Legislature(2005 - 2006)CAPITOL 124

01/23/2006 01:00 PM House RESOURCES


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01:05:57 PM Start
01:12:25 PM Board of Fisheries
01:27:10 PM Commercial Fisheries Entry Commission
02:15:32 PM Department of Natural Resources
02:52:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Confirmation Hearings
-Commercial Fisheries Entry Commission
-Board of Fisheries
-Commissioner, Dept. of Natural Resources
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                        January 23, 2006                                                                                        
                           01:05 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Jay Ramras, Co-Chair                                                                                             
Representative Carl Gatto                                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Harry Crawford                                                                                                   
Representative Mary Kapsner                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Ralph Samuels, Co-Chair  (excused)                                                                               
Representative Jim Elkins (excused)                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING(S)                                                                                                         
                                                                                                                                
Board of Fisheries                                                                                                            
                                                                                                                                
     Jeremiah Campbell - Seward                                                                                                 
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
Chair, Commercial Fisheries Entry Commission                                                                                  
                                                                                                                                
     Bruce Twomley - Juneau                                                                                                     
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
Commissioner, Department of Natural Resources                                                                                 
                                                                                                                                
     Michael Menge - Juneau                                                                                                     
                                                                                                                                
     - CONFIRMATION(S) HELD                                                                                                     
                                                                                                                              
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to report                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JEREMIAH CAMPBELL, Appointee                                                                                                    
to the Board of Fisheries                                                                                                       
Seward, Alaska                                                                                                                  
POSITION STATEMENT: Testified as appointee.                                                                                     
                                                                                                                                
BRUCE TWOMLEY, Appointee                                                                                                        
to the Alaska Commercial Fisheries Entry Commission                                                                             
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified as appointee.                                                                                     
                                                                                                                                
MICHAEL MENGE, Commissioner                                                                                                     
Department of Natural Resources                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified as appointee.                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CO-CHAIR  JAY   RAMRAS  called   the  House   Resources  Standing                                                             
Committee meeting to order at  1:05:57 PM. Representatives Gatto,                                                             
Olson, Seaton, Ramras, Crawford,  LeDoux and Kapsner were present                                                               
at  the call  to order.  Representative Bill  Thomas was  also in                                                               
attendance.  Representative  Elkins  and  Co-Chair  Samuels  were                                                               
excused.                                                                                                                        
                                                                                                                                
^CONFIRMATION HEARING(S)                                                                                                        
                                                                                                                                
^Board of Fisheries                                                                                                           
                                                                                                                                
CO-CHAIR RAMRAS announced that the  first order of business would                                                               
be  to  consider the  appointment  of  Jeremiah Campbell  to  the                                                               
Alaska Board of Fisheries.                                                                                                      
                                                                                                                                
JEREMIAH CAMPBELL, Appointee, Board of  Fisheries, said he owns a                                                               
sportfishing and sightseeing business  and has recently purchased                                                               
a  commercial   fishing  tender  and  plans   to  participate  in                                                               
commercial fisheries in Togiak and  Bristol Bay. He noted that he                                                               
is on the  Seward Charter Boat Association and  was previously on                                                               
the Fish and Game Advisory Committee.                                                                                           
                                                                                                                                
REPRESENTATIVE  LEDOUX asked  Mr.  Campbell of  his knowledge  of                                                               
Gulf of Alaska groundfish rationalization.                                                                                      
                                                                                                                                
MR. CAMPBELL  said he is  only "a  little bit familiar"  with the                                                               
issue.                                                                                                                          
                                                                                                                                
REPRESENTATIVE LEDOUX asked if he has a position on it.                                                                         
                                                                                                                                
MR. CAMPBELL said  he does not have a formal  position, but he is                                                               
"not a  huge fan  of rationalization."  He said  Alaska fisheries                                                               
are  changing, but  stakeholders  are looking  for stability.  He                                                               
said that  safety is a  concern too,  but he believes  that "once                                                               
you  go to  rationalization...the turnover  is just  going to  be                                                               
very, very  small," even more so  than limited entry. He  said he                                                               
does  not want  to see  any Alaskan  fisheries become  investment                                                               
fisheries.                                                                                                                      
                                                                                                                                
1:12:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said the  state philosophy is  that access                                                               
to  the fisheries  is for  participating  fishermen, and  federal                                                               
programs give  access to  vessel owners  and investors.  He asked                                                               
which side Mr. Campbell might take on that issue.                                                                               
                                                                                                                                
