HOUSE BILL NO. 80 "An Act establishing the sport fishing hatchery facilities account; establishing the sport fishing facility surcharge; and providing for an effective date." 10:09:10 AM Vice-Chair Ortiz MOVED to ADOPT Amendment 1 (copy on file): Page 1, line 10: Delete "fisheries management," Insert "sport fisheries management, sport" Page 1, line 11: Delete "research," Insert "research, and" Delete ", and habitat restoration" Page I, lines 12 - 14: Delete all material and insert: "(2) the remainder of each surcharge collected to the department's sport fishing hatchery facilities, allocated equally to each facility, for the operations, maintenance, and sport fishing stock enhancement projects of the facilities." Co-Chair Merrick OBJECTED for discussion. Vice-Chair Ortiz MOVED to ADOPT Conceptual Amendment 1 to Amendment 1 (copy on file). Strike lines 5-8 On line 13: strike "each facility" and replace with "the Southeast region hatchery facilities, William Jack Hernandez Hatchery, Ruth Burnett Hatchery," Representative Ortiz requested an at ease to pass out the conceptual amendment. 10:09:53 AM AT EASE 10:16:26 AM RECONVENED Vice-Chair Ortiz restated his motion to adopt Conceptual Amendment 1 to Amendment 1. Representative LeBon OBJECTED for discussion. Vice-Chair Ortiz explained that his original amendment was to help put money back. It was specifically designed to put money where it had been generated - in Southeast Alaska. Just shy of one-third sport fish license surcharge revenue ($1.9 million) was generated from sport fish license sales. The first part of his original amendment further specified that the surcharge was meant to benefit sport fish. However, given the way his amendment was currently written he was offering Conceptual Amendment 1 to Amendment 1. The conceptual amendment on line 13 would strike the words "each facility" and replace it with "the Southeast Region Hatchery facilities: William Jack Hernandez Hatchery and Ruth Bernett Hatchery." The conceptual amendment would also strike lines 5-8 of the amendment because upon further review it was something that was adopted in the House Fisheries Committee. Representative Rasmussen asked if currently the surcharge was only impacting the Southeast fisheries rather than it being a statewide surcharge on all licenses. Commissioner Vincent-Lang replied that the surcharge did two things. First, it paid for the repayment of bonds for the Fairbanks and Anchorage hatcheries. It also took $500,000 off the top for enhancement projects in Southeast Alaska in recognition that the state did not build a hatchery there. The surcharge ended in the prior December when the bonds were paid off. When the surcharge went away, the $500,000 for Southeast Alaska was lost. Currently there was no surcharge. The bill would reinstate the surcharge at a reduced rate to pay for long-term state obligations for the maintenance of the Fairbanks and Anchorage Hatcheries. It would also reinstate the $500,000 payments to Southeast Alaska non-profit hatcheries that provided sport fishing opportunities. 10:20:14 AM Representative Rasmussen asked if the specific hatcheries mentioned in the conceptual amendment included Anchorage, Fairbanks, and Southeast Alaska. Commissioner Vincent-Lang did not have the amendment in front of him. Vice-Chair Ortiz answered Representative Rasmussen's question. The conceptual amendment changed the amendment to a regional distinction because in Southeast Alaska some of the resources taken from the surcharge went to two different facilities one in Juneau and one in Petersburg. He further explained that the original amendment looked like he was trying to get equal distribution amongst each facility. That was not his intent. His intent was to give equal distribution to each region. The original amendment intent was that each region would receive and equal distribution since the bonds had been paid in full. Prior to the amendment, significantly more resources had gone towards the facilities in Fairbanks and Anchorage to pay off the bonds. 