Legislature(1997 - 1998)

04/10/1997 01:15 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 198 - DIVE FISHERY MANAGEMENT ASSN. & ASSESSMNT                          
 CO-CHAIRMAN HUDSON announced the first order of business was House            
 Bill No. 198, "An Act relating to regional dive fishery development           
 associations and to dive fishery management assessments; and                  
 providing for an effective date."  Before the committee was the               
 original version of the bill.  Although a committee substitute had            
 been voted out of the House Special Committee on Fisheries, that              
 version had not been read across the House floor.                             
 Number 0115                                                                   
 KYLE JOHANSEN, Legislative Administrative Assistant to                        
 Representative Bill Williams, read the sponsor statement into the             
 "Southeast Alaska dive fishermen have been attempting for the past            
 decade to establish orderly, consistent and stable fisheries                  
 capable of providing dependable economic opportunity for                      
 themselves, their families and the communities of Southeast.  The             
 urgency to create an economically viable fishery is highlighted by            
 the recent closure of the region's largest employer and the other             
 related negative economic impacts on the economy of Southeast                 
 "Substantial untapped dive fishery resources have been identified             
 through diver and Fish and Game underwater activities for over a              
 decade.  Many of the Southeast communities have placed the                    
 development of the dive fishery as a priority item in economic                
 development documents and locally developed legislative budget                
 priorities.  The dive fishery resources appear to be abundant and             
 diverse throughout the region.  The small sea cucumber and geoduck            
 fisheries in Southeast have a combined annual ex-vessel value of $2           
 million to $2.5 million.                                                      
 "In California, the urchin fishery has ranged in ex-vessel value              
 from $16 million to $39 million annually from 1990 to 1996.                   
 Geoducks range in price from $6/pound live to $3.50/pound                     
 processed.  Alaskan waters contain abundant amounts of these                  
 fishery resources plus many others not currently harvested.  This             
 legislation will encourage the identification and development of              
 these resources.  The potential for future jobs for harvesters,               
 processors and the support industries is considerable.                        
 "The commitment to work together with Fish and Game is evidenced in           
 the red sea urchin fishery.  In 1996, the Alaska Department of Fish           
 and Game, after a test fishery, was unable to open the red sea                
 urchin fishery because of a lack of funding.  Based on positive               
 results in this test fishery and a vision to diversify and develop            
 their local economy, the Ketchikan Gateway Borough provided funding           
 to Fish and Game to conduct bio-assessment surveys needed to open             
 a fishery.                                                                    
 "The Borough continued its involvement by facilitating and                    
 participating in a local task force comprised of Borough personnel,           
 divers, processors and the department.  The resulting plan was for            
 processors to `forward fund' the management costs of the fishery,             
 with agreements to recoup their funding through a 5 cents/pound               
 assessment on the divers.  Thus, in January 1997, a red sea urchin            
 fishery opened in districts 1 through 4 in the Ketchikan and Craig            
 "This temporary fishery opening is based on a one-time source of              
 funding that will expire at the end of this fiscal year, June 30,             
 1997.  In order to continue this fishery and to develop the other             
 dive fishery resources, a stable source of funding is necessary.              
 "The August 1996 red urchin management plan states:  `Developing a            
 long-term program to fund the costs of stock assessment, research             
 and management remains an outstanding issue.  If sufficient funds             
 are not provided to the department each year, the fishery will not            
 open.'  This is the dilemma divers face, and House Bill 198                   
 provides a creative and progressive vehicle to move towards that              
 "House Bill 198 does not mandate but allows the creation of                   
 regional dive fishery development associations for the purpose of             
 developing dive fisheries and creates a working relationship                  
 between the divers and the Department of Fish and Game to develop             
 annual operating plans.  This legislation is permissive, and once             
 a regional association is formed, divers can hold a ballot election           
 of all [interim-use] permit holders to answer two questions:                  
 First, shall we assess ourselves?  And second, at what rate shall             
 we assess ourselves?                                                          
 "If approved by election, divers would be assessed, the state would           
 collect, and the legislature may appropriate the assessment back to           
 ADF&G.  The appropriation will be based on the mutually developed             
 annual operating budget and plan.  Fish and Game would then fund              
 the specific purposes outlined in the legislation for the regional            
 dive fishery development association and the Fish and Game.                   
