Legislature(1999 - 2000)

03/20/2000 03:10 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE RESOURCES COMMITTEE                                                                                
                          March 20, 2000                                                                                        
                             3:10 p.m.                                                                                          
MEMBERS PRESENT                                                                                                               
Senator Rick Halford, Chairman                                                                                                  
Senator Robin Taylor, Vice Chairman                                                                                             
Senator Pete Kelly                                                                                                              
Senator Jerry Mackie                                                                                                            
Senator Lyda Green                                                                                                              
Senator Sean Parnell                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Georgianna Lincoln                                                                                                      
COMMITTEE CALENDAR                                                                                                            
CS FOR SENATE BILL NO. 273(RES)                                                                                                 
"An Act  requiring oil  discharge prevention  and contingency  plans                                                            
and  proof  of financial  responsibility  for  nontank  vessels  and                                                            
railroad tank  cars; authorizing inspection  of nontank vessels  and                                                            
trains; and providing for an effective date."                                                                                   
     -MOVED CSSB 273(RES) OUT OF COMMITTEE                                                                                      
SENATE BILL NO. 258                                                                                                             
"An Act relating to registration  for commercial set gillnet fishing                                                            
sites;  relating  to leases  for shore  fisheries  development;  and                                                            
providing for an effective date."                                                                                               
     -HEARD AND HELD                                                                                                            
SENATE BILL NO. 212                                                                                                             
"An Act  authorizing  the commissioner  of  fish and  game to  award                                                            
grants  for  certain  resource  activities;  and  providing  for  an                                                            
effective date."                                                                                                                
     -MOVED CSSB 212(RES) OUT OF COMMITTEE                                                                                      
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
SB 273 - See Resources  Committee minutes dated 2/21/00  and 3/3/00.                                                            
SB 258 - No previous action to record.                                                                                          
SB 212 - No previous action to record.                                                                                          
WITNESS REGISTER                                                                                                              
Commissioner Michele Brown                                                                                                      
Department of Environmental Conservation                                                                                        
410 Willoughby  Ave.                                                                                                            
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Commented on SB 273.                                                                                      
Mr. Breck Tostevin, Assistant Attorney General                                                                                  
Department of Law                                                                                                               
310 K Street                                                                                                                    
Anchorage,  AK 99501                                                                                                            
POSITION STATEMENT: Commented on SB 273.                                                                                      
Mr. Rick Thompson                                                                                                               
Division of Mining, Land and Water Management                                                                                   
Department of Natural Resources                                                                                                 
3601 C St.,  Ste 800                                                                                                            
Anchorage,  AK 99503                                                                                                            
POSITION STATEMENT: Commented on SB 258.                                                                                      
Ms. Carol Carroll, Director                                                                                                     
Division of Support Services                                                                                                    
Department of Natural Resources                                                                                                 
400 Willoughby Ave., 5th Floor                                                                                                  
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Commented on SB 258.                                                                                      
Mr. David Rang                                                                                                                  
5033 W 80th Ave                                                                                                                 
Anchorage,  AK 99502                                                                                                            
POSITION STATEMENT: Commented on SB 258.                                                                                      
Mr. Marv Ebnet                                                                                                                  
9400 Springhill  Dr.                                                                                                            
Anchorage,  AK 99507                                                                                                            
POSITION STATEMENT: Opposed SB 258.                                                                                           
Mr. Al Bauman                                                                                                                   
P.O. Box 92895                                                                                                                  
Anchorage,  AK 99509                                                                                                            
POSITION STATEMENT: Opposed SB 258.                                                                                           
Mr. Kim Rice                                                                                                                    
Egegik Set Net Association                                                                                                      
P.O. Box 331                                                                                                                    
Girdwood, AK 99587                                                                                                              
POSITION STATEMENT: Opposed SB 258.                                                                                           
Mr. Tom Church                                                                                                                  
P.O. Box 406                                                                                                                    
Cordova, AK 99574                                                                                                               
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Mr. Jim Pahl                                                                                                                    
P.O. Box 179                                                                                                                    
Cordova, AK 99574                                                                                                               
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Mr. Dan Chalup                                                                                                                  
Kachemak Bay Salmon Coop                                                                                                        
RDO - Red Mountain                                                                                                              
Homer, AK 99603                                                                                                                 
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Ms. Sandy Umlauf, President                                                                                                     
Ugashik Set Netters Association                                                                                                 
Ugashik, AK                                                                                                                     
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Mr. Karl Kircher                                                                                                                
Kenai Peninsula Fishermen's Association                                                                                         
No address provided                                                                                                             
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Mr. Brant Johnson, Vice President                                                                                               
Kenai Peninsula Fishermen's Association                                                                                         
No address provided                                                                                                             
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Mr. Robert Kuchenbecker                                                                                                         
P.O. Box 876608                                                                                                                 
Wasilla, AK 99687                                                                                                               
