenue  from a  sale of  timber under  this section  to forestry                                                               
programs  operated   by  the  department  in   the  municipality,                                                               
reserve, or  community in which  the timber was harvested  or, if                                                               
the  timber was  not  harvested in  a  municipality, reserve,  or                                                               
community,  the municipality,  reserve, or  community closest  to                                                               
the area where the timber was harvested."                                                                                       
1:29:28 PM                                                                                                                    
REPRESENTATIVE TARR asked whether this  is supposed to be a style                                                               
of payment  in lieu of  taxes (PILT)  for state forestry  that is                                                               
modeled after the federal program.                                                                                              
CO-CHAIR TALERICO replied that his  idea behind this change is to                                                               
ensure  that  in  those  areas where  there  is  active  forestry                                                               
programs there is a reinvestment  in the community.  He requested                                                               
Mr. Chris Maisch to elaborate further.                                                                                          
1:30:19 PM                                                                                                                    
JOHN  "CHRIS"  MAISCH, Director  &  State  Forester, Division  of                                                               
Forestry (DOF),  Department of Natural Resources  (DNR), provided                                                               
a  refresher  on the  bill  given  it was  a  year  ago that  the                                                               
committee last  heard the bill.   He explained that  the Division                                                               
of Forestry currently has five  different authorities under which                                                               
it  can  sell  timber.    The  primary  and  preferred  authority                                                               
statewide  of selling  timber is  through  a competitive  process                                                               
under  AS 38.05.120  (".120").   Another  authority  is under  AS                                                               
38.05.117  (".117") where  the division  can offer  salvage sales                                                               
after  fires,  windstorms, disease,  or  other  kinds of  natural                                                               
disasters where the  timber will lose value quickly.   This is an                                                               
abbreviated process  to allow the  division to bring  those sales                                                               
to market  quickly.  This authority  is not used very  often, but                                                               
an  example is  the windstorm  in  the Tok  area where  a lot  of                                                               
timber was  lost.   There are two  negotiated sale  authorities -                                                               
small  negotiated sales  under AS  38.05.115 (".115")  for timber                                                               
under 500,000  board feet,  and large  negotiated sales  under AS                                                               
38.05.118  (".118"), to  which this  bill makes  changes.   These                                                               
authorities still  require best interest findings,  the exception                                                               
being  the .115  authority  which represents  about  40 acres  in                                                               
Interior Alaska.   The division  must still go through  the other                                                               
standard parts  of the planning  process, but for .115  sales the                                                               
division does  not have  to do  a best  interest finding.   Those                                                               
sales are currently only good for one year in length.                                                                           
MR.  MAISCH  said  the  original bill  also  clarifies  that  the                                                               
commissioner determine through the  best interest finding process                                                               
the  best  and   most  appropriate  authority  to   use  and  the                                                               
department must outline the conditions  of why it chose a certain                                                               
way to  sell the timber.   The bill  also ensures the  ability to                                                               
use 25 years of sale length  for the .118 authority, which is the                                                               
current sale  length.  Because  of the three conditions  that the                                                               
department is proposing  to modify, the .118  authority cannot be                                                               
used  statewide.   Those  three  conditions are:    1) must  have                                                               
under-utilized allowed cut  in the area in which  the timber will                                                               
be sold;  2) a  manufacturing facility must  exist or  will exist                                                               
within two  years that  can use  the timber that  is going  to be                                                               
sold; and 3)  a high level of unemployment, which  is a condition                                                               
the  division has  difficulty with.    The statute  reads a  high                                                               
level of unemployment and the regulation  reads that it has to be                                                               
135  percent  of the  statewide  average.   The  division  cannot                                                               
currently use  the .118 authority  in the Ketchikan  Borough, the                                                               
Matanuska-Susitna Borough, and the  Fairbanks North Star Borough,                                                               
so it  prevents the division  from doing these longer  term sales                                                               
under  that  authority.   So,  this  would essentially  even  the                                                               
playing field for all the operators  in the state to remove those                                                               
three  criteria.   More  importantly  it  is very  important  for                                                               
Southeast Alaska  where the timber  industry is in  dire straits.                                                               
Right  now the  division has  three sales  pending that  it would                                                               
negotiate in  Southeast Alaska to  Viking Sawmill in  Klawock and                                                               
represents  150 jobs  on Prince  of  Wales Island.   The  federal                                                               
government will not offer enough timber  in the next two years to                                                               
keep that  mill running and  without the proposed change  in this                                                               
statute the  division will  be unable  to negotiate  those sales;                                                               
they  would have  to go  competitive  and in  Southeast Alaska  a                                                               
competitive sale is  pretty much guaranteed to  go export because                                                               
the export  market can afford to  pay more.  So  the division has                                                               
long had a policy in Southeast  Alaska where it tries to meet the                                                               
needs of both segments of the  industry and it has been the state                                                               
policy  to  emphasize  jobs  and  manufacturing  and  in  today's                                                               
environment manufacturing jobs  in this state is a  good thing to                                                               
encourage and that is exactly what  this will do.  The only other                                                               
change the bill would do is  clarify that these sales can be done                                                               
for wood fiber and biomass use  and that is just updating some of                                                               
the older  language in the  statute to  use more modern  terms in                                                               
terms of the forestry application for those types of sales.                                                                     
1:34:45 PM                                                                                                                    
MR. MAISCH addressed Version P,  saying it would put into statute                                                               
what  the division  has long  done by  both policy  and practice,                                                               
because  a large  part of  the division's  timber sale  staff are                                                               
funded under  timber sale  receipts.  A  percentage of  all state                                                               
timber  sales go  into a  timber sale  receipts account  and then                                                               
that account pays  for the actual foresters that do  this work in                                                               
the various parts  of Alaska.  For example,  the Ketchikan office                                                               
is the  division's number one  revenue producing  office, getting                                                               
about  39  percent of  its  revenue  back  in the  salaries  that                                                               
actually  support  positions  that  are doing  that  work.    The                                                               
Fairbanks  office is  about 100  percent, so  100 percent  of the                                                               
staff are supported  by that.  Tok gets 529  percent back because                                                               
the value  of those timber  sales are not  that high as  they are                                                               
mostly fiber sales which are of fairly low value.                                                                               
1:35:52 PM                                                                                                                    
REPRESENTATIVE SEATON  inquired whether  the revenue  from timber                                                               
sales in the various areas of  the state offsets the cost so that                                                               
there is not  a loss to the state, particularly  if 25 percent of                                                               
the gross revenue is given to the local municipality.                                                                           
MR. MAISCH  responded that the  funding would not actually  go to                                                               
the municipality, it is programs  operated by the division.  That                                                               
means wages in most part, but  it could be road or infrastructure                                                               
improvements in  that community.   For example, there may  not be                                                               
as much money in road maintenance  accounts as is wanted, so that                                                               
25 percent  receipt might  be used  to do  extra grading  in that                                                               
community, especially during hunting  season.  The division would                                                               
still have discretion on how it uses those funds.                                                                               
1:36:52 PM                                                                                                                    
REPRESENTATIVE  TARR, recalling  that  her  earlier question  was                                                               
related  to the  PILT,  asked  how the  division  arrived at  the                                                               
figure of 25  percent and surmised it is based  off an average of                                                               
what the division has been doing in practice.                                                                                   
MR. MAISCH answered yes, the  division has done this in practice,                                                               
but it  is not necessarily modeled  after the PILT.   This is Co-                                                               
Chair Talerico's  suggested language and essentially  what he has                                                               
described  does put  in statute  what  the division  has done  in                                                               
practice.   As the division has  taken budget cuts over  the last                                                               
four years,  more and more  of the division's general  fund money                                                               
for wages and  salaries of its forest management  staff have been                                                               
shifted over to  the timber sale receipts account.   The division                                                               
has lost  about 42 percent  of its  general fund money  for wages                                                               
for  the  forest  management  part of  the  division,  which  has                                                               
resulted in  quite a few  layoffs.  The  only way to  continue to                                                               
operate a forest  management program is by using  the timber sale                                                               
receipts  program to  actually support  those positions.   Should                                                               
revenues go down he will be  confronted with how to pay for those                                                               
positions or lay off additional  people.  On average the division                                                               
collects  roughly $600,000  annually  over a  10-year period  and                                                               
wages are  about $675,000 annually;  but, he has  some discretion                                                               
based on other funding sources on how he manages that.                                                                          
1:38:34 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  inquired   whether  the  proposed  new                                                               
