Legislature(1997 - 1998)
04/11/1997 03:43 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE RESOURCES COMMITTEE April 11, 1997 3:43 P.M. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Loren Leman Senator Bert Sharp Senator Georgianna Lincoln Senator John Torgerson MEMBERS ABSENT Senator Lyda Green Senator Robin Taylor COMMITTEE CALENDAR SENATE BILL NO. 40 "An Act relating to management of discrete salmon stocks, to salmon management assessments, and to the fishery business tax." - HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION SB 40 - No previous action to be considered. WITNESS REGISTER Mr. Brett Huber, Staff Senator Rick Halford State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Staff to sponsor of SB 40. Mr. Geron Bruce, Legislative Liaison Department of Fish and Game P.O. Box 25526 Juneau, AK 99802-5526 POSITION STATEMENT: Commented on CSSB 40(RES). Mr. Bob Clasby, Director Division of Commercial Fisheries Department of Fish and Game P.O. Box 25526 Juneau, AK 99802-5526 POSITION STATEMENT: Commented on CSSB 40(RES). Mr. Kevin Delaney, Director Division of Sport Fish Department of Fish and Game P.O. Box 25526 Juneau, AK 99802-5526 POSITION STATEMENT: Commented on CSSB 40(RES). Dr. John White, Chairman Board of Fisheries P.O. Box 190 Bethel AK 99559 POSITION STATEMENT: Commented on CSSB 40(RES). Mr. Grant Miller, Member Board of Fisheries P.O. Box 2456 Sitka, AK 99835 POSITION STATEMENT: Commented on CSSB 40(RES). Mr. John Sund Alaska Seafood Council P.O. Box 91239 Anchorage, AK 99509 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Jerry McCune United Fishermen of Alaska 211 4th, #112 Juneau, AK 99801 POSITION STATEMENT: Opposed CSSB 40(RES). Ms. Chris Kelly, Licensing Project Leader Commercial Fisheries Entry Commission Department of Fish and Game 8800 Glacier Hwy., Ste 109 Juneau AK 99801-8079 POSITION STATEMENT: Commented on CSSB 40(RES). Mr. Sam McDowell 336 E 23rd Ave. Anchorage AK 99503 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Emmet Heidemann P.O. Box 770061 Eagle River AK 99577 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Louis Clark 2840 Porcupine Trail Anchorage AK 99516 POSITION STATEMENT: Opposed CSSB 40(RES). Ms. Kathy Tikka 1214 Lilac St. Kenai AK 99611 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Dale Bondurant HC1, Box 1197 Soldotna AK 99669 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Larry Malloy Kodiak Regional Aquaculture Association P.O. Box 3407 Kodiak AK 99615 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Dan Winn North Pacific Fisheries Association P.O. Box 1272 Homer AK 99603 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Bill Pace HC 31, Box 5097P Wasilla AK 99687 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Bruce Knowles Wasilla AK 99687 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Larry Engel, Member Board of Fisheries P.O. Box 197 Palmer AK 99645 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Eugene Svetc 1407 W 32nd Ave. Anchorage AK 99503 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Don Sherwood, President Alaska Boating Association 1640 Brink Dr. Anchorage AK 99504 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Kenneth Svetc 7715 Highlander Dr. Anchorage AK 99518 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Bud Hodson 2356 Canary Crt Anchorage AK 99515 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Randy Bjorgan 3038 Donnington Dr. Anchorage AK 99504 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Tom Namtredt 5640 Portage Dr. Wasilla AK 99654 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Leonard Haire P.O. Box 879030 Wasilla AK 99687 POSITION STATEMENT: Supported CSSB 40(RES). Mr. Cliff Skillings, Executive Director Southeast Alaska Seiners Association P.O. Box 23081 Juneau AK 99802 POSITION STATEMENT: Opposed CSSB 40(RES). Mr. Dean Paddock, Executive Director Bristol Bay Driftnetter's Association P.O. Box 21951 Juneau AK 99802 POSITION STATEMENT: Supported CSSB 40(RES). ACTION NARRATIVE TAPE 97-26, SIDE A Number 001 SB 40 DISCRETE SALMON STOCK MGMT AND ASSESSMENT CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:43 p.m. and announced SB 40 to be up for consideration. He said they also have a proposed CS. MR. BRETT HUBER, Staff to Senator Halford, said although fishery management in Alaska has been very successful in providing abundance of harvestable salmon on a statewide basis, record catches alone do not ensure that we are fulfilling our constitutional mandate for sustained yield. It is incumbent upon us all to pass along a healthy and diverse resource to future generations of Alaskans. SB 40 does just that. CSSB 40(RES) is a great deal different than the original bill. Gone are the mandates to the Board of Fisheries to adopt and implement discrete stock management in prescribed areas along specified time lines. Instead, the bill mandates discrete salmon stock assessment, leaving to the Board of Fisheries the determination of stocks for which it is appropriate, applying criteria such as the biological health of the stock and the magnitude of user conflicts. Far too much of our fishery management is being driven by allocation battles in our most contentious fisheries, instead of by sound science and pertinent information. In reviewing proposals for particular fisheries, the Board is often asked to address allocation disputes among various user groups or to react to a sudden and unexpected conservation concern. With a great deal of impassioned testimony on all sides of the issue and no better than anecdotal information on which to base their decisions, it is nearly impossible to resolve these issues. Lack of specific scientific information brings the same issues back before the Board year after year. CSSB 40 (res) will address those circumstances by providing a mechanism to gain the stock composition data and escapement information needed to equitably decide critical issues. This bill mandates discrete salmon stock assessment that will allow the Board to target research on