Legislature(2003 - 2004)

03/10/2003 03:34 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 10, 2003                                                                                         
                           3:34 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Scott Ogan, Chair                                                                                                       
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Fred Dyson                                                                                                              
Senator Ben Stevens                                                                                                             
Senator Kim Elton                                                                                                               
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Ralph Seekins                                                                                                           
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Paul Seaton                                                                                                      
Representative Les Gara                                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
Executive Order 106 - Coastal Policy Council and Office of                                                                      
Coastal Management to DNR                                                                                                       
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
Executive Order 107 - Fish Habitat Functions to DNR                                                                             
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
EO 106 - No previous action to record.                                                                                          
                                                                                                                                
EO 107 - No previous action to record.                                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Kevin Duffy                                                                                                                 
Acting Commissioner                                                                                                             
Department of Fish & Game                                                                                                       
PO Box 25526                                                                                                                    
Juneau, AK  99802-5226                                                                                                          
POSITION STATEMENT:  Presented EO 107 for the Administration                                                                  
                                                                                                                                
Commissioner Tom Irwin                                                                                                          
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1724                                                                                                          
POSITION STATEMENT:  Presented EO 107 for the Administration                                                                  
                                                                                                                                
Chris Kennedy                                                                                                                   
Assistant Attorney General                                                                                                      
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT:  Answered questions about EO 107                                                                          
                                                                                                                                
Aurah Landau                                                                                                                    
Southeast Alaska Conservation Council                                                                                           
419 6th St.                                                                                                                     
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Bruce Baker                                                                                                                     
PO Box 211384                                                                                                                   
Auke Bay, AK                                                                                                                    
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Bruce Schactler                                                                                                                 
PO Box 2254                                                                                                                     
Kodiak, AK  99615                                                                                                               
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Owen Graham                                                                                                                     
Alaska Forest Association                                                                                                       
PO Box 9023                                                                                                                     
Ketchikan, AK  99901                                                                                                            
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Marilyn Crockett                                                                                                                
Alaska Oil and Gas Association (AOGA)                                                                                           
121 West Fireweed Lane                                                                                                          
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Roberta Highland                                                                                                                
Kachemak Bay Conservation Society                                                                                               
3734 Ben Walters Lane #202                                                                                                      
Homer, AK  99603                                                                                                                
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Bob Churchill                                                                                                                   
Alaska Fly Fishers                                                                                                              
3415 Wentworth                                                                                                                  
Anchorage, AK  99508                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Garvan Bucaria                                                                                                                  
PO Box 870298                                                                                                                   
Wasilla, AK  99687                                                                                                              
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Nancy Morris                                                                                                                    
No address provided                                                                                                             
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Doug Yates                                                                                                                      
No address provided                                                                                                             
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Tim Ciosek                                                                                                                      
PO Box 2911                                                                                                                     
Sitka, AK  99835                                                                                                                
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Julie Decker                                                                                                                    
Southeast Alaska Dive Fishery                                                                                                   
Box 2138                                                                                                                        
Wrangell, AK  99929                                                                                                             
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Gabriel Scott                                                                                                                   
Cascadia Wildlands Project                                                                                                      
PO Box 853                                                                                                                      
Cordova, AK  99574                                                                                                              
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Frank Rue                                                                                                                       
7083 Hendrickson Rd.                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Keith Bayha                                                                                                                     
10443 High Bluff                                                                                                                
Eagle River, AK                                                                                                                 
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Bill Stevens                                                                                                                    
Cassandra Energy Corporation                                                                                                    
Kenai, AK                                                                                                                       
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
John Winther                                                                                                                    
Box 509                                                                                                                         
Petersburg, AK                                                                                                                  
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Steve Borrell                                                                                                                   
Alaska Miners Association                                                                                                       
3305 Arctic                                                                                                                     
Anchorage, AK  99503                                                                                                            
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Mike Sallee                                                                                                                     
PO Box 7603                                                                                                                     
Ketchikan, AK                                                                                                                   
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Paul Shadura                                                                                                                    
Kenai Peninsula Fishermen's Association                                                                                         
Soldotna, AK                                                                                                                    
POSITION STATEMENT:  Encouraged members to improve EO 107                                                                     
                                                                                                                                
Tadd Owens                                                                                                                      
Resource Development Council                                                                                                    
121 W Fireweed  #250                                                                                                            
Anchorage, AK  99503                                                                                                            
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Scott Metzger                                                                                                                   
PO Box 999                                                                                                                      
Cordova, AK  99574                                                                                                              
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Robert Zyanich                                                                                                                  
Alaska Seine Boat Owners                                                                                                        
726 O Place #201                                                                                                                
Anchorage, AK  99501                                                                                                            
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Deb Spencer                                                                                                                     
PO Box 619                                                                                                                      
Pelican, AK                                                                                                                     
POSITION STATEMENT:  Urged the Legislature to fully review the                                                                
impacts of EO 107 before taking action                                                                                          
                                                                                                                                
Dick Coose                                                                                                                      
PO Box 9533                                                                                                                     
Ketchikan, AK  99901                                                                                                            
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Dr. David Person                                                                                                                
148 Beacon Hill Lane                                                                                                            
Ketchikan, AK  99901                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Dr. Eric Knudsen                                                                                                                
5000 Whispering Spruce                                                                                                          
Anchorage, AK  99516                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Joel Bennett                                                                                                                    
Defenders of Wildlife                                                                                                           
15255 Pt. Louisa Rd.                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Paula Terrell                                                                                                                   
Alaska Marine Conservation Council                                                                                              
5025 Thane Rd.                                                                                                                  
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Jan Dawe                                                                                                                        
Alaska Boreal Forest Council                                                                                                    
PO Box 84530                                                                                                                    
Fairbanks, AK 99708                                                                                                             
POSITION STATEMENT:  No position on EO 107, asked questions                                                                   
                                                                                                                                
Dave Hanna                                                                                                                      
PO Box 20834                                                                                                                    
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Jan Konigsberg                                                                                                                  
Trout Unlimited                                                                                                                 
1399 W 34th                                                                                                                     
Anchorage, AK  99503                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Harold Heinze                                                                                                                   
2917 Jackson                                                                                                                    
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Mike Robbins                                                                                                                    
ASEA Local 52                                                                                                                   
626 F Street                                                                                                                    
Anchorage, AK  99501                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Bill Hauser                                                                                                                     
3621 Hazen Circle                                                                                                               
Anchorage, AK  99515                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Mack Meiners                                                                                                                    
Kodiak Seiners Association                                                                                                      
Kodiak, AK                                                                                                                      
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Ben Kirkpatrick                                                                                                                 
521 W 12th St.                                                                                                                  
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Maggie Wigen                                                                                                                    
General Delivery                                                                                                                
Tenakee Springs, AK                                                                                                             
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Josh Pierce                                                                                                                     
6446 West Circle                                                                                                                
Anchorage, AK 99516                                                                                                             
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Doug Hill                                                                                                                       
PO Box 220236                                                                                                                   
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Eric Lee                                                                                                                        
PO Box 858                                                                                                                      
Petersburg, AK                                                                                                                  
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Neil MacKinnon                                                                                                                  
Hyak Mining Company                                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Chip Dennerlein                                                                                                                 
1627 W 14th Ave.                                                                                                                
Anchorage, AK  99501                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Steve Albert                                                                                                                    
17708 Kiloaua                                                                                                                   
Eagle River, AK  99577                                                                                                          
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Katherine Paul                                                                                                                  
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Ellen Simpson                                                                                                                   
2900 Porcupine Trail Rd.                                                                                                        
Anchorage, AK 99516                                                                                                             
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Celia Rosen                                                                                                                     
3711 Amber Bay Loop                                                                                                             
Anchorage, AK  99515                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Jerry McCune                                                                                                                    
United Fishermen of Alaska                                                                                                      
211 4th Street, Suite 110                                                                                                       
Juneau, Alaska  99801-1172                                                                                                      
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Rodger Painter                                                                                                                  
PO Box 20704                                                                                                                    
Juneau, AK                                                                                                                      
POSITION STATEMENT: Asked committee members to hold an oversight                                                              
hearing next year to review how the transfer is working.                                                                        
                                                                                                                                
Cevin Gilleland                                                                                                                 
19136 Birchwood Loop                                                                                                            
Eagle River, AK 99567                                                                                                           
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Larry Houle                                                                                                                     
Alaska Support Industry Alliance                                                                                                
4220 B St.                                                                                                                      
Anchorage, AK 99503                                                                                                             
POSITION STATEMENT:  Supports EO 107                                                                                          
                                                                                                                                
Jeanne Walter                                                                                                                   
19658 Creek Way                                                                                                                 
Chugiak, AK  99567                                                                                                              
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Cindy Anderson                                                                                                                  
Serenity Circle                                                                                                                 
Anchorage, AK  99502                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
Daniel Sharp                                                                                                                    
2821 Cutwater Ct.                                                                                                               
Anchorage, AK  99516                                                                                                            
POSITION STATEMENT:  Opposes EO 107                                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-10, SIDE A                                                                                                            
                                                                                                                                
CHAIR SCOTT  OGAN called the Senate  Resources Standing Committee                                                             
meeting to  order at 3:34  p.m. Senators Wagoner,  Stevens, Elton                                                               
and Chair Ogan were present.  Senator Dyson arrived shortly after                                                               
the  committee convened.  The  first order  of  business to  come                                                               
before the committee was EO 107.                                                                                                
                                                                                                                                
             EO 107 - FISH HABITAT FUNCTIONS TO DNR                                                                         
                                                                                                                                
MR. KEVIN DUFFY, Acting Commissioner  of the Alaska Department of                                                               
Fish  and Game  (ADF&G), told  members that  he and  Commissioner                                                               
Irwin were  present to  provide a  description of  the Governor's                                                               
proposal to move  the functions and positions of  the Division of                                                               
Habitat and Restoration  from ADF&G to the  Department of Natural                                                               
Resources (DNR),  along with a  number of functions that  will be                                                               
incorporated  into   the  Divisions   of  Sport   Fish,  Wildlife                                                               
Conservation,  Commercial Fish,  and the  Exxon Valdez  Oil Spill                                                               
(EVOS) office. He provided members  with a handout detailing that                                                               
proposal.  He noted  that  one  page of  the  handout provides  a                                                               
description of  the anticipated  layoffs and  position deletions.                                                               
The handout also includes a  proposed organizational chart of DNR                                                               
and a  chart of where the  habitat biologists will be  located in                                                               
the Division of Sport Fish.                                                                                                     
                                                                                                                                
COMMISSIONER DUFFY  told members  that he and  Commissioner Irwin                                                               
talked about some of these issues  last Friday. He said the focus                                                               
of EO  107 is  to streamline  permit processes.   It will  move a                                                               
significant number  of habitat biologists who  currently work for                                                               
ADF&G to  DNR. The Division  of Habitat and Restoration  has many                                                               
talented biologists;  he hopes that  expertise is  transferred to                                                               
DNR  through this  effort so  that the  [two departments]  have a                                                               
relationship in  which the  streamline permitting  functions with                                                               
habitat biologists'  presence is  effective. He  and Commissioner                                                               
Irwin  will sign  a memorandum  of agreement  describing the  new                                                               
structure and  how the  relationship between  ADF&G and  DNR will                                                               
work.                                                                                                                           
                                                                                                                                
MR. TOM  IRWIN, Commissioner  of DNR,  introduced the  staff that                                                               
worked on  EO 107:  Kerry Howard, Kevin  Brooks and  Randy Bates;                                                               
and Nancy  Welsh and  Chris Kennedy  (who were  participating via                                                               
teleconference).  He  told  members   that  these  staff  members                                                               
represent the  "best of the  best" and  are from ADF&G,  DNR, and                                                               
the Department of Law (DOL).  He welcomed the biologists who will                                                               
be transferred to DNR.                                                                                                          
                                                                                                                                
COMMISSIONER   IRWIN  showed   and   described   to  members   an                                                               
organizational chart of DNR. The  regional and field offices will                                                               
be changed  to seven  area offices  located in  Anchorage, Kenai,                                                               
Mat-Su, Fairbanks, Juneau, Petersburg and  Prince of Wales.  They                                                               
will  report  to an  operations  manager  who  will report  to  a                                                               
director linked to the Commissioner's  Office, giving the habitat                                                               
biologists a  direct line to  the Commissioner's Office.  He told                                                               
members that the memorandum of  agreement is very appropriate. He                                                               
and Commissioner Duffy feel the  two departments will need a tie-                                                               
in, which the memorandum will do.                                                                                               
                                                                                                                                
COMMISSIONER IRWIN said  he heard a presentation a  few weeks ago                                                               
named  "Perception is  Reality," which  was based  on the  Frazer                                                               
Report.  That  report  is  mining related  but  speaks  for  [the                                                               
mining]  industry in  general. That  report is  a summary  of the                                                               
results  of  a  poll  of  all of  the  large  significant  mining                                                               
companies  worldwide  about  the  desirability  of  investing  in                                                               
mining   activities  in   each  state,   province,  and   country                                                               
throughout the  world. Alaska, as  a desirable location  in which                                                               
to  invest, has  dropped in  that  poll during  the last  several                                                               
years. Last year,  on a scale from zero to  100, public companies                                                               
ranked Alaska 50th based on  their perception of the desirability                                                               
of  investing here.  He said  that perception  is reality  - when                                                               
people vote  with their  purses they  take their  exploration and                                                               
development dollars  elsewhere. He feels  it is critical,  in the                                                               
messages DNR sends to the outside  world, that the state has very                                                               
efficient procedures  that protect  habitat and  the environment.                                                               
He stated, "With  that said, we fully  need to and we  can and we                                                               
will change the perception and  move resource development forward                                                               
in our state."                                                                                                                  
                                                                                                                                
CHAIR OGAN  noted that Senators  Seekins and Lincoln  had excused                                                               
absences and that Representative  Seaton joined the committee. He                                                               
then took questions for the commissioners.                                                                                      
                                                                                                                                
SENATOR ELTON  referred to the  new DNR organizational  chart and                                                               
pointed out  that the Sitka  and Ketchikan habitat  offices would                                                               
be closed.  He asked if  any other  habitat offices in  the state                                                               
would be closed.                                                                                                                
                                                                                                                                
COMMISSIONER IRWIN said he did not believe so.                                                                                  
                                                                                                                                
SENATOR ELTON asked if the only new office is in the Mat-Su.                                                                    
                                                                                                                                
COMMISSIONER  IRWIN  replied,  "These   were  designed  based  on                                                               
workload.  The groups  that were  together  wanted to  prioritize                                                               
where  the quantity  of  work  was, what  was  required, and  the                                                               
decision was made that this  is the most efficient, effective way                                                               
that  we  can serve  Alaska  and  access  the permitting  to  the                                                               
habitat." He affirmed the Mat-Su office is the only new office.                                                                 
                                                                                                                                
SENATOR  ELTON said  he  has heard  the  Frazer Report  mentioned                                                               
before but he feels the  Division of Habitat and Restoration move                                                               
creates  a certain  amount of  cognitive dissidence  because both                                                               
Commissioner Irwin and the Governor  have pledged that no habitat                                                               
degradation will occur. He said  the only way Alaska will improve                                                               
its rank  of 50th  would be  to make  changes that  could degrade                                                               
habitat.  He  asked how  the  business  climate can  be  improved                                                               
otherwise.                                                                                                                      
                                                                                                                                
COMMISSIONER  IRWIN  said  it is  all  about  efficiency:  people                                                               
working   together,   communicative  steps,   streamlining,   and                                                               
conveying to  the outside  world that the  state will  not accept                                                               
any  degradation of  habitat. He  emphasized that  people working                                                               
together in the  same groups communicate therefore  the steps are                                                               
much  more efficient.  He  said  this approach  is  based on  the                                                               
business and environmental success of large projects in Alaska.                                                                 
                                                                                                                                
