SB 68-COOPERATION WITH FEDERAL AGENCIES CHAIRMAN HALFORD announced SB 68 to be up for consideration. MR. BRETT HUBER, Aide to Senator Halford, said the intent of SB 68 is clear. If the federal government takes action to preempt our state's authority to manage our fish and game resources, they need to pay the bill. Anything less is simply an unfunded federal mandate. SB 68 does not prohibit cooperation with federal agencies. It merely requires that when federal actions restrict state management of fish and game resources, the State will be reimbursed for any action taken that aides in the preemptive effort. The determination of what actions constitute a restriction of state management and what costs should be appropriately allocated between the state and federal agencies is left, in a great degree, to the discretion of the commissioner of ADF&G. In reviewing fiscal notes prepared for the original version of the bill, the Department appeared to have misinterpreted the intent in regard to the impact on current management programs funded with Wallop-Breaux, Pitman/Robertson, and Dingle/Johnson monies. The bill was never intended to preclude the continued utilization of those federal dollars or their compliance with associated reporting requirements. In those cases the federal government is paying their way. When and if programs using federal aid dollars come into conflict, programs can always be redirected to areas without preemption conflicts and where Alaskans would benefit from a more aggressive management program. In order to clarify the bill's intent and to provide a additional direction to the Department, Mr. Huber presented the committee with a proposed committee substitute, LSO351\G. MR. HUBER continued saying that language in AS 16.05.145(a) further clarifies that the federal reimbursement required in instances where state management is restricted is limited to the additional costs incurred by the state to cooperate with the federal program. In addition, corresponding references in the reporting requirements in Subsections (b) and the delineation of the related costs, the commissioner should consider and Subsection (c) have also been changed to reflect the clarified intent. The committee substitute also adds a new Subsection (d) which provides the commissioner broad direction in determining the federal expenditures of state funds. It directs the commissioner to prorate the share in proportion to the extent the federal program restricts state management of the resource for which the funds have been expended. MR. HUBER concluded that congress and the federal courts have made it clear that states shouldn't be faced with bearing the brunt of unfunded federal mandates. During this period of severe state budget constraints, it's important the federal government pays its fair share, especially when it's their intent to preempt traditional management of state resources. Anything less is simply an unfunded federal mandate. SENATOR MACKIE moved to adopt the committee substitute dated 3/12/99G\Utermohle. There were no objections and it was so ordered. Number 490 MR. GERON BRUCE, Legislative Liaison, ADF&G, said they have looked at the committee substitute and their comments apply to it. The sweep of SB 68 is so broad they can't be certain which fish and wildlife management programs will be implicated. It goes far beyond the issue of dual management of subsistence. Obvious examples of programs likely to be impacted include the Pacific Salmon Treaty, State/Federal cooperation, and interaction in the management of migratory waterfowl, pacific cod, Bering Sea crab, scallops, and rock fish. In each of these instances federal rules limit or restrict how the State manages certain of its resources. In some cases the federal government has provided funding in recognition of the impact federal rules have on the State and in other instances they don't provide funding. Even in instances where federal funding is provided, they never cover the full cost to the State as required by SB 68. We commit state dollars to these programs because of the benefits accrued to Alaskans. In all of the above fish and wildlife management programs, part of them would be prohibited from cooperating with the federal government, because of they don't pay the full cost for State cooperation. MR. BRUCE said no one can foresee the complete picture as it might play out and this is one of their concerns with SB 68. A few examples will illustrate the kinds of consequences that can be expected. If the State of Alaska refused to cooperate with the federal government in the implementation with the terms and conditions of the Pacific Salmon Treaty, it would probably result in the preemption of management of several fisheries in Southeast Alaska. This includes our recreational and commercial chinook salmon fisheries, our boundary area sockeye, pink, chum, and coho fisheries, and the Transboundary fisheries off the Stikine, Taku, and Alsek Rivers. Similar consequences could also befall the Alaskan fisheries harvest in the Yukon River chinook and chum salmon. He said Mr. Regelin would have examples relating to wildlife. Sharing management responsibilities with the federal government can be problematic for the federal government, but it can also bring benefits to our State. For example, by cooperating with federal managers and operating under the Magnuson/Stevens Act, the State has been able to generate significant new economic opportunity in groundfish and crab fisheries. The Community