Legislature(1997 - 1998)

04/06/1998 03:40 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE RESOURCES COMMITTEE                                       
                    April 6, 1998                                              
                      3:40 P.M.                                                
MEMBERS PRESENT                                                                
Senator Rick Halford, Chairman                                                 
Senator Lyda Green, Vice Chairman                                              
Senator Loren Leman                                                            
Senator Bert Sharp                                                             
Senator Robin Taylor                                                           
Senator John Torgerson                                                         
Senator Georgianna Lincoln                                                     
MEMBERS ABSENT                                                                 
All Members Present                                                            
COMMITTEE CALENDAR                                                             
HOUSE JOINT RESOLUTION NO. 52                                                  
Relating to opposition to the designation of any rivers in Alaska              
as American Heritage Rivers under the American Heritage Rivers                 
     - PASSED SCS HJR 52(RES) FROM COMMITTEE                                   
CS FOR HOUSE BILL NO. 392(L&C) am                                              
"An Act relating to access by the Department of Environmental                  
Conservation and the Department of Fish and Game to confidential               
records for fisheries businesses and resources prepared or kept by             
the Department of Revenue under AS 43.75.015; relating to certain              
salmon products reports; and providing for an effective date."                 
     - HEARD AND HELD                                                          
CS FOR HOUSE BILL NO. 373(RES)                                                 
"An Act making changes to the Forest Resources and Practices Act;              
classifying anadromous streams and tributaries; relating to the                
designation of riparian areas; establishing buffers and slope                  
stability standards on certain streams; and requiring retention of             
low value timber along certain water bodies where prudent."                    
     - PASSED SCS CSHB 373(RES) FROM COMMITTEE                                 
PREVIOUS SENATE COMMITTEE ACTION                                               
HJR 52 - No previous action to consider.                                       
HB 392 - No previous action to consider.                                       
HB 373 - See Resources minutes dated 3/11/98 and 3/20/98.                      
WITNESS REGISTER                                                               
Representative Jeannette James                                                 
State Capitol Bldg.                                                            
Juneau, AK 99811-1182                                                          
POSITION STATEMENT: Sponsor of HJR 52.                                         
Ms. Mel Krogseng                                                               
P.O. Box 3913                                                                  
Soldotna, AK 99669                                                             
POSITION STATEMENT: Supported HJR 52.                                          
Mr. Stan Leaphart, Executive Director                                          
Citizen's Advisory Commission on Federal Areas                                 
3700 Airport Way                                                               
Fairbanks, AK 99701                                                            
POSITION STATEMENT: Supported HJR 22.                                          
Ms. Amy Daugherty, Staff                                                       
Representative Alan Austerman                                                  
State Capitol Bldg.                                                            
Juneau, AK 99811-1182                                                          
POSITION STATEMENT: Commented on HB 392 for sponsor.                           
Mr. Bob Bartholomew, Assistant Director                                        
Division of Income Exise and Audit                                             
Department of Revenue                                                          
P.O. Box 110420                                                                
Juneau, AK 99811-0420                                                          
POSITION STATEMENT: Opposed HB 392.                                            
Mr. Scott McAllister, Chairman                                                 
Southeast Regional Chapter, United Salmon Association                          
POSITION STATEMENT: Supported HB 392.                                          
Ms. Janice Adair, Director                                                     
Division of Environmental Health                                               
Department of Environmental Conservation                                       
555 Cordove St.                                                                
Anchorage, AK 99501                                                            
POSITION STATEMENT: Supported HB 392.                                          
Ms. Pat Springer, Staff                                                        
Speaker Gail Phillips                                                          
State Capitol Bldg.                                                            
Juneau, AK 999811-1182                                                         
POSITION STATEMENT: Read sponsor statement for HB 373.                         
Mr. Jeff Jahnke, State Forester                                                
Division of Forestry                                                           
Department of Natural Resources                                                
400 Willoughby Ave.                                                            
Juneau, AK 99801-1724                                                          
POSITION STATEMENT: Supported HB 373.                                          
Ms. Marty Welbourn, Program Manager                                            
Forestry Resources                                                             
Division of Forestry                                                           
Department of Natural Resources                                                
400 Willoughby Ave.                                                            
Juneau, AK 99801-1724                                                          
POSITION STATEMENT: Supported HB 373.                                          
Mr. Rich Harris, Sr. Vice President                                            
Sealaska Corp.                                                                 
Juneau, AK 99801                                                               
POSITION STATEMENT: Supported HB 373.                                          
Mr. Jack Phelps, Executive Director                                            
Alaska Forest Association                                                      
111 Stedman St, Suite 200                                                      
Ketchikan, AK 99901                                                            
POSITION STATEMENT: Supported HB 373.                                          
Mr. Dick Coose                                                                 
P.O. Box 9533                                                                  
Ketchikan, AK 99901                                                            
POSITION STATEMENT: Supported HB 373.                                          
ACTION NARRATIVE                                                               
TAPE 98-25, SIDE A                                                             
Number 001                                                                     
             HJR 52 - OPPOSE AMERICAN HERITAGE RIVERS                          
CHAIRMAN HALFORD called the Senate Resources Committee meeting to              
order at 3:40 p.m. and announced HJR 52 to be up for consideration.            
