Legislature(1995 - 1996)

03/01/1996 11:45 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                  
                         March 1, 1996                                         
                           11:45 a.m.                                          
 MEMBERS PRESENT                                                               
 Senator Loren Leman, Chairman                                                 
 Senator Georgianna Lincoln                                                    
  MEMBERS ABSENT                                                               
 Senator Drue Pearce, Vice Chairman                                            
 Senator Steve Frank                                                           
 Senator Rick Halford                                                          
 Senator Robin Taylor                                                          
 Senator Lyman Hoffman                                                         
  OTHER SENATE MEMBERS PRESENT                                                 
 Senator John Torgerson                                                        
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 198                                                           
 "An Act establishing the Homer Airport Critical Habitat Area."                
 CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 191(FIN)                         
 "An Act relating to the management and disposal of state land and             
 resources; relating to certain remote parcel and homestead entry              
 land purchase contracts and patents; and providing for an effective           
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 198 - See Resources minutes dated 2/21/96 and 3/1/96.                      
 HB 191 - No previous action to consider.                                      
  WITNESS REGISTER                                                             
 Roy Hoyt, Jr.                                                                 
 P.O. Box 2121                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Opposed SB 198.                                        
 Paul K. Seaton                                                                
 58360 Bruce Dr.                                                               
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Marla McPherson                                                               
 P.O. Box 3585                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Daisy Leebitter                                                               
 60385 Skyline Dr.                                                             
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Jan Eagle                                                                     
 P.O. Box 2285                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Kathleen Moore                                                                
 4631 Kachemak Bay Dr.                                                         
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Commented SB 198.                                      
 Gino DelFrate, Wildlife Biologist                                             
 Department of Fish and Game                                                   
 3298 Douglas St.                                                              
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Bob Moss                                                                      
 P.O. Box 774                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Mildred Martin                                                                
 P.O. Box 2652                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Joel Cowper                                                                   
 P.O. Box 3585                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Nancy Lord                                                                    
 P.O. Box 558                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Dennis Leach                                                                  
 Homer City Council                                                            
 P.O. Box 1414                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Elizabeth Webb                                                                
 Pratt Museum Homer Society of Natural History                                 
 3779 Bartlett St.                                                             
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Lynn Whitmore                                                                 
 Homer Fish and Game Advisory Committee                                        
 P.O. Box 355                                                                  
 Anchor Pt. AK 99556                                                           
  POSITION STATEMENT:   Supported SB 198.                                      
 Jim Reardon                                                                   
 413 E. Lee Dr.                                                                
 Homer, Ak 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Ron Drathman                                                                  
 P.O. Box 12                                                                   
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Nina Faust                                                                    
 Box 846                                                                       
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Edgar Bailey                                                                  
 P.O. Box 2994                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Harry Gregoire                                                                
 P.O. Box 241                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Ken Castner                                                                   
 P.O. Box 558                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Pam Brodie                                                                    
 P.O.Box 1134                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Garner McGinty                                                                
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supported SB 198.                                      
 Brent Johnson                                                                 
 HC 2, Box 508                                                                 
 Clam Gulch, AK 99568                                                          
  POSITION STATEMENT:   Opposed HB 191.                                        
 Ron Swanson, Deputy Director                                                  
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C St., Ste.1122                                                          
 Anchorage, AK 99503-5947                                                      
  POSITION STATEMENT:   Supported HB 191.                                      
 Bill Ward                                                                     
 Ward Farms                                                                    
 P.O. Box 350                                                                  
 Soldotna, AK 99669                                                            
  POSITION STATEMENT:   Commented on HB 191.                                   
 Lauren Moss                                                                   
 Prince William Sound Setnetters Association                                   
 P.O. Box 869                                                                  
 Girdwood, AK 99587                                                            
  POSITION STATEMENT:   Opposed HB 191.                                        
 David Sanden                                                                  
 P.O. Box 210306                                                               
 Auke Bay, AK 99821                                                            
  POSITION STATEMENT:   Commented on HB 191.                                   
 Joe Chuckwuk                                                                  
 P.O. Box 8                                                                    
 Dillingham, AK 99576                                                          
  POSITION STATEMENT:   Opposed HB 191.                                        
 Kim Rice                                                                      
 Egegik Setnet Association                                                     
 P.O. Box 331                                                                  
 Girdwood, AK 99587                                                            
  POSITION STATEMENT:   Opposed HB 191.                                        
 Marv Ebnet, President                                                         
 Ugashik Setnetters Association                                                
 P.O. Box 110370                                                               
 Anchorage, AK 99511                                                           
  POSITION STATEMENT:   Opposed HB 191.                                        
 Dee Pearson                                                                   
 P.O. Box 669                                                                  
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 Don Fox                                                                       
 P.O. Box 2971                                                                 
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 Pat Jones                                                                     
 P.O. Box 544                                                                  
 Cordova, AK 99574                                                             
  POSITION STATEMENT:   Opposed HB 191.                                        
 John Thomas                                                                   
 P.O. Box 284                                                                  
 Cordova, AK 99574                                                             
  POSITION STATEMENT:   Opposed HB 191.                                        
 Kimberly Peterson                                                             
 P.O. Box 240102                                                               
 Douglas, AK 99824                                                             
  POSITION STATEMENT:   Opposed HB 191.                                        
 Tom Bursch                                                                    
 P.O. Box 2582                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Commented on HB 191.                                   