SENATOR ELTON said it is  difficult to separate the definition of                                                               
"efficiency"  from  the  definition  of "layoffs."  He  said  the                                                               
handout shows that  14 biologist positions will  be eliminated in                                                               
this  process. He  thought  that may  not  induce efficiency  but                                                               
instead may change  a system that has processed  2,000 permits in                                                               
14 or 15 days each.                                                                                                             
                                                                                                                                
COMMISSIONER IRWIN  said one thing to  be mindful of is  that the                                                               
routine permits  need to continue.  Those are the  simple permits                                                               
that could be  labeled as standard. He said on  the other side of                                                               
the coin  are the large  significant project issues that  must be                                                               
addressed. He said he has  experienced, during his entire career,                                                               
that  when the  right  decision  has to  be  made about  critical                                                               
issues, the  process works when  those involved work in  the same                                                               
areas, discuss the  same issues and have the  same priorities. He                                                               
said it is important to  understand that the habitat employees in                                                               
DNR will  have their own  system of accountability, which  is why                                                               
that office  was set up separately.  He does not think,  when one                                                               
sees the  people involved in  those jobs, they will  be concerned                                                               
that DNR will run over the environment.                                                                                         
                                                                                                                                
COMMISSIONER  DUFFY asked  Senator  Elton to  keep  in mind  that                                                               
biologists do  a whole host  of activities, not  just permitting.                                                               
He explained:                                                                                                                   
                                                                                                                                
     It is  very important  to us  that with  this executive                                                                    
     order  that  an  adequate  number  of  trained  habitat                                                                    
     biologists  who deal  with  permitting are  transferred                                                                    
     over to  DNR. There [are]  a number of  other functions                                                                    
     within   the   department   that   aren't   necessarily                                                                    
     permitting and within that  whole paradigm, Senator, is                                                                    
     where   there   [are]   some  efficiencies   and   some                                                                    
     reductions in staff. So, it  is not necessarily just in                                                                    
     the permitting  arena but it's all  the activities that                                                                    
     the  current   Division  of  Habitat   and  Restoration                                                                    
     operates.                                                                                                                  
                                                                                                                                
CHAIR  OGAN asked  what statutory  functions  will be  eliminated                                                               
with this transfer.                                                                                                             
                                                                                                                                
COMMISSIONER DUFFY  said no Title 16  permitting responsibilities                                                               
will be eliminated.                                                                                                             
                                                                                                                                
CHAIR  OGAN  asked if  everything  the  Division of  Habitat  and                                                               
Restoration is required  to do in ADF&G by statute  will still be                                                               
required under DNR.                                                                                                             
                                                                                                                                
COMMISSIONER DUFFY said that is correct.                                                                                        
                                                                                                                                
CHAIR OGAN asked Commissioner Irwin  to address a concern that he                                                               
will be the "fox watching the henhouse."                                                                                        
                                                                                                                                
COMMISSIONER  IRWIN  said  he  believes  his  record  speaks  for                                                               
itself. He said DNR will  still be accountable to the legislature                                                               
and the  governor and  he has  never compromised  the environment                                                               
for  business. By  working with  both interests  in mind,  he has                                                               
created a  situation where both  sides have  won in the  past. He                                                               
said  this   system  has  clear   sideboards  and  DNR   will  be                                                               
accountable.  He pointed  out that  every commissioner  who takes                                                               
this oath of office swears to work for all people in Alaska.                                                                    
                                                                                                                                
CHAIR OGAN  said, like many  people, he  lives in Alaska  to hunt                                                               
and fish and  because he loves the natural resources.  He said he                                                               
will publicly  commit to  personally take  action if  someone can                                                               
show him where  the habitat has been damaged as  a result of this                                                               
transfer taking place. He said  he is very pro-development but he                                                               
does not  want to see the  resources that God has  endowed Alaska                                                               
with compromised in any way.  He believes the Constitution set up                                                               
a tension between  the legislature and the  executive branch; the                                                               
legislature's role  is to  oversee what  the executive  branch is                                                               
doing and to set policy.                                                                                                        
                                                                                                                                
COMMISSIONER IRWIN said he believes that is most appropriate.                                                                   
                                                                                                                                
REPRESENTATIVE SEATON  informed the  audience that  the Fisheries                                                               
Committee will  be holding a  hearing on  EO 107 on  Monday night                                                               
from  7:00   to  10:00   p.m.  He  then   referred  to   the  DNR                                                               
organizational chart  and pointed out  that all of  the functions                                                               
of  the  Office of  Habitat  Management  and Permitting  will  be                                                               
delegated   to   the   deputy  commissioner   rather   than   the                                                               
commissioner. He asked Commissioner  Irwin what his function will                                                               
be within that structure.                                                                                                       
                                                                                                                                
COMMISSIONER  IRWIN  deferred to  Chris  Kennedy  for a  detailed                                                               
answer  but  said the  purpose  is  to  provide a  mechanism  for                                                               
elevation. He explained:                                                                                                        
                                                                                                                                
     The elevation  - again,  we kept  them separate  so you                                                                    
     could still have  the two competing entities  - one may                                                                    
     want development  and one may want  to protect habitat.                                                                    
     We very much wanted that  progression. You would get up                                                                    
     to the  deputy commissioner where you'd  have one final                                                                    
     elevation  to  the  commissioner   who  again  has  the                                                                    
     accountability to make sure both sides are protected.                                                                      
                                                                                                                                
REPRESENTATIVE  SEATON asked  if the  deputy commissioner  or the                                                               
commissioner  will  have  the authorities  under  the  permitting                                                               
process.                                                                                                                        
                                                                                                                                
COMMISSIONER IRWIN again deferred to Mr. Kennedy.                                                                               
                                                                                                                                
SENATOR ELTON  asked if the  commissioner will be allowed  to get                                                               
involved in  the decision making down  the line since he  will be                                                               
the first point of appeal.                                                                                                      
                                                                                                                                
CHAIR OGAN  announced an at-ease  for the purpose  of rearranging                                                               
the room to  accommodate the large number of  participants.  When                                                               
CHAIR OGAN reconvened the meeting,  he asked committee members to                                                               
limit their  questions to give the  many people who have  come to                                                               
testify  priority at  this time.  He  then asked  Mr. Kennedy  to                                                               
respond to Senator Elton's question.                                                                                            
                                                                                                                                
MR. CHRIS  KENNEDY, assistant attorney general,  told members the                                                               
overall  thrust  of  the  executive order  was  to  preserve  the                                                               
separate functions  of the habitat  staff where those need  to be                                                               
maintained as  an independent influence  on policy. He  said that                                                               
is most true in the Forest  Practices Act. The legislature set up                                                               
a series  of checks and  balances between the habitat  staff, who                                                               
reported to  the commissioner of  ADF&G, and the  forestry staff,                                                               
who reported  through the state  forester to the  commissioner of                                                               
DNR. He explained that since  both the habitat and forestry staff                                                               
will reside  in DNR, it  was necessary  to create a  mechanism to                                                               
preserve  those checks  and  balances. To  do  that, the  habitat                                                               
staff has been assigned to the  deputy commissioner of DNR, a new                                                               
position,  while  the  forestry   functions  have  been  assigned                                                               
directly  to the  state  forester.   The  two  positions will  be                                                               
legally equal;  the commissioner can resolve  any impasse between                                                               
them.                                                                                                                           
                                                                                                                                
SENATOR BEN  STEVENS asked  if Senator  Elton was  asking whether                                                               
the   commissioner's   decision    will   override   the   deputy                                                               
commissioner's decision.                                                                                                        
                                                                                                                                
SENATOR  ELTON said  his  understanding, under  EO  107, is  that                                                               
powers are  delegated to  the deputy  commissioner and  the first                                                               
point of  appeal is to  the commissioner.  He  questioned whether                                                               
the commissioner could be involved in  any of the new Division of                                                               
Habitat and Restoration's processes.                                                                                            
                                                                                                                                
SENATOR BEN  STEVENS asked Commissioner  Duffy whether  the ADF&G                                                               
commissioner  currently   has  that   same  authority   on  these                                                               
decisions.                                                                                                                      
                                                                                                                                
COMMISSIONER DUFFY  said historically, as decisions  get elevated                                                               
in the department, the commissioner  makes the decisions on these                                                               
types of issues rather than the deputy commissioner.                                                                            
                                                                                                                                
SENATOR  BEN  STEVENS  asked  if under  the  new  structure,  the                                                               
commissioner  will  have  overruling authority  over  the  deputy                                                               
commissioner's decisions.                                                                                                       
                                                                                                                                
COMMISSIONER DUFFY  said he cannot answer  that definitively from                                                               
ADF&G's standpoint.                                                                                                             
                                                                                                                                
SENATOR  BEN  STEVENS asked  the  same  question of  Commissioner                                                               
Irwin.                                                                                                                          
                                                                                                                                
COMMISSIONER IRWIN asked that Mr. Kennedy clarify the procedure.                                                                
                                                                                                                                
SENATOR BEN STEVENS  said the point he is trying  to make is that                                                               
the  commissioner  always has  the  overruling  authority in  the                                                               
decision making process in any department.                                                                                      
                                                                                                                                
MR.  KENNEDY said  he believes  the structure  will be  different                                                               
now.  The  deputy commissioner's  decision  is  the final  agency                                                               
action.  An appeal  would  be  made to  the  Superior Court.  The                                                               
deputy commissioner does  report to the commissioner  in the same                                                               
way the governor  could have intervened in the past  in a dispute                                                               
between the commissioners  of ADF&G and DNR.  The commissioner of                                                               
DNR  can now  intercede or  mediate a  dispute between  the state                                                               
forester and the deputy commissioner.                                                                                           
                                                                                                                                
MR. KENNEDY said he would have  to talk about a specific instance                                                               
to  give a  more direct  answer  on how  the deputy  commissioner                                                               
would interact with the commissioner.                                                                                           
                                                                                                                                
SENATOR BEN  STEVENS said he  would like a better  definition and                                                               
asked for an example.                                                                                                           
                                                                                                                                
MR. KENNEDY said  a common example would be  an anadromous stream                                                               
permit  under AS  16.05.870.  If  the staff  denied  a permit,  a                                                               
hearing  would be  held under  the Administrative  Procedures Act                                                               
(APA).  The hearing  officer would  recommend a  decision to  the                                                               
deputy commissioner  of DNR who  would make the  final department                                                               
decision on that permit.                                                                                                        
                                                                                                                                
CHAIR  OGAN announced  that Representative  Gara  had joined  the                                                               
committee.                                                                                                                      
                                                                                                                                
SENATOR  ELTON said  his understanding  is  that AS  44.37.011(b)                                                               
provides that the deputy commissioner  will make the decision and                                                               
the  first  appeal  would  be   made  to  the  commissioner.  His                                                               
interpretation is that if the  commissioner is the first point of                                                               
appeal, the commissioner could not  be involved in decisions that                                                               
were made up to the deputy commissioner level.                                                                                  
                                                                                                                                
CHAIR OGAN  asked Mr.  Kennedy to get  back to  committee members                                                               
with a response.                                                                                                                
                                                                                                                                
MR. KENNEDY told members he was  not really speaking to the issue                                                               
of whether  the commissioner  could be  involved in  the decision                                                               
and said he would get back to committee members.                                                                                
                                                                                                                                
REPRESENTATIVE  SEATON ccommented  that  EO  107 establishes  the                                                               
authority with the deputy commissioner, not the commissioner.                                                                   
                                                                                                                                
COMMISSIONER DUFFY said that both  he and Commissioner Irwin have                                                               
open  door  policies and  would  be  happy to  provide  committee                                                               
members with a thorough evaluation.                                                                                             
                                                                                                                                
CHAIR OGAN  announced the committee would  take public testimony.                                                               
He  said  that due  to  the  large  number of  participants,  the                                                               
committee  will have  to limit  the  testimony time  and that  he                                                               
would rotate throughout the legislative teleconference sites.                                                                   
                                                                                                                                
MS. AURAH LANDAU, representing  the Southeast Alaska Conservation                                                               
Council   (SEACC),  a   coalition  of   18  volunteer   community                                                               
conservation groups  and 14 communities around  Southeast Alaska,                                                               
told members  that SEACC's mission  is to guard the  integrity of                                                               
Southeast  Alaska's   natural  resources   and  to   provide  for                                                               
sustained,  balance  use of  them.  SEACC  has talked  to  people                                                               
around  the region  to see  how  EO 107  will potentially  impact                                                               
communities.  Those  people  have said  that  commercial  charter                                                               
operators  and guides  are dependent  on the  health of  wildlife                                                               
habitat. The  forests and streams  are enormous  economic engines                                                               
for the  towns around Southeast.  In 1953, Alaska was  declared a                                                               
natural   disaster  area   because  fish   traps  decimated   the                                                               
fisheries. Protection of fisheries  resources was a driving force                                                               
behind  statehood and  the first  legislators  wisely solved  the                                                               
problem  of bad  management by  assigning fisheries  to ADF&G  to                                                               
ensure  that Alaska's  renewable wildlife  resources and  habitat                                                               
are  managed  on sustained  yield  principles.  That is  a  sound                                                               
approach that balances the interests  of all Alaskans now and for                                                               
future years.                                                                                                                   
                                                                                                                                
MS.  LANDAU  informed  members   that  Southeast  residents  want                                                               
logging jobs but they want  enforcement of straight laws that are                                                               
designed  to  protect the  resources.  Many  habitat permits  are                                                               
issued after  consultation with development sponsors  and private                                                               
landowners  and the  original proposals  are  modified to  create                                                               
better projects.  If the Division  of Habitat and  Restoration is                                                               
transferred to  DNR, protection of  wildlife habitat will  not be                                                               
on equal footing with resource  development. Without balanced and                                                               
knowledgeable  oversight,  projects  could be  permitted  without                                                               
modifications that benefit fish  habitat, such as larger culverts                                                               
and avoiding spawning areas. Fish habitat  is lost one piece at a                                                               
time; the cumulative effects  have compounded impacts. Prevention                                                               
of habitat loss is more economical than habitat restoration.                                                                    
                                                                                                                                
MS. LANDAU  cautioned that one  only has  to look to  the Pacific                                                               
Northwest to  see that salmon  runs are  only a fraction  of what                                                               
they once were,  partially due to habitat loss.  Those states are                                                               
spending  hundreds  of  millions  of  dollars  to  restore  those                                                               
habitats and most fishing jobs have vanished.                                                                                   
                                                                                                                                
MS. LANDAU  said an  example of  another way  EO 107  could cause                                                               
significant  problems  is  in  Section   18,  which  repeals  the                                                               
requirement  that the  state forester  provide detailed  plans of                                                               
operations  for  logging.  Those  plans  show  stream  crossings,                                                               
anadromous and  high value resident  fish streams, buffers  to be                                                               
retained, and  other ways to prevent  non-point source pollution.                                                               
This information is critical to people  who live near a sale area                                                               
as well  as other  agencies looking at  the project  to determine                                                               
what  other resources  will be  affected. Removing  this type  of                                                               
public information ensures  further conflicts between communities                                                               
and developers.                                                                                                                 
                                                                                                                                
MS.  LANDAU said  protecting fish  and wildlife  habitat is  very                                                               
important to all Alaskans. She  thanked the committee for holding                                                               
public  hearings  and  stated  there   must  be  better  ways  to                                                               
streamline  permitting that  do  not eliminate  vital checks  and                                                               
balances. She  urged members to  support the  resolution opposing                                                               
EO 107 and to bring it to the full Senate for a vote.                                                                           
                                                                                                                                