 "All the appropriate checks and balances are in place, and all the            
 parties are held accountable.  In addition, all other fisheries               
 business taxes are collected and deposited into the general fund.             
 "House Bill 198 is a positive step forward by the private sector to           
 support economic development and diversification without seeking a            
 general fund appropriation.  Time is of the essence.                          
 Representative Williams would appreciate your support of this                 
 legislation for passage this session, and keep the economic                   
 development for Southeast moving forward."                                    
 Number 0505                                                                   
 REPRESENTATIVE BILL WILLIAMS advised that committee packets include           
 letters of support from the City of Craig, City of Wrangell and               
 City and Borough of Sitka, as well as from the Sitka Chamber of               
 Commerce, Wrangell Fisheries Incorporated, Sitka Sound Seafoods,              
 Norquest Seafoods, Incorporated, the Seafood Producers Cooperative            
 and others.                                                                   
 Number 0556                                                                   
 GERON BRUCE, Legislative Liaison, Office of the Commissioner,                 
 Department of Fish and Game (ADF&G), came forward to testify,                 
 noting he had also testified the previous day before the House                
 Special Committee on Fisheries.  He indicated the committee                   
 substitute, voted out of that committee but not read across the               
 House floor, had contained changes requested by the ADF&G.                    
 Number 0601                                                                   
 CO-CHAIRMAN HUDSON advised that the committee needed to adopt as a            
 work draft version 0-LS0415\T, Utermohle, 4/9/97.                             
 Number 0671                                                                   
 REPRESENTATIVE FRED DYSON made a motion to adopt that as a work               
 draft.  There being no objection, 0-LS0415\T, Utermohle, 4/9/97 was           
 before the committee.                                                         
 Number 0695                                                                   
 MR. BRUCE discussed changes made at the ADF&G's request.  The                 
 sponsor had agree to two changes, incorporated in this version, and           
 a third was still under discussion.                                           
 MR. BRUCE referred to page 2, lines 4 through 7.  He said the first           
 change relates to composition of the board of directors of the dive           
 association.  The ADF&G believes its representation should reflect            
 all stakeholders involved in development of the resource, not just            
 harvesters.  The sponsor agrees with this change.                             
 MR. BRUCE referred to page 8, line 7.  He said the second change              
 relates to the annual operating plan.  The earlier version had the            
 dive association responsible for writing the fishery's annual                 
 operating plan, with the ADF&G assisting.  The ADF&G believes                 
 actual management and development of the management plan should be            
 by public officials with no vested interest in the fishery; for               
 good reason, it is done that way in all fisheries.  Under the new             
 version, the ADF&G will develop the plan with cooperation,                    
 assistance and input from the industry.  The sponsor agrees to                
 Number 0871                                                                   
 MR. BRUCE provided general comments on the bill.  The ADF&G is very           
 interested in developing these under-utilized resources.  These               
 resources offer an opportunity not only for economic development              
 but also for Alaska to build a new fisheries model that does not              
 suffer from problems associated with more historic fisheries.  The            
 latter were developed largely by outside interests, not necessarily           
 with a maximum concern for benefits to Alaskans.  This offers an              
 opportunity for Alaska to start over again, at least on these                 
 fisheries, and do it right.                                                   
 MR. BRUCE said questions about the big picture relate to sustained            
 yield, preventing overharvest, preventing boom-and-bust cycles and            
 ensuring maximum benefits to Alaskans and communities.  There is              
 certainly less benefit if the state goes to great efforts to                  
 develop these resources and then most benefits leave the state.               
 MR. BRUCE said unfortunately, the timing of opportunities to                  
 develop these resources coincides with reduced general fund                   
 appropriations to the ADF&G.  To develop a new fishery, the ADF&G             
 must remove money from an existing one.  Hence, the introduction of           
 HB 198.  The sponsor is looking for some way to provide a source of           
 funding for development of new fisheries that does not subtract               
 resources from management of existing fisheries.                              
 Number 1011                                                                   
 MR. BRUCE does not believe, however, that this bill alone will                
 accomplish that.  Program receipts, such as these, are generally              
 considered by the legislature as part of the general fund                     
 appropriation for the department.  If additional program receipt              
 funds flow into the ADF&G's general fund appropriation, funds from            
 elsewhere would be eliminated.  Divers could justifiably claim they           
 expect their fishery to go forward with these funds because they              
 are coming forward to tax themselves.                                         
 MR. BRUCE suggested one way to deal with this issue.  The                     
 designated program receipt bill, introduced by the Governor in both           
 the House and the Senate, establishes designated program receipts             
 as an "other fund" category, rather than a general fund category.             