 Lauren Carlton                                                                
 P.O. Box 198                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Opposed HB 191.                                        
 Will Bishop                                                                   
 P.O. Box 1455                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Opposed HB 191.                                        
 Virginia Adams, President                                                     
 Northwest Kodiak Setnetters                                                   
 P.O. Box 870                                                                  
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 Hugh Malone                                                                   
 Kenai Peninsula Fishermen's Association                                       
 119 Seward St., #3                                                            
 Juneau, Ak 99801                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 Nelle Murray                                                                  
 Alatak Basin Setnetters Association                                           
 P.O. Box 21                                                                   
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 LaQuiata Yatsik                                                               
 P.O. Box 13                                                                   
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 Nora Sutton                                                                   
 P.O. Box 91756                                                                
 Anchorage, AK 99503                                                           
  POSITION STATEMENT:   Opposed HB 191.                                        
 Al Bauman, President                                                          
 Quinhagak Setnetters Association                                              
 P.O. Box 92895                                                                
 Anchorage, AK 99509                                                           
  POSITION STATEMENT:   Opposed HB 191.                                        
 Paul Vick                                                                     
 642 Liten Elv Way                                                             
 Fairbanks, AK 99712                                                           
  POSITION STATEMENT:   Opposed HB 191.                                        
 Pete Murray                                                                   
 P.O. Box 2181                                                                 
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposed HB 191.                                        
 Representative Al Austerman                                                   
 State Capitol Bldg.                                                           
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Commented on HB 191.                                   
 Kathy Dugan                                                                   
 Department of Natural Resources                                               
 3601 C Street                                                                 
 Anchorage, AK 99503                                                           
  POSITION STATEMENT:   Commented on HB 191.                                   
  ACTION NARRATIVE                                                             
  TAPE 96-22, SIDE A                                                           
 Number 001                                                                    
            SB 198 HOMER AIRPORT CRITICAL HAB. AREA                           
  CHAIRMAN LEMAN  called the Senate Resources Committee meeting to             
 order at the Homer LIO at 11:45 a.m. and announced  SB 198  to be up          
 for consideration.                                                            
 SENATOR LINCOLN thanked them all for attending the meeting and                
 hoped that the bill would be moving out right away.  She asked                
 Senator Leman why there was a Finance Committee referral if there             
 was a $0 fiscal note.  SENATOR LEMAN answered that the Resources              
 Committee doesn't issue fiscal notes on bills.                                
 ROY E. HOYT, JR. said he had been a pilot since 1942 and in                   
 aviation for many years.  He has a detailed knowledge of the Homer            
 Airport and its surroundings.  Thirty two years ago in the military           
 he was in an accident caused by Canada geese coming through the               
 windshield of a plane.  A goose hit his student in the head                   
 breaking his neck and killing him. He thought it was irresponsible            
 to have a critical habitat near the airport within city limits.  It           
 is impossible to enhance the area for moose without enhancing it              
 for birds, too.  He thought the residents of Homer should vote on             
 Number 106                                                                    
 PAUL K. SEATON, supported SB 198.  He said they had been trying to            
 enhance the winter moose habitat by planting willows in the area on           
 private lands and other lands.  This would aid in the local effort            
 that has been ongoing to improve the moose habitat.                           
 SENATOR LEMAN asked if what they were doing would enhance the bird            
 population.  MR. SEATON answered that he didn't think it would                
 enhance it at all.                                                            
 MARLA MCPHERSON supported SB 198 and said every time she has flown            
 into the airport at Homer in the winter she has counted 30 - 40               
 moose in the area.  She thought the area should be preserved.  She            
 didn't think the issue of birds should be of concern.                         
 Number 158                                                                    
 DAISY LEEBITTER said she had been an Alaskan for over 41 years and            
 supported SB 198 because of the educational, recreational, and                
 tourism values associated with it.  Through the years she has led             
 people through the edge of the wetlands areas through the 11 acres            
 of land trust and she has had a lot of public support so that                 
 trails were established and an observation platform was built.                
 Number 202                                                                    
 JAN EAGLE said she was a new resident of Homer and said she moved             
 there to live because of the beauty of the habitat, the wildlife,             
 and the birding.  She commented that it seems we need to learn to             
 share habitat as both humans and animals exist and use the same               
 SENATOR LEMAN noted that there was a provision stating that it is             
 subject to the authority of the Department of Transportation and              
 Public Facilities to prohibit or remove an activity, installation,            
 or object on the land that may enhance bird habitat on or in the              
 vicinity of the Homer Airport.  Another section says that neither             
 the Department of Fish and Game or any other person may create,               
 develop, or enhance bird habitat within the Homer Airport Critical            
 Habitat Area.  He thought that was a good point.                              