Development Quota Program was a result of state/federal cooperation. Number 540 CHAIRMAN HALFORD asked him how the unfunded mandate is determined. Who decides which percentage should be federal and which should be state. MR. BRUCE said he thought the committee substitute leaves it to the discretion of the commissioner. CHAIRMAN HALFORD commented that the commissioner of ADF&G decides if the State is getting its fair share of the co-management effort and asked why the commissioner would decide against himself in determining that the State is not getting its fair share of federal dollars. MR. BRUCE said he didn't really understand the question. CHAIRMAN HALFORD explained that there is co-management and all the comanagement agreements are fine as long as the State is getting it's money's worth. The person who decides that is the commissioner of ADF&G. MR. BRUCE responded that it would be a judgement call and different people would call it in different ways. Any call would be certain to be second-guessed by a number of people. The federal government might also have a different opinion. The consequence of this is that the necessary relationship between these two governments breaks down and there's rupture that could come back and harm Alaskans who are involved in fisheries harvesting those resources and we could have federal preemption. He continued saying examples of federal laws that restrict our management of fish and game currently on the books are the Pacific Salmon Treaty, the Migratory Bird Treaty, the Marine Mammal Protection Act, the Endangered Species Act, the Magnuson/Stevens Fisheries Conservation Act, and ANILCA. As the on-the-ground managers of fish and wildlife, the Department must look for practical ways to manage these resources for the maximum benefit of Alaskans, MR. BRUCE said. One of the ways to minimize the detrimental impacts of dual management is to work with federal managers in an attempt, given our divergent interests, using the process where we can attempt to persuade and influence the federal program managers to be responsive to the rights, the desires and the values of Alaskans. They are concerned that SB 68 will preclude the Department in many instances from availing themselves of that ability, because there won't be agreement on what's the appropriate share. CHAIRMAN HALFORD tried to clarify that you can't spend more than you get value for and you get to decide if you get value for it. MR. BRUCE asked if the bill also provides if the feds are not paying for those programs, we can't cooperate with them. CHAIRMAN HALFORD responded after the Department makes that determination. MR. BRUCE said that the feds could have a different estimate of what they should pay and if that can't be resolved, we are in a situation where this bill would prohibit us from cooperating with them. That's their concern. SENATOR MACKIE said that he was concerned that it won't effect just hunting and sportfishing, but commercial fisheries, as well. He asked what effect if would have on participants in the commercial fisheries. MR. BRUCE answered that their concern is that it could lead to federal preemption of the management of those fisheries or the elimination of the State to manage those fisheries under a federal umbrella. In the case of the Pacific cod fishery, for example, which exists in the Kodiak area, that is actually a fishery in which the State through the Council process, has persuaded the federal government to allocate a portion of the Pacific cod catch that is typically taken in the offshore fishery to the inshore fishery. The assessment for the biomass of the cod is done totally by the federal government. He thought that reasonable people could argue about who is paying what fair share of the cost of managing that fishery. The Department does not want to get into that kind of dispute. The program is working well and providing significant benefits to Alaskan fishermen. TAPE 99-13, SIDE B Number 590 CHAIRMAN HALFORD responded that SB 68 doesn't change any of that. The Commissioner can reduce his level of participation to the level that he thinks he's getting his monies' worth and still be cooperative. He hoped the provisions of this bill are things that the State does every time it deals with a federal agency. MR. BRUCE said the Department always tries to get the best deal possible. Most deals are long-term and the Division sometimes goes forward feeling they didn't get the best deal maybe in year number one, but they work on improving that in the following years. He explained that it's not possible to reach total agreement between parties that have different views of the world about the relative shares of the financial burden that each should carry. MR. BRUCE informed the committee that we get a lot funding from the federal government for our fish and wildlife management, almost as much as our general fund appropriation. We don't account for it in the way SB 68 has them account for it, however. SENATOR MACKIE asked Senator Halford to explain Subsection (a) where it mentions, "A state agency may not cooperate with a federal agency in the implementation of a federal program that restricts the state management of fish or game in the State unless the commissioner of ADF&G finds in writing that the federal agency has entered into an agreement to reimburse the state for the full cost of cooperation." and how it relates to the inshore cod fishery in Kodiak. He asked if they wouldn't be able to have the quota that was given