HB 49-CHINOOK RESEARCH & RESTORATION ENDOWMENT    10:03:49 AM CHAIR SEATON announced that the first order of business would be HOUSE BILL NO. 49, "An Act establishing the Alaska Chinook salmon research and restoration endowment fund and relating to grants from the fund." 10:04:33 AM REPRESENTATIVE HERRON, speaking as the prime sponsor, explained that HB 49 creates a salmon research and restoration fund in the Department of Revenue (DOR) with the intent that revenue generated off the interest of the fund would be issued to qualifying organizations in partnership with the Alaska Department of Fish & Game (ADF&G). Representative Herron advised that Chinook salmon is the state fish, a staple food for residents throughout Alaska, economically important to commercial fisheries, a prized sport fishery, and holds an important place in Alaskan culture and way of life. Chinook salmon is also a "trend" species that tells us whether there are issues in its life environment, thus the importance of the bill. 10:06:45 AM ROB EARL, Staff, Representative Herron, Alaska State Legislature, provided a PowerPoint presentation entitled, "HB 49 - Chinook Salmon Research and Restoration Endowment," on behalf of Representative Herron, prime sponsor. Mr. Earl said the bill establishes the Alaska Chinook salmon research and restoration fund in DOR and which is managed by the commissioner of DOR. The amount of the endowment will be a separate budget item, and the bill does not create a dedicated fund or mandate funding [slide 2]. He explained that the fund creates a grant account in the general fund (GF) and an appropriation amount will be identified by the commissioner on an annual basis. This amount may then be appropriated by the legislature for the uses of the grant account described on page 2, line 30, of the bill. The grant account can be used for research and restoration projects, reimbursements to DOR and the Department of Commerce, Community & Economic Development (DCCED) for costs associated with the fund, and for matching funds for private and federal grants [slide 4]. The bill also establishes an endowment fund board in DCCED to administer the grant program. Members of the board consist of the commissioner of ADF&G or designee, and one public member appointed by the governor from each of six regions across Alaska [slide 5]. The six regions are based on boundaries established by ADF&G resource management regions and are set in statute by the bill from page 3, line [30] through page 5, line 10. One of the duties of the board is to identify an organization to support its duties [slide 7]. In addition, on page 6, line 24, the bill directs that the board prioritize grants based on which Chinook salmon stocks in the last 10 years were either listed as stocks of concern, subject to disaster declaration, closed or restricted, or significantly declined [slide 8]. 10:11:18 AM CHAIR SEATON asked whether the four abovementioned bullet points on the slide entitled, "HB 49 - Grant Prioritization" are listed in order of priority. MR. EARL responded that the items are not prioritized, but the board is directed to give weight to all of these factors. REPRESENTATIVE JOHNSON asked whether ADF&G has been consulted regarding setting the boundaries in statute and if doing so would raise management issues. MR. EARL advised that the proposed regions relate closely to ADF&G resource management regions. He was unsure of any issues that may arise, and pointed out the boundary between region 3 and region 5 is not the same as the ADF&G resource management boundary. REPRESENTATIVE JOHNSON clarified that the bill does not set the boundaries for ADF&G, but just for the purposes of the proposed board. MR. EARL concurred. CHAIR SEATON confirmed that setting these boundaries does not change the boundaries of the management areas that are set in code. MR. EARL said correct. 10:14:11 AM REPRESENTATIVE GATTIS asked why the bill only establishes the study of Chinook salmon. MR. EARL restated that Chinook salmon is the first species that is affected by environmental changes thus the study of Chinook will predict declines for all species. REPRESENTATIVE GATTIS advised her constituents are interested in all species. REPRESENTATIVE HERRON interjected that the deliberation process may reveal that all salmon are of concern, and that all should be studied; however, Chinook salmon is the first focus of attention. REPRESENTATIVE JOHNSON observed there could be a considerable difference between the concerns of constituents from Kodiak and of those from Palmer. He asked whether the sponsor would consider changing the region boundary between region 3 and region 5, so that region 5 [encompasses the entire Aleutian chain]. MR. EARL explained that Kodiak was always part of region 3 in the resource management boundary, and the change is to the "slim edge" of the peninsula. REPRESENTATIVE HERRON pointed out the bill establishes the board boundaries and not ADF&G management areas, so an amendment would be acceptable. 