stocks and fisheries for which they most need the information. Passage of CSSB 40(RES) will improve the management of our diverse fishery resource by assisting the Board in reaching decisions in the most contentious fisheries. Decisions supported by sound science are much more likely to be accepted by the user groups. MR. HUBER noted that they had an analysis by the Commercial Fisheries Entry Commission (CFEC) that describes how the funds would be apportioned among the permit classifications. Section 6 provides that the initial discrete stock assessment list be prepared for submission in the FY 99 budget and that license surcharges would be imposed beginning 1998. Section 7 ties the sport fish license surcharge to the passage of SB 7. It basically repeals section 3 of the bill, the $1 surcharge, providing that SB 7 raising nonresident license fees is passed and enacted into law this year. The Department requested this as they believe SB 7 should generate an additional $2 million - $4 million dollars of Fish and Game Fund revenue that would more than cover the cost of the equivalent of a $1 surcharge to the program. Number 104 SENATOR LEMAN asked why he picked $1 for each license sold instead of staying with the distribution on resident and nonresident licenses. CHAIRMAN HALFORD replied that he picked $1 as a starting point and the Department came back and said that rather than change twice, they should use the bill that's already passed because it's going to generate a lot more than that. So they didn't do any more work on it as it would have been more complicated to spread it between residents and nonresidents. The other bill they are following generates most of the money from nonresidents. MR. GERON BRUCE, MR. BOB CLASBY, and MR. KEVIN DELANEY, Department of Fish and Game, joined the committee. MR. BRUCE agreed that CSSB 40(RES) was significantly different than the original bill and his comments address the CS. He said they like the changes that have been made to ways in which additional stock assessment needs would be met and supported them. They know, however, that some segments of the user community are not supportive of the bill and the Department hopes that through the committee process the purpose and impact of the bill can be clarified and most of the concerns that people don't support can be answered. MR. BRUCE said that Alaska has the best salmon management system in the world and it hasn't come cheaply, but it isn't a cadillac either. An important element in being able to pay for our management system is the willingness of the users of the resource to pay and a review of State revenues and expenditures shows that the users are contributing more than the State is spending managing our fisheries. Unfortunately this hasn't always been recognized in recent times in budgets passed by the legislature and has resulted in declining general fund appropriations despite some increases in fees from commercial users. MR. BRUCE said he thought it was important that the users believe the way the additional stock assessment is paid for is fair. However, the department doesn't intend to take sides on this decision and feel it's up to the users and the legislature. In reviewing the legislation itself, they asked themselves three questions: does it promote good science, is good public process followed in prioritizing which stock assessments to undertake, and does the legislation strengthen the ability of the department to make good fisheries management decisions. They believe the legislation definitely promotes good science. They also support the public process that is laid out in the bill for determining the stocks of salmon for which stock assessments are needed. This legislation provides an opportunity for the Board to tell the department what information it needs the most to guide its conservation and development decisions. It allows the members of the public an opportunity to voice their opinions; and finally, it promotes a dialogue between the public, the Board, and the department about these needs. They think this is a logical and beneficial extension of a historic function performed by the Board. It allows as open and democratic a process for setting priorities as could be designed. This seems to compliment the historic roll of the Board. Thirdly, the assessment information collected under this bill will aid in the management of our fisheries resources during their harvest. This information will help prevent the over harvest of stocks as well as allow the maximum harvest possible. He inserted a caution here. The stock assessment provided for in this bill will be less useful than hoped if the budget cuts to the fisheries management programs considered by the legislature this year are carried out. Their worst fear is that the increase in funding would be viewed by some members of the legislature as a justification for cutting hard general funds out of another part of the department's budget, particularly the fisheries management program. Although they are somewhat reassured on that measure by the language in the purpose section of the bill that makes it clear this funding is not intended to replace funds in the commercial fish and sportfish budget request units. However, as a further assurance that this would not happen they are requesting that passage of the governor's designated program receipt bill, SB 55, be done to insure that any new program receipt revenue provided by the proposed funding source, or any other funding source, would be accounted for separately from the hard general fund dollars appropriated to the department in the operating budget. They specifically ask them to entertain the possibility of having an amendment to the bill that would link the effective date of this bill to the effective date of the bill establishing program receipts. Number 215 SENATOR SHARP asked if he understood him to say that if fish and game funds are reduced, this bill shouldn't be passed because it would jeopardize the ability to even effect what this bill wants to