Legislature(1999 - 2000)
03/20/2000 03:10 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 258-SET NET SITES/ SHORE FISHERIES DEVELOPMENT
CHAIRMAN HALFORD announced SB 258 to be up for consideration.
MR. RICK THOMPSON, Department of Natural Resources (DNR), said that
the current set net leasing program is a long-standing program that
allows limited entry gill-net permit holders to obtain leases for
their fishing sites. However, it does not require one to fish in
that spot.
MR. THOMPSON explained that a lease gives fishermen control over
the locations where they habitually fish. A lease holder may use
the location for set net fishing to the exclusion of others. In FY
00, the legislature reduced the funding in the program by about
two-thirds and reallocated the program receipts to other programs.
MR. THOMPSON said DNR cannot manage the program as it stands with
the finances left so it is proposing to restructure the program.
The registration system would not result in the customary lease,
but it would give fishermen the right to fish their sites in a
manner similar to the existing lease program. A statute change is
required to implement the registration system. At the present
time, DNR is not accepting any applications for leases and, without
modification to the statute and with the resources DNR has left, it
cannot continue to manage the program as it exists.
CHAIRMAN HALFORD asked how much income was generated from the
program receipts for the existing lease program.
MR. THOMPSON answered that the total income from program receipts
was $360,000 and, prior to FY00, $300,000 of that was allocated to
the program.
CHAIRMAN HALFORD asked if DNR is asking to repeal a program that
was making a $60,000 profit.
MR. THOMPSON explained that DNR lost two-thirds of the resources it
had to run the program. DNR has 1,200 outstanding leases, which
require lease management, and the program cannot be run by one
person. He was asked to come up with a way to continue the
registration program with one person and this is his best shot.
CHAIRMAN HALFORD asked if the registration would cost as much as
the lease program, in terms of what the people pay.
MR. THOMPSON replied that the fee would stay the same.
CHAIRMAN HALFORD asked if the lessees were paying $360,000 to get
$300,000 worth of work in the past and under this bill they will
pay $360,000 to get $50,000 worth of work.
MR. THOMPSON responded the lessees will pay the same amount of
money to get less services from DNR.
CHAIRMAN HALFORD asked where the program receipts went.
MR. THOMPSON replied they were redirected by the legislature and he
isn't sure where they went.
MS. CAROL CARROLL, DNR, explained that DNR received a reduction in
its authority to expend the program receipts and her understanding
is that they are now deposited into the general fund. The program
receipts were not redirected within DNR.
SENATOR MACKIE commented that this might be a Finance Committee
question. He asked if anyone from OMB explained this to the
Finance Committee members so they could give DNR enough program
receipts to manage the program.
Number 1900
MS. CARROLL answered when they went through budget reductions last
year, the subcommittee knew it was redirecting program receipts.
CHAIRMAN HALFORD asked what the difference is between the
registration program and the lease program from the user's
perspective.
MR. THOMPSON explained that users get the exclusive use of the
beach for that site, but applicants have to locate the site and
fill out a form with DNR to register it. That registration
information will be a matter of public record. Applicants have to
provide the coordinates for that location.
CHAIRMAN HALFORD asked what's different and what they get with a
lease that they didn't get with registration.
MS. CARROLL explained that DNR used to adjudicate any controversy
but will no longer do that if the bill passes. Any controversy
will be decided through arbitration, mediation, or the court.
CHAIRMAN HALFORD asked if DNR would accept multiple registrations
for the same site.
MR. THOMPSON answered yes; a system would be set up so that if
someone registers for a site and someone else comes along and
claims it, there's a conflict resolution system the parties can go
through but DNR wouldn't handle it.
CHAIRMAN HALFORD said so he is not guaranteeing a lessee the
exclusive right to use a specific piece of beach.
MR. THOMPSON replied that the lessee has to be able to prove he or
she is the superior fisherman on that site.
SENATOR MACKIE asked who would do the conflict resolution in that
situation.
MR. THOMPSON replied that it would be an arbitrator.
SENATOR MACKIE asked if it would be up to the fisherman who's been
fishing the same site for 20 years to find an arbitrator.
MR. THOMPSON answered if a person has an existing lease, it would
be converted and no one will be able to challenge it. He was
referring to the way it would work for a new site.
CHAIRMAN HALFORD said he thought DNR isn't accepting leases this
year.
MR. THOMPSON responded DNR isn't accepting any leases but if it
switches over to the registration program, the leases will be
allowed to go through the normal cycle. When they expire, they
could convert.
CHAIRMAN HALFORD asked what would happen if a lease expires this
year.
Number 2100
MR. THOMPSON replied they will renew a license that just expired in
the interim to protect people's ability to maintain their
exclusivity on the site.
