Legislature(1993 - 1994)
01/29/1993 08:00 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE January 29, 1993 8:00 a.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Bill Hudson, Vice-Chairman Representative Con Bunde Representative Pat Carney Representative John Davies Representative Joe Green Representative Jeannette James Representative Eldon Mulder Representative David Finkelstein MEMBERS ABSENT None OTHER LEGISLATORS PRESENT Representative Cliff Davidson COMMITTEE CALENDAR EO 83: Merging the State Geographic Board and the Historic Sites Advisory Committee into the Alaska Historical Commission in the Department of Natural Resources. MOVED OUT OF COMMITTEE WITH A DO PASS RECOMMENDATION EO 85: Moving the bonding program that serves as security for the collection of wages and payments for raw fish from the Department of Labor to the Department of Revenue. MOVED OUT OF COMMITTEE WITH A DO PASS RECOMMENDATION EO 86: Transferring the functions and duties of the division of fisheries rehabilitation, enhancement and development (FRED) to the Department of Fish and Game. HELD IN COMMITTEE FOR FURTHER CONSIDERATION WITNESS REGISTER Kristie Leaf Office of the Governor P.O. Box 110001 Juneau, Alaska 99811 Phone: 465-3500 Position Statement: Summarized the intent of EO 83 Leo Land Box 122 Haines, Alaska 99827 Phone: 766-2466 Position Statement: Expressed concern over the disposition of Native Alaskan artifacts Donald G. Study, Acting Director Division of Labor Standards and Safety Alaska Department of Labor P.O. Box 20630 Juneau, Alaska 99802-0630 Phone: 465-4855 Position Statement: Explained the transfer of the bonding program Rod Mourant, Assistant Commissioner Alaska Department of Revenue P.O.Box 110400 Juneau, Alaska 99811-0400 Phone: 465-2300 Position Statement: Testified on EO 85 Geron Bruce, Special Assistant II Alaska Department of Fish & Game P.O. Box 25526 Juneau, Alaska 99802 Phone: 465-4100 Position Statement: Testified on EO 86 Jeff Koenings, Director Division of Fisheries Rehabilitation, Enhancement and Development Alaska Department of Fish & Game P.O. Box 25526 Juneau, Alaska 99802 Phone: 465-4100 Position Statement: Explained the Division's oversight functions Representative Cliff Davidson State Capitol, Room 400 Juneau, Alaska 99801-1182 Phone: 465-2487 Position Statement: Asked questions related to EO 86 John McMullen Prince William Sound Aquaculture P.O. Box 1110 Cordova, Alaska 99574 Phone: 424-4334 Position Statement: Testified on the role of the Division of Fisheries Rehabilitation, Enhancement Development Bob Clasby, Acting Director Division of Commercial Fisheries Alaska Department of Fish & Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4210 Position Statement: Testified on EO 86 PREVIOUS ACTION ORDER: EO 83 SHORT TITLE: MERGER OF STATE GEOGRAPHIC BOARD AND HISTORIC SITES ADVISORY COMMITTEE SPONSOR(S): GOVERNOR'S OFFICE TITLE: Merging the State Geographic Board and the Historic Sites Advisory Committee into the Alaska Historical Commission in the Department of Natural Resources. JRN-DATE JRN-PG ACTION 01/11/93 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 (H) STATE AFFAIRS, RESOURCES, FINANCE 01/19/93 (H) STA AT 08:00 AM CAPITOL 102 01/29/93 (H) RES AT 08:00 AM CAPITOL 124 ORDER: EO 85 SHORT TITLE: MOVING THE BONDING PROGRAM RE RAW FISH FROM DOL TO DOR SPONSOR(S): GOVERNOR'S OFFICE TITLE: Moving the bonding program that serves as security for the collection of wages and payments for raw fish from the Department of Labor to the Department of Revenue. JRN-DATE JRN-PG ACTION 01/11/93 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 (H) STATE AFFAIRS, RESOURCES, FINANCE 01/19/93 (H) STA AT 08:00 AM CAPITOL 102 01/29/93 (H) RES AT 08:00 AM CAPITOL 124 ORDER: EO 86 SHORT TITLE: TRANSFER OF FUNCTIONS FROM FRED TO ADF&G SPONSOR(S): GOVERNOR'S OFFICE TITLE: Transferring the functions and duties of the division of fisheries, rehabilitation, enhancement and development (FRED) to the Department of Fish and Game. JRN-DATE JRN-PG ACTION 01/11/93 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 (H) STATE AFFAIRS, RESOURCES, FINANCE 01/19/93 (H) STA AT 08:00 AM CAPITOL 102 01/29/93 (H) RES AT 08:00 AM CAPITOL 124 ACTION NARRATIVE TAPE 93-10, SIDE A Number 000 CHAIRMAN BILL WILLIAMS called the meeting of the House Resources Committee to order at 8:07 a.m. Members present at the call to order were Representatives Williams, Hudson, Bunde, Carney, Davies, Green and James. CHAIRMAN WILLIAMS announced the committee would address three executive orders, and