POSITION STATEMENT:  Opposed SB 258.                                                                                          
Mr. Ken Taylor, Director                                                                                                        
Division of  Habitat and Restoration                                                                                            
Department of Fish and Game                                                                                                     
P.O. Box 25526                                                                                                                  
Juneau, AK 99802                                                                                                                
POSITION STATEMENT:  Supports SB 212                                                                                          
ACTION NARRATIVE                                                                                                              
TAPE 00-11, SIDE A                                                                                                            
Number 001                                                                                                                      
          SB 273-OIL SPILL RESPONSE; NONTANK VESSELS & RR                                                                   
CHAIRMAN HALFORD  called the Senate  Resources Committee  meeting to                                                          
order at 3:10 p.m. and  announced SB 273 to be up for consideration.                                                            
He announced  the committee already  adopted a committee  substitute                                                            
SENATOR TAYLOR moved to adopt Amendment 1.                                                                                      
SENATOR GREEN objected for an explanation.                                                                                      
SENATOR PEARCE  explained there was some concern that  the timing to                                                            
put regulations  for the contingency  plans in place was  too short.                                                            
To remedy that  concern, the date of June 1 was changed  to November                                                            
1 on page 1, line  9 following the word "effectively."  In addition.                                                            
that date change was made throughout the bill.                                                                                  
The  second change  was  made on  page  2, line  7, in  response  to                                                            
questions about where a  vessel that had persistent product, such as                                                            
fuel or  in bulk,  or nonpersistent  product, would  fall under  the                                                            
bill.   Following the word  "greater," new  language was added  that                                                            
     (C)  Both persistent  product,  as fuel  or  in bulk,  and                                                                 
     nonpersistent   product   at  the   applicable  financial                                                                  
     responsibility  rate  established in  (A) or  (B) of  this                                                                 
     paragraph  for  the storage  capacity  of the  vessel  for                                                                 
     persistent   product   or   nonpersistent   product   that                                                                 
     predominates on the vessel.                                                                                                
She summarized that the  vessel owner would determine which category                                                            
applies depending on the  predominant fuel on board. This was worked                                                            
out with  the Department  of  Environmental Conservation  (DEC)  and                                                            
some of the folks who would be affected by the bill.                                                                            
SENATOR  PEARCE said  that she  and Senator  Taylor  are working  on                                                            
language to limit a portion  of the liability of the response action                                                            
contractors,  such that  in a neg/reg  process  they could  possibly                                                            
become contingency plan  holders themselves, which should streamline                                                            
the  whole  process  dramatically.    That  change  will  take  some                                                            
liability  changes.  She  requested  that the bill  be moved  out of                                                            
committee while  they continue working  on that liability  language.                                                            
SENATOR PEARCE  said a number of shippers have said  the bill is not                                                            
necessary  so she  would like  to enter  into the  record the  first                                                            
paragraph of a letter dated  February 22, 2000 from the Commander of                                                            
the U.S. Coast  Guard, Officer in  Charge of Marine Inspections  for                                                            
Southeast Alaska, R.C.  Lorigan, to NorthStar Maritime in Anchorage,                                                            
acting  as agents.   The same  letter went  to other organizations.                                                             
She read:                                                                                                                       
     I am writing  this letter to express my concern  about the                                                                 
     increased  incidents  that  deep  draft  vessel operators                                                                  
     failing to  comply with the navigation safety  regulations                                                                 
     contained  in 33 CFR 64.33.   Specifically, in the course                                                                  
     of  routine  boardings,  my  inspectors  have  noted  that                                                                 
     vessels have  navigated far within the internal  waters of                                                                 
     Southeast  Alaska with  inadequate charts.   This poses  a                                                                 
     significant risk to safe  navigation and protection of the                                                                 
     pristine Alaska marine environment."                                                                                       
SENATOR PEARCE  said this letter and  other actions the Coast  Guard                                                            
has taken in  Southwest Alaska make  it clear to her that  ships are                                                            
navigating in  Alaskan waters that the Coast Guard  doesn't consider                                                            
to be safe.  That's one  reason she thought ships that come into our                                                            
waters  should  have  to  show  financial  responsibility  and  have                                                            
contingency  plans  in  case  they end  up  on the  rocks  as  they,                                                            
unfortunately, all too often do.                                                                                                
At members'  request, SENATOR  PEARCE offered  to provide a  copy of                                                            
Officer Lorrigan's letter to them.                                                                                              
SENATOR  TAYLOR  said  he  knew the  U.S.  Supreme  Court  ruled  on                                                            
Washington  tanker   regulations.    He  asked  if  Senator   Pearce                                                            
addressed that.                                                                                                                 
Number 450                                                                                                                      
SENATOR  PEARCE  replied  that  it's  her  understanding   that  the                                                            
Washington  law  that was  thrown  out had  to  do with  other  than                                                            
protection  of the state's waters.   The contingency plans  (CP) and                                                            
financial responsibility  areas of Washington's laws were not thrown                                                            
out by the courts.  The  Supreme Court said Washington could not get                                                            
into the business  of trying to be the entity that  decides how many                                                            
people must  be on the bridge of a  ship, what language they  speak,                                                            
and what bridge  accommodations there had to be.   Bridge management                                                            
is not something that a state can push.                                                                                         
CHAIRMAN HALFORD said he  just read the decision and thinks there is                                                            
a bigger  problem but  he doesn't  know that it's  laid out  at this                                                            
She  said  that  DEC looked  at  it  and  doesn't  believe  Alaska's                                                            
contingency  planning regulations  nor the financial responsibility                                                             
regulations would be impacted  by that decision and certainly not in                                                            
the scope of this bill.                                                                                                         
SENATOR  TAYLOR  asked if  other provisions  of  Alaska  law may  be                                                            
impacted by the decision.                                                                                                       
SENATOR PEARCE  said she doesn't know whether any  of the provisions                                                            
of Alaska's tanker laws  are going to be impacted.  Under state law,                                                            
there  are  no requirements  for  bridge  management.   One  of  the                                                            
concerns  after the  Exxon Valdez  spill was whether  the number  of                                                            
crew members onboard was  too small to operate a ship that size.  At                                                            
that time, the number was  down to about 18 onboard; now it is up to                                                            