SENATOR DYSON  asked what process  SEACC used to verify  that its                                                               
members support the position Ms. Landau presented.                                                                              
                                                                                                                                
MS.  LANDAU repeated  that SEACC  has  18 member  groups and  all                                                               
SEACC decisions are made on  the board level with representatives                                                               
from each community. She explained,  "This is something that they                                                               
were concerned about  and specifically spoke to us -  asked us to                                                               
get  information about  - get  information to  our members  about                                                               
with  a  series  of  many  calls,  lots  of  research  into  what                                                               
potentially  this   could  mean   and  then   understanding  what                                                               
particular projects had been stopped and that sort of thing."                                                                   
                                                                                                                                
SENATOR DYSON  asked if the  decision to present a  viewpoint was                                                               
made at a  board level and whether Ms. Landau  was inferring that                                                               
each  board member  went through  a rigorous  process to  contact                                                               
their membership.                                                                                                               
                                                                                                                                
MS. LANDAU  said each board  member uses a different  process but                                                               
they are  elected by their  groups and are comfortable  in giving                                                               
staff advice and recommendations.                                                                                               
                                                                                                                                
MR. BRUCE  BAKER, a Juneau  resident, urged members to  bring the                                                               
resolution to  reject EO 107 to  the Senate floor for  a vote. He                                                               
said the state needs to  maintain the checks and balances between                                                               
ADF&G  and  DNR  that  have   benefited  Alaska's  economy  since                                                               
statehood.  ADF&G's fundamental  mission is  to protect  Alaska's                                                               
fish  and wildlife  resources. DNR's  fundamental  mission is  to                                                               
develop the  state's other natural resources.  These two missions                                                               
balance each other  in a way that ensures  adequate protection of                                                               
the  state's economically  important fish  and wildlife  habitats                                                               
while  allowing   legitimate  natural  resource   development  to                                                               
proceed  in  a  timely  manner.  By  eliminating  the  permitting                                                               
authority of one  agency, EO 107 eliminates  essential checks and                                                               
balances.                                                                                                                       
                                                                                                                                
MR. BAKER opined that EO 107  is a solution looking for a problem                                                               
because  the timeliness  of ADF&G's  permitting is  exemplary. Of                                                               
1,926 permit applications received last  year, over 99 percent of                                                               
the applicants either received permits  or were told they did not                                                               
need  one. The  average  processing  time was  only  14 days.  He                                                               
pointed  out   a  process  is   already  in  place   that  allows                                                               
commissioners  to  quickly  resolve issues  consistent  with  the                                                               
Governor's policies.  He pointed  out that DNR  has a  backlog of                                                               
over  700  permit applications,  some  20  years old,  and  3,000                                                               
miscellaneous applications,  such as water right  transfers, that                                                               
have yet  to be processed.  He noted the Administration  plans to                                                               
layoff 22 ADF&G  habitat staff and transfer 36 others  to DNR but                                                               
believes  to  boost  its  natural  resource  development  without                                                               
costly  delays and  lawsuits, Alaska  needs  to increase,  rather                                                               
than eliminate, habitat  staffing and leave it  in the department                                                               
that  has expertise  to draw  on. He  provided committee  members                                                               
with two ADF&G  memoranda with specific information  that was not                                                               
available to the Governor when  he made his public statements. He                                                               
said  that EO  107  is  not about  making  state government  more                                                               
efficient:  it is  a thinly  veiled effort  to lower  the habitat                                                               
protection bar for permit applicants.                                                                                           
                                                                                                                                
SENATOR ELTON  asked Mr.  Baker to  describe his  experience with                                                               
the Division of Habitat and Restoration.                                                                                        
                                                                                                                                
MR.  BAKER  told members  he  is  currently a  natural  resources                                                               
consultant  and is  testifying  strictly on  his  own behalf.  He                                                               
retired from  ADF&G 10 years ago,  where he served as  the deputy                                                               
director of the Division of  Habitat and Restoration for about 11                                                               
years. He said he is very  familiar with the degree of commitment                                                               
and  interaction  between  the   departments  and  how  well  the                                                               
existing system works.                                                                                                          
                                                                                                                                
TAPE 03-10, SIDE B                                                                                                            
                                                                                                                                
MR. BRUCE  SCHACTLER, testifying  from Kodiak,  said that  EO 107                                                               
may save  over $1 million  from the Commercial  Fisheries budget.                                                               
He  completely supports  the Governor's  position on  this matter                                                               
and does  not believe there  will be any degradation  of habitat.                                                               
He agreed  with Chair Ogan that  the Legislature will call  for a                                                               
review if problems occur and stated support for EO 107.                                                                         
                                                                                                                                
MR.  OWEN GRAHAM,  representing  the  Alaska Forest  Association,                                                               
stated support  for EO  107. He said  the current  permitting and                                                               
Alaska  Coastal  Management  Program  (ACMP)  commenting  process                                                               
under  ADF&G  is  unnecessarily costly  and  contentious.  Alaska                                                               
needs an  agency that  encourages responsible  development rather                                                               
than an agency  that believes in protecting  the environment from                                                               
development.  State  support  for  development  is  essential  to                                                               
restore  resource  industry  jobs, particularly  timber  industry                                                               
jobs. In addition, significant cost savings should result.                                                                      
                                                                                                                                
MS. MARILYN CROCKETT,  Deputy Director of the Alaska  Oil and Gas                                                               
Association  (AOGA),  told  members  that AOGA  spent  18  months                                                               
identifying   permitting   programs   that  need   updating   and                                                               
streamlining.  Early  in  the process,  AOGA  adopted  a  guiding                                                               
principle, which  was to  accomplish permit  streamlining without                                                               
compromising the environment or  safety standards. That principle                                                               
mirrors the Administration's proposals.  These proposals are long                                                               
overdue and  will be  giant steps forward  in making  Alaska more                                                               
competitive   with   other   resource  development   states   and                                                               
provinces.  AOGA  appreciates  the  work and  commitment  of  the                                                               
Governor and the Legislature to move forward in this area.                                                                      
                                                                                                                                
MS. ROBERTA  HIGHLAND, Kachemak Bay Conservation  Society (KBCS),                                                               
stated  opposition to  EO 107.  KBCS urges  committee members  to                                                               
recommend overriding EO  107 and to keep the  Division of Habitat                                                               
and Restoration within  ADF&G. Protecting fish and  wildlife is a                                                               
bipartisan issue:  as the habitat  of fish and wildlife  goes, so                                                               
go those resources. Salmon populations  in the Lower 48 have been                                                               
greatly  reduced   by  habitat  modification  to   the  point  of                                                               
endangered   species  status   for  some   populations.  Alaska's                                                               
economic   development  needs   the  careful   oversight  of   an                                                               
independent watchdog  that will  protect the public  interests by                                                               
protecting its  resources. Placing habitat permitting  within DNR                                                               
makes protection of fish and  wildlife secondary to DNR's mission                                                               
to conserve and develop state  lands. ADF&G currently has habitat                                                               
permitting  authority  over projects  on  various  types of  land                                                               
ownership,  including private  and federal  lands. DNR  and ADF&G                                                               
have very different mandates. K                                                                                                 
                                                                                                                                
MS.  HIGHLANDS said  that KBCS  is further  concerned with  DNR's                                                               
development  mandate. The  Title 16  requirements regarding  fish                                                               
passage will increase protection of  our fisheries. An example of                                                               
DNR's  less   than  adequate  protection  of   fisheries  streams                                                               
occurred in  1992 when  the Division  of Oil  and Gas  proposed a                                                               
reduction  or elimination  of some  production rig  setbacks. The                                                               
state  will  lose its  system  of  checks  and balances  and  the                                                               
oversight of fish and wildlife.  DNR's primary mission to develop                                                               
land  will take  precedence. The  physical separation  of habitat                                                               
biologists  from ADF&G  will make  sharing of  essential research                                                               
more difficult,  time consuming and  expensive. The facts  do not                                                               
show  any clear  and  convincing reasons  to  change the  current                                                               
system, a system that has worked well for more than 40 years.                                                                   
                                                                                                                                
MR. BOB CHURCHILL,  Alaska Fly Fishers, told  members that Alaska                                                               
is  one  of  the  premier  destinations  for  wilderness  fishing                                                               
experiences for  people from  all over  the world.  This industry                                                               
not only  brings dollars into the  state, it also provides  for a                                                               
great many  local businesses, both  rural and urban.  His concern                                                               
with moving  habitat biologists out  of ADF&G is  the contentious                                                               
issue of buffer zones along  streams and culverts. These agencies                                                               
were  intentionally placed  in Alaska's  constitution to  provide                                                               
accountability.                                                                                                                 
                                                                                                                                
MR.  GARVAN BUCARIA,  a retired  biologist, who  worked for  both                                                               
state and  federal agencies  and on  oil rigs,  said he  has seen                                                               
some problems  over the  years such  as mercury  contamination of                                                               
fish  resources  and forest  areas  denuded,  principally in  the                                                               
[indisc.] reservoir in  North Carolina. He is also  aware of lead                                                               
problems  at the  Red Dog  mine. EO  107 is  not compatible  with                                                               
objective decision-making.  He referred  to written  testimony he                                                               
submitted to members and said items  4, 5, and 6 relate to monies                                                               
that might  be encumbered because of  shifting the organizational                                                               
structure.  He  also  noted  that   people  are  not  necessarily                                                               
compatible just because they work in the same agency.                                                                           
                                                                                                                                
CHAIR  OGAN clarified  that the  Red  Dog Mine  has improved  the                                                               
quality of  local streams to  the point that fish  are inhabiting                                                               
them for the first time.                                                                                                        
                                                                                                                                
MS. NANCY MORRIS, a sports  fisher from Bristol Bay, told members                                                               
she has dealt  with the permitting process several  times and has                                                               
never experienced  efficiency problems with ADF&G.  She expressed                                                               
concern that  EO 107 removes accountability  because, "You cannot                                                               
have two entities  that are not in cahoots with  each other being                                                               
able  to be  objective."  Development projects  in  the Bush  are                                                               
often  initiated  by outside  interests;  residents  do not  feel                                                               
their interests  are being looked  after. She said she  has never                                                               
seen ADF&G work against development;  instead, it has had a major                                                               
role in taking steps to  ensure responsible development. If ADF&G                                                               
is removed  from the permitting  process, that will no  longer be                                                               
the case. She asked that the status quo remain.                                                                                 
                                                                                                                                
MR. DOUG  YATES, testifying from Fairbanks,  expressed opposition                                                               
to  EO 107  because the  transfer is  egregious to  the long-term                                                               
best interests  of the state. He  said the move is  a transparent                                                               
effort to give  more power and control to  resource developers at                                                               
the  expense of  Alaska's fish  and game  resources. Rather  than                                                               
make  it easier  to log  and drill,  the precarious  condition of                                                               
Alaska  salmon  should  be  considered.  Throughout  the  Pacific                                                               
Northwest,  hundreds of  salmon  runs have  gone  extinct or  are                                                               
seriously  depleted. The  same will  occur  in Alaska  if EO  107                                                               
takes effect.  EO 107  protects corporations,  not the  people of                                                               
the state.                                                                                                                      
                                                                                                                                
MR. TIM CIOSEK, a Sitka  resident, stated strong opposition to EO                                                               
107.  Many  of  his  friends are  commercial  fishermen,  charter                                                               
operators and guides.  All of these people rely on  a healthy and                                                               
productive environment.  This transfer will eliminate  a critical                                                               
system of  checks and balances  and any  meaningful environmental                                                               
review  of proposed  projects. In  addition,  the elimination  of                                                               
habitat biologists will  result in weaker field  review that will                                                               
lead to permit delays. He asked members to disapprove EO 107.                                                                   
                                                                                                                                
MS. JULIE DECKER, Director of  the Southeast Alaska Regional Dive                                                               
Fishers  Association  (SARDFA),  said  SARDFA  supports  resource                                                               
protection. SARDFA believes that  a healthy resource is necessary                                                               
to have  a healthy  industry. SARDFA is  confident that  DNR will                                                               
fulfill the  responsibilities of  Title 16.  EO 107  will protect                                                               
fish and wildlife habitat and make government more efficient.                                                                   
                                                                                                                                
MR. GABRIEL  SCOTT, Alaska field representative  for the Cascadia                                                               
Wildlands Project based  in Oregon, said he would like  to give a                                                               
concrete example of  the impact EO 107 would have  on the Katalla                                                               
exploration   project.  The   Cassandra  Energy   Corporation  is                                                               
proposing  to explore  for  oil  in the  Copper  River delta,  an                                                               
incredibly  important  fish habitat.  All  five  species of  wild                                                               
Pacific salmon and  two species of trout are at  risk. That delta                                                               
supports  two   fishing  guide  lodge  businesses,   as  well  as                                                               
commercial and  subsistence fisheries.  EO 107 will  kill salmon,                                                               
breach the  public trust, and  result in increased  conflict. All                                                               
other  agencies involved  in the  permitting process  have relied                                                               
extensively  on  the Division  of  Habitat  and Restoration.  The                                                               
Division of Habitat and Restoration  biologists have done a great                                                               
deal  of logistical  planning  work for  the  oil company.  Those                                                               
biologists  have conducted  three separate  site inspections;  no                                                               
one else  has with  the exception of  the USFS.  DNR's biologists                                                               
have  never been  to Katalla.  The  Cassandra Energy  Corporation                                                               
originally proposed bringing a couple  hundred barge loads up the                                                               
Katalla River,  traveling over one-half  mile of  salmon spawning                                                               
habitat.   Division  of   Habitat   and  Restoration   biologists                                                               
conducted  stream  channel surveys  on  the  river, which  showed                                                               
those areas are  only three feet deep while  Cassandra planned to                                                               
use  barges with  a  four to  five foot  draft.  The Division  of                                                               
Habitat  and  Restoration  issued   a  permit  with  stipulations                                                               
containing the  maximum size of  the barge and the  minimum depth                                                               
of river  travel. After  EO 107  goes into  effect, it  is highly                                                               
unlikely  that  any state  official  will  ever monitor  standard                                                               
barge  operations  near  spawning   habitat.  That  means  permit                                                               
stipulations  will  have  to  be   revised  by  someone  with  no                                                               
knowledge  of  the Katalla  River.  The  lead agency  authorizing                                                               
Katalla is  the USFS, which  bases many  of its decisions  on the                                                               
Division of Habitat and Restoration's decisions.                                                                                
                                                                                                                                
MR. FRANK  RUE, former commissioner  of ADF&G,  said EO 107  is a                                                               
very  significant  issue  that  was   dealt  with  by  the  first                                                               
legislature of  Alaska. The Division  of Habitat  and Restoration                                                               
program  has been  in existence  for 43  years, therefore  EO 107                                                               
will make a significant change.                                                                                                 
                                                                                                                                
MR. RUE  informed members that he  worked for DNR for  nine years                                                               
and has nothing but admiration  for DNR employees. He worked with                                                               
Tom Irwin  when he  was with  the Fort Knox  mine, and  feels Mr.                                                               
Irwin did  a great job getting  the mine developed. Mr.  Rue said                                                               
he also worked as the habitat  director for seven years under two                                                               
administrations  and  was the  commissioner  of  ADF&G for  eight                                                               
years. He stated  that this issue is not  about personalities; it                                                               
is about  how the Legislature  wants Alaska's fish to  be managed                                                               
and where  it wants to put  the priority for that  protection. He                                                               
provided members with  copies of two handouts: one  a letter from                                                               
the last  five commissioners of ADF&G;  and a letter he  wrote to                                                               
Representative Gara in response to  questions about the impact of                                                               
this move  and how it  might play out.  He then asked  to address                                                               
some of the  myths that are causing people to  be too comfortable                                                               
with this transfer.                                                                                                             
                                                                                                                                