 If that passes, Mr. Bruce believes the objectives of HB 198 would             
 be achieved.                                                                  
 Number 1122                                                                   
 MR. BRUCE discussed the second concern, which relates to the big              
 picture and the chance to develop Alaska's new fisheries the right            
 way.  The bill is a funding mechanism.  The ADF&G believes                    
 additional issues should be addressed now.  Five years down the               
 road, they do not want to end up with the same structure as they              
 have in some older fisheries from which Alaskans are not receiving            
 maximum benefits.  A number of species with development potential             
 are not currently being developed.  Some are dive resources, some             
 are not.  Mr. Bruce cited octopus as an example.  The ADF&G is                
 looking for a mechanism to address broader public policy issues               
 underlying and guiding development of these new fisheries, which              
 would apply to a variety of species statewide.                                
 MR. BRUCE acknowledged that is not the sponsor's intention.  He               
 said the ADF&G applauds what Representative Williams is trying to             
 do.  Unfortunately, even in early development of the urchin fishery           
 the ADF&G is seeing all-too-familiar characteristics of the older             
 fisheries' development model.  Increasing product is already                  
 leaving the state, which concerns them.                                       
 Number 1247                                                                   
 MR. BRUCE discussed the third change the ADF&G seeks.  They suggest           
 launching a public/private task force or working group to examine             
 policy issues and possible or existing models.  They expect that to           
 take one or two years.  At the end of that time, they want to                 
 revisit this whole issue, including how the funding mechanism is              
 working and how it ties in with the bigger policy issues.  For that           
 reason, they request a sunset on the bill.                                    
 MR. BRUCE said this new approach deserves an opportunity.  However,           
 the ADF&G has concerns about an individual fishery believing they             
 are funding a particular management program, rather than having               
 funds go into the broad base of government and then being part of             
 the legislature's general appropriation to the department.                    
 Although the sense of ownership fishermen may feel over the                   
 management and managers may work all right, it may cause problems.            
 The ADF&G, through the sunset provision, would come back and make             
 sure this serves the public interest and is not causing                       
 inadvertent, undesired consequences.                                          
 MR. BRUCE stated that the ADF&G sees this as an interim funding               
 approach that may become permanent.  Another reason for revisiting            
 the issue is that it may serve as a precedent for other fisheries             
 Alaskans may want to develop.  Furthermore, if it works for new               
 fisheries, people in existing fisheries may also want it.                     
 Number 1462                                                                   
 REPRESENTATIVE WILLIAMS agreed this is a new approach and that                
 other fisheries may be interested in such a concept.  However, he             
 does not support a sunset clause.  If it does not work, the                   
 legislature can change it later.  He asked for input from the                 
 Number 1589                                                                   
 CO-CHAIRMAN HUDSON asked whether there is a sunset on the Northern            
 Southeast Regional Aquaculture Association (NSRAA), for example.              
 MR. BRUCE said no.  He noted, however, that during the hatchery               
 forums, people had felt maybe there should have been.                         
 Number 1608                                                                   
 CO-CHAIRMAN HUDSON advised there is a sunset on the Alaska Seafood            
 Marketing Institute (ASMI) 1 percent salmon marketing tax.  He                
 stated the belief that a small, emerging fishery such as this would           
 receive "enough daylight and hard looks" because it is new and                
 exotic.  He applauded participants in the fishing industry in                 
 general for putting their money up.  He does not take a firm                  
 position that a sunset is necessary.                                          
 Number 1648                                                                   
 REPRESENTATIVE JOE GREEN concurred.  He also agreed that if                   
 something is not working or needs modified, that can be done either           
 through regulation or the legislative process.                                
 Number 1725                                                                   
 REPRESENTATIVE GREEN asked whether Mr. Bruce envisions that some              
 control through bag limits or seasonal limits may be required.                
 MR. BRUCE replied that the fishery is managed on a quota basis,               
 based on inventory and assessment of the resource and what it can             
 maintain as a sustained yield.                                                
 Number 1743                                                                   
 REPRESENTATIVE GREEN asked whether some sea urchins would be                  
 brought to the surface to extract roe and whether that falls under            
 the category of "roe stripping."                                              
 MR. BRUCE said the roe is the edible, marketable part of the                  
 product.  To his knowledge, it is the only part currently sold.               