by the federal agency to our Board of Fisheries to manage unless the North Pacific Council is willing to reimburse the State for the management costs. CHAIRMAN HALFORD answered that every one of those things are totally in reverse, because the cod is not a state authority. It's an authority granted back from the federal government to the State. SB 68 doesn't apply at all to that situation. SENATOR MACKIE responded that it is within three miles of the State. MR. BRUCE clarified that it is an inshore instate fishery. Four or five years ago it was a completely offshore fishery. Through the North Pacific Fisheries Management Council we sat down and reached an agreement where a portion of that fishing was allocated to an inshore fishery occurring within State waters. CHAIRMAN HALFORD asked if we are getting our money's worth. MR. BRUCE answered that he thought we were doing very well in that program. SENATOR MACKIE said his question was the reimbursement, because he was sure there were costs involved dealing with the Board of Fisheries for promulgating regulations to allow for that; there are the ADF&G personnel who are managing that fishery and enforcement personnel. He didn't know that the feds were giving us any money for that; but we get the quota and manage the fishery. This is a change from before. He thought we would have problems asking for money in addition to the quota in this case. Number 530 SENATOR TAYLOR asked how we lost jurisdiction of our cod within the three mile zone in the first place. MR. BRUCE explained that we didn't lose jurisdiction over them, but the harvest that was being taken in the offshore waters was taking the entire allowable harvest. So instituting a state fishery unilaterally, we would have started to deplete the resource and we would not have had a sustainable fishery. We had to reach an agreement with the federal managers that they would reduce the federal take, so that some portion of the total allowable catch would be available to take in state waters. It's not a jurisdictional question, but rather a question of to what catch locations do you allocate the available harvest. We were successful in getting some allocated to state waters. SENATOR TAYLOR asked if it was like IFQ. MR. BRUCE responded that it was not; it's an open access issue. CHAIRMAN HALFORD said the answer to the allocation question is in (d) and the way it's computed. SENATOR MACKIE said he understood where the chairman wanted to go with this and agreed with the intent, but he feared what could be eliminated as a result of that. He said the Kodiak cod fishery is a very good program. MR. BRUCE said he wanted to highlight the fact that the bill is very broad reaching and he thought the motivation was from subsistence management, but it touches a number of issues and he didn't want unintended consequences. CHAIRMAN HALFORD asked if Mr. Bruce thought the National Park Service and the U.S. Fish and Wildlife Service were paying their own way under the Memorandums of Understandings and Joint Operations Agreements. Number 495 MR. REGELIN answered that the State operates under a master memorandum of understanding with the federal agencies, but there is no written cooperative agreement about who pays for what. CHAIRMAN HALFORD asked if he was satisfied with what we get versus what we give under that memorandum. MR. REGELIN replied said he doesn't put their cooperative work in the terms of the memorandum and he thought the feds paid their fair share with cooperative work. CHAIRMAN HALFORD asked if the feds followed what was written in the Memorandum of Understanding. MR. REGELIN said he would have to look at the detail of the memorandum. He explained that it is a very general agreement. He commented that he interprets SB 68 as saying the State may not cooperate with federal agencies in the implementation of fish and game programs that restrict our management authorities unless they reimburse us for a "fair share." CHAIRMAN HALFORD clarified that there are two separate issues. One is we can't cooperate if it restricts us unless the feds pay for it. MR. REGELIN continued if they refuse to pay for it, he understands that the State is not to continue cooperating. CHAIRMAN HALFORD asked if he thought it was an absolute and if they would cooperate to the level of our fair share and then stop or just not cooperate at all if they don't pay all $10 of the $10 they owe; they pay only $9. MR. REGELIN replied that he wasn't sure as he just received the committee substitute this morning. CHAIRMAN HALFORD explained that it was intended for the Department to make the determination of the degree to cooperate to the extent the feds are willing to fund. SENATOR MACKIE asked if it was that way now. CHAIRMAN HALFORD answered that it wasn't that formal. MR. REGELIN explained the costs the Commissioner would have to look at would include the direct costs incurred by ADF&G, the Board of Fisheries and Game, the local advisory committees, the Department of Law, the Department of Public Safety, the Department of Corrections, and any other agency it might affect. MR. REGELIN informed the committee that the Division of Wildlife Conservation is responsible for management on all lands within the State including federal lands. They don't give any consideration to land ownership when they are conducting wildlife surveys or recommending seasons or bag limits to the Board. They conduct no surveys or research programs or take any actions at the request of any federal agency. Decisions