MR. DAVID RANG, Cook Inlet fisherman of 48 years, said he sees this
as a divestiture of interest. When you put a municipality's
interest ahead of fishermen's, the process of eminent domain should
take care of that. The people at DNR forced a utility outfit to
tempt him to buy out his fishing interests for the season. The
other thing he does not like about SB 258 is that it addresses
several issues to be handled by one claim. He didn't think
registering would work very well for the fishermen and would work
to someone else's advantage. He also asked that this bill be
translated into lay language. He is opposed to SB 258.
MR. MARV EBNET, Bristol Bay set netter, said, "If something ain't
broke, don't fix it, and this ain't broke." There are two things
lessees pay for with the shore lease program - long term security
and conflict resolution without the risk of injury or loss of
income. Take that away, and there will be no incentive for the set
netters to participate in the program and the program will die.
He said there is a history of people dying while trying to protect
set net sites. He also said that GPS isn't accurate enough to nail
down site locations. Everyone out there has already made a
substantial investment in existing survey data. That shouldn't
change; there's nothing wrong with that data.
If this fishery becomes disorderly through violence, the Department
of Fish and Game will shut down the fishery. That will have a
serious impact on fishermen and the State. He is opposed to SB 258
and would like to see this program have dedicated funds similar to
the guide program.
MR. AL BAUMAN, Bristol Bay fisherman, testified that in October,
1992, a letter from Ron Swanson said if the program was not self
supporting, it might be eliminated. Fees were then increased from
$150 to $300. At the time there were four full-time employees,
which accounted for about 90 percent of the just over $200,000 cost
of the program. The program's viability was to be reviewed in
1997. In February of 1998, they received a letter from Cathy
Doogan, Bethel Resource Officer, saying that costs had not
increased so no fee increase was necessary, and that the next
review would be in 2002. At that time, there were three employees;
one was cut due to DNR budget cutting. At present, the program as
he knew it no longer exists. One person is employed part-time on
shore fishery issues.
TAPE 00-11, SIDE B
MR. BAUMAN continued. Under the proposed registration program,
which is partially operating now, no new diagrams are accepted. No
amending diagrams are allowable, conflicts are not resolved, and
public notices have been eliminated. From time to time, it's
necessary to adjust shore fishery diagrams because of shore erosion
or the voluntary elimination of an existing site to increase
"fishability." The ability to change a diagram is essential.
At present, most arguments have already been settled. Public
notice of new lease and lease changes is a tool to avoid conflicts
and is paid for directly by the fishermen. Three hundred dollar
fees are still required. The fee is not the issue; the issue is
that the participant-funded receipt program is accepting funding
and not performing services. They would like to see the section
pertaining to shore fishery leases in SB 258 be stricken and the
former program reinstated. The best way to stop what has become an
annual fight to save the program would be to declare fees from the
shore fishery program as non-general fund monies. It appears that
DNR is using the shore fishery program as a cash cow. Last year,
it had one employee and he can't see how DNR spent $300,000 on this
program.
MR. KIM RICE, Egegik set netter, said he is opposed to SB 258. He
wants to save the program because it brings stability to the
fishery. He said the Governor should have discussed this bill with
them to see what they could do to help before submitting it to the
legislature. The lease program as it exists works fine; changing
it to a yearly lease as opposed to a 10-year lease (as it is now)
will disrupt the fishery and create a Smith and Wesson mentality.
The program was enacted to add stability to the mostly Alaskan
fishery (90 percent). Set netters are paying $360,000 for the
program and he would like to see that money dedicated. That would
end the conflict.
MR. RICE agreed that GPS is not accurate enough to use for set net
location as sites are 300 ft. apart in Bristol Bay. They have
already spent millions on surveyors statewide to locate and
dedicate these sites to their leases. They need the 10 years so
that they can plan their seasons. They are willing to pay the
money for the system as long as they get it.
CHAIRMAN HALFORD asked if the $300 fee is for the 10 year period or
whether it is annual.
MR. RICE replied they pay an annual fee for a 10-year lease.
MR. TOM CHURCH, Prince William Sound set netter, clarified that the
fee is $300 per year per lease site. In his district, they are
entitled to have three lease sites for a total of $900 per year.
He supported the previous shore fishery lease program.
Historically, it has proven to be successful and provided an
efficient, valuable, and stable means of managing that fishery.
The facts show that the annual fees have been increased to the
point where the program provides a surplus to the State. It's been
successful so why fix something if it's not broken.
MR. JIM PAHL, Prince William Sound set netter, said he is opposed
to SB 258. He pays $600 per year for his plots and it cost him
$1,000 last year to have an amendment to it. He is concerned that
something like this could happen without his knowledge.
MR. DAN CHALUP, Kachemak Bay Salmon Co-op, opposed SB 258 for the
reasons already stated. He would like to see the fees dedicated to
the shore lease fisheries program instead of the general fund.
