Legislature(2011 - 2012)BUTROVICH 205

02/07/2011 03:30 PM RESOURCES

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Heard & Held
Presentation by Bill Sponsor
(public comment at a later date)
Heard & Held
Presentation and Public Comment
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                        February 7, 2011                                                                                        
                           3:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Joe Paskvan, Co-Chair                                                                                                   
Senator Thomas Wagoner, Co-Chair                                                                                                
Senator Bill Wielechowski, Vice Chair                                                                                           
Senator Bert Stedman                                                                                                            
Senator Lesil McGuire                                                                                                           
Senator Hollis French                                                                                                           
Senator Gary Stevens                                                                                                            
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
OTHER LEGISLATORS PRESENT                                                                                                     
Senator Cathy Giessel                                                                                                           
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 24                                                                                                              
"An Act establishing  the Sport Fishing Guide  Services Board and                                                               
licensing requirements for  sport fishing guide-outfitters, sport                                                               
fishing  outfitters, sport  fishing assistant  guides, and  sport                                                               
fishing transporters; making  conforming amendments; allowing the                                                               
Department of  Fish and  Game to  collect information  on guiding                                                               
services; and providing for an effective date."                                                                                 
     - HEARD AND HELD                                                                                                           
SENATE BILL NO. 44                                                                                                              
"An Act relating to the Southeast State Forest; and providing                                                                   
for an effective date."                                                                                                         
     - HEARD AND HELD                                                                                                           
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  24                                                                                                                  
SHORT TITLE: SPORT FISHING GUIDES: BOARD; LICENSES                                                                              
SPONSOR(s): SENATOR(s) MCGUIRE                                                                                                  
01/19/11       (S)       PREFILE RELEASED 1/7/11                                                                                
01/19/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/11       (S)       RES, FIN                                                                                               
02/07/11       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
BILL: SB  44                                                                                                                  
SHORT TITLE: SOUTHEAST STATE FOREST                                                                                             
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
01/19/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/11       (S)       RES, FIN                                                                                               
02/07/11       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
WITNESS REGISTER                                                                                                              
MICHAEL PAWLOWSKI, Staff to Senator McGuire                                                                                     
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Introduced SB 24 on behalf of the sponsor.                                                               
CHRIS MAISCH, State Forester and Director                                                                                       
Division of Forestry                                                                                                            
Department of Natural Resources                                                                                                 
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Supported SB 44.                                                                                         
ACTION NARRATIVE                                                                                                              
3:32:41 PM                                                                                                                    
CO-CHAIR THOMAS WAGONER called the Senate Resources Standing                                                                  
Committee meeting to order at 3:32 p.m. Present at the call to                                                                  
order were Senators, Wielechowski, Stevens, McGuire, French, Co-                                                                
Chair Paskvan and Co-Chair Wagoner.                                                                                             
          SB  24-SPORT FISHING GUIDES: BOARD; LICENSES                                                                      
3:33:40 PM                                                                                                                    
CO-CHAIR WAGONER announced the consideration of SB 24.                                                                          
SENATOR MCGUIRE,  speaking as sponsor  of SB 24, stated  that she                                                               
gets  involved in  contentious fishing  issues because  she is  a                                                               
lifelong  Alaskan and  strong supporter  of the  fishing industry                                                               
and is committed  to preserving the resource  for both commercial                                                               
and sport fishing purposes.                                                                                                     
3:35:10 PM                                                                                                                    
SENATOR STEDMAN joined the committee.                                                                                           
SENATOR MCGUIRE  explained that SB 24  builds on SB 294  that she                                                               
introduced last  year to extend  the licensing program  for sport                                                               
fishing guides into  perpetuity, but the bill was  amended in the                                                               
House to  sunset after just  one year.  Therefore, SB 24  aims to                                                               
continue the program after this  year. It has two components: the                                                               
licensing component to ensure the  competence of licensed guides,                                                               
and the  logbook component to  ensure the collection  of accurate                                                               
data. It is the only data that is collected by the department.                                                                  
3:38:59 PM                                                                                                                    
The  bill  also  transfers  the licensing  requirement  from  the                                                               
Department of Fish and Game  (ADF&G) to a newly established board                                                               
in   the  Department   of   Commerce,   Community  and   Economic                                                               
Development (DCCED).  This idea is  patterned after the  Board of                                                               
Game and intends  to bring representation to the  3,600 guides in                                                               
the state and get them more  involved in the industry. They would                                                               
be the fourth largest group as an industry if SB 24 passes.                                                                     
She explained  that logbook data  is key to managing  the state's                                                               
fisheries and control of it  remains in ADF&G. She also explained                                                               
that because ADF&G doesn't collect  enough fees to cover the cost                                                               
of the  licensing program, it  is subsidized by  other department                                                               
funds.  The  funds  should  be  used  to  manage  fish,  not  the                                                               
industry. So, in  the end, SB 24 is about  putting the regulation                                                               
of guides  as an industry in  the hands of guides,  so that ADF&G                                                               
can focus on managing the  resource rather than the industry. She                                                               
said there are strong views on both sides of this bill.                                                                         
CO-CHAIR  WAGONER said  he would  hold the  bill and  take public                                                               
