Legislature(2001 - 2002)

03/20/2002 03:35 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                   SENATE RESOURCES COMMITTEE                                                                                 
                         March 20, 2002                                                                                         
                            3:35 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator John Torgerson, Chair                                                                                                   
Senator Gary Wilken, Vice Chair                                                                                                 
Senator Ben Stevens                                                                                                             
Senator Kim Elton                                                                                                               
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Rick Halford                                                                                                            
Senator Robin Taylor                                                                                                            
Senator Georgianna Lincoln                                                                                                      
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 329                                                                                                             
"An Act  authorizing community  development  quota groups  to hold                                                              
commercial fishing permits."                                                                                                    
     HEARD AND HELD                                                                                                             
                                                                                                                              
CS FOR HOUSE BILL NO. 206(RLS)                                                                                                  
"An Act  relating to a  vessel-based commercial fisheries  limited                                                              
entry system for  the Bering Sea Korean hair crab  fishery and for                                                              
weathervane   scallop  fisheries,   to   management  of   offshore                                                              
fisheries, and to  the definition of 'person' for  purposes of the                                                              
commercial  fisheries   entry  program;   and  providing   for  an                                                              
effective date."                                                                                                              
     HEARD AND HELD                                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 298(L&C)                                                                                                  
"An Act  relating to authorizing  the Alaska Railroad  Corporation                                                              
to lease land for a period of up to 55 years."                                                                                  
     HEARD AND HELD                                                                                                             
                                                                                                                              
HOUSE BILL NO. 131                                                                                                              
"An Act relating to standards for  forest resources and practices;                                                              
and providing for an effective date."                                                                                           
     HEARD AND HELD                                                                                                             
                                                                                                                              
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
                                                                                                                              
SB 329 - See Resources minutes dated 3/6/02.                                                                                    
                                                                                                                                
HB 206 - No previous action to record.                                                                                          
                                                                                                                                
HB 298 - No previous action to record.                                                                                          
                                                                                                                                
HB 131 - No previous action to record.                                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
Ms. Kelly Huber                                                                                                                 
Staff to Senator Halford                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Presented SB 329 for the sponsor.                                                                       
                                                                                                                                
Mr. Bruce Twomley, Chairman                                                                                                     
Commercial Fisheries Entry Commission                                                                                           
8800 Glacier Hwy, Ste 109                                                                                                       
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Opposed SB 329.                                                                                           
                                                                                                                                
Mr. Steve White, Assistant Attorney General                                                                                     
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on SB 329.                                                                                      
                                                                                                                                
Mr. Jerry McCune                                                                                                                
United Fishermen of Alaska                                                                                                      
211 4th Street, #110                                                                                                            
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Opposed SB 329.                                                                                           
                                                                                                                                
Mr. Robert Heyano                                                                                                               
Bristol Bay Economic Development Council                                                                                        
PO Box 1409                                                                                                                     
Dillingham AK 99576                                                                                                             
POSITION STATEMENT: Commented on SB 329.                                                                                      
                                                                                                                                
Mr. Oliver Holm                                                                                                                 
333 Tona Lane                                                                                                                   
Kodiak AK 99615                                                                                                                 
POSITION STATEMENT: Opposed SB 329 and HB 206.                                                                                
                                                                                                                                
Mr. Alan Parks                                                                                                                  
PO Box 3339                                                                                                                     
Homer AK 99603                                                                                                                  
POSITION STATEMENT:  Opposed SB 329 and HB 206.                                                                               
                                                                                                                                
Mr. Malcolm Milne                                                                                                               
PO Box 1846                                                                                                                     
Homer AK 99603                                                                                                                  
POSITION STATEMENT:  Opposed SB 329 and HB 206.                                                                               
                                                                                                                                
Mr. Mako Haggerty                                                                                                               
PO Box 2001                                                                                                                     
Homer AK 99603                                                                                                                  
POSITION STATEMENT: Opposed SB 329 and HB 206.                                                                                
                                                                                                                                
Mr. Yakov Reutov                                                                                                                
PO Box 2956                                                                                                                     
Homer AK 99603                                                                                                                  
POSITION STATEMENT: Opposed SB 329 and HB 206.                                                                                
                                                                                                                                
Representative Drew Scalzi                                                                                                      
Alaska State Capitol                                                                                                            
Juneau AK  99801-1182                                                                                                           
POSITION STATEMENT: Sponsor of HB 206.                                                                                        
                                                                                                                                
Ms. Mary McDowell, Commissioner                                                                                                 
Commercial Fisheries Entry Commission                                                                                           
8800 Glacier Hwy, Ste 109                                                                                                       
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Commented on HB 206.                                                                                      
                                                                                                                                
Mr. John Winther                                                                                                                
Petersburg AK                                                                                                                   
POSITION STATEMENT: Supported HB 206.                                                                                         
                                                                                                                                
Mr. Jim Stone                                                                                                                   
Scallop Vessel Ocean Runner                                                                                                     
Kodiak AK                                                                                                                       
POSITION STATEMENT: Supported HB 206.                                                                                         
                                                                                                                                
Mr. Chris Berns                                                                                                                 
PO Box 26                                                                                                                       
Kodiak AK 99615                                                                                                                 
POSITION STATEMENT: Opposed HB 206.                                                                                           
                                                                                                                                
Mr. Jim Kubitz                                                                                                                  
Vice President, Real Estate                                                                                                     
Alaska Railroad Corporation                                                                                                     
PO Box 107500                                                                                                                   
Anchorage AK 99510                                                                                                              
POSITION STATEMENT: Commented on HB 298.                                                                                      
                                                                                                                                
Ms. Carol Carroll, Director                                                                                                     
Division of Support Services                                                                                                    
Department of Natural Resources                                                                                                 
400 Willoughby Ave. 5th Floor                                                                                                   
Juneau AK 99801                                                                                                                 
POSITION STATEMENT:  Supported HB 131.                                                                                        
                                                                                                                                
Ms. Marty Freeman, Manager                                                                                                      
Forest Resources Program                                                                                                        
Division of Forestry                                                                                                            
Department of Natural Resources                                                                                                 
550 W 7th Ave. Ste 1450                                                                                                         
Anchorage AK 99501                                                                                                              
POSITION STATEMENT:  Supported HB 131.                                                                                        
                                                                                                                                
Mr. Bob Zachel                                                                                                                  
Interior Timber Industry                                                                                                        
PO Box 83244                                                                                                                    
Fairbanks AK 99708                                                                                                              
POSITION STATEMENT: Supported HB 131.                                                                                         
                                                                                                                                
Mr. James Durst                                                                                                                 
Division of Habitat and Restoration                                                                                             
Department of Fish and Game                                                                                                     
333 Raspberry Rd.                                                                                                               
Anchorage AK 99518                                                                                                              
POSITION STATEMENT: Supported HB 131.                                                                                         
                                                                                                                                
Ms. Beth Caissie                                                                                                                
Northern Alaska Environmental Center                                                                                            
830 College Rd.                                                                                                                 
Fairbanks AK 99709                                                                                                              
POSITION STATEMENT: Supported HB 131.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-12, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
          SB 329-ALLOW CDQ GROUPS TO HOLD ENTRY PERMITS                                                                     
                                                                                                                              