language is designed to act as  sort of a designated general fund                                                               
component to help  the division when the  legislature has reduced                                                               
the division's undesignated general fund (UGF).                                                                                 
MR. MAISCH  replied he does  not think necessarily that  that was                                                               
its primary intent  because the division was  already in practice                                                               
doing that with  the timber sale receipt account.   That has been                                                               
in place  for many years, the  division has used it,  but has not                                                               
depended on  it as much as  the division is now  depending on it.                                                               
The  legislature has  aggressively  shifted the  division out  of                                                               
general funds over to the timber  sale receipt account to pay for                                                               
the  division's staff.   This  [proposed  language] just  ensures                                                               
that the  places that  are generating  the timber  sales actually                                                               
will see  some benefit from  those timber  sales so that  he does                                                               
not take all the  money and put it in a place  that is not really                                                               
having a timber sale  program.  It is not that  he would do that,                                                               
but this  would just ensure that  everybody gets a fair  share of                                                               
the timber revenue.                                                                                                             
REPRESENTATIVE JOSEPHSON  said he  has reviewed the  minutes from                                                               
the other body  and surmises that the key  component/heart of the                                                               
bill is the reforming of .118  sales so that the threshold of the                                                               
135 percent of unemployment does not need to be met.                                                                            
MR. MAISCH agreed  that is the heart of the  bill, along with the                                                               
other two pieces  which are not as difficult to  meet.  There are                                                               
three parts to  that regulation:  1) the excess  allowable cut so                                                               
he cannot over-commit and fail  to use sustained yield management                                                               
to  do a  large  negotiated sale,  so  he has  to  be within  the                                                               
allowable  cut; 2)  there has  to be  a facility  there that  has                                                               
excess capacity and can process that  cut; and 3) the 135 percent                                                               
[unemployment].   All three of those  would go away and  it would                                                               
make it a cleaner statute and much easier to administer.                                                                        
1:40:34 PM                                                                                                                    
REPRESENTATIVE  SEATON asked  whether, with  the sustainable  cut                                                               
language  going  away,  the division  has  other  regulations  or                                                               
statute that require sustainable harvest.                                                                                       
MR.  MAISCH responded  that the  state constitution  requires the                                                               
division to do [sustained yield  cutting], as do other provisions                                                               
of statute and  the division's forest management plan.   The bill                                                               
would not do  away with the need to manage  sustainably, it would                                                               
just delete the  wording that there must be  excess allowable cut                                                               
for [the  .118] sale  methodology].  It  would not  somehow "back                                                               
door" that he can exceed sustained yield principles.                                                                            
1:41:12 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON inquired whether  the reason for why the                                                               
.123 authority for negotiated sales  is unsatisfactory is because                                                               
of the required value-added feature.                                                                                            
MR.  MAISCH  answered  that  that is  not  necessarily  the  main                                                               
reason.   The main reason is  that those sales are  limited to 10                                                               
years in  length, and sometimes for  these industries, especially                                                               
the  biomass  side,  it  will   take  longer  than  10  years  to                                                               
capitalize the investment that was made in the plant and                                                                        
facility.  The division is also limited to two value-added sales                                                                
per forest practices region in any given time.                                                                                  
1:42:00 PM                                                                                                                    
CO-CHAIR TALERICO opened public testimony on the bill.                                                                          
REBECCA KNIGHT testified in opposition to the bill.  She spoke                                                                  
as follows:                                                                                                                     
     I previously  provided testimony  in opposition  to the                                                                    
     proposed SB 32 and its  companion HB 87 and continue to                                                                    
     oppose  the legislation  based on  those concerns  with                                                                    
     expanded testimony today.                                                                                                  
     One can only  conclude that based on  review of impacts                                                                    
     resulting  from  drastic  budget  cuts,  the  state  is                                                                    
     unable  to   adequately  fund  administration   of  its                                                                    
     current  timber sale  program.   Consequently,  whether                                                                    
     adequate  funding for  administration of  new long-term                                                                    
     timber contracts can be  secured is highly questionable                                                                    
     given  that the  state's  budgetary  crisis remains  in                                                                    
     near freefall, this  despite optimistic assurances from                                                                    
     DOF personnel  and the  bill's zero  fiscal note.   For                                                                    
     instance, as noted during the  recent Board of Forestry                                                                    
     meeting, "In  2015 due to budget  reductions and travel                                                                    
     restrictions, DEC  participated in  only one  trip with                                                                    
     three compliance inspections."   According to the state                                                                    
     forester, most  of the  2015 decline  in the  number of                                                                    
     inspections  is  due  to reduced  staffing  and  is  an                                                                    
     impact  of the  budget cuts.    I would  note that  one                                                                    
     annual   statewide  inspection   does  not   equate  to                                                                    
     satisfactory oversight.                                                                                                    
     It  is also  questionable  whether SB  32 can  actually                                                                    
     generate  significant positive  revenue  to the  state.                                                                    
     According to  DOF's 2013  annual report,  the statewide                                                                    
     timber  program costs  $5.9  million,  but generated  a                                                                    
     mere  $293,000 in  receipts for  the 2013  fiscal year.                                                                    
     The report  anticipated $851,000 in 2014  receipts from                                                                    
     a  projected 2014  budget of  $6.9  million.   Overall,                                                                    
     statewide  average revenues  for  the five-year  period                                                                    
     from  2009-2013 were  only $600,000  per year  with the                                                                    
     majority  of the  volume  offered  coming from  outside                                                                    
     Southeast Alaska.   The report does  not provide enough                                                                    
     information  to  assess   the  contributions  of  state                                                                    
     forests in  Southeast Alaska, but  it appears  that the                                                                    
     amount   of   revenue   generated   relative   to   the                                                                    
     administrative  cost is  very small  per million  board                                                                    
     feet,  meaning that  the program  likely operates  at a                                                                    
     net  public loss.   In  fact, according  to the  latest                                                                    
     [Board of  Forestry (DOF)] meeting  minutes, shortfalls                                                                    
     to DOF's  budgets are so  severe that tourism  head tax                                                                    
     was  suggested as  well as  a raid  on the  proceeds of                                                                    
     fishing  industry  licensing   fees  to  "help  protect                                                                    
     fisheries habitat."   This  obtuse logic  is especially                                                                    
     troubling    when     these    industries    contribute                                                                    
     significantly  without  harm   to  regional  economies,                                                                    
     especially in Southeast Alaska.                                                                                            
     Overall,  SB  32 and  HB  87  represent a  considerable                                                                    
     expansion of  the timber  sale program  in a  period of                                                                    
     declining  budgets and  an irresponsible  abdication of                                                                    
     oversight  to the  industry.   Quite simply,  there are                                                                    
     inadequate  funds  to  do otherwise.    I  respectfully                                                                    
     request  that you  disallow  this  bill from  advancing                                                                    
1:46:03 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON requested  Ms.  Knight  to clarify  her                                                               
statement  in  regard to  using  tourism  or fisheries  money  to                                                               
regulate the forestry industry.                                                                                                 
MS. KNIGHT answered that was in  the March 2016 Board of Forestry                                                               
draft meeting minutes; she believed it  was on page 12.  She said                                                               
she  will provide  written testimony  to the  committee that  has                                                               
footnotes that cite those sources.                                                                                              
REPRESENTATIVE TARR  requested Ms. Knight to  submit her comments                                                               
in writing and  noted that she is particularly  interested in Ms.                                                               
Knight's testimony  about overall cost versus  the amount brought                                                               
in in receipts and what is being included in the overall cost.                                                                  
MS.  KNIGHT  replied  she  is uncertain  exactly  what  all  that                                                               
includes,  but  it is  from  the  [Division] of  Forestry's  2013                                                               
annual report.                                                                                                                  
1:47:32 PM                                                                                                                    
DAVID BEEBE,  City of Kupreanof,  testified in opposition  to the                                                               
bill.  He spoke as follows:                                                                                                     
     [CSSB  32(RES) authorizes]  the commissioner  to bestow                                                                    
     ownership  of  a  25-year supply  of  state  forest  to                                                                    
     create  regional  state-sanctioned  timber  plantations                                                                    
     for  the  purposes  of timber  export  and  large-scale                                                                    
     conversion  of  forests  to  biomass  energy.    Gordon                                                                    
     Harrison   reminds   us   in   his   book,   [Alaska's]                                                                  
     Constitution:   A  Citizen's Guide,  that delegate  Bob                                                                  