referred to the procedure for adopting or rejecting executive orders, specified under Article III, Section 23 of the Alaska Constitution. He noted legislative action had to be taken by the sixtieth day of the session, or the executive orders automatically become law. The chairman acknowledged Representative David Finkelstein joined the meeting at 8:10 a.m. EO 83: MERGER OF STATE GEOGRAPHIC BOARD AND HISTORIC SITES ADVISORY COMMITTEE CHAIRMAN WILLIAMS announced further that the committee would first consider EO 83. He then introduced the first witness. KRISTIE LEAF, representing the GOVERNOR'S OFFICE, addressed the committee with a summary of the intent of EO 83. She said the consolidation was recommended by a task force and the same duties now met in the separate entities would be maintained. She said the new consolidated commission would have a total membership of nine individuals, reduced from the current 21 among the three separate entities. Ms. Leaf cited increased accessibility and lower administrative costs as justification for the consolidation. REPRESENTATIVE JOE GREEN asked Ms. Leaf why a zero fiscal note had been submitted if any cost savings were anticipated. MS. LEAF responded that the FY 94 budget did not reflect the savings that might be realized, and no figures were available at this time. Number 164 REPRESENTATIVE BILL HUDSON referred to the memorandum in members' packets from the Division of Legal Services (1/18/93, Lauterbach). He asked Ms. Leaf about the possible legal question discussed in paragraph two of the memorandum, regarding the removal of partially exempt employees into classified service by executive order. MS. LEAF told the committee that aspect of EO 83 had not been looked at by the Governor's Office. REPRESENTATIVE HUDSON suggested the next committee of referral address that question. Number 194 REPRESENTATIVE JOHN DAVIES MOVED that the committee records reflect the committee's concern over the potential legal problem in paragraph two of the Lauterbach memo, and cautioned that precedent not be set. Number 218 REPRESENTATIVE CON BUNDE suggested the committee draft a letter reflecting that recommendation. Number 234 CHAIRMAN WILLIAMS asked members if there were any objections to the motion that the committee attach a letter of intent with the executive order noting the committee's concern about partially exempt state employees' status, as identified in the 1/18/93 Lauterbach memo. Hearing no objection, the MOTION PASSED. Number 257 LEO LAND of Haines offered testimony on EO 83. He expressed concern over the disposition of Native Alaskan artifacts as a result of the changes called for in EO 83. Number 330 REPRESENTATIVE JEANNETTE JAMES explained that only the structure of the Historical Commission would change, not the policies of the committees it would encompass. Number 351 REPRESENTATIVE BUNDE pointed out lines seven and eight on page two of EO 83, which referred to the exclusive right of the state to conduct field archaeology on state-owned or controlled land. In response to Mr. Land's concerns, he noted: "Nothing in AS 41.35.010 - 41.35.240 diminishes the cultural rights and responsibilities of persons of aboriginal descent or infringes upon their right of possession and use of those resources that may be considered of historic, prehistoric, or archaeological value." Number 372 REPRESENTATIVE HUDSON made a MOTION to move EO 83 from committee with the letter of intent regarding the Lauterbach memo and adopting the zero fiscal notes. He asked for unanimous consent. EO 85: MOVING THE BONDING PROGRAM RE RAW FISH FROM DOL TO DOR Number 385 CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED. The chairman announced the committee would next hear testimony on EO 85, which related to the transfer from the Department of Labor (DOL) to the Department of Revenue (DOR), of a bonding program for the collection of wages and payment for raw fish. Number 394 DONALD G. STUDY, ACTING DIRECTOR, DIVISION OF LABOR STANDARDS AND SAFETY, DOL, explained the transfer of the bonding program was to make the program's administration more expedient, as the DOR already administered related programs. He said an automated system that handled the program would also be transferred to the DOR. He explained the zero fiscal note did not reflect a savings of $55,000 previously deleted from the DOL's FY 94 budget submission. Number 434 REPRESENTATIVE BUNDE commented the memorandum from Legal Services regarding EO 85 showed substantial changes in the fish bonding program, and he hoped the