22.  When those  ships were first operated, 27 people  were onboard.                                                            
The Exxon Valdez  didn't have a third officer.  Those  are the sorts                                                            
of things that can't be required under state law.                                                                               
Number 900                                                                                                                      
SENATOR TAYLOR  said he is  considering amending  page 5, line  4 to                                                            
change the  definition of  "nontank vessel"  from 300 gross  tons to                                                            
400.  He asked what types  of vessels would be excluded or included.                                                            
CHAIRMAN  HALFORD asked  if a Coast  Guard person  was available  to                                                            
tell them if there is another  classification that would make sense.                                                            
SENATOR  PEARCE responded  that the  original number  was chosen  to                                                            
comply  with the  size  the State  of Washington  used  in its  law.                                                            
That  way, ships  that travel  in Washington  waters  would then  be                                                            
covered when  they come into Alaskan  waters.  The Coast  Guard uses                                                            
gross tonnage  as opposed to displacement or other  ways you can use                                                            
to measure the bulk of  a ship.  If the definition is changed to 400                                                            
gross  tons,  she is  not familiar  with  how  many ships  would  be                                                            
SENATOR TAYLOR  asked if  anyone could give  a ballpark idea  of the                                                            
difference in size between a 300 and 400 gross ton vessel.                                                                      
MR. HANS ANTONSON, Southeast  Sea Pilots Association, responded that                                                            
in many  instances,  the gross  tonnage doesn't  reflect the  actual                                                            
size of the vessel.  Small  vessels can have a greater gross tonnage                                                            
because of the  way the space is divided up.  Passenger  vessels can                                                            
be affected by  design features, such as whether the  cabins open to                                                            
the outside deck or an inside corridor.                                                                                         
SENATOR PEARCE  noted that the regulations  that were overturned  by                                                            
the  Supreme   Court  include   crew  training,   English   language                                                            
proficiency, navigation  watch requirements, accident reporting, and                                                            
containment boom  requirements for some tankers.   She said that her                                                            
understanding  is  that the  basis  for contingency  plans  and  the                                                            
ability to  clean up petroleum spills  will not be affected  by this                                                            
federal decision.                                                                                                               
SENATOR GREEN asked Senator  Pearce if she believes the scope of the                                                            
ruling is limited by paragraph 2.                                                                                               
SENATOR PEARCE  replied that  she was reading  from an article,  not                                                            
from the opinion itself.   Intertanko actually sued on the points it                                                            
thought the Coast Guard  had primacy over, not Washington State. The                                                            
issue of who has primacy  is clear under this decision.  Alaska laws                                                            
don't  require   drug  and  alcohol   testing,  although   the  U.S.                                                            
Department  of  Transportation  requires  testing  on  the  tankers.                                                            
Proving  financial  responsibility   for a  spill  and  requiring  a                                                            
contingency plan  are not the issues that Intertanko  had thrown out                                                            
of the  federal courts.   It is  possible that  Intertanko will  sue                                                            
over some  of the other requirements  in the  future.  She  said she                                                            
wouldn't discount  that the industry  worldwide will try  to get out                                                            
from under any  regulations it can.  That doesn't  mean we shouldn't                                                            
try to protect our waters.                                                                                                      
CHAIRMAN HALFORD commented  that booming is one of the things that's                                                            
not mentioned in that paragraph.                                                                                                
SENATOR PEARCE  responded that the article refers  to booming during                                                            
a transfer.  She  didn't know  where in  Washington  state ships  do                                                            
lightering.   She said  she would  be surprised  if the Coast  Guard                                                            
didn't require booming when there was lightering anyway.                                                                        
SENATOR PEARCE  repeated that DEC looked at the opinion  and doesn't                                                            
believe it will affect any of our state laws.                                                                                   
CHAIRMAN  HALFORD announced  a brief  at-ease at  3:32 p.m.  Shortly                                                            
after, he called the meeting back to order.                                                                                     
COMMISSIONER  MICHELE  BROWN, DEC,  testifying  via teleconference,                                                             
announced that she was available to answer questions.                                                                           
CHAIRMAN  HALFORD asked why  a distinction  is made at 300  tons and                                                            
whether another  Coast Guard category  is close to that but  larger.                                                            
MR. BRECK TOSTEVIN,  Assistant Attorney General, Department  of Law,                                                            
said his understanding  of the 300 gross ton distinction  is that it                                                            
was used  by the  states of Oregon,  Washington,  and California  in                                                            
their nontank  contingency planning  legislation.  Those  states, in                                                            
turn, relied  on that distinction  based on  the Coast Guard,  which                                                            
used 300  gross tons as  a regulatory threshold.   Ships above  that                                                            
size have to meet various requirements.                                                                                         
CHAIRMAN HALFORD  asked what provisions  of the current legislation                                                             
are brought into question by the Supreme Court opinion.                                                                         
MR. TOSTEVIN  explained that  the current  legislation would  not be                                                            
affected.  Contingency  planning requirements and  cleanup equipment                                                            
were not addressed  in the decision.   The Supreme Court  focused on                                                            
vessel design,  equipment, manning, qualifications  of the crew, and                                                            
navigation.  He  didn't think that decision affected  current Alaska                                                            
laws either.   He thought that DEC, in implementing  the contingency                                                            
plans, will be mindful  of the uniformity requirements and the Coast                                                            
Guard regulations.   The Supreme Court did say state  liability laws                                                            
can be more stringent than federal law.                                                                                         
CHAIRMAN  HALFORD said the  one thing that  might be in question  is                                                            
the  equipment requirements  that  are tied  to the  spill  response                                                            
MR.  TOSTEVIN   said  that   the  Supreme   Court  was  focused   on                                                            
requirements  of vessel design.   For example,  Washington  required                                                            
that two [indisc.]  be onboard while  the Coast Guard only  required                                                            
one. The Supreme Court  said there was no uniformity and that states                                                            
could not  change that  standard.  Washington  has contingency  plan                                                            
requirements  regarding the kind of  cleanup equipment that  must be                                                            
available. That was not challenged in the Washington case.                                                                      
Number 1400                                                                                                                     
SENATOR TAYLOR moved to adopt Amendment 1 which reads:                                                                          
                       A M E N D M E N T   1                                                                                
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSB 273(   ), Draft Version "D"                                                                                      
Page 1, line 9, following "effective":                                                                                          
     Delete "June 1"                                                                                                            
     Insert "November 1"                                                                                                        