REPRESENTATIVE JEANNETTE JAMES, Sponsor of HJR 52, said the                    
American Heritage River initiative is a wolf in sheep's clothing.              
It is something we don't need more of in Alaska, because we already            
have enough federal designation over some of our lands and waters.             
She said that President Clinton issued Executive Order 13061                   
directing agencies to establish and implement the initiative. It               
was touted as a method to give us money to clean up our rivers, but            
it also includes the entire watershed. John Schuller killed a                  
grizzly bear in his own backyard and was found to be at fault                  
because he was in the zone of imminent danger according to the                 
Endangered Species Act.  We don't want to allow the federal                    
government to come in and put a blanket over our rivers and call               
them American Heritage Rivers.                                                 
SENATOR TORGERSON proposed to change the last "Whereas" to "Be It              
REPRESENTATIVE JAMES said she supported that.                                  
There were no objections to the adoption of the amendment and it               
was so ordered.                                                                
MS. MEL KROGSENG said she was speaking on her own behalf as a Kenai            
River property owner and that although the majority of property                
owners objected to being included in the American Heritage Rivers,             
the Kenai River Special Management Area Advisory Board chose to                
make a motion to nominate the river as an American Heritage River.             
The statute clearly states that their authorization is purely to               
hold meetings on the Comprehensive Management Plan for the river               
and to make recommendations to the Commissioner.  There was a lot              
of discussion on the matter and they came very close to being                  
nominated, but the Kenai Peninsula Assembly defeated that action.              
She wanted them to know that the Kenai River Special Management                
Area Advisory Board seems to be taking actions that she believes               
are inappropriate with their mission.                                          
CHAIRMAN HALFORD asked if they should be added to the list this                
resolution is sent to.                                                         
MS. KROGSENG answered that it wouldn't be inappropriate for them to            
send a copy to all the other 49 states.                                        
MR. STAN LEAPHART, Citizens Advisory Commission on Federal Areas,              
said in August last year they submitted comments on the initiative             
to Katie McGinty, who is chairperson of the Council on                         
Environmental Quality, urging that the proposed initiative not be              
adopted.  But it was adopted over those objections.  There are                 
currently 126 rivers that have been nominated for designation and              
it's expected that the President will make his decision on the                 
first 10 within the next two weeks.  Their analysis indicated that             
at best its goals and objectives remain poorly defined and is a                
duplication of existing programs designed to provide assistance to             
local governments.  At worst, it represents an entirely new federal            
program with no statutory authority for its creation which is a                
threat to state and local government authority, as well as the                 
rights of private property owners.  Although there have been some              
improvements to the initiative, there are still a lot of problems              
with it.                                                                       
One of the stated goals is to improve the delivery of services by              
the 12 departments and agencies that constituted the American                  
Heritage Rivers' Interagency Committee.  He asked why it takes the             
creation of a new federal program to compel these 12 agencies to do            
their job.  The answer, of course, is that it does not.  The                   
Department is not currently performing as it should under existing             
statutory mandates and regulatory guidelines and they fail to see              
how this initiative would change that.  On the contrary, by                    
requiring agencies to focus on this new program, they will have                
fewer resources available for more important and legitimate                    
programs.  Better agency performance is not what this initiative is            
all about.  It truly represents an effort to create, by executive              
fiat, a program that Congress refused to create in 1996 when it                
rejected a number of bills which would have created a National                 
Heritage Area Partnership Program.  His commission is also highly              
skeptical of the claim that designation of a river would only occur            
if there is "broad community support," particularly in light of the            
extremely lose definition of the term community.  He used the                  
example of the creation of the 1.7 million acre Grand Staircase                
Escalante National Monument over the objection of local communities            
by Utah's congressional delegation.                                            
Designation of a river would require adherence to a wide array of              
program guidelines and requirements in order to maintain the                   
designation and qualify for federal funds.  This would come at some            
cost to local control or loss of opportunity for the private                   
property owner.  The carrot and stick approach by the federal                  
government means some special interest group gets the carrot and               
private property owners and businesses get the stick, usually in               
the form of more regulations and restrictive programs.                         
Number 229                                                                     
SENATOR TAYLOR asked which six rivers were on the short list to be             
MR. LEAPHART answered that there are actually 126 rivers which are             
primarily in the eastern states, but the Columbia, the Rio Grande,             
and portions of the Upper Mississippi are some.                                
CHAIRMAN HALFORD asked Representative James if she considered                  
opposing the entire program, as well as being exempted.                        
REPRESENTATIVE JAMES said she thought about it, but decided they               
might be stepping on some other people's toes.                                 