MR. CAMPBELL answered that it  is important to have stability for                                                               
stakeholders so they can plan their  futures. He said there are a                                                               
lot of  Seattle and foreign  interests in the  federal fisheries,                                                               
and  he doesn't  want to  see that  in state  waters. "You  would                                                               
definitely need to be an  active participant." He said he doesn't                                                               
know  how it  will  shake  out with  rationalization,  but a  key                                                               
component is dedicated access privilege,  where the fishermen are                                                               
leasing from the state. He said  he doesn't want what happened in                                                               
federal fisheries to happen in state waters.                                                                                    
                                                                                                                                
1:15:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked Mr.  Campbell if stability  is better                                                               
for the industry than a changing free market system.                                                                            
                                                                                                                                
MR. CAMPBELL said  many fisheries are processor  driven, and what                                                               
he meant by  stability is for fishermen to be  sure that they can                                                               
sell their  fish for a reasonable  price and make a  good living.                                                               
He said there are a lot of  permit holders who would love to fish                                                               
in some  of the salmon  fisheries, but the processors  won't take                                                               
on any more fishermen.                                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO said  he heard that Ford  Motor Company laid                                                               
off workers, and  the company would like the  stability of people                                                               
always  buying its  cars,  but  that may  not  happen  in a  free                                                               
market. He  asked Mr. Campbell  about reserving the  resource for                                                               
people who are already participating and not allowing new users.                                                                
                                                                                                                                
MR. CAMPBELL said  as a charter boat owner he  can relate to what                                                               
Representative Gatto  said. There has  to be room for  growth and                                                               
for other people. He said  his concern with an investment fishery                                                               
is  the  lack of  opportunity  for  new Alaskans,  including  "my                                                               
children, your children."  He added, "You have  to have stability                                                               
but there  has to  be room  in all of  the fisheries  programs to                                                               
allow for new entrants."                                                                                                        
                                                                                                                                
1:19:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked  Mr. Campbell if he  is familiar with                                                               
the issue of mixing zones.                                                                                                      
                                                                                                                                
MR. CAMPBELL said he has read a  lot about it, and he knows it is                                                               
a  hot topic.  He  said the  state stresses  the  quality of  the                                                               
resource, "but suddenly we have  this mixing zone issue...putting                                                               
a lot of our quality issues in jeopardy."                                                                                       
                                                                                                                                
1:20:56 PM                                                                                                                    
                                                                                                                                
MR. CAMPBELL concluded that he  is learning, and he looks forward                                                               
to serving all  the interests of all the user  groups. He said it                                                               
ultimately  comes down  to protecting  the  resource and  keeping                                                               
things balanced.                                                                                                                
                                                                                                                                
1:22:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  moved to  advance  the  name of  Jeremiah                                                               
Campbell  for  confirmation.  Hearing  no objection,  it  was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
^Commercial Fisheries Entry Commission                                                                                        
                                                                                                                                
CO-CHAIR RAMRAS announced  that the next order  of business would                                                               
be to consider the appointment of  Bruce Twomley for Chair of the                                                               
Alaska Commercial Fisheries Entry Commission.                                                                                   
                                                                                                                                
BRUCE   TWOMLEY,  Chair,   Alaska   Commercial  Fisheries   Entry                                                               
Commission,  said he  was first  appointed to  the commission  by                                                               
Governor  Jay Hammond  in 1982,  and he  has been  reappointed by                                                               
governors elected under three political  parties. He said he used                                                               
to  sue  Alaska for  a  living  as  a  lawyer with  Alaska  Legal                                                               
Services. That  gave him a good  sense of being on  the receiving                                                               
end of  agency actions, he  noted, but  it also helped  him learn                                                               
how to  keep the agencies  out of  trouble. Mr. Twomley  said his                                                               
job is  challenging because it  is a  difficult area of  law. The                                                               
limited entry law has been called arcane, he noted.                                                                             
                                                                                                                                
MR. TWOMLEY said  the primary duty of the  commission is limiting                                                               
entry into  fisheries when doing  so would help  prevent economic                                                               
distress  among fishermen  and help  promote the  conservation of                                                               
the fisheries. He  said he has to determine a  maximum number for                                                               
a fishery, which would be the  highest number of units of gear in                                                               
one of  the four years  prior to  limitation. That is  the target                                                               
number for  the commission, but  lots of  people come and  go, so                                                               
when  the  commission  limits  a fishery,  there  are  many  more                                                               
applicants  for the  limited opportunities.  The statute  directs                                                               
the  commission to  rank the  applicants  by the  level of  their                                                               
dependency on  the fishery.  It is a  heavily legal  progress, he                                                               
noted.  Many rejected  applicants get  evidentiary hearings,  and                                                               
some  of  them then  go  before  the  commissioners who  are  all                                                               
administrative law judges.  If the applicants are  not happy with                                                               
the commissioners' decision, they can take the case to court.                                                                   
                                                                                                                                