 Prices quoted earlier were for roe.                                           
 Number 1781                                                                   
 REPRESENTATIVE GREEN asked whether somehow the ADF&G would be able            
 to determine that by extracting roe, the fishery would not be                 
 MR. BRUCE said yes.                                                           
 Number 1788                                                                   
 REPRESENTATIVE GREEN asked whether there are possible alternate               
 methods, such as robot arms or urchin pots, or whether this would             
 always remain a dive fishery.                                                 
 MR. BRUCE said someone testified the previous day about experiments           
 with alternative harvest methods for sea urchins.  The dive method,           
 successful in other parts of the country, has been what the                   
 industry has focused on; Mr. Bruce assumes that is the best way.              
 Number 1824                                                                   
 REPRESENTATIVE GREEN asked whether the ADF&G or the sponsor has               
 checked to see how this would affect other fisheries such as                  
 MR. BRUCE said as part of the ADF&G's assessment and inventory, to            
 some extent it looks at relationships between different species.              
 They do not believe there are detrimental affects on other                    
 resources such as crab as a result of harvesting urchins.                     
 Number 1862                                                                   
 CO-CHAIRMAN HUDSON suggested divers could provide the department              
 more information, from a management perspective, than currently               
 Number 1880                                                                   
 REPRESENTATIVE GREEN asked whether the ADF&G would encourage, if              
 not require, that kind of feedback from divers.                               
 MR. BRUCE replied that he believes that is the principal idea in              
 this cooperative relationship.                                                
 Number 1960                                                                   
 EDWARD T. GRAY testified via teleconference from Sitka.  A diver              
 and member of the Alaska Harvest Divers Association, he deferred to           
 the sponsor statement for the many reasons why he supports the                
 bill.  He had ten years of experience meeting with a string of                
 ADF&G officials in unsuccessful bids to secure funds.  He said the            
 first allocations in Sitka happened around 1989.  Since then, there           
 have been closures and reduced quotas while large quantities of               
 unharvested products have gone unutilized year after year because             
 of inability to secure funds.                                                 
 MR. GRAY said they are committed to the association concept.  It              
 contains the "appropriate checks" to provide security to the                  
 divers.  He has no philosophical preference about who should pay or           
 why.  He is happy with the 3 percent salmon tax, both in what it              
 has done for him and the salmon fleet.  Mr. Gray concluded by                 
 thanking the sponsor and saying he has renewed hope of going                  
 forward because of this bill.                                                 
 Number 2043                                                                   
 LARRY TRANI, President, Alaska Harvest Divers Association,                    
 testified via teleconference from Sitka.  His association,                    
 representing about 50 divers in the area, unanimously supports HB
 198.  He pointed out that for years, divers have requested that               
 ADF&G expand various dive fisheries or open new ones.  The answer             
 has always been that there is not enough money in the ADF&G budget            
 to meet those requests.  Now, the ADF&G is facing budget cuts.                
 Requests will only be met if the industry comes forward with the              
 money.  Although naturally members would prefer that the state pick           
 up the tab to develop fisheries, because that is unlikely to happen           
 in the near future, they urge passage of the committee substitute             
 for HB 198.                                                                   
 Number 2105                                                                   
 GEORGE ELIASON testified via teleconference from Sitka.  A lifelong           
 fisherman, he has been diving 20 to 30 years.  He supports HB 198             
 on behalf of himself, his two sons and the two divers he works                
 with.  It will provide a long-term, economically viable dive                  
 fishery for his region.  He believes these renewable resources will           
 remain unharvested without such a bill, which would be unfortunate            
 for divers, processors, deck hands, consumers and support services.           
 This sounds like a win-win situation, and Southeast Alaska needs              
 the jobs.                                                                     
 Number 2178                                                                   
 JAMES R. DENNIS testified via teleconference from Craig in support            
 of the bill.  Although there is no dive organization there, he                
 believes he can speak for a major portion of the area's divers.               
 While nobody wants to think they are paying more than their share,            
 this is realistic in light of budget cuts.                                    