CHAIRMAN HALFORD said he didn't think they could do it under the               
current title and he didn't think it was appropriate to go through             
the process of a title change.                                                 
SENATOR LINCOLN said under the process for nominating a river it               
says the communities in coordination with state, local, or tribal              
governments can nominate the river stretch and individuals living              
outside the area cannot nominate a river.  This resolution says the            
Alaska State Legislature opposes a nomination or designation of any            
river in Alaska and asked if that does not preclude anyone in a                
community who wants to nominate their river.                                   
REPRESENTATIVE JAMES said the intent of the President's initiative             
was to have the people who live along the river make the nomination            
which is part of the problem.  Along with allowing your river to be            
identified as an American Heritage River, you get money to clean it            
up and that's an inviting thing.  She thought the nomination should            
also be agreed to by the State, because the rivers are under the               
power of the state, not the local people.  They do not want local              
people to have that authority.                                                 
SENATOR LINCOLN asked if someone chooses to nominate a river in                
their community, would they need the state's blessing, the local               
blessing, and the tribal blessing.  If that is so, by this                     
resolution, that will never happen.  She asked if that was correct.            
REPRESENTATIVE JAMES said that was the purpose.                                
SENATOR TORGERSON said he knows from experience that it does not               
come to the legislature for approval or to a local government.                 
Their problem initially is that the advisory group to the                      
Commissioner  nominated it in the first place and that could be two            
people.  To the Commissioner of Natural Resources it could be one.             
SENATOR LINCOLN said she wanted to understand if it says all the               
different bodies could nominate, but the State would not give their            
SENATOR TAYLOR said it goes beyond that, because the federal                   
government has no jurisdiction over the navigable waters of the                
United States.  There is not one single court case that indicates              
that isn't right.  He thought the President was trying to use the              
initiative as leverage against the people who own property along               
rivers and the states who have all the rights to those waters.  The            
Dinkum Sands case clearly indicates who has control over those                 
navigable waters.                                                              
REPRESENTATIVE JAMES supported Senator Taylor's comments and then              
added that the communities can nominate the rivers; and it says the            
federal role will be solely to support community based efforts to              
preserve and protect the resource.                                             
SENATOR TAYLOR moved to pass SCSHJR 52 (RES) from Committee with               
individual recommendations.  There were no objections and it was so            
Number 450                                                                     
           HB 392 - REPORTS: FISH TAX & SALMON PRODUCTS                        
MS. AMY DAUGHERTY, Staff to Representative Alan Austerman, sponsor             
of HB 392, said it addresses two types of reporting, exvessel value            
and wholesale price.  The most important part are the changes they             
make to the wholesale price reporting.  The size of the cans are               
antiquated, so they changed the denominations of the cans.  Section            
Four also adds another reporting period, so this information can be            
obtained on a more timely basis by people who make marketing                   
decisions with it.                                                             
The first three sections enable the Department of Revenue to                   
provide processor information needed by ADF&G and DEC.  Currently,             
ADF&G is able to share information they receive with DOR, but this             
is not provided for in law.  DEC currently is unable to access this            
information from DOR as well, although they have legitimate needs              
for it.  Additional duplicative reporting may be established unless            
we can maximize and coordinate information the State already                   
SENATOR TAYLOR asked if DEC would use this legislation to increase             
fees on processors.                                                            
MS. DAUGHERTY answered that the fees wouldn't necessarily increase,            
but perhaps they would decrease.                                               
SENATOR TAYLOR said since DEC lives of its fees, he hadn't seen a              
decrease yet.  Once they take away the floor they are having to                
charge all processors as a set fee, he is concerned they will use              
this as an opportunity.                                                        
SENATOR TORGERSON asked if this information is currently available             
to DEC.  He said he didn't know why they don't take the word of a              
little operator that they are a little operator.                               
CHAIRMAN HALFORD noted that they are adding thermally processed to             
the reporting requirements and fees and asked if they are totally              
untaxed at this point.                                                         
MS. DAUGHERTY said this just deals with the wholesale price which              
isn't where the taxation occurs at the dock. The thermal processing            
is new language so everything is consistent with DEC and federal               
regulations on this type of product.                                           
CHAIRMAN HALFORD said we are amending this law to be consistent                
with regulations and thought it was supposed to happen the other               
way.  He asked if there was any change to any processor by changing            
the word "canned" to "thermally processed."                                    
MS. DAUGHERTY answered that the bill speaks past canned, applying              
to pouched as well as any other device.                                        
CHAIRMAN HALFORD asked if that was previously taxed.                           
MS. DAUGHERTY answered that it has always been taxed, but this is              
just for the reporting of the wholesale value.  There are enough               
loopholes that information on products was not reported.  This                 
generalizes the information by the size of container in which the              
salmon is sold.                                                                
Number 502                                                                     
SENATOR LEMAN asked what is the purpose of this report if they                 
don't have reporting of frozen product. He asked if that showed up             
somewhere else.                                                                
MS. DAUGHERTY answered that fishermen who approached them were                 
concerned mostly with pink salmon and how that goes through the                
market and how the information gets compiled.  She said that frozen            
is not within this bill now.                                                   
CHAIRMAN HALFORD said he hoped someone from DEC could explain how              
this system works.  It looks like it's all full of holes and all               
they are doing is changing the terminology.                                    