1:27:10 PM                                                                                                                    
                                                                                                                                
MR. TWOMLEY  said there  are 68  fisheries under  limitation, and                                                               
the  commission has  a duty  to limit  entrants when  there is  a                                                               
basis for doing  so. There are 75 supreme  court cases addressing                                                               
limited entry, he added.                                                                                                        
                                                                                                                                
1:28:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  noted that Mr. Twomley  visited Kodiak and                                                               
asked how he would look at rationalization now.                                                                                 
                                                                                                                                
MR. TWOMLEY said  the visit to Kodiak dealt with  SB 113, but the                                                               
commission has  always tried to  operate where "we  actually have                                                               
real live  fishermen come to us  seeking something. If we  can do                                                               
it under the  limited entry program...we would try to  do what we                                                               
could; if it's something that  required legislation, we would try                                                               
to  facilitate   those  real  live   fishermen  going   to  their                                                               
legislators." He  said his  experience in  Kodiak chilled  him on                                                               
the idea  of dealing  with task forces  instead of  fishermen. He                                                               
stressed  that limitations  come from  fishermen petitioning  the                                                               
commission.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LEDOUX   asked  if  Gulf  of   Alaska  groundfish                                                               
problems can be solved through  traditional limited entry instead                                                               
of rationalization as defined by the federal government.                                                                        
                                                                                                                                
1:30:54 PM                                                                                                                    
                                                                                                                                
MR.  TWOMLEY  said  each  fishery  is  different.  There  may  be                                                               
fisheries  that would  be  well served  by  a license  limitation                                                               
system within the  Gulf of Alaska, but, he said,  that system was                                                               
designed  for  salmon fisheries  and  works  less well  in  quota                                                               
fisheries. The  state should consider  some form  of individually                                                               
assigned shares  to help  manage a quota  fishery, he  stated. It                                                               
doesn't have to be the same  as the federal system, "and it can't                                                               
be, because  we've got a  constitutional provision that  makes it                                                               
clear  that if  we're  going to  do limited  entry  in any  form,                                                               
you've  got to  be  serving  conservation and  you've  got to  be                                                               
benefiting real live fishermen."  For fisheries managed by quota,                                                               
like the Gulf of Alaska, he recommends the additional tool.                                                                     
                                                                                                                                
1:33:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked him to  explain "some sort of a quota                                                               
system."                                                                                                                        
                                                                                                                                
MR. TWOMLEY  said, "It would be  the ability to limit  entry, and                                                               
you have  a fishery managed  by one  overall quota, if  the state                                                               
could  have  the  power  to   assign  shares  of  that  quota  to                                                               
individual  participants, according  to their  past participation                                                               
so  that  the  shares  related to  past  participation."  In  the                                                               
federal system, some shares automatically  go to vessel owners or                                                               
investors, but  in Alaska  the constitution  requires participant                                                               
fishermen to get  shares. "You might be able to  find, create, an                                                               
opportunity  for  vessel  owners  as  well,  but  I  think  that,                                                               
clearly, the system  would have to be directed to  the benefit of                                                               
individual participants  if it were  going to meet  the standards                                                               
set   in  the   Alaska   constitution  and   survive  any   legal                                                               
challenges."                                                                                                                    
                                                                                                                                
1:34:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked about  the fate of parallel fishermen                                                               
if the resource  goes to the people on the  vessels.  "The people                                                               
who have  been fishing in  the federal fishery, but  they've been                                                               
fishing in state  waters during that federal fishery.  And so, if                                                               
the state gave the IFQ  [individual fishery quota] based upon who                                                               
was actually fishing on the boat,  and then the Feds gave the IFQ                                                               
based  upon who  owned  the  boat, then  you've  got  a class  of                                                               
parallel  fishermen  who thought  that  they  were fishing  in  a                                                               
federal fishery, who  are going to end up,  maybe, actually, with                                                               
nothing."                                                                                                                       
                                                                                                                                
MR. TWOMLEY said  the state has managed the  parallel fishery and                                                               
if the state were to  set up limitations through legislation, the                                                               
state  would   be  constitutionally   required  to   benefit  the                                                               
fishermen and not  exclude anybody. No one should  be a "complete                                                               
loser,"  he added.  He  said it  should be  possible  to craft  a                                                               
program where people take shares  out of a fishery that represent                                                               
the shares  they now take.  There are owners, operators  and crew                                                               
currently  taking  shares,  and  it   ought  to  be  possible  to                                                               
construct  a program  where "everyone  can share  in roughly  the                                                               
fashion  they're sharing  now." The  program would  need to  make                                                               
sure that fishermen are the primary beneficiaries, he noted.                                                                    
                                                                                                                                