committee would address that question. Number 444 REPRESENTATIVE HUDSON referred to the same memo, dated January 19, 1993 from George Utermohle to the House Resources Committee. He mentioned a section regarding provisions for adopting regulations on the fish bonding program within the DOR. He felt executive orders were not the best way to effect changes such as this one, and that a bill allowing for provisions for substantive changes might be more effective. Number 465 REPRESENTATIVE BUNDE expressed concern that it would not be wise to leave questions unanswered, allowing for future changes in regulations that were not intended. REPRESENTATIVE JAMES offered her concern that provisions for filing evidence of compliance were not clearly specified in EO 85. She felt that aspect of the bonding program should also have specifically been transferred to the DOR. REPRESENTATIVE JOE GREEN agreed with Representative Hudson's view and suggested the committee could do as they did with EO 83, and attach a letter of intent expressing the concern about evidence of compliance regulations. REPRESENTATIVE BUNDE added it was important to provide for consistency in the state bureaucracy. He agreed with the proposal before the committee to include a letter of intent with EO 85. Number 508 ROD MOURANT, ASSISTANT COMMISSIONER, DOR, testified that the issue of transferring the fish bonding program had been studied in the past, with the conclusion that such a move would make good administrative sense. He said the DOR presently required evidence of compliance in fish bonding for the purposes of potential tax liability. Under EO 85, he explained, the responsibility for the verification of a labor bond would be transferred to the DOR. He said it was the intent of the DOR that regulations be adopted requiring a certificate of evidence of bond to be presented prior to a license being issued. REPRESENTATIVE JAMES supported the transfer and the simplification of the process, but expressed concern that procedural matters not be overlooked. She agreed concerns should be expressed in writing. REPRESENTATIVE HUDSON discussed the powers of the DOR to implement regulations necessary to implement the transfer of the fish bonding program. Noting the Commissioner of the DOR had the authority to adopt such regulation, he said that was sufficient provision. REPRESENTATIVE DAVIES concurred with Representative Hudson. He did not see any substantive change in the duties of the respective commissioners. Number 565 REPRESENTATIVE HUDSON asked Mr. Mourant whether there would be any transfer of functions or positions from the DOL to the DOR when the bonding program was transferred. MR. MOURANT responded that there would not be any dedicated positions or funding transferred with the program. Within the DOR, he said the bonding program would be located in the Income and Excise Audit Division. He added it was the Department's intent to protect fisheries employees and would adopt the necessary regulations to accomplish that. Number 585 REPRESENTATIVE HUDSON made a MOTION to pass EO 85 from the committee. CHAIRMAN WILLIAMS asked if there were any objections to the motion. REPRESENTATIVE DAVIES offered a friendly AMENDMENT to the motion that the committee attach a letter of intent to EO 85 regarding the committee's concern about the bonding procedure and compliance verification. REPRESENTATIVE HUDSON ACCEPTED the friendly AMENDMENT and revised his motion that EO 85 be passed from committee with individual recommendations and including the letter of intent for the next committee of referral. EO 86: TRANSFER OF FUNCTIONS FROM FRED DIVISION TO ADF&G CHAIRMAN WILLIAMS suggested the committee add to the motion the acceptance of the fiscal note. He asked for objections to the motion, and hearing none, the MOTION PASSED. He then presented EO 86 for the committee's attention. TAPE 93-10, Side B Number 000 GERON BRUCE, SPECIAL ASSISTANT II, ALASKA DEPARTMENT OF FISH AND GAME (ADF&G), explained the intention of EO 86 was to place the functions of the Division of Fish Rehabilitation, Enhancement and Development (FRED) into the ADF&G as a whole, eliminating the FRED division. He described the history of the FRED division, and its successful efforts in developing salmon fisheries. He discussed the growing role of non-profit hatcheries in the success of fisheries development in Alaska. The action proposed in EO 86, he said, was in response to a need to streamline government. He added that a savings of $300,000 was already realized in the ADF&G's FY 93 