SENATOR LEMAN asked where in the bill was the reporting on exvessel            
MS. DAUGHERTY said the only part that refers to exvessel value is              
the part that seeks to let the agencies share information in                   
Sections One and Two.                                                          
SENATOR LEMAN asked what kind of information DEC would possibly                
have access to.  Would it be grouped information or down to raw                
fish data and who catches it and where it's caught.                            
MS. DAUGHERTY said she thought the bill didn't have restrictions on            
the information.  She said Representative Austerman is far more                
attached to the wholesale reporting than any raw fish data.                    
MR. BOB BARTHOLOMEW, Assistant Director, Income and Exise Audit,               
Department of Revenue, said he understands that there are two                  
distinct objectives with the draft bill, one is bringing in a                  
provision from last year to streamline and become more efficient.              
This is to save money to satisfy industry concerns that too many               
agencies are asking for too many reports.  They found that they                
could not streamline the reporting parts, because there were                   
certain confidentialities.  The information comes into their data              
base and the information that's not confidential they pass on to               
ADF&G and DEC.  They also send them the applications because they              
don't capture all of the data.  There is a lot of information the              
ADF&G and DOR use that is reported to both departments.  As the                
Department of Revenue, it is their intent that the only information            
they would allow DEC access to is what they have already been                  
getting in current reports.  They would, then, replace a Fish and              
Game report with the unified report.  It's the same with DEC.  They            
will not open up the tax information and let DEC come in and pick              
what they want.                                                                
TAPE 98-25, SIDE B                                                             
But if they currently, in determining their fees,  get volume and              
value information, they would work with industry and DEC to                    
eliminate that report.  Sections One and Two deal with three                   
agencies trying to find ways to combine reporting.  They took the              
lead on this and it seems to have worked.  Three agencies use one              
application; dealing with the reporting is phase two of it.  There             
are no changes in reporting requirements in terms of looking for               
The second part of the bill deals mainly with the objectives of                
Representative Austerman.  It has nothing to do with taxes or                  
values and is basically a reporting requirement the legislature has            
placed on certain parts of the fishing industry and they needed                
somebody to collect that data, compile a report, and release it.               
That somebody was the Department of Revenue.  They don't do a lot              
with the information.  It used to be strictly for canned salmon                
twice a year.  Certain fishermen requested information more often              
in a different format and covering more than just canned salmon.               
SENATOR HALFORD said the way he reads the reference section, there             
is no confidentiality required because it says it's not a matter of            
public record except as provided in AS 43.05.230 which says it has             
to have the degree of confidentiality required by law which it                 
MR. BARTHOLOMEW said the intent is to make certain confidential                
information available to DEC and to ADF&G and try to give some                 
assurance that that information will be kept confidential by making            
them subject to the same confidentiality requirements as the                   
Department of Revenue.                                                         
CHAIRMAN HALFORD said there is some concern about the actual                   
language in everything that is passed under 230 (I) remains                    
confidential and he's not convinced that it works.                             
Number 521                                                                     
MR. SCOTT MCALLISTER, Chairman, Southeast Regional Chapter of                  
United Salmon Association, said they are comprised of salmon permit            
holders and high volume harvesters of pink salmon, chum salmon, and            
red salmon.  Their primary purpose is to recapture profitability               
for the salmon harvest industry.  One of their objectives in                   
achieving that goal is to become market oriented.  It became                   
apparent to them a number of years ago that they had no standards              
of measurement in the marketplace.   In researching what their                 
options were, they came up with the WCPR reporting requirement in              
this bill.  It's their desire to see the language tightened up in              
statute to close the loopholes that seem to be of concern to                   
harvesters.  The old statutes had can sizes that are not used now              
and the other purpose was to have reporting periods that were more             
conducive to negotiation and settlement of a year-round contract.              
This bill also adequately tightens up language with thermal                    
processed wording replacing the "canned" wording.                              
Number 46                                                                      
SENATOR TAYLOR asked if there was somewhere in law where frozen                
product is reported.                                                           
MR. MCALLISTER said it was in regulation, but not statute.  They               
don't get good information about frozen product, which is another              
SENATOR TAYLOR asked where egg sales are covered.                              
MR. MCALLISTER said the commercial operator's annual report that               
ADF&G requires covers eggs.                                                    
SENATOR TAYLOR thought egg sales would be a higher revenue                     
generator than canned product is.                                              
MR. MCALLISTER said that's true in some years on some species,                 
particularly with chum salmon.  Processors say that the data base              
isn't worth the paper it's reported on and it's not statutorily                
required; there is nothing requiring them to be accurate and also              
there is no auditing provision.                                                
CHAIRMAN HALFORD said it looks like the title doesn't prohibit an              
amendment that would deal with frozen product.                                 
MR. MCALLISTER said a very good report that was generated  for this            
body in 1983 goes into the difficulties in condensing different                
product forms down to reliable and accurate reporting requirements.            