Page 2, line 3, following "(A)":                                                                                                
     Insert "only"                                                                                                              
Page 2, line 5:                                                                                                                 
     Delete "and"                                                                                                               
Page 2, line 6, following "(B)":                                                                                                
     Insert "only"                                                                                                              
Page 2, line 7, following "greater":                                                                                            
     Insert "; and                                                                                                              
                     (C)  both persistent product as fuel or in                                                                 
          bulk,   and  nonpersistent  product,  at  the   applicable                                                            
          financial  responsibility  rate established in  (A) or (B)                                                            
          of  this paragraph for the storage capacity  of the vessel                                                            
          for  persistent  product  or  nonpersistent  product  that                                                            
          predominates on the vessel"                                                                                           
Page 2, line 10, following "effective":                                                                                         
     Delete "June 1"                                                                                                            
     Insert "November 1"                                                                                                        
Page 2, line 23, following "effective":                                                                                         
     Delete "June 1"                                                                                                            
     Insert "November 1"                                                                                                        
CHAIRMAN HALFORD  asked if there was  any objection to the  adoption                                                            
of Amendment 1.  There were no objections and it was so ordered.                                                                
SENATOR TAYLOR moved to  adopt Amendment 2, which would delete "300"                                                            
and insert "400" on page 5, line 4.                                                                                             
SENATOR PEARCE  explained that 300 gross tons was  chosen because it                                                            
is consistent  with the rest  of the West  Coast and with the  Coast                                                            
Guard threshold.   She didn't know  how many ships will be  left out                                                            
of the requirement  if it is changed to 400 but the  ships that have                                                            
been involved  in the latest  groundings in  our state would  not be                                                            
excluded from compliance because of this change.                                                                                
SENATOR TAYLOR  said his first thought was to go to  500.  He wanted                                                            
to go  to a number  that wouldn't  capture a  whole bunch of  little                                                            
guys - like  packers and tenders in  the fishing fleet.   He said he                                                            
is willing to  do more research on that number and  provide examples                                                            
of vessels that would be excluded.                                                                                              
CHAIRMAN HALFORD noted  that if the same vessel can fall between 100                                                            
and 1000 gross tons based  on whether the cabin doors open in or out                                                            
on deck, this standard is strange.                                                                                              
SENATOR  PARNELL said  he would  vote against  the  bill because  he                                                            
wants to know what the impact is on specific ships.                                                                             
A roll  call  vote was  taken  on Amendment  2.   SENATORS  HALFORD,                                                            
KELLY, GREEN,  TAYLOR, and MACKIE  voted yea; SENATOR PARNELL  voted                                                            
nay.  The amendment passed five to one.                                                                                         
SENATOR  TAYLOR moved  to  pass CSSB  273(RES) from  committee  with                                                            
individual recommendations.   There were no objections and it was so                                                            
         SB 258-SET NET SITES/ SHORE FISHERIES DEVELOPMENT                                                                  
CHAIRMAN HALFORD announced SB 258 to be up for consideration.                                                                   
MR. RICK THOMPSON, Department  of Natural Resources (DNR), said that                                                            
the current set net leasing  program is a long-standing program that                                                            
allows limited  entry gill-net permit  holders to obtain  leases for                                                            
their fishing  sites.  However, it  does not require one  to fish in                                                            
that spot.                                                                                                                      
MR. THOMPSON  explained that  a lease gives  fishermen control  over                                                            
the locations  where they habitually  fish.  A lease holder  may use                                                            
the location for set net  fishing to the exclusion of others.  In FY                                                            
00, the  legislature  reduced the  funding in the  program by  about                                                            
two-thirds and  reallocated the program receipts to  other programs.                                                            
MR. THOMPSON  said DNR cannot manage  the program as it stands  with                                                            
the finances  left so it  is proposing to  restructure the  program.                                                            
The registration  system would  not result  in the customary  lease,                                                            
but it  would give  fishermen  the right  to fish their  sites  in a                                                            
manner similar  to the existing lease program.  A  statute change is                                                            
required  to implement  the  registration  system.   At the  present                                                            
time, DNR is not accepting  any applications for leases and, without                                                            
modification to the statute  and with the resources DNR has left, it                                                            
cannot continue to manage the program as it exists.                                                                             
CHAIRMAN  HALFORD  asked how  much  income  was generated  from  the                                                            
program receipts for the existing lease program.                                                                                
MR. THOMPSON  answered that the total  income from program  receipts                                                            
was $360,000 and,  prior to FY00, $300,000 of that  was allocated to                                                            
the program.                                                                                                                    
CHAIRMAN  HALFORD asked if  DNR is asking  to repeal a program  that                                                            
was making a $60,000 profit.                                                                                                    
MR. THOMPSON explained  that DNR lost two-thirds of the resources it                                                            
had to  run the program.   DNR has 1,200  outstanding leases,  which                                                            
require  lease management,  and  the program  cannot be  run by  one                                                            
person.   He  was  asked to  come  up with  a  way to  continue  the                                                            
registration program with one person and this is his best shot.                                                                 
CHAIRMAN  HALFORD asked if  the registration  would cost as  much as                                                            
the lease program, in terms of what the people pay.                                                                             
MR. THOMPSON replied that the fee would stay the same.                                                                          
CHAIRMAN HALFORD  asked if the lessees  were paying $360,000  to get                                                            
$300,000  worth of work in  the past and under  this bill they  will                                                            
pay $360,000 to get $50,000 worth of work.                                                                                      
MR. THOMPSON  responded  the  lessees will  pay the  same amount  of                                                            
money to get less services from DNR.                                                                                            
CHAIRMAN HALFORD asked where the program receipts went.                                                                         
MR. THOMPSON replied they  were redirected by the legislature and he                                                            
isn't sure where they went.                                                                                                     
MS. CAROL CARROLL,  DNR, explained that DNR received  a reduction in                                                            
its authority  to expend the program receipts and  her understanding                                                            
is that they are  now deposited into the general fund.   The program                                                            
receipts were not redirected within DNR.                                                                                        
SENATOR  MACKIE commented  that this  might be  a Finance  Committee                                                            
question.   He  asked  if anyone  from  OMB  explained  this to  the                                                            