testimony  on  a  Saturday to  provide  maximum  opportunity  for                                                               
people to testify. He asked for  someone to bring the bill before                                                               
the committee.                                                                                                                  
SENATOR  PASKVAN moved  to bring  SB  24, version  A, before  the                                                               
committee. There were no objections.                                                                                            
3:42:28 PM                                                                                                                    
MICHAEL PAWLOWSKI,  staff to  Senator McGuire,  noted that  SB 24                                                               
came about  as a result of  a 2006-ADF&G task force  that started                                                               
looking  at the  concept  of limited  entry.  In the  intervening                                                               
period, the  existing guide licensing  program was created  by HB                                                               
452 in  2005 has been sunsetted  and then extended on  a one-year                                                               
bases for  two times. The  upcoming lapse  in the program  in the                                                               
existing  guide requirements  provides an  opportunity to  take a                                                               
look at the licensing and regulation of the industry.                                                                           
As  Senator  McGuire   pointed  out  and  as   the  fiscal  notes                                                               
demonstrate, he said, currently  ADF&G is subsidizing the running                                                               
of this logbook and licensing  program by over $200,000 annually,                                                               
because  not  enough fees  are  collected  through the  licensing                                                               
program to cover the cost of running and administering it.                                                                      
3:44:01 PM                                                                                                                    
MR.  POWLAWSKI  said t  has  become  clear  in working  with  the                                                               
department  that the  logbook data  is critical  in managing  the                                                               
state's fisheries. SB 24 keeps  the logbook program in ADF&G, but                                                               
the licensing program  would move to the  Department of Commerce,                                                               
Community  and  Economic   Development  (DCCED)  where  analogous                                                               
boards use  fee-supported services  to support the  structure. He                                                               
said the bill  has errors related to the collection  of fees, but                                                               
he looked  forward to cleaning that  up so the fiscal  notes more                                                               
accurately reflect  the intent.  He walked the  committee through                                                               
the following sectional analysis:                                                                                               
Section 1  states a  purpose for  the bill,  which is  to provide                                                               
stability   for  the   sportfish  industry   by  regulating   the                                                               
activities   of   the   sport    fish   guide,   outfitters   and                                                               
transportation  services. He  noted that  when the  guide license                                                               
was created, several business models  popped up in the state that                                                               
while they provided sport fishing  services to clients, might not                                                               
qualify as  a guide.  Under the  current system  those businesses                                                               
aren't required to  submit logbook data. The reason  the bill has                                                               
the different classifications of licenses  - be it sport fishing,                                                               
guide outfitter, or transporter -  those are intended to meet the                                                               
different business  models that  exist and  get the  logbook data                                                               
into ADF&G's hands so it can be used for management.                                                                            
Section 2 creates  the Sport Fishing Guides  Services Board. This                                                               
is where the rest of the boards are listed.                                                                                     
Section  3 is  the  meat of  the  bill, which  he  said he  would                                                               
address in articles.                                                                                                            
3:46:13 PM                                                                                                                    
Article 1 on  page 2, line 10, is the  creation and membership of                                                               
the board.  It consists  of 9 members  appointed by  the governor                                                               
(as is the condition for  most commercial services boards) with 5                                                               
members  who  are  currently licensed  sport  fishing  guides,  a                                                               
transporter, 2  public members,  and 1 member  from the  Board of                                                               
Fisheries. Language  on page 2,  lines 25-26, is  fairly standard                                                               
for commercial services boards where  terms are staggered and the                                                               
members do not receive compensation  but are entitled to per-diem                                                               
and traveling expenses (page 2, lines 26-27).                                                                                   
Board  Assistance is  the next  section  and it  is important  to                                                               
providing  the   technical  assistance  needed  to   fulfill  its                                                               
regulatory responsibility that the bill charges it with.                                                                        
Sec.08.57.030  on  page 3  addresses  duties  and powers  of  the                                                               
board.  Lines   3-18  are   the  examination   statutes  creating                                                               
examinations that demonstrate first:                                                                                            
(A) a qualifying exam for guides and a certification exam; and                                                                  
(B) relates  to the  unit in  which one  is fishing  or providing                                                               
guide services for.                                                                                                             
MR. PAWLOWSKI  said paragraph (3)  on page  3, lines 22-23,  is a                                                               
departure from the existing statutes.  Under the existing program                                                               
the ADF&G does  not really have the power  to impose disciplinary                                                               
actions  on a  guide through  the licensing  process. This  is an                                                               
important difference  in the commercial services  board concept -                                                               
in that  rather than having  to complain to ADF&G  enforcement or                                                               
the  Better  Business  Bureau,  now the  public  and  the  guides                                                               
themselves would have a disciplinary  body made up of guides that                                                               
they can go  to complain about actions out in  the industry. Then                                                               
those  complaints   could  either  be  dealt   with  through  the                                                               
licensing provisions  or forwarded  on to  the Department  of Law                                                               
for prosecution.                                                                                                                
On page 4,  lines 6-8, the board adopts  regulations that include                                                               
establishing a  code of ethics  for professions regulated  by it.                                                               
This is  another departure from the  existing licensing statutes,                                                               
and  it would  enable the  board to  come up  with good  business                                                               
practices guidelines.                                                                                                           
MR.  PAWLOWSKI  said   language  on  page  4,   lines  13-18,  is                                                               
significantly  controversial  and   will  enable  the  Commercial                                                               
Services Board to  start looking at the  process of establishing,                                                               
for  resource  conservation  purposes,   the  maximum  number  of                                                               