do. MR. BRUCE clarified that he said if the field program is cut, the information on stock assessments will not be able to be used as effectively as it could be in the field during the season. This is a research program that this bill funds and to get the most bang out of the research, you have to also have the management staff in the field able to use that research in making their in-season decisions which drives fisheries management. SENATOR TORGERSON said many of the commercial fishing groups oppose SB 40 because it would set up the equivalent of a mini endangered species act. He asked what the CS does to relieve the concerns of the commercial fishermen that it's not doing that. MR. BOB CLASBY, Division of Commercial Fisheries, said the concern they had with the previous bill is that it talked about establishing discrete stock management plans and it didn't specify what those were. That raised some concerns in their eyes particularly if that meant really moving fisheries off of mixed stock fisheries and into very discrete stocks; and a discrete stock really means fishing on spawning grounds and they don't think that's an appropriate thing to do. The CS doesn't direct that kind of management plan and has been turned around to be a data gathering problem solving bill. CHAIRMAN HALFORD commented that the mandate of SB 40 was a plan; the CS is a mandate to research and the Board decides where the research goes. SENATOR LINCOLN asked if Commercial Fisheries was already paying its way; that in 1996 commercial fishing revenues to the State of Alaska exceeded the fish management by $9 million. Furthermore, the fishermen are maintaining that the marine fuel tax was increased last year, that the 1995 vessel fees were increased; and that there was a one percent marketing tax on seafood. So as all of these increases are occurring for commercial fishermen, they have not in the past objected to, because they are (more than) paying their way. She asked how they say that they need to give more under this bill. MR. CLASBY answered that was correct and one could debate whether commercial fisheries pays its way depending on what you want to call it, but it does produce enough revenue into the general fund to cover all commercial fishing related activities throughout all of State government. CHAIRMAN HALFORD asked if that included the $19 million that goes back to the communities. MR. CLASBY replied no it doesn't in their calculations. He added that if it's $19 million and the net is $10 million for the last two years, then they are only $9 million short. MR. CLASBY clarified that their major concern is if the budget gets cut so low they can't have a basic staff to support the research programs. Another big concern is that if they take cuts how it affects the two sockeye escapement measuring programs in northern Cook Inlet. If they lose the weir, they are losing half of the basic program in an area in which they have broad concerns. At some point it may not make good scientific sense if they are cutting some of those basic stock assessment and composition projects. Number 326 CHAIRMAN HALFORD asked if the department supported the CS. MR. BRUCE replied that the department supported it as it addresses the stock assessment work, but they are neutral on how they pay for that. SENATOR LINCOLN said she didn't know the definition of discrete stock assessment. MR. CLASBY said it is not defined in statute or the legislation. Typically in this bill they are talking about stocks on the level of major system producers, like Susitna River sockeye salmon or Kenai River sockeye salmon. Number 354 MR. KEVIN DELANEY, Division of Sport Fish, said he thought the basis for any successful fishery management comes from habitat protection, adequate stock assessment, and public involvement in the decision process. CSSB 40 squarely addresses two of the three components by establishing a funding stream dedicated to salmon stock i.d. and escapement work, that would otherwise in many cases go unfunded, and setting up a funding process that would involve more sport fishermen in the department in selecting the projects for funding. MR. DELANEY said that they stand solidly behind Mr. Bruce's comments. Number 366 MR. JOHN WHITE, Chairman, Board of Fisheries, said they supported the bill's intent regarding the Board's and the Department's authorities and responsibilities for identifying and prioritizing discrete assessment projects. He would hope that the assessment system would be fair and proportionate to the utilization of these fisheries resources. The Board also has concerns regarding the breadth and the depth of the funding vehicle. The Board knows that shellfish, ground fish and other species are in need of as much research for sustainable management as the other resources. Because of the comprehensive research needs of the Board to utilize and allocate Alaska's fisheries resource, they advise and sponsor a broader tax or fee system than only sport fish license holders, crew members, interim use, and limited entry permit holders. The Board suggested it needs more research than this vehicle can provide and thinks that others in the secondary and tertiary economies using the fisheries as a resource should be taxed, like an excise tax on sport fishing equipment, outboard motor fuel and oil taxes, and a bed tax on sport fish lodge owners for fisheries research. Some members of the Board believe that the legislature could match these increased revenues with additional general fund monies, not less general fund monies; and that match could be a percentage of the increased derived revenues, because all Alaskans profit from Alaska's fisheries resources. MR. GRANT MILLER, member, Board of Fisheries, said he strongly supported the effort in SB 40 to establish sound science and it is an excellent step in the right direction. They see the need for expansion of research gathering. He felt if they could tax all users, as Dr. White suggested, in a fair and proportionate way, they could generate a whole lot of