Legislature(2005 - 2006)SENATE FINANCE 532
04/13/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SJR14 | |
| SB 158 | |
| SB 147 | |
| SB158 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 16 | TELECONFERENCED | |
| + | SJR 14 | TELECONFERENCED | |
| + | SB 158 | TELECONFERENCED | |
| + | SB 147 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 70 | ||
9:34:26 AM SENATE BILL NO. 147 "An Act providing for a sport fishing facility surcharge on sport fishing licenses; providing for the construction and renovation of state sport fishing facilities and for other projects beneficial to the sport fish resources of the state as a public enterprise; and authorizing the issuance of revenue bonds to finance those projects." This was the first hearing for this bill in the Senate Finance Committee. SENATOR RALPH SEEKINS, sponsor of the bill, testified to the desire to catch fish while sport fishing and the practice of stocking water bodies with fish species for this purpose. Formally, three hatcheries supplied fish for sport fish activities; however, the Clear Hatchery was closed and likely another would close soon. Population has increased in the Interior region, particularly with the expansion of the military bases. Some areas of the State, primarily in Southcentral and Interior Alaska, are facing a crisis in providing the necessary biomass for sport fishing activities. Senator Seekins detailed the process of certain Fairbanks residents to consider options to increase the biomass. The Aurora Energy power plant is situated along the Chena River and discharges heated water into the river. This heat could be captured and utilized for a hatchery. Interested parties began contacting State and federal agencies and US Senator Ted Stevens to request assistance. Senator Stevens secured $10 million for the construction of a new hatchery facility located in Fairbanks, near the power plant. Senator Seekins reported that no statewide plan exists to address sport fishing hatchery needs. The proposed Fairbanks facility would have the capability of meeting statewide needs. Senator Seekins opined that the new facility would be "not cheap, but affordable." Federal funds and receipts from a revenue bond package would be utilized. The bond would be repaid from a "moderate fisheries enhancement fee" added to the price of recreational fishing licenses. The cost of the license would be comparable to that of licenses in other states, especially given the better assurance of a successful catch. He detailed the consideration of the proposed fee amount and stated that $8.50 per license would be adequate to repay the bond. Once the bond is paid, the fee would be eliminated. Senator Seekins stated this proposal should alleviate the current shortages, sustain the need for 20 to 25 years, and be useful in planning for the future. Before a new hatchery could be completed, the biomass would be reduced and short-term impacts would be realized. Senator Seekins cautioned that taking no action would delay the replacement of the biomass. He stressed the intent this program be a "statewide concept". Other efforts to enhance sport fishing in Southeast Alaska are under review. 9:41:56 AM Senator Hoffman questioned the assertion that this is a statewide problem, as shortages were not occurring in Southwestern Alaska and the Bristol Bay area. He asked how this legislation would affect residents of Southwestern Alaska. 9:42:25 AM Senator Seekins replied that residents would have the ability to stock lakes and areas in Southwestern Alaska. He understood this area currently has "world class" fisheries; however, increased demand on the resources would reduce the wild fish stocks. 9:43:06 AM Senator Hoffman asked who would determine the allocation of the new fish. 9:43:17 AM Senator Seekins answered that the Division of Sport Fish in the Department of Fish and Game would administer the program. The Department is "very excited to be able to use enhancement" opportunities. 9:43:39 AM ROB BENTZ, Deputy Director, Division of Sport Fish, Department of Fish and Game, outlined the annual process of updating a five-year stocking plan. This plan details the fish species allocated to certain lakes and rivers. He told of the public process involving local fish and game advisory committees and sport fishing organizations. 9:44:42 AM Senator Hoffman asked if the infrastructure for operation and maintenance of the new facility and this program are in place. If not, he asked whether funds for these efforts are included in this legislation. 9:45:10 AM Senator Seekins responded that funds for infrastructure are not included in this bill. The bonds are intended for construction costs only. He stated that funds for operation and maintenance "are there". He spoke about the current practice in which hatchery fish are flown into areas to be stocked. 9:45:49 AM Senator Hoffman pointed out that this legislation would impose an additional $8.50 charge for all sport fishing licenses in the State. The largest concentration of sport fishing activity occurs in Southcentral Alaska and fishers in that area would contribute the largest share to this endeavor. He wanted to understand what benefit these fishers would receive. 9:46:41 AM Senator Seekins responded that as demand increases and enhancement is needed, supplies would be made available. The majority of the funds would be generated from nonresident licenses, most of which are sold in the Interior, Southcentral and Southeastern Alaska. In some respects, anglers in Southeast may not benefit as much from this bond issue as they would from "some of the other commitments that we've made to be able to help them enhance their fisheries." 