licensees who might  operate within an existing  sport fish guide                                                               
unit  or  in a  concessionaire  program  to achieve  the  maximum                                                               
number. There  is a  lot of public  concern over  this provision,                                                               
and  it  is  different  than existing  statute  under  ADF&G  the                                                               
licensing program.                                                                                                              
3:50:16 PM                                                                                                                    
Article 2  on page 4,  line 19, through page  10, line 5,  is the                                                               
licensing statutes.  The first  on line 27  is the  sport fishing                                                               
guide-outfitter license.  The requirements are fairly  similar to                                                               
what exist in  current statute in terms of CPR  training or first                                                               
aid,  residency,  and  holding  a current  fishing  license.  New                                                               
additions are  on page  5, lines 9-12,  which are  the qualifying                                                               
and the certifying examinations.                                                                                                
MR. PAWLOWSKI  said paragraph  (8) relates  to being  licensed to                                                               
perform the  services of a  sport fishing assistant guide  in the                                                               
state  for at  least  20 days  within the  last  three years  and                                                               
having  received a  favorable recommendation  from  at least  one                                                               
licensed  sport  fishing  guide outfitter.  Part  of  the  bill's                                                               
provisions  is  to  create  a  new  assistant  guide  license  to                                                               
supplement  the existing  guide license  much like  the Big  Game                                                               
Commercial Services  Board uses Big  Game Hunting Guides  and Big                                                               
Game  Assistant Guides  who work  their way  up to  become Master                                                               
Page 6,  line 30, through  page 8, line  1, relates to  the sport                                                               
fishing outfitter  license. This is  a little bit  different than                                                               
the  guide-outfitter. It  is a  person that  may not  be directly                                                               
involved  on the  boat helping  with fishing  itself, but  rather                                                               
providing services helping  people get out into the  field and do                                                               
fishing. In that  that is still a commercial endeavor,  this is a                                                               
new type of  license which would be required  most importantly to                                                               
provide  logbook data  on the  catch  rates of  people using  the                                                               
service to get out and fish.                                                                                                    
Language on page 8, line 2,  is about the sport fishing assistant                                                               
guide license. This  is the position that could  advance to guide                                                               
with the  recommendation of  a master  guide. These  are intended                                                               
for the  people who are  the assistants  to the outfitter  who is                                                               
taking people  out. They  are working  under language  in section                                                               
(c) [page  8, lines  24-26]. This  section is  controversial, and                                                               
time is needed to work with industry on it, Mr. Pawlowski said.                                                                 
3:54:09 PM                                                                                                                    
MR. PAWLOWSKI  continued: page 9,  line 9, through page  10, line                                                               
5, is  the sport fishing  transporter license section.  This goes                                                               
beyond  the outfitter  and to  someone who  is transporting  to a                                                               
permanent  lodge or  cabin or  to  a boat  with permanent  living                                                               
quarters,  but still  being a  commercial relationship  between a                                                               
client and the person providing  the services. This would bring a                                                               
different  class of  guide and  guide-related  services into  the                                                               
logbook and  enforcement programs  to give ADF&G  data to  use in                                                               
managing fisheries.                                                                                                             
3:54:49 PM                                                                                                                    
Section 08.57.150  on page 10,  lines 6-22, provides  the renewal                                                               
process.   Lines   23-31   [on   page   10]   require   financial                                                               
responsibility and  insurance to be  carried by the  licensee for                                                               
sport  fishing guide-outfitters,  sport  fishing outfitters,  and                                                               
sport  fishing   transporters.  The  assistant  guides   are  not                                                               
included in the proof of  responsibility section; the presumption                                                               
being  that   since  they  are   under  the  employ   and  direct                                                               
supervision  of the  guide outfitter,  the guide  outfitter would                                                               
carry  the   appropriate  level  of  insurance.   This  level  of                                                               
insurance is what is required of guides in current statute.                                                                     
3:56:02 PM                                                                                                                    
Page 11, line  6, Article 3, relates to enforcement,  and that is                                                               
a  new  power.   The  board  has  authority   to  impose  certain                                                               
disciplinary sanctions for:                                                                                                     
-violations of  state or federal  statute or  regulation relating                                                               
to  sport  fishing  or  to provisions  of  sport  fishing  guide-                                                               
outfitter,  sport  fishing  outfitter,  sport  fishing  assistant                                                               
guide,   sport  fishing   assistant  guide,   or  sport   fishing                                                               
transportation services;                                                                                                        
-failing to file records or reports required by law;                                                                            
-negligently misrepresenting  or omitting  a material fact  on an                                                               
-breaching an agreement with a client;                                                                                          
-failing  to  comply  with  limitations   or  conditions  of  the                                                               
professional practice of the licensee;                                                                                          
-as well as the ability to:                                                                                                     
 -impose   certain   disciplinary   sanctions,   singly   or   in                                                               
 -permanently revoke a license or suspend a license                                                                             
 -censure or reprimand                                                                                                          
 -impose limitations or conditions                                                                                              
 -impose requirements for remedial professional education                                                                       
 -impose probation                                                                                                              
MR. PAWLOWSKI  said a lot of  these were taken from  the Big Game                                                               
Commercial Services Board.  Again it creates the  ability to have                                                               
a separate line  of enforcement in the community  when people are                                                               
bad operators and to have a  place for the public to complain to.                                                               
On page 12, line 2, the civil  fine that can be levied under this                                                               
section  cannot exceed  $5,000, which  is standard  for a  lot of                                                               