CHAIRMAN  JOHN TORGERSON  called  the Senate  Resources  Committee                                                            
meeting to order at 3:35 p.m. Senators  Wilken, Stevens, Elton and                                                              
Chairman  Torgerson  were  present. Chairman  Torgerson  said  the                                                              
committee would  have a quorum until  4:00 so it wouldn't  be able                                                              
to  move any  bills  today.  He announced  SB  329  to  be up  for                                                              
consideration.                                                                                                                  
                                                                                                                                
MS. KELLY HUBER, staff to Senator Halford, sponsor of SB 329,                                                                   
explained:                                                                                                                      
                                                                                                                                
     SB  329 provides  an additional  tool  to the  community                                                                   
     development  quota  groups  by  allowing  them  to  hold                                                                   
     limited  entry  permits. Broadening  the  limited  entry                                                                   
     permitting process  creates a mechanism that  will allow                                                                   
     the  CDQ groups  to  protect their  own  region and  get                                                                   
     permits   into   smaller   communities    within   their                                                                   
     geographic bounds. It's an effort  to bring new jobs and                                                                   
     wages that  will strengthen  the economic well-being  in                                                                   
     communities of  Western Alaska. Should this  bill become                                                                   
     law,   limited   entry   permits  would   be   held   by                                                                   
     individuals,  CDQ  groups,  CFAB and  other  state  loan                                                                   
     programs. The sponsor recognizes  that this is the first                                                                   
     step  in the process  and welcomes  public comment  that                                                                   
     will  be before you  today and  encourages changes  that                                                                   
     will strengthen  the bill and  at the same  time prevent                                                                   
     unintended consequences.                                                                                                   
                                                                                                                                
MR.   BRUCE   TWOMLEY,  Chairman,   Commercial   Fisheries   Entry                                                              
Commission  (CFEC), stated  support for  getting permits  into the                                                              
hands of  the local rural residents,  but was against the  bill in                                                              
its  current form.  He stated,  "I want  to say  that there's  the                                                              
means to meet those goals under state law right now."                                                                           
                                                                                                                                
He  explained  that  under  the  existing  state  commercial  loan                                                              
program,  a special  loan program  was created  some years  ago by                                                              
Nels  Anderson  for  rural  residents.  It allows  CDQ  groups  to                                                              
partner in the process to help get  more permits into the hands of                                                              
local people.  CDQ groups  can actually  promote local  people for                                                              
the loans and partner with the Division  of Investments. He noted:                                                              
                                                                                                                                
     The reason we  feel compelled to speak against  the bill                                                                   
     basically  comes  down to  two  points. First,  I  think                                                                   
     there are some serious legal  issues raised by the bill.                                                                   
     The  bill  would authorize  CDQ  organizations  to  hold                                                                   
     limited entry permits. Well,  CDQs are entities that are                                                                   
     confined  to certain limited  geographic areas  in rural                                                                   
     Alaska. They're also composed  entirely of Alaska Native                                                                   
     villages  certified by the  Secretary of Interior.  This                                                                   
     is a very  limited category of holders of  limited entry                                                                   
     permits.  It's   very  restrictive.  I  think   you  can                                                                   
     contrast  it with  the category  that formerly  governed                                                                   
     the subsistence  preference in  Alaska. Under our  state                                                                   
     constitution,  a rural  preference  for subsistence  was                                                                   
     struck  down.  Now, that's  a  very broad  largely  open                                                                   
     category. The  category being  put forward in  this bill                                                                   
     is much more  restrictive in terms of area  and in terms                                                                   
     of the composition  of the groups that can  hold limited                                                                   
     entry permits. The basic question  I would want to raise                                                                   
     is  how would  you defend  this new  category under  the                                                                   
     state constitution? I'm not sure that can be done.                                                                         
                                                                                                                                
     The second  question I  want to raise  is: why open  the                                                                   
     holding  of limited  entry permits  to entities at  all?                                                                   
     The major step this bill takes  would be to authorize an                                                                   
     entity,  a corporation, to  hold limited entry  permits.                                                                   
     Going back  to the time  limited entry was  created, one                                                                   
     of the fundamental purposes  of the Act was to make sure                                                                   
     that limited  fishing privileges  could be held  only by                                                                   
     real  live individual  fishermen.  The  notion was  that                                                                   
     there  was  some  history  of  exploitation  of  Alaskan                                                                   
     fishermen by  corporations and other entities.  The idea                                                                   
     was  to help  insulate Alaskan  fishermen  from that  by                                                                   
     giving them  total control  of their fishing  privileges                                                                   
     so that  they could conduct  their own affairs,  conduct                                                                   
     their own businesses, have some  bargaining power in the                                                                   
     process. I  would submit that  in the future as  we face                                                                   
     various dislocations  for the industry trying  to adjust                                                                   
     to  a  changing   world  market  that   preserving  that                                                                   
     individual  place for  Alaskans in  the fishery  remains                                                                   
     important;  even  though  there  may be  any  number  of                                                                   
     creative  ideas where  people  could  get together  with                                                                   
     CDQs. CDQs could help open up  new markets. I think that                                                                   
     the individual  fishermen need  to remain in  control of                                                                   
     their fishing  rights so that they have  some bargaining                                                                   
     power in  the process  so they can  preserve a place  in                                                                   
     the  process and  not  simply become  an  employee of  a                                                                   
     corporation.  I  think  that   issue  remains  important                                                                   
     today…                                                                                                                     
                                                                                                                                
CHAIRMAN TORGERSON asked if other loans are available to people.                                                                
                                                                                                                                
MR. TWOMLEY reviewed  his list. The State Commercial  Fishing Loan                                                              
Program has money available in the  Division of Investments, which                                                              
has  a special  category  to loan  money  to rural  residents  for                                                              
limited entry permits. He stated:                                                                                               
                                                                                                                                
     There has  been an  upper limit on  the amount of  money                                                                   
     that  was  available for  those  loans and  today,  with                                                                   
     depressed permit prices, permits  for the first time are                                                                   
     within reach of this loan program.  It's called the Type                                                                   
     B Loan Program. Now, that's  coupled with an opportunity                                                                   
     for  CDQ organizations  to literally  be a partner  with                                                                   
     the Division of Investments.  All CDQ organizations need                                                                   
     to do  is deposit  some money into  an account where  it                                                                   
     can  sit  and  collect  interest  and  have  that  money                                                                   
     available as  loan guarantees. From there they  can work                                                                   
     together   with  the  Division   of  Investments   where                                                                   
     Division  of  Investments does  all  the  administrative                                                                   
     work, handles the money, all  of the detail work and the                                                                   
     opportunity  for the local CDQ  organization is  to pick                                                                   
     good candidates  for the  loans -  people they know  can                                                                   
     succeed as  fishermen. It's a much better  prospect than                                                                   
     having  someone  in  Juneau  pick  an  applicant  for  a                                                                   
     loan…They can also pick people  to stand in line to step                                                                   
     in  and assume  the loan  in  the event  that there's  a                                                                   
     failure of the original loan.  It's an opportunity; it's                                                                   
     there  right now  and it  doesn't  require changing  the                                                                   
     law.                                                                                                                       
                                                                                                                                
