HOUSE BILL NO. 79 "An Act relating to salt water sport fishing operators and salt water sport fishing guides; and providing for an effective date." 9:03:12 AM DOUG VINCENT-LANG, COMMISSIONER, DEPARTMENT OF FISH AND GAME (via teleconference), introduced the legislation. He stated that the bill had come before the committee the previous year but due to the pandemic it had not moved forward. He read from prepared remarks: With this bill the department would like to reinstate the saltwater licensing and reporting requirements. Before an amendment in House Fisheries, it did not reinstate freshwater licensing and reporting requirements because the department does not see immediate need for this kind of reporting in freshwater at this time, which is what initially caused some of the contention with this bill. However, in House Fisheries the bill was amended to require licensure of freshwater operators and guides, but not require reporting by them. This is accompanied by reductions in licensure fees for both freshwater and saltwater guides. This change has caused some concern with freshwater operators and guides. However, before I go any further, let me provide you with some legislative background with respect to this issue. The sportfish guide and operator licenses were first adopted in the 2003 and 2004 legislative session and took effect in 2005 and remained in effect through December 31, 2014, when they expired due to a sunset clause. This legislation was passed based on the urging of both fresh and saltwater guides at the time who were looking to professionalize their industries. During the 2015/2016 legislative session, only the saltwater licensing and reporting requirements were reinstated and included a sunset of 2018. The legislature stripped the freshwater piece from this legislation and the department supported this as we were not using freshwater information for in season management assessment of fisheries, and we were seeing minor logbook violations. For example, an error in the reporting of the number of grayling released resulted in loss of concession permits, notably on federal lands. This legislation sunset in 2018. The legislature provided some bridge funding through UGF, but that has since gone away. As such, we have no legislation in place to collect fees to pay for the marine logbook program. Logbook data has been collected by the department from saltwater sportfishing businesses and guides since 1998 and is critical to upholding the state's U.S./Canada Pacific Salmon Treaty obligations, providing data to the International Pacific Halibut Commission crucial to making allocation decisions. It is also critical for the North Pacific Fisheries Management Council (IPHC) for managing federal fisheries, avoiding duplicative reporting mechanisms and undue burden in the charter fishing industry. Logbook data also supports a myriad of additional critical uses, including but not limited to state fisheries monitoring and management, advisory announcements and emergency orders, the Alaska Board of Fisheries process, advisory committees, external communication, statewide harvest survey estimation verification, fisheries disaster declarations, federal subsistence board processes, land use and permitting, operational planning and exemptions from NOAA saltwater registry, all of which are included in the logbook use summary provided in your packet. 9:06:29 AM Commissioner Vincent-Lang continued to read from prepared remarks: Let me give you an example of the utility of this information in the management of saltwater fisheries. Last year we saw significant decreases in tourism across Alaska, which resulted in significant reduction in saltwater charter boat fishing. We use data from the logbook program to show that we would be significantly below our quotas for halibut and were able to use this data to relax the regulations enacted by the IPHC. This resulted in additional opportunity participation for halibut charter fisheries, most of which helped Alaskans. This provided a needed economic boost to the charter fisheries and the local economies, as well as an opportunity for Alaskans to put some food in their freezers. Fees collected as part of this bill would provide data necessary to manage marine charter fisheries of Alaska. These fisheries support somewhere in the neighborhood of 250,000 angler days of effort and contributed over $1.5 million to the state's economy. In sum, the department supports this bill and sees it as a necessary tool to fund and manage saltwater charter fisheries. We urge your support in moving this bill out of committee. Thank you. If the committee would like, Ms. Hanke can walk you through a sectional analysis of the bill and I am more than happy to try to answer any questions you may have. 9:07:39 AM Co-Chair Merrick asked for a review of the sectional analysis. RACHEL HANKE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND GAME (via teleconference), reviewed a sectional analysis for the bill. Section 1 Establishes license fees for sport fishing guides and operators. • Guide license - $100 • Operator license - $200 • Operator and guide combined license - $200 Section 2 Adds new Article to AS 16.40 that • AS 16.40.262 provides