Legislature(2021 - 2022)ADAMS 519
04/13/2021 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB79 | |
| HB80 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 79 | TELECONFERENCED | |
| + | HB 80 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 80
"An Act establishing the sport fishing hatchery
facilities account; establishing the sport fishing
facility surcharge; and providing for an effective
date."
9:23:51 AM
DOUG VINCENT-LANG, COMMISSIONER, DEPARTMENT OF FISH AND
GAME (via teleconference), shared that the governor's bill
was supported by the department and was one of its session
priorities. He read from a prepared statement:
A little background before I begin will add some
needed perspective. In 2005, the legislature approved
a bond measure to construct two sportfish hatcheries,
the William Jack Hernandez hatchery in Anchorage and
the Ruth Barnett hatchery in Fairbanks. I was involved
in the construct and passage of this legislation.
To receive the bond, the Department of Fish and Game
had crafted a repayment plan that was unprecedented. A
surcharge was added to sportfishing licenses, nearly
all of which went directly to the repayment of the
bond, less $500,000, which went to Southeast Alaska
annually for hatchery production since this area was
not serviced by the two bonded hatcheries, yet
fishermen paid the surcharge. No general fund dollars
were used to pay back the bonds. Sport angler dollars
matched by federal DJ funds paid the bill and the
bonds were principally paid for by nonresidents. Let
me repeat this. We built two state-of-the-art
hatcheries using no general fund receipts and the
license fee surcharge used to pay the bonds was
overwhelmingly collected from nonresidents. This
unique plan worked so well that the department paid
this bond back five-years early in calendar year 2020.
As a result, the surcharge, and all associated
statutes sunset on December 31, 2020.
With the loss of the surcharge however, we have
ongoing maintenance obligations with these hatcheries.
Examples include installation of PFAS filters,
installation and start up, testing of a third
production well, and purchase and installation of UV
disinfection units at the Fairbanks hatchery. At the
Anchorage hatchery, examples include evaluation,
design, and construction of a formal concentrated
effluent disposal system, boiler system upgrade and
replacement, oxygen system upgrade and replacement,
and well development.
This legislation would establish a funding source to
ensure that these long-term deferred maintenance costs
are covered. We could pay for this using Fish and Game
Fund money, but this would come at the expense of
other projects as these funds are already fully
allocated. Additionally, upon repayment of the bond,
there was an immediate loss of $500,000 funding impact
to Southeast Alaska from the loss of the surcharge
income, which funds the raising and rearing of over
$1.4 million chinook salmon and hundreds of thousands
of coho smolt at release sites targeted to benefit
sport anglers in Southeast Alaska inside waters.
Losing this level of funding to support existing
enhancement activities will be detrimental to
Southeast Alaska sport anglers and charter operators,
which have already been highly impacted by lack of
out-of-state travelers due to COVID travel
restrictions.
9:26:50 AM
Commissioner Vincent-Lang continued to read from prepared
remarks:
It will also allow us to address deferred maintenance
issues at the Crystal Lake hatchery in Southeast
Alaska, which is state-owned, but operated by PNP
partner. This hatchery is the backbone to the
sportfish hatchery program in Southeast Alaska. To
address these issues, we worked with user groups
across Alaska to propose a new, but reduced surcharge
that would be used to support hatchery maintenance and
support continued nonprofit hatchery operations in
Southeast Alaska without impacting other important
work currently underway and funded by the Fish and
Game Fund.
This legislation reinstates a reduced surcharge to
support hatchery maintenance and nonprofit hatchery
operations in Southeast Alaska. A reduction of what
was being collected by $5.00 across the board. This
leaves residents with a $4.00 surcharge and
nonresidents contributing the lion's share, four or
five times what residents contribute. The proposed
surcharge would be a 60 percent reduction for
residents and an overall 34 percent from the original
surcharge fee.
In your packets you will see a license fee breakdown
for both residents and nonresidents. If this
legislation passes, the department proposes to again
collect the surcharge and deposit it into a separate
subaccount within the Fish and Game Fund to be
accounted for and used only for the state's sportfish
enhancement programs and sportfish facilities and to
continue to support enhancement activities in
Southeast Alaska. Again, recognizing these anglers pay
the surcharge, yet are not serviced by the two
sportfish hatcheries. We would use the generated funds
as match to incoming federal DJ funds, thereby
increasing our purchasing power by 75 percent as
federal DJ funds can be matched 3 to 1.