CHAIRMAN TORGERSON  asked if his  technical concerns are  small in                                                              
nature.                                                                                                                         
                                                                                                                                
MR. TWOMLEY replied  a couple of them are small.  Language on page                                                              
1,  line  6 to  10,  would  authorize CDQ  organizations  to  hold                                                              
interim use  permits and he assumed  those were in  open fisheries                                                              
as opposed to limited entry fisheries.  That language doesn't make                                                              
sense  since CDQ  organizations can  participate in  open-to-entry                                                              
fisheries now. They simply have to  employ a captain and a captain                                                              
can buy an interim  use permit to participate  in those fisheries.                                                              
He remarked:                                                                                                                    
                                                                                                                                
     The only way this would make  sense is if CDQs under the                                                                   
     bill would be  in a position to compete  with individual                                                                   
     fishermen for limited entry  permits if the fishery goes                                                                   
     to limited. That may be the  purpose of the bill because                                                                   
     at a later point in the bill,  page 7, lines 11 -13, the                                                                   
     wording suggests  that the CDQ itself could  qualify for                                                                   
     a limited entry permit on initial  issuance by the state                                                                   
     just as individual fishermen  can now. That was an issue                                                                   
     that concerned me…                                                                                                         
                                                                                                                                
     One has to contemplate that  limited entry only survives                                                                   
     under  the state constitution  if it  satisfies the  two                                                                   
     specified  constitutional purposes,  one  of them  being                                                                   
     conservation  of the fishery,  the other one  preventing                                                                   
     economic distress among fishermen.  If you can't satisfy                                                                   
     those two  provisions, the limited entry system  will be                                                                   
     struck down and I can't see  from the bill that it meets                                                                   
     either of those standards.                                                                                                 
                                                                                                                                
3:47 p.m.                                                                                                                       
                                                                                                                                
SENATOR STEVENS  asked why  the sponsor  statement says  that CFAB                                                              
and state loan programs would become eligible under this bill.                                                                  
                                                                                                                                
MS. HUBER  responded, "The sponsor  is just letting you  know that                                                              
the CDQ  groups would be  among the list  that could hold,  if the                                                              
bill passed, limited entry permits."                                                                                            
                                                                                                                                
SENATOR STEVENS said that CFAB cannot  hold a limited entry permit                                                              
right now.                                                                                                                      
                                                                                                                                
MR. TWOMLEY added that is true, but it has a security interest.                                                                 
                                                                                                                                
SENATOR  STEVENS asked  if he was  saying that  nothing right  now                                                              
prevents a CDQ group from having secured interest on a loan.                                                                    
                                                                                                                                
MR. TWOMLEY replied they have the  opportunity to piggyback on top                                                              
of the State  Division of Investments Program now.  They can do it                                                              
with CFAB, too.                                                                                                                 
                                                                                                                                
SENATOR  STEVENS  said,  in  that  case,  the  CDQ  group  is  the                                                              
guarantor of the individual.                                                                                                    
                                                                                                                                
MR. TWOMLEY  said that is  correct. That  helps make the  money go                                                              
further  and,  in this  case,  it's in  a  program  where no  down                                                              
payment  is required.  Basically, the  loan program  does all  the                                                              
grunt work.                                                                                                                     
                                                                                                                                
SENATOR  STEVENS asked  what the  security  would be  for the  CDQ                                                              
group.                                                                                                                          
                                                                                                                                
MR. TWOMLEY  answered that the  permit, itself, will  be security.                                                              
The Division  of Investments and  CFAB are authorized  to actually                                                              
foreclose  on  a  permit.  He  stated,  "Under  the  scheme,  they                                                              
wouldn't  necessarily  have to  do  that  because there  could  be                                                              
another local  person standing  in line ready  to assume  the loan                                                              
under  this program.  They wouldn't  necessarily  lose the  permit                                                              
from the local area.                                                                                                            
                                                                                                                                
SENATOR STEVENS  asked how  many limited  entry permits  exist for                                                              
the salmon fishery now.                                                                                                         
                                                                                                                                
MR. TWOMLEY replied that altogether  there's about 14,000 permits.                                                              
Alaskans hold  about 78%  (11,000) of  the permits overall.  Rural                                                              
residents hold more than half of the permits held by Alaskans.                                                                  
                                                                                                                                
SENATOR STEVENS asked if he had a breakdown by region.                                                                          
                                                                                                                                
MR. TWOMLEY  replied that  it varies from  fishery to  fishery. In                                                              
the  lower   Yukon,  Norton  Sound,   and  lower   Kuskokwim,  the                                                              
percentage of  Alaskans holding permits  varies between 98  - 99%.                                                              
Most of them are held by local people.  In Bristol Bay, 72% of the                                                              
setnet permits  are held by Alaskans  and more than half  of those                                                              
are held by local Alaskans. In the  driftnet fishery a little more                                                              
than 49%  are Alaskans, which  is roughly the historic  percentage                                                              
of Alaskan/not  Alaskan  participation in  the fishery. More  than                                                              
half of the permits  held by Alaskans are held  by local Alaskans.                                                              
It's in excess of 450 drift permits.                                                                                            
                                                                                                                                
He  said they  tried  to encourage  people  to  establish a  local                                                              
permit  brokerage to  help them  get limited  entry permits.  They                                                              
have been  working with  the CDQ  and their representative,  Robin                                                              
Samuelson,  has told  him  that they  are  exploring  the kind  of                                                              
program he has suggested could be productive in the Bay.                                                                        
                                                                                                                                
3:53 p.m.                                                                                                                       
                                                                                                                                
MR.  STEVE WHITE,  Assistant  Attorney  General,  agreed with  Mr.                                                              
Twomley's  comments,   especially  regarding   the  constitutional                                                              
issues. He explained:                                                                                                           
                                                                                                                                
     We  have a  constitutional  problem because  CDQ  groups                                                                   
     have to  be certified  and one of  the criteria  is that                                                                   
     they  have to  be certified  as a  Native village  under                                                                   
     ANCSA.  The federal  government is  permitted under  its                                                                   
     constitutional  scheme  to give  preference  based  upon                                                                   
     Native  issues,  but  the state  constitution  does  not                                                                   
     allow  us  to  do that  unless  we  meet  really  strict                                                                   
     standards  under our  equal protection  and our  uniform                                                                   
     application clauses. Essentially,  our courts would say,                                                                   
     'What is the purpose for this  type of scheme and if the                                                                   
     purpose  is  to  return  permits   [indisc.],  is  there                                                                   
     another way to do that without  establishing essentially                                                                   
     a racial classification or preference?'  Mr. Twomley has                                                                   
     already said  there are other  ways to accomplish  that.                                                                   
     So,  I think  this would  be very  vulnerable under  our                                                                   
     state constitution.                                                                                                        
                                                                                                                                
     Also, I think  it could be challenged under  the federal                                                                   
     constitution,  because it  would  be giving  not only  a                                                                   
     preference  to  racial  classification,  but  to  Alaska                                                                   
     residents versus nonresidents  who also commercial fish.                                                                   
     Then we get back to the whole  privileges and immunities                                                                   
     clause problem  that we're dealing  with in  the Carlson                                                                   
     case.  We are  actually  vulnerable there,  because  not                                                                   
     only  do  the  CDQ  groups have  to  be  Native  village                                                                   
     certified,  they have to  be local  residents - that  is                                                                   
     Alaskans. So Alaskans would  be given preference in this                                                                   
     scheme versus nonresidents.  And even though I like that                                                                   
     idea, the federal constitution has problems with it.                                                                       
                                                                                                                                