 KATHLEEN MOORE said her concern was with being able to continue               
 multiple use of lands.  She said she and her family use trails that           
 go from Kachemak Bay to East Road.  She said that moose are around            
 the town only when the snow is too deep to be somewhere else unless           
 there are problems with predation when they are calving.  She                 
 supported Mr. Hoyt's concern with accidents from birds flying into            
 planes and suggested that when people see large flocks of geese               
 near the airport to let the airport know.                                     
 SENATOR LEMAN asked Senator Torgerson if he knew of anything in               
 this bill that would preclude that kind of activity.  SENATOR                 
 TORGERSON replied, but the recording was indistinct (background               
 noise).  SENATOR LEMAN said they would look it over and make sure             
 she would not be restricted.                                                  
 DAVE VANDERBRINK said he had been a member of the Wetlands Task               
 Force.  His primary interest from long observation is that there is           
 a great deal of summer time moose habitat and very little for                 
 winter.  That is his primary interest in establishing more area in            
 the lower elevations for the moose to attempt to survive.  He                 
 didn't think the bird problem would be of any great concern so long           
 as managers don't make things too neat, for instance, making the              
 grass too short which attracts geese.  He didn't see how birds                
 would be more of a problem in the future than they are now.                   
 GINO DEL FRATE, ADF&G Wildlife Biologist, testified, but the                  
 recording was indistinct due to background noise.                             
 Number 359                                                                    
 BOB MOSS supported SB 198 based on 50 years of watching changes and           
 developments in the Homer area.  He thought the point had been                
 reached that this legislation was needed.  He said they are working           
 with the whole ecological system, not just one part.  He said this            
 issue has support from the city fathers and from the Division of              
 MILDRED MARTIN supported SB 198.  She said many moose died in the             
 winter of 1992 because the snow was too deep up on the mountain.              
 She thought it was vital that they preserve the habitat for them              
 and recognize the fact that everytime someone builds they are                 
 losing habitat.  She said local support is very strong.                       
 Number 447                                                                    
 JOEL COWPER said he supported creating the habitat area for moose             
 and for other species, as well.  He thought everything should be              
 done to protect the area.  He said the birds were not a problem               
 SENATOR LEMAN said it looked like it wasn't likely that the                   
 legislature would be able to fund any significant effort to enhance           
 NANCY LORD supported SB 198.  She was concerned that the session              
 was half over and the bill was still in its first committee of                
 DENNIS LEACH, Homer City Council, said whenever testimony was taken           
 on this issue, it was favorable.  He explained that Homer is in the           
 process of changing its main focus of economy from commercial                 
 fishing to tourism.  There is a tremendous future there in tourism,           
 but it's going to take some work.  That particular herd of moose              
 represents the vast majority of the watchable wildlife on the                 
 ELIZABETH WEBB, Pratt Museum Homer Society of Natural History, said           
 they supported SB 198.  She read a letter from the Society,                   
 representing about 800 members, reviewing the proposal for                    
 formation of a critical habitat area for the Beluga Wetlands.  The            
 board members were unanimously in favor of the proposal.                      
 She paraphrased comments from Dr. George West, a local                        
 ornithologist regarding bird populations and the aircraft hazard              
 issue.  He said when their task force was formed there was a                  
 healthy colony of 40 pairs of arctic Aleutian terns nesting in the            
 marsh.  Since that time the number of nesting terns has dwindled to           
 two to three pairs.  There are several species of duck which nest             
 there, also.  When there were more nesting birds in the area the              
 task force was not aware of any trouble with aircraft.  He assured            
 everyone that even with critical habitat status there would                   
 continue to be increased pressure on habitat and birds from                   
 recreational use, so there would be even fewer birds, not more                
 birds, to present a hazard to aircraft in the years to come.  The             
 effect of designating the Beluga Wetlands with critical habitat               
 status will benefit the moose more than the birds.                            
 LYNN WHITMORE said he is co-chairman of the Beluga Wetlands Task              
 Force and is the chairman of the Homer Fish and Game Advisory                 
 Committee.  He strongly supported SB 198.                                     
 JIM REARDON, a 40-year resident of Homer and a 46-year resident of            
 Alaska, said he managed the wildlife department of the University             
 of Alaska in 1950 and worked for the ADF&G for 12 years.  He has              
 also worked at the Homer Airport.  He said the problem with the               
 birds down there is that they seem to be diminishing and he didn't            
 see how the critical habitat area would increase the danger from              
 bird strikes by airplanes using the Airport.                                  
 RON DRATHMAN, Kenai Peninsula Borough Assembly (KPBA), said there's           
 really nothing you can do about the situation.  It's not good to              
 have an airport near developed land and if it is out of town there            
 will be some animals around it.  He said he thought we are fighting           
 a losing battle against development, but we should do something to            
 protect the area.                                                             
 NINA FAUST, Kachemak Bay Conservation Society, strongly supported             
 SB 198.  She thought it was a good idea to set aside areas of                 
 habitat for the economic infrastructure associated with tourism.              
