04/04/2016 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB266 | |
| SB32 | |
| HB112 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 32 | TELECONFERENCED | |
| *+ | HB 112 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 266 | TELECONFERENCED | |
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,
HOFFMAN
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
committee.
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
further.
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
provided]:
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
operating.
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
ADJOURNMENT
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 |