HOUSE BILL 406 "An Act authorizing the Board of Fisheries and the Board of Game to identify fish and game that are taken for subsistence and to identify subsistence and nonsubsistence areas; relating to the establishment of preferences for and to regulation of subsistence fishing and hunting; relating to advisory committees." Co-chair Sharp addressed the fiscal notes. He referred to a recap of the fiscal notes in the members' files. Senator Phillips MOVED to MODIFY the fiscal notes to change them all to federal funds except for the fiscal notes from the Alaska Courts and the Department of Natural Resources (Department of Law, Civil Division, component DNR). Senator Adams OBJECTED because there had not been a discussion on HB 406 and he did not understand why there were nearly $3 million in fiscal notes. A roll call was taken on the motion. IN FAVOR: Parnell, Phillips, Donley, Pearce, Sharp OPPOSED: Adams Senator Torgerson was absent from the vote. The motion PASSED (5/1). The fiscal notes were changed to federal funds except for Alaska Courts and the Department of Law. Senator Adams wanted clarification about the constitutionality of the bill. STEVE WHITE, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, replied that there were two sections of the bill that raised constitutional issues. The first section was the one dealing with eligibility for subsistence, or who would be considered a qualified subsistence user. One section of the bill would qualify people based on residency; people would get a presumption in favor of eligibility or a presumption against eligibility based on whether they lived in a subsistence-dependent area. A constitutional issue would be raised under equal-access clauses based upon the supreme court's decision in a case a few years prior. He detailed the reference related to page 4, line 31 to page 5, line 13, subsections (d) and (e). Mr. White continued that there were essentially two ways to become a qualified subsistence user under the bill. The first would be to qualify under individual criteria, which were administered through a process before the board (in subsection (c)). The presumptions based on where a person lived were in subsection (d); the way the presumptions would operate was described in subsection (e). There were constitutional issues under the McDowell and Camacho decisions because the presumptions were based on where a person lived. Mr. White noted that there was also a possible second constitutional issue in subsection (c) that was not as clear; one of the criterion to become a certain kind of subsistence user was history of use of a stock or population; the question had been raised of whether the provision would create a closed class, or one that no one could enter in the future. In other words, a person could not become a subsistence user unless they used the stock or population for subsistence, but on the other hand, the person could not use the stock or population unless they were a subsistence user; it created a no-win situation. He thought the issue could be reconciled if past use could be established through some other use besides subsistence, for example, through sport or commercial use. The resolution could be difficult but could address concerns about creating a closed class. Mr. White summarized that the principal constitutional issue was raised by the presumptions based upon residency in the other two sections. Co-chair Sharp asked whether the current Tier II was based a point system for qualification related to past usages and where a person lived. Mr. White explained that Tier II had two criteria left after the supreme court removed the "where you live" criteria; one related to a person's dependency on a particular stock or population and the second related to the availability of alternative resources. The system was not closed because a person was already a subsistence user; the legislation would qualify them through the other two Tier II criteria. A person would qualify in the first place in subsection (c) as a subsistence user. Co-chair Sharp noted that Tier II applications asked how long an applicant had lived in the area and used the resource; the longer and more often used, the more points, and the more ability to qualify for a permit. He mentioned something about being tied to a region, which he did not think had been challenged. Senator Adams asked whether the bill would comply with the Alaska National Interest Lands Conservation Act (ANILCA). Mr. White responded that he did not believe the bill would comply with ANILCA. He thought there would have to be changes to the bill or to ANILCA in order to regain state management. Senator Adams pointed out that Senator Ted Stevens had amendments regarding ANILCA. He asked for more details about the amendments and whether they would be beneficial to the state of Alaska. Co-chair Sharp did not think what Senator Stevens would do had any relationship to HB 406. He opined that Senator Stevens did things he said he would not do and did not do other things he said he would do. Senator Adams argued that possible provisions in HB 406 could result in dual management. Co-chair Sharp believed that Senator Stevens had been "flexible" in the past. Mr. White described the amendments; whether they were beneficial to the state was a judgment the legislators could make. He underlined that the amendments would not be truly effective until December 1, and then only if the state had a law that came in compliance with ANILCA. Mr. White provided an overview of what the amendments would do. The amendments would clarify what federal lands were; ANILCA governed subsistence uses on federal lands. The amendments would make certain findings, one of which had been controversial. The amendments would define customary, traditional uses, commercial trade, and rural residency in Alaska, and they would establish reasonable opportunities to measure subsistence under federal law. The definitions and establishment of reasonable opportunity would bring ANILCA closer to what the state's statutory definitions and practices had been over the years. The amendments would specify the composition and operation of regional councils, which was not present in the existing version of ANILCA. The amendments would clarify what would happen when the state came into compliance; the state would unequivocally regain management, unless the state was found by a court to be out of compliance. The amendments dealt with federal court oversight and would establish that state agencies (such as state boards) had the same deference as equivalent federal agencies (such as federal boards) and that the decisions made by the boards could not be overturned unless found to be arbitrary, capricious, an abuse of discretion, or otherwise in violation of law. In other words, the federal courts would have to defer to interpretations or adoptions