 Number 2247                                                                   
 RICHARD POLLEN, Plant Manager, Norquest Seafoods, Incorporated,               
 testified via teleconference from Craig, specifying he is also a              
 member of the city council.  He said as a processor in Craig, he              
 fully supports the bill.  Norquest is currently involved in the sea           
 urchin fishery.  Employing 35 people, they contribute $2,500 per              
 day in payroll to the community, providing jobs that would                    
 otherwise not be there.  At any given time, they have five to                 
 twelve divers working for them, each with a deck hand on board.               
 MR. POLLEN, speaking as a city council member, advised that the               
 City of Craig had voted unanimously to contribute start-up money in           
 one way or another.  He said this fishery offers the city revenue             
 in the form of a fish tax, which is sorely needed.                            
 Number 2316                                                                   
 LINDA SLITER testified via teleconference from Ketchikan in                   
 opposition to the bill.  The wife of a diver, she is an equal                 
 partner in the Linda Lou (ph), a dive vessel.  She asked where                
 start-up costs for the association would come from.  The                      
 association will need an office; equipment; travel money; an                  
 executive director, secretary and other employees; and a paid                 
 lobbyist to watch-dog the budget yearly to ensure money collected             
 goes to the dive fisheries.  She asked:  If the proposed                      
 association goes to the state loan fund for an operation's loan,              
 who would pay it back?  She further asked whether divers would                
 start out "in the red" with a loan to repay before any money can be           
 appropriated for management.                                                  
 MS. SLITER said the association sounds like an expensive layer of             
 bureaucracy between divers and the ADF&G.  If the bill passes, an             
 association forms, and an election is held to determine the amount            
 of assessment, she said it would take at least two years before tax           
 proceeds find their way into the ADF&G budget.  She asked who will            
 foot the bill until that tax is a reality.                                    
 MS. SLITER had heard rumors that the proposed association would               
 seek disaster fund money given to Southeast communities by the                
 federal government.  Convincing communities to fund an association            
 whose goals are extremely unclear will be a battle all its own.               
 Once salmon, herring, crab and shrimp fisheries find out about                
 this, participants will demand their fair share of the disaster               
 fund money from their communities.  She asked whether it is the job           
 of communities to fund fisheries programs managed by the ADF&G.               
 MS. SLITER finds it hard to believe a state with no need for a                
 state income tax, and which distributes millions of dollars to                
 residents yearly through permanent fund dividends, cannot come up             
 with $300,000 to fund a multimillion-dollar fishery.  A self-                 
 imposed tax for management of a fishery is precedent-setting.  She            
 asked when participants in other fisheries would be requested to              
 fund management of their fisheries as well.                                   
 MS. SLITER noted that she has worked for the Southern Southeast               
 Regional Aquaculture Association for 18 years.  They are partially            
 funded by a 3 percent tax self-imposed by the fishermen of                    
 Southeast Alaska.                                                             
 TAPE 97-40, SIDE B                                                            
 Number 0006                                                                   
 MS. SLITER concluded by saying the sea urchin fishery is able to              
 become one of the highest revenue-generating industries in Alaska.            
 It would be economically unsound for the state not to fund the                
 fishery once it is established and paying the 3 percent raw fish              
 tax.  She urged delay of HB 198 until all avenues of state funding            
 have been exhausted and all fisheries are being managed equitably.            
 Number 0064                                                                   
 MELINDA WEST testified via teleconference from Ketchikan in                   
 opposition to HB 198.  A harvest diver, she spoke on behalf of                
 herself, her husband and 40 other divers who had signed a petition            
 against the bill.  They believe it is unconstitutional and                    
 discriminatory against one user group.  A tax amounting to 14                 
 percent would be required to manage and enforce the fishery and               
 support the dive association attached to the bill.  Ms. West said             
 dive fisheries will pay a 3 percent raw fish tax next year.  They             
 will therefore pay for management of the fishery twice.  If dive              
 fisheries expand and stabilize, the 3 percent tax would generate              
 more than enough revenue to make the fishery self-sustaining.                 
 Number 0116                                                                   
 MS. WEST suggested modifications in the event the bill passes.                
 First, the "user pay" tax should be across-the-board for all                  
 fisheries.  Second, the cooperative management statement, which               
 "fooled all the divers on this bill to start with," should be put             
 back in.  Third, the ability to use the tax for dive association              
 management should be eliminated; she believes those should be                 
 separate issues.                                                              
 MS. WEST also wants to delete the requirement that divers must have           
 bought and paid for their permits 90 days before being allowed to             
 vote.  Many divers cannot afford permits until the day before they            
 fish, and many are fronted money to do so.  The present scheme                
 would not provide good representation for the vote on the tax.                