budget, and any further savings had not been identified. MR. BRUCE added the core functions of the FRED division would continue, particularly support of the private sector, limnology, and disease control, among others. Number 106 REPRESENTATIVE DAVIES asked Mr. Bruce what efficiencies would result from implementation of EO 86. MR. BRUCE cited some administrative savings, and noted that some programs were presently operated partially by separate divisions and integration of such programs would be more efficient. In response to Rep. Davies' question regarding the zero fiscal note and where savings would be realized, Mr. Bruce responded that initial savings of $300,000 had already been taken in FY 93. MR. BRUCE said additional savings beyond that initial amount had not yet been identified. Many functions of the FRED division and the Commercial Fisheries Division would be maintained, he added. Number 149 REPRESENTATIVE DAVIES asked Mr. Bruce to identify overlapping functions which EO 86 promised to eliminate. MR. BRUCE answered that, as an example, both the FRED division and the Commercial Fisheries Division had area management biologists specializing in different areas but stationed in the same location. He explained that in such situations, it might be possible to combine those functions in one individual with possibly an assistant, which could result in some savings. Number 174 REPRESENTATIVE DAVIES asked whether the role of the Department in offering technical assistance and oversight to the private sector hatcheries would be diminished or remain essentially the same. MR. BRUCE said that question would best be answered by Mr. Jeff Koenings. Number 190 JEFF KOENINGS, DIRECTOR of the FRED division, explained the oversight functions for conducting the state's private non- profit aquaculture programs. He reported the FRED division had made efforts to strengthen those areas of its services. He reiterated it was best to combine functions that overlapped. The strengthening of protection for both wild and hatchery stocks was a priority of the department that would not be diminished by EO 86, he said. Number 245 REPRESENTATIVE BUNDE expressed surprise that a whole division of state government could be eliminated without saving money. He asked about the status of state employees working in privatized state hatcheries, and whether they would, as a result of EO 86, remain state employees. MR. KOENINGS responded that four facilities were to be transferred to the private sector, and state employees at those facilities might either be employed by the associations taking over the facilities, or be involved in the state employment bumping pools. He said the answers to those questions were not known yet and possible alternatives were being explored. He expressed hope that the private sector might pick up some of the displaced employees affected by the changes. REPRESENTATIVE BUNDE suggested few state employees would be willing to give up the state's benefits package to pursue employment in the private sector. He also voiced concerns that his constituents would be interested in the preservation of sport fishing enhancement. He said he was doubtful that the private sector would pick up that role. Number 280 MR. KOENINGS answered the concerns raised by Rep. Bunde by saying that in the FY 94 budget, sport fish producing facilities located in Anchorage would be transferred to the Division of Sport Fish. Those facilities, he said, were user-pay facilities through federal and ADF&G funding sources and did not rely on general fund money for operation. (Chairman Williams announced for the record that Representative Eldon Mulder joined the meeting at 9:05 a.m.) Number 304 REPRESENTATIVE GREEN commented that although he favored the consolidation, he had concerns about the actual savings that would result. In particular, he asked Mr. Koenings whether the $300,000 saved in the FY 93 budget might be requested again in the FY 94 budget. MR. KOENINGS responded that the department did not anticipate the budget creeping up again, and that the money already saved included reductions in staff. Number 333 REPRESENTATIVE JAMES supported the consolidation, and added the role of fisheries rehabilitation was a very important one for the state. She was concerned that the emphasis on rehabilitation and enhancement would be diminished with the elimination of the FRED division. She questioned the effectiveness of non-profit facilities to fill that role. Number 350 MR. KOENINGS told the committee that the Department would work in