MR. RUE said the first myth  is that the level of protection will                                                               
remain the same.  The second myth is that this  approach has been                                                               
successful in other states, such  as Oregon.  Regarding the first                                                               
myth,  he  asked  why  transfer  the division  if  the  level  of                                                               
protection will  remain the  same? In  response to  the rationale                                                               
that the transfer  will result in a timelier  permit process, the                                                               
current average  permit processing time  is 14 days. On  a recent                                                               
Glen  Highway project  with  6,000 Coho  per  acre, ADF&G  issued                                                               
permits in two  hours to enable the developer to  get the project                                                               
done quickly.  He said he  does not think the transfer will speed                                                               
that up if 22  people are being laid off. It  will only be faster                                                               
if  permits  are  issued  with  a  rubber  stamp.  Regarding  107                                                               
instream permitting authority, DNR rarely  has a presence, so the                                                               
transfer will not remove layers of bureaucracy.                                                                                 
                                                                                                                                
MR. RUE  said the layers of  protection will not remain  the same                                                               
because the  standards of  the Anadromous Fish  Act and  the Fish                                                               
Ways Act  provide a  lot of discretion  by containing  terms like                                                               
"to protect  important anadromous fish  habitat" and "to  give it                                                               
proper  protection."  In  the Fish  Ways  Act,  the  commissioner                                                               
determines when it  is necessary to provide a fish  way. When the                                                               
first legislature  passed that statute,  it gave  that discretion                                                               
to the  commissioner of  ADF&G because  the legislature  wanted a                                                               
cabinet level person  responsible for getting out  the catch. The                                                               
legislature  felt that  person would  give it  the proper  weight                                                               
when  decisions were  made. If  this change  happens, the  deputy                                                               
commissioner of  DNR, a  department whose mandate  is not  to get                                                               
out the catch, will make  the decisions. DNR's mission to develop                                                               
oil,  gas,  timber,  and  other  resources  is  very  legitimate.                                                               
However,  that downgrading  of  responsibility  will give  higher                                                               
stature to a potato than  to salmon spawning habitat. That potato                                                               
will  have a  cabinet  level  commissioner to  look  out for  the                                                               
Division of Agriculture's interests.  Salmon will have the deputy                                                               
commissioner as their final advocate.                                                                                           
                                                                                                                                
CHAIR  OGAN   said  with  all   due  respect,  he   believes  the                                                               
commissioner  is  looking  out  for the  farmers  more  than  the                                                               
potatoes.                                                                                                                       
                                                                                                                                
MR. RUE  said the USFS  refused to  talk to ADF&G  about instream                                                               
structures for  years and  would not apply  for Title  16 permits                                                               
because, as a federal agency,  it argued that it had sovereignty.                                                               
The USFS had  internal biologists that looked at  the road plans,                                                               
but the road  engineer or the forester in the  U.S. Department of                                                               
Agriculture made the  final decision. The USFS  and ADF&G finally                                                               
signed a memorandum  of understanding so that  the USFS submitted                                                               
all of  its plans for  stream crossings  to ADF&G. ADF&G  and the                                                               
USFS did a collaborative survey in  the Tongass and found that 70                                                               
percent  of the  culverts issued  by USFS  biologists impeded  or                                                               
blocked fish. That  is when the USFS decided to  work with ADF&G.                                                               
ADF&G   had  a   similar  experience   with  the   Department  of                                                               
Transportation and  Public Facilities  (DOTPF) and  a lot  of old                                                               
problems are now being fixed.                                                                                                   
                                                                                                                                
MR.  RUE's final  point was  that Oregon  has been  held up  as a                                                               
successful model.  However, of the  300 stocks of Coho  along the                                                               
coast, about 100  are extinct. All of Oregon's stocks  are on the                                                               
endangered species  list. EO 107 would  make the responsibilities                                                               
of ADF&G weaker than Oregon's  Department of Fish and Wildlife in                                                               
its  authority  to permit  instream  structures.  In Oregon,  DNR                                                               
issues the  permits but by  law it has  to give deference  to the                                                               
Oregon Department of Fish and  Wildlife for the standards for the                                                               
stream crossings. EO 107 takes  ADF&G totally out of the picture.                                                               
He said  that ADF&G  has acted  in a  timely manner  when issuing                                                               
permits and if  problems occur, the Governor could  appoint a new                                                               
director of the Division of  Habitat and Restoration. However, EO                                                               
107  makes  a structural  change  and  he expects  a  significant                                                               
downgrade of fish and wildlife in 40 to 60 years.                                                                               
                                                                                                                                
5:08 p.m.                                                                                                                     
                                                                                                                                
SENATOR ELTON asked  Mr. Rue if he and Mr.  Rosier would submit a                                                               
written  response to  the committee  on the  question of  whether                                                               
federal agencies will do more of  their own assessment work if EO                                                               
107 takes effect.                                                                                                               
                                                                                                                                
MR.  RUE  said  he  believes that  federal  agencies  have  often                                                               
deferred to  ADF&G more often in  relation to EO 106,  for gravel                                                               
pits  and North  Slope wetland  fills.   He believes  the federal                                                               
agencies will take  a much more aggressive approach  if ADF&G has                                                               
no  voice. He  noted  the federal  agencies  have never  involved                                                               
themselves in instream  permitting because ADF&G has  done a good                                                               
job of it.                                                                                                                      
                                                                                                                                
SENATOR BEN STEVENS  noted that Mr. Rue said he  was the director                                                               
of  the  Division  of Habitat  and  Restoration  under  Governors                                                               
Hickel  and  Cowper and  asked  how  many  people worked  in  the                                                               
Division of Habitat and Restoration during that time period.                                                                    
                                                                                                                                
MR. RUE said the number was around 60 to 70.                                                                                    
                                                                                                                                
SENATOR BEN STEVENS asked if  Governor Knowles then appointed Mr.                                                               
Rue as the commissioner of ADF&G in 1994.                                                                                       
                                                                                                                                
MR. RUE said that is correct.                                                                                                   
                                                                                                                                
SENATOR BEN STEVENS asked Mr. Rue  if he could recall the request                                                               
for  personnel in  the  Division of  Habitat  and Restoration  in                                                               
1996.                                                                                                                           
                                                                                                                                
MR. RUE  said the Division  of Habitat and Restoration  staff was                                                               
combined with the Exxon Valdez restoration staff that year.                                                                     
                                                                                                                                
SENATOR BEN STEVENS said the  EVOS restoration had a separate BRU                                                               
that year.                                                                                                                      
                                                                                                                                
MR. RUE said he would have to research that information.                                                                        
                                                                                                                                
SENATOR BEN  STEVENS asked if  the statutory requirements  of the                                                               
Division of  Habitat and  Restoration's authority  changed during                                                               
Mr. Rue's tenure as director and commissioner.                                                                                  
                                                                                                                                
MR.  RUE  said  the  statutory responsibilities  did  not  change                                                               
although  some  of the  issues  changed.  He noted  the  statutes                                                               
changed in 1989  with the Alaska Forest Practices  Act, which put                                                               
greater responsibility on ADF&G.                                                                                                
                                                                                                                                
SENATOR  BEN STEVENS  asked what  occurred  in 2001  to 2002.  He                                                               
cited  from  the  Division of  Habitat  and  Restoration  '96-'03                                                               
management  plan  and gave  the  following  numbers of  positions                                                               
funded in the Division of Habitat and Restoration BRU:                                                                          
   · in 1996, 12 positions                                                                                                      
   · in 2000, 16 positions                                                                                                      
   · in 2001, 20 positions                                                                                                      
   · in 2002, [indisc. - tape change]                                                                                           
   · In 2003, 69 positions.                                                                                                     
                                                                                                                                
TAPE 03-11, SIDE A                                                                                                            
                                                                                                                                
He asked why a threefold increase occurred between '01 and '02.                                                                 
                                                                                                                                
MR. RUE explained  that a budget restructuring took  place and he                                                               
would have  to look at the  BRUs to refresh his  memory. He noted                                                               
the division did  not add that many more people.  He believed the                                                               
increase resulted from a structural change.                                                                                     
                                                                                                                                
SENATOR BEN  STEVENS said the  division had a permitting  BRU, an                                                               
EVOS restoration BRU and one other.                                                                                             
                                                                                                                                
MR. RUE repeated it was  simply due to reorganization rather than                                                               
a staff increase. The EVOS  Trustee Council decided to have ADF&G                                                               
manage its program.                                                                                                             
                                                                                                                                
SENATOR  BEN STEVENS  said the  EVOS portion  stays within  ADF&G                                                               
under EO 107.                                                                                                                   
                                                                                                                                
MR. RUE commented:                                                                                                              
                                                                                                                                
     ... when  we combined  the restoration  division, which                                                                    
     you know,  it used to  be a whole separate  division of                                                                    
     fish and  game, when  the cleanup  part changed  and we                                                                    
     went into restoration, we got  rid of that division and                                                                    
     combined it  with habitat so  that was another  jump in                                                                    
     numbers. And  then when  Forest Practices  happened, we                                                                    
     added some biologists to Forest  Practices in the early                                                                    
     - late  '89, '90. That was  the only times when  we saw                                                                    
     significant numbers of positions.                                                                                          
                                                                                                                                
SENATOR BEN STEVENS  said when Mr. Rue was director  he had about                                                               
60 or 70 staff.                                                                                                                 
                                                                                                                                
MR. RUE said that is correct to his recollection.                                                                               
                                                                                                                                
MR. KEITH BAYHA told members he  is a hunter, fisher, trapper and                                                               
a  retired biologist  with  the U.S.  Fish  and Wildlife  Service                                                               
(USFWS). He  considers the work  done by the Division  of Habitat                                                               
and Restoration biologists  to be vital to the  protection of the                                                               
public  trust, fish  and wildlife,  and water  and wetlands.  The                                                               
role  the Division  of Habitat  and Restoration  plays under  the                                                               
Fish  and Wildlife  Coordination  Act is  the  key to  successful                                                               
mitigation of  projected damages of resource  development to fish                                                               
and wildlife  habitat and to  the enhancement of  these resources                                                               
when   the  opportunity   is  present.   That   role  cannot   be                                                               
successfully  executed from  DNR,  especially with  a 20  percent                                                               
reduction in staff. He asked members  to reject EO 107 and send a                                                               
message to Governor  Murkowski that this is not  a "rubber stamp"                                                               
Legislature.                                                                                                                    
                                                                                                                                
MR.  BILL STEVENS,  President  of  Cassandra Energy  Corporation,                                                               
stated support  for EO 107.  He told  members he has  a five-page                                                               
timeline for  the Cassandra  Energy Corporation's  project. After                                                               
29 months,  that project is still  not permitted to get  into the                                                               
Katalla area. Seven months of that  time has been directly due to                                                               
the system  being broken, partly  in the Division of  Habitat and                                                               
Restoration. He believes it would best be operated under DNR.                                                                   
                                                                                                                                
MR. STEVENS said  he would like to clear up  some statements made                                                               
earlier  about  the  Katalla  project.   Never  in  the  plan  of                                                               
operations was  it entertained that Cassandra  would use 100-foot                                                               
barges  with  four or  five  foot  drafts.  He  said he  will  do                                                               
everything he can to make sure  no fish or potatoes die from that                                                               
project.                                                                                                                        
                                                                                                                                
CHAIR OGAN said that committee  members have been told the permit                                                               
turnaround time is  two weeks. He said that could  mean two weeks                                                               
once  all of  the preliminary  work is  done but  the preliminary                                                               
work could  take months  and be  costly. He asked  if that  is an                                                               
accurate assessment.                                                                                                            
                                                                                                                                
MR. STEVENS said most of the  delays have been with the USFS, not                                                               
with  the state  agencies. The  state permit  process, since  the                                                               
first pre-application, has taken about  one year.  He noted there                                                               
has been  a tremendous amount  of interest and  activity involved                                                               
in  this particular  project.  It was  scrutinized  with a  fine-                                                               
toothed comb resulting in turf wars between agencies.                                                                           
                                                                                                                                
CHAIR   OGAN  asked   where  Cassandra   Energy  Corporation   is                                                               
operating.                                                                                                                      
                                                                                                                                
MR. STEVENS  said Cassandra  Energy wants to  drill from  the old                                                               
Katalla oil  fields under  federal land and  exploit the  oil and                                                               
gas rights given  to the Chugach Native Corporation  back in 1981                                                               
or 1982.                                                                                                                        
 He bHe                                                                                                                         
                                                                                                                                
CHAIR OGAN asked if those fields are in the Yakutat area.                                                                       
                                                                                                                                
MR. STEVENS said  they are in the old town  of Katalla, about two                                                               
miles East of the Katalla River.                                                                                                
                                                                                                                                
REPRESENTATIVE  SEATON asked  Mr. Stevens  to fax  a copy  of his                                                               
timeline to members.                                                                                                            
                                                                                                                                
MR.  JOHN  WINTHER, a  commercial  fisherman  for 39  years  from                                                               
Petersburg, stated support  for EO 107. He told  members that the                                                               
community  of  Petersburg  is entirely  dependent  on  commercial                                                               
fishing and  its residents  are confident  that DNR  will protect                                                               
the marine  environment. He said  he is assuming that  the buffer                                                               
strip  protections  will also  be  transferred  to DNR.  He  told                                                               
members  that 80  percent  of  Petersburg's population  supported                                                               
Governor Murkowski,  which he believes  makes a  strong statement                                                               
that they are comfortable with  his proposals. He told members he                                                               
was on  Governor Murkowski's  fish and  game transition  team and                                                               
participated on  the habitat committee. The  information he heard                                                               
convinced him the  Division of Habitat and  Restoration should be                                                               
transferred and the permitting system put under one roof.                                                                       
                                                                                                                                
MR. STEVE  BORELL, Alaska Miners Association,  stated support for                                                               
EO  107.  He  said  EO  107 is  the  first  significant  move  to                                                               
streamline the  permit system.  The AMA is  not opposed  to being                                                               
regulated  in  a fair  system  based  on a  scientific  approach.                                                               
Regulations not  only protect the  environment, they  protect the                                                               
industry from  individual operators who  may not want to  do what                                                               
is correct. This  change will not modify the  requirements of the                                                               
law as they stand today.                                                                                                        
                                                                                                                                
MR. MIKE  SALLEE told members he  lived in Ketchikan most  of his                                                               
life  and has  worked  as a  fish  packer, commercial  fisherman,                                                               
harvest diver,  and sawmill owner  and operator. He  believes the                                                               
reasons  given for  cutting habitat  jobs are  nebulous at  best.                                                               
ADF&G has  provided rebuttals  on each of  the cited  instances -                                                               
the  Juneau golf  course, the  Dorothy Lake  hydro-project, False                                                               
Creek, Tok Highway reconstruction  and others. Regarding previous                                                               
comments that  DNR will  be looking out  for the  environment, he                                                               
asked members to  recall that floating fish traps  were shut down                                                               
when Alaska became a state because  a few wealthy companies had a                                                               
stranglehold  on  the salmon  resource  of  Southeast Alaska.  He                                                               
doubts that a  single fish trap owner would have  admitted to the                                                               
remotest connection to  any problem with the  salmon resource. He                                                               
spoke with  some of  the representatives  of the  Alaska Longline                                                               
Fishermen's' Association  who oppose EO  107. He said  although a                                                               
SARDFA representative has  testified in support of  it, he polled                                                               
a number  of SARDFA  members who  do not favor  EO 107.  He asked                                                               
members to reject EO 107.                                                                                                       
                                                                                                                                