He would support that debate anywhere it would occur, but it would             
not be in time for the upcoming fishing season which is almost upon            
Number 401                                                                     
MS. JANICE ADAIR, Director, Division of Environmental Health, said             
Mr. Bartholomew characterized the first three sections of this bill            
very well. They have been involved in combining their permitting               
applications and the reporting is the next step that the processors            
have actually asked for.                                                       
The fisheries business tax, which is the information that would be             
provided to DEC, is from people who engage in processing fisheries             
resources for sale by freezing, cooking, salting, or other methods.            
This bill does not give DEC access to any kind of catch records,               
nor would they want that information.  It is their intent to not               
actually share paper with the Department of Revenue, but have                  
electronic sharing of processing amounts for purposes of main                  
categories.  Right now, their processing permits are based on the              
amounts of fish processed and are very large groupings.  This is               
because right now they do not have the authority to keep that                  
information confidential.  They are subject to the public record               
and have relied upon constitutional protection for trade secrets               
when it comes to recipes and things like that that they have in                
their files.  So far they have been successful, but haven't wanted             
to chance it with financial information.  This bill would allow                
them to have access to that information for purposes of determining            
the appropriate permitting structure and placement in that                     
structure for different processors and that's all they want it for.            
SENATOR LEMAN said that is all the information they should be                  
seeking, but to get to that number, is it possible that the                    
Department could claim that they need the underlying data which is             
the actual raw data that the processor uses as a receipt to pay the            
MS. ADAIR answered that she couldn't fathom that.                              
SENATOR LEMAN asked if they would be looking at other data relating            
to that processor's sales, or deployments of vans, or something                
else that demonstrates how much product is moving out of the                   
MS. ADAIR answered that they would be looking at how much they                 
SENATOR TORGERSON asked if they would base that on tons or numbers             
of cans or what - to determine the size of the facility.                       
MS. ADAIR said they report this in pounds.  That is the information            
they would use and put it into categories like they have now for               
SENATOR TORGERSON asked if they don't trust the operators now to               
tell them how many pounds they process a year.                                 
MS. ADAIR answered that they don't ask them now.                               
SENATOR TORGERSON asked why they don't instead of having the                   
legislature pass legislation that would open up confidential                   
MS. ADAIR answered she didn't know why they would tell her.                    
SENATOR TORGERSON responded if their fee structure is based that               
way, why wouldn't they.                                                        
MS. ADAIR answered that DEC couldn't keep it confidential.                     
SENATOR TORGERSON said their fee structure for restaurants is based            
on how many people they sit and that's not confidential either.                
MS. ADAIR responded that it's easy to see how many people a                    
restaurant can seat; it is a trade secret how much fish a processor            
processes.  All the seats in the restaurant are not full seven days            
a week.  You can't really glean how much money they are making                 
based on the number of seats, but you could figure out how much                
money a processor is making by finding out how many pounds they                
process and she didn't think it was appropriate for them to be                 
involved with that.                                                            
SENATOR TORGERSON asked if the processors are asking for this, but             
they don't want each other to know what they are doing.                        
MS. ADAIR read an excerpt from a letter from the Southeast Alaska              
Gillnetters Association saying they supported a fee assessment                 
based on poundage processed.                                                   
SENATOR TORGERSON asked if they have the authority to audit if they            
suspect the poundage information was not correct.                              
MS. ADAIR said she didn't believe so.                                          
SENATOR TAYLOR asked why DEC would, other than for structuring a               
fee, have to know poundage. Wouldn't they rather know the number of            
lines they had for canning processing, the number of tables and                
cookers, the number of sinks and bathrooms, etc.                               
MS. ADAIR said he was right.  There is a correlation between how               
much fish is processed and all those other things. They base their             
fees on how much time it takes them within a given plant in certain            
broad categories of plants.  They want the categories to be smaller            
and once you break them down, you're looking at amounts that are               
being processed.                                                               
SENATOR TAYLOR asked if they are just looking for ways to come up              
with a new fee schedule.                                                       
MS. ADAIR responded that they are responding to a request made by              
the public which has asked them to base their fees on something                
they don't have access to.  She thought it would lead to a fee                 
reduction for the smaller processors.                                          
SENATOR TAYLOR said they could just as easily base their fee on the            
number of employees at a plant.                                                
MS. ADAIR said she didn't know what correlation she could make                 
between their processing services and the number of employees at a             
given facility.                                                                
SENATOR TAYLOR said he was concerned that basing fees on the volume            
of fish processed would be moving toward a straight tax.                       
MS. ADAIR said it is not their intent or the processor's intent,               
but they are trying to get a better correlation between their                  
average amount of time spent in a plant and what that plant                    
actually looks like.  Currently, their categories are broad,                   
because they are not able to keep the information confidential.                
They are trying to get smaller categories that are more reflective             
of those processors who are in that category.  One of the ways to              
do that is to look at how much fish is processed in a facility.                