partnership with the non-profit hatcheries to develop fish populations, and said the state's abilities to perform its share had been diluted with reductions in funding. He stressed the planning process and management plans in place had given the state a good working relationship with the private sector. Number 372 REPRESENTATIVE JAMES reiterated more savings ought to be realized by the elimination of an entire division than what had already been taken from the budget. Number 378 MR. KOENINGS responded that it had been planned to take that $300,000 cut in anticipation of this consolidation of functions, and that the adjustments being made now should not call for further cuts. He added, though, that new problems arose that had to be addressed by the Department, and there were areas where expansion might be foreseen. He told the committee that by next year there might be more specific numbers available on future savings or funding needs. Number 408 REPRESENTATIVE HUDSON remarked on the diminished responsibilities in meeting the functions of the FRED division, and asked Mr. Koenings to clarify whether those functions would be absorbed into the Commercial Fisheries Division. MR. KOENINGS responded that that was a correct appraisal. He added the process was ongoing and would come to fruition on July 1, 1993. He explained that a combined division would result with the critical functions of both former divisions intact. Number 415 REPRESENTATIVE HUDSON requested the ADF&G provide more specific details about which positions would be eliminated and how others would be assigned in the new scheme of the department. MR. KOENINGS explained that an interim structure was set up where interim deputy directors would handle the responsibilities and functions of both divisions under the new structure. A core planning group, headed by himself, would seek advice from people throughout the department and affected divisions. He said there would be both vertical and horizontal integration of responsibilities to reach the ultimate new structure, which would be recommended to the ADF&G's Commissioner on July 1, 1993. Number 450 REPRESENTATIVE BUNDE asked whether the elimination of the division would accomplish anything other than getting rid of stationery that says the FRED division. He asked Mr. Koenings what his role as Director of the FRED division would be, after July 1, 1993. Number 460 MR. KOENINGS replied that there was a possibility that his own job could be eliminated. Number 474 REPRESENTATIVE CLIFF DAVIDSON asked about the number of employees affected who were state employees in name only, but who actually worked for and were paid by the private, non-profit associations. He pointed to the division's involvement in bottom-fish. Number 484 MR. KOENINGS explained that in the new division, there would be commercial fisheries management and development functions, with an ability to effect management decisions in the bottom-fish area. The savings that might accrue to the department would allow the new division to move in that direction. Currently, there were no resources to meet the needs in that area, he explained. MR. KOENINGS further explained that in the FY 94 budget, the program receipts' authority had been eliminated, so the Department could not take in funds from aquaculture associations. Employees at those facilities, he said, would be operated by the aquaculture associations and not through the transfer of money to the state. Number 510 REPRESENTATIVE DAVIDSON asked what the state would gain from this arrangement other than just cutting state employees out of successful hatcheries and thereby undermining the state's ability to have a close relationship with those hatcheries. Number 520 MR. KOENINGS believed the department's oversight responsibility was carried out whether a facility was operated by a regional or non-profit association. He said what was good for preservation of a state facility was good for the non-profit association as well. He did not foresee the quality of programs being diminished by the proposed plan, and indicated the non-profits might be able to operate the facilities cheaper than the state. REPRESENTATIVE HUDSON questioned the reasons for getting rid of the FRED division's language, and suggested the possibility of shrinking and reorganizing that division. He also expressed concern about keeping technical support for hatcheries. He said he would like to see a plan that was more "fleshed-out." He was also interested in the long- range plans of the Department. Number 570 MR. BRUCE