MR. PAUL  SHADURA, President of  the Kenai  Peninsula Fishermen's                                                               
Association  (KPFA),  said  KPFA   respects  the  rights  of  the                                                               
Governor  to  streamline  government  and  improve  the  economic                                                               
welfare of  the state. KPFA believes  that EO 107 has  merits but                                                               
also has  serious flaws that  do not allow for  reviews necessary                                                               
to  protect the  environment from  overzealous industrialization.                                                               
His three main suggestions for modification are:                                                                                
   · The commissioner of ADF&G should retain a voice in the                                                                     
     final permitting process. It is extremely important that                                                                   
     aquatic  systems  are  protected to  the  highest  standards                                                               
     available. ADF&G  is the state specialist  that supports our                                                               
     state's constitutional mandate to  sustain and conserve. The                                                               
     commissioner  should have  the  authority  to object,  veto,                                                               
     vote or call for further  analysis and public involvement if                                                               
     he believes that vital habitat will be compromised.                                                                        
   · The new deputy commissioner position within DNR requires a                                                                 
     person  with  special  talents  and an  ability  to  not  be                                                               
     influenced by individuals. This  position should be required                                                               
     to  go  through  the full  confirmation  and  administrative                                                               
     appointment review process.                                                                                                
   · The functions of the anadromous fish catalog stay within                                                                   
     ADF&G. There is no reason  that function should be delegated                                                               
     to non-biologist  staff. This catalog is  the most important                                                               
     log  of  fisheries management  that  tells  the public  what                                                               
     systems are performing  and which are showing  stress. It is                                                               
     a  performance  document that  acts  as  a resource  history                                                               
     book.                                                                                                                      
                                                                                                                                
He encouraged  members to reconsider  the adoption of EO  107 and                                                               
to consider the suggested improvements.                                                                                         
                                                                                                                                
MR.  TADD  OWENS,  Resource  Development  Council  (RDC),  stated                                                               
support  for EO  107 because  the current  permitting process  is                                                               
costly  and time  consuming. He  noted  that EO  107 retains  the                                                               
statutory requirements.  RDC members  do not  want or  expect the                                                               
habitat  standards  to change.  They  do  expect the  process  of                                                               
permitting a  project to become  more efficient  and predictable.                                                               
In every major development sector,  Alaska companies are fighting                                                               
for capital dollars  in a global arena. What is  done in the next                                                               
few  years to  improve Alaska's  investment climate  will have  a                                                               
profound effect on its economy over the long term.                                                                              
                                                                                                                                
MR.  SCOTT METZGER,  a Cordova  resident, told  members that  Mr.                                                               
Stevens' statement  that a 100-foot  long, four-foot  draft barge                                                               
was never  considered is  false. That  is a  matter of  record at                                                               
ADF&G.  He  said  since  its inception,  the  ADF&G  Division  of                                                               
Habitat  and Restoration  has done  an exemplary  job of  issuing                                                               
permits  and   protecting  Alaska's   wild  salmon   habitat.  By                                                               
streamlining  the   habitat  permitting  division,   the  overall                                                               
process  will  not,  in  fact,   be  streamlined  at  all.  Fewer                                                               
biologists will  review the  same number of  permits or  more and                                                               
they  will  be  unable  to  be as  effective.  He  said  although                                                               
Governor Murkowski has  alleged that the Division  of Habitat and                                                               
Restoration  has been  obstructionist, in  reality it  has merely                                                               
been doing  the job of critically  reviewing development permits.                                                               
DNR's mission  is incompatible with  the protection  of fisheries                                                               
habitat while  the protection is  the number one priority  of the                                                               
Division of Habitat  and Restoration. He supports  both house and                                                               
senate  resolutions   disapproving  EO  107.  He   is  especially                                                               
concerned  about  the  Copper  River  watershed  as  it  lacks  a                                                               
comprehensive  management  plan that  would  serve  as a  guiding                                                               
principle  for how  to proceed  with project  permitting in  this                                                               
sensitive area. In  1991, DOTPF began construction  of the Copper                                                               
River  highway without  even attempting  to  secure habitat  area                                                               
state and federal  permits. He urged the  Legislature to exercise                                                               
its power  to check  and balance  the executive  branch. Governor                                                               
Murkowski's  proposal is  vindictive,  politically motivated  and                                                               
misguided.                                                                                                                      
                                                                                                                                
MR.  ROBERT ZYANICH,  representing the  Alaska Seine  Boat Owners                                                               
Association (ASBOA),  stated support  for EO 107.  ASBOA believes                                                               
opposition to  EO 107  is designed to  generate heat  rather than                                                               
light.  A mindset  has occurred  within ADF&G,  which is  running                                                               
contrary to a balanced approach  to sound economic development in                                                               
this state. EO 107 is  about streamlining the permitting process,                                                               
not the destruction of fish habitat.                                                                                            
                                                                                                                                
MS.  DEB  SPENCER,  a  resident  and  fish  buyer  from  Pelican,                                                               
implored  members to  look  at  the check  and  balance issue  in                                                               
relation to EO  107. She said she strongly  hopes the Legislature                                                               
will  take this  divisive  issue on  because  all Alaskans  value                                                               
personal  use of  the resources.  She noted  questions about  the                                                               
relationship  between the  commissioner  and deputy  commissioner                                                               
within DNR need to be answered  before a decision can be made. No                                                               
matter  where  members  believe   the  Division  of  Habitat  and                                                               
Restoration should  reside, it is  the Legislature's job  to give                                                               
its  full attention  to  this  issue. She  said  sadly, the  only                                                               
healthy aspect of the salmon  industry is the resource itself and                                                               
she fears any tampering with the healthiest piece of the puzzle.                                                                
                                                                                                                                
CHAIR OGAN explained to participants  that the Legislature can do                                                               
several things: it can allow  the executive order to take effect;                                                               
it  can  disallow  it  to  go into  effect;  or  any  member  can                                                               
introduce a  bill after it goes  into effect to make  changes. In                                                               
addition,  state  law  can  be  amended  through  the  referendum                                                               
process.                                                                                                                        
MS.  SPENCER  said  she  understands that  a  review  process  is                                                               
available after the fact but she  believes EO 107 deserves a full                                                               
review before the transfer actually occurs.                                                                                     
                                                                                                                                
MR. DICK COOSE, a Ketchikan  resident, stated support for EO 107.                                                               
He  told  members he  has  been  a professional  forest  resource                                                               
manager  for  40  years.  Placing all  of  the  resource  systems                                                               
together in one place is the  most efficient and effective way to                                                               
provide the best management solutions  for resources and habitat.                                                               
He  believes  DNR  will  act   positively  and  protect  Alaska's                                                               
valuable habitat resources.                                                                                                     
                                                                                                                                
DR.  DAVID  PERSON  of  Ketchikan  said  he  sees  no  compelling                                                               
evidence or information provided by  the Governor or his staff to                                                               
justify  this move.  All of  the allegations  and innuendoes  put                                                               
forth fall flat when investigated.  They reveal nothing more than                                                               
a division  composed of dedicated  professionals who do  the jobs                                                               
expected   of   them.   Last  Friday's   news   conference   with                                                               
Commissioners  Duffy and  Irwin  suggested to  him  that this  is                                                               
nothing but  an effort to  punish division staff for  doing their                                                               
jobs.  Commissioner  Irwin  stated  in the  interview  that  many                                                               
states   have  consolidated   their   resource  development   and                                                               
protection  staffs  into  one  agency.  He  cited  Oregon  as  an                                                               
example. That  should serve not  as a model  but as a  warning to                                                               
every commercial,  sport and subsistence fisherman  in the state.                                                               
There  are  not enough  habitat  biologists  now  to do  the  job                                                               
effectively.  He questioned  how  scaling down  staff and  moving                                                               
them  to another  department will  create greater  efficiency and                                                               
maintain quality.  He said perhaps  the motivation behind  EO 107                                                               
is to ultimately do away with  those laws and simply rubber stamp                                                               
proposals that  could impact  fish and  wildlife resources.  On a                                                               
personal note, he  told members that he and  colleagues needed to                                                               
build a cabin  on a remote island  several years ago to  use as a                                                               
base camp  for a research  project. They selected state  land and                                                               
applied for  a permit to build.  DNR informed them it  would take                                                               
three  to four  years to  process the  application. He  then told                                                               
members that timber planners with  DNR drafted a project proposal                                                               
for timber land  on Prince of Wales Island.  In their description                                                               
of the wildlife in that  project area, they described populations                                                               
of red  squirrels, porcupines, and  snowshoe hare. None  of those                                                               
species  occur on  the island.  It  took a  habitat biologist  to                                                               
point that out to them. He urged members to rescind EO 107.                                                                     
                                                                                                                                
DR. ERIC  KNUDSEN, a professional  fisheries scientist  with over                                                               
20  years of  experience in  management and  research on  Pacific                                                               
salmon  and trout  and  the  current and  past  president of  the                                                               
Western Division of the American  Fisheries Society, told members                                                               
he has  submitted a copy  of a letter  that he wrote  to Governor                                                               
Murkowski to  the committee for  the record. He asked  to explain                                                               
three scientific  based claims which, when  taken together, argue                                                               
for  a joint  resolution to  reject EO  107. First,  there is  no                                                               
scientific doubt  that healthy stream  and riparian  habitats are                                                               
fundamental  to the  amount  of salmon  and  steelhead and  other                                                               
related  fish  and  wildlife   produced  in  Alaskan  watersheds.                                                               
Second, a combination  of solid science in  Alaska and elsewhere,                                                               
together  with  a  long  history of  experience  in  the  Pacific                                                               
Northwest,   demonstrates   that    the   gradual,   incremental,                                                               
cumulative   effects   of   numerous  seemingly   minor   habitat                                                               
alterations  can lead  to the  extensive  destruction of  habitat                                                               
that supports  a productive salmon population.  Third, scientific                                                               
research in the Pacific Northwest  has led to the conclusion that                                                               
it is much  more difficult to repair stream  and riparian habitat                                                               
to  their fully  functional  states than  to  simply protect  the                                                               
natural stream functions in the  first place. Damage elsewhere is                                                               
insidious  and irreversible,  and  often the  effects of  habitat                                                               
damage are not known until it is  too late.  Alaska is not immune                                                               
to  the  problems  that  are being  experienced  in  the  Pacific                                                               
Northwest. He  said he is  very concerned that any  relaxation on                                                               
habitat protection  will result  in the insidious  degradation of                                                               
habitat. It is  impossible to judge how  effectively habitat will                                                               
be  protected if  the permitting  functions are  transferred from                                                               
ADF&G  to  DNR.  Because  the  stated purpose  is  to  speed  and                                                               
streamline development, he believes  that habitat protection will                                                               
be less  effective. The  existing system  of checks  and balances                                                               
has  served the  marine  habitat  of Alaska  well.  He urged  the                                                               
Legislature to reject EO 107  and retain habitat permit functions                                                               
within ADF&G.                                                                                                                   
                                                                                                                                
MR.  JOEL  BENNETT,  representing  Defenders  of  Wildlife,  told                                                               
members  that  Defenders of  Wildlife  is  a national  non-profit                                                               
conservation  organization  that  supports consumptive  and  non-                                                               
consumptive uses  of the state's  wildlife with  special emphasis                                                               
on  biodiversity.  He  stated  opposition  to  EO  107  primarily                                                               
because his  organization sees no fundamental  or compelling need                                                               
to  make   this  major   change.  ADF&G   and  DNR's   roles  are                                                               
fundamentally different.  Defenders of Wildlife believes  that to                                                               
best protect and enhance wildlife,  matters of habitat permitting                                                               
should remain where they are.                                                                                                   
                                                                                                                                
MR. BENNETT said  that Defenders of Wildlife believes  there is a                                                               
frequent  need  for   immediate  consultation  and  communication                                                               
between  area biologists  and other  experts  and habitat  review                                                               
personnel.  This  is best  achieved  within  ADF&G. Defenders  of                                                               
Wildlife sees that  as the most responsible  and professional way                                                               
to  operate   so  that   project  development   assures  resource                                                               
protection.  Regarding efficiency,  Defenders  of Wildlife  feels                                                               
the executive  branch can make  modifications and  changes within                                                               
the  department.  Streamlining   and  reorganization  can  happen                                                               
quickly and  efficiently. The more  serious problems of  bias and                                                               
personnel  can  be  made  with personnel  changes.  He  said,  in                                                               
conclusion,  a previous  commissioner  of ADF&G  perhaps said  it                                                               
best when he said that habitat  is such a cornerstone of fish and                                                               
game management that  you want management located  where the most                                                               
expertise is. Defenders of Wildlife could not agree more.                                                                       
                                                                                                                                
MS. PAULA  TERRELL, representing  the Alaska  Marine Conservation                                                               
Council (AMCC), said  that AMCC is a  statewide organization with                                                               
almost  1,000   members,  comprised  of   fishermen,  subsistence                                                               
harvesters, marine  scientists, conservationists,  small business                                                               
owners and others, all of whom  are linked by a desire to protect                                                               
and  restore our  ocean environment  through sustainable  fishing                                                               
practices,  habitat  protection,   and  local  stewardship.  AMCC                                                               
opposes EO 107  because this transfer will  create downside risks                                                               
for fishermen. The  fact that the statutes are  not being changed                                                               
gives  AMCC   little  comfort  because  the   fact  remains  that                                                               
fishermen have looked to the  Division of Habitat and Restoration                                                               
for the protection  of their fisheries. The  status quo initiated                                                               
in  Statehood has  served Alaska's  fishing  community well.  She                                                               
requested the  committee get answers  from the  Administration to                                                               
the following questions.                                                                                                        
                                                                                                                                
   1. Would the DNR commissioner continue what has been an                                                                      
     historical  practice of  the fish  and game  commissioner of                                                               
     delegating the  authority for making the  initial permitting                                                               
     decisions  to  the  habitat biologists?  Habitat  biologists                                                               
     have  been  signing  the  permits.  Would  these  decisions,                                                               
     therefore, become subject to the  process for appeals to the                                                               
     DNR commissioner?                                                                                                          
   2. The commissioner under DNR will have broad discretion to                                                                  
     interpret  the   Anadromous  Fish  Act.  For   example,  the                                                               
     commissioner would  determine the  waters of the  state that                                                               
     are  important for  the rearing,  spawning and  migration of                                                               
     anadromous  fish. The  DNR  commissioner  would decide  what                                                               
     constitutes  important habitat  and what  constitutes proper                                                               
     protection. A  similar discretion is offered  under the Fish                                                               
     Way  Act. Given  the different  mandates of  DNR and  ADF&G,                                                               
     what  safeguards would  prevent this  discretion from  being                                                               
     unduly  conflicted or  compromised  because  it now  resides                                                               
     with the DNR commissioner?                                                                                                 
                                                                                                                                
MS. TERRELL said  at a minimum, AMCC urges the  committee and the                                                               
Legislature  to  request  the   following  commitments  from  the                                                               
Administration.                                                                                                                 
                                                                                                                                
   1. DNR will give the same level of environmental protection to                                                               
     fish  and wildlife  and that  the  habitat biologists  being                                                               
     transferred from ADF&G would be  housed in this newly formed                                                               
     habitat office.                                                                                                            
   2. Under the reorganization, the DNR commissioner would                                                                      
     delegate the  authority for issuing  permits to  the habitat                                                               
     biologists who have been transferred from ADF&G.                                                                           
   3. DNR will require the state forester to grant due deference                                                                
     under the Forest Practices Act  to the new office of habitat                                                               
     management on issues  relating to the harvest  of trees from                                                               
     within  the  66 foot  buffer  zone  on  private land.    The                                                               
     inclusion in the Forest Practices  Act of this due deference                                                               
     to ADF&G  was the key  to the fishing industry's  support of                                                               
     the Forest Practices Act.                                                                                                  
   4. A commitment from DNR to continue the same level of                                                                       
     permitted   monitoring   compliance   and   enforcement   as                                                               
     previously existed under ADF&G.                                                                                            
                                                                                                                                