money. MR. MILLER also urged the legislature to stop cutting the funds to the Department of Fish and Game and actually match, with some percentage, the funds they derive from these assessments to the other users. SENATOR LINCOLN asked if they felt that the assessment was fair to the commercial fishermen the way the bill is written now. MR. MILLER replied that it's not fair the way it is written now, that it isn't broad enough. He thought that ultimately a few people who commercially fish would bear a higher burden of the cost than necessary. He thought all users should be taxed, even the secondary and tertiary users. DR. WHITE supported Mr. Miller's comments. He reminded them of the economic study that addresses the Cook Inlet disputes between the two users cost about $300,000 and it came up with a coin flip as to who contributed most to Alaska's economy, either the commercial industry or the sport industry. The breadth of the assessment should reach into the secondary and tertiary economies and the vessel owner and individual crew participants in the commercial industry are disproportionately weighted. CHAIRMAN HALFORD asked how the sport fish dollar works and what is the match. MR. DELANEY replied that the funding for his division comes from two sources presently: from the sale of fishing licenses which is deposited into the Fish and Game Fund. The other source of funding is the Dingle Johnson federal aid funds which are the result of excise taxes on sport fishing equipment and boat motor fuels that are levied at the manufacturer level federally and given back to the states according to a formula that takes into consideration the number of licenses sold and the land mass. Alaska receives the maximum percentage of all the states. There are statutory and regulatory restrictions on the use of those funds. The Fish and Game Funds must be used to pursue the goals and objectives of Title 16. The federal funds must be used only in a manner that is primarily sport fishermen. There is a tie between the two in that federal funding is only available to them if they match one state licensed dollar to three federal aid dollars to form what is called a federal aid contract. One of the federal aid contractual tenets is that once you enter into it, you will only use the remainder of the license fees in a manner that produces benefits primarily for sport fishermen as well. Using this match, you get a lot of bang for your bucks, but you then condition the use of the remaining license fees. None of this precludes them from using the monies on a broad range of projects and they do. It challenges them to set the proportion of the funding for the project in a manner that is totally defensible. They have a lot of experience in doing that and it offers flexibility, but they are regularly audited by the federal government to make sure this is taking place. In general, they can go from area to area and deal with chinook and cohos which are the most commonly targeted by sport fishermen. If they deal with chum salmon, they might not be able to pick up much of the total. CHAIRMAN HALFORD said he was trying to find what a dollar from the Division of Sport Fish can generate when it's added to whatever it can capture in federal funds. MR. DELANEY replied that would depend on how you structure the bill. As it's presently structured, there would be a dollar surcharge per license sold. So what the sources would contribute to this money would be one dollar for each license sold, or in 1997 approximately $450,000. They would like to retain the flexibility to use State license fees to match the federal funds. So on any given year what is likely is that out of the $450,000 contribution from Sport Fish there would be $100,000 worth of State license fees they would use to match with $450,000 of federal money (roughly). DR. WHITE clarified that it's not the Board's suggestion that the Dingle Johnson funds be reallocated and moved laterally into a research fund. It was only to suggest that those were models the State could use for in-state taxation. Number 516 MR. JOHN SUND, Alaska Seafood Council, said they are in favor of good information and good management practices. However, he opposes SB 40 which he sees has three phases. One is it is a means and methods to gather information and gather a list of proposed projects and has a process developed to go out in the field and do that. The second thing it does is raise taxes on fishermen and thirdly, it attempts, in the legislative format, to set up as a dedicated fund as you can, or what is now called program receipts. He thought there was an easier way to develop a list of projects than this process. This is not to say the public process through the Board isn't wide open. He thought it was the most public process of any situation there is. But there is already another public process which is the legislature and in this bill alone there is a list. There is a process in the legislature to make the list and prioritize it. Regarding the taxation of fishermen, MR. SUND said that the fishing industry is in very tough straights and the issue here is how to cut costs to remain competitive in world. Raising taxes is not a way of cutting costs. He thought it was quite erroneous to add taxes to fishermen, especially after he sat in Senate Finance this morning listening to the ADF&G budget get cut by $1.5 million. MR. SUND emphasized that the industry has been paying its way. In 1979 when the legislature repealed all the taxes in the State and we had oil money, three people in the government at that time said don't repeal raw fish tax - Governor Hammond, President of the Senate Clem Tillion, and Speaker of the House Terry Gardener. They said not only didn't they want to repeal the raw fish tax, but they wanted to increase them and they did. The issue then was let's pay our own way because when the oil money runs out, we'll be able to say we paid our way all the way down and we should be able to get the money that comes out of the industry back to manage it. That's