     Bartlett  and  others   urged  constitutional  defenses                                                                    
     against freewheeling disposals  of public resources and                                                                    
     colonial-style   exploitation  that   would  contribute                                                                    
     nothing  to  the  growth   and  betterment  of  Alaska.                                                                    
     Timber  monopolies  have a  bad  track  record here  in                                                                    
     Southeast.  The United  States Supreme Court found that                                                                    
     50-year,  long-term  pulp   contract  holders  colluded                                                                    
     through  price  fixing  and   other  illegal  means  to                                                                    
     destroy  the  existing   small  loggers  in  Southeast.                                                                    
     These repercussions of  long-term contracts continue to                                                                    
     span   the   social,    economic,   and   environmental                                                                    
     landscapes across  most of  Southeast and  the wildlife                                                                    
     on some islands may never fully recover from that.                                                                         
     The    management    of    old-growth-dependent    deer                                                                    
     populations also  has a bad track  record in Southeast.                                                                    
     The Alaska Board of Fisheries  and Board of Game are on                                                                    
     record  on  several  occasions  requesting  the  Forest                                                                    
     Resources and  Practices Act be amended  to include for                                                                    
     the  protection and  management  of  wildlife on  state                                                                    
     forests  to   provide  for   constitutionally  mandated                                                                    
     sustainable  yield  principles.    This  has  not  been                                                                    
     accomplished, nor  has the Alaska Department  of Fish &                                                                    
     Game  as co-managers  of fish  and wildlife  on federal                                                                    
     forest  lands  been  successful  at  preventing  severe                                                                    
     crashes in  deer populations in Game  Management Unit 3                                                                    
     and wolf populations in Unit 2.                                                                                            
     Both the  briefing paper and  the fiscal  note analysis                                                                    
     of SB  32 prepared by  the director of the  Division of                                                                    
     Forestry [have]  overlooked the full  environmental and                                                                    
     fiscal  consequences  of  the  bill in  the  realms  of                                                                    
     environmental  impacts on  rural communities  and human                                                                    
     health consequences.   The briefing paper  states, "All                                                                    
     timber sales,  including negotiated sales,  must comply                                                                    
     with  the constitutional  requirement to  manage timber                                                                    
     for sustained yield."   But, characteristically, avoids                                                                    
     mentioning  that   Article  VIII,  Section   4,  titled                                                                    
     Sustained Yield, includes  fish, forests, and wildlife.                                                                    
     The  health consequences  of large-scale  conversion to                                                                    
     biomass combustion is a  serious concern for healthcare                                                                    
     professionals of  the American Lung  Association, which                                                                    
     emphasizes   pollution   from   the   consequences   of                                                                    
     combustion of wood and other biomass sources.                                                                              
     Language providing  25 percent of the  revenue from the                                                                    
     timber    sale    to     the    nearest    municipality                                                                    
     notwithstanding an absent  and adequate fiscal, social,                                                                    
     and  environmental  analysis  of  SB 32,  the  City  of                                                                    
     Kupreanof  requests  state  legislators to  table  this                                                                    
     legislation in committee.                                                                                                  
1:51:14 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON inquired  whether  he  is correct  that                                                               
there are no  state forests near Kupreanof or  Petersburg and the                                                               
closest one is northeast of Wrangell.                                                                                           
MR.  BEEBE  responded that  that  is  not  quite correct.    Game                                                               
Management Unit  3 involves  a number of  state parcels  that are                                                               
within 10 miles  of the City of Kupreanof.   The Wrangell Narrows                                                               
separates  Kupreanof  Island  from Mitkof  Island  and  Frederick                                                               
Point in particular  has an area that is one  of the last refuges                                                               
of a  very heavily hit  island of winter  deer range.   The south                                                               
end of  the island, only about  20 miles away from  Kupreanof, is                                                               
also a very important deer winter  refuge that is pretty much not                                                               
going  to be  regarded for  the qualities  that it  represents to                                                               
maintain winter populations of deer.                                                                                            
1:53:12 PM                                                                                                                    
OWEN  GRAHAM,  Executive  Director,  Alaska  Forest  Association,                                                               
stated he  supported this bill  last year and still  supports it.                                                               
The  bill gives  the Department  of Natural  Resources (DNR)  the                                                               
flexibility  it  needs  to  better manage  its  timber  lands  in                                                               
Southeast.   It would  get used  from time  to time  in Southeast                                                               
Alaska.   The  other regions  do not  have the  same issues  that                                                               
Southeast has, such  as remote sites and  high mobilization costs                                                               
for  small  parcels, the  competition  from  outside Alaska  from                                                               
speculators that  end up mostly  not performing  their contracts.                                                               
There  is  an  inadequate  supply  of  timber  for  the  existing                                                               
operators.  Those conditions are  pretty much unique to Southeast                                                               
Alaska.   This flexibility will not  get used a lot,  but when it                                                               
is used  it would be very  helpful.  A number  of times conflicts                                                               
have arisen because of two  different operators trying to use the                                                               
same  remote log  transfer facilities,  rafting grounds,  storage                                                               
areas, and  roads.  A number  of times speculators have  put in a                                                               
sky-high bid  on what  few timber  sales are  out there  and then                                                               
defaulted, and  the state  had to  go back.   The same  thing has                                                               
happened with the U.S. Forest  Service, which usually delays that                                                               
timber sale for an entire year  during a time of being critically                                                               
low on  timber.  He said  Alaska has a good  forest practices act                                                               
that is  designed specifically  to protect  water quality.   Fish                                                               
populations  in  areas on  Prince  of  Wales  Island that  he  is                                                               
familiar  with have  more  than  doubled in  the  last 60  years,                                                               
particularly  in  the most  heavily  logged  areas.   The  Alaska                                                               
Department of  Fish & Game  gave him  some records that  show the                                                               
fish  populations  have  more than  doubled  all  over  Southeast                                                               
Alaska in the last 60 years.   Logging at much higher levels than                                                               
what  DNR will  be  harvesting has  had no  impact  on the  fish.                                                               
Wildlife is also  doing very well; deer  populations are sky-high                                                               
on Prince of  Wales Island.  People say the  wolf populations are                                                               
down right  now, and they  might be down,  but it is  not because                                                               
they do  not have enough deer  to eat in Game  Management Unit 2.                                                               
The  Division of  Forestry  can manage  its  timber sale  program                                                               
without harming fish  and wildlife.  Providing  the division with                                                               
this  additional  flexibility  to  operate will  provide  a  much                                                               
needed  timber supply  and help  the economy  of scale  and maybe                                                               
keep one  or two  sawmills open that  would otherwise  be closed.                                                               
Frequently the Forest  Service or the state sells a  sale where a                                                               
portion of  it goes  export, but  the other  portion will  end up                                                               
going to the mills.  Sometimes,  because of extreme high costs in                                                               
these remote areas, that higher value  from a portion of the wood                                                               
going export  gets enough value  out of  the timber sale  so that                                                               
the mill can afford to saw the rest of the logs.                                                                                
1:56:57 PM                                                                                                                    
REPRESENTATIVE TARR recalled the  testimony that according to the                                                               
2013 annual  report it cost  $5.9 million to manage  the forestry                                                               
program and  only brought  in about  $300,000 in  receipts, which                                                               
means  the program  is about  2,000  times more  costly than  the                                                               
receipts that  are brought in.   She asked how Mr.  Graham thinks                                                               
members  should  evaluate that  in  the  context of  the  state's                                                               
overall budget problem.                                                                                                         
MR. GRAHAM  answered that whoever  made that remark  probably did                                                               
not understand the  budget.  The Division of Forestry  gave him a                                                               
chart that shows  the division makes a good profit  on the timber                                                               
sales.   There is  a lot  more in  the division's  budget besides                                                               
preparing timber sales and managing  the young growth stands that                                                               
come up behind the sales.   He offered to provide a graph showing                                                               
this if  requested.  Responding  further to  Representative Tarr,                                                               
he agreed to provide this information.                                                                                          
1:58:30 PM                                                                                                                    
CARL PORTMAN,  Deputy Director,  Resource Development  Council of                                                               
Alaska (RDC), spoke  in support of CSSB 32(RES).   He paraphrased                                                               
from  the  following   written  statement  [original  punctuation                                                               
     RDC  is a  statewide business  association representing                                                                    
     forestry,  oil and  gas, mining,  tourism, and  fishing                                                                    
     industries.  Our  mission  is to  grow  Alaska  through                                                                    
     responsible   resource    development.   RDC   supports                                                                    
     policies aimed  at ensuring  a reliable  and economical                                                                    
     long-term State and federal timber supply.                                                                                 