 Number 573                                                                    
 EDGAR BAILEY, Homer wildlife biologist, supported previous                    
 testimony of Jim Rinehart and George West.  Being from California             
 he has seen what has happened cumulatively with the lost habitat              
 and if we don't use some foresight we are going to have the same              
 thing happen in Alaska that is occurring in California.                       
 TAPE 96-22, SIDE B                                                            
 Number 580                                                                    
 He said the key wintering areas are what are in short supply.  He             
 thought this was an outstanding opportunity to look at cumulative             
 impacts and have foresight and safeguard a very key area which is             
 only a little more than a square mile.  It is very essential for              
 wintering moose populations.                                                  
 MR. BAILEY thought passage of this bill was extremely important and           
 he didn't think there would be any real problem with birds because            
 with the surrounding loss of habitat the bird problem is actually             
 HARRY GREGOIRE said there was a bird problem at the airport and               
 they would continue to have a problem with enhancing the moose                
 habitat.  He said there was an accident at the airport that wasn't            
 recorded.  He said the economic base is dependent upon the airport.           
 He said they need to make jobs.  He found that $87 million dollars            
 of land within the city limits of Homer is either State, federal,             
 or Borough - non-taxed.  That is one fourth of their total lands.             
 DOT want to take another 600 feet (300 acres) which would wipe out            
 the commercial D-2 property.                                                  
 MR. GREGOIRE said he was concerned about the airport's ability to             
 function, but he didn't think SB 198 would keep it from being able            
 to function.                                                                  
 KEN CASTNER, Homer resident and private pilot, said he does a lot             
 of his flying around Beluga Lake.  He said the summer wind in Homer           
 comes in from the Southwest and the proposed critical habitat area            
 is his approach into Beluga Lake and he sees moose there most of              
 the time.  Moose aren't a big problem.  He said that Beluga Lake is           
 not the wildest place he flies in and out of.  There are a lot of             
 places that have animals and birds, especially large birds like               
 swans, loons, and cranes, but that is just a factor in being an               
 Alaskan pilot.  Pilots carry experiences and relations of                     
 experiences around with them so they don't run into the same                  
 problems.  Bird avoidance is part of the skills that you build.  He           
 really didn't see what the alternative was to making this a                   
 critical habitat.  He would object to putting a tower up there for            
 the approach to Beluga Lake.  Short of killing every bird in the              
 area he really didn't know how to avoid that problem.                         
 PAM BRODIE supported SB 198. She spends a lot of time out of doors            
 and thought it was important to keep the area open to the moose.              
 An unidentified Homer City Council member (Jack) wanted Homer to be           
 a town where people could come in and see a herd of moose.  He said           
 the area on the north side of the runway and the small areas to the           
 south are specifically targeted by moose.  As pressures around                
 these areas increase the population of birds decrease.  We are                
 stewards not only for now, but for generations to come.                       
 GARNER MCGINTY said he had been in Alaska for 50 years and had been           
 all over.  Moose and bird habitat is all over Alaska.  He said                
 there are two choices here.  Either everyone moves out and lets the           
 moose and birds have it or we have to work together.                          
 SENATOR TORGERSON thanked everyone for their participation at the             
 meeting.  SENATOR LEMAN also thanked his staff, Mary Vollendorf,              
 and Eric Musser, staff to Speaker Gail Phillips, for their help.              
 Number 451                                                                    
 SENATOR LEMAN recessed the meeting at 12:55 p.m.                              
 TAPE 96-23, SIDE A                                                            
 Number 001                                                                    
          HB 191 MANAGEMENT OF STATE LAND AND RESOURCES                        
 SENATOR LEMAN reconvened the Resources meeting at 2:55 p.m. at the            
 Kenai LIO and announced  CSSSHB 191(FIN)  to be up for consideration.         
 He said he intended to take testimony on sections 24, 25, and 26              
 which contain the changes proposed by the Department of Natural               
 Resources in the operation of the shore fisheries program.  He had            
 met with the Department and expressed his concerns about what this            
 would do with the program that he believes is operating fairly                
 successfully and is paying for itself.                                        
 REPRESENTATIVE THERRIAULT, prime sponsor, commented that HB 191 is            
 a housekeeping measure that attempts to clarify certain Title 38              
 statutes governing DNR.  It is intended to bring greater efficiency           
 to the management of State lands without sacrificing public                   
 involvement in making the decisions.                                          
 This bill revises the remote cabin permit program to a program that           
 will allow for either the sale or lease of land for a remote cabin            
 sight.  This permit program was never put into action because of              
 the associated administrative costs with a minimal return to the              
 State.  This program is just one example of proposed changes                  
 intended to give DNR the tools necessary to dispose of State land             
 more efficiently.  The CS also includes a section clarifying that             
 the sale of State land does not obligate the State to provide                 
 additional services.  HB 191 changes the shore fisheries program to           
 allow a reasonable rate of return to the State for the use of State           
 lands for setnet sites.                                                       
 He spoke with Senator Leman and Mr. Swanson, DNR, to understand               
 their concerns regarding the shore fisheries section of the bill .            