of subsistence regulations by state boards, unless they were defective in any one of the three listed ways. Finally, the amendments would not prohibit the state or the federal government from co-managing with other land- use organizations or organizations involved in subsistence resource. Co-chair Sharp queried the constitutionality and workability of HB 406. TED POPELY, COUNSEL, SENATE AND HOUSE MAJORITIES, responded that the bill as written conformed to the Alaska Constitution and would not require an amendment. He added that the provision in the bill that had raised concerns related to community-based presumptions that were fully rebuttable and had been argued to go afoul of the equal- access provisions, including uniform application of law. He did not believe the bill would be found to violate the state constitution because the residency-based criterion was not ultimately used in determining whether or not someone was a qualified subsistence user. In other words, it was merely used at the presumption stage, and was fully rebuttable, which meant that the subsistence preference was ultimately open to anybody in the state of Alaska without regard to where they lived. The criterion would merely be used in a preliminary fashion as an administrative convenience to sort people. Ultimately, since the presumption was rebuttable (by preponderance of the evidence standard) it would not be used as a determining factor as it had been in McDowell and other cases. He stressed that it would not be even a little bit of a factor in the ultimate determination by the boards of whether or not someone would qualify as a subsistence user in Alaska. Mr. Popely quoted from a passage by the Alaska Supreme Court in the Kenaitze case [1986 State v. Kenaitze Indian Tribe], the closest case providing guidance as to whether or not the proposed legislation could violate the constitution. He reminded the committee that in the Kenaitze case, the supreme court considered the Tier II provisions that originally included a person's proximity to the resource as one of the qualifying criterion. The proximity to resource was ultimately stricken and the determination was made that the non-subsistence areas were found not to violate the constitution. The court looked at the argument raised against the non-subsistence areas, which said that establishing non-subsistence areas created an extreme inconvenience for people who did not live in them. The people would not have local access to subsistence resources in their immediate proximity the way people outside the non-subsistence areas could. The court addressed the argument and said: Inconvenience is in no sense the equivalent of bar to eligibility for participation in subsistence hunting and fishing, and does not suffice to trigger an analysis under the equal access clauses. Mr. Popely submitted that the same argument would apply under HB 406 if and when it were challenged; ultimately the residence criteria would be classified as an administrative inconvenience rather than as a qualifying criterion as it was in McDowell or Kenaitze, and would therefore be upheld. Co-chair Sharp asked whether any of the proposed amendments would cause conflicts with existing state law or cause potential problems for the state. Mr. Popely responded that there had been sections that were added by Public Law 105-83 that were not contemplated at the task force stage. For example, Mr. White had addressed the basis on which the federal courts could overturn agency decisions, or the deference standard. He pointed to the example of the section added to comply with the Administrative Procedure Act, which added the section "otherwise not in accordance with law." There were also provisions in the findings of the law that was passed that were not contained in the task force proposal. For example, there was explicit recognition of both the Katie John [Katie John v. United States] and Babbitt [Alaska v. Babbitt] decisions; if the provisions were adopted because the state adopted a constitutional amendment, the provisions would become part of federal law. The Katie John decision would go to the federal government's ability and authority to manage navigable waters in Alaska, and the Babbitt decision would go to the U.S. Secretary of Interior's ultimate authority to manage lands in Alaska. Mr. Popely turned to Section 805, another provision that was added. He noted that there was a provision in the Stevens amendments that would permit the interior secretary to bring a judicial action to enforce the subsection relating to the state's compliance with federal law; that was another provision not contained in the task force proposal. In other words, if the provision were adopted, the U.S. Secretary of the Interior could bring an action to enforce the state's non-compliance with federal law, whereas under the previous Title VIII provisions, an individual would bring the action. Senator Adams asked whether HB 406 would comply with ANILCA. Mr. Popely replied that there were two questions and two answers. The first question was related to whether the bill would comply in terms of the specific preference schemes articulated under Title VIII; the answer was no. The second question was whether the legislation would comply with the general intent of ANILCA. He believed the question asked by Senator Adams was the first question. Senator Adams replied that he liked the first answer. He noted that the legislative majority had conducted a public opinion poll on the subject of subsistence. The response had been that the public wanted to vote on a constitutional amendment. He asked whether the legislature should hold back on the constitutional amendment. Co-chair Sharp opined that the choice would not be made by Mr. Popely but by the legislature. Senator Adams pointed out that Mr. Popely represented the majority. He withdrew the question. Senator Phillips MOVED to REPORT CSHB 406(FIN)am with individual recommendations and the updated fiscal note. Senator Adams OBJECTED. He stated that his problem with the bill was the constitutionality of a few provisions related to equal access and resident status. He believed that the bill would not comply with ANILCA. He thought the bill would function as an invitation for dual management, which he did not believe the public wanted. He noted the nearly $3 million fiscal note change from general funds to Department of Fish and Game funds, with the exception of a few items. He opined that there was an expectation of the measure complying with ANILCA, so that the state would get management back. A roll call was taken on the motion. IN FAVOR: Parnell, Phillips, Donley, Pearce, Sharp OPPOSED: Adams Senator Torgerson was absent from the vote. The motion PASSED (5/1). CSHB 406(FIN) was REPORTED out of committee with no recommendation and fiscal notes by the Department of Law and the Alaska Courts.