Legislature(1999 - 2000)
03/20/2000 03:10 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 (CS). 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 reads: (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 point. 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 excluded. 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 capability. 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 ordered. 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 perspective. 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 situation. 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 year. 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 year. 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 program. 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 controversial. 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 program. 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 cuts. 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 industry. 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 speakers. 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 bill. 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 restoration. 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 effectively. 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 related. 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 River. 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 ordered. CHAIRMAN HALFORD adjourned the meeting at 4:48 p.m.