House Fisheries amended this bill to add an additional
$2.50 surcharge to fund work related to fisheries
management, fisheries research, invasive species
management, and habitat restoration. This language is
broad enough in my opinion to cover improvement of
access for sport fishermen. It also requires separate
accounting of these additionally collected funds. As
you can see from the fact sheet in your packages, the
overall sportfish enhancement programs released nearly
7.2 million fish in nearly 270 locations annually.
That in addition to the 1.4 million that are released
in Southeast Alaska would provide thousands of anglers
with additional fishing opportunities, providing a
large economic boost to Southeast Alaska businesses.
Again, I want to thank you for the opportunity to come
and present this bill. I urge your support for this
important legislation and am willing to answer any
questions you may have. If the committee would like,
Ms. Hanke is prepared to go over a sectional analysis.
Co-Chair Merrick asked to hear from Ms. Hanke.
9:29:25 AM
RACHEL HANKE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND
GAME (via teleconference), reviewed a sectional analysis
(copy on file):
Section 1
Adds new section AS 16.05.130(h) which creates a new
sub-account of the fish and game fund called the sport
fishing enhancement account. This section also
restricts the use of the sub-account to maintenance
and operations of sport fishing hatchery facilities,
sport fishing stock enhancement, fisheries research
and management, invasive species management, and
habitat restoration.
Section 2
Conforming amendment to reference new section.
Section 3
Adds new section AS 16.05.340(l) which establishes the
new sport fishing license surcharge fee schedule.
Section 4
Effective date July 1, 2021.
9:30:41 AM
Representative Carpenter stated his understanding that the
bill would create a new sportfish hatchery fund. He asked
if the department was concerned there could be
constitutional issues associated with the creation of the
fund.
Commissioner Vincent-Lang replied that the department was
not concerned. He elaborated that DFG had the subaccount
established to repay the bonds. He stated that DFG did not
see any constitutional issues with recreating the
subaccount to deal with the hatchery maintenance.
Representative Carpenter asked if the new fund would be
dedicated to sportfish hatchery issues only.
Commissioner Vincent-Lang answered in the affirmative. He
explained that the Fish and Game Fund needed to be used to
benefit the license fee holders. He explained that it was
one of the state's few dedicated funds because it had been
approved by the voters. He relayed that the funds would
only be used to benefit hatcheries providing sportfishing
including the Ruth Barnett and William Jack Hernandez
hatcheries. Additionally, because the state-owned Crystal
Lake hatchery was used for Southeast Alaska, the fund would
be used to pay for its deferred maintenance as well.
Representative Carpenter asked for the department's
perspective on the $2.50 increase included in the
governor's original legislation.
Commissioner Vincent-Lang answered that the department
supported the governor's legislation as written. He stated
he would leave it to the committee and legislature to
decide whether or not to add into the surcharge. He
explained there was a call for additional funding for
things the department could not currently provide such as
invasive species management and other things that
legislators in the House Fisheries Committee saw a need to
provide a funding source for.
Representative Carpenter asked why the funding had not been
rolled into the normal ongoing maintenance. He asked why
the need was being dealt with in a special way.
Commissioner Vincent-Lang replied that DFG could probably
deal with the hatchery maintenance costs with Fish and Game
Fund revenue derived from license fees; however, the
revenues were already spoken for in terms of how Dingle
Johnson funds were matched. He explained that it meant the
department would likely have to cut something else in order
to pay for the maintenance. He relayed that DFG worked with
user groups to try to find a way to deal with the deferred
maintenance costs without asking for undesignated general
funds (UGF). He reported the department had received
general support for establishing a smaller surcharge.
9:33:54 AM
Representative LeBon referred to Section 1 of the bill that
referenced maintenance and operations of sportfishing
hatchery facilities. He understood the need to maintain
investments over time and had no problem with that. He
asked how the money would be used for invasive species
management and habitat restoration.