She  restated  AMCC's  opposition  to  the  transfer  of  habitat                                                               
permitting  functions   to  DNR.  AMCC  asks   the  Governor  and                                                               
Legislature  to  ensure  that Alaska's  world-renowned  renewable                                                               
fishing industry  and the  habitat upon which  it depends  not be                                                               
compromised.                                                                                                                    
                                                                                                                                
MS. JAN DAWE, representing the  Alaska Forest Council (AFC), told                                                               
members  that  the AFC's  mission  is  to help  communities  make                                                               
informed decisions about forests  and other resources in Interior                                                               
Alaska.  The AFC's  role in  policy  discussions is  not to  take                                                               
positions,  but   to  ask  questions  and   raise  concerns.  She                                                               
presented the following questions regarding EO 107.                                                                             
                                                                                                                                
   1. Were ways to improve the permitting process and provide                                                                   
     greater  regulatory  transparency  within  ADF&G  considered                                                               
     before  recommending  the  move  of  habitat  functions  and                                                               
     biologists to DNR?                                                                                                         
   2. If the executive order becomes law, will there be a way to                                                                
     ensure  the possibility  of cabinet  level, commissioner-to-                                                               
     commissioner  resolution  in  the  exceptional  instance  of                                                               
     [indisc.] over habitat protection.                                                                                         
   3. Given DNR's backlog of permits still pending action, will                                                                 
     the  government  be able  to  provide  sufficient long  term                                                               
     financial resources  to the agency to  handle the additional                                                               
     permitting  in  the new  office  of  habitat management  and                                                               
     permitting?                                                                                                                
                                                                                                                                
MS.  DAWE said  the Board  of Forestry  has recently  developed a                                                               
stream classification system  for Region 3, which is  found in SB
88. She asked if it  is possible for certain permitting functions                                                               
within Title 16 to now be  treated on a [indisc.] basis, parallel                                                               
to the way in which  the Department of Environmental Conservation                                                               
has streamlined its  permitting process with regard  to small log                                                               
storage  areas at  tidewater. The  AFC has  due process  concerns                                                               
with EO  107. One  is a  timing issue that  the order  was issued                                                               
three  weeks   into  the  legislative  session   making  it  more                                                               
difficult  for the  Legislature to  gather constituent  input and                                                               
make  an   informed  decision.  AFC's   second  concern   is  the                                                               
difficulty for the  public to get substantive  information on the                                                               
executive order, the first information  being released on March 7                                                               
during the joint press conference of the commissioners.                                                                         
                                                                                                                                
TAPE 03-11, SIDE B                                                                                                            
                                                                                                                                
MS.  DAWE  said  for  those reasons,  AFC  refrains  from  taking                                                               
positions  on individual  issues.  AFC wants  the  state to  make                                                               
improvements  to  the  regulatory   process  to  provide  greater                                                               
regulatory  certainty for  permit applicants.  AFC has  just seen                                                               
the special concurrent  resolutions in the House  and Senate. AFC                                                               
is concerned  about the ramifications  of EO 107 and  the process                                                               
that  has led  AFC here  today. AFC  wonders if  it might  not be                                                               
better  to  adopt the  special  concurrent  resolutions with  the                                                               
caveat  that a  working group  be formed  immediately to  look at                                                               
improvements to  Title 16 permitting and  to make recommendations                                                               
to  the  Legislature   next  session  or  for   a  subsequent  or                                                               
substitute executive order to be  issued this summer. She offered                                                               
AFC's services to such a working group.                                                                                         
                                                                                                                                
MR. DAVE  HANNA, a Juneau  resident, told members his  family has                                                               
been  involved   in  mining,  timber  development,   fishing  and                                                               
construction since  the 1870s. He  said in  the last 25  years he                                                               
has spent  a good deal of  time working with ADF&G  and the other                                                               
departments  on  permitting  projects  in  and  around  Southeast                                                               
Alaska. During that  time, he has never had  a problem permitting                                                               
a resource  development project with  ADF&G. That  department has                                                               
acted very professionally. He said  some of his projects have had                                                               
the  potential  to have  large  impacts  on major  fisheries.  He                                                               
believes having the  habitat biologists in the  same offices with                                                               
the sport and commercial fish  divisions has enabled them to work                                                               
expeditiously. The  habitat biologists  finished their  review of                                                               
his projects ahead of the other agencies.                                                                                       
                                                                                                                                
MR. HANNA noted he is not saying  he has never had a problem with                                                               
ADF&G. He  said he  also chairs  the board  of a  local watershed                                                               
partnership.  The   board  frequently  gets  involved   in  local                                                               
restoration  projects. Last  year  the Board  was  involved in  a                                                               
project  that  was  supported  by  just  about  everyone  but  it                                                               
involved some new technology that  some of the habitat biologists                                                               
were not familiar with. Their  policy was to not approve anything                                                               
they were not  familiar with. This raises the issue  that many of                                                               
the problems,  if not all, that  have been raised with  ADF&G are                                                               
due  to policy  and the  fact that  the habitat  statutes are  so                                                               
broad.  Policies are  set by  administrations  and personnel  and                                                               
they shift  over the years.  He believes the fact  that decisions                                                               
are made based  on policy rather than statute is  what has led to                                                               
the  inconsistency  in  the  permitting  climate  in  Alaska.  He                                                               
suggested  instead of  transferring the  Division of  Habitat and                                                               
Restoration to DNR and leaving it  subject to the whims of policy                                                               
changes, direct the  Division of Habitat and  Restoration to work                                                               
with the Legislature to put  permitting rules in statute. He said                                                               
that although Commissioner  Irwin may be able to  wear both hats,                                                               
without  a  check  and  balance  system in  place,  there  is  no                                                               
guarantee  that Alaska's  resources  will be  protected down  the                                                               
line.                                                                                                                           
                                                                                                                                
MR.  JOHN STURGEON,  representing  Koncor  Forest Products,  told                                                               
members he was a  Board of Forestry member for 18  years and is a                                                               
member  of the  Resource  Development Council  and Alaska  Forest                                                               
Association.  He stated  support  for EO  107.  He believes  this                                                               
transfer   can  be   done  while   successfully  protecting   the                                                               
environment and will improve  efficiency in government. Regarding                                                               
concerns  addressed about  buffer  zones, he  clarified that  DNR                                                               
already has  primary authority  for buffer  zones. ADF&G  has had                                                               
due deference since  about 1991. He believes DNR has  done a good                                                               
job.  Regarding the  statement that  DNR is  strictly a  resource                                                               
development  entity,   the  timber   industry  sees  DNR   as  an                                                               
enforcement entity  under the Forest  Practices Act.  He believes                                                               
EO 107  will provide for  "one-stop shopping." Under  the current                                                               
system,   a  developer   must  comply   with  several   agencies'                                                               
requirements. With  a $1 billion  dollar budget  shortfall, state                                                               
government needs to function more efficiently.                                                                                  
                                                                                                                                
MR. JAN  KONIGSBERG, representing  Trout Unlimited,  told members                                                               
he has submitted  written comments to the committee  about how EO                                                               
107 is  based on the  assumption that  this transfer will  have a                                                               
significant  impact   on  economic  development  in   the  state.                                                               
Regarding Commissioner Irwin's previous  statement that the State                                                               
of  Oregon's system  was used  as  a role  model for  EO 107,  he                                                               
pointed out  that the last time  he checked, the State  of Oregon                                                               
is facing  a budget  shortfall of $2  billion. He  questioned the                                                               
connection between  its permitting  system and economy  as Oregon                                                               
no longer  has a natural  resource based economy. That  must have                                                               
something to  do with  a lack of  productive habitat.  Oregon has                                                               
over  13,000 culverts  on state  highways and  forest roads  that                                                               
block  fish. He  questioned why  Alaska  would use  Oregon as  an                                                               
example to  follow. He  believes EO 107  is a  misguided approach                                                               
and he wonders whether anyone  has done their homework to produce                                                               
a  sensible   plan  for  economic   development.  He   noted  the                                                               
Administration  seems   to  believe  that   consolidating  permit                                                               
oversight in  DNR will remedy what  is perceived to be  the undue                                                               
influence  of environmentalists  and professional  biologists and                                                               
that  somehow magically  economic development  will start  taking                                                               
care  of itself.  If subtracting  citizen participation,  science                                                               
and public  policy analysis  from the  equation is  the solution,                                                               
Alaska  can look  forward  to more  projects  like the  Ketchikan                                                               
veneer plant or the Great Alaska  Seafood Plant in Anchorage - no                                                               
doubt a money  maker for a few select individuals  but a net loss                                                               
to the  state. He repeated that  he cannot figure out  how EO 107                                                               
has anything to do with economic development.                                                                                   
                                                                                                                                
MR.  KONIGSBERG  said  the  Southeast  timber  industry  depended                                                               
mainly   on  federal   dollars   and  failed,   not  because   of                                                               
environmentalists, but  because the  world demand  for dissolving                                                               
pulp  collapsed. The  salmon industry,  which depended  mainly on                                                               
Japanese   demand,  has   shriveled,  not   because  of   habitat                                                               
biologists but  because of the  huge supply of farmed  salmon. If                                                               
the salmon  industry is ever  to gain  its market share,  it will                                                               
have  to have  high-quality  salmon habitat.  He  stated when  it                                                               
comes time to  develop a meaningful plan to grow  the economy, he                                                               
does not believe  it will start with permitting.  Alaska needs to                                                               
start  with its  comparative  advantages, one  being its  natural                                                               
beauty, habitat, and productivity.  He urged committee members to                                                               
reject EO 107. He pointed  out the Governor's transition advisory                                                               
group  never  recommended  moving  the Division  of  Habitat  and                                                               
Restoration to  DNR; it  recommended appointing  the commissioner                                                               
of  ADF&G  to  investigate  ways  to  make  improvements  in  the                                                               
Division of Habitat and Restoration.                                                                                            
                                                                                                                                
MR.  HAROLD HEINZE  told members  that numerous  experiences have                                                               
brought  him to  testify  before the  committee.  He recalls  the                                                               
predictions of  the impacts  of development  of the  North Slope,                                                               
particularly the  demise of  the caribou  herd and  waterfowl. He                                                               
was  the DNR  commissioner during  the Hickel  Administration and                                                               
held hearings on the Forest  Practices Act. From that experience,                                                               
he has a  strong sense of interaction with DNR  and ADF&G on that                                                               
one issue. He  is very supportive of EO 107  for several reasons.                                                               
First,  he believes  the teamwork  approach will  lead to  better                                                               
decisions. DNR operates under the  one constitutional mandate the                                                               
state has  and that is  the development of the  state's resources                                                               
to the maximum benefit of all  Alaskans.  He believes that is the                                                               
overriding  mandate and,  working as  a team,  habitat biologists                                                               
can contribute  to it.  He stated the  commissioner of  ADF&G has                                                               
had  time to  fix the  problems of  the Division  of Habitat  and                                                               
Restoration  over  the last  12  years  but  he  did not  do  so,                                                               
therefore he  presumes those  problems cannot  be fixed.  He said                                                               
one of  the biggest disappointments  he has seen during  the last                                                               
12 years  is that the Division  of Habitat and Restoration  had a                                                               
charge to develop permit standards  so that applicants would know                                                               
whether  they  would get  a  permit  or  not.  All of  the  other                                                               
agencies  of state  government have  created  standards. He  said                                                               
under the Forest Practices Act,  the deference to habitat is very                                                               
clear and, as a commissioner, he experienced a habitat veto.                                                                    
                                                                                                                                
MR. HEINZE  said he had  a few more  observations. One is  that a                                                               
previous  testifier used  fish traps  as  an example  of a  prior                                                               
disaster. He said that was a  fish management issue rather than a                                                               
habitat  management   issue.  Second,   he  has  found   it  very                                                               
interesting  that  when  it  comes to  the  management  of  these                                                               
important fish  and game resources, management  decisions are not                                                               
made by  the biologists or  the scientists  but by people  with a                                                               
broader perspective. It has struck  him as odd that is considered                                                               
to  be  the right  approach  for  fish  and  game, but  that  the                                                               
Division  of   Habitat  and  Restoration  can   veto  a  resource                                                               
development issue related to other industries.                                                                                  
                                                                                                                                
SENATOR ELTON asked Mr. Heinze if  due deference must be given to                                                               
ADF&G  under  the  Forest  Practices  Act  now  and  if  the  two                                                               
departments disagree,  whether a process  is in place  to resolve                                                               
the  disagreement.  He  then  asked  if  there  will  be  no  due                                                               
deference  under  EO   107  and  whether  Mr.   Heinze  sees  the                                                               
elimination of the conflict resolution process as helpful.                                                                      
                                                                                                                                
MR.  HEINZE said  he would  describe the  current process  as one                                                               
without equal  footing. He believes  the Division of  Habitat and                                                               
Restoration has  veto power under  the current system.  In trying                                                               
to  resolve matters  commissioner-to-commissioner, he  never won.                                                               
More importantly, he  sees this change as  creating equal footing                                                               
for DNR.                                                                                                                        
                                                                                                                                
6:20 p.m.                                                                                                                     
                                                                                                                                
MR. MIKE  ROBBINS, representing ASEA Local  52, stated opposition                                                               
to EO  107 and urged  members to rescind  the order. He  made the                                                               
following points about the legality of  EO 107. First, there is a                                                               
separation of  powers doctrine in art.  II, sec. 1 of  the Alaska                                                               
Constitution, which  the Legislature  should be  concerned about.                                                               
That article gives  the legislature the power  to enact statutes.                                                               
On the other hand, art. III,  sec. 1 says the Governor implements                                                               
those laws.  EO 107 attempts to  amend laws and repeal  a law. He                                                               
pointed out  that 43 years ago  the Departments of Fish  and Game                                                               
and  Natural  Resources  were established  with  different  roles                                                               
designed  to  balance the  public  interest.  In the  1970s,  the                                                               
legislature  passed  statutes  concerning  public  employees  and                                                               
their  retirement  system.  In 1983,  the  legislature  passed  a                                                               
statute giving ADF&G employees a  20-year retirement package. The                                                               
executive  branch  sought to  change  the  retirement package  by                                                               
transferring ADF&G employees for  whom the 20-year retirement was                                                               
established to DNR.  That is a violation of the  1983 statute. He                                                               
also  noted the  merit principle  is a  matter of  constitutional                                                               
law, art. XII,  sec. 6. According to a 1992  Alaska Supreme Court                                                               
decision,  that  is not  supposed  to  be impacted  by  political                                                               
consideration.  It   also  violates  the   collective  bargaining                                                               
agreement, which provides for  progressive discipline, meaning if                                                               
employees are  not performing their  job in a timely  manner, the                                                               
employer has a right to  discipline. That process requires notice                                                               
to  the employee,  a right  to  representation by  the union  and                                                               
opportunities  to  be  heard.  The  state  also  recognizes  that                                                               
normally progressive  discipline follows  a pattern  of training,                                                               
letters of instruction, and verbal  and written reprimands, which                                                               
has not occurred.                                                                                                               
                                                                                                                                
REPRESENTATIVE  SEATON told  Mr. Robbins  and other  participants                                                               
that  the House  State Affairs  Committee will  hold hearings  on                                                               
Tuesday and  Wednesday night, which  is an appropriate  venue for                                                               
state employment matters. The  Resources Committees are concerned                                                               
about the resource impacts.                                                                                                     
                                                                                                                                