SENATOR ELTON said  his memory of the limited entry  debate in the                                                              
early  '70s is  that  the privilege  of limited  entry  was to  be                                                              
accorded to  real people and not  to corporations. That  was based                                                              
on the  state's previous experience  and the concerns  many people                                                              
in the state had about processors accumulating permits.                                                                         
                                                                                                                                
MR. WHITE  said he wasn't  sure of  the constitutional  history of                                                              
the amendment  that allowed  limited entry, but  he knew a  lot of                                                              
the impetus  behind it was to  get the fishing industry  away from                                                              
being owned  by the processors,  particularly the ones  in Seattle                                                              
who  had   accumulated  a   lot  of   power  through  owning   the                                                              
opportunities  to   fish  and  sharecropping   them  out   to  the                                                              
fishermen.                                                                                                                      
                                                                                                                                
SENATOR  ELTON  said  he  asked because  this  legislation  is  so                                                              
narrowly drafted  only one kind of  an entity would be  allowed to                                                              
accumulate the permits  from a very discreet region  of the state.                                                              
He asked if that would be a problem.                                                                                            
                                                                                                                                
MR. WHITE replied that he thought  the language was general enough                                                              
to pass that particular constitutional  test. He thought the other                                                              
constitutional problems were a lot more severe.                                                                                 
                                                                                                                                
MR. JEFF  BUSH, Deputy Commissioner,  Department of  Community and                                                              
Economic  Development (DCED),  said  he is  also a  member of  the                                                              
state's CDQ team. He stated:                                                                                                    
                                                                                                                                
     In contrast  to Bruce Twomley's position, our  agency at                                                                   
     least  is  supportive  of  the  philosophy  behind  this                                                                   
     particular  piece of legislation,  but we share  some of                                                                   
     the  same concerns  in  terms of  the  legal issues  and                                                                   
     truly believe that those need to be addressed…                                                                             
                                                                                                                                
     Excluding the  legal concerns or assuming they  could be                                                                   
     dealt  with, our department  at least  is supportive  of                                                                   
     the concept of  assisting CDQ groups, at  least in terms                                                                   
     of  if the  overriding  philosophy  or purpose  of  this                                                                   
     legislation  as  we  understand  it  is  to  essentially                                                                   
     assist western Alaskan communities  in retaining permits                                                                   
     in  the   regions  and   allowing  fishermen  in   those                                                                   
     particular  communities to  have  more opportunity  than                                                                   
     they  would otherwise  to utilize  those permits,  maybe                                                                   
     we're  only  arguing  here or  disagreeing  on  how  you                                                                   
     accomplish that.                                                                                                           
                                                                                                                                
MR. BUSH  said he recognized the  legal concerns and  would oppose                                                              
anything that  would open up the  limited entry program  to larger                                                              
entities or other entities like fish processors.                                                                                
                                                                                                                                
SENATOR ELTON said that CDQ groups are processors in a sense.                                                                   
                                                                                                                                
MR. BUSH  responded  that CDQ groups  are in  all cases  nonprofit                                                              
corporations.  Their   members  are  the  communities   that  they                                                              
represent specifically,  they have to actually select  their board                                                              
from  the communities  and as  part  of their  businesses they  do                                                              
processing.                                                                                                                     
                                                                                                                                
CHAIRMAN TORGERSON  questioned how  much of a  problem this  is if                                                              
99% of the permits are already owned  by local rural residents. He                                                              
asked if that was his experience in dealing with CDQ groups.                                                                    
                                                                                                                                
MR. BUSH replied that in some of  the regions that is true, but in                                                              
the Bristol Bay area it's not true;  it's more like 50/50. That is                                                              
where the loss of permits from Alaska is occurring.                                                                             
                                                                                                                                
SENATOR STEVENS asked if this bill  passes, whether each CDQ group                                                              
could own a permit in each limited entry fishery.                                                                               
                                                                                                                                
MR. TWOMLEY  said he  thought that  was a  correct reading  of the                                                              
bill.                                                                                                                           
                                                                                                                                
SENATOR STEVENS noted that he thought  there were about 26 limited                                                              
entry fisheries.                                                                                                                
                                                                                                                                
MR. TWOMLEY  said he thought  it was  intended that the  CDQ group                                                              
could hold more permits than one.                                                                                               
                                                                                                                                
SENATOR  STEVENS asked  if  the CDQ  entity  could  only hold  one                                                              
permit, would he still oppose the bill.                                                                                         
                                                                                                                                
MR. TWOMLEY said he was concerned  about that as well as the broad                                                              
opportunities  for an  entity to  hold limited  entry permits.  He                                                              
explained:                                                                                                                      
                                                                                                                                
     There are some limited exceptions  now for cost recovery                                                                   
     permits and  educational permits  in the Act,  but there                                                                   
     is this basic bias in the Act  from the beginning for, I                                                                   
     think, sound  reasons that  fishing privileges  ought to                                                                   
     be restricted to real live individual  fishermen and not                                                                   
     go to  entities. I'm kind  of worried about  opening the                                                                   
     door and the additional pressures  that might create for                                                                   
     more  entities  to  move  in   and  hold  limited  entry                                                                   
     permits. Even  if it's confined  to CDQ holding  limited                                                                   
     entry  permits, even  though CDQs  are one  of the  best                                                                   
     things  that has  ever happened  to  Western Alaska,  if                                                                   
     CDQs can hold  limited entry permits. It  does interpose                                                                   
     a corporation  between a  fisherman and the  fisherman's                                                                   
     rights.  That  fisherman  becomes  an  employee  of  the                                                                   
     corporation as  opposed to somebody who can  make his or                                                                   
     her own decisions  about prosecuting a fishery.  I would                                                                   
     be concerned about that.                                                                                                   
                                                                                                                                
CHAIRMAN TORGERSON  asked if there was  any cap they could  put in                                                              
this bill  to make him  feel more comfortable,  like saying  a CDQ                                                              
couldn't own more  than 10% of the permits available  in the area,                                                              
if the legal issues were resolved.                                                                                              
                                                                                                                                
MR. TWOMLEY replied that he was concerned about the principle.                                                                  
                                                                                                                                
SENATOR  STEVENS  theorized that  a  CDQ  group is  given  special                                                              
recognition  in federal  law  and has  benefits  of certain  state                                                              
laws, but it's not recognized in  the limited entry commission. He                                                              
asked Mr.  Bush if  CDQ groups  can only  invest in entities  that                                                              
harvest fish.                                                                                                                   
                                                                                                                                
MR. BUSH  said that is  correct right  now, but that  provision is                                                              
under review  by the North  Pacific Fisheries Management  Council,                                                              
which  might  possibly  allow  a  small  percentage  of  in-region                                                              
general   economic  development   investments   instead  of   just                                                              
fisheries.                                                                                                                      
                                                                                                                                