1:37:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked about  someone inheriting a commercial                                                               
fishing vessel, and asked if it  was Mr. Twomley's job to protect                                                               
the  "existing  fishermen" and  prevent  any  new entrants  to  a                                                               
fishery.                                                                                                                        
                                                                                                                                
1:38:27 PM                                                                                                                    
                                                                                                                                
MR.  TWOMLEY said  there is  another constitutional  dimension to                                                               
limited entry which prevents a  closed-class system. "People have                                                               
to  be able  to come  and go.  You have  to preserve  entry-level                                                               
opportunities in  a fishery."  Transferability of  the privileges                                                               
needs to be protected, and the  commission has a duty to put more                                                               
"permits into the water" if a fishery becomes too exclusive.                                                                    
                                                                                                                                
1:39:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE THOMAS  said he  came to  the meeting  because the                                                               
previous witness  "made some  comments I  didn't agree  with." He                                                               
told  Mr.  Twomley  that [the  commission]  has  never  increased                                                               
permits in  two fisheries that  Representative Thomas  thinks are                                                               
lucrative,  "and that's  Sitka sac  roe herring  fishery and  the                                                               
Chatham Strait permit, which are  in excess of $400,000 in value,                                                               
and one  is $250,000." He  said he was  in a gillnet  fishery and                                                               
"the  permits went  to 15,000,"  and he  has seen  that happening                                                               
around the state.  He asked Mr. Twomley why there  hasn't been an                                                               
increase in permits in those two lucrative fisheries.                                                                           
                                                                                                                                
MR. TWOMLEY  said the  commission has  not found  the need  to do                                                               
that yet,  but it has addressed  the issue. He said  with Chatham                                                               
Strait black  cod, the commission  decided on an  optimum number,                                                               
and that decision was upheld by  the supreme court in the Simpson                                                               
case.  "Granted, that's  a profitable  fishery,  but our  optimum                                                               
number decision  was supported by  some very strong  testimony of                                                               
the manager of  the fishery, who said that for  the sake of being                                                               
able  to manage  the  fishery  and to  be  able  to conserve  the                                                               
resource,  that  is was  critical  that  we contain  the  numbers                                                               
within  the limits  of  the optimum  number  decision we  finally                                                               
made." If there had been  no compelling conservation interest the                                                               
results would probably have been different, he added.                                                                           
                                                                                                                                
1:41:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE THOMAS  said the black  cod fishery has  a 25,000-                                                               
pound quota,  and if there are  50 boats and black  cod sells for                                                               
three dollars a pound, that  provides $75,000 per vessel. He said                                                               
it is a "side" fishery, and  it could be reduced to 15,000 pounds                                                               
per boat  to allow more people  to participate. He said  a "true"                                                               
commercial  fisherman  has more  than  one  permit, reducing  the                                                               
impact  of the  loss  of income  to each  boat  currently in  the                                                               
fishery. "I think [the current limits are] wrong," he stated.                                                                   
                                                                                                                                
1:43:15 PM                                                                                                                    
                                                                                                                                
MR. TWOMLEY  said the  fishery is managed  by overall  quota, and                                                               
the commission tried to apply  the license limitation system, and                                                               
it failed.  It reached a point  where the manager "was  afraid to                                                               
open the fishery  because it was too much  amassed fishing power.                                                               
She was afraid she was not going  to be able to contain the catch                                                               
and conserve  the resource." The  manager prevailed on  the Board                                                               
of Fish  to divide the  fishery up  into equal shares,  which has                                                               
allowed this  fishery to open  when it wouldn't otherwise  do so,                                                               
he stated. The  shares are assigned by the  season, and everybody                                                               
gets an equal  share of the harvest, he said.  But there is still                                                               
a race  for the fishery.  "The manager was running  scared. There                                                               
was some  difficulty containing  the catch,  especially bycatch."                                                               
He said the big purpose  under the constitution is conserving the                                                               
resource and  preventing economic  distress to fishermen,  so "we                                                               
thought we had a duty to do that."                                                                                              
                                                                                                                                
1:45:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE THOMAS said there  were talks about transferring a                                                               
limited entry  system in the  shrimp fisheries to an  IFQ system.                                                               
He said he opposes it. He noted  that he has a shrimp permit, but                                                               
he doesn't fish all year round  with it. He said, "What they were                                                               
trying to do is  take a limited entry permit and  turn it into an                                                               
IFQ  system  that  benefits  the long  term  fishermen,  not  the                                                               
recreational, commercial" fisherman. He  asked if anyone has come                                                               
to the commission regarding that issue.                                                                                         
                                                                                                                                