what's on the table now and it's not happening. MR. SUND also said he couldn't agree with tying program receipts into these management projects because there's a stream of money flowing in and 10 or 15 years from now the priorities will have changed and the stream of money is still be going into projects that you may not even think are priorities. He thought it tied the hands of the legislature and was not in their own self interest to do that. MR. SUND said it appeared to him the $1 allocation on sport fish licenses was added in this bill, but is repealed if SB 7 passes. Therefore, the whole burden of funding this program is on the commercial fishermen. CHAIRMAN HALFORD explained if SB 7 passes, it generates between $2 - $4 million from sport fishermen. MR. SUND said he understood that, but there's nothing in SB 7 that says any of that money should be appropriated back into the stock assessment program. He thought it might be a technical drafting error. MR. SUND said he was in support of funding the Department and that they do a tremendous job of managing the fisheries in this State. He thought the testimony today was a cry from industry for more scientific information, but more taxes on the industry is a tough nut to crack. TAPE 97-26, SIDE B MR. JERRY MCCUNE, United Fishermen of Alaska, thanked them for all the work they did on SB 40. He said there is no doubt that they support science and research, but he thought the fishermen were paying enough money if the legislature would fund some of the projects that have been requested by the Department in the past. He said he personally couldn't squeeze much more money out of his business. He agreed to the marine fuel tax increase, to increase vessel fees, and they are now looking at another 1% marketing tax; and he thought it was unfair to be taxing the fishing industry over and over. There is extra money in the budget to be used for some of these projects. MR. MCCUNE said he was against giving an open check book to the Board of Fisheries and the ADF&G to do what they want with. He said they don't always agree on science and he has a problem with the discrete stock management assessment which he thought should be just salmon stock assessment. He also thought the funding of the $1 was very unclear. MR. MCCUNE said the problem they have with using the discrete stock term is identifying what it is because there are many different definitions. Number 554 SENATOR LINCOLN asked him to respond to the Board members comments about spreading the costs more equitably. MR. MCCUNE replied what he understands is that we are lacking scientific money to do crab assessments, not only in the Bering Sea, but in Prince William Sound. He said what drives bills like this is allocation which is not always solved by science. He assumed Dr. White meant to bring in the other users, the crabbers and the longliners. MS. CHRIS KELLY, Commercial Fisheries Entry Commission, noted there was a memo they did on a few different scenarios in terms of how the Entry Commission would assess the surcharge. They did one view where it was assessed just to salmon interim use and entry permit holders. This can vary from year to year and surcharge would range from $17 for the lowest fee class and up to $85 for the higher fee class. She said there is a $0 fiscal note. MS. KELLY said she assumed this fee schedule would stay in effect and they based it on 1996 permit counts and fees and assumed that the fishers who qualified for the reduced permit fee would be included in this assessment. She said it would be impossible to predict what the surcharge would have to be to generate exactly $500,000. The statute right now allows for the annual renewal fees to be waived if a fishery doesn't open during the year and they didn't know if the surcharge would still be assessed if the annual permit renewal fee was going to be waived. Number 493 MR. SAM MCDOWELL, Anchorage, supported CSSB 40(RES) provided they could get some consideration on what happens in the Upper Cook Inlet escapement. He said he has been in fisheries management for 49 years. He was very concerned that chum salmon are being totally wiped out there. MR. EMMET HEIDEMANN, Eagle River, supported the science and research and the study of fish wholeheartedly. He thought this area is overlooked and does not have enough funding. He thought that "discrete stock management" is a term that has no definition and the plan needs to be defined. He didn't think the way SB 40 is written provides good science. It's a good idea. He said the funding was very improper. The ADF&G should be able to give them the figures on what it would cost and they should be funded. MR. HEIDEMANN noted also that there were no commercial dive fees mentioned in the funding allotment. He said there was no mention of commercial guides who should be considered as part of the commercial fleet. He also said there was a large number of non- resident guides that are making a living off of Alaska. MR. LOUIS CLARK, Anchorage, said he is already paying 2% of his gross for aquaculture, 1% for salmon marketing, and in the last five years he has lost 50% of his income. He thought they should put a few more dollars into enforcement on the rivers and the State biologists, they wouldn't need to have any of this. They do real well. MS. KATHY TIKKA, Kenai, said she has been a resident of Alaska since 1959 and is pretty frustrated because we are just taxed to death. She has 13 years of background in the commercial fishing industry and she feels that the biologists have done an excellent job. SB 40 is just another tax for the working man and woman who carry the burden of government spending. She said that Alaska is not broke. She asked that this bill not be moved from committee. MR. DALE BONDURANT, Soldotna, said he thought the constitutional requirement of sustained yield also requires management of all the streams' stocks on the same guidelines. He supported full funding of this program and considers it an allocation of the resources. He said it is his