CS FOR SENATE BILL NO. 147(FIN) "An Act providing for a sport fishing facility surcharge on sport fishing licenses; providing for the construction and renovation of state sport fishing facilities and for other projects beneficial to the sport fish resources of the state as a public enterprise; and authorizing the issuance of revenue bonds to finance those projects." Representative Holm noted that the companion bill to SB 147 is HB 252 [sponsored by Representative Holms]. He spoke in support of the legislation. SENATOR RALPH SEEKINS, SPONSOR, explained that the legislation would provide a sport fishery surcharge to reconstruct and construct new sport fish hatcheries in the state and enhance or expand the recreational fishing opportunities around the state. Alaska has an ever-growing demand for fish stocks. More people want to fish. Resident populations are growing. Tourist demand for recreational opportunity is increasing. And, at the same time, sport fish production is decreasing. Alaska's only sport fish hatcheries are located at Ft. Richardson and Elmendorf A.F.B. Both are more than 30 years old and nearing the end of their useful life. To make matters worse, biomass production will soon plummet. Hatcheries require warm water to enhance growth in baby fish. Waste heat from the Ft. Richardson and Elmendorf power plants has provided that energy for many years. Both power plants will be shutting down hot water production in October. As a result, biomass production will suffer greatly at the same time that demand is increasing. We can fix this problem and plan for years to come. Senate Bill 147 provides for the renovation and expansion of the Ft. Richardson and Elmendorf facilities to meet south central needs. Furthermore, it will also provide for a new hatchery in Fairbanks to meet the demands of the interior regions. (Currently hatchery fish are trucked from Richardson into the interior for planting.) It won't be cheap but it is affordable. Federal funds have been procured to meet increased demand due to military expansion. Senator Seekins observed that there are some environmental problems in the Fairbanks area that can be cured by using hot water from the Chena V power plant. Some of the BTU's can be taken out of the water before it is discharged back into the river. Educational facilities with the University of Alaska School of fisheries can be enhanced and visitor facilities created for school aged kids. He anticipated that Senator Stevens would be able to provide $10 million toward this effort. Senator Seekins observed that a new fish hatchery building with a salmon modular would be built at Ft. Richardson. He observed that 95 percent of the fish from this would go to sport fisheries. He emphasized that the legislation would allow the conversion of fishing into catching. The facilities would be expandable for up to 20 - 25 years. Senator Seekins explained that once the bonding mechanism is paid off the surcharge would end. Every dollar earned would go to pay down the indebtedness. Senator Seekins stressed the statewide benefit. The Wrangell/Petersburg Crystal Lake Hatchery would receive $2.5 million; the Sitka/Haines hatchery would receive $1.5 million; and the Skagway hatchery would receive $1.6. 2:47:17 PM Co-Chair Chenault asked where the fish are deposited after they are reared. Senator Seekins explained that the fish go into the lakes and streams of the interior, Kodiak Island, the Kenai Peninsula, and through South Central Alaska. 2:48:29 PM Vice-Chair Stoltze asked if inclusion of game licenses was discussed. Senator Seekins explained that game licenses were included in SB 170. He observed that there has been indication that the public would support an increase in hunting licenses if there is a greater opportunity to bring something home. Vice-Chair Stoltze noted that the Susitna Advisory Board has shown some support for the legislation and suggested a fee increase of $5.00. Senator Seekins observed that deposits into the Fish and Game Fund must be sufficient to pay off the indebtedness. The initial figure was $7.50. The charge was increased to $8.50 to cover the additional $5.5 million that went into Southeast Alaska. He termed it a user-benefit surcharge. 2:52:18 PM Vice-Chair Stoltze referred to legislation, which would name the Fairbanks hatchery after Ruth Burnette. Representative Weyhrauch explained that the only complaint he has received is that the $8.50 fee would require vendors to carry change. He suggested an amendment to round down the amount to $8.00 in order to eliminate the need for change. Senator Seekins questioned if the reduction would jeopardize the bond issues and prevent fully-funding the projects. He suggested rounding it off to $9.00 if the bonding authority felt it was necessary. Representative Kelly WITHDREW Amendment 1, which would have lowered the amount to $7.50. 2:56:24 PM JIM PRESTON, JUNEAU, spoke as a charter operator and license vendor. He testified in support of the proposed amendment by Representative Weyhrauch, which would eliminate the need to carry quarters around. He argued for "whole dollar amount" fees. He spoke in support of SB 147. 3:00:08 PM RICKY GEASE, EXECUTIVE DIRECTOR, KENAI RIVER SPORTFISHING, testified in support of SB 147. He stressed the need to upgrade the hatcheries and note that demand on the fisheries is growing. He agreed that the surcharge should be eliminated after the bond is paid. 3:01:28 PM Vice-Chair Stoltze asked if limiting set nets or the bill would provide the most benefit. Mr. Gease answered both. Co-Chair Chenault asked for Mr. Gease's opinion on the rounding up or down to a whole number. Mr. Gease stated that he would support, whichever amount supported the proposal. 