1:46:00 PM                                                                                                                    
                                                                                                                                
MR.  TWOMLEY   said  some  of  the   participants  recruited  the                                                               
commission  to participate  in discussions  with the  shrimp task                                                               
force. He  said there  are individuals in  the fishery  who would                                                               
like to see that change, but the time might not be right.                                                                       
                                                                                                                                
REPRESENTATIVE THOMAS  said, "I  would say so.  I think  when you                                                               
buy an open-access  permit, you were talking  about earlier, then                                                               
close the door on people..." He  explained that if he retires and                                                               
gives  someone his  permit that  he just  paid $30,000  for, that                                                               
person would  not be able  to fish  because "he doesn't  have any                                                               
quota of his own."                                                                                                              
                                                                                                                                
1:47:06 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS asked about the future of the resource.                                                                         
                                                                                                                                
MR. TWOMLEY  said the big  element is world competition.  To help                                                               
fishermen  compete,  the commission  has  looked  at options  for                                                               
fleet  reduction of  Alaskan fisheries  to make  each opportunity                                                               
more lucrative. He said the  commission has limited tools, and he                                                               
is counting  on the resourcefulness  of fishermen and  the virtue                                                               
of the  wild salmon product, which  should be able to  compete on                                                               
the world  market. Another big issue  will be the Gulf  of Alaska                                                               
fisheries,  and  he  recommends  using  the  additional  tool  of                                                               
assigned shares.  In assigning  shares there  are ways  of taking                                                               
into account past participants and new entrants, he said.                                                                       
                                                                                                                                
1:50:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  asked  if  Mr. Twomley  would  support  a                                                               
rationalization  program  in  the  Gulf of  Alaska  that  treated                                                               
different fisheries differently.                                                                                                
                                                                                                                                
MR. TWOMLEY said the commission  looks at individual fisheries to                                                               
see  what their  needs  are. He  said, for  example,  if the  jig                                                               
fishery  could  go  on  happily   without  economic  distress  or                                                               
conservation  problems, the  commission would  not apply  limited                                                               
entry.  But if  that fishery  is a  concern because  of spillover                                                               
effects from limiting  at the federal level, the answer  may be a                                                               
license  limitation  instead of  a  share  system. He  said  some                                                               
fishery definitions have not been created.                                                                                      
                                                                                                                                
1:53:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked  if  there may  be spillover  effect                                                               
between state  and federal  fisheries, and  if Mr.  Twomley would                                                               
"consider   rationalizing   certain   state   fisheries   without                                                               
analyzing the spillover  effect that you would have  on the other                                                               
state fisheries from rationalizing that one."                                                                                   
                                                                                                                                
MR. TWOMLEY said all those factors would be considered.                                                                         
                                                                                                                                
REPRESENTATIVE SEATON said  there is a vessel  license system for                                                               
Korean hair crab and scallops. The  crab program is not open, and                                                               
there are  only four vessels  harvesting all the scallops  in the                                                               
state.  "At   what  point  does  this...few   number  of  vessels                                                               
harvesting an entire resource of  the state, become such that you                                                               
would say  that you need  to expand  the number of  licenses?" He                                                               
said that the state restricted  the harvest to only four vessels,                                                               
but because there is no  owner-on-board provision, one vessel can                                                               
harvest many  vessels' quota. "At  what point does that  become a                                                               
constitutional problem?" he asked.                                                                                              
                                                                                                                                
1:55:25 PM                                                                                                                    
                                                                                                                                
MR. TWOMLEY answered  that it is a problem at  the point at which                                                               
someone can demonstrate  that it is not  benefiting fishermen and                                                               
is harming conservation.                                                                                                        
                                                                                                                                
REPRESENTATIVE SEATON  asked about changes  that need to  be made                                                               
with the limited entry law or the moratorium implementation.                                                                    
                                                                                                                                
MR.  TWOMLEY said  there has  been consideration  of a  temporary                                                               
moratorium to  protect the resource  prior to studying  a problem                                                               
and enacting legislation. He also  promoted the ability to assign                                                               
individual shares in a fishery managed by quota.                                                                                
                                                                                                                                
1:57:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON noted  that "when  the scallop  and Korean                                                               
hair crab proposal  went forward, there was an  analysis that the                                                               
number of vessels  would constrain the fisheries  better, and yet                                                               
if  we  look at  the  numbers  by  just  requiring two  years  of                                                               
participation, you had  almost the same--in fact it  was a couple                                                               
of  fewer permits  that would  have been  issued--you would  have                                                               
required  that...for a  person to  get a  permit they  would have                                                               
just had  to participate two  years in  the fishery. Do  you have                                                               
the authority to  do that?" He asked, "What were  the reasons for                                                               
not having two years of participation to establish hardship?"                                                                   
                                                                                                                                