     In   the  decades   since  the   State's  timber   sale                                                                    
     authorizing statutes were last  amended, the demand for                                                                    
     wood  fiber from  State lands  for energy  purposes has                                                                    
     increased significantly in  response to escalating fuel                                                                    
     oil  costs and  State  capital  investment through  the                                                                    
     renewable  energy capital  grant program.  As a  result                                                                    
     wood  fiber  for  biomass  energy  has  grown  into  an                                                                    
     important  component  of  forest  products  from  State                                                                    
     timber sales.                                                                                                              
     What  has also  changed over  the past  decades is  the                                                                    
     dependence of  our remaining Southeast Alaska  mills on                                                                    
     timber sales  from State  lands. In  some circumstances                                                                    
     negotiated State timber sales  are essential in keeping                                                                    
     what is  left of  our remaining  manufacturing capacity                                                                    
     RDC agrees  with the administration, as  articulated in                                                                    
     Governor Walker's transmittal  letter, that competitive                                                                    
     timber sales are the preferred  means of selling timber                                                                    
     under  most  conditions.   However  some  circumstances                                                                    
     warrant  the flexibility  of offering  negotiated sales                                                                    
     at appraised  fair market  value in  order to  ensure a                                                                    
     reliable  supply   of  raw   material  to   mills.  The                                                                    
     Department of Natural Resources  (DNR) has a good track                                                                    
     record  of  limiting  its  negotiated  sales  to  those                                                                    
     circumstances where  it is clearly in  the State's best                                                                    
     interest,  and the  added flexibility  afforded to  the                                                                    
     DNR  Commissioner by  this surgical  statutory revision                                                                    
     will  provide needed  flexibility  required by  today's                                                                    
     realities of timber supply and markets.                                                                                    
     By  giving the  DNR Commissioner  added flexibility  in                                                                    
     offering negotiated sales and  clarifying that users of                                                                    
     wood fiber are also  eligible for negotiated sales, the                                                                    
     State will  have tools  appropriate to  conditions that                                                                    
     frankly were  not part of  the timber  supply landscape                                                                    
     when State's timber sale statutes were last revised.                                                                       
     These  amendments support  recommendations of  the 2012                                                                    
     Alaska  Timber   Jobs  Task   Force.  The   task  force                                                                    
     recommendations were developed  with input from leaders                                                                    
     in the  timber industry and  have been endorsed  by the                                                                    
     Alaska Board of Forestry.                                                                                                  
MR. PORTMAN  concluded by stating  that the basic premise  of the                                                               
bill is to remove the  constraints on negotiated timber sales and                                                               
to allow longer term timber  sales where appropriate.  Passage of                                                               
this bill  will help  keep RDC's members  in the  forest products                                                               
industry  in business.   The  current restrictions  limit DNR  to                                                               
negotiating only with  certain sawmills.  He  urged the committee                                                               
to pass the proposed House CS for CSSB 32(RES).                                                                                 
2:01:41 PM                                                                                                                    
CO-CHAIR  TALERICO  closed  public testimony  after  ascertaining                                                               
that no one else wished to testify.                                                                                             
REPRESENTATIVE TARR requested that Mr.  Maisch be able to respond                                                               
to the testimony about the overall cost relative to receipts.                                                                   
MR.  MAISCH  confirmed  that Ms.  Knight's  figures  are  correct                                                               
regarding the  overall budget,  but said  Mr. Graham  was correct                                                               
that that budget does many more  things than just fund the timber                                                               
sale  program.   He said  a significant  amount of  federal money                                                               
comes into the  division that runs a suite  co-op programs around                                                               
the  state, such  as forest  health programs,  community forestry                                                               
programs, and forest stewardship  programs that provide technical                                                               
assistance  to private  land owners  to help  them better  manage                                                               
their forests.   The [2013 Alaska Forest  Resources and Practices                                                               
Act] was mentioned  and many more inspections than  one have been                                                               
accomplished.  Three  agencies are involved in  that effort, with                                                               
the Division of  Forestry being the lead agency.   The key things                                                               
are to  protect water quality and  fish habitat, so ADF&G  is one                                                               
of the  division's partners and  the Department  of Environmental                                                               
Conservation  (DEC) is  the other  partner.   It is  correct that                                                               
DEC's budget has  put DEC in the situation where  it is unable to                                                               
participate in  field inspections  as much as  it was  once able.                                                               
Because DEC  only participated  in one  inspection does  not mean                                                               
that only  one inspection was done.   He offered his  belief that                                                               
over 40  or 50 inspections  were done last  year and ADF&G  was a                                                               
partner on those inspection.                                                                                                    
MR. MAISCH  continued, reporting that about  $2.1 million remains                                                               
in  the division's  budget for  general funds  for forestry  as a                                                               
whole.   The division  collects about  $600,000-$700,000 annually                                                               
in  timber sale  receipts that  are directly  invested back  into                                                               
that  budget.   Statewide that  money provides  300-350 full-time                                                               
jobs in  the forest products  sector and  creates infrastructure.                                                               
Roads  and bridges  that are  built  for these  timber sales  are                                                               
written  against  the  timber  sales   in  most  cases,  so  that                                                               
infrastructure is  paid for as  part of  the value of  the timber                                                               
that comes  out of the woods  and then the division  picks up the                                                               
maintenance of  that infrastructure  over the  long run  and that                                                               
infrastructure provides  access for a  variety of uses.   Perhaps                                                               
the most important  thing it provides the division  is access for                                                               
wildland fire  protection around communities.   The management of                                                               
that forest  reduces fuel loads  around communities,  making them                                                               
safer to  live in  and enjoy,  and this is  a hard  one to  put a                                                               
price tag  on.   During the  Willow fire  last year  the division                                                               
protected  $360 million  in value  just  in the  areas that  were                                                               
evacuated.   The fire two  years ago  on the Kenai  Peninsula was                                                               
about $260 million in value.   A large-scale landscape fuel break                                                               
was done  and that  allowed the division  to save  that community                                                               
that was evacuated.   So, there is a big  other benefit from this                                                               
forest management that  the division does not  usually get credit                                                               
for and  it may be more  important than the revenue  generated by                                                               
the  division.   He  pointed  out  that  many of  the  division's                                                               
[staff] positions  have feet  in the  division's fire  program as                                                               
well as  the resources  program.   Thus, a  position lost  on the                                                               
resources side is also a position lost on the fire side.                                                                        
2:05:52 PM                                                                                                                    
REPRESENTATIVE TARR understood that in  a typical fiscal year the                                                               
division is  not staffed up for  the kind of fire  event like the                                                               
Willow fire.   She surmised  that most of those  additional funds                                                               
would come through the supplemental budget.                                                                                     
MR.  MAISCH replied  correct, a  base budget  funds the  division                                                               
just  like a  fire  department ready  to fight  fire  - the  fire                                                               
engine  is  ready,  staff  trained  and  ready,  helicopters  and                                                               
retardant aircraft -  and that is about $19 million.   Then there                                                               
is  the  suppression  account  which is  funded  at  the  10-year                                                               
average.   This 10-year average  has not been updated  for almost                                                               
20 years and  only comes in at $6 million  in the budget process;                                                               
the division  must supplement  this throughout  the process.   An                                                               
updated 10-year average would be  about $52 million.  Last year's                                                               
fire  season was  the division's  second largest  at 5.1  million                                                               
acres.   The division is  not staffed for  that and so  relies on                                                               
other  states and  on  Canadian  provinces through  international                                                               
agreements.   Last year help came  from 37 states and  2 Canadian                                                               
provinces with 3,700 firefighters at the height of the season.                                                                  
2:07:34 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  understood  that the  Southeast  State                                                               
Forest includes about a dozen locations.                                                                                        
MR. MAISCH replied  correct.  It is a lot  of dispersed locations                                                               
and is  about 50,000  acres in total,  which is  relatively small                                                               
compared to the Interior state forests.                                                                                         
REPRESENTATIVE  JOSEPHSON  asked   whether  those  aforementioned                                                               
locations are  all south of  Petersburg so that they  are between                                                               
Petersburg and Ketchikan.                                                                                                       
MR.  MAISCH answered  he would  have  to look  at a  map, but  he                                                               
believes yes.   The Southeast  State Forest is  primarily located                                                               
in southern Southeast  Alaska, and the Haines State  Forest is in                                                               
northern [Southeast Alaska].                                                                                                    
REPRESENTATIVE  JOSEPHSON  posed  a   scenario  of  boating  past                                                               