MR. JERRY MCCUNE, United Fishermen  of Alaska (UFA), said that UFA                                                              
doesn't want to  see any entity hold a permit, whether  it's a CDQ                                                              
group or  anything else.  He said  other processors  in the  state                                                              
would love to own permits. He said  when the limited entry law was                                                              
drafted,  it was  pretty  smart to  keep  permits in  individual's                                                              
names  so  those  permits  would   stay  in  Alaska.  The  biggest                                                              
opportunity  that Bristol  Bay has  now is to  start buying  those                                                              
permits back, like Mr. Twomley said.                                                                                            
                                                                                                                                
MR.  ROBERT  HEYANO, Bristol  Bay  Economic  Development  Council,                                                              
supported the concept of SB 329 and  shared Commissioner Twomley's                                                              
concerns, but the  Council feels the content of the  bill is worth                                                              
pursuing.                                                                                                                       
                                                                                                                                
MR. OLIVER  HOLM, Kodiak,  opposed SB 329.  He thought  there were                                                              
other methods to get permits into  local ownership in Bristol Bay.                                                              
He was  concerned about  the legal issues  and keeping  permits in                                                              
the hands of individuals.                                                                                                       
                                                                                                                                
MR. ALAN  PARKS, Homer  fisherman,  shared a lot  of the  concerns                                                              
expressed  about SB  329,  including consolidation  into  entities                                                              
that  would   ultimately  control   communities  and   independent                                                              
fishermen. He  commented, "The  protection of independent  fishing                                                              
families is very  important to the social structure  and fabric of                                                              
our communities and our lives as fishermen…"                                                                                    
                                                                                                                                
MR.  MALCOLM  MILNE,  Homer  fisherman,  opposed SB  329  for  all                                                              
reasons already stated, especially those by Mr. Twomley.                                                                        
                                                                                                                                
MR. MAKO HAGGERTY,  retired fisherman, said he would  like to fish                                                              
again sometime,  but bills like this  make fishing for him  in the                                                              
future look  pretty dim.  He surmised,  "It seems  to me  like the                                                              
first step  in turning fishing into  an agribusiness and  that, of                                                              
course, eliminates  the individual fisherman, which is  what I am,                                                              
was, and will be."                                                                                                              
                                                                                                                                
MR. YAKOV  REUTOV, Homer  fisherman,  opposed SB  329 for all  the                                                              
reasons stated.                                                                                                                 
                                                                                                                                
CHAIRMAN TORGERSON said they would  set the bill aside for further                                                              
work.                                                                                                                           
                                                                                                                                
         CSHB 206(RLS)-LIMITED ENTRY FOR COMM. FISHERIES                                                                    
                                                                                                                                
CHAIRMAN TORGERSON announced HB 206 to be up for consideration.                                                                 
                                                                                                                                
REPRESENTATIVE  DREW SCALZI, sponsor  of HB 206,  said in  1996 or                                                              
1997 a  moratorium was  placed on  the hair  crab and  weathervane                                                              
scallop  fisheries   and  reauthorized  a  few   years  later.  He                                                              
explained:                                                                                                                      
                                                                                                                                
     Under the  direction of the legislature,  the Commercial                                                                   
     Fisheries Entry  Commission was asked to come  up with a                                                                   
     limited  entry plan  for these two  fisheries. The  CFEC                                                                   
     needed a different tool than  was in the toolbox to come                                                                   
     up  with a plan.  Currently, our  limited entry  permits                                                                   
     must go to an entity, a person.  Under this scenario, it                                                                   
     was not  acceptable to create  a limited entry  plan for                                                                   
     these  two  fisheries  that  would  not  exacerbate  the                                                                   
     problem.  If  the  limited entry  system  that  we  have                                                                   
     currently was used, the permits  would have had to go to                                                                   
     more than  one vessel,  because all  vessels have  up to                                                                   
     five different permit holders on them.                                                                                     
                                                                                                                                
     These  are Bering  Sea fisheries  and the  owner is  not                                                                   
     usually  on board  and under  that  scenario, you  would                                                                   
     need multiple permits. That  would have allowed too many                                                                   
     entrants into the fishery. So,  the CFEC felt that if we                                                                   
     would modify the  system with HB 206 and  allow a vessel                                                                   
     based  permit  to  take place,  the  vessels  that  were                                                                   
     involved in the  fisheries for the last few  years would                                                                   
     be  the  potential  recipients   of  the  limited  entry                                                                   
     permits  that would  be made available.  HB 206  changes                                                                   
     essentially  the  manner  in  which  the  limited  entry                                                                   
     system can take place by attaching it to the vessel.                                                                       
                                                                                                                                
He  said  the  bill  had  been  modified  several  times,  because                                                              
initially  CFEC wanted  a tool that  could be  utilized for  other                                                              
fisheries. Because the  bill allows an entity to be  an owner of a                                                              
permit, they thought it best to limit it to these two fisheries.                                                                
                                                                                                                                
REPRESENTATIVE  SCALZI said  that initially,  after the permit  is                                                              
issued to the  vessel, the next generation of  ownership should go                                                              
back  to an  entity. Because  of the  dynamics of  the Bering  Sea                                                              
fisheries,  they  realized  that  the  owners  can't  operate  the                                                              
business while being onboard and often are not there.                                                                           
                                                                                                                                
SENATOR STEVENS  asked him to explain  the concept of  the Limited                                                              
Liability Partnership  (LLP) versus a  state permit and  the issue                                                              
of why the state should let LLP participants in.                                                                                
                                                                                                                                
REPRESENTATIVE SCALZI answered after  an incident when one scallop                                                              
vessel  took  the quota  a  few years  ago,  there  was a  drastic                                                              
measure  to put  a moratorium  on  new entrants  into the  scallop                                                              
fishery. The LLP  and the federal fisheries are  separate, in that                                                              
[the LLP] applies to federal fisheries.  This is for state managed                                                              
fisheries.                                                                                                                      
                                                                                                                                
CHAIRMAN TORGERSON  referred to Section 3, which  deletes "scallop                                                              
fisheries" and inserts  "fisheries." He asked what  else this bill                                                              
would include besides the scallop fishery.                                                                                      
                                                                                                                                
REPRESENTATIVE SCALZI  said this bill just applies  to the scallop                                                              
and hair  crab fisheries and that  language change was made  to be                                                              
consistent with another part of the bill.                                                                                       
                                                                                                                                
TAPE 02-12, SIDE B                                                                                                            
                                                                                                                              
MS. MARY MCDOWELL, Commercial Fisheries Entry Commission, said:                                                                 
                                                                                                                                
     As the sponsor  of the bill said, as far  as the origins                                                                   
     of  the  bill,  this is  something  the  Commission  was                                                                   
     directed  to do by  the legislature specifically.  There                                                                   
     was language in the hair crab  moratorium bill asking us                                                                   
     to  come back  to  the  legislature with  language  that                                                                   
     would  be  generic.  Originally   that's  what  we  were                                                                   
     requested  to do -  to come  up with  a bill that  would                                                                   
     create  this alternative  program that  would be  vessel                                                                   
     based,  that could  be used  in fisheries  that did  not                                                                   
     lend  themselves  to  effective   limitation  under  our                                                                   
     current program.                                                                                                           
                                                                                                                                