Finance  Committee members  so they  could give  DNR enough  program                                                            
receipts to manage the program.                                                                                                 
Number 1900                                                                                                                     
MS. CARROLL answered  when they went through budget  reductions last                                                            
year, the subcommittee knew it was redirecting program receipts.                                                                
CHAIRMAN  HALFORD   asked  what  the   difference  is  between   the                                                            
registration   program  and  the  lease  program  from   the  user's                                                            
MR. THOMPSON  explained  that  users get  the exclusive  use of  the                                                            
beach for  that site,  but applicants  have to  locate the site  and                                                            
fill  out  a form  with  DNR  to register  it.    That registration                                                             
information will  be a matter of public record.  Applicants  have to                                                            
provide the coordinates for that location.                                                                                      
CHAIRMAN  HALFORD asked what's  different and  what they get  with a                                                            
lease that they didn't get with registration.                                                                                   
MS. CARROLL  explained that DNR used  to adjudicate any controversy                                                             
but will  no longer  do that if  the bill passes.   Any controversy                                                             
will be decided through arbitration, mediation, or the court.                                                                   
CHAIRMAN HALFORD  asked if DNR would  accept multiple registrations                                                             
for the same site.                                                                                                              
MR. THOMPSON  answered  yes; a  system would  be set  up so that  if                                                            
someone  registers  for a  site and  someone  else comes  along  and                                                            
claims it, there's  a conflict resolution system the  parties can go                                                            
through but DNR wouldn't handle it.                                                                                             
CHAIRMAN  HALFORD  said  so he  is  not guaranteeing  a  lessee  the                                                            
exclusive right to use a specific piece of beach.                                                                               
MR. THOMPSON replied  that the lessee has to be able  to prove he or                                                            
she is the superior fisherman on that site.                                                                                     
SENATOR MACKIE  asked who would do  the conflict resolution  in that                                                            
MR. THOMPSON replied that it would be an arbitrator.                                                                            
SENATOR MACKIE  asked if it would be up to the fisherman  who's been                                                            
fishing the same site for 20 years to find an arbitrator.                                                                       
MR. THOMPSON  answered if a person  has an existing lease,  it would                                                            
be converted  and  no one  will be  able to  challenge  it.  He  was                                                            
referring to the way it would work for a new site.                                                                              
CHAIRMAN  HALFORD said he  thought DNR isn't  accepting leases  this                                                            
MR. THOMPSON  responded  DNR isn't  accepting any  leases but  if it                                                            
switches  over  to the  registration  program,  the leases  will  be                                                            
allowed  to go through  the normal  cycle.  When  they expire,  they                                                            
could convert.                                                                                                                  
CHAIRMAN  HALFORD asked what  would happen  if a lease expires  this                                                            
Number 2100                                                                                                                     
MR. THOMPSON replied they  will renew a license that just expired in                                                            
the  interim   to  protect  people's   ability  to  maintain   their                                                            
exclusivity on the site.                                                                                                        
MR. DAVID RANG, Cook Inlet  fisherman of 48 years, said he sees this                                                            
as  a divestiture  of  interest.    When you  put  a municipality's                                                             
interest ahead of fishermen's,  the process of eminent domain should                                                            
take care  of that.  The people at  DNR forced  a utility outfit  to                                                            
tempt him  to buy out  his fishing  interests for  the season.   The                                                            
other  thing he does  not like  about SB  258 is  that it  addresses                                                            
several  issues  to  be handled  by  one  claim.   He  didn't  think                                                            
registering  would work very well  for the fishermen and  would work                                                            
to  someone else's  advantage.   He  also asked  that  this bill  be                                                            
translated into lay language.  He is opposed to SB 258.                                                                         
MR. MARV EBNET,  Bristol Bay set netter,  said, "If something  ain't                                                            
broke, don't  fix it, and this ain't  broke."  There are  two things                                                            
lessees pay  for with the shore lease  program - long term  security                                                            
and  conflict resolution  without  the  risk of  injury  or loss  of                                                            
income.  Take that away,  and there will be no incentive for the set                                                            
netters  to participate  in the program  and the  program will  die.                                                            
He said there  is a history of people dying while  trying to protect                                                            
set net sites.  He also  said that GPS isn't accurate enough to nail                                                            
down  site  locations.    Everyone  out there  has  already  made  a                                                            
substantial  investment  in existing  survey data.   That  shouldn't                                                            
change; there's nothing wrong with that data.                                                                                   
If this fishery becomes  disorderly through violence, the Department                                                            
of Fish  and Game  will shut  down the  fishery.   That will have  a                                                            
serious impact on fishermen  and the State.  He is opposed to SB 258                                                            
and would like  to see this program have dedicated  funds similar to                                                            
the guide program.                                                                                                              
MR. AL  BAUMAN, Bristol  Bay fisherman, testified  that in  October,                                                            
1992, a  letter from Ron  Swanson said if  the program was  not self                                                            
supporting, it  might be eliminated.  Fees were then  increased from                                                            
$150 to  $300.  At  the time  there were four  full-time  employees,                                                            
which accounted for about  90 percent of the just over $200,000 cost                                                            
of the  program.   The program's  viability  was to  be reviewed  in                                                            
1997.   In  February of  1998,  they received  a letter  from  Cathy                                                            
Doogan,  Bethel   Resource  Officer,  saying  that   costs  had  not                                                            
increased  so no  fee  increase was  necessary,  and  that the  next                                                            
review would be in 2002.   At that time, there were three employees;                                                            
one was cut due  to DNR budget cutting.  At present,  the program as                                                            
he knew it  no longer exists.  One  person is employed part-time  on                                                            
shore fishery issues.                                                                                                           
TAPE 00-11, SIDE B                                                                                                            
MR. BAUMAN  continued.   Under  the proposed  registration  program,                                                            
which is partially operating  now, no new diagrams are accepted.  No                                                            
amending  diagrams are allowable,  conflicts  are not resolved,  and                                                            
public  notices  have been  eliminated.   From  time  to time,  it's                                                            
necessary to adjust shore  fishery diagrams because of shore erosion                                                            
or  the  voluntary  elimination  of an  existing  site  to  increase                                                            
"fishability." The ability to change a diagram is essential.                                                                    
At  present, most  arguments  have  already  been settled.    Public                                                            
notice of new  lease and lease changes is a tool to  avoid conflicts                                                            
and is  paid for directly  by the fishermen.   Three hundred  dollar                                                            