opinion that the goals of the current management systems are not realistic for effective management of Kenai and Kasilof escapement goals. He thought it was time to have information on the discrete stocks of the Cook Inlet. MR. CARL KIRCHER, Kodiak Regional Fishermen's Association, opposed the present form of CSSB 40(RES), although they are not opposed to increased research to improve scientific management of Alaska's salmon resource. Their opposition is that the research generated by SB 40 will be driven by political and special interests as opposed to genuine needs identified by the Department. Leaving the Board of Fisheries to determine which stocks of salmon for which discrete stock assessments are needed takes away from research aimed at scientific needs. He agreed with Senator Halford's statement that fishery management is being driven by allocation battles in our most contentious fisheries. Certainly the discrete stock assessment programs generated by the Board as a result of SB 40 will also be driven by the most contentious issues, not the most pressing scientific needs of the Department. However, user group pressure may be more persuasive than ADF&G testimony. MR. KIRCHER said they also thought this could be another endangered species act. Section 2(b)1 says that research projects must include development of escapement objectives for discrete salmon stocks and without a definition these fears could be realized. Further political manipulation is possible because of language in section 2(c) stating that the individual projects contained on the list should be included in allocation under the appropriation for discrete salmon stocks. This would make each individual project a separate allocation that may or may not be approved by the legislature and would surely leave room to further politicize which projects go forward. SENATOR TORGERSON asked if he was reading the CS to SB 40. MR. KIRCHER replied that he was. MR. LARRY MALLOY, Kodiak Regional Aquaculture Association, opposed CSSB 40(RES) because they feel it is redundant and unnecessary when considering the potential costs and the targeted revenue sources versus the actual need for this type of legislation. They feel that ADF&G currently has an active enough salmon data base to be able to develop a reasonably thorough listing of salmon [indisc] systems and probably in descending order of production by species that would address concerns about sustained yield production potential for any of the systems or species identified on the list. In those cases where there is an identifiable shortage of information, it seems to be more associated with collection of in season stock data information for certain terminal fisheries where there may have been short falls in meeting conservation objectives. These should be obvious to most people, especially ADF&G who report them to the Board of Fisheries who can deal with them. MR. MALLOY noted there already exists in most areas of the State regional comprehensive salmon plans which, in essence, are long term strategic planning documents that address a region's salmon production potential. In conclusion, MR. MALLOY said that this legislation is not necessary and Alaska's long term sustained yield salmon production is more closely related to funding existing salmon programs that ADF&G currently has on line that they are in jeopardy with because of proposed budget cuts. Number 301 MR. DAN WINN, North Pacific Fisheries Association, agreed with many of Mr. Malloy's comments about the Board of Fisheries and Game, ADF&G, and good science for all of our fisheries. He opposed CSSB 40(RES). He said it would basically undermine the Board of Fisheries and ADF&G and put fisheries, especially salmon issues more in the realm of the legislature. For instance on page 2, B(1) it mentions annual development and you can't work on an annual basis. It has to be at least a three, four, five or six year program to even get an idea of what your stock assessment is because salmon don't come back on an annual basis. MR. WINN again said this proposal is supposed to be submitted to the Governor who then submits it to the legislature on an annual fiscal year basis and you can't do good science on salmon on an annual basis. MR. WINN said that commercial fishermen are already paying their own way and he would like to see more funding going to ADF&G. MS. JUNE BURKHART, Willow resident, said she is a consumptive user of Alaskan fish and game and has done so for a number of years. She represents herself and one half of the Legislative Affairs Committee for the Alaska Voting Association. She supported SB 40 and said all users would benefit from sound decisions based on good science. She thought the taxation was fair to everyone. SENATOR LINCOLN asked if she would support the bill if they increased the surcharge for the sport fishing licenses. MS. BURKHART replied yes as long as it was an equitable increase to everyone, including commercial fishermen. MR. BILL PACE, commercial fisherman from Wasilla, said one of the problems with this bill is that it will further divide the Board of Fisheries and the commercial fishery user groups. If this bill passes, user groups will by vying for research on pet projects as well as traditional allocation of stocks. He realizes the Board tries to be impartial, but it is still a political body driven by the agenda of the various groups it represents. If the research is so valuable, why can't the legislature fund through the general fund which already has a generous contribution from commercial fishermen, MR. PACE asked. If research projects are determined by the Board of Fisheries, they are allowing science to be controlled politically and thereby diluting the value of the research. Another issue is that the days of testimony before Board of Fisheries meetings now would be multiplied drastically because each user group would testify for their pet projects. He said that the bill is ambiguous in that it doesn't say which division in ADF&G will do the research - or a separate