1:58:27 PM                                                                                                                    
                                                                                                                                
MR. TWOMLEY  said there  is some  indication that  the commission                                                               
should  try to  consider  at  least four  years,  but  that is  a                                                               
guideline. He  stated it wasn't  the primary reason "we  went the                                                               
way we did."  He said there are many more  applicants than places                                                               
to fill.  He said the  legislature established  vessel limitation                                                               
systems in  the hair crab  and scallop fisheries in  part because                                                               
it served conservation.  He said the hair crab fishery  is a good                                                               
example  because  it  can't  be open  despite  having  a  license                                                               
limitation in place,  "and that was exactly the  fear. The notion                                                               
was that if  you couldn't limit the number of  units of gear from                                                               
the  outset, there  would be  too much  fishing pressure  and the                                                               
fishery would  close. Which  is exactly  what happened."  He said                                                               
the commission  was persuaded  to go  with the  vessel limitation                                                               
system because  that was the one  tool it had. He  continued, "If                                                               
you went  with people,  you have this  whole array  of applicants                                                               
who had to be ranked. Everyone  of those applicants could jump on                                                               
a new  vessel, and  you would  see more  fishing pressure  in the                                                               
fishery than you had ever seen."   He said he did not like vessel                                                               
limitation because it is messy  and may not protect participants.                                                               
"If  you had  the ability  to assign  individual shares  based on                                                               
past participation, you wouldn't need  to mess with vessels," and                                                               
he added that each person would have their own limit.                                                                           
                                                                                                                                
2:01:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said the federal  Fishing Vessel Safety Act                                                               
requires a  signed agreement for  the distribution of  shares for                                                               
any large  fishing boat prior to  leaving the dock. He  asked Mr.                                                               
Twomley if the state needs a similar requirement.                                                                               
                                                                                                                                
MR. TWOMLEY  said that would  fill a  void in information  and be                                                               
helpful to the commission.                                                                                                      
                                                                                                                                
2:02:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAPSNER  noted that  Mr.  Twomley  wrote a  paper                                                               
about  keeping  Alaska  limited  entry  permits  in  local  rural                                                               
communities. She said there has  been a significant out-migration                                                               
of permits and wondered what  the problem is. The legislature has                                                               
instituted  low  interest  loans   and  other  measures  to  help                                                               
fishermen keep their permits, but "what else can we do?"                                                                        
                                                                                                                                
MR. TWOMLEY said the commission  has advocated the same thing and                                                               
that the  legislature has provide  some good tools, but  the best                                                               
tool is  the guaranteed loan  program within the  Alaska Division                                                               
of  Investments.  Local groups  can  help  put forward  deserving                                                               
applicants, people who they know can  perform, he said, and he is                                                               
unhappy that very few people have taken advantage of it.                                                                        
                                                                                                                                
2:05:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO said after  looking at Alaska Public Offices                                                               
Commission  reports,   he  determined  that  the   limited  entry                                                               
commission  seems to  favor one  particular political  group over                                                               
another.  He said  he is  concerned about  entrenched people  not                                                               
giving sufficient regard to opposing  views. He expressed concern                                                               
that people who  want to compete on a level  playing field can't,                                                               
and that the state is reserving  privileges to a very few who are                                                               
getting very rich. He said both sides should be heard.                                                                          
                                                                                                                                
2:08:19 PM                                                                                                                    
                                                                                                                                
MR. TWOMLEY  asked if  Representative Gatto  was speaking  to the                                                               
dividing line between  those who support limited  entry and those                                                               
who do not.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO  said  that  would  be  one.  He  said  the                                                               
government  makes  people  rich  by  passing  legislation  making                                                               
restrictions on competition.  He noted that Mr.  Twomley has been                                                               
in  his position  a long  time, and  "you certainly  have made  a                                                               
great deal  of friends who are  making their living and  need you                                                               
to help them."                                                                                                                  
                                                                                                                                
2:09:57 PM                                                                                                                    
                                                                                                                                
MR. TWOMLEY said  that message is well taken,  and the commission                                                               
does not have a stake  in creating entrenched interest or wealthy                                                               
fishermen.  The  constitution  is   strict  and  reinforces  what                                                               
Representative Gatto is saying, he added.                                                                                       
                                                                                                                                
