Legislature(1997 - 1998)

04/11/1997 03:43 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                 
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            
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                    
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                  
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                   
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                
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                    
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                
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              
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             
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                   
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            
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            
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             
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            

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