MR.  ROBBINS concluded  by saying  that  art. XII,  which is  the                                                               
layoff article  of the collective bargaining  agreement, concerns                                                               
reorganization.  The  union  feels  it   is  important  that  the                                                               
committee  understands  and  addresses  these  issues.  He  urged                                                               
members to disapprove EO 107.                                                                                                   
                                                                                                                                
MR. BILL  HAUSER told members that  he is in support  of Alaska's                                                               
fisheries  resources. Unique  habitats  are  required to  support                                                               
their long-term  sustainability. He  is a retired  ADF&G employee                                                               
and  a  current temporary  employee  of  the habitat  restoration                                                               
division.  His  work  status  is  unaffected by  EO  107.  He  is                                                               
speaking  to the  committee as  a fisheries  scientist. He  has a                                                               
Ph.D. in  zoology and fisheries  management and over 30  years of                                                               
experience. Mr.  Hauser said fish  is the most  important natural                                                               
resource in the  state for many users. If we  care about and want                                                               
to preserve  this resource for  future generations,  the resource                                                               
needs   good  quality   habitat  for   spawning,  rearing,   over                                                               
wintering,  and open  pathways for  access  to migration  amongst                                                               
these  habitats. Any  of these  are jeopardized  by any  resource                                                               
development   project.   In   addition,  when   anadromous   fish                                                               
populations are reduced or  destroyed, other resident populations                                                               
are diminished.  Regarding the issue  of checks and  balances, he                                                               
does not understand how the  habitat biologists will work as well                                                               
in DNR  because the mission  of DNR  is to develop  resources. He                                                               
can only assume that when  decisions are made, DNR's main mission                                                               
will  be  the driving  force.  With  fewer staff  available,  the                                                               
quality of the  product will be lower  and fish-friendliness will                                                               
diminish. He said in a short  time, the people transferred to DNR                                                               
will find other  jobs and newcomers will have  less expertise. He                                                               
concluded by stating opposition to EO 107.                                                                                      
                                                                                                                                
MR. MACK  MEINERS, representing  the Kodiak  Seiners Association,                                                               
stated  support   for  EO  107.   He  said  the   Kodiak  Seiners                                                               
Association believes the Governor and DNR  will do a fine job and                                                               
that EO 107  will create a streamlined,  one-stop shopping permit                                                               
process.                                                                                                                        
                                                                                                                                
CHAIR OGAN asked  Mr. Meiners to let him know  if he believes DNR                                                               
does not do a good job.                                                                                                         
                                                                                                                                
MR. BEN KIRKPATRICK, an ADF&G  habitat biologist since 1995, said                                                               
he is  speaking on  his own  behalf in opposition  to EO  107. He                                                               
said  his main  reason for  speaking out  is that  he feels  as a                                                               
habitat  biologist, the  Governor  listed many  examples of  poor                                                               
jobs done  by division employees  as the reason for  the transfer                                                               
to DNR.  He said if one  looks at the facts,  the biologists were                                                               
doing their jobs  as directed by the Administration  at the time.                                                               
He  said  as  Mr.  Heinze  mentioned, he  does  not  believe  the                                                               
Division of Habitat  and Restoration has veto power.  He said one                                                               
of the big  issues is that in Southeast Alaska,  one-third of the                                                               
Division of  Habitat and Restoration's  permitting staff  will be                                                               
reduced.  That  alone  will  make  it  much  more  difficult  for                                                               
biologists to  work on the  many small projects. He  believes the                                                               
big projects will be looked at in  detail but much of his time as                                                               
a habitat biologist has been  spent working with small developers                                                               
to provide  expertise. That will  become impossible to do  with a                                                               
smaller  staff  and  will  have  a  very  significant  impact  on                                                               
Southeast's  resources.  He  said   the  Administration  has  the                                                               
responsibility of making accurate  statements when speaking about                                                               
employees  and  saying  there  will  be  no  changes  in  habitat                                                               
protection. He said  he has found the  allegations surrounding EO                                                               
107 have been lacking.                                                                                                          
                                                                                                                                
MS. MAGGIE  WIGEN, a  resident of Tenakee  Springs, said  much of                                                               
the livelihood of  her community is dependent  upon subsisting on                                                               
deer and fish  resources. She is not convinced  that the transfer                                                               
of the  permitting authority  from ADF&G  to DNR  is in  the best                                                               
interest  of habitat  protection.  While she  has  not spoken  to                                                               
everyone  in  her  community,  those   she  has  spoken  to  have                                                               
expressed deep concern  about the transfer. She  urged members to                                                               
oppose EO 107.                                                                                                                  
                                                                                                                                
MR.  JOSH PIERCE,  testifying from  Anchorage, said  the repeated                                                               
phrase,  "streamlining"   as  justification  for  EO   107  is  a                                                               
misnomer.  ADF&G  has  been extremely  efficient  in  its  permit                                                               
process while  DNR has an  extremely large backlog in  its permit                                                               
process.  Regarding  statements   made  about  improved  services                                                               
resulting  from teamwork,  he believes  that  is also  misleading                                                               
because  all of  the management  authority and  research will  be                                                               
done at  ADF&G, while those  issuing the  permits will be  in the                                                               
Division of Habitat  and Restoration. ADF&G will  lose a valuable                                                               
tool  in its  ability to  manage. He  believes that  will have  a                                                               
detrimental effect  on fisheries resources. He  said once habitat                                                               
problems  are discovered,  they will  be extremely  expensive and                                                               
difficult to fix. He asked members to reject EO 107.                                                                            
                                                                                                                                
MR.  DOUG  HILL,  an ADF&G  employee  and  commercial  fisherman,                                                               
directed his  testimony to the Frazer  Report. Commissioner Duffy                                                               
said Alaska  ranked 50th in  that report; that was  an investment                                                               
tracking  index  rather  than  a  ranking.  That  index  includes                                                               
taxation,  government policies,  Native issues  and environmental                                                               
regulations, among other things. The  index ranges from 1 to 100,                                                               
1 being  the worst.  Alaska rose  from 46th in  1997 to  80th [in                                                               
2002]. He  urged members  to look  at that report,  as well  as a                                                               
report by  Mining Watch Canada,  which was formed to  ensure that                                                               
mineral  development practices  are  consistent with  sustainable                                                               
communities. He stated opposition to EO  107 as it will clear the                                                               
way for  development at  the cost  of fish  and game  habitat. He                                                               
said  this is  not a  democratic or  republican issue:  it is  an                                                               
issue about  people and fish.  He believes  it is not  a fiscally                                                               
conservative  policy  as restoration  is  much  more costly  than                                                               
preservation.                                                                                                                   
                                                                                                                                
MR.  ERIC LEE,  a  commercial fisherman  from Petersburg,  stated                                                               
opposition to EO  107. He said the fishing  industry is extremely                                                               
important to  Alaska's economy. It  generates more jobs  than any                                                               
other  industry  in  Alaska,  including  the  oil  industry.  The                                                               
tourism industry also plays a  big role in Alaska's economy. Both                                                               
the fishing and  tourism industries are totally  dependent on the                                                               
condition of fish  and wildlife habitat. He believes  EO 107 will                                                               
result in a situation where  permitting decisions are made in DNR                                                               
by  overworked  employees  in an  atmosphere  of  expediency  and                                                               
mistakes   will  be   made.  He   does   not  believe   important                                                               
considerations will  be adequately  addressed by  biologists with                                                               
site-specific  knowledge. He  noted the  conditions in  Southeast                                                               
Alaska  are very  different from  other  areas. Local  biologists                                                               
know what local  considerations need to be  addressed when making                                                               
decisions.  He  added that  he  heard  at  the beginning  of  the                                                               
meeting that  this change is  about expediency  and streamlining.                                                               
He said  the top priorities  should be proper decision  making by                                                               
qualified biologists  with local knowledge. He  said the existing                                                               
system works quite well.                                                                                                        
                                                                                                                                
TAPE 03-12, SIDE A                                                                                                            
                                                                                                                                
MR. NEIL  MACKINNON, President  of Hyak  Mining Company,  said he                                                               
has had numerous  opportunities to interact both  with DNR, ADF&G                                                               
and  the Division  of Governmental  Coordination. He  supports EO                                                               
107 for  two reasons.  First, the Legislature  has to  figure out                                                               
how to deal  with the state's budget problems, so  if it can't do                                                               
this, it will have  to figure out other ways to  get the money to                                                               
"keep funding that  animal." His second reason  for supporting EO                                                               
107 is that in his dealings  with ADF&G, he believes the Division                                                               
of  Habitat   and  Restoration  would  benefit   from  a  broader                                                               
perspective. In the  last few years, he has  found the division's                                                               
attitude  to be  that  anything without  fins  doesn't count.  He                                                               
thinks DNR  might also consider  the human habitat.  His earliest                                                               
experience with the Division of  Habitat and Restoration occurred                                                               
in  1994 when  Hyak was  logging its  land in  Berners Bay.  Hyak                                                               
wanted to cut  some trees in the buffer zone  of a salmon stream.                                                               
Both a  Division of Habitat  and Restoration biologist and  a DNR                                                               
biologist  visited   the  site.  The  Division   of  Habitat  and                                                               
Restoration  biologist  was much  more  forgiving  while the  DNR                                                               
biologist was not  going to allow any, maybe  because the habitat                                                               
biologist  knew  what  counted.  He said  he  doesn't  see  where                                                               
turning  the  permitting  function  over to  DNR  will  open  the                                                               
floodgates to do anything.                                                                                                      
                                                                                                                                
MR. CHIP DENNERLEIN gave his  numerous credentials working in the                                                               
area of Alaska's natural resources and  said he would be happy to                                                               
respond   to  any   questions   and   provide  documentation   to                                                               
substantiate his following comments. EO  107 is based on fiction.                                                               
The commissioner  will no  longer have  any clear  authority over                                                               
salmon and resident fish habitat.  Habitat permit issuers will be                                                               
separated  by  agency  and  physically  from  fish  and  wildlife                                                               
biologist  colleagues  and  from ongoing  science  and  research.                                                               
There will  be fewer  permitting staff  to get  in the  field and                                                               
solve  problems.  The  federal  agency permit  issuers  will  now                                                               
consult by  law, under  the Fish  and Wildlife  Coordination Act,                                                               
with  ADF&G  biologists,  not  with   DNR  staff.  Every  project                                                               
mentioned  in  the  Governor's  state of  the  state  speech  was                                                               
heavily  federally funded  and subject  to  federal permits.  The                                                               
state uses  examples of state  and single resource  agency models                                                               
elsewhere with numerous apple and  orange differences from agency                                                               
staffing  to  retaining  deference   requirements  for  fish  and                                                               
wildlife.   The  projects   used   as   examples  are   blatantly                                                               
misleading. Falls Creek is one  example. That is a proposed hydro                                                               
project  inside   the  boundaries  of   a  national  park   in  a                                                               
congressionally   designated   wilderness.  He   doubts   habitat                                                               
concerns about fish passages are  holding the project up since it                                                               
is subject to  an environmental impact statement.  It was subject                                                               
to a bill  in then Senator Murkowski's Senate  Energy and Natural                                                               
Resources Committee.                                                                                                            
                                                                                                                                
MR.  DENNERLEIN said  the Governor's  transition team  never once                                                               
met  with  ADF&G  division directors.  Neither  the  Division  of                                                               
Habitat  and Restoration  director nor  deputy director  was ever                                                               
contacted  by  any  member  of  the  transition  team,  including                                                               
habitat committee members. However,  they still did not recommend                                                               
the  transfer. He  believes  EO 107  is a  radical  move that  is                                                               
reckless and based on falsehoods.                                                                                               
                                                                                                                                
MR. STEVE ALBERT,  a 21-year ADF&G employee, said  he is speaking                                                               
on his own  behalf. He believes EO 107 is  poor public policy. He                                                               
respects the Alaska Constitution and  the ability of the Governor                                                               
to reorganize the executive branch.  However, the implications of                                                               
this reorganization  will have far  reaching effects  well beyond                                                               
the Habitat and  Restoration Division. He asked  members to focus                                                               
their attention  on Section  45 of EO  107. It  includes language                                                               
that  states  that  ADF&G employees  with  peace  officer  status                                                               
delegated before  June 23, 1983  will continue to  accrue service                                                               
credit as  peace officers  under AS 39.35  after the  transfer as                                                               
long  as the  employees remain  in a  position described  in this                                                               
subsection in  DNR. Therefore, if  he or other  colleagues choose                                                               
to apply  for a position in  DNR that could benefit  the State of                                                               
Alaska if selected  as the most qualified candidate,  he would be                                                               
forced  to  endure  financial  repercussions   in  terms  of  his                                                               
retirement status. The Governor has  no right to impose financial                                                               
consequences and force  him to stay in one position  for the rest                                                               
of  his  working  life.  He  said he  cannot  apply  for  another                                                               
position in DNR,  nor can he return to ADF&G  in his professional                                                               
capacity without suffering  financial consequences. The executive                                                               
order provision  of the  Constitution was  included to  allow the                                                               
governor  to reorganize,  but  not to  punish  employees. He  was                                                               
simply  doing the  job he  was asked  and expected  to do  by the                                                               
public.  He noted  that Commissioner  Irwin  has received  praise                                                               
about how  the permitting  process for  his previous  company was                                                               
handled in  the Fairbanks  office where  the Division  of Habitat                                                               
and Restoration was a separate entity.  He stated that he got his                                                               
permit  in a  timely  manner and  the  environment was  protected                                                               
and/or  enhanced.  Mr. Albert  emphasized  that  the Division  of                                                               
Habitat  and  Restoration  was  a  separate  entity  during  that                                                               
process and the  system worked. He said the  current system works                                                               
for the public  by protecting habitat and for the  more than 99.5                                                               
percent  of  all development  projects  proposed  in Alaska  each                                                               
year. He  said he is not  against development but he  appealed to                                                               
members  to recognize  that development  at any  cost over  other                                                               
societal    values   without    recognizing   the    concept   of                                                               
sustainability and multiple  use is wrong and  against the vision                                                               
of the writers of the Alaska Constitution.                                                                                      
                                                                                                                                
7:00 p.m.                                                                                                                     
                                                                                                                                
SENATOR ELTON  said he wanted  to take this opportunity  to thank                                                               
committee  members  and  participants  for staying  to  hear  the                                                               
testimony.                                                                                                                      
                                                                                                                                
MS. KATHERINE PAUL, an ADF&G  habitat biologist, told members she                                                               
was testifying  on her own  behalf. She said the  information the                                                               
committee is working  from is not good. She noted  that the ADF&G                                                               
logo  contains animals;  DNR's logo  does not,  showing the  very                                                               
different  focus of  the two  agencies.   She  said that  habitat                                                               
protection  is part  of the  overall mission  of ADF&G.  The word                                                               
"protection" remains  in the statutory responsibilities  for this                                                               
agency despite EO 107. She  questioned how the habitat protection                                                               
mandate can be met through  having habitat permitting and project                                                               
review in DNR. Ms. Paul said  she is one of the project reviewers                                                               
who has  been targeted by  repeated accusations in the  press, by                                                               
the Governor,  and others for  doing her job under  the direction                                                               
of her  supervisors and  as part  of a larger  team of  sport and                                                               
commercial fish  and wildlife division  staff. It has  been quite                                                               
shocking to her  to hear attacks made against her  by the state's                                                               
leader in the  media for doing her job correctly.  She and others                                                               
wrote a memo  to the director and presumably  to the commissioner                                                               
and Governor  to correct the  Governor's information but  she has                                                               
received no acknowledgement that  that information was incorrect.                                                               
Instead,  she has  heard more  accusations,  inaccurate and  some                                                               
defamatory. She  said there is  a continuing resting of  the case                                                               
for  making this  transfer based  on  erroneous information.  She                                                               
said  it  is unbelievable  to  see  an agency  be  "scapegoated,"                                                               
especially  in  an  era  when  our  country  is  working  against                                                               
repressive regimes,  which begin  by abusing and  controlling the                                                               
flow  of information.  She said  it is  important for  members to                                                               
view this as  an environmental injustice and an  issue of respect                                                               
for  information. She  said there  are several  ways to  show how                                                               
these  changes will  lead  to  a reduction  in  the substance  of                                                               
habitat  protection, not  just a  change in  process.   She noted                                                               
that not  only has the committee  received incorrect information,                                                               
it has  provided incorrect information  about this  process. That                                                               
needs to be looked at in concert  with the people who work on the                                                               
permitting  process. This  transition  was  proposed without  any                                                               
contact with  the people who  do the work  and it will  not serve                                                               
the public to base this decision on incorrect information.                                                                      
                                                                                                                                