stipulations for the sport fishing operator license and defines the license type o Includes requirements such as a business license and general liability insurance • AS 16.40.272 provides stipulations for the sport fishing guide license and combined operator guide license, defines both license types o Includes requirements such as a current sport fishing license and first aid certification • AS 16.40.282 establishes the logbook reporting requirements for saltwater guides and operators • AS 16.40.292 establishes penalties for violations the of the chapter • AS 16.40.301 defines "sport fishing guide" and "sport fishing guide services". Section 3 Adds salt sportfishing operator and guide license to AS 25.27.244(s)(2) which defines "license" in statutes regarding the Child Support Services Agency. Section 4 Uncodified law directing the Department of Fish and Game to prepare a report for the legislature proposing solutions to gathering harvest data for the saltwater rental and unguided fishing industry, due December 1, 2022. Section 5 Effective date of January 1, 2022. 9:09:40 AM Representative Josephson was trying to understand what the absence of the logbook data looked like. He thought there must have been some reporting requirement for the department to know how the guides were performing and what they were taking. He thought there was some obligation for guides to report success and failure. Commissioner Vincent-Lang answered that when the logbook program had sunset and funding had gone away, the department recognized the necessity of trying to collect the information and had adopted companion regulations through the Board of Fisheries. The department had been funding the collection of the information with internal dollars. It was the department's goal to get back to a user-pay system from the logbook program. He relayed that in the past year, the Sport Fish Division had taken a large hit in license fees going into the Fish and Game Fund due to the COVID-19 pandemic and loss of tourism across the state. The department was looking for a way to fund the unfunded mandate it had to collect the information through a treaty and licensing program, which was generally supported by the marine sportfishing industry in Alaska. Representative Josephson asked about the lost federal concession. He thought it sounded bad. He was familiar with a federal concession related to hunting, but less so with fishing. He asked for detail. Commissioner Vincent-Lang answered there had been minor violations occurring with freshwater fishing some areas of freshwater occupied by federal land. He explained that when there were two to three violations, even if they were minor, it set the state up to potentially lose its concession program on federal lands. He remarked that it was probably a good thing to have happen if the violations were major; however, some of the cases had been very minor such as the number of grayling released by an angler or failure to account for the number of rainbow trout released. He explained that the department had been in a position where its logbook program (that freshwater guides were required to use) was used by federal officers to cite guides. He explained that the citations had been used against the guides in terms of concession programs on federal lands. Commissioner Vincent-Lang reported that the department was also seeing issues in state waters such as the Kenai River, where minor violations were being used by the Department of Natural Resources to effect business operations. He clarified that if DFG needed the information it would be one thing, but it had not been using the information in freshwater for in-season management purposes. 9:13:01 AM Representative Thompson asked for verification that the state had been providing the logbooks at its own expense. Commissioner Vincent-Lang answered in the affirmative. He relayed that DFG was seeking some additional federal funding and may be successful in the future, but it was currently uncertain how much the federal government would continue to contribute to the programs. Representative Thompson asked for verification that the department was providing the logbooks in FY 21, which was the reason for the January 1, 2022 effective date (when new licenses would come out). Commissioner Vincent-Lang replied in the affirmative. He elaborated that DFG was trying to streamline the program to be as cost efficient as possible by making the logbooks electronic. Representative Carpenter asked where the funding for the program was currently coming from. He asked about the current cost to the state. Commissioner Vincent-Lang answered that the funds were coming from the Fish and Game Fund matched by [federal] DJ [Dingle Johnson] funds. He reported that the bill would not cover the entire cost of the logbook program. He believed the program cost about $500,000. He clarified that the total cost of the freshwater component to run the logbook program was about $650,000. Representative Carpenter asked about alternatives available that would provide the funds necessary to address the problem. Commissioner Vincent-Lang answered that DFG was seeking additional funding through the halibut commission or the North Pacific Fisheries Management Council because some of the information collected was used for those fisheries; however, DFG could not rely on the organizations to cover all of the funding because some of the information on rockfish and other species was not necessarily covered by the halibut treaty or the Pacific Salmon Treaty. He reiterated that DGF was trying to seek additional funding to minimize the impact to the industry; however, the department was never certain whether the federal funding commitments would be followed through on an annual basis. Representative Carpenter asked about the other funding alternatives aside from taxing sport fish guides. Commissioner Vincent-Lang replied that they would likely have to fund the program with the Fish and Game Fund matched with DJ funds. 