She  explained  that CSHB  206(RLS)  is generic  legislation  that                                                              
creates this  program with  specific criteria.  The default  is to                                                              
the  original program  unless the  purposes of  the Limited  Entry                                                              
Act, conservation and avoiding economic  distress among fishermen,                                                              
could not  be met under  the current  program. In that  case, CFEC                                                              
could consider  using this alternative  program, vessel  based, to                                                              
limit that  fishery. During  considerable  testimony in the  House                                                              
Resources Committee, concerns were  expressed about moving towards                                                              
the  possibility  of  a  limited entry  program  based  on  vessel                                                              
ownership and ownership  by entities rather than  by human beings.                                                              
She commented:                                                                                                                  
                                                                                                                                
     The  Commission  feels  very  strongly  that  we  should                                                                   
     always  use the  person-based program  when we  possibly                                                                   
     can. That is  something that has been very  important to                                                                   
     the  way Alaska  manages  its fisheries  and  empowering                                                                   
     fishermen and so on and we are  very supportive of doing                                                                   
     that whenever possible.                                                                                                    
                                                                                                                                
She said CFEC recognizes that the  state is faced with managing or                                                              
limiting a  few fisheries that just  may not lend  themselves well                                                              
to limitation under their current  program, two examples being the                                                              
weathervane scallop and hair crab fisheries. She noted:                                                                         
                                                                                                                                
     These are  very much unlike  the kinds of  fisheries the                                                                   
     state  has had  to limit  before. These  are Bering  Sea                                                                   
     fisheries, large  boat, currently corporately  owned and                                                                   
     for the most  part the owners are not on  board. Most of                                                                   
     them are used  by corporations and partnerships  and use                                                                   
     hired skippers  and relief skippers. There  are a number                                                                   
     of different people running  the boat over the course of                                                                   
     a season.                                                                                                                  
                                                                                                                                
MS. MCDOWELL  said that the  House Resources Committee  recognized                                                              
the need  to have an alternative  program in these  two instances,                                                              
but it  was not  willing to create  a generic  tool that  could be                                                              
used in  any of  the fisheries.  Language in  CSHB 206(RLS)  still                                                              
largely  reflects   the  original  generic  bill,   but  has  been                                                              
restricted to use in those two fisheries only. She stated:                                                                      
                                                                                                                                
     The  question that  arose a  few minutes  ago on page  9                                                                   
     about   "scallop  fisheries"   being  broadened  to   "a                                                                   
     fishery"  was in the  original generic  bill, but  still                                                                   
     makes sense  to include  here. This is  just to  make it                                                                   
     clear in statute that when the  state has an opportunity                                                                   
     to  manage  a  fishery  that the  feds  are  willing  to                                                                   
     delegate management  to the state  to run, that  we have                                                                   
     clear  statutory authority  to accept  that. I think  it                                                                   
     has  always been  the state's  position  that we  should                                                                   
     manage whatever fisheries we  can and in some instances,                                                                   
     the  North Pacific  Council and  the federal  government                                                                   
     are willing to turn over management  of a fishery to the                                                                   
     state. So,  this is to  make sure that generic  language                                                                   
     is in there for the state to accept that.                                                                                  
                                                                                                                                
She said  that phrase really  doesn't have  much to do  with CFEC,                                                              
but rather with state management of a fishery through ADF&G.                                                                    
                                                                                                                                
SENATOR STEVENS  asked how many weathervane scallop  permits would                                                              
be issued with this legislation.                                                                                                
                                                                                                                                
MS. MCDOWELL answered:                                                                                                          
                                                                                                                                
     I  guess it's  important to  start  by recognizing  that                                                                   
     this bill  doesn't limit either  of those fisheries.  It                                                                   
     will only give us the ability  if and when we were going                                                                   
     to  limit  those, to  use  this alternative  program  if                                                                   
     necessary. So  we haven't done the research  to know how                                                                   
     we would  limit these two  fisheries. I think  under the                                                                   
     moratorium there are 21 boats  for scallops and only one                                                                   
     for hair crab.                                                                                                             
                                                                                                                                
SENATOR  STEVENS  asked if  this  framework meets  the  moratorium                                                              
requirement and when it sunsets.                                                                                                
                                                                                                                                
MS.  MCDOWELL replied  that the  hair crab  moratorium sunsets  in                                                              
2003 and the scallop moratorium in 2004.                                                                                        
                                                                                                                                
SENATOR STEVENS asked if they would  have to implement the plan by                                                              
'03 and '04.                                                                                                                    
                                                                                                                                
MS. MCDOWELL said this would be the enabling legislation and:                                                                   
                                                                                                                                
     Once  it  is in  place,  the  Commission would  have  to                                                                   
     research both fisheries, determine  which program - this                                                                   
     doesn't automatically  say we shall limit it  under this                                                                   
     program.  At  that point,  we  would have  to  determine                                                                   
     whether  there   was  any  possible  way  to   limit  it                                                                   
     effectively under our current  program and then we would                                                                   
     have to  make a finding that  we would have to  use this                                                                   
     program  to limit  that fishery,  put  out a  regulatory                                                                   
     proposal proposing  a limitation  and go through  all of                                                                   
     that,  and then adoption  of the  program and have  that                                                                   
     eligibility  criteria and have  it adopted and  in place                                                                   
     before  the  moratorium  expired  - in  order  to  avoid                                                                   
     having an open access fishery happen in the meantime.                                                                      
                                                                                                                                
SENATOR STEVENS asked  if both of these biomasses  in the GHLs are                                                              
managed by the Alaska Department  of Fish and Game (ADF&G) under a                                                              
fisheries management plan from the federal government.                                                                          
                                                                                                                                
MS. MCDOWELL said she thought that was true.                                                                                    
                                                                                                                                
SENATOR STEVENS  said the  reason he brought  it up is  because of                                                              
the recent  news that the  entire shellfish management  plan might                                                              
be reverting  back to the federal  government anyway. He  asked if                                                              
she had talked to ADF&G about that potential.                                                                                   
                                                                                                                                
MS.  MCDOWELL replied  that she  understands that  there had  been                                                              
some conversation  about  what to  do with the  management  of the                                                              
fisheries that have been delegated  to the state under the current                                                              
budget situation,  but CFEC  needs to have  the tools in  place in                                                              
case they are faced with this management dilemma.                                                                               
                                                                                                                                
SENATOR STEVENS agreed they need to be prepared.                                                                                
                                                                                                                                
MS. MCDOWELL  said she thought the  discussion he referred  to had                                                              
to do with where the state had been  delegated authority to manage                                                              
in federal waters and, in this case,  they are talking about state                                                              
waters.  She stated,  "The  feds  are already  managing  scallops;                                                              
they've done the LLP. The state is  managing the licensing for the                                                              
scallops."                                                                                                                      
                                                                                                                                
SENATOR STEVENS said  the point he was trying to  make is if ADF&G                                                              
is cut from shellfish management, all of this is for naught.                                                                    
                                                                                                                                
MS. MCDOWELL responded that she didn't  know if this would be part                                                              
of that or not, since this is in state waters.                                                                                  
                                                                                                                                