 MS. WEST said furthermore, the tax should be dedicated.  She                  
 stated, "We would support this tax on those grounds, because we are           
 not opposed to supporting our fishery.  We are opposed to this bill           
 as it is written."  She specified they do not want to pay a                   
 lobbyist $50,000 per year to get their money back through the                 
 general fund.  "I think this is the biggest flaw of this bill, is             
 that general fund," she added.                                                
 Number 0161                                                                   
 MS. WEST suggested if they pay for management, they have the right            
 to call the shots.  This must be cooperative management, and they             
 would be looking at competitive bids for management, as perhaps               
 someone else could do it for better and cheaper than the ADF&G.               
 MS. WEST concluded by saying no consideration should be given to              
 any unproven method of self-taxation that singles out a certain               
 user group to fund management by the ADF&G.  She referred to the              
 previous day's hearing, where someone had "pointed out the $60                
 million that comes in on the raw fish tax, and only $20 million of            
 it comes back."  She feels this is a bit of mismanagement.                    
 Number 0222                                                                   
 CO-CHAIRMAN HUDSON referred to dedicated funds and said in his                
 experience with the legislature, that is impossible without a                 
 constitutional amendment.  He asked that Ms. West fax her proposed            
 amendments to the committee.                                                  
 Number 0264                                                                   
 STERLING SLITER, President, Alaska Harvest Divers Association,                
 testified via teleconference from Ketchikan.  A member of the sea             
 urchin task force, he has worked with the ADF&G since the inception           
 of this concept.  He said Geron Bruce echoes their concerns                   
 regarding collected taxes going into the general fund.  For this              
 reason, as written, they cannot support the bill.  Not opposed to             
 taxing themselves if necessary, they believe there must be a                  
 mechanism that would allow taxes generated by divers to go back               
 into their industry.                                                          
 Number 0295                                                                   
 CO-CHAIRMAN HUDSON commented that over the years, the legislature             
 has made diligent efforts to ensure that assessments collected from           
 the NSRAA and others go back to appropriate areas; this applies as            
 well to ASMI and to the raw fish tax that generally supports the              
 industry.  He said there is a moral commitment on his part, and he            
 believes also on the part of his colleagues, that if they collect             
 the tax for this particular purpose, they would do their level best           
 to guarantee it goes back to the ADF&G for the management, growth             
 and development of that industry.                                             
 Number 0333                                                                   
 RODNEY LINTON testified via teleconference from Ketchikan.  A                 
 harvest diver, he supports HB 198 but is concerned about changes in           
 the committee substitute, including deletion of cooperative                   
 management terms.  Although supportive of having a way to                     
 supplement state funding for the fishery, he does not believe they            
 should have to fund the whole thing.  He also likes the idea of               
 this mechanism to develop new dive fisheries such as for clams,               
 scallops or octopus.  Mr. Linton wants the tax funds to be                    
 designated for the dive fishery, as in the designated program                 
 receipts bill he has been hearing about.  He asked the number of              
 that bill.                                                                    
 Number 0391                                                                   
 MR. BRUCE said HB 78 and SB 55.                                               
 CO-CHAIRMAN HUDSON agreed program receipts ought to be designated             
 to the extent possible.  He said he wishes to see changes to                  
 differentiate between monies collected generally and those                    
 collected for specific purposes.                                              
 Number 0426                                                                   
 JACK SHAY, Mayor, Ketchikan Gateway Borough, testified via                    
 teleconference.  The previous Monday, the assembly had voted                  
 unanimously to authorize him to send a letter in support of HB 198.           
 In talking with dive harvesters and processors, they had been                 
 impressed with the excellent economic opportunity, which would help           
 in part to rescue the area's economy.  Until the timber industry is           
 healthy again, they look forward to having a healthy dive fishery.            