commercial service-type boards.                                                                                                 
3:57:25 PM                                                                                                                    
SENATOR STEVENS asked if  the fine cap is for a  single fine or a                                                               
MR. PAWLOWSKI  said he  would provide an  answer after  he checks                                                               
with Legislative Legal.                                                                                                         
He  continued that  language  on  page 12,  line  24, relates  to                                                               
unlawful acts that have been  defined. When the working group was                                                               
developing the  draft, this  kind of  language related  to things                                                               
that people were concerned about  happening. For example, on page                                                               
12,  lines  25-27  -  to intentionally  obstruct  or  hinder,  or                                                               
attempt to obstruct the lawful  sport fishing engaged by a person                                                               
who is  not a client  of the person  (on a crowded  river someone                                                               
comes in and  pushes someone else out  of the way) -  this is the                                                               
type of  bad behavior the  board would  have the ability  to deal                                                               
with.  Knowingly guiding  or assisting  the  guiding outside  the                                                               
unit  where  the  person  is  licensed is  another  type  of  bad                                                               
behavior on page  13, lines 9-11. He said  drafting related these                                                               
provisions back to specific requirements of licenses.                                                                           
SENATOR WAGONER  said Charlie Swanton,  Director of  the Division                                                               
of Sport  Fish, Alaska Department  of Fish and Game  (ADF&G), was                                                               
on line to answer questions.                                                                                                    
MR.  PAWLOWSKI said  he neglected  to  mention that  on page  13,                                                               
lines 26-27,  a person  presenting themselves  as a  master sport                                                               
fishing guide outfitter without being  one is an unlawful act. He                                                               
explained within the  guide outfitter provision on  page 6, lines                                                               
14-29,  a  special  subset  of the  guide  outfitter  license  is                                                               
created  called  a  master  sport   fishing  guide  license.  The                                                               
important requirements there (on page  6, lines 21-25) are having                                                               
been a sport fishing  guide for 12 of the last  15 years and then                                                               
getting  letters from  10 clients  that would  allow somebody  to                                                               
advertise themselves as  a master guide. This  license carries no                                                               
additional powers  and no  additional responsibilities;  it seems                                                               
to be more  of an advertising concept that was  put into the bill                                                               
as it  came out of  the task force  working group. He  added that                                                               
you cannot represent  yourself as a master guide  unless you have                                                               
actually received the master guide's license.                                                                                   
4:01:19 PM                                                                                                                    
Page   14  is   the  responsibility   section.  It   spreads  the                                                               
responsibility for  violations of one of  the responsibilities of                                                               
those  licenses equally  across the  difference license  classes.                                                               
Page  15, lines  26-31, addresses  license examinations  and fees                                                               
under the  current program in the  ADF&G that are fixed.  This is                                                               
what  has  led  to  the  revenue problem  that  the  fiscal  note                                                               
identifies  and this  language is  a  significant departure  from                                                               
existing  statute.  It would  give  the  Department of  Commerce,                                                               
Community  and Economic  Development  (DCCED) and  the board  the                                                               
responsibility  for adjusting  the fees  based on  the amount  of                                                               
revenue needed  for the program,  so that the program  itself can                                                               
become self sustaining, and so  that the industry being regulated                                                               
will be paying the state for the cost of the program.                                                                           
4:02:26 PM                                                                                                                    
SENATOR WIELECHOWSKI asked  if this would apply  to regular sport                                                               
fish licenses.                                                                                                                  
MR. PAWLOWSKI answered no; this  is particularly for guide, guide                                                               
outfitter,  transporter, and  assistant guide  licenses -  people                                                               
involved in the commercial use of fish.                                                                                         
SENATOR WIELECHOWSKI  referenced the  annual $1.1  million fiscal                                                               
note and asked if they assumed  a gap would occur that would need                                                               
an appropriation.                                                                                                               
MR. PAWLOWSKI  answered under  the DCCED enough  fees have  to be                                                               
collected to pay for  the cost of the programs. So,  on page 1 of                                                               
the fiscal  note, under  "revenues and  funds sources,"  it's all                                                               
"fund  code  1156  receipts supported  services."  There  are  no                                                               
general funds in this program, he stated.                                                                                       
SENATOR  PASKVAN  asked how  many  licenses  will be  issued  for                                                               
calculating the amount of the fee.                                                                                              
MR. PAWLOWSKI  replied about 3,500  licenses within the  state or                                                               
about $300 per license (back of the envelope calculation).                                                                      
SENATOR PASKVAN asked  if there is an intent to  limit the number                                                               
of  licenses  and  would  that  bar  some  people  from  becoming                                                               
assistant guides.                                                                                                               
MR. PAWLOWSKI replied that there  is no intent for limited entry;                                                               
and in  order to get  there, a finding would  have to be  made by                                                               
the Commercial  Services Board. But  they are concerned  if there                                                               
were to  be a limited  area, then there  might be a  problem with                                                               
assistant guides moving up. They are trying to work on language.                                                                
SENATOR  WIELECHOWSKI asked  how  many people  who are  currently                                                               
performing  this type  of  work will  not go  ahead  and get  the                                                               
MR. PAWLOWSKI  replied that  he didn't have  that figure,  but he                                                               
would be happy  to get some analysis of whether  there has been a                                                               
change  in the  number  of guides  on an  annual  basis from  the                                                               
moment  the  guide licensing  program  was  initially created  in                                                               
4:06:10 PM                                                                                                                    
CO-CHAIR WAGONER  suggested he  check the  drop in  sport halibut                                                               
SENATOR STEDMAN remarked that it  appears that there is no tie-in                                                               
in this bill  for situations where one or more  sport fish guides                                                               
