HOUSE BILL 198 "An Act relating to regional dive fishery development associations and to dive fishery management assessments; and providing for an effective date." Representative G. Davis MOVED that work draft, CS HB 198 (FIN), #0-LS0415\C, Utermohle, 4/21/97, be the version before the Committee. There being NO OBJECTION, it was adopted. REPRESENTATIVE WILLIAM WILLIAMS stated that the Southeast Alaska dive fishermen have been attempting for the past 7 decade to establish orderly, consistent and stable fisheries capable of providing dependable economic opportunity for themselves, their families and the communities. The urgency to create an economically viable fishery is highlighted by the recent closure of the regions largest employer and other related negative economic effects on the economy. Substantial untapped dive fishery resources have been identified through diver and underwater activities for over a decade. The dive fishery resources appear to be abundant and diverse throughout the region. The potential for future jobs for harvesters, processors and support industries is considerable. The temporary fishery opening is based on a one time source of funding that will expire June 30, 1997. In order to continue the fishery and to develop the other dive fishery resources, a stable source of funding would be necessary. Representative Williams pointed out that HB 198 would not mandate but allow the creation of regional dive fishery development associations for the purpose of developing dive fisheries and would create a working relationship between the divers and the Alaska Department of Fish and Game (ADF&G) to develop annual operating plans. The legislation is permissive and once a regional association is formed, divers can hold a ballot election of all interim-use permit holders to answer questions. If approved by election, divers would be assessed, the State would collect and the Legislature may appropriate the assessment back to ADF&G. The appropriation would be based on the mutually developed annual operating budget and plan. ADF&G would then fund the specific purposes outlined in the legislation for the regional dive fishery development association and ADF&G. Representative Williams concluded that HB 198 would be a positive step forward by the private sector to support economic development and diversification without seeking a general fund appropriation. He urged the Committee's support of the bill. GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND GAME, testified on the proposed legislation. He noted that the Department does appreciate the divers coming forward requesting the creation of a new fishery, however, the Department is concerned that expectations for increased funding are being created by this business which might not materialize. The development of the new fisheries will come at the expense of existing fisheries. Mr. Bruce continued, it does not appear that the program 8 will qualify for the designated program receipt funding as it currently is written in the bill. Without such designation, these expenditures will appear as additional general fund expenditures. Without it being an increment, funding for the new fisheries will have to come from the existing fisheries. He added, the bill would establish a close relationship between a particular group of harvesters and the Department of Fish and Game. There are a number of concerns which the public may have on developing resources. The bill would establish a special relationship, and the Department is concerned with maintaining the balance of managing public resources for a broad cross section of public interests. Mr. Bruce suggested that the Committee consider a sunset being added to the legislation which would force later reconsideration of the issue. Co-Chair Therriault asked if the Department was in support of the legislation. Mr. Bruce advised that would depend on how some other bills moved through the Legislature this year, and specifically, how program receipt authority would be addressed. Representative Williams noted that he would not support a sunset clause being added to the legislation. Co-Chair Therriault questioned if the legislation would gradually move into a limited entry permit system. Representative Williams stated that he did not know until all the information regarding need had been received. This is the first year of the moratorium. Co-Chair Therriault questioned why language had been included specifying interim-use permits. He recommended that language be held for future legislatures to determine if it should be transferred to that kind of system. Representative Williams recommended that inclusion would save a step in repeating the process. Representative G. Davis believed that a rough estimate could be provided regarding the resource cost of management. Mr. Bruce commented that the Department estimates at this time, the expenditures will be about $250 thousand dollars per year. Representative J. Davies voiced concern with the way the money is budgeted. He suggested that people supporting the legislation should follow it closely and support program receipts being used. He MOVED a conceptual amendment that revenues containing various percentages within the bill be classified as program receipts. Co-Chair Therriault OBJECTED. 9 Representative J. Davies noted that he would be amenable to changing the concept by adding that language to the intent. Co-Chair Therriault suggested that Representative J. Davies offer a Letter of Intent. He pointed out that currently, the Senate has been drawing the line on program receipts that are contractual, recommending more one-time items rather than on-going functions. A roll call vote was taken on the MOTION to adopt the conceptual amendment. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: G. Davis, Foster, Kelly, Kohring, Therriault Representatives Martin, Mulder and Hanley were not present for the vote. The MOTION FAILED (3-5). (Tape Change HFC 97-109, Side 2). Representative Williams provided a brief synopsis of the sea urchin history in Alaska. Today there are 500 sea urchin divers in Southeast Alaska. Co-Chair Therriault noted that over the next few years, there may be more people who want to enter into that fishery and that those persons would be precluded unless they buy one of the existing permits. Representative Grussendorf informed Committee members that in creating a moratorium, there becomes a block of time to assess and analyze what stock is available and if that stock could sustain a certain level of fisheries. Then the determination can be made regarding how many people should be involved in that fishery. The interim permit increases the number of persons becoming involved, although, the moratorium would be approaching in three or four years. A point system would be established to determine how many people be allowed in the fishery in order to keep it healthy. Co-Chair Therriault asked if the limited entry process would be identical to that used in the salmon fishery. Representative G. Davis spoke to his concerns with ownership of the resource. Representative Williams stressed that HB 198 does not address limited entry. Co-Chair Therriault reiterated concern with removing the Legislature from deliberation cycle in deciding whether a limited entry permit should be granted. FRANK HOMAN, FORMER COMMISSIONER, LIMITED ENTRY COMMISSION, 10 advised that the moratorium passed last year requires the Commissioner to provide a thorough study of the dive fishery, with a provision that they look at a non- transferable type arrangement. Those things will be studied for the next three years. Representative G. Davis MOVED to report CS HB 198 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 198 (FIN) was reported out of Committee with "individual recommendations" and with a fiscal note by the Department of Fish and Game dated 4/10/97, and zero fiscal notes by the Department of Revenue dated 4/10/97 and the Commercial Fish Entry Commission dated 4/10/97.