MS. SANDY UMLAUF, President, Ugashik Set Net Association, opposed
SB 258. The old program was self sustaining, offered stability for
shore fishery leases and provided a means for conflict resolution.
There was general satisfaction with the program from the fishermen.
The resulting chaos of abandoning this program might cause the set
net fishermen to abandon the program and lose that state revenue.
Set net sites are frequently hotly contested and very
controversial.
SENATOR TAYLOR asked Ms. Carroll if anyone supports this bill.
MS. CARROLL responded that DNR came forward with this bill because
its budget was cut last year. It is an attempt to handle the
program and still give the people who have a shore fishery lease a
registration program. Right now there is a moratorium on the lease
program because DNR cannot run it the way it used to.
SENATOR TAYLOR said it wasn't actually a budget reduction. He
asked if the money went some place else within DNR.
MS. CARROLL replied that it was a reduction in their authority to
expend program receipts. The money did not go anywhere else. It
was not allocated anywhere else in DNR's budget. It resides in the
general fund if people are still paying; and they are. The people
testifying today are saying that they totally fund this program;
but DNR does not have the authority to spend that money like it did
in previous years.
SENATOR TAYLOR asked if DNR doesn't believe it still has a mission
to provide the same service.
MS. CARROLL replied that DNR cannot provide the same services if it
doesn't have the staff to do that. Statutorily, DNR is required to
do a lease program, but it doesn't have the authority to expend the
money. Without the legislature's permission, it is unable to run
the program like it used to. SB 258 is a fix.
SENATOR TAYLOR asked if the Senate and House Finance Committees
actually cut DNR's budget by $200,000 last year.
MS. CARROLL said that is correct - directly to the shore fishery
program.
SENATOR TAYLOR said DNR should have just asked for program receipt
authority again, which doesn't take a bill. It just takes the
Finance Committee to reinsert it that way.
MS. CARROLL said that DNR recognizes that the State doesn't have
the money it used to and that the legislature is reducing the
overall State budget. DNR has been participating in those budget
cuts.
SENATOR TAYLOR said DNR would be much wiser to discuss this with
the Finance Committees.
Number 1512
MR. KARL KIRCHER, Kenai Peninsula Fishermen's Association,
submitted documents to the committee: an October 29, 1992 letter
from DNR to set netters outlining the need for an increase in the
yearly rental fees for shore fishery leases and an October 5, 1992
letter from DNR detailing how the increased fees would be used to
ensure that the adequate program receipts would cover
administrative costs. AS 38.05.082 gives authority to the director
to administer the program. This program brought a great deal of
stability to the program. They should look closely at the
circumstances surrounding the original cut to the fund.
He agreed with Senator Taylor that this should be dealt with in the
Finance Committee. He thought they should ask DNR if there are
specific areas of the shore lease program that are administratively
or financially problematic. Mr. Kircher said this is a bad bill
but, if it is killed, it would still leave the moratorium in place.
At a minimum, DNR should continue to issue renewals so as not to
harm those whose leases have expired. DNR should be given the
authority to spend the program receipts as they came from the
industry.
MR. BRENT JOHNSON, Vice President, Kenai Peninsula Fishermen's
Association, said he had been surveying shore fishery leases for
many years and he didn't see how this new program would work in
Cook Inlet. In this area, nets are sometimes a mile and a half off
shore. The only time they can possibly be surveyed is at slack
tide when the buoy lines are pulled absolutely tight so you can
locate the anchors which lay at the bottom of the ocean. He didn't
think it could be done with GPS.
MR. ROGER KUCHENBECKER said that Senator Taylor had suggested the
solution to the problem. He said he fished in the Ugashik River
district for 13 years and is opposed to SB 258. The current
program works and has taken 15 years to implement. He said that
"peacefully" was one of the important catch words here. One of his
main concerns would be the GPS location as mentioned by previous
speakers.
CHAIRMAN HALFORD said it is his understanding that the highest
percentage of Alaska resident ownership and the highest percentage
of local area resident ownership of a fishery is in set net sites.
The State shouldn't be dismantling something that works. If DNR
can come back with something that provides the same kind of service
that the existing system provides, it can make its case. Short of
that, this bill isn't destined to be a fast mover.
SENATOR MACKIE said the problem is that DNR isn't going to manage
the lease program any more and it needs to fix the program receipt
question in the budget so that the funds collected for that purpose
can be used for that purpose.
CHAIRMAN HALFORD said this may be one of those cases in which
something happened to the program receipts in the prior year and
because something wasn't done correctly, the program receipts were
reduced further.
SENATOR MACKIE repeated that whatever the cause of the problem is,
the funds collected for that purpose should be allocated to manage
that program.
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