group. He said that there was no stated goal for the research. MR. PACE said if the other users groups feel this research is needed, let them fund their fair share and not just a token $1 charge per license. CHAIRMAN HALFORD asked if he knew what the percentage of fish was taken by commercial fishermen versus non-commercial. MR. PACE replied that commercial fishing took a large percentage. CHAIRMAN HALFORD said he thought it was over 90%. MR. PACE disagreed. Number 179 MR. BRUCE KNOWLES, Wasilla fishing guide, said Alaska is one of the most effective fish harvesting machines in the world. When you couple this with Alaska's growth and expanded entry into the consumptive user groups, much greater demand has been placed on our salmon stocks. The Alaska Constitution directs that all salmon stocks are managed for sustained yield. This is not happening in many areas of Alaska and runs are dwindling in many areas, like the Yetna River and Cottonwood Creek and Wasilla Creek. He said it's not just an isolated area in the Cook Inlet. MR. KNOWLES said that until we know the stream of origin, we cannot make decisions and this bill gives us the ability to do that. He said once the small streams start to disappear, the larger ones start to disappear. He said the Attorney General's opinion in the Carlson case said that the State is paying an average of $975 per household to support commercial fishing in the State of Alaska. CHAIRMAN HALFORD asked if that was the case on resident versus non- resident differential. He replied yes. MR. LARRY ENGEL said he is a member of the Board of Fisheries and would defer to others in the room. CHAIRMAN HALFORD asked him if he agreed in general with the testimony of the two Board members who testified before him. MR. ENGEL said he supported their comments. MR. EUGENE SVETC said he thought the original SB 40 was a disguised fish allocation bill. Reducing the budget on the ADF&G and then reallocating the money by SB 40 is putting political pressure on the ADF&G and the Board of Fisheries. He said to leave the biologists and other trained personnel do their work. If money is needed to support the various needs of fish management, let it be collected fairly and from everyone involved in fishing. Fish guides should be listed as commercial fishermen because they are selling fish to tourists the same as commercial fishermen sell them. They should be listed on a limited entry basis. He concluded saying that commercial fishing is the major revenue producer in the State and don't kill the goose that laid the golden egg. Number 50 MR. DON SHERWOOD, President, Alaska Boating Association, supported SB 40. He said there are many good points in this bill, but he knows some will have to be changed. His association supports requiring the Board of Fisheries to annually identify salmon stocks for which discrete stock assessment is needed. This offers the Board the opportunity to have a say in what information the Department will gather under this program which will help insure the Board gets information it needs to address fisheries management decisions. Another plus is that this is paid for by users of the resource, both sport and commercial fishermen. MR. KENNETH SVETC, Anchorage, opposed CSSB 40(RES) because he believes ADF&G should determine research projects and determine their priorities. They should be funded by revenues that are already generated from the commercial fishermen. TAPE 97-28, SIDE A Number 001 MR. SVETC said he opposed discrete stock research because he thought it was a cover for an allocation issue. MR. BUD HODSON, lodge owner, supported CSSB 40(RES) because the additional data collection and stock assessment is greatly needed to assist ADF&G and the Board of Fisheries in managing our fisheries. For many years the Board has made management decisions not founded on good, if any, science. This bill allows the Board of Fisheries to identify how the term will be used for the purpose of discrete stock assessment. He encouraged them to look at the long term benefit from the additional science and data in managing our fisheries, not how and if stock assessment might affect allocative decisions. He said this bill is good, although the funding mechanism can be debated. SENATOR LEMAN asked what he thought of guide owners like himself participating in the funding. MR. HODSON responded that he thought the industry would be willing to pay its fair share as long as it was equitable. SENATOR LEMAN asked what mechanism would do that equitably. MR. HODSON replied that guide owners didn't have any licensing, yet. MR. RANDY BJORGAN supported CSSB 40(RES) saying it would enhance our fish resource and would provide the defined mechanism for ADF&G and the Board of Fisheries to work together in a successful management plan. It also provides a viable payment source and also thought that secondary and tertiary sources needed to be examined. He thought the number of fish extracted from the resource would be a good measure of what fees should be. Number 113 MR. TOM NAMTREDT, Prince William Sound crabber and gillnet fisherman and a former fisheries biologist, said he opposed CSSB 40(RES) because it appears to be just a modified version of an earlier discrete stock management bill which was designed to reduce the commercial catch and increase the sport catch under the guise of protecting biodiversity. He also questioned whether the three projects listed so far are technically feasible and worthwhile. He has problems with the funding logic. He said mark and recapture projects were employed in the Susitna River during the late 70s and early 80s and in his opinion this method overestimated the spawning population due to the fact that some tagged fish drifted downstream after tagging and were devoured by belugas. The Upper Cook Inlet genetic stock identification project appears to be a business as usual project formerly funded by federal aid, general fund, and the trustee council. This project may sort out which fish are headed for the Kenai, Kasilof, Susitna, and