10:18:21 AM CHAIR SEATON directed attention to page 1, line 11, of the bill that read: (3) income earned on investments of fund assets if that income is appropriated by the legislature to the fund. CHAIR SEATON recalled that interest is often retained in the fund. He asked why the intent is to only retain interest in the fund if it is appropriated by the legislature. REPRESENTATIVE HERRON deferred to the drafter of the bill. REPRESENTATIVE GATTIS asked for a comparison between the proposed bill and the governor's proposed Chinook study. REPRESENTATIVE HERRON said HB 49 creates a fund that will generate a revenue stream to be used for many years of continuing research, in partnership with ADF&G and other organizations. The governor's proposal provides ADF&G $10 million per year through the capital budget for three years, although the actual amount needed in a particular year is unknown. Also, the governor's proposal may not be sufficiently accountable for salmon research. 10:22:34 AM REPRESENTATIVE GATTIS surmised the sponsor feels the group supporting HB 49 is better prepared to move forward. REPRESENTATIVE HERRON opined discussion of HB 49 is an opportunity to determine the best procedure because there is disagreement on how to address the recognized analysis gap. He urged for a research revenue stream for partnered research projects based over many years and funded by money in a savings account rather than through a capital budget request. REPRESENTATIVE GATTIS agreed that resources should not be managed except through scientific research and data. CHAIR SEATON understood that a five-year research project will not address issues for salmon with a five- to six-year life cycle, and he agreed that funding for continuous research would be productive over time. 10:25:23 AM KAREN GILLIS, Executive Director, Bering Sea Fishermen's Association, informed the committee her organization has been researching and monitoring salmon since 1994. Since 1997, Alaska has declared or accepted 23 salmon-related disaster declarations. Although some Alaska salmon fisheries are successful, others face severe challenges. She said current information confirms the inability to resolve the basic issues of the recent salmon declines, even as these declines lead areas of Alaska into greater poverty. The Bering Sea Fishermen's Association recommends a two-pronged approach: monitoring and management as done by ADF&G, and research and restoration of salmon stocks. Both of these components are necessary to understand and manage salmon stocks. The approach by ADF&G does not address current declines, and will not provide answers about influences on salmon returns, or at what point to enhance their survival. Federal disaster funds have been the sole support for research and restoration efforts in the Arctic-Yukon-Kuskokwim (AYK) regions prior to 2010. Through the AYK Sustainable Salmon Initiative (AYK SSI) the state appropriated $5.5 million and learned that although research began in the AYK region in 2002, the myriad of variables that inhibit restoration remain unclear. An endowment will continue to build on knowledge and thus inform and improve management decisions and forecasting to reduce extreme harvest level variations. The primary means to affect salmon are by the regulation of fisheries through gear, geographic limits, timing, and duration of fisheries. To provide answers, a life-cycle approach is needed to gather knowledge, illuminate human impact and fully understand the natural world and how to achieve sustainability. Improved monitoring, process-oriented studies, modeling, and policy development are necessary to forecast and address changes. The basic questions to be answered are: · What is happening to salmon stocks? · Are there better management tools? · Are the calculations of escapement goals appropriate? · Are there restoration methods to increase survivability? · Are there forecasting tools for river systems? MS. GILLIS stated that the endowment can produce answers to the causes of declines and improve direction for the state through consistent funding during variations in salmon abundance, eliminating political pressure, and allowing for a long-term solution focused on research. Consistent financing also means research projects that match salmon life-cycle, from brood year to returning adult. In addition, HB 49 will allow for multi- disciplinary research to redefine problems outside of the normal boundaries, and for high quality, long-term research in response to changing environmental conditions. Alaska has a unique resource that requires an investment from the state to protect the sustainability of its Chinook salmon stocks. She recalled that similar legislation was introduced last year and any concerns raised at time have been addressed. Passage of this legislation will ensure that the state can deal with any future disaster declarations for the Yukon River. Ms. Gillis reminded the committee that the Alaska State Constitution mandates that all state resources are managed for sustainable harvest; in fact, not directing funds to ensure that resources are managed fails to provide Alaskans their constitutional rights. She concluded that the Alaska Chinook Salmon Research and Restoration fund provides research and restoration mechanisms necessary for today's crisis. 