 MAYOR SHAY advised that the only resistance they had heard was from           
 a few divers who believe they should not be assessed because the              
 ADF&G should do this.  In addition, the Kake Tribal Corporation               
 gave a presentation in Juneau the previous week, citing the fact              
 that processing occurs outside Alaska.  He said, similar to the               
 timber industry, until an enterprise can be guaranteed or be more             
 certain, people would not make a capital investment towards local             
 processing.  He noted that local processors have been processing              
 urchin roe.  However, a certain amount of expertise needs to be               
 built in to enhance the product and make it more cost-effective for           
 foreign markets.                                                              
 MAYOR SHAY said that "the proposals that have been made for                   
 amending the measure seem to be perfectly reasonable; as a matter             
 of fact, I like very much the inclusion of a local government                 
 involvement in the board of directors, and also the other proposal            
 seems to be perfectly acceptable here."  He urged passage of the              
 bill, saying the borough is fully committed to assisting in this              
 new enterprise.                                                               
 Number 0550                                                                   
 PATRICK LAWS testified via teleconference from Ketchikan,                     
 specifying he dives off the vessel Mach-I.  He opposes the bill as            
 currently written.  He cannot believe the state cannot come up with           
 a little money to help fund this fishery.                                     
 Number 0592                                                                   
 RAY CAMPBELL testified via teleconference from Ketchikan, saying he           
 is a harvest diver statewide.  He opposes HB 198.  The previous               
 year at this time, a moratorium had been placed on dive fisheries.            
 He was cut out under the moratorium but qualified as a dungeness              
 diver, in a fishery with three people in it.  Now, there is a bill            
 to tax him to help develop fisheries that do not even include him.            
 He believes that is wrong.  He further believes it is wrong to lump           
 all dive fisheries and try to manage four or five fisheries as one.           
 He suggested if there are problems with the urchin fishery, they              
 should come up with a bill taxing that fishery for itself.                    
 MR. CAMPBELL said he had called the sponsor's office twice in the             
 past month to ask why the dungeness dive fishery was included in              
 this bill.  He noted it was not included in the moratorium bill.              
 REPRESENTATIVE WILLIAMS asked for Mr. Campbell's phone number and             
 said he would contact him.                                                    
 Number 0704                                                                   
 HARLEY ETHELBAH testified via teleconference from Petersburg.  A              
 diver and statewide fisherman, he said this should be looked at as            
 a whole, for other fisheries as well.  He has participated in the             
 geoduck fishery for five years and has been working with the ADF&G            
 to try to expand that.  After five years, it is obvious to him that           
 the ADF&G does not have the money to do the surveys and expand it.            
 He sees HB 198 as a great opportunity for these fisheries.                    
 MR. ETHELBAH believes cooperative management should be included in            
 the bill, as it once was.  Divers could work with the ADF&G in the            
 surveys, as they are trained in looking for geoducks, urchins and             
 so forth.  Referring to the requirement that permit fees be paid              
 before voting, he said, "I think that's great that that's in the              
 bill, because it means that serious divers will be voting, and                
 those not willing to pay their permit fees won't be voting."                  
 Number 0811                                                                   
 STEPHEN LaCROIX, Dive Program, Norquest Seafoods, Incorporated,               
 came forward to testify.  He runs the dive program for Norquest,              
 which has processing plants in Craig, Petersburg and Ketchikan.  In           
 the recent dive fishery, they took one-half million pounds of                 
 urchins, almost 20 percent of the quota.  They have employed 70               
 people full time.  It is a good fit for his company, and it                   
 transforms part-time seasonal workers into full-time employees.  He           
 noted that it requires five people on shore to service one diver in           
 the water.                                                                    
 MR. LaCROIX stated that Norquest supports HB 198 because it puts a            
 secure funding structure in place for them to make investments                
 necessary to compete with established players in the business.  He            
 said so far, they had collected over $23,000 in voluntary                     
 assessments from the divers in this business.  "And we only have              
 about $480 that remains to be collected, in other words, money that           
 was not voluntarily donated," he stated.  "So that shows the kind             
 of support that we've got from the divers that are working for us."           
 Number 0885                                                                   
 GIG DECKER, President, Wrangell Harvest Divers Association, came              
 forward to testify, noting that his association is part of                    
 Southeast Alaska Harvest Divers Association.  Wrangell has had a              
 mill closure, and people are interested in going to work, not only            
 as divers but through attracting processing and all the jobs                  
 associated with it.  He expressed excitement about the bill and               
 said he totally supports it.                                                  
 Number 0943                                                                   
 AARON J. CUMMINS came forward to testify.  A lifelong commercial              
 fisherman from Petersburg, he completely supports the bill.  He               
 believes it is ironic that for the last few years, he has left                
 town, crossing vast resources of undeveloped fisheries to work in             
 the Bering Sea and California.  He would much rather be at home.              