9:47:35 AM Senator Hoffman requested a detail of the locations throughout the State in which sport fishing licenses are utilized. This would demonstrate who would be paying the additional fee and the benefits they would receive. 9:48:14 AM Senator Seekins did not have the information. He opined that most Alaskans consider the State as a "statewide organization", although some would receive more benefits than others. 9:48:37 AM Senator Hoffman requested this information. 9:48:47 AM Mr. Bentz did not have a detail of license sales by region. Twenty- five percent of sport fishing licenses are sold in Southeastern Alaska and the majority of the licenses are sold in the Southcentral region. Large areas of Southwestern Alaska are designated as subsistence areas where rod and reel fishing is prohibited. Sport fishing licenses are not required to fish these areas and many area residents do not purchase licenses. Nonresidents would pay most of the fees generated from this enhancement fee. Mr. Bentz continued that this program would benefit areas that currently are not stocked with fish. Approximately 20 percent of the Sport Fish Division spending is done in stocked areas. When the number of fish declines in a stocked area, those anglers begin fishing other areas, i.e. areas with wild stocks. Most wild stocks are either fully allocated or an increased harvest would result in stricter regulations. 9:51:07 AM Senator Hoffman requested information on sport fish license purchases delineated by postal zip code. 9:51:29 AM Mr. Bentz indicated he would provide the information. 9:51:34 AM Co-Chair Wilken asked the percent of sport fish licenses are nonresident licenses. 9:51:54 AM Senator Seekins listed the categories of license purchasers: 115,000 resident sport fishing, which contributes approximately $1 million annually; 44,000 resident sport fishing and hunting; 6,000 sport fishing, hunting and trapping; 4,200 nonresident military, 110,000 nonresident one-day sport fishing, and etc. He cited the fiscal note for additional information. Residents would pay approximately $1.4 million and nonresidents would pay approximately $5.1 million for this surcharge. 9:53:16 AM Senator Bunde recalled research he conducted eight years prior on the statewide distribution of residents who purchase hunting and fishing licenses. He discovered that less than one percent of residents living in unorganized areas purchased licenses. He therefore concluded that this legislation would not likely concern those rural residents. 9:54:11 AM Co-Chair Wilken calculated that nonresident anglers would pay 82 percent of this bond obligation. Senator Seekins affirmed. 9:54:34 AM Senator Stedman surmised the proposed rate structure burden would "fall" on nonresident anglers. Senator Stedman understood that as more visitors fish in certain concentrated areas, such as near Fairbanks, wild stocks would diminish to a point that the area would be closed to fishing until restocking could done. 9:55:35 AM Senator Seekins asserted this is already occurring, noting some areas are limited to catch and release fishing. 9:55:44 AM Senator Stedman expressed concern about the proposed hatchery construction. He surmised that a privately managed nonprofit agency operating a hatchery would be more viable than a State operated system. He asked about an analysis to determine whether reactivation of a "non-utilized" or "under-utilized" hatchery should be done with fish stock shipped to various locations as necessary. 9:56:51 AM Senator Seekins told of a clear distinction between production for sport fisheries and commercial fisheries that involve "turf wars" and different constituencies served. The two should remain separated for targeted markets. 9:58:32 AM Mr. Bentz was not involved in portions of analysis involving underutilized hatcheries. There are major differences between sport fish hatcheries and private nonprofit hatcheries. Sport fisheries hatcheries must retain brood stock to be raised on an annual basis, which is not done in commercial fisheries hatcheries. Each species must have separate waters with separate temperatures, etc. 9:59:52 AM Senator Olson asked the origins of the brood stock for commercial fisheries. 9:59:55 AM Mr. Bentz replied that the brood stock is taken each year from returning salmon. 10:00:05 AM Senator Stedman assumed the Department has contacted hatcheries currently in operation on this matter and that none have expressed interest in participating in this program. 10:00:47 AM Senator Seekins did not consult with existing hatcheries. Central locations were considered to meet the biomass demand. The Department already has control of two sport fisheries hatcheries and a municipal government is "eager" to help provide property for location of a third hatchery facility. 10:01:16 AM Senator Stedman remarked on the prudence of the Finance Committee to secure a cost analysis on this project before tens of millions of dollars are spend. If the need is identified, the project should commence, but not before research confirms this need. 10:01:48 AM Senator Stedman expressed concerns about implementation of this program. He understood efforts to revitalize areas of Fairbanks were planned and that this hatchery would be integrated into those plans. He asked if the proposed facility would be an "industrialized fish growing plant", or an "architectural complex" that would attract visitors. 