Commissioner Vincent-Lang answered that the inclusion of
invasive species management and habitat restoration had
been added by the House Fisheries Committee. He believed
the committee had an interest in dealing with invasive
species. He explained there had been a bill in the
committee to fund an invasive species council to look at
the regulatory authorities the department had and may need
to deal with invasive species. He elaborated that the
committee saw HB 80 as an avenue towards providing some
funding short of using UGF. In terms of other work on
associated fisheries management and research, he believed
the committee saw a need to evaluate the impact of stocking
programs on wild stock. He stated it was some of the
fisheries research the funding could be used for. He
thought there was a desire by some legislators to look at
ways of allowing access to stock fisheries through some
type of non-boating access program.
Representative LeBon asked Commissioner Vincent-Lang to
elaborate on the definition of invasive species. He asked
if invasive species were strictly living and breathing or
if there were other examples.
Commissioner Vincent-Lang answered that it was an ongoing
question currently under debate. He elaborated that it had
been relatively easy to define an invasive species as
something that was not indigenous to the area; however,
with climate change, species were moving naturally. He
explained that the department was not concerned about a
species that was not having deleterious effects. In terms
of prioritization, DFG was looking at species moving into
Alaska non-naturally that were having deleterious effects
on species that were important economically or for
subsistence purposes.
Representative LeBon referred to invasive plants in
Interior lakes that were not natural to Alaska. He
explained that the plant was impacting the use of lakes,
including fishing. He asked for comment from the
commissioner.
Commissioner Vincent-Lang answered that Representative
LeBon was referring to Elodea, which was a concern and was
a responsibility DFG shared with the Department of Natural
Resources. He reported the state had several active Elodea
programs, but the departments were struggling with finding
ways to fund the programs into the future. He believed the
House Fisheries Committee saw HB 80 as an opportunity to
provide some funding for the programs.
Representative LeBon asked if a portion of the funds raised
as a result of the bill would be used for invasive species
work.
Commissioner Vincent-Lang answered that the $2.50 surcharge
added by the House Fisheries Committee would go to a
separate subaccount to be used for the specific purposes -
including invasive species management - outlined in an
amendment passed by the committee.
9:37:55 AM
Representative Wool stated his understanding that in the
past there had been a $9.00 surcharge to pay for a bond to
build some hatcheries. He observed that the bond was paid
off, but money was needed to maintain the hatcheries, which
he imagined DFG had calculated when the hatcheries had been
built. He looked at the resident sportfishing category and
observed that at one point the surcharge had been reduced
to $4.00 and increased to $6.50. He remarked that a $2.50
increase had been added by the House Fisheries Committee to
help with invasive species. He asked if his statements were
correct.
Commissioner Vincent-Lang answered that the surcharge had
ended when the bond had been paid off. The current question
facing the department was how to pay for the long-term
deferred maintenance on the 15 to 20-year-old hatcheries.
The department had worked with user groups to identify a
way to reduce the surcharge and have a fund to dip into to
pay for the long-term deferred maintenance. He noted that
the House Fisheries Committee had added an additional $2.50
to deal with other issues.
Representative Wool observed that if another $2.50 were
added [above the $2.50 added by the House Fisheries
Committee] it would mean the residential sportfish
surcharge would be back at $9.00. He noticed that the
nonresident increase was $40 and $4.00 for residents. He
noted that the $2.50 added by the House Fisheries Committee
was applied equally to nonresident and residents. He
believed it was a much larger percentage of residential
sportfishing as opposed to nonresidential. He thought it
seemed disproportionate. He asked for comments from the
commissioner.
Commissioner Vincent-Lang corrected an earlier statement by
Representative Wool. He clarified that the resident
surcharge used to be $9.00. The department had proposed a
new surcharge of $4.00 and $2.50 had been added. He stated
that the surcharge under the legislation was $6.50, not
$9.00. He remarked that it was still a reduction. He
confirmed that the House Fisheries Committee had added the
$2.50 surcharge to all licenses regardless of the residency
type.
Representative Wool understood the surcharge as proposed
was $6.50. He observed that if another $2.50 were added,
the fee would be back up to $9.00. He speculated that since
$2.50 had been added for invasive species, another $2.50
could ostensibly be added for another purpose. He remarked
it appeared that a much larger percentage of the revenue
was from nonresidents. He asked if nonresidents were
consuming more of the hatchery sportfish. He remarked on
Commissioner Vincent-Lang's earlier statement that about 80
percent of licensing revenue came from nonresidents. He
pointed out that nonresidents were charged much more. He
reasoned nonresidents did not account for 80 percent of the
licenses, they were just charged much more. He asked if the
department knew what percentage of a sport fishery was
consumed by instate and out-of-state.