Coffman  Cove or  Edna  Bay  and inquired  whether  he would  see                                                               
management such that he would see  second growth coming back or a                                                               
complete denuding of the landscape.                                                                                             
MR.  MAISCH replied  it depends  on the  site as  it is  all site                                                               
specific.   A  mosaic  of different  age  classes is  represented                                                               
across that  landscape.   A lot  of young growth  has come  in in                                                               
Coffman  Cove and  Edna Bay,  primarily on  federal sales  as the                                                               
state has  not been in the  timber sales business as  long as has                                                               
the federal government.   But, the state does  have a significant                                                               
amount  of young  growth that  is in  a variety  of age  classes.                                                               
When looking across  a landscape like that it  depends on whether                                                               
there are  a lot  of mountains or  relief, because  harvest units                                                               
will be  seen in  those areas  high above  the waterline.   There                                                               
will be  harvested and unharvested  units.  On federal  and state                                                               
ground there are  buffers along the shorelines  and fish streams,                                                               
so it  will be  a mosaic landscape,  not a  devastated landscape.                                                               
However, he allowed, it depends on the eye of the beholder.                                                                     
2:10:19 PM                                                                                                                    
CO-CHAIR  NAGEAK moved  to report  the  proposed House  committee                                                               
substitute (CS)  for CSSB 32(RES), Version  29-GS1022\N, Bullard,                                                               
3/29/16,  out of  committee with  individual recommendations  and                                                               
the accompanying fiscal notes.                                                                                                  
2:10:36 PM                                                                                                                    
REPRESENTATIVE TARR  objected in  order to  state that  she would                                                               
like for  more time to  be put into  looking at the  overall cost                                                               
and  value.    When  the  legislature  talks  about  the  overall                                                               
sustainability of  programs, she  said, a look  must be  taken at                                                               
the other  economic opportunities in communities  if these timber                                                               
programs cannot be afforded.  She then removed her objection.                                                                   
REPRESENTATIVE CHENAULT  objected in order  to state that  a look                                                               
must be  taken at both  sides of the  coin.  He  concerns himself                                                               
with the  cost of managing the  state's forests, he said,  but he                                                               
also  concerns himself  with  the cost  to  communities when  the                                                               
forests are not  managed.  The fire on the  Kenai Peninsula could                                                               
easily have  devastated a number  of communities and some  of the                                                               
programs  spoken to  by Mr.  Maisch definitely  saved houses  and                                                               
probably some  lives.   Regarding wildlife, it  was found  on the                                                               
Kenai  Peninsula  that  after  a  fire  goes  through  the  moose                                                               
population  normally  rebounds  to be  considerably  better  than                                                               
before the  fire.   So, while  he is  concerned about  the price,                                                               
sometimes money is not everything in communities.                                                                               
2:14:09 PM                                                                                                                    
REPRESENTATIVE JOHNSON  thanked Carl Portman and  Owen Graham for                                                               
identifying who  they actually  work for  and what  their mission                                                               
was here.  Saying he "googled"  a couple of the other testifiers,                                                               
he maintained  that they represent  the greater  Southeast Alaska                                                               
conservation community,  which is people that  probably would not                                                               
want any timber cut.                                                                                                            
REPRESENTATIVE JOSEPHSON thanked and  applauded Mr. Beebe and Ms.                                                               
Knight for  their testimony and  said they are doing  great work.                                                               
In one of the great remaining  rainforests he can see the need to                                                               
remove some through the sales  that are identified as .115 sales,                                                               
which  are small  sales.   However, a  corner was  turned in  the                                                               
1990s  and, yes,  jobs were  lost,  but the  economic benefit  is                                                               
greater  to   tourism,  commercial  fishing,   ecotourism,  sport                                                               
fishing, and  related industries to  say that a few  hundred jobs                                                               
do  not need  to  be subsidized.    They are  great  jobs and  he                                                               
particularly likes the finished  work products that are reflected                                                               
in the .123 sales.  He applauds  folks who do not want to look at                                                               
denuded landscapes; they  want to see something  sustained in its                                                               
natural state and would never naysay them.                                                                                      
2:16:30 PM                                                                                                                    
CO-CHAIR NAGEAK said he spent  four years in Southeast Alaska and                                                               
has seen the benefits of the industry.   That was before oil.  He                                                               
recalled how  the students  who spent the  summer working  in the                                                               
timber, fishing, or mining industries  came back to school with a                                                               
bunch of  money.  While  his community had government  jobs, such                                                               
as federal  programs for kids  after school, those jobs  were not                                                               
as  lucrative.    The  discovery  of oil  made  a  whole  lot  of                                                               
difference.  He  knows how important those industries  are to the                                                               
people in  those communities.   Alaska is blessed with  all these                                                               
resources.   Trees  regrow and  there are  fisheries programs  to                                                               
ensure the resources are enjoyed by all.                                                                                        
REPRESENTATIVE OLSON  said it has been  a long time since  he has                                                               
heard  mutual aid  brought  up in  any  kind of  a  meeting.   He                                                               
related that  within two  days of  the start  of the  Funny River                                                               
fire  there were  about 600  firefighters  from approximately  10                                                               
states, smoke  jumpers from the  Interior, and  Canadian skimmers                                                               
and a pilot plane.  The cooperation was extremely impressive.                                                                   
REPRESENTATIVE TARR noted she is  a botanist and these are issues                                                               
that  she  has worked  on  for  about 20  years.    She said  her                                                               
comments were not  about fire suppression or the need  or lack of                                                               
need for  those services.   While those are  certainly important,                                                               
she was  referring to the  actual management for  timber harvest.                                                               
This  has been  a longstanding  problem in  national forests  and                                                               
that is  why she brought up  the PILT -  there has been a  lot of                                                               
tension  between local  communities  and  the federal  government                                                               
because those  areas that cannot  be developed cannot have  a tax                                                               
base and  she wanted to highlight  some of the issues  she thinks                                                               
are worth consideration.   In areas where there are  not a lot of                                                               
other  economic opportunities  it has  been shown  time and  time                                                               
again that ample lead time is  needed so people do not experience                                                               
severe economic hardship  as a result of some of  the projects or                                                               
jobs going away.                                                                                                                
2:21:29 PM                                                                                                                    
REPRESENTATIVE CHENAULT  removed his  objection.  There  being no                                                               
further objection, HCS  CSSB 32(RES) was reported  from the House                                                               
Resources Standing Committee.                                                                                                   
2:21:41 PM                                                                                                                    
The committee took an at-ease from 2:21 p.m. to 2:27 p.m.                                                                       
         HB 112-REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG                                                                     
2:27:22 PM                                                                                                                    
CO-CHAIR TALERICO announced  that the final order  of business is                                                               
HOUSE  BILL NO.  112,  "An Act  repealing  the Alaska  Commercial                                                               
Fisheries  Entry  Commission and  transferring  its  duties to  a                                                               
commercial   fisheries   entry   division  established   in   the                                                               
Department  of Fish  and Game  and the  office of  administrative                                                               
hearings;  and  providing for  an  effective  date." [Before  the                                                               
committee was CSHB 112(FSH).]                                                                                                   
CO-CHAIR NAGEAK moved to adopt  the proposed committee substitute                                                               
(CS) for  HB 112,  Version 29-LS0485\N,  Bullard, 3/2/16,  as the                                                               
working document.                                                                                                               
REPRESENTATIVE TARR objected for discussion purposes.                                                                           
REPRESENTATIVE LOUISE STUTES, Alaska  State Legislature, spoke as                                                               
the  sponsor of  HB 112.    She explained  that Version  N is  in                                                               
response  to Governor  Walker's  Administrative  Order (AO)  279,                                                               
which  moves the  administrative  and research  functions of  the                                                               
Alaska  Commercial  Fisheries  Entry  Commission  (CFEC)  to  the                                                               
Alaska  Department of  Fish &  Game (ADF&G).   Version  N defines                                                               
executive  compensation  for  the three  CFEC  commissioners  and                                                               
compensation for CFEC employees that  are moved from an exempt to                                                               
a  classified   service.    Staff  salaries   would  take  effect                                                               
immediately  and  commissioner  salaries  would  take  effect  on                                                               
January 1, 2017.   She deferred to her aide,  Mr. Reid Harris, to                                                               
elaborate further on the bill.                                                                                                  
REID HARRIS,  Staff, Representative  Louise Stutes,  Alaska State                                                               
Legislature,  reiterated  that  [Version  N] is  in  response  to                                                               
Administrative Order 279.   The prior version of HB  112 did much                                                               
of  what AO  279 accomplished  and therefore  the bill  went down                                                               
from about 58 pages  to one and a half pages.   Version N defines                                                               
executive compensation  for the CFEC commissioners,  setting them                                                               
at  Range 27A,  and changes  the  commissioners from  being on  a                                                               
monthly rate to a daily, much like  what is done for the Board of                                                               