fees are  still required.   The fee is not  the issue; the  issue is                                                            
that the  participant-funded  receipt program  is accepting  funding                                                            
and not  performing services.   They would  like to see the  section                                                            
pertaining  to shore fishery  leases in SB  258 be stricken  and the                                                            
former program reinstated.   The best way to stop what has become an                                                            
annual fight to  save the program would be to declare  fees from the                                                            
shore fishery  program as non-general fund monies.   It appears that                                                            
DNR is using  the shore fishery program  as a cash cow.   Last year,                                                            
it had one employee and  he can't see how DNR spent $300,000 on this                                                            
MR. KIM RICE,  Egegik set netter, said he is opposed  to SB 258.  He                                                            
wants  to save  the  program  because  it brings  stability  to  the                                                            
fishery.  He said the Governor  should have discussed this bill with                                                            
them to see what  they could do to help before submitting  it to the                                                            
legislature.   The lease program as  it exists works fine;  changing                                                            
it to a yearly  lease as opposed to  a 10-year lease (as  it is now)                                                            
will disrupt  the fishery and create  a Smith and Wesson  mentality.                                                            
The program  was  enacted to  add stability  to  the mostly  Alaskan                                                            
fishery  (90 percent).   Set  netters are  paying  $360,000 for  the                                                            
program and he  would like to see that money dedicated.   That would                                                            
end the conflict.                                                                                                               
MR. RICE agreed  that GPS is not accurate enough to  use for set net                                                            
location  as sites  are 300  ft. apart in  Bristol  Bay.  They  have                                                            
already  spent  millions  on  surveyors   statewide  to  locate  and                                                            
dedicate  these sites to their  leases.  They  need the 10  years so                                                            
that they  can plan  their seasons.   They  are willing  to pay  the                                                            
money for the system as long as they get it.                                                                                    
CHAIRMAN HALFORD asked  if the $300 fee is for the 10 year period or                                                            
whether it is annual.                                                                                                           
MR. RICE replied they pay an annual fee for a 10-year lease.                                                                    
MR. TOM CHURCH, Prince  William Sound set netter, clarified that the                                                            
fee is $300  per year per  lease site.    In his district,  they are                                                            
entitled  to have three lease  sites for a  total of $900 per  year.                                                            
He   supported   the   previous   shore   fishery   lease   program.                                                            
Historically,  it  has  proven  to be  successful  and  provided  an                                                            
efficient,  valuable, and  stable  means of managing  that  fishery.                                                            
The facts  show  that the  annual fees  have been  increased to  the                                                            
point where the program  provides a surplus to the State.  It's been                                                            
successful so why fix something if it's not broken.                                                                             
MR. JIM PAHL,  Prince William Sound  set netter, said he  is opposed                                                            
to SB  258.  He pays  $600 per year  for his plots  and it cost  him                                                            
$1,000 last year  to have an amendment to it.  He  is concerned that                                                            
something like this could happen without his knowledge.                                                                         
MR. DAN CHALUP,  Kachemak Bay Salmon  Co-op, opposed SB 258  for the                                                            
reasons already stated.   He would like to see the fees dedicated to                                                            
the shore lease fisheries program instead of the general fund.                                                                  
MS. SANDY UMLAUF,  President, Ugashik  Set Net Association,  opposed                                                            
SB 258.  The old program  was self sustaining, offered stability for                                                            
shore fishery  leases and provided a means for conflict  resolution.                                                            
There was general satisfaction  with the program from the fishermen.                                                            
The resulting  chaos of abandoning this program might  cause the set                                                            
net fishermen  to abandon the program  and lose that state  revenue.                                                            
Set   net   sites  are   frequently   hotly   contested   and   very                                                            
SENATOR TAYLOR asked Ms. Carroll if anyone supports this bill.                                                                  
MS. CARROLL responded  that DNR came forward with  this bill because                                                            
its  budget was  cut last  year.   It is  an attempt  to handle  the                                                            
program and still  give the people who have a shore  fishery lease a                                                            
registration program.   Right now there is a moratorium on the lease                                                            
program because DNR cannot run it the way it used to.                                                                           
SENATOR  TAYLOR said  it wasn't  actually  a budget  reduction.   He                                                            
asked if the money went some place else within DNR.                                                                             
MS. CARROLL  replied that it was a  reduction in their authority  to                                                            
expend program  receipts.  The money  did not go anywhere  else.  It                                                            
was not allocated anywhere  else in DNR's budget.  It resides in the                                                            
general fund if  people are still paying; and they  are.  The people                                                            
testifying  today are saying  that they totally  fund this  program;                                                            
but DNR does not have the  authority to spend that money like it did                                                            
in previous years.                                                                                                              
SENATOR TAYLOR  asked if DNR doesn't believe it still  has a mission                                                            
to provide the same service.                                                                                                    
MS. CARROLL replied that  DNR cannot provide the same services if it                                                            
doesn't have the staff  to do that.  Statutorily, DNR is required to                                                            
do a lease program, but  it doesn't have the authority to expend the                                                            
money.  Without  the legislature's  permission, it is unable  to run                                                            
the program like it used to.  SB 258 is a fix.                                                                                  
SENATOR  TAYLOR asked  if the Senate  and House  Finance  Committees                                                            
actually cut DNR's budget by $200,000 last year.                                                                                
MS. CARROLL  said that is  correct - directly  to the shore  fishery                                                            
SENATOR TAYLOR  said DNR should have just asked for  program receipt                                                            
authority  again, which  doesn't  take a bill.   It  just takes  the                                                            
Finance Committee to reinsert it that way.                                                                                      
MS. CARROLL  said that DNR  recognizes that  the State doesn't  have                                                            
the  money it  used to  and that  the  legislature  is reducing  the                                                            
overall State  budget.  DNR has been  participating in those  budget                                                            
SENATOR TAYLOR  said DNR  would be much wiser  to discuss this  with                                                            
the Finance Committees.                                                                                                         
Number 1512                                                                                                                     
MR.  KARL   KIRCHER,  Kenai   Peninsula   Fishermen's  Association,                                                             
submitted documents  to the committee:   an October 29, 1992  letter                                                            
from DNR to  set netters outlining  the need for an increase  in the                                                            
yearly rental  fees for shore fishery leases and an  October 5, 1992                                                            
letter from  DNR detailing how the  increased fees would  be used to                                                            
ensure   that   the   adequate   program    receipts   would   cover                                                            
administrative costs.   AS 38.05.082 gives authority to the director                                                            
to administer  the program.   This program  brought a great  deal of                                                            
stability  to  the  program.    They  should  look  closely  at  the                                                            