2:10:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE THOMAS  said limited  entry caused the  Lynn Canal                                                               
fleet to  grow from 20  to 50 or 60  vessels. "We had  people who                                                               
hadn't fished  for several years  selling and buying  permits for                                                               
nothing, and  the active  fleet got  the shaft  because all  of a                                                               
sudden there were more permits  issued than actual people fishing                                                               
for several  years. At the  same time,  I halibut fished  when it                                                               
was open access,  starting in 1975, and when they  went to IFQs I                                                               
got   the   shaft  on   the   other   end  because   the   bigger                                                               
boats...displaced  the guys  who had  been fishing  longer. So  I                                                               
went  from 50-60,000  pounds of  halibut" to  13,000. "It  has it                                                               
merits," he said, but it doesn't always work.                                                                                   
                                                                                                                                
2:13:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved to advance  the name of Bruce Twomley                                                               
for confirmation. Hearing no objection, it was so ordered.                                                                      
                                                                                                                                
2:14:19 PM                                                                                                                    
                                                                                                                                
^Department of Natural Resources                                                                                              
                                                                                                                                
CO-CHAIR RAMRAS announced that the  final order of business would                                                               
be  to  consider  the  appointment   of  Michael  Menge  for  the                                                               
Commissioner of the Department of Natural Resources.                                                                            
                                                                                                                                
2:15:32 PM                                                                                                                    
                                                                                                                                
MICHAEL  MENGE,  Commissioner  Appointee, Department  of  Natural                                                               
Resources (DNR), said  he was raised on a cattle  ranch and has a                                                               
degree  in geology.  He noted  that  he has  respect for  working                                                               
people. His first  job out of geology school was  on an oilrig in                                                               
the Gulf Coast,  and he stated that lease owners  are entitled to                                                               
a  fair  share of  proceeds.  He  worked  for the  United  States                                                               
Geological  Survey   (USGS)  on  coal   exploration,  delineating                                                               
federal coal  reserves in Wyoming  and Montana. He noted  that he                                                               
came to  Alaska in 1980 with  the USGS to map  coal reserves, and                                                               
he worked  well with  the state. He  said the  federal government                                                               
and the state need to work together or developers will suffer.                                                                  
                                                                                                                                
2:21:11 PM                                                                                                                    
                                                                                                                                
COMMISSIONER MENGE said  he then worked on the  first lease sales                                                               
on  the  National   Petroleum  Reserve-Alaska  (NPR-A).  Congress                                                               
passed the  Alaska National Interest Lands  Conservation Act, and                                                               
so he went to  work for the Bureau of Land  Management on the 10-                                                               
02  area  of  the  Alaska   National  Wildlife  Refuge.  He  said                                                               
Representative  George Miller  worked him  up and  down during  a                                                               
Congressional hearing,  and then Congressman Miller  told him not                                                               
to  take it  personally.  He  said he  learned  that everyone  is                                                               
important and deserves respect.                                                                                                 
                                                                                                                                
COMMISSIONER MENGE  said he started  working at  the Trans-Alaska                                                               
Pipeline System  and put together  the joint  monitoring program.                                                               
He stressed  that it is  a powerful  tool when federal  and state                                                               
workers work  together. He  spoke of the  Exxon Valdez  oil spill                                                               
and said  he learned  the valuable lesson  of being  prepared for                                                               
the unexpected.                                                                                                                 
                                                                                                                                
COMMISSIONER MENGE  said Governor Hickel  offered him the  job of                                                               
the  Director  of Environment  Quality  under  the Department  of                                                               
Environmental  Conservation.  He  worked on  revisions  to  state                                                               
water quality  regulations and the  air quality program  where he                                                               
learned to  bring everyone along.  The best ideas  need consensus                                                               
building and  communications, he  stressed. When  Governor Hickel                                                               
left, Mr. Menge left the  state, and then Senator Frank Murkowski                                                               
hired him a  year later to work on the  Senate Energy and Natural                                                               
Resources  Committee. He  said  he appreciates  the  role of  the                                                               
legislative branch.                                                                                                             
                                                                                                                                
2:34:02 PM                                                                                                                    
                                                                                                                                
COMMISSIONER MENGE  said he will  work on concerns  of individual                                                               
members.  He  noted  that  the  mission of  DNR  is  to  develop,                                                               
conserve  and  maximize the  use  of  Alaska's natural  resources                                                               
consistent with the public interest.  He said that tells him that                                                               
DNR has a  huge responsibility on land resources and  has a large                                                               
role in  sea resources.  He said  he is  guided by  these tenets:                                                               
accountability,  accessibility, efficiency  and partnerships.  He                                                               
said he  is accountable  to the people,  politicians and  his own                                                               
conscience. He  said his department  will be accessible  24 hours                                                               
each day, and he  tries to answer every phone call  by the end of                                                               
the day. He stated that it  is DNR's duty to stretch every dollar                                                               
from the legislature into "a buck and a half."                                                                                  
                                                                                                                                