said the commissioner was trying to proceed as Representative Hudson suggested. TAPE 93-11, SIDE A Number 000 MR. BRUCE explained the Commissioner's flexibility was limited as long as the FRED division's duties were established by statute. Executive Order 86, he said, provided that flexibility. He also said the commissioner had been aware of the public and legislative interest in the continuation of the programs located within the FRED division. After soliciting public opinion the commissioner would come back to the legislature with his plan, and essential services would be preserved, he said. Numbder 047 REPRESENTATIVE JAMES questioned the underlying motivation for the action. She said both net results and cost-savings were critical, and the emphasis on the FRED division's services seemed to be getting lost without resulting in any real savings, which should be the bottom-line in such a measure. Number 088 REPRESENTATIVE GREEN agreed the committee needed a clearer idea of the department's plans before taking action on EO 86. MR. KOENINGS presented a chart showing the interim structure that would be in place until July 1, 1993. Number 103 REPRESENTATIVE PAT CARNEY was not convinced the consolidation was a good idea, but said further information could change his mind. REPRESENTATIVE BUNDE inquired into the need to combine the FRED division's functions if a savings had already been realized, especially if the newly reorganized department's first action was to hire new employees. Number 171 JOHN McMULLEN of PRINCE WILLIAM SOUND AQUACULTURE in Cordova, testified to the role of the FRED division. He contrasted the low catches of the 1960's and 1970's with much larger catches in recent years. He cited favorable environmental factors as partly responsible for the growth in catches. Regarding the implementation of changes proposed in EO 86, Mr. McMullen suggested a scenario where certain functions and services of the FRED division might be maintained for user agencies. He recommended the FRED division be realigned in a way that preserved the division's role as an advocate for salmon enhancement. Number 294 REPRESENTATIVE BUNDE asked Mr. McMullen if his move from state employment to the private enterprise was an example of a smooth transition that could be followed by other division employees affected by the change in division status. MR. McMULLEN responded that he had done other things after leaving the FRED division and did not go directly to Prince William Sound Aquaculture Corporation. Number 302 REPRESENTATIVE DAVIES asked Mr. McMullen's position on EO 86. MR. McMULLEN did not argue for the preservation of the entire FRED division, but for those functions which he described as being very important to the success of non- profit hatcheries. Number 379 REPRESENTATIVE HUDSON commented that although the FRED division contributed to building up fish stocks in Alaska, history had shown what could happen. He said the division served a critical function and he wanted more specific information before voting on EO 86. Number 342 REPRESENTATIVE JAMES had a question regarding the cyclical nature of fish populations and the drastic changes in a twenty-year period. Number 355 MR. McMULLEN referred to the resurgence in fish populations in 1979, and cited factors like water temperatures, plankton levels and other environmental influences. REPRESENTATIVE JAMES commented there was an even more acute need now for good fisheries management as we approached a down cycle in fish populations. MR. McMULLEN agreed and added it was important to diversify the salmon industry. Number 392 BOB CLASBY testified on behalf of the DIVISION OF COMMERCIAL FISHERIES. He had not heard objections within the division to the proposed consolidation. He emphasized the cuts taken in the FY 93 budget were the first step in the department's integration. REPRESENTATIVE BUNDE requested the committee also hear from the Division of Sport Fish before taking action on EO 86. ANNOUNCEMENTS Number 430 CHAIRMAN WILLIAMS announced EO 86 would be held over until an unspecified date in early February, and the committee would not meet on Monday, February 1, 1993, but members of the committee were invited to attend a meeting of the Special Committee on Fisheries at 8:30 a.m. in Room 17. He also announced the committee would hold an overview on the Mental Health Lands issue on February 3, 1993, at 8 a.m. ADJOURNMENT Hearing no other business, Chairman Williams adjourned the meeting at 9:50 a.m.
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