Fisheries and Board  of Game.  Version N also  provides that CFEC                                                               
employees who were transferred from  exempt to classified service                                                               
under ADF&G will remain at the same  rate of pay.  Sections 3 and                                                               
4 of Version N are the effective dates.                                                                                         
2:31:26 PM                                                                                                                    
REPRESENTATIVE SEATON  asked whether the bill  has any provisions                                                               
that  are   not  consistent  with  the   recommendations  of  the                                                               
legislative audit that was performed.                                                                                           
MR.  HARRIS   responded  that   the  bill   is  drafted   to  the                                                               
recommendations of the audit.   The audit recommended that over a                                                               
three-year period  the commissioners go  to less than 15  hours a                                                               
week without  benefits.  The  sponsor felt, however, that  due to                                                               
the administrative order being such  a shock to the commission it                                                               
would be unfair  to ask them to  go to less than 15  hours a week                                                               
in such a short timeframe and  would not give the commission time                                                               
to get its house  in order.  So, the bill  adjusts their pay rate                                                               
from a monthly to  a daily rate and at a future  date it would be                                                               
a good  idea for this body  to revisit this and  consider putting                                                               
different stipulations on the hours of the commissioners' work.                                                                 
2:32:49 PM                                                                                                                    
REPRESENTATIVE  TARR  removed  her  objection.   There  being  no                                                               
further objection, Version N was before the committee.                                                                          
2:32:55 PM                                                                                                                    
CO-CHAIR TALERICO opened public testimony.                                                                                      
MARTIN LUNDE,  Southeast Alaska Seiners Association,  stated that                                                               
his  association is  opposed to  anything  in HB  112 because  it                                                               
would  help  to implement  Administrative  Order  279, which  the                                                               
association has severe  difficulties with.  If done  at all, this                                                               
should  have been  done with  an executive  order rather  than an                                                               
administrative order.  The association  cannot in good conscience                                                               
support anything  that is implementing Administrative  Order 279,                                                               
which is specifically addressed in  Version N.  Additionally, the                                                               
association  has questions  about the  financial implications  of                                                               
moving [staff] from  exempt to classified and  what the long-term                                                               
fiscal  impacts of  that  would be.   He  assumed  it would  mean                                                               
higher  rates  of  overtime pay  during  licensing  and  research                                                               
functions at the  time when fishermen need to have  their gear in                                                               
the water,  because if  there are  difficulties during  that time                                                               
there would be higher costs  associated with that.  Fundamentally                                                               
it  is  frustration over  the  administrative  order and  further                                                               
implementing it.                                                                                                                
2:35:32 PM                                                                                                                    
REPRESENTATIVE  TARR  noted the  audit  results  have been  under                                                               
consideration  for some  time now.    She asked  how Mr.  Lunde's                                                               
organization would have addressed the  audit results to provide a                                                               
solution  had Administrative  Order 279  not been  put in  place.                                                               
The conversation  had been that  a bill would be  forthcoming and                                                               
that there  would be  some changes.   She  asked what  could have                                                               
been  done that  would  have  been more  in  line  with what  the                                                               
Southeast Alaska Seiners Association might have been expecting.                                                                 
MR. LUNDE replied that there  certainly was room for streamlining                                                               
within  the agency,  which  he believes  the  agency was  already                                                               
doing.    At  issue  is  that the  CFEC  is  funded  entirely  by                                                               
commercial fishing  fees.   The [fishing  industry] pays  its own                                                               
way,  it brings  in  roughly  $7 million  and  it  is roughly  $4                                                               
million to  operate.  [Fishermen]  get really nervous  when there                                                               
are elements  about that  put into danger  $1.2 billion  worth of                                                               
permit values and  limited entry itself.   Commercial fishing men                                                               
and women  in Alaska have  invested heavily in permits  and their                                                               
boats; these  are small businesses.   Streamlining  government is                                                               
always a good thing, but  [fishermen] get really nervous when too                                                               
much  is taken  away from  something  that they  are paying  for.                                                               
[His association]  likes the  idea of  having competent  folks at                                                               
the CFEC full time and ready  to address the issues that come up.                                                               
It is like firemen - they are paid  to be there just in case even                                                               
though they are  not always out there fighting fires.   There are                                                               
always waves of heavier business  times and there are times where                                                               
there  is  going  to  be some  potential  buybacks  in  different                                                               
fisheries throughout  the state and times  in the not-too-distant                                                               
future  of limiting  some  fisheries  out west.    Those are  the                                                               
things for  which the  association would like  to have  a strong,                                                               
capable Commercial  Fisheries Entry  Commission and  having three                                                               
commissioners there to do the job.                                                                                              
2:38:19 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON understood  the  audit recommended  the                                                               
CFEC not  be subsumed into  ADF&G.   He posited that  there would                                                               
still, under the bill, be a CFEC.                                                                                               
MR. LUNDE agreed.                                                                                                               
REPRESENTATIVE  JOSEPHSON  inquired  whether the  fees  that  Mr.                                                               
Lunde  talked about  would still  be collected  and, if  so, what                                                               
would be done with them.                                                                                                        
MR. LUNDE  answered he  is not  entirely sure  what is  going on.                                                               
His organization has  asked many questions of ADF&G,  but has had                                                               
a difficult time getting any answers.                                                                                           
REPRESENTATIVE JOSEPHSON asked what  the difference is between an                                                               
administrative order  versus an executive  order, as seen  by Mr.                                                               
Lunde's organization.                                                                                                           
MR. LUNDE replied  that his organization did not want  to see any                                                               
of this  done in the first  place.  However, there  are steps the                                                               
legislature can take to reject  an executive order and that would                                                               
be through  a simple majority vote  in a joint session,  which is                                                               
why an administrative  order was probably done.   Also, according                                                               
to Legislative Legal and  Research Services, Administrative Order                                                               
279 goes beyond the parameters of an administrative order.                                                                      
2:41:23 PM                                                                                                                    
REPRESENTATIVE  TARR understood  the preference  is that  none of                                                               
this would be happening.   But, given the administrative order is                                                               
now in place, she inquired  whether some of the bill's provisions                                                               
would help improve the circumstances  relative to what was put in                                                               
place with the administrative order.                                                                                            
MR.  LUNDE  responded  that  he   does  not  honestly  think  so,                                                               
especially in  light of where things  may go with an  hourly rate                                                               
for the commissioners.   The bill is really looking  to just trim                                                               
in the commissioners  and that is not  something his organization                                                               
would  like.   His organization  wants a  strong, capable,  fully                                                               
staffed Commercial  Fisheries Entry  Commission as it  exists now                                                               
with all three commissioners.                                                                                                   
2:43:04 PM                                                                                                                    
ROBERT  THORSTENSON, Executive  Director and  Lobbyist, Southeast                                                               
Alaska  Seiners Association,  and  lobbyist  for Kenai  Peninsula                                                               
Fishermen's Association,  Alaska Bering Sea  Crabbers, Armstrong-                                                               
Keta,  Inc.,  and  Alaska Pacific  Environmental  Services,  LLC,                                                               
stated he  has talked  to everyone  he works  for in  the fishing                                                               
industry.  He related that he  has told the commissioner that "we                                                               
would  back off  on our  position opposing  this CFEC  orders and                                                               
these bills that have come flying  at us the last couple years if                                                               
they  could come  up with  one permit  holder, one  single permit                                                               
holder, and I have  yet to find anybody ... of  one of the 11,000                                                               
permit holders who hold $1.2 billion  worth of permits."  This is                                                               
a special  agency, it  is not  just some  agency that  is holding                                                               
some general  funds (GF), and it  is an agency that  is funded by                                                               
his members.  His members pay $700,000  a year in fees and do not                                                               
mind paying  larger fees because  they know the general  fund has                                                               
been  short on  overall  fish  and game  management.   While  his                                                               
members love  ADF&G, ADF&G houses  personal use,  sport, wildlife                                                               
viewing, charter,  commercial, and  hunting, so it  has a  lot of                                                               
different functions.   He reported  that former  state legislator                                                               
Clem Tillion  has urged that the  CFEC not be merged  into ADF&G,                                                               
because the  CFEC needs  to be  separate.  There  may still  be a                                                               
couple  of  commissioners  and one  secretary  remaining  and  no                                                               
research or other functions.                                                                                                    
MR. THORSTENSON  pointed out that  recently the harvest  in state                                                               
waters in the Bering Sea went from  0 to 36 million pounds of cod                                                               