CHAIRMAN HALFORD asked what would happen to the fee if they freeze             
the fish.                                                                      
MS. ADAIR responded that their fees are different for different                
kinds of processing.  Thermal processing and smoking are the                   
highest fees, because that is more complicated and requires more               
time.  Fresh frozen has lower fees.                                            
CHAIRMAN HALFORD asked how they knew processors were not lying                 
about how much they froze.                                                     
MS. ADAIR answered if they have facilities for smoking and canning,            
they are inspected at a higher frequency.                                      
CHAIRMAN HALFORD clarified his point was that they have a lot of               
reporting for thermally processed fish and not for frozen fish.                
SENATOR TAYLOR said he thought the majority of lobbying for this               
bill is coming from the smaller processors who are getting hit with            
the same fee that they are charging the big processors.                        
MS. ADAIR said that was not the case and that the smaller                      
processors don't pay as much as the large ones do.                             
SENATOR TAYLOR asked if everyone wanted the fee based on the volume            
of fish produced.                                                              
MS. ADAIR answered that wasn't true, but the lobbying was coming               
from only one group.                                                           
SENATOR TAYLOR asked why they didn't just charge $100, $200, and               
$300 for the small, medium, and large processors and come back to              
the legislature for general funds which is the way it used to be               
MS. ADAIR said that is not how they budget and set fees and she                
would be happy to go over the process with him.  No one pays the               
full cost to the Department of the time involved in inspections and            
permitting.  The fees cover only about 30 percent of the seafood               
processing program.                                                            
SENATOR TAYLOR asked if there was assurance in this legislation                
that that same 30 percent of cost would be reflected in the future.            
He asked how he would know they weren't getting 100 percent of                 
their cost in the future.                                                      
MS. ADAIR responded that the Legislature had to approve, through               
the budget process, any department's ability to receive and expend             
SENATOR TAYLOR parried that was called program receipts and didn't             
count as general funds, anymore, and no one gets denied their                  
program receipts.                                                              
MS. ADAIR responded that program receipts are only considered                  
designated program receipts if they cover the entire cost of a                 
program.  DEC has a statutory prohibition on covering the travel               
costs of the programs through fees.  Their program receipts are                
considered general funds and they have had increases denied.                   
CHAIRMAN HALFORD said they would have staff work on this bill                  
                    HB 373 - FOREST RESOURCES                                  
CHAIRMAN HALFORD announced HB 373 to be up for consideration.                  
MS. PAT SPRINGER, Staff to Speaker Phillips, sponsor, read Speaker             
Phillips' sponsor statement.  It said this bill would greatly                  
enhance protection of Alaska's salmon resources and water quality.             
This legislation improves present Forest Practices Act safeguards              
and represents a commitment from the industry, environmental                   
concerns and government to periodically reevaluate the Forest                  
Practices Act.  The Board of Forestry has found that the Act is                
working well in protecting salmon habitat and water quality, but               
concluded that some areas needed further review.  They established             
a Science and Technical Committee that recommended opportunities to            
strengthen habitat and wildlife protection.  A Stakeholder                     
Committee then convened to incorporate the findings into                       
recommendations for the Board of Forestry which endorsed a series              
of amendments to the Forest Practices Act.  These amendments have              
broad consensus support from all the participants.                             
MR. JEFF JAHNKE, State Forester, said he is also the presiding                 
officer for the Board of Forestry.  Today he is testifying on                  
behalf of both in support of HB 373.  He emphasized the process and            
resulting recommendations were based on the best available                     
scientific recommendations and that the process was open                       
throughout.  The results were supported by a wide range of                     
interests - the Board of Forestry with commercial fishing, forest              
industries, native corporations, environmental corporations,                   
mining, fish and wildlife biologists and recreationists.  He said              
this legislation was achieved through consensus over a period of               
two years and any substantive changes would make the consensus                 
difficult to sustain.  This is a good bill providing additional                
protection for key water bodies in coastal Alaska and is workable              
for the timber industry.  He said that Ms. Marty Welbourn was the              
co-chairman of the Science and Technical Committee and has thorough            
knowledge of the legislation.                                                  
MS. MARTY WELBOURN, Division of Forestry, explained that this is               
not a wholesale revision of the Forest Practices Act, but affects              
only the part of the Act that addresses stream classification and              
riparian management on private lands in Region One - the coastal               
forest in Southeast Alaska through Prince William Sound, the                   
eastern part of the Kenai Peninsula, and Kodiak.  It includes                  
Mental Health Trust lands within that area, as well.                           