are egregious in  their violations while being  directed by lodge                                                               
owners. How was that going to be handled?                                                                                       
4:07:32 PM                                                                                                                    
MR. PAWLOWSKI thanked him for  that suggestion. They may have not                                                               
captured that  concept; the  concept being  that the  lodge owner                                                               
would perhaps  be a  sport guide  outfitter, and  that is  in the                                                               
responsibility section  that links the licenses  back together so                                                               
the  outfitter can  be held  responsible for  what the  assistant                                                               
guide is doing while under their employ.                                                                                        
He went  on to explained that  Article 4 on page  16 contains the                                                               
definitions. The most important  definition is for "compensation"                                                               
on  lines 21-29.  Since licenses  are linked  to providing  sport                                                               
fishing  or   sport  fishing   services  for   compensation,  the                                                               
definition  of  this word  is  very  important. He  is  currently                                                               
reviewing different suggestions for it.                                                                                         
Sections  4, 5,  and 6  are conforming  since such  a substantive                                                               
change is being  done to the licensing system. Section  8 on page                                                               
22, lines  4-8, addresses  sunsets and  repealers. Section  10 is                                                               
fairly  standard language  for transitional  appointments when  a                                                               
board (Sport Fishing  Guide Board) is being created.  You want to                                                               
stagger terms so that members aren't all coming up at once.                                                                     
Section 11 is  accepting applications; and he noted  they need to                                                               
do a better job with the  transition provisions to make it easier                                                               
for existing  guides to transfer  from the existing  framework to                                                               
the  proposed one  in  DCCED,  if this  were  to  pass. There  is                                                               
concern that the  transfer would provide a lot  of opportunity to                                                               
deny a  lot of  people licenses,  and that  is not  the sponsor's                                                               
Sections  12-14   are  effective   dates  related   to  different                                                               
provisions in the bill, and  are part of the transition framework                                                               
they are  trying to do  a better job  of working on.  Those dates                                                               
will change as  they try to figure out how  quickly the DCCED can                                                               
fulfill this mission.                                                                                                           
4:11:47 PM                                                                                                                    
SENATOR STEVENS said he has  serious reservations about the bill.                                                               
He has  received many communications  saying it is not  needed or                                                               
At ease from 4:12 p.m. to 4:14 p.m.                                                                                             
4:14:13 PM                                                                                                                    
CO-CHAIR WAGONER announced he would hold SB 24 in committee.                                                                    
                 SB  44-SOUTHEAST STATE FOREST                                                                              
4:14:28 PM                                                                                                                    
CO-CHAIR WAGONER announced  the consideration of SB  44 and asked                                                               
for a motion to bring the bill before the committee.                                                                            
SENATOR STEDMAN  moved to  bring SB 44  before the  committee for                                                               
discussion purposes. There were no objections.                                                                                  
4:15:34 PM                                                                                                                    
CHRIS MAISCH, State Forester and  Director, Division of Forestry,                                                               
Department of Natural Resources, supported  SB 44. He stated that                                                               
SB  44  is an  effort  to  ensure  that local  timber  processing                                                               
continues  to be  part of  the economy  in Southeast  Alaska. The                                                               
majority of timber in southern  Southeast is on federal land, but                                                               
because federal  timber sales  have declined  dramatically, local                                                               
mills now  depend heavily  on state  timber for  survival. Demand                                                               
for Southeast  timber to supply  wood energy is  also increasing,                                                               
further raising the importance of  securing a timber base in this                                                               
region. For  example, Sealaska  Corporation recently  installed a                                                               
wood pellet boiler at their headquarters in Juneau.                                                                             
He  explained  that  last  year   the  legislature  passed  SCSHB                                                               
162(RES) that established the  25,291-acre Southeast State Forest                                                               
that  will be  managed as  an  integrated unit  and according  to                                                               
state  forest management  plans. SB  44 would  add an  additional                                                               
23,181 acres  of state lands  to the Southeast State  Forest from                                                               
state lands currently available  for timber harvest. The Division                                                               
of  Forestry  would  then  be  able to  manage  48,472  acres  of                                                               
Southeast State  Forest lands for  a long-term timber  supply and                                                               
retain  these lands  in state  ownership for  multiple uses.  The                                                               
2009 forest inventory supports this request.                                                                                    
MR. MAISCH  said that the  Department of Natural  Resources (DNR)                                                               
manages  over 159,000  acres of  uplands  in southern  Southeast.                                                               
Timber management is allowed on  about one-third of this land and                                                               
it is  actively managed to  supply wood to local  processors. The                                                               
remaining  land   is  designated  primarily  for   other  uses  -                                                               
including land  sales, recreation, water resources,  and fish and                                                               
wildlife habitat.  Over 25,000 acres is  legislatively designated                                                               
as state parks, refuges, and public use areas.                                                                                  
Much  of the  state-owned timber  in Southeast  is second  growth                                                               
timber that,  if actively  managed, can  provide more  volume per                                                               
acre  on  shorter  rotations  and can  result  in  improved  deer                                                               
browse. Thinning is a long-term  investment and is only justified                                                               
if the land  will continue to be available  for forest management                                                               
The  proposed 23-parcel  addition  to the  State Forest  includes                                                               
general use  lands totaling approximately 23,100  acres on Prince                                                               
of  Wales,   Tuxekan,  Gravina,  Kosciusko,   Revilla,  Wrangell,                                                               
Suemez, Mitkof,  Kuiu, Dall,  and Zarembo  Islands. Six  of these                                                               
parcels are  adjacent to or  near existing state  forest parcels.                                                               
The  Division of  Forestry worked  with the  Division of  Mining,                                                               
Land, and  Water (DML&W) to  identify and exclude lands  that are                                                               