and the  fishery is going  to get  closed three weeks  early this                                                               
year.   It will probably be  at a level of  50-100 million pounds                                                               
within  the next  couple years  of  a new  state waters  fishery.                                                               
Fishing will be expanding into areas  that are going to be really                                                               
hard to deal with.   The weakening of CFEC by  sliding it over to                                                               
ADF&G "is going to  hamper us in all of our  abilities for all of                                                               
our new  state waters fisheries;  we've got hundreds of  boats in                                                               
state water fisheries in the gulf  that have not been put under a                                                               
system yet."   This system is  a special system, it  is a special                                                               
agency.  There  is not another one  like it in the  world.  Every                                                               
other state  that has limited  entry, every other state  that has                                                               
some type  of a management plan,  does not have the  same type of                                                               
constitution  that Alaska  has.   That fragile,  constitutionally                                                               
protected privilege  of Alaskans  to commercially  harvest salmon                                                               
is threatened by AO 279 and  goes far, far deeper and further and                                                               
far more destructive than the audit itself was.                                                                                 
MR.   THORSTENSON   charged   that   to  add   credence   to   an                                                               
administrative order  that literally plucked  a bill out  of this                                                               
body  and moved  it over  to  the governor's  office without  any                                                               
public discourse  when the  entire board  of United  Fishermen of                                                               
Alaska was in town, if that is  the way that this body decides to                                                               
conduct business  with the rest  of the industries in  the state,                                                               
bar the doors.   This is a huge mistake, this  bill was a mistake                                                               
in the first  place.  While he appreciates the  intent of cutting                                                               
the budget, there  are some places where the cutting  is too deep                                                               
and is  putting at risk  a huge  system with the  state's largest                                                               
employer.  Currently the fishing  industry is putting in about as                                                               
much tax as any other industry in the state.                                                                                    
2:47:18 PM                                                                                                                    
REPRESENTATIVE  TARR addressed  Mr. Thorstenson's  statement that                                                               
ADF&G  has many  other duties  besides commercial  fishing.   She                                                               
asked if  Mr. Thorstenson's  concern is  that once  the positions                                                               
are transferred  to ADF&G they may  then be diluted by  having to                                                               
do  other work  or would  somehow  be influenced  by the  overall                                                               
department direction  that could be  in conflict with  what would                                                               
otherwise have happened.                                                                                                        
MR.  THORSTENSON  answered  that  maybe the  intent  here  is  to                                                               
unionize more state employees.  What  has made the CFEC a special                                                               
commission, a stand-apart commission, is  that it is sitting on a                                                               
$1.2 billion  existing permit bank.   The members that he  has in                                                               
Southeast Alaska  are 30 percent  Sealaska shareholders  and they                                                               
own permits that fluctuate between  $200,000 and $300,000 apiece.                                                               
Many Native  Alaskans need an  attorney just to look  after their                                                               
own business, their own permit, and  their own boat because it is                                                               
worth more than  any other asset they have.   They see their fees                                                               
paying  two  or  three  commissioners, who  are  extremely  sharp                                                               
attorneys, to  make sure this  system stays afloat,  because this                                                               
is  the most  tenuous, very  carefully constitutionally  balanced                                                               
system of  its kind  in the  world.   United Fishermen  of Alaska                                                               
voted against  this 33-0.   Out of 11,000 Alaskan  permit holders                                                               
he has yet  to find one single permit holder  who supports AO 279                                                               
or any version of any of these CFEC bills.                                                                                      
2:49:45 PM                                                                                                                    
BEN  BROWN, Commissioner,  Commercial Fisheries  Entry Commission                                                               
(CFEC), said Version N of HB  112 is vastly simpler than the bill                                                               
as introduced.   The debate that  has started to happen  does not                                                               
really  address the  four corners  of this  version of  the bill.                                                               
The larger picture  is that last year "we  were gravely concerned                                                               
with what HB  112 would have done in its  original form."  During                                                               
the interim the audit results  were released and the big takeaway                                                               
from the  audit was that  CFEC should  continue to operate  as an                                                               
independent  regulatory quasi-judicial  agency.   The audit  also                                                               
said that  several of the  CFEC's administrative  functions could                                                               
be transferred over  to ADF&G and the CFEC did  not contest that,                                                               
but one  point made on page  13 of the audit  is that maintaining                                                               
CFEC's organizational  structure allows  the agency to  expand as                                                               
necessary without  changing statutes  or regulations.   The audit                                                               
also recommends that  [the commissioners] be reduced  to 15 hours                                                               
a week.  While he respects the  good and thorough job done by the                                                               
legislative  audit, he  sees an  internal inconsistency  in those                                                               
two recommendations.                                                                                                            
MR.  BROWN thanked  Representative Stutes,  noting that  it is  a                                                               
conundrum on  how to  proceed, but  Version N  of HB  112 threads                                                               
that needle quite well.  Version  N takes the commissioners to an                                                               
hourly  rate of  compensation, which  is by  definition scalable;                                                               
when  the work  is there  the work  can be  done.   Regarding Mr.                                                               
Lunde's  reference to  upcoming buybacks  and certainly  a future                                                               
limitation, he said that if a hard  cap of two days a week at 7.5                                                               
hours is put  into statute and then a limitation  goes forward, a                                                               
backlog  of  work  for the  commissioners  would  immediately  be                                                               
created.   One  of the  three  seats is  vacant and  there is  no                                                               
indication from  the governor's office  at what point  that third                                                               
commissioner's  seat  will  be  filled.   He  said  he  and  CFEC                                                               
commissioner Bruce Twomley can support  Version N because it just                                                               
deals with  a very specific  thing, which  is the amount  of work                                                               
the commissioners are  able to do in a manner  that is consistent                                                               
with the audit's recommendations.                                                                                               
MR. BROWN  addressed Section 2 of  Version N, saying he  does not                                                               
know what the practical end result of  AO 279 is going to be.  He                                                               
said communication  has been attempted with  the commissioner and                                                               
deputy  commissioner  of  ADF&G  and   also  some  folks  at  the                                                               
Department of  Law to  give [the  CFEC] clarification  about what                                                               
the practical effects  of the administrative order will  be.  The                                                               
clutch of  documents that Mr.  Harris gave to the  committee will                                                               
provide  some  more information  but  will  probably create  more                                                               
questions  than provide  answers.   Therefore, he  does not  know                                                               
that  it is  practical  if Representative  Stutes  wants to  move                                                               
forward  with her  bill  trying to  solve  one specific  targeted                                                               
element of  the problem to  try to find  an answer to  the larger                                                               
debate, because he  does not think that is going  to happen today                                                               
or this week.   So, the CFEC commissioners can  support Version N                                                               
and  can talk  about the  audit  and AO  279 or  the larger  more                                                               
complicated things, but  he does not know that  that is necessary                                                               
for the committee to decide to move forward with Version N.                                                                     
2:53:28 PM                                                                                                                    
REPRESENTATIVE  TARR observed  that Version  N would  provide for                                                               
Range 27 and  surmised the idea is a daily  rate similar to other                                                               
boards, which, she  calculated, could be a pay cut  of 50 percent                                                               
or more for an individual  commissioner.  She inquired whether [a                                                               
commissioner]  would  have  to  find  other  work  to  supplement                                                               
his/her income  and asked  how would  a commissioner  shuffle the                                                               
deck  to become  available  on  a full-time  basis  when work  is                                                               
available or when there is an emergency situation.                                                                              
MR. BROWN first pointed to what he  thinks is an error on page 1,                                                               
line 8,  of Version N, stating  he thinks "[A]" should  be "[a]".                                                               
He then replied to Representative  Tarr's question about how this                                                               
would work, saying that there are  other examples of this such as                                                               
the Board of  Fisheries and the Alaska  Public Offices Commission                                                               
(APOC).  He related the experience  of a friend who was appointed                                                               
to  APOC and  discovered  the  great deal  of  work involved  and                                                               
juggling that  with her other  affairs as  an attorney.   He said                                                               
APOC is  a good example  of a feast  or famine kind  of workload.                                                               
Going forward the governor would have  to have to have his boards                                                               
and commissions people carefully look  at whom they were going to                                                               
appoint  to these  seats  knowing that  an  appointee could  find                                                               
himself/herself having to work a  full-time-plus job in the event                                                               
of a really thorny limitation  that just produced an onslaught of                                                               
applications for  permits.  It  could not be promised  to someone                                                               
that there was  going to be stability over the  course of a four-                                                               
year  term.   That said,  there are  going to  be people  who are                                                               
interested in this work and who  do not have a vested interest in                                                               
any commercial business, given that  prohibition still remains in                                                               