Under the existing Forest Practices Act, about 20 percent of the               
streams in the area, including anadromous streams are unclassified             
and have no designated riparian areas.  Furthermore, there are                 
requirements to maintain some trees along stream banks of                      
unclassified streams.  Tree cover along streams provides woody                 
debris for fish habitat and stabilizes stream banks to help control            
erosion and provides nutrients to the stream.  When the Science and            
Technical Committee reviewed the Act, they found many issues where             
they didn't recommend changes.  Two significant recommendations                
from the Committee require legislative change.  They found all                 
anadromous streams and their tributaries should be classified and              
have appropriate riparian protection.  Secondly, they found that               
Type B streams, anadromous streams that have rock banks and                    
relatively steep gradients, need more woody debris than they are               
currently getting.  Woody debris is needed for fish habitat within             
Type B streams and other sorts of debris for Type A channels which             
can wash down from Type B streams.  Woody debris is also needed for            
control of sedimentation.  HB 373 contains consensus                           
recommendations from the Board of Forestry that respond to the                 
Science and Technical Committee's  provision findings.                         
TAPE 98-26, SIDE A                                                             
The Act would also classify all tributaries to anadromous streams              
as Type B or D based on the steepness of the stream and stability              
standards would apply on those streams, as well.                               
She explained under the current Act, only Type A streams,                      
anadromous streams with a relatively low gradient, have a buffer.              
One of the things the bill does is add requirements that applies               
stability standards out to 100 feet from the stream or to the slope            
break on Type A streams, but it does not change the existing                   
buffers on those Type A streams.  On Type B streams, it would add              
a buffer that would go out to 66 ft. or to the slope break which               
ever is smaller.  Many Type B streams are inside channels, so the              
buffers in many cases would be narrower than 66 ft.  On the                    
tributaries to anadromous streams, both stability standards would              
apply.  On Type C streams there would be 100 ft. and on Type B                 
streams about 50 ft. unless the break comes first.  For larger                 
tributaries to anadromous streams the bill strengthens the timber              
retention standards.  It would require the operator to retain low              
value timber within at least 25 ft. and that could be wider                    
depending on the characteristics of the stream.  These changes help            
insure that the goal for the Forest Practices Act are met - to                 
provide adequate protection of fish habitat and water quality and              
insure that it continues to satisfy the requirements for nonpoint              
source pollution under the federal Clean Water Act and the Coastal             
Zone Management Act.                                                           
SENATOR TAYLOR commented that he thought the Forest Practices Act              
was a cookie cutter approach to forest management and that this                
bill's four-part breakdown of streams based upon gradient and bank             
structure is probably a more refined cookie cutter, but it's still             
just a cookie cutter.  He thought it might get permits approved                
more quickly to be able to harvest with a greater level of                     
stability than what they have had in the past.  He supported that              
concept, although it was still just a cookie cutter approach.                  
Number 133                                                                     
CHAIRMAN HALFORD noted that the distances were not consistent in               
the original Forest Practices Act.  He asked if there was any place            
that private forest land can include fairly small parcels with                 
another primary purpose to exclude the right of a property owner on            
their five or ten acre parcel to clear their stream front.                     
MR. JAHNKE said he thought that was covered.                                   
MS. WELBOURN answered that first of all, land owners can convert               
their land to another use.  They just need to notify them of a land            
use conversion.  Small land owners, the size varying by region, are            
exempted from notification under the Act.                                      
CHAIRMAN HALFORD asked how small is small.                                     
MS. WELBOURN answered in Southeast it's 10 acres and in                        
Southcentral, it's 40 acres.  Above those thresholds, you have to              
notify DNR if you are clearing the land and converting it to                   
another use.  Then the Forest Practices Act does not apply.  If the            
conversion is not under way in a five year period, you are expected            
to reforest.                                                                   
CHAIRMAN HALFORD said he was concerned about making it impossible              
for someone to develop another use because they have forest land.              
SENATOR TORGERSON asked if the slope stability standards are in                
existence now.                                                                 
MR. JAHNKE answered yes, and they are established by the rule                  
making process, but the Board of Forestry is the body that reviews             
SENATOR TORGERSON asked if they had to worry about anything more               
than 100 ft.                                                                   
MR. JAHNKE said he thought that was correct for private lands.                 
SENATOR TORGERSON asked where the definition of break of slope was             
MR. JAHNKE said it is defined in statute at the point where the                
stream bank changes to a lower area.  In most cases, they believe              
the point of the break in the slope is easily identifiable.                    
CHAIRMAN HALFORD asked him if the statute specified the first break            
in the slope.                                                                  
MR. JAHNKE didn't have an answer.                                              
CHAIRMAN HALFORD said he liked the fact that the other area of                 
interpretation was high value/low value and it's the land owner                
that decides.                                                                  
MR. JAHNKE said that is how they interpret that, also.                         
Number 240                                                                     
SENATOR LEMAN said for the Type C and D water bodies there is a                
reference to a width measurement if the channel is incised.  He                
asked if that was a term that is well recognized or does it need to            
be further defined by the angle of the incision or anything having             
to do with the structure of the stream bank.                                   
MR. JAHNKE said the distinction between incised and gradient is one            
that has existed for a while and he didn't think there had been a              
problem with that in the past.                                                 
Number 256                                                                     
MS. WELBOURN said it hasn't been a problem and has been worked out             
in the field.                                                                  
SENATOR LINCOLN said she didn't understand the fiscal note.  DNR               
said based on distribution, there's going to be an estimated 21                
percent increase in the number of buffer stream miles which would              
require additional staff time for office review of notification and            
field review of requests and violations.  Training will be needed              
for land owners and operators and staff, etc. and it's all free.               