Commissioner Vincent-Lang answered that he could follow up
with the numbers. He relayed that in general terms most
fishery resources were consumed by residents, but
nonresidents paid the largest portion of the contribution
to the Fish and Game Fund.
9:41:39 AM
Representative Carpenter asked how much would be raised by
the $2.50 increase [added by the House Fisheries
Committee].
Commissioner Vincent-Lang replied that he would follow up
with the information.
Representative Carpenter thought it would be interesting to
know what a $1 increase would generate as well.
Commissioner Vincent-Lang replied that the department would
follow up with the numbers.
Representative Josephson highlighted the greater cost
associated with out-of-state nonresident fees shown in
spreadsheets in members' packets [note: one spreadsheet
from DFG labeled "Surcharge Revenue Breakdown," updated
April 4, 2021 (copy on file)]. He thought of HB 79 and
observed that the interconnection appeared to be the
question of whether a larger fee could have been imposed on
freshwater and saltwater guides from out-of-state.
Commissioner Vincent-Lang explained that DFG had tried to
separate the issues. He elaborated that the saltwater
logbook program had been used to collect data from
saltwater charter boat fishing; therefore, DFG tried to
keep the fee associated with the charter boat operators. He
detailed that HB 80 was more general and supported hatchery
programs benefitting residents and nonresidents throughout
the state. He noted there were businesses impacted by the
saltwater charter logbook program. The goal for HB 80 was
to make the surcharge more generally placed across
residents and nonresidents. He relayed that DFG had
followed the structure from the original bond repayment in
terms of what the department could collect from
nonresidents versus residents according to a lawsuit that
provided guidance. He added that most of the burden of the
hatchery long-term maintenance would be placed on
nonresidents.
9:44:19 AM
Representative Josephson had spent a lot of time looking at
the governor's vetoes in the past couple of years. He noted
that DFG had suffered numerous vetoes to commercial
fisheries appropriations, particularly in 2019. He asked if
the surcharges were meant in any way to solve the problem
caused by the vetoes.
Commissioner Vincent-Lang replied in the negative. He
explained that the bill was a way for DFG to look at
funding long-term deferred maintenance, realizing that UGF
funds were tight. The idea was to fund the cost with user
fees, which the department had found to be generally
acceptable when it had spoken to people. In terms of the
logbook program [in HB 79], the department had obligations
under two treaties and was trying its best to seek federal
funds. The department understood that UGF funds were tight,
and it had worked with the industry to find a way to self-
fund the important work. He added that the industry
understood the value of the work because the department had
been able to relax salmon limits in Southeast and halibut
limits in 3A and 2C that brought additional business to
businesses hurt hard by COVID.
HB 80 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick thanked the presenters. She reviewed the
agenda for the afternoon.
Representative Thompson asked Co-Chair Foster about some
clarification on the when the budget committee substitute
(CS) would be released. He wondered about the amendment
timeline and asked if there would be a meeting on Saturday.
Co-Chair Foster replied that the original intent had been
to roll out the CS the previous day and give committee
members two days to write amendments. He did not want to
spring it on anyone. He had planned to take up amendments
later in the week, but it had all changed while trying to
figure out what to do with the American Rescue Plan Act
(ARPA) money. He shared that the Legislative Finance
Division had communicated they could get the committee a
proposal later in the week outlining what the money could
and could not be used for. He was hopeful the CS could be
out the following week. He wanted to give members enough
time to review the CS and have time to write amendments.
Representative Thompson thanked Co-Chair Foster for the
information.
9:48:28 AM
Vice-Chair Ortiz asked about the potential of meeting the
coming Saturday.
Co-Chair Foster answered that he did not have any plans on
meeting the coming Saturday.
Co-Chair Merrick had no plans for meeting the coming
Saturday.
Co-Chair Merrick reviewed the agenda for the afternoon.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 80 Public Testimony as of 041221.pdf |
HFIN 4/13/2021 9:00:00 AM |
HB 80 |