the  statute.   It would  become  a personnel  matter for  future                                                               
governors to determine  who had the right skill set  and also the                                                               
right availability  of time  to be  able to  function for  a full                                                               
four-year term  in this newly configured  model.  He said  he met                                                               
with several  of the  committee's members last  year, as  well as                                                               
members  of the  other body,  in anticipation  of the  hearing on                                                               
this bill when it was doing a great  deal more.  In many of those                                                               
conversations  he  suggested  going  to some  sort  of  part-time                                                               
model.  So, that is one reason he  is in a position to be able to                                                               
support this, but it is not going to be one size fits all.                                                                      
2:57:10 PM                                                                                                                    
JERRY  MCCUNE,  President,  United  Fishermen  of  Alaska  (UFA),                                                               
offered  his understanding  that an  administrative order  cannot                                                               
contain statute, while licensing is in  statute.  So, it is being                                                               
ordered  to move  the statute  people  over to  ADF&G, which,  he                                                               
understood,  cannot be  done under  an  administrative order,  it                                                               
must be an executive  order.  Also of concern to  UFA is that the                                                               
ADF&G  commissioner   sits  on   the  [North   Pacific  Fisheries                                                               
Management Council].  Other fisheries  are being developed in the                                                               
Bering Sea and part of these  fisheries will be under the council                                                               
because of  the quotas.  Thus,  there will be a  big conflict for                                                               
the commissioner of  ADF&G to make that decision and  also do the                                                               
licensing  and  everything  else  under CFEC,  especially  if  it                                                               
becomes limited.   Right  now a  transfer of a  permit, if  it is                                                               
objected to,  would have to go  from ADF&G over to  CFEC and then                                                               
back.   So, there are  two agencies,  with one that  is specialty                                                               
law, which  will have  to be  relied upon to  make some  of these                                                               
decisions.   The same  thing can be  accomplished by  leaving the                                                               
CFEC where it is and still  result in the savings talked about by                                                               
the audit.  The CFEC has  already been cut $650,000 and six staff                                                               
people and that will provide more  profit to the state, plus $1.3                                                               
million  is  generally  given  to   ADF&G.    Everything  can  be                                                               
accomplished that was  said by the audit and still  keep the CFEC                                                               
a  separate  agency  to  run  the limited  entry  law  under  the                                                               
constitution and  also keep  the CFEC  separate out  of politics.                                                               
Throwing the CFEC into the arena  of ADF&G will be a big conflict                                                               
if there  is a limited  entry fishery, such  as a Bering  Sea cod                                                               
fishery that will involve quotas.                                                                                               
2:59:45 PM                                                                                                                    
REPRESENTATIVE  TARR remarked  that there  seems to  be a  lot of                                                               
confusion  about  AO  279  and  it is  unclear  how  it  will  be                                                               
implemented.    She  asked  whether  the  specific  provision  in                                                               
Section 1 of Version N to  move the CFEC commissioners to a part-                                                               
time position is acceptable to UFA.                                                                                             
MR.  MCCUNE replied  that UFA  is  amenable to  making CFEC  stay                                                               
where it  is at and be  more efficient, whether that  is with one                                                               
part-time  and  one  full-time commissioner  or  three  part-time                                                               
commissioners, whatever works for CFEC's workload in the future.                                                                
3:00:50 PM                                                                                                                    
CO-CHAIR TALERICO closed public testimony.                                                                                      
REPRESENTATIVE  SEATON  said  he  is  that  first  permit  holder                                                               
[mentioned in Mr. Thorstenson's  testimony] because he introduced                                                               
a bill to  change CFEC in the previous legislature  and there are                                                               
other permit  holders he has talked  to that knew the  CFEC was a                                                               
very inefficient  agency.   As he  sees it,  the bill  before the                                                               
committee would ensure  that there is a transfer  of personnel in                                                               
a way in which they can  reasonably work on their daily schedules                                                               
instead of  having full-time commissioners with  not having full-                                                               
time  duties  to  do.    The committee  heard  from  one  of  the                                                               
commissioners that  this is a  reasonable way because  when there                                                               
is  more work  the commissioners  can flex  up for  the workload.                                                               
Also,  the   bill  provides   some  protection   for  individuals                                                               
transferring  from one  place to  another.   If  there are  legal                                                               
questions  on what  an administrative  order can  do, he  is sure                                                               
those will  get solved as  they cannot be  solved here.   He does                                                               
not see  it as  a constitutional  problem.   He said  he supports                                                               
this bill as  a reasonable way of adjusting the  work load to the                                                               
timeframe of  what the  CFEC commissioners will  be doing  and it                                                               
follows the recommendations of the legislative audit.                                                                           
3:03:12 PM                                                                                                                    
CO-CHAIR TALERICO re-opened public testimony.                                                                                   
STEVEN SAMUELSON  stated he  fully agrees  with the  testimony he                                                               
has heard  today.   In his  opinion, what  is happening  with the                                                               
CFEC has  been in  the works  since his  grandfather and  so many                                                               
people have  paid into the  system and  worked to have  that CFEC                                                               
work on their behalf.  He  is concerned that mixing the CFEC with                                                               
ADF&G goes  against what so  many have  worked for.   His largest                                                               
concern is  that the  CFEC will  get lost  in the  transition and                                                               
will  become absorbed  somehow within  ADF&G  so that  it is  not                                                               
seen.   He therefore feels  that HB 112  is premature.   There is                                                               
also  much concern  with  some of  the  other legislation  coming                                                               
through and those  will affect this directly and he  wants to see                                                               
what will  happen with that before  changing the CFEC.   The CFEC                                                               
knows   the  fishermen,   their  names,   families,  and   boats.                                                               
Regarding the $1.3 billion in the  industry, he said this is very                                                               
true under  the permits, but  it is not  a huge group  of people.                                                               
Many fishermen are just  that - they own a permit  and a boat and                                                               
they  are floating  around on  their retirement.   They  need the                                                               
organizations   to   represent   them,  although   he   is   here                                                               
representing  himself as  someone working  in the  industry.   He                                                               
reiterated that HB 112 is premature.                                                                                            
CO-CHAIR TALERICO  closed public testimony after  ascertaining no                                                               
one else wished to testify.                                                                                                     
3:06:34 PM                                                                                                                    
CO-CHAIR TALERICO offered his appreciation  to the testifiers who                                                               
mentioned Administrative Order 279.   He said he had no knowledge                                                               
that the  administrative order  was coming  forward and  that for                                                               
all intents  and purposes it  removed the original bill  that was                                                               
before the committee.   He posited that  Representative Stutes is                                                               
trying to address policy and, while  the end result is not known,                                                               
if something  changes with the  administrative order  there would                                                               
at least  be some  type of  policy in place  if the  AO continues                                                               
forward, regardless  of the committee's support  or opposition to                                                               
that particular administrative order.                                                                                           
CO-CHAIR TALERICO,  in response to Representative  Olson, said he                                                               
will be holding over HB 112.                                                                                                    
REPRESENTATIVE  JOHNSON  said he  would  like  to understand  the                                                               
relationship  between HB  112 and  Administrative  Order 279  and                                                               
what would happen if the  bill becomes law and the administrative                                                               
order is overturned.  He  requested that someone from Legislative                                                               
Legal and  Research Services  address the  committee at  its next                                                               
meeting on the bill in this regard.                                                                                             
CO-CHAIR TALERICO  noted he sees the  sponsor giving confirmation                                                               
to the request.                                                                                                                 
REPRESENTATIVE OLSON  also requested  the committee  be addressed                                                               
by someone from the governor's office regarding the rationale.                                                                  
3:09:28 PM                                                                                                                    
CO-CHAIR TALERICO held over HB 112.                                                                                             
3:09:37 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 3:10 p.m.                                                                 

Document Name Date/Time Subjects
HCS CS SB 32 Ver N.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Support Letter.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Briefing Paper.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 1.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 2.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 3.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 4.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 5.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 6.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Letter of Support 7.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Resolution.pdf HRES 4/4/2016 1:00:00 PM
SB 32
CS SB 32 Sectional Analysis.pdf HRES 4/4/2016 1:00:00 PM
SB 32
SB0032B(1).PDF HRES 4/4/2016 1:00:00 PM
SB 32
SB32CS Fiscal Note.pdf HRES 4/4/2016 1:00:00 PM
SB 32
HB 112 ver P (RES draft CS).pdf HRES 4/4/2016 1:00:00 PM
HB 112
HB 112 Sponsor Statement Ver P.pdf HRES 4/4/2016 1:00:00 PM
HB 112
HB 112 Sectional P.pdf HRES 4/4/2016 1:00:00 PM
HB 112
HB 112 Explanation of Changes W to P.pdf HRES 4/4/2016 1:00:00 PM
HB 112
CSHB 266N 4-1-16.pdf HRES 4/4/2016 1:00:00 PM
HB 266
CSHB 266 explanation of changes.pdf HRES 4/4/2016 1:00:00 PM
HB 266
HB 266 Supporting Document - Letter of Support Resident Hunters of Alaska.pdf HRES 4/4/2016 1:00:00 PM
HB 266
CSHB112 ver P 4.3.16 CFEC opposing letter.pdf HRES 4/4/2016 1:00:00 PM
HB 112
SB 32 LOS Denali Log.pdf HRES 4/4/2016 1:00:00 PM
SB 32
HB 112 Oppose -UFA Hse Resources 040416.pdf HRES 4/4/2016 1:00:00 PM
HB 112
HB 112 Support LB&A CFEC Audit.pdf HRES 4/4/2016 1:00:00 PM
HB 112
CSSB 32-RDC Support.pdf HRES 4/4/2016 1:00:00 PM
SB 32
HB 266 Opposing Written Testimony.pdf HRES 4/4/2016 1:00:00 PM
HB 266