circumstances surrounding the original cut to the fund.                                                                         
He agreed with Senator  Taylor that this should be dealt with in the                                                            
Finance  Committee.  He thought  they should  ask DNR  if there  are                                                            
specific areas of the shore  lease program that are administratively                                                            
or financially  problematic.   Mr. Kircher  said this is a  bad bill                                                            
but, if it is killed, it  would still leave the moratorium in place.                                                            
At a minimum,  DNR should  continue to issue  renewals so as  not to                                                            
harm  those whose  leases have  expired.   DNR should  be given  the                                                            
authority  to spend  the  program  receipts as  they  came from  the                                                            
MR.  BRENT JOHNSON,  Vice  President,  Kenai  Peninsula Fishermen's                                                             
Association,  said he had  been surveying  shore fishery leases  for                                                            
many years  and he  didn't see how  this new  program would  work in                                                            
Cook Inlet.  In this area,  nets are sometimes a mile and a half off                                                            
shore.   The only time  they can  possibly be  surveyed is at  slack                                                            
tide when  the buoy  lines are pulled  absolutely  tight so  you can                                                            
locate the anchors which  lay at the bottom of the ocean.  He didn't                                                            
think it could be done with GPS.                                                                                                
MR. ROGER KUCHENBECKER  said that  Senator Taylor had suggested  the                                                            
solution  to the problem.   He said he fished  in the Ugashik  River                                                            
district  for 13  years  and is  opposed  to SB  258.   The  current                                                            
program works  and has taken  15 years to  implement.  He said  that                                                            
"peacefully" was one of  the important catch words here.  One of his                                                            
main concerns  would be the  GPS location  as mentioned by  previous                                                            
CHAIRMAN  HALFORD said  it  is his  understanding  that the  highest                                                            
percentage of  Alaska resident ownership and the highest  percentage                                                            
of local area  resident ownership of a fishery is  in set net sites.                                                            
The State  shouldn't be dismantling  something  that works.   If DNR                                                            
can come back with something  that provides the same kind of service                                                            
that the existing  system provides, it can make its  case.  Short of                                                            
that, this bill isn't destined to be a fast mover.                                                                              
SENATOR MACKIE  said the problem is  that DNR isn't going  to manage                                                            
the lease program  any more and it needs to fix the  program receipt                                                            
question in the budget  so that the funds collected for that purpose                                                            
can be used for that purpose.                                                                                                   
CHAIRMAN  HALFORD  said this  may be  one of  those  cases in  which                                                            
something  happened to the  program receipts  in the prior  year and                                                            
because something  wasn't done correctly, the program  receipts were                                                            
reduced further.                                                                                                                
SENATOR MACKIE  repeated that whatever the cause of  the problem is,                                                            
the funds collected  for that purpose should be allocated  to manage                                                            
that program.                                                                                                                   
                     SB 212-FISH & GAME GRANTS                                                                              
CHAIRMAN HALFORD announced SB 212 to be up for consideration.                                                                   
MR. KEN TAYLOR,  Director, Habitat and Restoration  Division, Alaska                                                            
Department  of Fish and  Game (ADF&G), said  he appreciated  working                                                            
with the committee to narrow  the scope of this bill so that it does                                                            
not deal  with general funds,  Fish and Game  funds, or federal  aid                                                            
funds, but  simply with federal  receipts.   This bill is  necessary                                                            
because  the  Habitat Division  has  been  involved  in restoration                                                             
activities for  some time.  In 1994, the legislature  passed SB 183,                                                            
which provided some criminal  settlement funds from EVOS, of which a                                                            
large  portion  went toward  restoration  activities  on  the  Kenai                                                            
River.  That program has  been very popular with the public and with                                                            
the fishing community.                                                                                                          
Unfortunately, the way  that system works, because ADF&G didn't have                                                            
granting  authority, it had  to enter into  a cooperative  agreement                                                            
with  the U.S.  Fish and  Wildlife Service  (USFWS).   The  division                                                            
transfers  the money  to USFWS,  it takes  an 11  percent cut,  then                                                            
makes the  grants and  does a little  bit of the  paper work  to the                                                            
individual  land owners on  the Kenai.  ADF&G  works with the  USFWS                                                            
but  it ends  up getting  most of  the credit  for  this work,  thus                                                            
elevating its stature in the public's eye.                                                                                      
This system is  administratively inefficient.  ADF&G  feels it would                                                            
service the public much  better if the grants went directly from the                                                            
State to the  private land owners  where restoration activities  are                                                            
necessary.  There are a fair number  of federal funds available  for                                                            
this kind of work that  ADF&G frequently gets receipt authority for.                                                            
SB 212 would facilitate  that process.  ADF&G has long-term plans to                                                            
do restoration  work throughout a  good part of Southcentral  Alaska                                                            
and some  work will  be done on  the Chatanika  over the next  year.                                                            
Some work will  be done in Southeast,  as well.  In essence,  that's                                                            
the purpose of  this bill.  This bill may benefit  some of the other                                                            
divisions,   although  he  didn't   know  much  about  granting   in                                                            
commercial  fisheries or sport  fish or wildlife.   The director  of                                                            
the Wildlife Division  thinks this bill would benefit  that division                                                            
as well.                                                                                                                        
SENATOR TAYLOR  said this version still seems very  broad to him. It                                                            
basically says the Commissioner  may award grants from federal funds                                                            
and just restricts  the specific funding  mechanisms that  come from                                                            
tax receipts.   He asked  what program these  funds are coming  from                                                            
and whether  this is being set up  so that ADF&G can take  advantage                                                            
of S 25 or H 701 by Don Young.                                                                                                  
MR. TAYLOR answered  no.  Those bills will require  major changes to                                                            
state legislation  as well.  Currently,  AS 16.05.300 (d)  restricts                                                            
the use of federal aid  funds to programs that only directly benefit                                                            
hunters,  trappers,  and  sport  fishermen.    If  the Conservation                                                             
Reinvestment  Act  passes,  which  is  principally   for  non-hunted                                                            
species,  there  will have to be some  changes made to the  fish and                                                            
game fund in statute.   SB 212 is simply for federal  funds that are                                                            
available  through   the  Environmental  Protection   Agency  (EPA),                                                            
through  the  Governor's  request  in the  federal  budget  and,  he                                                            
believes that  in this fiscal year  the Governor received  money for                                                            
salmon restoration  - a statewide  pot - as  a result of the  Treaty                                                            
negotiations.   Some  of the money  comes from  the National  Marine                                                            