She asked how that can be.                                                     
MR. RICK HARRIS, Sealaska, said HB 373 was put together in a                   
process of consensus building and was a continuation of a process              
that began in 1988.  They have been able to work with various                  
interest groups and, where good science comes along and indicates              
there is a need to make a modification to the Forest Practices Act             
or to the regulations, they have come together to do that.  This               
bill has identified some deficiencies in the Act and regulations.              
Since 1982, they have been monitoring the Forest Practices Act.                
Most of that money has been provided by the timber industry and the            
people who are interested in seeing the Forest Practices Act work,             
although they have received grants from EPA to do monitoring.  As              
a result of the monitoring, they can say that the Act is working to            
protect fish habitat and water quality.  The purpose of modifying              
the Act and regulations is to provide that all the streams are                 
MR. HARRIS said this is not a cookie cutter approach.  It                      
establishes the standard, but it allows people in the field -                  
competent trained biologists and resources trained people, - to go             
out and make adjustments in the field that provide better                      
protections for the private timber owner or to modify the practices            
in site specific areas, if it appears that water quality standards             
are not being met.  The bill provides more flexibility than Senator            
Taylor gives it credit for.                                                    
The other part of the bill that's useful is providing protection in            
the upstream reaches.  Up until this time, there was no mandatory              
retention of timber, but through research they have found that some            
timber retention is important and for that reason they are                     
agreeable to retain some timber along those streams to provide                 
enhanced protection for the stream.                                            
SENATOR TORGERSON asked if they should amend this to say the first             
break in the slope.                                                            
MR. HARRIS said they had been using this standard since 1990 and               
there hasn't been a problem with interpretation.  It's been                    
described as the first break you encounter as you come up over the             
Number 340                                                                     
SENATOR LEMAN asked if the definition of incised had ever been a               
MR. HARRIS answered there are some minor adjustments they are                  
suggesting, but incised and channels contained by geomorphology are            
terms that are understood when you are out in the field.                       
CHAIRMAN HALFORD commented that in Southeast, the thing that shows             
the most and lasts the longest from timber cuts is a straight line.            
If you can avoid straight lines, it will look fine.                            
MR. JAHNKE said straight lines generally occur on property                     
Number 376                                                                     
MR. JACK PHELPS, Executive Director, Alaska Forest Association,                
supported HB 373 as written and said he had sent a letter to that              
effect.  Their involvement has been thorough in this process and               
this is good legislation encouraging stability in terms of how the             
industry is dealt with by regulatory agencies and it is very                   
science based.  He also talked to Dick Coose with Concerned                    
Alaskans For  Resources and Environment, who wanted him to say they            
support this bill, also.                                                       
CHAIRMAN HALFORD noted that the fiscal note enumerated all the                 
costs and then put zeros and he wanted that clarified.  SENATOR                
LINCOLN agreed.                                                                
MR. JAHNKE said they had struggled over the fiscal impacts of this             
bill and much of it they can do in the course of their normal                  
inspections.  It has been tough to identify what the additional 20             
percent of Type B would mean.  He thought the fiscal note said                 
that.  He said they are out in the field, anyhow, on the                       
inspections.  The training was the biggest issue and they are                  
already conducting training session that they were going to work it            
CHAIRMAN HALFORD said he has a problem with the zero fiscal note               
for the additional three months for two existing seasonal Forester             
II positions, because the Department will come back next year and              
say they notified the legislature of the cost and they approved it.            
MR. JAHNKE attempted to clarify that this is an adjustment to the              
Forest Practices Act and the people are in the field anyway and                
it's difficult to separate the impacts of this particular                      
legislation.  It's not a wholesale change.                                     
CHAIRMAN HALFORD asked if he wrote the fiscal note.                            
MR. JAHNKE answered yes, he wrote some of it.                                  
SENATOR LINCOLN said she thought ADF&G would be involved in this               
process and she didn't see any fiscal note from them either.                   
CHAIRMAN HALFORD said he didn't have a problem with moving the bill            
out, but wanted a fiscal note that justified in numbers what it                
says with the words.                                                           
Number 454                                                                     
SENATOR LINCOLN said they had passed other legislation out of this             
committee that had a zero fiscal note and if the Department thought            
they could do it with a zero fiscal note, they could hold their                
feet to the fire.                                                              
SENATOR LEMAN moved the technical amendment to replace "whichever              
area is smaller" with "whichever distance is less" and where it                
says "whichever area is greater" replace with "whichever distance              
is greater."  There were no objections and it was so ordered.                  
SENATOR LEMAN moved to pass SCS CSHB 373(RES) with individual                  
recommendations and an accurate fiscal note.  There were no                    
objections and it was so ordered.                                              
CHAIRMAN HALFORD adjourned the meeting at 5:50 p.m.                            

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