priorities for the state land disposal program.                                                                                 
Consultation  was also  initiated with  the University  of Alaska                                                               
Office  of  Statewide  Land   Management  and  senior  University                                                               
officials. A  key difference between  a state  forest designation                                                               
and a  transfer of lands  as proposed by previous  legislation is                                                               
the  continued  long-term  public  ownership of  these  lands  as                                                               
opposed to other development uses.                                                                                              
MR.  MAISCH said  the  division also  consulted  with the  Alaska                                                               
Department of Fish and Game  (ADF&G) to ensure there was internal                                                               
alignment on the list of proposed parcels - and there is.                                                                       
Fish habitat and  water quality are key components  of the Forest                                                               
Resources and Practices  Act (FRPA), he said, which  have a suite                                                               
of regulations that would apply  to managements of these parcels.                                                               
There is a  no-cut 100-foot minimum width on  both anadromous and                                                               
high-value  resident fish  streams.  The next  100-300 foot  zone                                                               
allows  timber  harvest  if  it   maintains  important  fish  and                                                               
wildlife habitat. In  addition, area plans also  provide for 300-                                                               
500  foot coastal  buffers  with  additional recommendations  for                                                               
specific parcels.                                                                                                               
When  the  Forest  Management  Plan  was  developed,  Mr.  Maisch                                                               
explained, a  key consideration for  the Neets Bay parcel  was to                                                               
maintain water quality and quantity  for the fish hatchery at the                                                               
head  of the  bay. Dialog  with the  Southern Southeast  Regional                                                               
Aquaculture Association (SSRAA) is ongoing concerning this bill.                                                                
The Southeast State Forest would be  managed as part of the State                                                               
Forest  System   set  forth  in  AS   41.17.200-.230.  Subsection                                                               
41.17.200(a) reads in part:                                                                                                     
     The  primary  purpose  in the  establishment  of  state                                                                    
     forests  is timber  management  that  provides for  the                                                                    
     production,  utilization, and  replenishment of  timber                                                                    
     resources while  allowing for other beneficial  uses of                                                                    
     public land and resources.                                                                                                 
MR. MAISCH said  in addition to timber  management, State Forests                                                               
are  open  to  multiple  uses   including  wildlife  habitat  and                                                               
harvest, mining,  transportation, recreation, and  tourism. State                                                               
Forest  lands would  be managed  consistent  with the  management                                                               
intent  under the  current  Prince of  Wales  Island and  Central                                                               
Southeast  area plans,  which have  both  been recently  updated.                                                               
Changes   in  management   intent   would   require  public   and                                                               
interagency review through adoption  of a state forest management                                                               
plan under AS 41.17.230.                                                                                                        
He  said one  of  the other  demands on  state  land in  southern                                                               
Southeast   is    to   fulfill   land   entitlements    for   new                                                               
municipalities.  To  avoid  conflict with  the  Wrangell  Borough                                                               
entitlement,  the bill  specifies that  the new  Wrangell Borough                                                               
may select  state forest land  from within the  borough boundary.                                                               
This  boundary encompasses  three parcels  in the  existing state                                                               
forest -  Crittenden Creek,  Bradfield Canal  East and  West, and                                                               
four parcels  in the  proposed additions  - the  Eastern Passage,                                                               
Pat Creek, Pat Creek Uplands and Earl West Cove.                                                                                
If  additional municipalities  are incorporated  before June  30,                                                               
2019, land that was vacant,  unappropriated, or unreserved before                                                               
the  state  forest  was  established would  be  included  in  the                                                               
calculation of the municipal entitlement  acreage, but may not be                                                               
selected. So,  there is one  key difference between  the Wrangell                                                               
exception and others:  Wrangell can select from  lands within the                                                               
State  Forest and  others cannot,  but it  wouldn't affect  their                                                               
total calculation for entitlement.                                                                                              
MR. MAISCH said  DNR has briefed many  statewide groups including                                                               
the Board  of Forestry,  Southeast Conference,  local governments                                                               
and  the  diverse groups  participating  in  the Tongass  Futures                                                               
Round  Table process,  and these  discussions  will continue.  To                                                               
date the City of Coffman  Cove, the Resource Development Council,                                                               
the  Alaska Forest  Association, and  the Alaska  Chapter of  the                                                               
Society of American  Foresters have sent letters  of support, and                                                               
the Southeast Conference passed a supporting resolution.                                                                        
4:25:06 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if he foresees additional requests.                                                                  
MR. MAISCH  replied that  he believes this  23,000 acres  will be                                                               
the last  increment, mainly because  this would add-in  the lands                                                               
that have  been identified through  the area planning  process as                                                               
"GUNs" and have forest management intent as their key purpose.                                                                  
SENATOR WIELECHOWSKI  noted that  AS 41.17.210 says  the governor                                                               
"must include  a report and  recommendations that  include, among                                                               
other things, an  estimate of the full cost  of implementation of                                                               
an  operational forest  inventory and  management plan."  He said                                                               
none of  this was  in the legislation  creating the  State Forest                                                               
last year. The Governor's transmittal  letter said that this will                                                               
enable  management  to  "increase  long-term  timber  supply...to                                                               
provide  near-term  jobs  and  pre-commercial  thinning."  So  it                                                               
sounds like  there will  be some  need for  money and  the fiscal                                                               
note doesn't say that.                                                                                                          
MR. MAISCH  replied because of  the area planning  process, these                                                               
lands have been identified for  forest management for many years,                                                               
so the  division has already  been managing these lands  for that                                                               
purpose.  They   updated  the  forest  inventory   in  2009  that                                                               