 It was not his intent to have a $300 shore fishery lease go up to             
 $5,000.  He has talked with Senator Leman about the possibility of            
 tagging the lease to some reflection of the value of the property             
 as it reflects the value of the permit being used.  He would be               
 willing to consider a percentage of the value that would be at a              
 less than one percent or perhaps they could consider the existing             
 $300 to be a floor and then have an upper limit of no more than               
 $1,000.  The lease payment that would be generated based on the               
 percentage that would be set in statute would be somewhere between            
 that floor and ceiling, but nowhere close to the $5,000 people are            
 fearful of.                                                                   
 REPRESENTATIVE THERRIAULT said many sections of the bill are to               
 allow the public to utilize that State resource at a fair market              
 He said he thought there was a way to address the concerns with the           
 homesteading provision and allow people to choose to continue their           
 homestead under the old statutes or the new statutes, but not allow           
 them to pick and choose between sections.                                     
 In the DNR budget review, the shore fisheries issue has come up and           
 in the current year funding for the program has been zeroed out.              
 If this legislation passed, it would be accompanied by a fiscal               
 note reflecting money put back into the budget for continuation of            
 the program.                                                                  
 Number 199                                                                    
 SENATOR LEMAN noted that Representative Alan Austerman was in                 
 attendance at the Kodiak LIO.                                                 
 BRENT JOHNSON said he does land surveying and has a small business            
 of drawing shore fishery lease diagrams for setnetters in Bristol             
 Bay, Kodiak, Prince William Sound, and other Cook Inlet locations.            
 He said this legislation would hurt his business because it deters            
 fishermen from applying for shore fishery leases.                             
 MR. JOHNSON said his family holds five shore fishery leases.  These           
 leases have accomplished a very good purpose in the setnet industry           
 by giving fishermen stability.                                                
 Section 24 says it would eliminate the unique leasing process for             
 setnet sites which need a unique leasing process.  The "higher                
 value leases could be awarded at auction" language will be opposed            
 by all setnetters because they are opposed to any system that would           
 auction off sites where a person who has fished a sites for years             
 will be disenfranchised from it by being outbid.                              
 Fishermen who lease sites often move rocks, stakes, and things away           
 from their nets.  They also install permanent anchors and make                
 improvements that increase the value of their own sites.  He                  
 thought it might be a good idea to tie the value of the lease to              
 the permit renewal which fluctuates according to the value of the             
 industry and area.                                                            
 Number 239                                                                    
 REPRESENTATIVE THERRIAULT pointed out that the value of the permit            
 would fluctuate with the market and it is an average around which             
 they are trying to structure.  He thought the language could be               
 tightened up to ensure that an existing lease holder would be able            
 to continue without fear of having someone take a lease out from              
 under them.  That is not his intention.                                       
 SENATOR LEMAN noted that language in the bill did provide for                 
 maintaining that integrity throughout the term of the lease, but it           
 doesn't address the issue of lease renewal.                                   
 SENATOR LEMAN noted that Representative Ivan joined the Committee             
 at the Dillingham LIO.                                                        
 RON SWANSON, DNR, said it has been in statute for many years that             
 if a person has a lease, they will be able to renew it without                
 competition.  There is some confusion, though, because it refers to           
 section 38.05.102 which deals with long term leases.  They have               
 always interpreted that statute to say we should treat the short              
 term set net leases the same as a long term lease when it comes up            
 for renewal.                                                                  
 MR. SWANSON agreed with Representative Therriault that the $5,000             
 reference is in no way intended to apply to the shore fishery                 
 lease.  The $5,000 limit and the 10-year limit is scattered                   
 throughout Title 38.  If the lease is for under 10 years, under               
 $5,000 they can negotiate the lease.  Over that it has to go to               
 competitive auction.  That is why the shore fishery leases were               
 established for under 10 years.                                               
 He said they are open to different ideas regarding the fees.  Their           
 intent is to figure out a more equitable way to charge for the use            
 of State lands rather than to just cover administrative costs.                
 They also feel that they don't want to be "counting fish" and they            
 don't want to punish the person who fishes a site very hard                   
 compared to a person who goes out for one or two openings.                    
 Regarding the new applications for an area coming in, it doesn't              
 happen very often, where they must determine the most eligible                
 person for the site.  A competitive bidding situation would be used           
 only in extreme cases.                                                        
 Number 325                                                                    
 REPRESENTATIVE THERRIAULT assured people he would be willing to               
 structure the language so if there is a temporary lapse and if a              
 person has held the lease for a long time and wants to renew, there           
 is a finding that person is the most eligible and could reestablish           
 that lease.                                                                   
 MR. SWANSON reiterated that is their intent.  SENATOR LEMAN noted             
 they may want to retain some of the old language in section 24.               