3:02:48 PM Representative Weyhrauch MOVED to ADOPT Amendment 2: Page 3, lines 23, 24, 25 Delete $8.50 Insert $8.00 Page 3, line 29 Delete $8.50 Insert $10.00 Co-Chair Meyer OBJECTED. Representative Weyhrauch reiterated his reasoning and requested comments from Mr. Mitchell. 3:04:15 PM DEVON MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND BANK AUTHORITY, DEPARTMENT OF REVENUE, related that the fiscal note by the department contemplated a 20-year bond. He felt that the legislation allowed flexibility and zero impact would be easy to manage. Representative Croft opined that the numbers are slightly positive. 3:05:47 PM Mr. Mitchell had not examined the numbers by the Department of Fish and Game. He noted that if there is a positive impact that it is the sponsor's intent return any funds. 3:06:47 PM Representative Hawker inquired if the extra revenue would be dedicated to early retirement of the debt. Mr. Mitchell agreed and clarified that the intent is to accelerate the debt repayment and shorten the schedule. Representative Hawker spoke in support of increasing $8.50 to $9.00. 3:08:20 PM Mr. Mitchell noted that the Department of Fish and Game's fee collection has been growing. The amounts suggested are based on current numbers, not projected numbers. Representative Weyhrauch suggested Representative Holm make a friendly amendment as such. 3:09:47 PM Representative Holm offered a friendly amendment to Amendment 2, changing $8.00 to $9.00 on page 3, lines 23-25. Representative Weyhrauch restated the friendly amendment to Amendment 2. Vice-Chair Stoltze and Co-Chair Chenault OBJECTED. 3:12:56 PM Mr. Mitchell pointed out that page 4, line 1 and 2 would also need to be changed if the intent is to go to whole numbers. Representative Croft observed that the other cites are for non-resident military fishing and small game licenses, which would have a small impact. He suggested sticking to the lower number of $8.00 for these uses. He also asked about the implications of the Carlson Case. 3:15:32 PM KELLY HEPLER, DIRECTOR, DIVISION OF SPORT FISH, DEPARTMENT OF FISH AND GAME, addressed the Carlson case, which applies to commercial issues. He did not feel there would be a problem. 3:16:47 PM Representative Croft asked for more information regarding the use of the Fairbanks hatchery stock. Mr. Hepler related that the two hatcheries, Ft. Richardson and Elmendorf, provide all of the stock for Homer to the Alaskan range. The new hatchery is proposed in Fairbanks to take care of the Interior needs. The Ft. Richardson hatchery would be refurbished to take care of area south of the Alaskan range to Kodiak. Vice-Chair Stoltze inquired how long this surcharge would be in place. Mr. Mitchell replied that the fiscal note was based on 20 year leveraging. He estimated that the term could be shortened to 17 years or less. In response to a question by Representative Stoltze, Mr. Hepler explained that the Ft. Richardson hatchery would be located on a former Air Force Base facility, with no practical public access. The facility will be for production only; there would not be anything fancy about the facility. The Fairbanks facility would be built for production. There have been discussions of additional money that would make the facility more "pleasing to the eye", but without becoming a visitor center. There have been discussions regarding housing at Ft. Richardson, similar to what is at Fairbanks. 3:21:05 PM GORDON GARCIA, PROJECT MANAGER, DIVISION OF SPORT FISH, DEPARTMENT OF FISH AND GAME, described the facility and the attempt to reduce costs. He noted that the Fairbanks facility has been scaled back to reduce costs. The amount raised through the legislation would fund the building. 3:21:39 PM Mr. Mitchell noted that there is a dedicated fund that cannot crossover into other needs. 3:22:11 PM Vice-Chair Stoltze expressed concern that the angler surcharges not be used to pay for any "grand ideas". 3:23:28 PM Mr. Hepler emphasized that the facility would be a production facility. He stressed that without fish there is no hatchery. 3:24:24 PM Representative Kelly summarized that the amendment to the amendment is to lower the fee to $8.00. Representative Croft clarified that the amendment to the amendment would take the fee to $9.00. His objection would leave it at $8.00. 3:25:39 PM Co-Chair Chenault observed that $9.00 would provide $2.47 million more that the original proposal. 3:26:37 PM Representative Holm observed that the concern is that the amount be whole, but emphasized that $8.00 would not be sufficient to fully fund the project. He pointed out that any extra funds would only pay off the debt earlier. He noted that most projects do not come in at their estimated price. 3:28:21 PM A roll call vote was taken on the motion to amend Amendment 2 to "$9.00". IN FAVOR: Hawker, Holm, Kelly, Moses, Weyhrauch, Meyer OPPOSED: Foster, Joule, Stoltze, Croft, Chenault The MONTION PASSED (6-5). Co-Chair Meyer MOVED to ADOPT Amendment 2, as amended. A roll call vote was taken on the motion to adopt Amendment 2. IN FAVOR: Hawker, Holm, Joule, Kelly, Moses, Weyhrauch, Foster, Chenault, Meyer OPPOSED: Stoltze, Croft The MOTION PASSED (9-2). Representative Hawker spoke in support of the legislation and noted the need for the new facility. 3:33:59 PM Representative Holm thanked the Department of Fish and Game. 3:34:19 PM Representative Holm MOVED to report HCSSB 147 (FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCSSB 147 (FIN) was REPORTED out of Committee with a "no recommendation" recommendation and with three fiscal impact notes: #1 REV, #2 DFG, #3 DFG. 3:35:08 PM