10:02:58 AM Senator Seekins had heard rumors that the hatchery would be the "kingpin to development". He produced a map [copy on provided] and pointed to the location of the proposed hatchery near Pioneer Park and the Carlson Center. He detailed the municipality mayor's plans for improving and developing this area with better access, condominiums, etc. The primary reason this location was selected was proximity to the Aurora Power Plant. The project has received a commitment from the power company to provide hot water for a minimum of 15 years. Senator Seekins stated the hatchery would have a visitor component as well as an education component for the University of Alaska, which would be constructed with federal funds. The facility is meant to be a functioning building, although somewhat attractive. The proposed hatchery is not the cornerstone to future development of the area, but rather a functioning hatchery with good access. 10:06:30 AM Senator Stedman did not disagree with the concept of integrating tourism with the hatchery, although stressed the greater importance to integrate the hatchery activities with education. He asked for further explanation of the heated water issue, noting that hatcheries located in Southeast Alaska did not change water temperatures. 10:07:30 AM Senator Seekins responded that fish "grow faster" in warm water. 10:07:40 AM Senator Stedman surmised that hot water is therefore necessary for hatchery activities. 10:08:01 AM Senator Seekins indicated the location of the power plant along the Chena River on the aforementioned map. The river water near the power plant does not freeze in the winter, given the BTUs of the water discharged from the plant. The hatchery would utilize the hot water otherwise cycled back into the river, thus alleviating an environmental issue. 10:08:56 AM Senator Stedman assumed the commitment for the supply of hot water was less than an actual guarantee. 10:09:11 AM Senator Seekins replied that Usibelli Coal Mine owns the power plant and has given a 15-year commitment. 10:09:28 AM Senator Stedman commented that, generally speaking, commitments should be tied to the life expectancy of the bonds and debt of projects. 10:09:56 AM Senator Seekins distributed a letter from Aurora Energy, indicating this commitment [copy on file]. 10:10:19 AM BUKI WRIGHT, General Manager, Aurora Energy Company, testified via teleconference from Fairbanks about the process of utilizing water from the Chena River to cool the plant systems. Some of the heat is returned to the river, although the temperature increase is approximately 55 degrees and not significant. This excess heat is not suitable for hot water heating systems, but would be suitable for hatchery operations. The water would be made available to the hatchery "almost free". He clarified that Aurora Energy did not intend to incur the costs of installing, operating or maintaining the pipes. The hatchery would require additional heat for the offices and other public areas, which the company would supply at the usual assessed rate. That expense would be a moderate portion of the total operating costs of the hatchery. Mr. Wright reported that the power plant has been in operation many years and would continue much longer. The company has plans for business expansion. If this legislation is passed and the hatchery is constructed, Aurora Energy intends to enter into a long-term contract to provide the heated water. The minimum term of the contract would be 15 years, although the terms could be longer. 10:14:25 AM Senator Seekins reported this would result in an annual savings of approximately $750,000. 10:14:44 AM Senator Stedman understood that the residents of Fairbanks would continue to require electricity and therefore the power plant would likely continue to operate. Senator Stedman repeated that the Committee should undertake an analysis of existing infrastructure to determine how these facilities are inferior to a new facility. 10:15:31 AM Senator Seekins responded that in communicating with Department representatives, he learned that the available infrastructure is not adequate to produce the sport fishery stocks. 10:16:15 AM Co-Chair Wilken spoke to the timing of this project. Utilizing the aforementioned map, he told of a major upgrade to a road system near the proposed facility. The intent is to lay the water pipes necessary for the hatchery operation at the time the road is under construction. This digging is planned for the upcoming summer season. Therefore, this legislation should not be delayed. 10:17:36 AM GORDON GARCIA, Department of Fish and Game, addressed the issue of whether existing hatcheries could perform this function. The Department reviewed the conditions of other facilities and determined that the complexities of the different fish species necessary for sport fishing activities require that a specific hatchery be constructed. Commercial fisheries hatcheries produce andronomous fish. However, in dispersing fish across the State, water quality is important. The intent is to construct a "bullet proof" facility to raise a range of fish species for planting in over 400 lakes and rivers. 10:19:32 AM Senator Stedman countered the witness' testimony differs from information he has received from hatchery operators. Senator Stedman wanted to know the architectural elements of the proposed Fairbanks hatchery. He understood the feasibility of installing water pipes at a time when the road is under construction. He did not support re-digging and re-paving of streets. However, the matter is larger than the road construction aspect. 