 MR. SWANSON added that they wanted to make it "may" instead of                
 "shall."  If they are put in the situation where they cannot make             
 a determination, they are forcing them to go one way.  They want an           
 option in the rare case that they can't figure it out.                        
 BILL WARD, Ward Farms, said he thought the statute should retain              
 the "shall" status because the individuals need to have the                   
 assurance that as land comes available and as they need the                   
 opportunity to expand their base of operations they will be able to           
 do so.  He added that SB 162 should "dove tail" with actions in               
 this bill.                                                                    
 LAUREN MOSS, Prince William Sound Setnetters Association, said they           
 feel the revisions to HB 191 are not necessarily needed.  They feel           
 if the system works, why fix it.  It's efficient and simple and she           
 didn't think it would reduce the cost.  She didn't see how                    
 auctioning off the high line set nets would really raise any money.           
 She reminded them that they are talking about a fishery, not real             
 MS. MOSS told Representative Therriault that it appears to them               
 that the budget line for the shore fishery is being held hostage to           
 these provisions and asked him if that was a misconception.                   
 Number 409                                                                    
 REPRESENTATIVE THERRIAULT replied that the Governor zeroed out the            
 funding for the program and he is trying to make the budget numbers           
 work.  Right now the expense of issuing the permits can be covered,           
 but now the statute doesn't allow the expense of adjudicating any             
 of the permits.  He also said that many of the people who are                 
 testifying today mistakenly believe that they are going to shift              
 everything over to an auction.  That is not the intent at all.  If            
 a person has a lease, they will be able to continue that lease for            
 as long as they want to.  He didn't think there would be that much            
 change in the program.  They are talking about a floor on the                 
 amount they would pay for the lease and he is willing to consider             
 a ceiling so that the price will not go through the roof.  The                
 auction will only come into effect when there is a dispute DNR                
 cannot make a determination of who is the most qualified applicant            
 for a lease.                                                                  
 SENATOR LEMAN commented that he and the legislature know that is              
 his intent, but the legislation as currently written does not say             
 Number 426                                                                    
 DAVID SANDEN said his concern was with the 4,000 people who applied           
 for homesteads last year and of that number 53 received homesteads.           
 He wanted to know if they would be put under the old law or the new           
 law.  He is also concerned with the effective date of the                     
 legislation and how that would affect the staking period which is             
 normally from June 15, 1996 - August 14, 1996.  He suggested that             
 there be something in the staking packet allowing them to choose              
 which law they want to go with.                                               
 SENATOR LEMAN replied that was the intention of the Department and            
 the bill's sponsor.                                                           
 MR. SWANSON also replied that was absolutely their intent if this             
 legislation passes.                                                           
 JOE CHUCKWUK said his concern was what affect the auction would               
 have on existing fishermen in the Bristol Bay area and elsewhere.             
 Historically there has been enough effort by foreign companies to             
 attempt to take over the fishery in Alaska.  This makes fishermen             
 very suspicious when leases are auctioned off to the highest                  
 Number 489                                                                    
 KIM RICE, Egegik Setnetters Association, said they feel as other              
 people who testified that the system they have now works.  He                 
 thought it might change a lot of people's minds if the real intent            
 were put down, because everyone was reacting to the $5,000.  He               
 said that right now the program is paying for itself and he would             
 be willing to pay for the added administrative costs to keep the              
 program as it is.  However, people would drop their leases if they            
 cost too much more and then the system would fall apart.  With the            
 system now, people respect each other.                                        
 MARV EBNET, President, Ugashik Setnet Association, said that people           
 are struggling with the costs they have now.  Additional costs in             
 the setnet industry would cause people to drop their leases.                  
 DEE PEARSON said she had setnetted on her site in Kodiak since 1947           
 with her family and she believed the bill was very unfair to                  
 setnetters.  She said they only use a rock to tie to and they don't           
 fish on State lands; they fish in deep water and are required to              
 tie to something above high water.  That is the only time they use            
 the land.  She feels they are already paying quite a bit and they             
 are being singled out as setnetters to pay more.  If the State                
 needs money she thought they should do it on a more equitable                 
 basis.  She said the Kodiak Wildlife Refuge System makes their                
 situation a little different than others in the State.  They have             
 fairly large investments in their shore facilities having been                
 there so long.  They are all small businesses and employ a lot of             
 young people who are working their way through school.                        
 She said that she pays her help well and felt that another expense            
 was more than she could stand.  She was definitely against                    
 auctioning off the sites.  She didn't see any language that                   
 addressed the sale of a site.                                                 
 DON FOX, Kodiak resident, concurred with Ms. Pearson's statements.            
 He said a lot of their shore support facilities are on Wildlife               
 Refuges which they pay $250 per year for use of.  The values of               
 their permits are approximately $120,000 and they use a rock about            
 10 ft. big.  To charge a one percent fee of that would probably be            
 $1,200.  He closed asking why fix something that's not broken.                