establishes the  allowable cut for  these lands and  actually had                                                               
to  reduce  it  based  on   better  inventory  information.  That                                                               
particular inventory  was funded  with a CIP  to the  Division of                                                               
Forestry.  The  fiscal  note  is zero,  he  said,  because  their                                                               
ongoing work is  already funded to do  forest management planning                                                               
activities; the division  already has a forest  planner and staff                                                               
that would do  the work. They already have funding  for some pre-                                                               
commercial  thinning   activity  and   for  running   the  timber                                                               
management programs they already have  in place in Southeast. The                                                               
key difference is this bill allows them to do aggressive pre-                                                                   
commercial  thinning on  young growth  stands so  that production                                                               
will be doubled on the same  acreage of land in the future. Right                                                               
now the allowable cut is 8.5 million board feet.                                                                                
4:28:35 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if the plan  is to work on  the young                                                               
growth,  why are  52 percent  of  the selected  acres old  growth                                                               
forest. Will you harvest that?                                                                                                  
MR. MAISCH  answered yes; the  old growth will be  harvested over                                                               
time as part of the allowable calculation.                                                                                      
SENATOR WIELECHOWSKI asked how much  of the old growth is planned                                                               
to be harvested.                                                                                                                
MR. MAISCH answered that some will  depend on the location of the                                                               
stands and  economic conditions.  Their current  8.5-million foot                                                               
allowable cut is managed on a  "decadal" basis. In any given year                                                               
they can be below or above  that 10-year average, but over the 10                                                               
year period  they have to  be at the  same level of  harvest. For                                                               
example, when  USFS sales were  cut drastically a few  years ago,                                                               
he started  a "bridge  timber program"  consisting of  trees that                                                               
hadn't been  cut to the  maximum each year. Klawock's  Viking Saw                                                               
Mill  continued to  operate  on  this basis.  Over  time, a  good                                                               
percentage  of the  old growth  timber will  be harvested  on the                                                               
State Forest land.                                                                                                              
4:30:48 PM                                                                                                                    
SENATOR WIELECHOWSKI  said Hook  Arm is 595  acres, 590  of which                                                               
are old  growth; and Rowan  Bay has 402  acres, 390 of  which are                                                               
old  growth and  12 are  muskeg. It  looks like  that is  all old                                                               
growth that will be harvested.                                                                                                  
MR.  MAISCH replied  yes;  but  they won't  know  what the  final                                                               
harvest  acreage will  be  until a  site-specific  plan is  done.                                                               
Their  planning  process requires  having  sales  on a  five-year                                                               
schedule, which is reviewed by  both the industry and the public.                                                               
Then they  have to write  a forest land use  plan that is  a site                                                               
specific plan  for the  timber sale.  That is  when they  look at                                                               
economics, roading,  and access in  a much more  detailed manner.                                                               
So,  he  didn't know  for  sure  if  the  full acreage  would  be                                                               
harvested of  those two, but  more than likely a  full percentage                                                               
will be.                                                                                                                        
SENATOR WIELECHOWSKI asked  if he knew what mill  this old growth                                                               
timber on  Hook Arm  and Rowan  Bay would be  going to.  Does DNR                                                               
anticipate selling this old growth  only as a negotiated sale for                                                               
local manufacture or  could it be sold to the  highest bidder and                                                               
exported in the round?                                                                                                          
MR.  MAISCH replied  that  more than  likely it  would  go to  an                                                               
exporter because of the location  of the sales. He explained that                                                               
the southern  Southeast timber industry  has two  components; one                                                               
is local  manufacture with  mills both  mid-size and  very small,                                                               
and  the other  is round-log  export. He  explained that  the two                                                               
work together. The export log is  two to three times the value of                                                               
a domestic log.                                                                                                                 
He said  it has long  been the policy of  the State of  Alaska to                                                               
try and  support domestic manufacture. The  state cannot actually                                                               
restrict round log  export or have a  primary-manufacture rule on                                                               
the books (which was  tried in the late 70s and  went all the way                                                               
to  the Supreme  Court resulting  in  a decision  that the  state                                                               
cannot regulate interstate trade).  Instead, policies were put in                                                               
place  that  encourage  high value-added  manufacturing  whenever                                                               
possible. But when  the purchaser purchases these  logs for these                                                               
small businesses, it  helps their cash flow to be  able to market                                                               
the log  to its highest and  best use. So, sometimes  some of the                                                               
logs  they purchase  will be  sold as  round logs  and go  to the                                                               
marketplace which  could be  the US West  Coast, China  or Japan.                                                               
They get  charged for an  export price if  they do that,  but the                                                               
domestic price is  much lower. He said  another Southeast company                                                               
primarily does  round log  export, but they  trade some  of their                                                               
logs to domestic manufacturers, so  "there's very much a give and                                                               
take going on in the log market."                                                                                               
4:34:55 PM                                                                                                                    
CO-CHAIR  PASKVAN  noted the  letter  from  the Southeast  Alaska                                                               
Conservation  Council (SEACC)  expressing concern  with the  bill                                                               
and offering what they think is a more balanced approach.                                                                       
MR. MAISCH responded that he had  seen the letter and is aware of                                                               
most of the  issues it raises. He tried to  address some of those                                                               
in his  testimony. He explained  that the  state is a  very small                                                               
land  owner   in  Southeast  Alaska;  it's   98  percent  federal                                                               
ownership. The federal government has  set aside large amounts of                                                               
land in  wilderness areas,  parks and  other reserves  that allow                                                               
very   little  other   types  of   multiple  uses   for  resource                                                               