Fisheries Service (NMFS), EPA, and the USFWS.                                                                                   
CHAIRMAN  HALFORD said that  money is subject  to appropriation  and                                                            
would still  have to go  through the appropriation  process.   Other                                                            
departments  have granting authority,  but if you want to  do a fish                                                            
and game grant,  you have to do it  through another agency.   SB 212                                                            
would  allow grants  directly  through  ADF&G; it  still  has to  be                                                            
appropriated  by this legislature  for the purpose of that  grant to                                                            
whoever it's supposed to go to.                                                                                                 
MR. TAYLOR said that is correct.                                                                                                
SENATOR MACKIE  asked if that was  a result of the narrowing  of the                                                            
CHAIRMAN HALFORD  said that's in the Alaska Constitution.   He asked                                                            
to whom the grants would be made.                                                                                               
MR. TAYLOR responded  that currently, he understands  that ADF&G can                                                            
make  grants  to any  recognized  governmental  entity,  such  as  a                                                            
municipality  or first, second,  or third class  cities.  ADF&G  can                                                            
also  make grants  to nonprofits  or to  private  individuals.   The                                                            
grants ADF&G has  funneled through the USFWS have  been primarily to                                                            
private land owners  that own land adjacent to the  Kenai River.  If                                                            
SB 212 passes and ADF&G  receives the federal funds, it would expand                                                            
the program it  has on the Kenai to places like Chester  Creek, Ship                                                            
Creek, Cottonwood Creek,  Wasilla, and other water bodies in need of                                                            
SENATOR TAYLOR  asked if ADF&G plans  to do restoration work  on the                                                            
Chatanika near Fairbanks.                                                                                                       
MR.  TAYLOR answered  through  the Yukon  Treaty  negotiations,  the                                                            
Yukon  River Board  receives  federal funds  from  Congress for  its                                                            
activities.  Money was  put in the federal FY 00 budget to deal with                                                            
some of  the dams and impoundments  built  years and years  ago that                                                            
blocked  off a lot  of salmon  spawning areas.  ADF&G also  received                                                            
$200,000 in the  federal budget this year for that.   He didn't know                                                            
if that would given as  grants or whether ADF&G would go through the                                                            
contract procurement code process to deal with that.                                                                            
Number 478                                                                                                                      
CHAIRMAN  HALFORD  asked  what ADF&G  would  think  about  including                                                            
language that  says, "The Commissioner may, with the  concurrence of                                                            
the  respective  Boards of  Fisheries  and  Game, make  grants  from                                                            
federal  funds other  than ...."   He  thought that  might create  a                                                            
balanced  approach to  enhancing some  resources  in return for  the                                                            
protection of other resources.                                                                                                  
MR. TAYLOR answered  that during the course of the  year, it takes a                                                            
while to  figure out  which projects  are going  to occur and  which                                                            
aren't.   There  were over  160 different  projects  on Kenai  River                                                            
alone.   He didn't think  ADF&G would mind  some Board oversight  in                                                            
this matter  but the question is how  to do it most efficiently  and                                                            
CHAIRMAN  HALFORD  noted  the  Board  could  give  ADF&G  a  general                                                            
concurrence or a specific concurrence.                                                                                          
SENATOR  MACKIE  asked  if  the  Commissioner  of  ADF&G  would  put                                                            
together a grant proposal,  i.e., for a fisheries habitat project on                                                            
the Kenai,  and submit it  to the Board  of Fisheries for  approval.                                                            
If the  Board blessed  it, it would  then go in  the budget  and the                                                            
legislature would have to approve it.                                                                                           
SENATOR HALFORD  said yes, it would  just get them back on  the same                                                            
sheet of music.                                                                                                                 
MR. TAYLOR  said he thought  that would work.   He pointed  out that                                                            
tomorrow  the  Board of  Fisheries  would  take up  its sustainable                                                             
fisheries policy  and the first criteria  in that policy  is habitat                                                            
Number 223                                                                                                                      
SENATOR GREEN  asked if there could  be a timing problem  in getting                                                            
the concurrence for the  project and whether it would delay anything                                                            
by 12 months.                                                                                                                   
MR. TAYLOR  said  it would  depend on  the approach  that the  Board                                                            
took.   ADF&G plans  its  budget in  September and  it doesn't  take                                                            
effect until  July.  The  legislature approves  it sometime  between                                                            
January  and May.   Board meetings  occur over  that time and  ADF&G                                                            
could give the Board its general approach.                                                                                      
SENATOR  TAYLOR asked  if he had  done any  assessments to  indicate                                                            
whether any  of the habitat enhancement  projects done on  the Kenai                                                            
have had an effect.                                                                                                             
MR. TAYLOR answered that  studies are on-going right now, but people                                                            
doing visual  observations of stream  banks that have been  restored                                                            
have observed  an increase in the  number of salmon fry,  especially                                                            
king salmon, so it appears to have been very successful.                                                                        
SENATOR  TAYLOR asked  if  ADF&G thought  about putting  some  large                                                            
woody debris in that river.   He said it is interesting that pooling                                                            
is taken for granted in  Southeast and yet he has never seen it done                                                            
on the Kenai.                                                                                                                   
MR.  TAYLOR said  ADF&G  looked  at doing  that  to rivers  but  not                                                            
particularly  on the  Kenai.  Large  woody debris  is being  studied                                                            
intensively in  Washington State for some of the salmon  restoration                                                            
projects.  He noted the  Kenai River has some deep pockets of water,                                                            
unlike the  rivers in Washington.   Large woody debris is  a science                                                            
in itself  and  biologists are  finding there  is a  fair amount  of                                                            
difference  in its importance to certain  environments.   Right now,                                                            
ADF&G is  looking at whether  it is important  at all on the  Tanana                                                            
TAPE 00-12, SIDE A                                                                                                              
Number 001                                                                                                                      
CHAIRMAN  HALFORD suggested  amending  line 6 by  adding, "With  the                                                            
concurrence  of the respective Board  of Fisheries or Game,"  before                                                            
the words,  "the Commissioner  may."   There being  no objection  to                                                            
adopting the  amendment, Chairman  Halford noted it was so  ordered.                                                            
SENATOR TAYLOR moved to  adopt the CS.  There were no objections and                                                            
it was so ordered.                                                                                                              
SENATOR  TAYLOR moved  to  pass CSSB  212(RES) from  committee  with                                                            
individual recommendations.   There were no objections and it was so                                                            
CHAIRMAN HALFORD adjourned the meeting at 4:48 p.m.                                                                             

Document Name Date/Time Subjects