CHAIRMAN TORGERSON  asked what would happen without  this bill. He                                                              
asked  if   they  could  issue   limited  entry  permits   to  the                                                              
individuals under current law and not vessels.                                                                                  
                                                                                                                                
MS. MCDOWELL  replied that  the dilemma they  would be  faced with                                                              
would be to decide they couldn't  effectively manage and let it go                                                              
back to  open access,  which could result  in ADF&G's  closing the                                                              
fishery if they felt that was too risky. She said:                                                                              
                                                                                                                                
     The  other  option would  be  to explore  whether  there                                                                   
     would be  a way to limit  it using the existing  program                                                                   
     to get the numbers down to something  that was sensible.                                                                   
     A  policy  call  for the  legislature  is  the  fairness                                                                   
     question  of  issuing permanent  fishing  privileges  to                                                                   
     those who  have been hired  skippers rather  than invest                                                                   
     in the boat.                                                                                                               
                                                                                                                                
SENATOR STEVENS asked how many permits that would amount to.                                                                    
                                                                                                                                
MS.  MCDOWELL  replied that  they  hadn't  done the  research  and                                                              
didn't know the exact numbers.                                                                                                  
                                                                                                                                
MR.  JOHN  WINTHER,  Petersburg  fisherman,  said he  had  been  a                                                              
commercial  fisherman since  1964 in Southeast  and expanded  into                                                              
the Bering Sea with a crab vessel  in 1973. He said the Bering Sea                                                              
is unique because the majority of  vessels are not owner-operated.                                                              
All of  the crab fisheries  are under  a ration program  under the                                                              
North Pacific Fisheries Management  Council (NPFMC) except for the                                                              
Korean hair crab fishery, which was  delegated to state management                                                              
quite a while ago. That is why they  are asking for legislation to                                                              
create a vessel license through the  state with authorization from                                                              
the legislature.  They see no other  way under the  current system                                                              
that  uses  personal  license  permits  to reduce  the  number  of                                                              
permits to where  it can be a rational fishery. He  said, "In fact                                                              
you would be expanding the effort because of multiple skippers."                                                                
                                                                                                                                
MR. WINTHER said another issue is  with the large cost of entering                                                              
the Bering Sea fisheries:                                                                                                       
                                                                                                                                
     You  have a  vessel and  you have  a guy  that owns  the                                                                   
     permit who doesn't have any  interest in the vessel. The                                                                   
     vessel owner  is held  hostage to the  guy that  has the                                                                   
     license. If  he chooses not  to go on your  vessel, your                                                                   
     vessel sits at the dock. If  it's a vessel license, then                                                                   
     you can get  anybody to run the vessel. So,  we have all                                                                   
     the investment  and all the  risk and yet no  license to                                                                   
     fish under the current entry system.                                                                                       
                                                                                                                                
He said that  every boat that goes  up there is qualified  to fish                                                              
as a  catcher vessel. All  the product  is taken to  Alaskan shore                                                              
side plants, processed in state.  The state derives a fish tax off                                                              
of it and jobs are created. He maintained:                                                                                      
                                                                                                                                
     If the  moratorium expires and  there's nothing  to take                                                                   
     its place, this thing will shift  to an offshore fishery                                                                   
     where you  get the catcher  processors involved  and the                                                                   
     state sees little or nothing…                                                                                              
                                                                                                                                
He pointed  out that a  majority of the  Bering Sea  fisheries are                                                              
out-of-state owned,  but in this little fishery, about  24% of the                                                              
boats are owned  by Alaskans. Of the larger crab  fleet about 5 to                                                              
10% of the boats are owned by Alaskans. He stated:                                                                              
                                                                                                                                
     If  this  does  expire  and  it  goes  back  to  federal                                                                   
     management,  you don't want  it there.  By the time  you                                                                   
     get something implemented under  the federal system, new                                                                   
     entrants  come into  being  and they  won't  be able  to                                                                   
     manage the fisheries.                                                                                                      
                                                                                                                                
MR. JIM STONE said he is from the  scallop vessel Ocean Hunter and                                                              
has fished  off  the coast  of Alaska  for 15 years;  10 of  those                                                              
years in state waters. They were  excluded from state waters after                                                              
the moratorium.  They have a federal  license to fish  outside the                                                              
three-mile limit where 80% of the  scallop beds exist. He supports                                                              
HB 206, as the  LLP vessel license limitation has  done a bunch of                                                              
good things  for them.  The boats work  well together,  their crab                                                              
by-catch has gone  way down through voluntary  monitoring and they                                                              
are no longer  racing for fish or  going out in storms.  He noted,                                                              
"We'd like  to see the  state mirror  what the federal  government                                                              
has done in federal waters."                                                                                                    
                                                                                                                                
MR. OLIVER  HOLM said he is  concerned about the precedent  set in                                                              
HB 206  in licensing  vessels, because  an entity  is getting  the                                                              
right to harvest  fish. He thought the concentration  of ownership                                                              
would be very hard to track, especially  with a reduced budget. He                                                              
didn't think it was necessary to  have state limited entry at all.                                                              
The Korean  Hair Crab fishery  is fairly small  and insignificant.                                                              
He said  most of the money  would go out  of state if  the vessels                                                              
were licensed. If individuals were  licensed they would contribute                                                              
to the economy in Alaska more.                                                                                                  
                                                                                                                                
MR.CHRIS BERNS said  he opposes HB 206 because of  all the reasons                                                              
previously stated,  along with the  same concerns people  had with                                                              
SB 329. He believes,  "It's a drastic policy shift  that the state                                                              
has taken."                                                                                                                     
                                                                                                                                
MR. YAKOV REUTOV opposed HB 206 for the reasons already stated.                                                                 
                                                                                                                                
MR. ALAN  PARKS, Homer commercial  fisherman, said he  is speaking                                                              
on his own behalf and opposes HB  206 for a lot of reasons. He has                                                              
participated  in the  fisheries on  a variety  of different  sized                                                              
vessels.  He disagrees  somewhat with what  the sponsor  statement                                                              
(dated 3/21/01)  says,  "Further, it would  award ongoing  fishing                                                              
privileges to  many who have  worked professionally as  hired crew                                                              
and not those who have invested in the fishery."                                                                                
                                                                                                                                
By giving rights to the resource  to vessel owners, he, as a hired                                                              
crew, is  basically a  sharecropper and he  didn't think  that was                                                              
the intent of limited entry laws.                                                                                               
                                                                                                                                
MR.  MALCOLM MILNE,  Homer commercial  fisherman,  opposed HB  206                                                              
because, "It's important that fishing  rights go to the people who                                                              
are fishing  and not those who  are at the dock  out-of-state just                                                              
collecting the money."                                                                                                          
                                                                                                                                
MR.  MAKO  HAGGERTY also  opposed  HB  206  for the  same  reasons                                                              
already stated. He thought the economics  of the hair crab fishery                                                              
determines  the level  of participation  and he  wasn't sure  that                                                              
limited entry was a fair way of managing that fishery.                                                                          
                                                                                                                                
CHAIRMAN TORGERSON reiterated that  he had lost a quorum so he was                                                              
only taking testimony today. He thanked everyone who testified.                                                                 
                                                                                                                                