10:20:51 AM Senator Seekins informed that he has invested five years to this project, starting before he became a legislature. He worked with the Department of Fish and Game, the Fairbanks municipality and user groups to develop a plan that did not "overstep" the "peoples' money" to produce biomass. He has never seen a project with greater community support than this. People identify the need, especially with an expanded military presence. Those people spend time enjoying outdoor activities. This proposal is intended to reach the broadest number of people possible in the State with an enhanced fisheries program. The people who harvest the fish would pay for the project. Further delay would ensure the demand would not be met. 10:23:41 AM Senator Hoffman commented he should probably support this legislation because it would limit fishing pressure in rural Alaska. The Anchorage hatchery is expected to cost $45 million and generate approximately $6.4 million in fish, $4 million of that in salmon and the proposed Fairbanks hatchery is expected cost $25 million and produce less than one-third of a million dollars. He questioned the economics. There is nothing "mystical or magical" about hatcheries. They utilize incubators and other equipment. Existing hatcheries should be considered. He requested additional information about retrofitting existing hatcheries versus constructing new facilities. 10:26:32 AM DOUG VINCENT-LANG, Assistant Director, Division of Sport Fish, Department of Fish and Game, testified that hatcheries located in Southeast Alaska could be used for stocking waters in Southeast, but would not be viable for Southcentral and Interior Alaska. Building new facilities in Anchorage and Fairbanks would be most cost effective. 10:27:47 AM Senator Olson asked the field source of the power that would be provided to the Fairbanks facility. 10:27:58 AM Mr. Wright responded that coal from the Usibelli Mine is used to fuel the power plant. 10:28:08 AM Senator Olson asked the impact to the power plant of a natural gas supply provided to the community. Mr. Wright replied that natural gas would likely be used for some uses such as space heat. However, switching from coal to natural gas would not be economical for other power uses in the short term. 10:29:33 AM Senator Olson asked how the hatchery would operate if the hot water were not supplied from the power plant. 10:29:40 AM Senator Seekins responded that boilers would be needed to heat the water. 10:29:50 AM Co-Chair Wilken asserted that "nobody is contemplating taking down Chena five power", Fairbanks' major power source. 10:30:11 AM Mr. Wright affirmed and reported that Aurora Power has a long-term contract with Golden Valley Electric Association and provides heat to almost every building located in downtown Fairbanks. Those buildings have no other heat source method. 10:30:50 AM Senator Olson asked about the ability to air transport fish fry across the State. 10:31:06 AM Senator Seekins had seen it done in roadless areas. 10:31:22 AM Senator Olson asked if successful air transport is possible to locations in Western Alaska. 10:31:39 AM Mr. Garcia replied that the Department has "fish flying down to a science" and that it is possible to transport fish fry over distances. The issue is cost. 10:32:09 AM Mr. Vincent-Lang reiterated that stocking of areas is determined based on a five year stocking plan with a public process. If a need is identified in a certain area, the public has the ability to petition for inclusion in the plan. 10:32:56 AM Senator Olson asked the plan in the event disease was to become rampant in an area, possibly through the introduction of Canadian stocks. 10:33:33 AM Mr. Vincent-Lang responded that the Department could do nothing about fish from Canada introducing diseases. The Department has invasive species policies and efforts would be made to prevent disease from entering the system or stop if from spreading if it did occur. The Department stocking policy dictates that stock fish are disease free and are raised from local areas. For example, fish would not be taken from waters in Southeast Alaska and transferred to Southwestern waters. 10:34:43 AM Senator Bunde shared that he has caught hatchery fish. If this bill were before the Committee and proposed utilizing State general funds to construct the new facilities, he would join in the scrutiny and likely vote against its passage. However, this legislation provides that the program would be user paid. Although all who purchase a sport fishing license in Alaska would contribute, the majority of residents who purchase a license live along the Alaska Railbelt and would be direct beneficiaries. 10:37:29 AM Senator Hoffman emphasized the intent that this program be user paid. While general funds would not be utilized, he could not identify the benefit to Western Alaska residents required to pay the additional charge. He then asked the percentage of hatchery Coho salmon that would be caught by commercial fishers who would not pay this fee. 10:38:34 AM Senator Hoffman contended that salmon from the Anchorage hatchery must go to sea then return to area rivers and streams. He understood that the king salmon would likely be caught by sport fishers, but again asked the percentage of Coho salmon that would be caught in commercial fisheries. 10:39:22 AM Mr. Vincent-Lang responded that hatchery fish are tagged. In past surveys it has been determined that 85 to 90 percent of hatchery salmon are caught by sport fishers, with the remainder caught by commercial fishers. 10:39:57 AM Senator Hoffman concluded that the catchers of 15 percent of the hatchery fish are not paying anything to this program. 10:40:42 AM Senator Bunde clarified he is not necessarily against this bill. 10:41:18 AM Senator Stedman announced intent to review the funding "mechanism" further. He qualified that he does not oppose the concept of hatchery sport fish activities and that part of the program is located in Senate District A, which he represents. Co-Chair Green ordered the bill HELD in Committee.
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