development.  The state  is trying  to keep  the timber  industry                                                               
alive in Southeast with a limited amount of resources.                                                                          
CO-CHAIR WAGONER  asked how  many acres  the US  government holds                                                               
title to in Southeast Alaska that is harvestable forest lands.                                                                  
MR. MAISCH replied  the 2009 Tongass Land  Management Plan allows                                                               
commercial development  to take  place on under  1-million acres.                                                               
The  Tongass  is  98  percent   of  southern  Southeast  and  the                                                               
allowable cut  is 260  million feet. The  plan has  three phases;                                                               
the state  is in  phase 1 now,  and that should  allow up  to 100                                                               
million feet  to be  harvested annually. The  feds sold  under 12                                                               
million  feet in  their worst  year. He  remarked that  the state                                                               
sold more than  they did off of  less than 2 percent  of the land                                                               
SENATOR WAGONER  asked how old  most of the second  growth timber                                                               
MR. MAISCH replied it varies, 25-30  years, which is still a ways                                                               
from being mature enough to  harvest. Pre-commercial activity can                                                               
be done by the time timber  reaches 15-20 years old. The rotation                                                               
ages  for the  timber right  now are  100 years  and that  can be                                                               
shortened  to 60  years  on  very good  sites,  but  80 years  is                                                               
probably a more  accurate number to use for second  growth in the                                                               
CO-CHAIR WAGONER asked  if anyone is putting in a  pellet mill in                                                               
MR. MAISCH answered  no; some people have  discussed the concept,                                                               
but the  biggest issue is a  stable timber supply and  until that                                                               
changes,  it's unlikely  anyone  would make  the investment  that                                                               
would need to be made to  build a new wood production facility in                                                               
4:39:27 PM                                                                                                                    
SENATOR  STEDMAN stated  that  in Southeast  it's  also a  demand                                                               
issue,  and  the  transportation  corridor  is  rather  difficult                                                               
because  of the  water  and  mountains. He  asked  Mr. Maisch  to                                                               
explain the allowable cut going into perpetuity.                                                                                
MR. MAISCH replied that currently  the allowable cut is about 8.5                                                               
million  feet. Prior  to the  inventory update,  it was  about 13                                                               
million feet. As  they convert over to a  young growth management                                                               
on these  lands, the volume  will approximately double  or triple                                                               
depending on the site. At some  point in the future the allowable                                                               
cut will be 60 million feet  off the same acreage. That timeframe                                                               
is 30-40  years out, and will  depend on how fast  the old growth                                                               
is converted to young growth.                                                                                                   
SENATOR STEDMAN  recalled that Viking  is about 35  million board                                                               
feet a year.                                                                                                                    
MR.  MAISCH replied  that  Viking Lumber  runs  about 20  million                                                               
board feet  a ship, so  they can run up  to a 3-ship  basis. They                                                               
haven't done  that for  many years because  of supply.  Viking is                                                               
the mill they helped supply bridge timber to.                                                                                   
4:41:04 PM                                                                                                                    
SENATOR STEDMAN said that's the only mill left in Southeast.                                                                    
MR. MAISCH agreed.                                                                                                              
SENATOR STEDMAN  stated in the scheme  of things, this is  a very                                                               
small  land  expansion  and  the  amount of  fiber  that  can  be                                                               
produced off it  is miniscule. And in particular,  if the federal                                                               
forest continues to  be shut down, this amount of  volume off the                                                               
State Forest will keep extremely  small mills running, but that's                                                               
4:42:26 PM                                                                                                                    
MR. MAISCH agreed;  it would be difficult to support  a mill like                                                               
Viking just off of state land.                                                                                                  
SENATOR  STEDMAN asked  him to  expand  on the  impact to  really                                                               
small mills if they decide to enlarge the state forest.                                                                         
4:43:26 PM                                                                                                                    
MR. MAISCH  answered that right  now small mills can  be supplied                                                               
volumes  in various  places in  southern  and northern  Southeast                                                               
Alaska. Some of the small mills  don't need a lot, maybe a couple                                                               
dozen trees. The US Forest Service  actually has a good small log                                                               
program where they  can actually provide small  amounts of volume                                                               
to  small  saw mills,  too.  Some  of  these are  very  specially                                                               
oriented  mills that  use high-grade  spruce or  cedar for  other                                                               
value-added  products like  sound  boards for  pianos and  guitar                                                               
stock.  Small  mills  produce   locally-used  products  that  are                                                               
typically  not exported.  The best  example is  Icy Straits  that                                                               
produces very high-quality  log cabins out of cedar.  The cost of                                                               
transportation is the largest impediment.                                                                                       
4:46:29 PM                                                                                                                    
CO-CHAIR  WAGONER  announced   that  SB  44  would   be  held  in                                                               
committee. There  being no  further business  to come  before the                                                               
committee, Co-Chair Wagoner adjourned the meeting at 4:46 p.m.                                                                  

Document Name Date/Time Subjects
SB 24_Sponsor Statement.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Bill_Version A.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Sectional Analysis Version A.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_ Back-Up_Guide Requirements - Compare Sheet.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Back-Up_Sportfish Program Summary.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Letter of Support_KRSA.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB 24_Letter of Support_Kenai River Professional Guides.pdf SRES 2/7/2011 3:30:00 PM
SB 24
SB44_Hearing Request SRES.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Stevens SESF Transmittal.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Bill_Version A.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Back-Up_Public Briefing by Div of Forestry.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Back-Up_Parcel Maps SESF.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Back-Up_Vicinity Map SE State Forest.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_AFA.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_RDC.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter_SEACC.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_SAF.pdf SRES 2/7/2011 3:30:00 PM
SB 44
SB44_Letter of Support_Coffman Cove.pdf SRES 2/7/2011 3:30:00 PM
SB 44
NEW 2-6-11_SB44_Fiscal Note DNR.pdf SRES 2/7/2011 3:30:00 PM
SB 44
NEW_2-7-2011_SB 24_Back-Up_Leg Research Report Licenses and Occupations.pdf SRES 2/7/2011 3:30:00 PM
SB 24
NEW_2-7-11_SB 24 Fiscal Note_ADF&G.pdf SRES 2/7/2011 3:30:00 PM
SB 24