10:35:05 AM CHAIR SEATON noted that at the AYK SSI conference in December, he learned research was focused on seven theories and further scientific research was requested to verify or refute each theory and report back. This approach - in a manner similar to that of HB 49 - tests particular theories and finds answers, instead of just collecting information without proposing further testing and finding an answer. He asked whether there is funding still available from the $5.5 million appropriated to AYK SSI. MS. GILLIS agreed the structure of AYK SSI provides the ability to draw from scientists around the world and "prove ourselves right or wrong." The last appropriation was in fiscal year 2013 (FY 13) for 90 percent of the total, and an additional $2.5 million will shortly be dedicated for projects, leaving a small amount to direct toward expert panels. CHAIR SEATON stressed the difference between "finding things to spend money on, and going out with directed research proposals to answer questions." At the AYK SSI conference, stakeholders from across the area were coming forward and testing theories. 10:39:47 AM CHAIR SEATON opened public testimony on HB 49. 10:39:57 AM STEVE RUNYAN disclosed he is a member of the Susitna Valley Fish & Game Advisory Committee, ADF&G, and is representing himself in support of HB 49. He urged for serious consideration of the bill because there are gaps in salmon research, especially on Chinook salmon. He and the Susitna Valley Fish & Game Advisory Committee believe issues that need to be addressed are: the effect of severe drought conditions on salmon production in streams; the effect of major floods in 2006 and 2012; and productivity problems in the marine environment during various stages of the life-cycle of salmon. Gaps in research hamper the management of the fisheries as well as restoration efforts. The Susitna Valley Fish & Game Advisory Committee has been advised by ADF&G that the average sport harvest in the Susitna River drainage was 25,000 Chinook salmon in the '90s and has declined to about 10,000 and below. The decline is damaging economically to the sport fishery and to the tourism industry. Mr. Runyan expressed his concern that there is no language in the bill to ensure that all interested groups are represented on the proposed board. 10:43:53 AM DAVID MARTIN stated his support for some elements of the bill; however, he said the intent of the bill should be addressed to all salmon because salmon are managed as a whole. He supports funding some research, but the appointees to the board suggest that politics will become involved. His past experience is that some ongoing studies do not look at the issue as a whole, but ignore elements such as the freshwater environment. Other issues that affect the salmon are the presence of pike and hook and release mortality. Mr. Martin urged not to create another layer of bureaucracy with no solutions or results because there are things that can be done immediately. CHAIR SEATON asked how appointees to the board can be made to represent an area and all of the concerns of a region. MR. MARTIN said under the structure of the bill it could be difficult to remove the politics and have the best representation of the resource. He suggested a vetting process by fishing advisory groups in each area. Selected projects should be those desired by the people in the area, scientists and biologists, or regional managers. 10:51:31 AM PETE WEDIN, Representative, Alaska Marine Conservation Council (AMCC), and charter fishing business owner, said he was representing AMCC and himself as a business owner who depends on Chinook salmon for a portion of his livelihood. He informed the committee AMCC is comprised of seafood harvesters from all over Alaska dedicated to protecting the long-term health of Alaska's oceans and coastal communities. Chinook salmon are important to Alaskans nutritionally, culturally, and economically, because of tourism and commercial fisheries. Stable, long-term funding of Chinook salmon research is needed to fill the existing gaps in knowledge of environmental conditions, freshwater habitat, population trends, and the causes of the declines of Chinook salmon in freshwater and marine environments. He urged for the research to draw on the best available science, and facilitate efforts among diverse partners and Native organizations. Mr. Wedin pointed out that the bill's research endowment fund could leverage additional matching funds. In response to Chair Seaton, he recommended vetting members of the proposed board through the 82 advisory committees (ACs) of the Joint Board of Fisheries and Game, ADF&G, which represent a cross-section of stakeholders. He stated that AMCC supports HB 49 as a good step toward stable funding for Chinook salmon research. 