2:37:46 PM                                                                                                                    
                                                                                                                                
COMMISSIONER MENGE  said the  budget process  is healthy,  and he                                                               
supports defending  expenditures to  the legislature.  He pointed                                                               
out  the importance  of partnerships  between the  private sector                                                               
and government.                                                                                                                 
                                                                                                                                
COMMISSIONER MENGE  mentioned three  programs that are  the heart                                                               
of  DNR: large  projects, coastal  zone consistency  and habitat.                                                               
The world  has gotten complex and  to get permits an  entity runs                                                               
into a miasma,  he opined. Small projects can  be infuriating, he                                                               
said, and  it is orders  of magnitude more frustrating  for large                                                               
projects.  Anyone  going  through the  regulatory  process  needs                                                               
help, and  he said DNR will  carry out that role  without cutting                                                               
anyone a "sweetheart deal."                                                                                                     
                                                                                                                                
COMMISSIONER  MENGE noted  that  the gasline  is  the "800  pound                                                               
gorilla." He  was one  of the principle  drafters of  the federal                                                               
gasline statutes. The  Alaska gasline will be the  biggest job in                                                               
his career.  When the contract  is presented to  the legislature,                                                               
it will  not be  simple or  easily understood,  he said,  and "we                                                               
will have to work you through the  pathway of how we got to where                                                               
we  got." He  said his  goal  is to  explain the  process to  the                                                               
legislature. He stated that oil and  gas are the cash register in                                                               
the  state,  and DNR  does  hundreds  of approvals,  permits  and                                                               
actions  daily to  facilitate ongoing  operations. He  noted that                                                               
DNR  will not  forget its  underlining responsibilities.  He said                                                               
DNR is doing everything it can  to bring new explorers to Alaska.                                                               
Opening new  basins is very  important, and there are  new basins                                                               
"that we can get into, and we  will work diligently to try and do                                                               
that."                                                                                                                          
                                                                                                                                
COMMISSIONER MENGE said,  "It's also about getting  land from the                                                               
federal  government--fulfilling   the  statehood   compact.  It's                                                               
putting land into  the hands of the boroughs so  they can build a                                                               
sustainable tax base."   Alaska has a fraction  of land ownership                                                               
in private hands, he added.  Mining is the most permit intensive,                                                               
represents  the   most  impact  to  the   environment,  has  huge                                                               
financial  benefit to  the developers  and to  the state,  and is                                                               
very emotional.  He told the committee  that he worked on  the AJ                                                               
Mine  project  in Juneau  which  did  not  work  well, and  on  a                                                               
Colville  project  that  did  work well.  The  right  way  always                                                               
involves consensus between all agencies  and the communities, and                                                               
you can't run over the top of local individuals, he said.                                                                       
                                                                                                                                
2:45:42 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  MENGE  said  it  used to  be  that  geologists  and                                                               
operators would  begin a project  and then think about  hiring an                                                               
environmental  engineer. "That  doesn't work  anymore," he  said.                                                               
Environmental folks need to show up  at day one, he said, and DNR                                                               
will continue to foster that. He  noted that State Parks have not                                                               
had a  strategic plan  since 1971, and  they are  floundering and                                                               
have lost  their vision. "We love  our parks," he said,  and they                                                               
need to  be protected.  A strategic plan  will let  park managers                                                               
understand what  is expected of  them. The  plan will be  born of                                                               
public  meetings across  the state,  he stated.  Forestry is  all                                                               
about getting  ready for the  fire seasons, he said,  and climate                                                               
change has had  a traumatic effect on  Alaska's firefighting with                                                               
longer, hotter seasons  and more lightning. He  noted the problem                                                               
of increased development in fire-prone  areas, so the state needs                                                               
to provide more education.                                                                                                      
                                                                                                                                
COMMISSIONER MENGE  pointed out  geological maps and  said Alaska                                                               
has  huge  mineral  potential.   He  said  individuals  or  small                                                               
companies  are the  first  to  find minerals,  so  DNR has  "seed                                                               
programs,"  like  flying  aeromagnetic and  geophysical  surveys,                                                               
which provides  free information  to the  public. He  stated that                                                               
the state gets the money back in the long run.                                                                                  
                                                                                                                                
2:50:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS said he has many questions for Mr. Menge and                                                                    
will continue the hearing on January 25, 2006.                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 2:52 PM.                                                                

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