maybe Crescent Rivers, but he doubted that it would generate useful information on any further defined stocks. The third project, the genetic stock identification of indicator stocks project, will in theory track two sockeye salmon stocks, Upper Susitna and Russian River, to the marine environment. If the individual stocks in the Upper Susitna have been small, a few thousand fish, this is akin to looking for a needle in a haystack. It is possible that a thousand samples from the entire commercial fishery could be processed without finding one single fish from one of these stocks. The proposed budget he saw was $50,000 which would not fund much sampling and analysis. SB 40 mandates that an additional $500,000 be collected from commercial fishermen, but he didn't see any mention of sport fish guides in the bill other than the dollar increase in sport licenses. Discrete stock assessment will lead to discrete stock management and from a practical standpoint there are only so many stocks that can be managed. He thought that the Director of Commercial Fisheries' definition of discrete stock to be drainage stocks needs to be defined in law if this bill passes. Number 187 MR. LEONARD HAIRE, said as a member of the user group for 20 years, he knows the process isn't working. He supported CSSB 40(RES) and hoped it would solve some of their problems. MR. CLIFF SKILLINGS, Executive Director, Southeast Seiners, said they do not support CSSB 40(RES) and one reason is because of the funding structure. He said they thought it was the intention of the majority to balance the budget by reducing spending and not imposing new taxes. This bill is contradictory to those beliefs. The commercial fishing industry is continually being taxed and can make the statement that they pay their way. The additional taxes they impose on his fleet in Southeast will pay for sport fish studies in the southcentral and AYK areas. At a time when state officials are looking for tax incentives to increase Alaska's foothold in world markets and the legislature is vying for a balanced budget without further taxation, he asked how can a bill providing for additional industry tax even be contemplated. MR. SKILLINGS asked if these studies are truly required, why was it not an ADF&G budget item. He also noted SB 7 increases the fee structure for out-of-state sport fishermen and lowers it for in- state sport fishermen. Commercial fishermen in SB 40 have no such tiered structure of taxes differentiating between in-state and out- of-state commercial fishermen. Section 7 implies the commercial fishermen will provide the majority of funding for these sport fish projects, exonerating the in-state sport fishermen from funding those projects. MR. SKILLINGS concluded asking them not to forget the original intent of this bill, the on-going allocation battle in the Cook Inlet area. It is no different this year. They do not oppose the use of ADF&G biological studies for our fisheries resource. He said these studies help his area, particularly with the North Pacific Salmon Treaty. They are opposed to legislation promoting the use of political science funded by an industry that continues to pay its way to resolve allocation issues. Number 238 CHAIRMAN HALFORD asked if there was a difference in the in-state and out-of-state cost for limited entry permit renewals. MR. SKILLINGS replied that there is a difference, but there's no tiered structure in this bill; it's a flat rate. MR. DEAN PADDOCK, Bristol Bay Driftnetter's Association, supported CSSB 40(RES. He said the issue is ignorance versus knowledge. He said they have heard ADF&G plead ignorance many times. He said there is a relationship between the numbers of spawners and the subsequent return. To quantify any return, the manager must be able to determine the catch within acceptable limits. Limited Entry brought a problem where now there is a situation where fishers in one area can harvest stock bound for another area and the terminal fishermen are stuck with whatever remainder reaches them. There has been much frustration in Bristol Bay by the situation where interception has occurred outside of our limited entry area and the ADF&G have not only refused to work toward a solution, but have insisted on denying that a problem might be occurring, upon occasion. MR. PADDOCK said that the status quo is an allocation and in many instances that kind of allocation isn't acceptable any longer. He said he feels that most of our biologists have been doing a great job, he feels in recent times some of our scientists have been more adept at analyzing public opinion than they have in defining fish stocks. Users have become very adept at lobbying their interests before the Board and, incidentally, with the local area management staffs. MR. PADDOCK said it's not perfect, but he supports SB 40 because he firmly believes it would restore a scientific rationale to many critically important management decisions which have too often fallen by the wayside of late. Regarding the taxing in this bill, its criticism strikes a sympathetic note with his libertarian tendencies because he regards the management of public resources as one of the few legitimate government functions and he believes the public should help pay. He is also concerned by taxes because he agrees we are already more than adequately taxed. He personally pays 11% off the top of his gross. The figure for this bill quoted by the Limited Entry Commission doesn't even make a blimp on his radar screen. Number 358 SENATOR LINCOLN asked if he supports the mechanism for paying for this bill. MR. PADDOCK replied that it isn't perfect, but the figures sighted by the Limited Entry Commission are so insignificant compared to the 11% he already pays, they don't really distress him. CHAIRMAN HALFORD said there were a number of people on the teleconference they wouldn't be able to get to and they would have to adjourn at this point. He apologized and said the bill will come back before them again. He then adjourned the meeting at 5:45 p.m.