10:54:17 AM LYNN WHITMORE said he was representing himself and disclosed that he has been a member of the Homer Advisory Committee, ADF&G, for 17 years. He urged for the committee to find a way to assure parity among the user groups by gleaning information from the ACs and taking the politics out of the appointment process. If the proposed board is successful, he suggested the research not be limited to Chinook salmon, but that the board may take the opportunity to address other fisheries issues, such as undercover and other enforcement operations on the high seas. Mr. Whitmore opined large boards can be difficult and advised keeping the board small. 10:57:00 AM CHAIR SEATON, after ascertaining no one else wished to testify, closed public testimony on HB 49. REPRESENTATIVE HERRON, in response to previous testimony, suggested drafting an amendment that would delete all references in the bill to "Chinook" and insert "wild." CHAIR SEATON cautioned that changing the bill from a target species and expanding it may disperse its focus from a statewide concern for Chinook to looking at all fisheries - from Norton Sound to Southeast - with limited dollars. In the future, the proposed program could be expanded, but at this time expansion has the potential to slow the process down. REPRESENTATIVE JOHNSON agreed that maintaining a focus on Chinook would be most productive, unless additional funding was provided. CHAIR GATTIS stated her support for maintaining a focus on Chinook salmon, which are a concern of her constituency. 11:01:08 AM REPRESENTATIVE FEIGE warned that expanding research to all stocks would result in a dilution of effort. Referring to the structure of the board, he said the credibility of the board members will be critical to the success of the research program. A geographical distribution is acceptable, and he suggested there be a nomination process or selection by those from the local area. He opined seats assigned for special interests such as sport, commercial, and subsistence fishing do not need to be assigned geographically, as long as a balance is maintained. REPRESENTATIVE HERRON restated that Chinook salmon research will reveal threats to all salmon. [The conceptual amendment was treated as withdrawn.] CHAIR SEATON stated that the appointment of board members will require further discussion and public comment. 11:05:20 AM REPRESENTATIVE HERRON moved Amendment 1 which read: Page 1, line 2, following "fund": Insert "; and providing for an effective date" Page 7, following line 15: Insert new material to read: "(b) Under AS 37.14.660, enacted by sec. 1 of this Act, for the first three fiscal years after the effective date of this Act, as soon as practicable after July 1 of each fiscal year, the commissioner of revenue shall identify as available for appropriation to the Alaska Chinook salmon research and restoration grant account established under AS 37.14.655, and the legislature may appropriate to the grant account, five percent of the market value of the Alaska Chinook salmon research and restoration endowment fund.    * Sec. 3. This Act takes effect July 1, 2013." REPRESENTATIVE JOHNSON objected for the purpose of discussion. REPRESENTATIVE HERRON said the amendment clarifies that the revenue is available for appropriation and 5 percent of the market value of the fund may be appropriated. REPRESENTATIVE JOHNSON removed his objection. CHAIR SEATON paraphrased Amendment 1. There being no further objection, Amendment 1 was adopted. 11:07:31 AM REPRESENTATIVE HERRON moved Amendment 2 which read: Page 5, following line 12: Insert a new subsection to read: "(c) Except as provided in AS 37.14.680(b)(5), the board shall act by a vote of a majority of the members of the board." REPRESENTATIVE JOHNSON objected for the purpose of discussion. REPRESENTATIVE HERRON said Amendment 2 inserts a new subsection. CHAIR SEATON paraphrased Amendment 2. REPRESENTATIVE GATTIS asked why there are six board members instead of seven. REPRESENTATIVE HERRON explained that the commissioner of ADF&G, or designee, is the seventh member. REPRESENTATIVE JOHNSON said the exception in the amendment refers to AS 37.14.680(b)(5), which provides that the awarding of grants must be by unanimous vote. REPRESENTATIVE HERRON stressed that all of the board's other business would be under normal parliamentary procedure. REPRESENTATIVE JOHNSON removed his objection. CHAIR SEATON clarified the amendment. 11:10:14 AM There being no further objection, Amendment 2 was adopted. REPRESENTATIVE JOHNSON asked whether the proposed statute would allow the board to vote telephonically; if members must vote in person, he suggested that it may be necessary to lower the voting threshold to five members to allow for illness or absences. 11:10:53 AM CHAIR SEATON reviewed other questions for the sponsor to address. [HB 49 was heard and held.]