 Number 567                                                                    
 MR. SWANSON clarified that they don't deal with the sale of                   
 permits.  The person who has the lease deals with it and they honor           
 the lease.                                                                    
 PAT JONES, Cordova setnetter, said sections 24, 25, and 26 should             
 remain as they were.  She said the program has been working and               
 giving fair value to the State and she didn't see any reason to               
 change it.                                                                    
 JOHN THOMAS said his family had a setnet in Prince William Sound              
 for a number of years and he felt the system was working quite                
 KIMBERLY PETERSON opposed HB 191.  She said she and her husband are           
 Kodiak setnetters from the Alatek Bay District where her husband              
 had been fishing since 1964.  They bought their sites before                  
 limited entry was established and they have been traditional sites            
 since the 1940's.                                                             
 TAPE 96-23, SIDE B                                                            
 Number 580                                                                    
 MS. PETERSON said they got shore fishery water leases to avoid the            
 political contentions in offshore fisheries with the advent of                
 limited entry. They paid for surveying and an attorney and applied            
 for shore leases.  The fees for the leases at that time was $150;             
 now they are $300.                                                            
 She agreed that they should pay for the services they are                     
 receiving.  A few years ago in Alatak there was a conflict and they           
 had to get their sites resurveyed and their point of attachment               
 monumented since they go under water.  All of the fishermen                   
 involved paid for everything, even for DNR to come down.                      
 Now, she said, they are being told they want to charge more per               
 year for their leases and when they have to get them reissued the             
 fee could be based on the market value of the sites; and if they              
 don't pay they lose their sites to the highest bidder.                        
 She also understood that the yearly lease payment would be based on           
 the market value of their permits and she asked why some fishermen            
 should pay more for the same service.                                         
 Number 556                                                                    
 TOM BURSCH, Homer resident, said he and his wife setnet in Bristol            
 Bay near Nugashik and their operation makes a substantial                     
 contribution to the State's economy.  He thought there was                    
 confusion with the auction terminology and if they are talking                
 about a $1,000 ceiling on the leases, he didn't see where the                 
 auction wording should even come in.                                          
 He said other methods needed to be looked into of resolving                   
 conflicts over leases, like using a private arbitrator and having             
 the loser pay.                                                                
 LAUREN CARLTON thanked the committee for the opportunity to speak             
 and said she represented herself and Eric Beeman who has setnetted            
 with his family for 30 years at Kalgin Island.  She said they                 
 understand the frustration in DNR with conflicts over sites.  She             
 suggested beginning a mediated program because Mr. Beeman is in               
 that situation right now.  She is really concerned with section 27,           
 the auction section. She said the three year permit process is very           
 important because they need to know in advance how much gear and              
 crew they will need.  She thought the auction should be completely            
 MS. CARLTON said the way she hears it is that the biggest costs are           
 over arbitration in certain site conflicts.                                   
 WILL BISHOP, Homer resident, said most points have already been               
 made a couple of times, but he said the wording he sees is too                
 vague.  The system works, so leave it alone.  He pointed out that             
 site values change each year with fish prices, weather, and all               
 sorts of things.                                                              
 Number 488                                                                    
 KIMBERLY PETERSON repeated her testimony as the transmission was              
 cut off the first time.                                                       
 VIRGINIA ADAMS, Northwest Kodiak Setnetters, said they represent              
 about 80 permits.  She pointed out that just having the tremendous            
 participation from setnet groups testifying indicates the                     
 pervasiveness of interest on this issue and she hoped the consensus           
 would be noticed by the committee.                                            
 She said the shore fishery program was established to preserve the            
 fishing opportunities to those fishing traditional areas as well as           
 to add stability to the State setnet fishery.  Awarding a shore               
 fishery lease to a high bidder in the case of a new or contested              
 lease would actually create instability within the setnet fishery             
 and may contribute to shore fishery disputes.  They appreciate the            
 difficulty the Division of Lands has in resolving conflicting                 
 claims and their desire for a solution in the form of a law.  This            
 solution is ill conceived.  Her group is working on an alternative            
 proposal or approach to this issue.  She suggested they solicit the           
 opinions of the different setnet organizations around the state.              
 Number 420                                                                    
 HUGH MALONE, Kenai Peninsula Fishermen's Association, thanked them            
 for having a full hearing on this issue.  This legislation would              
 bring uncertainty to the business investments connected with a                
 shore fisheries lease.  If it is the intent that the present lease            
 holder should have priority, that should be specified in the                  
 The second point he wanted to make concerned the potential                    
 increased cost to shore fisheries lease holders under this                    
 proposal.  He said there has been no clear reason given for the               
 potential increase in costs.  If the program is about breaking even           
 now and if the director has the ability to set the administrative             
 costs of the program, collecting costs through this mechanism                 
 beyond that seems inappropriate.  The fisheries resource does                 
 contribute now to the State's economy in a number of ways,                    
 principally through the raw fish tax.                                         
 The industry is facing a fairly dramatic price drop in the value of           
 our salmon and even though it's not intended, this legislation                
 could put people out of business.                                             
 Number 391                                                                    
 NELLE MURRAY, Alatak Setnetters Association, said she was confused            
 about this legislation because it seems that the original reasoning           
 behind it is no longer valid.  When this program was introduced the           
 shore fisheries lease program was running a deficit.  Since that              
 time, the yearly lease payments have doubled and there's one less             
 person in the lease office.  It seems as if there is widespread               
 concern about the conflicts that occurred in the lease program;               
 last year there were five (out of 1,344 leases).  She felt this               
 legislation was a way to raise revenue for the general fund.                  