7:10 p.m.                                                                                                                     
                                                                                                                                
CHAIR  OGAN  announced a  brief  at-ease  and, upon  reconvening,                                                               
asked  participants to  limit  their testimony  to  1 minute.  He                                                               
reminded them that two more  hearings have been scheduled on this                                                               
issue in the House.                                                                                                             
                                                                                                                                
MS.  ELLEN  SIMPSON,  representing   herself,  told  members  she                                                               
currently works for  ADF&G. She came to Alaska 20  years ago from                                                               
Washington  State, where  she  worked as  a  fish biologist.  She                                                               
wanted to  work with wild salmon  rather than salmon that  had to                                                               
be raised in a hatchery because  the habitat they depended on was                                                               
gone. She  believes the  same thing  will happen  if EO  107 goes                                                               
into  effect.  Fish  habitat  is  lost one  project  at  a  time.                                                               
Without productive  salmon habitat,  salmon returns can  never be                                                               
sustainable, no  matter how good the  state's management policies                                                               
are.   She   said   she  is   especially   concerned   that   the                                                               
Administration  has not  adequately justified  a major  change to                                                               
the way  business is  done in  the state.  The Governor  says his                                                               
goal  is to  streamline  permitting and  make  it more  efficient                                                               
along the  lines of the  large mine projects. He  believes moving                                                               
the Division  of Habitat and  Restoration to DNR  will accomplish                                                               
that.  Commissioner  Irwin  explained   the  large  mine  project                                                               
concept  in his  overview  to the  House  Resources Committee  on                                                               
February 20  and in  a press conference  last week.  He indicated                                                               
that the Fort Knox staff  and habitat biologists worked to modify                                                               
that project  to benefit  both the company  and fish  habitat. He                                                               
praised the  process, which  sounds like  an endorsement  for the                                                               
existing  process,   not  a  justification  to   change  it.  She                                                               
indicated of  the 2,000  permits ADF&G issues  each year,  only a                                                               
few   are   for  large   projects.   Over   80  percent   require                                                               
consultations within  ADF&G. These permits are  very important to                                                               
landowners and  small developers who depend  on ADF&G's expertise                                                               
to help construct projects that  are fish-friendly. Most of these                                                               
projects are unique.   She pointed out that ADF&G  and DNR had to                                                               
draft  a   memorandum  of  understanding  so   that  the  habitat                                                               
biologists located in  DNR will know how to  communicate and work                                                               
with ADF&G  biologists. She  does not  see that  as streamlining.                                                               
She urged members to disapprove EO 107.                                                                                         
                                                                                                                                
MS. CELIA  ROSEN, an ADF&G librarian  for 15 years, said  she has                                                               
worked  with the  same crew  of habitat  biologists that  will be                                                               
transferred and noted those biologists  are very professional and                                                               
take  sound  science  very seriously.  Those  employees  work  an                                                               
incredible number  of hours  and risk  their lives  flying around                                                               
the state to do field work.  She believes they probably work more                                                               
unpaid  hours than  anyone  else in  state  government. The  most                                                               
significant loss  she sees resulting from  EO 107 is the  loss of                                                               
legal  continuity.  She  expressed concern  that  the  collective                                                               
wisdom  of generations  of lawmakers  will  be thrown  away on  a                                                               
political  whim  under  the guise  of  reorganization.  She  said                                                               
Alaska differs  from other states  in that it has  been proactive                                                               
in preventing habitat loss. She asked members to oppose EO 107.                                                                 
                                                                                                                                
MR. JERRY MCCUNE, representing United  Fishermen of Alaska (UFA),                                                               
stated  support  for  EO  107.   He  said  that  fishery  habitat                                                               
protection is  of the  utmost importance to  UFA and  clearly the                                                               
fishing industry's  sustainability depends  on it. UFA  has spent                                                               
the last  1 1/2 years trying  to revitalize and a  key element of                                                               
that  work has  been the  examination  of ways  to reduce  costs.                                                               
Permit  streamlining is  certainly  an element  of  that. UFA  is                                                               
working to streamline direct marketing  permits so that fishermen                                                               
do not have to deal with  four different agencies to do business.                                                               
UFA sees EO  107 as a similar move; one  intended to better serve                                                               
natural  resource   users  to  reduce   costs  and   move  toward                                                               
efficiency. As long as state  and regulatory protections are made                                                               
under DNR  permitting as  they currently  exist under  ADF&G, UFA                                                               
does not  believe EO 107  will cause  any harm to  fisheries. UFA                                                               
will monitor the  new process and voice its concerns  if and when                                                               
they occur.                                                                                                                     
                                                                                                                                
MR. RODGER  PAINTER asked to share  a comment made to  him by the                                                               
director of  the commercial fisheries  division, that  being that                                                               
if commercial  fishermen had  to go through  the same  process of                                                               
review  with  the  Division  of   Habitat  and  Restoration,  the                                                               
director  would  be out  of  a  job  because  there would  be  no                                                               
commercial  fisheries.  He said  he  is  representing the  Alaska                                                               
Shellfish  Growers'   Association  (ASGA).  ASGA  has   had  long                                                               
standing disputes  with the Division of  Habitat and Restoration.                                                               
He said the  statutes are broadly written, which leaves  a lot of                                                               
room  for personal  interpretation.  ASGA found  there  to be  no                                                               
review standards.  He requested  the committee hold  an oversight                                                               
hearing next  year to look at  how this process has  been carried                                                               
out. He said he hopes that DNR  and the Governor live up to their                                                               
promises, but little solid information is available.                                                                            
                                                                                                                                
CHAIR OGAN committed to doing that  and said he would also be out                                                               
in the field this year looking at the process.                                                                                  
                                                                                                                                
MR. CEVIN  GILLELAND, an  area habitat  biologist for  the Mat-Su                                                               
Borough, Prince William  Sound, and the Copper  River Basin, said                                                               
he was testifying on his own  behalf. He told members he has been                                                               
involved  in  three  of  the  projects that  have  been  used  to                                                               
demonstrate  why  ADF&G's  responsibility  to  protect  fish  and                                                               
wildlife should  be moved to  DNR. Moving this  responsibility to                                                               
DNR will eliminate ADF&G's ability  to protect fish and game. The                                                               
information about  the three projects  he is working on  that was                                                               
given to  the press has  been inaccurate. Those projects  are the                                                               
Tok Highway Cutoff  Upgrade, the Glenn Park  Interchange, and the                                                               
Power Creek Hydro-electric  project. He said it  has been alleged                                                               
that the habitat  division first provided comments  saying it had                                                               
no objection  to the  Tok Highway Cutoff  Upgrade. That  is true,                                                               
however  DOTPF  changed  the  project  to  include  24  acres  of                                                               
wetlands fill adjacent  to the Copper River and  the diversion of                                                               
a clear channel  Copper River tributary. The  Division of Habitat                                                               
and Restoration  received the information that  those two changes                                                               
were part  of the project.  The Division did change  its comments                                                               
because  it was  the right  thing to  do. The  Division requested                                                               
plans for the stream diversion and  to evaluate the impact of the                                                               
wetlands fill.  The second project  was the Glenn  Parks Highway.                                                               
The Governor  said the consistency  finding was issued  in March,                                                               
2001 and it took 16 months to  get a fish habitat permit. That is                                                               
incorrect. The  first meetings  took place in  June of  2001. The                                                               
consistency  finding required  the contractor  provide plans  and                                                               
specifications to ADF&G 30 days  before construction began. ADF&G                                                               
could not  issue permits  when the  consistency finding  was done                                                               
because  the  plans were  not  complete.  ADF&G worked  with  the                                                               
contractor to  eliminate one of the  bridges over a creek  and to                                                               
get a  concrete wall  reduced. ADF&G  helped the  contractor save                                                               
over $1 million on that project.  He urged members to overturn EO                                                               
107.                                                                                                                            
                                                                                                                                
MR. LARRY HOULE  stated support for EO 107 and  said that nothing                                                               
exists  to  prove that  streamlining  a  government process  will                                                               
degrade or compromise the Alaskan environment.                                                                                  
                                                                                                                                
MS. JEANNE WALTER  told members she has worked  at the Department                                                               
of  Interior,  the  State  of  Alaska,  the  University  and  for                                                               
industry. She said the original intent  of EO 107 has been stated                                                               
to streamline the  permitting process. This will  not be possible                                                               
for  several   reasons.  The  ADF&G   Division  of   Habitat  and                                                               
Restoration staff  processed 2,000  permits per year  averaging a                                                               
14-day  turnaround  time.  She  noted  that  information  can  be                                                               
verified at  the ADF&G tracking  system. Of those  2,000 permits,                                                               
only .5  percent was denied. A  second reason is that  22 habitat                                                               
staff will be laid off and  12 currently vacant positions will be                                                               
eliminated. Of the 36 positions  that will be transferred to DNR,                                                               
those  positions  will  be  spread   out  among  three  different                                                               
divisions  and  the  EVOS office.  Dismantling  the  Division  of                                                               
Habitat and  Restoration will decrease the  ability of biologists                                                               
to receive  consultative information from adjacent  fish and game                                                               
divisions and  field biologists.  Decreasing staff by  30 percent                                                               
will decrease  monitoring, restoration,  and mitigation  and will                                                               
slow the permitting  process down or create a  process which will                                                               
provide  rubber-stamping of  permits. These  reviews and  habitat                                                               
biologists'  expertise  save  permittees money  in  costly  legal                                                               
fines, both  federal and state.  She asked members  to disapprove                                                               
EO 107.                                                                                                                         
                                                                                                                                
MS.  CINDY  ANDERSON  told  members  she  is  an  ADF&G  employee                                                               
eligible for retirement after 20 years  and is slated to be moved                                                               
to  DNR. She  will  be economically  penalized  because after  20                                                               
years  of  managing  fisheries for  the  Division  of  Commercial                                                               
Fisheries,  she  moved  over  to   the  Habitat  and  Restoration                                                               
Division to  try to  end her  career in  a more  positive manner,                                                               
helping manage  resource development  in the state.  She supports                                                               
development in  a responsible manner.  She noted  dedicated staff                                                               
in  the Division  of  Habitat and  Restoration  have worked  many                                                               
uncompensated hours  to protect  fish habitat. If  a considerable                                                               
number  of habitat  biologists are  laid off  and others  move to                                                               
DNR,  she questioned  how the  resources and  resource users  are                                                               
being protected.                                                                                                                
                                                                                                                                
MR.  DANIEL SHARP,  an  ADF&G biologist  since  1982, said  since                                                               
September of  2002 he has  been employed as a  habitat biologist.                                                               
Under   the  Governor's   planned  reorganization,   his  current                                                               
position  and  duties  are  slated  to  remain  with  ADF&G.  The                                                               
organizational  structure employed  by  ADF&G  has long  depended                                                               
upon  the concept  of  relying upon  area  biologists. These  are                                                               
individuals   with   experience   that  allow   them   to   speak                                                               
knowledgeably  about the  fish or  wildlife  resources for  which                                                               
they hold  responsibility. As a  12-year resident of  Cordova, he                                                               
has  had  the  unique  pleasure  of  serving  as  the  Commercial                                                               
Fisheries area management biologist from  1995 to 1998 and as the                                                               
Copper  River area  management biologist  from 1999  to 2001.  He                                                               
said he  has heard  a number  of representatives  from commercial                                                               
fishing organizations  voice their support  for EO 107.  He asked                                                               
committee  members to  consider that  if EO  107 is  such a  fine                                                               
idea, would  they have supported  it had former  Governor Knowles                                                               
proposed it during the last six months of his administration.                                                                   
                                                                                                                                
He said  the Power  Creek hydro-electric  project in  Cordova has                                                               
been repeatedly  cited as an  example of the Division  of Habitat                                                               
and  Restoration's   interference  with   legitimate  development                                                               
projects. A less  expensive, cleaner and stable  source of hydro-                                                               
electric power was widely supported  by industry, local residents                                                               
and himself. Habitat biologists  connected with this project were                                                               
recently  described as  refusing to  be reasonable  on a  project                                                               
that was  set way  up in the  hills where there  are no  fish. He                                                               
asked to clarify  that description and said in  actuality, just a                                                               
few hundred  yards downstream thousands  of sockeye,  silver, and                                                               
pink  salmon spawn  each year.  Brown and  black bear,  trumpeter                                                               
swans  and other  waterfowl live  in the  area year  round. Power                                                               
Creek  drains into  Eyak Lake,  a source  of the  city's drinking                                                               
water.  Eyak Lake  supports  a  return of  tens  of thousands  of                                                               
sockeye  salmon.  These  are  the same  fish  that  Copper  River                                                               
commercial fishermen  receive their  highest price per  pound for                                                               
each  season.   Sockeye salmon  returns have  paid a  substantial                                                               
dividend to  the residents of  Cordova for hundreds of  years and                                                               
likely sustained generations  of Native Eyak people.  If any area                                                               
deserves  due diligence  from  a  habitat protection  standpoint,                                                               
Power Creek certainly qualifies. He  cannot attest directly as to                                                               
whether unreasonable  due diligence was exercised  by the habitat                                                               
biologists at  the time  of this project.  However he  can attest                                                               
that as a  local area biologist he received  numerous phone calls                                                               
and in-person  complaints about unreported  small and  large fuel                                                               
spills,  unchecked  erosion  of  spawning  streams  and  repeated                                                               
illegal stream crossings  with heavy equipment to  the work site.                                                               
It quickly became  evident by the contractor's  behavior that any                                                               
restrictions  designed  to  protect   the  spawning  habitat  and                                                               
wildlife  would  only  be  followed   if  the  habitat  biologist                                                               
enforced them. He finds it  most unfortunate that this particular                                                               
project  has  been heralded  by  the  Administration as  a  prime                                                               
example   of  showing   unreasonable   interference  by   habitat                                                               
biologists working for ADF&G.  His experience, however ancillary,                                                               
was  that   this  project   needed  almost   constant  department                                                               
oversight  if  any  cooperation  was  to  be  received  from  the                                                               
contractor.                                                                                                                     
                                                                                                                                
He feels  badly the Governor's  Office has been so  ill-served by                                                               
those seeming to  pass on disinformation about  the importance of                                                               
Power  Creek to  the residents  of  Cordova, the  conduct of  the                                                               
contractor,  and  about the  work  the  Division of  Habitat  and                                                               
Restoration   has  performed   in  attempting   to  provide   the                                                               
protection this area deserves. He  urged the committee's thorough                                                               
exploration of the proposed transfer  and to co-sponsor the joint                                                               
resolution to rescind EO 107.                                                                                                   
                                                                                                                                
CHAIR OGAN thanked  all participants and invited  them to provide                                                               
written  comments  for inclusion  in  the  record. He  noted  the                                                               
committee   has  heard   from   62  people   tonight,  plus   the                                                               
commissioners.  He then  announced  the committee  would take  no                                                               
action on EO 107 tonight and adjourned the meeting at 7:37 p.m.                                                                 

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