9:16:31 AM Representative Josephson asked if the bill would not fully fund the logbook program because the previous committee had reduced the license fees. Commissioner Vincent-Lang replied that it was part of the answer. Additionally, DFG was trying to absorb some money out of the federal government to pay for the treaty obligations on halibut and salmon treaty. The department expected to recover some of the fees; therefore, the fee increase in the bill had been reduced to what the department believed was non-recoverable, but still necessary for state management. 9:17:16 AM Representative Carpenter observed that the proposal would require a registration or licensing fee for sportfish guides only, which reflected a tax on one user group. He highlighted an alternative way to raise the money that would be spread across all users. He suggested a $1 increase across all fish licenses to generate the $650,000 needed. He believed it was an alternative way to arrive at the same conclusion. He stated that as written, the bill did not generate the needed amount. He asked if the department had explored other ways to fund the program with state dollars. Commissioner Vincent-Lang answered that the department had considered raising license fees in general; however, it presented a situation where people who never saltwater fished would have to pay for the saltwater fishing requirements. The department had received general acceptance of the proposal to increase license fees to pay for the program as it was impacting guides' industry and clients. He noted there were a few people who were opposed to the proposal. He remarked that the fee could be broader, but at that point there started to be opposition from people who never went fishing in saltwater. He explained that DFG tried to make the fee as user-based as possible. Representative Carpenter asked if the bill charged a license fee to freshwater guides. Commissioner Vincent-Lang answered that the bill had been amended in the House Fisheries Committee to require licensure of both freshwater and saltwater guides and operators, but it would not require the reporting by freshwater guides. He explained that it had not been the governor's intent with the bill to only have licensure of saltwater guides. Representative Carpenter thought there was a disparity or unfairness in the bill where it forced people to pay a tax who would not benefit. He referenced an argument that a smaller tax on a broader audience should not be considered for a similar reason. He thought the topic should be given further consideration. 9:20:26 AM Representative Rasmussen thought the direction the department had taken was appropriate. She shared that she had only fished in saltwater a handful of times, and she regularly fished on the Kenai River in the summer. She did not think it made sense to have Alaskans who were not using the fishing areas to pay anything. She asked if saltwater sportfish operators typically served mostly tourists or Alaska residents as well. Commissioner Vincent-Lang answered that it varied by region. He elaborated that in Southeast Alaska there were a lot of locals using guides to fish, whereas in Southcentral the percentage was about 50/50 residents versus nonresidents. He added that in areas such as Valdez, the clients were primarily residents. Representative Carpenter asked about the percentage of revenue raised by resident and nonresident fishing licenses. Commissioner Vincent-Lang answered that about 80 percent of the incoming fees to the Fish and Game Fund were from nonresidents and 20 percent were from residents. The license fees under the bill would be identical regardless of residency because the responsibility of paying for the reporting was placed on the business and operators. Representative Carpenter stated his understanding that the administration wanted to charge a few operators a license fee of $100 to $200, which would fall completely on Alaskans versus a broader fee where 80 percent of the money would be generated by out-of-state residents. Commissioner Vincent-Lang answered that the bill would place the licensing requirements equally on the industry for residents and nonresidents, as opposed to placing the licensing fee or fee for the logbook program across the broad spectrum of Alaskan fishermen where most of the fees would be collected by nonresidents who may or may not be fishing in saltwater. HB 79 was HEARD and HELD in committee for further consideration.