10:22:38 AM Representative Rasmussen wanted to double check that the amendment would distribute one-third to the Southeast Region hatchery facilities, one-third to the William Jack Hernandez Hatchery, and one-third to the Ruth Bernett Hatchery. Mr. Bullard replied that, if the intent of the conceptual amendment was to ensure that the funds were distributed regionally, it would be best for the amendment to provide that they should be distributed regionally rather than naming specific facilities. He thought there could be a potential challenge Under Article 2, Section 129 of the Alaska Constitution that prohibited local and special acts. Vice-Chair Ortiz noted that the purpose of the conceptual amendment was to speak regionally rather than to specific facilities. Representative Rasmussen was confused because certain hatcheries were named. Vice-Chair Ortiz was fine with making a change to the wording. He was happy to reflect equal distribution within the 3 regions. He asked the department if there were any other facilities in Anchorage or Fairbanks that the state owned that would benefit from the surcharge that was being levied. Commissioner Vincent-Lang clarified that the two primary sport fisheries in Alaska were the Ruth Burnett Sport Fish Hatchery in Fairbanks and the Williom Jack Hernandez Sport Fush Hatchery in Anchorage. In Southeast Alaska there were state-owned hatcheries that were owned and operated by a private nonprofit (PNP) in Southeast. Currently, the state- owned programs at Crystal Lake which produced fish for sport fishing as well as the DIPAC Hatchery which produced fish for King Slamon. His intent was to continue to partner with people in Southeast Alaska to provide for some long- term maintenance associated with those facilities owned by the state. In interior Alaska, the state did not have any other PNP hatcheries in which it was subcontracting out those services. Commissioner Vincent-Lang also noted that one of the things he had discussed with Vice-Chair Ortiz was that the expense was allocated equally across a timeframe. He provided an example. The goal was not to distribute equally on an annual basis. 10:26:56 AM AT EASE 10:30:54 AM RECONVENED Vice-Chair Ortiz WITHDREW Conceptual Amendment 1 to Amendment 1. Representative Wool touched on the comments by the commissioner about the different facilities being managed differently. He assumed they likely had different fiscal needs. He asked the commissioner to elaborate. Commissioner Vincent-Lang offered that the Fairbanks and Anchorage hatcheries were benefiting sport fishermen at 100 percent. The hatcheries in Southeast Alaska were providing a mix of sport and commercial opportunities. He used Crystal Lake as an example, a state-owned facility. The state contracted with the PNP to provide fish for sport fisheries that were important in the Juneau area. It was important since the treaty had become more constraining with southern bound fish. The department had done a significant amount of replacement with fish hatchery stock. The state would use some of the surcharge revenue to replace the raceways at Crystal Lake which were in bad need of repair. The state could not keep up its current production levels up much less expand production levels to provide those opportunities. The department would continue to pay to support the PNPs to provide sport fishing opportunities at the hatcheries. 10:33:01 AM Representative Wool understood the concept of spreading the wealth to different regions and not focusing on a single area. He also understood that the legislature could not dedicate funds. Even though a fee might be slated for something specific, it could be used for something else. He asked if there was a crisis or shortage in which the department could not pay for maintenance for one facility because of a constraint of money for another facility. He asked if there were facilities that were not being maintained or were being neglected because of regional funding considerations. Commissioner Vincent-Lang raised the concern regarding the verbiage "allocated equally" because a future legislator might claim that in any given year the legislature did not give any money to Southeast Alaska. For example, in one year the department might spend $2.5 million for maintenance at Crystal Lake exceeding the relative allocation equally. He was looking for some additional guidance to ensure that, overtime, the contributions were based on the number of licenses purchased in a specific region. Representative Wool referred to the chart showing the number of licenses purchased and commented that it had some relevance. He heard that 80 percent of them came from out of state. There were also online purchases which did not show a location, but the information was extrapolated from previous data prior to heavy usage online. He was somewhat concerned about using the location where the licenses were purchased to determine where the money was spent. He noted the importance of maintaining all of the state's facilities. He did not want to constrain the department with any "use it or lose it" parameters. Co-Chair Merrick set HB 80 aside. She thanked the commissioner for being at the meeting. HB 80 was HEARD and HELD in committee for further consideration.