 He believes these fisheries can be expanded.  Right now in                    
 Petersburg there are 25 divers, who often take an additional diver            
 along.  If this fishery could be enhanced to where they earn more             
 per diver, many would gladly buy their own boats.  They could quit            
 working as deck hands for others, opening up new jobs for younger             
 people in the communities.  In addition, more boats would generate            
 additional shipyard work, and so on.  He restated his support.                
 Number 1020                                                                   
 CLAY BEZENEK, President, Southeast Alaska Harvest Divers                      
 Association, came forward to testify.  A Ketchikan resident, he has           
 fished in Alaska 15 years, and 100 percent of his income derives              
 from harvest of "creatures from the sea."  With the exception of              
 one dissenting vote, his association fully supports HB 198.  It               
 provides a reliable funding source for all developing dive                    
 fisheries, as well as a direct link for a cooperative working                 
 relationship with the ADF&G.  He noted that dive fisheries are                
 unique in that the gear used is a human being, not gillnets or                
 hooks.  He believes special consideration should be given to any              
 fishery that is "so human-interactive," and that HB 198 addresses             
 this important issue.                                                         
 MR. BEZENEK advised that they now voluntarily assess themselves for           
 management costs set forth by the ADF&G for the urchin fisheries.             
 This is not new to them.  This bill provides a tried-and-true                 
 assessment vehicle that guarantees a funding source for years to              
 come.  As a commercial salmon fisherman as well, he is completely             
 satisfied with the job the aquaculture association does with                  
 assessment dollars.  He expects to be similarly satisfied when this           
 becomes law.  It will allows businesses, both small and large, to             
 formulate business plans for processing these products.  It will              
 also allow development of new dive fisheries currently identified             
 but not bio-assessed.  He believes HB 198 is important to all                 
 Southeast Alaska towns.                                                       
 Number 1131                                                                   
 CO-CHAIRMAN HUDSON asked if anyone else wished to testify, then               
 closed public testimony.                                                      
 Number 1156                                                                   
 REPRESENTATIVE WILLIAMS advised that he had worked with the ADF&G             
 on the cooperative management language removed from the bill.  In             
 talking with them, he understands the department will come up with            
 a plan but divers will still have a say.  He feels comfortable with           
 CO-CHAIRMAN HUDSON asked Geron Bruce whether that is his                      
 Number 1212                                                                   
 MR. BRUCE replied yes, they are interested in working with people             
 in the dive industry on shaping and developing the fishery.  He               
 added that the ADF&G does this kind of thing routinely.  In pretty            
 much all fisheries, there are working groups and an advisory                  
 committee system.  "We want to work with people affected by fishery           
 management and have the benefit of their knowledge and expertise in           
 shaping management," he concluded.                                            
 Number 1245                                                                   
 REPRESENTATIVE REGGIE JOULE commented that he supports this.  He              
 cautioned, however, that in efforts to try to curtail spending, the           
 legislature should not limit development of areas that need a jump-           
 start for economic development.                                               
 Number 1316                                                                   
 CO-CHAIRMAN SCOTT OGAN said this is a statement of the                        
 legislature's support of people in Southeast Alaska in recognition            
 of mill closures.                                                             
 CO-CHAIRMAN HUDSON acknowledged suggested amendments by testifiers            
 and said obviously the committee could not deal with amendments               
 that were not before them.  He did not intend to hold the bill.               
 However, he asked that proposals be advanced to Representative                
 Williams; if amendments would enhance the bill and maintain its               
 intentions, he suggested the sponsor would not hesitate to offer              
 those on the House floor.                                                     
 REPRESENTATIVE WILLIAMS said either on the floor or the other side.           
 Number 1396                                                                   
 REPRESENTATIVE GREEN made a motion to move the committee                      
 substitute, 0-LS0415\T, Utermohle, 4/9/97, from the committee with            
 accompanying fiscal notes and individual recommendations.  There              
 being no objection, CSHB 198(RES) moved from the House Resources              
 Standing Committee.                                                           
 CO-CHAIRMAN HUDSON turned the gavel over to Co-Chairman Ogan for              
 the next item of business.                                                    

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