      CSHB 298(L&C)-LEGISLATIVE APPROVAL OF RAILROAD LEASES                                                                 
                                                                                                                                
CHAIRMAN  TORGERSON   announced  CSHB   298(L&C)  to  be   up  for                                                              
consideration.                                                                                                                  
                                                                                                                                
MS.  ROBIN  PHILLIPS,  staff  to  Representative  Lisa  Murkowski,                                                              
sponsor of HB 298, gave the following synopsis of the bill.                                                                     
                                                                                                                                
     The Alaska  Railroad Corporation  (ARRC) requested  this                                                                   
     bill, which  extends the length  of time they  can lease                                                                   
     lands from the current 35 years to 55 years.                                                                               
                                                                                                                                
     This  change in  statute  will help  cultivate  economic                                                                   
     development in communities along  the Railbelt by making                                                                   
     commercial   and  residential   development  on   Alaska                                                                   
     Railroad lands  more viable. The current  35-year leases                                                                   
     are  an obstacle in  leasing lands  to large  commercial                                                                   
     and residential developers who  need to secure long-term                                                                   
     financing for  their investments. Financial  lenders are                                                                   
     reluctant  to invest in  large scale projects  requiring                                                                   
     substantial   equity  participation   when  there's   no                                                                   
     guarantee the  land will be  available for 35  years. HB
     298  will also make  the ARRC's  leasing practices  more                                                                   
     consistent   with  other   state   agencies.  Both   the                                                                   
     University  of  Alaska  and the  Department  of  Natural                                                                   
     Resources can lease land for up to 55 years.                                                                               
                                                                                                                                
     The proposed  extension of the  allowable lease  term is                                                                   
     supported by  the following businesses,  individuals and                                                                   
     organizations: Anchorage Historic  Properties, Anchorage                                                                   
     Neighborhood  Housing Services,  Mel Tipton (Ship  Creek                                                                   
     tenant   and  commercial   developer),   Seward   Ship's                                                                   
     Drydock,  Inc., Dowl  Engineers,  Northrim Bank,  AIDEA,                                                                   
     Yukon Fuel,  Kantishna Holdings, Inc.,  A&A Construction                                                                   
     and  Development,   Inc.,  the   Anchorage  Chamber   of                                                                   
     Commerce,  City   of  Seward,  Anchorage   Assembly  and                                                                   
     Fairbanks Chamber of Commerce.                                                                                             
                                                                                                                                
MR. JIM KUBITZ,  Vice President, Real Estate Division,  ARRC, said                                                              
there  really hadn't  been much  controversy about  this. It  came                                                              
from a demand  from their tenants and leaseholders  who really are                                                              
looking for longer terms to lease lands.                                                                                        
                                                                                                                                
CHAIRMAN TORGERSON said he didn't know of any opposition either.                                                                
                                                                                                                                
          HB 131-FOREST RESOURCES & PRACTICES STANDARDS                                                                     
                                                                                                                                
CHAIRMAN TORGERSON announced HB 131 to be up for consideration                                                                  
and said it was introduced by the House Rules Committee at the                                                                  
request of the Governor.                                                                                                        
                                                                                                                                
MS. CAROL CARROLL, Director, Support Services, Department of                                                                    
Natural Resources (DNR), said:                                                                                                  
                                                                                                                                
     What  the   bill  does,   it  identifies  the   riparian                                                                   
     standards for Region 3. The  Board of Forestry requested                                                                   
     the science  and technical subgroup to get  together and                                                                   
     identify  all of  the best  science.  They got  together                                                                   
     with  an  implementation  group  and  with  all  of  the                                                                   
     affected parties  to make sure  what we were  looking at                                                                   
     in the scientific and technical  group really would work                                                                   
     on  the ground.  After that  process  was completed,  we                                                                   
     brought  the bill  back  to the  Board  of Forestry  for                                                                   
     their review  and that bill  is what you see  before you                                                                   
     today.                                                                                                                     
                                                                                                                                
MS. CARROLL said the committee has a "consensus bill" before it.                                                                
                                                                                                                                
CHAIRMAN TORGERSON asked what the  difference was between this and                                                              
Areas 1 and 2.                                                                                                                  
                                                                                                                                
MS.  CARROLL replied  that Area  1 is  coastal Alaska,  Area 3  is                                                              
Interior Alaska and Area 2 is next.                                                                                             
                                                                                                                                
MS. MARTY  FREEMAN, Division  of Forestry, DNR,  said she  was co-                                                              
chair  of the  Science and  Technical  Committee in  the group  of                                                              
stakeholders.  She  said  that the  difference  between  this  and                                                              
Region  1 is  that  they have  a different  stream  classification                                                              
system in  the Interior that is  tailored to the  different stream                                                              
types there.  In Region  1 there are  four different  stream types                                                              
including anadromous streams and  tributaries. In the Interior the                                                              
streams are both  anadromous and high value resident  fish streams                                                              
and those are subdivided between non-glacial and glacial waters.                                                                
                                                                                                                                
MR.  BOB  ZACHEL   said  he  was  the  Interior   timber  industry                                                              
representative on  the Science and  Technical Committee  when they                                                              
worked on this.  He said, "I wanted  to make it clear  that what I                                                              
thought I was  getting from this agreement was that  Fish and Game                                                              
must present  clear scientific data  to justify any  objections to                                                              
sales beyond the 100 ft. setback."                                                                                              
                                                                                                                                
CHAIRMAN TORGERSON asked if he wanted  to see something in statute                                                              
rather than just have a promise from ADF&G.                                                                                     
                                                                                                                                
MR. ZACHEL said he did.                                                                                                         
                                                                                                                                
MR.  JAMES  DURST,  Division  of  Habitat  and  Restoration,  DNR,                                                              
supported  HB 131.  He  commented,  "I think  it's  been a  pretty                                                              
impressive, consensus based development  and nobody got absolutely                                                              
everything we  wanted, but I  think we all  got enough of  what we                                                              
needed to get…"                                                                                                                 
                                                                                                                                
He said it was  a good balanced bill and clarified  that it wasn't                                                              
their intention  to deal with issues  beyond 100 ft.  The existing                                                              
statute calls  for a  100 ft. special  management area  along high                                                              
value resident  and [indisc.].  The bill  maintains that  idea and                                                              
narrows it down to 66 ft. on private land.                                                                                      
                                                                                                                                
CHAIRMAN  TORGERSON said  he hoped  Mr. Durst  could get  together                                                              
with Mr. Zachel to work the differences out.                                                                                    
                                                                                                                                
MR. DURST said they had been talking about it.                                                                                  
                                                                                                                                
CHAIRMAN TORGERSON said the industry  needed to be on board and if                                                              
it wasn't, he wasn't either.                                                                                                    
                                                                                                                                
MS. BETH CAISSIE, Northern Alaska  Environmental Center, supported                                                              
HB 131. She stated,  "We support this bill because  not only would                                                              
it provide a higher level of protection  for riparian habitats and                                                              
the fish that depend on it here in  the Interior, but also because                                                              
we support the process by which this bill is drafted…"                                                                          
                                                                                                                                
CHAIRMAN TORGERSON said that concluded  the committee's agenda for                                                              
the day and adjourned the meeting at 5:07 p.m.                                                                                  

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