 She looked up the statutes referenced in section 24 and 38.05.070             
 says negotiated leases are not eligible for a preference.                     
 Historical use has been the backbone of the fishery long before the           
 shore fishery lease program was instituted.  If past use is no                
 longer an important factor, the people who are going to be hardest            
 hit are those who have been in it the longest.                                
 Another statute that bothers her is 38.05.102 that states when your           
 lease is up for renewal, the State can renew at its appraised                 
 market value.  This could vary widely from year to year.                      
 The legislature should try to provide a stable environment for                
 independent fishermen.  The focus should be on assisting businesses           
 to create a strong economic base.                                             
 This legislation will put older well established village people out           
 of the fishing business in favor of the younger more aggressive               
 fishermen.  It will create new proposals before the Board of Fish             
 as people try to save their businesses.                                       
 Number 350                                                                    
 YAQUIATA YATSIK, Kodiak setnetter, opposed HB 191.  It singles out            
 the setnetters to provide extra money to DNR.  She asked why people           
 who have been in the setnetting business for hundreds of years be             
 required to possibly have to bid for their right to fish areas that           
 have been fished by their parents and grandparents.                           
 A lot of sites are not listed as registered sites.  HB 191 is a               
 monster that would require more money for DNR and the Division of             
 Wildlife Protection.                                                          
 NORA SUTTON, Bristol Bay setnetter, agreed with everything everyone           
 has said.  She said this legislation would cause disarray in every            
 part of the setnet industry.  She has heard Mr. Swanson say it is             
 not their intent to do certain things, but everything is working              
 very well the way it is.                                                      
 Number 325                                                                    
 AL BAUMAN, President, Quinhagak Setnetters Association, said this             
 program was originally established in 1963 when fishermen asked for           
 help.  The shore fishery program was created bringing order,                  
 procedure, and stability to a volatile business.  He said they                
 presently have a means of settling conflicts amicably and cost                
 MR. BAUMAN said the shore fishery lease program is voluntary.  The            
 bill, as written, has no method for appraising value.  Tying a                
 lease fee to the limited entry permit would discourage people from            
 obtaining or maintaining leases.  He would like to see any fees               
 this program generates to be dedicated back to it and not siphoned            
 off to some obscure program.                                                  
 SENATOR LEMAN informed Mr. Bauman that these fees can't be                    
 PAUL VICK said he setnets on the west side of Kodiak.  He added to            
 the comments made today that this bill would create a new level of            
 conflict on both the beach and in the court room.  He said he pays            
 fees in eight different places, to license his skiffs, a limited              
 entry permit fee, a shore lease fee, a fee for having his cabin on            
 a refuge, a business license, and he is taxed on the cabin and the            
 land that he doesn't even own; he pays a 3.67 percent tax on his              
 fish, plus the cannery charges another 3 percent.  He said this is            
 a fishery and not a land use situation.                                       
 MR. VICK said he was appalled that this bill made it through the              
 House without the fishing community being made aware of it.                   
 PETE MURRAY, setnetter from the south end of Kodiak, said that most           
 of what he wanted to say has already been said.  He pointed out               
 that the value of permits doesn't always go up.  If they were to go           
 down, DNR would be severely underfunded.                                      
 REPRESENTATIVE AUSTERMAN asked that the record be corrected to show           
 that contrary to what was testified to early in the hearing, the              
 Governor's proposed budget cut new revenues from shore leases at              
 $300,000.  The budget has not been "zeroed out" for the shore fish            
 lease program.                                                                
 KATHY DUGAN, DNR, said she wanted time to assimilate all the                  
 REPRESENTATIVE THERRIAULT commented that many times intentions are            
 not clear in legislation and he would be willing to tighten the               
 language to make sure that what they are intending to do is very              
 clear.  He thought most of the comments today were based on a                 
 misunderstanding of why the $5,000 was included in the language and           
 whether all leases would go to a competitive bid process.  He                 
 wanted also to make sure that a person could sell their lease to              
 another person with their permit.  He wanted this to apply only to            
 new areas or when a person lapses their lease.                                
 Attaching the fee to the value of the permit is a way of tracking             
 the market fluctuations.  If they establish a floor on the current            
 $300, many individuals would pay no increase for their yearly                 
 lease.  He would certainly be willing to talk about a ceiling for             
 additional insurance.                                                         
 He said he would work with everyone to make sure as many concerns             
 as possible are extinguished.  He gave examples of how fair market            
 value is used in business transactions and said he thought that was           
 a fair value to use.                                                          
 SENATOR LEMAN thanked everyone for their participation and                    
 adjourned the meeting at 4:37 p.m.                                            

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