about which populations to survey are based on our needs and those of the Alaska Board of Game. In many instances we and the federal agencies conduct joint censuses or joint projects, especially on the large caribou herds and moose populations that occupy both State and federal lands, because they are so expensive. Oftentimes we share aircraft and personnel and it's not an exchange of funds. When we work together, the data is available to the federal agencies at the time they are completed. The feds could use money to restrict State subsistence prerogatives, but we don't know that as we are doing the survey or census. State data is made available to the public after they have been summarized and analyzed. We provided summaries to federal agencies and other organizations on a state time line that the Department sets. We don't charge anyone for the data and don't do any special analysis for the federal agencies. CHAIRMAN HALFORD asked if all the Department's data was public. MR. REGELIN explained that there are some statutory limitations on locations of certain animals and nest sites. CHAIRMAN HALFORD asked which statute restricts what is public. MR. BRUCE responded that it is AS 16.05.815. MR. REGELIN said all of our surveys are partially funded by federal money and he didn't know if we had a choice to provide them the data under the Federal Freedom of Information Act and the State Public Records Act. We attend meetings of the federal regional advisory councils and our headquarter's staff meetings and don't do it to help the federal agencies. We do it to protect the State's interests and to ensure the data we have collected are interpreted properly. MR. REGELIN said in his mind federal agencies have been pretty willing to pay their portion of the direct costs for surveys and inventory, especially if it's collected on their lands. They may be willing to pay more, but he thought it was doubtful that they would be willing to pay the indirect costs and more doubtful that they would pay for research or for law enforcement or corrections activities. He thought the most likely scenario would be that the feds would cease to cooperate with us and close more federal lands to everyone but those who qualify under the Federal Subsistence Law. Residents would then have less opportunity. In some instances the feds will collect their own data if we don't provide it to them. Then we would end up in front of the Federal Subsistence Board arguing about whose data is correct. MR. REGELIN had a real question about how this might impact our migratory bird program. We are restricted by federal regulations in this program and it could place our waterfowl hunters in jeopardy. Federal regulations limit the harvest of migratory birds to certain levels. Within this framework the feds provide, the State can only be more restrictive. He added that we pay for our own waterfowl program and they match some of it, but they will not pay more. Now that "additional costs" have been added he would have to think that through. MR. REGELIN said he thought the federal government already pays it's fair share. The overall Department budget is over 30 percent federal funds and in his Division gets over 40 percent. He wasn't sure we could do our job without cooperating with the land owner, whether private or federal. He said they are all frustrated with the dual system which he thinks has resulted in poor wildlife management in many instances, but he thought this approach would just make it worse. SENATOR TAYLOR asked if the 30 - 40 percent federal aid coming in was from programs that are supported by hunters and fishers. MR. REGELIN replied that for their base budget that's entirely so. It comes from federal tax and Exise tax on firearms and ammunition. SENATOR TAYLOR commented that it's basically the user group that's paying for it and the federal government washes it through to the state with significant restrictions. MR. REGELIN agreed that there were restrictions. SENATOR TAYLOR said according to June 6 - 7, 1996 Washington D.C. briefing material put out by the U.S. Fish and Wildlife Service/Department of Interior on Implications of Federal Management of Subsistence Fisheries, page 19, the concluding paragraph indicates that federal managers at that time believed it would cost $18 million for the first year and up to $31 million annually thereafter to implement federal subsistence management on fisheries in navigable waters in Alaska. He was told the federal government has currently funded their effort at $11 million. He asked who was picking up the difference between the $11 million and the $18 million for the first year. He asked if Mr. Regelin knew of anyone talking about the funding up to $30 million. He said that someone else would have to pick up the cost and that's why he didn't want the State personnel cooperating with them unless they were forced to. MR. REGELIN responded that those were federal figures and he didn't know what they meant when they put them together. He explained when the State manages a fishery or wildlife resource, we do it for all users on all lands, commercial, sport, and subsistence. We have all the data. Federal agencies are taking some of that data and making decisions on a small aspect of it. He said the federal government is not requiring us to do anything; we collect data anyway. If we use the data on their lands for wildlife, they are paying most of those costs now. SENATOR TAYLOR asked if they are paying now for subsistence work. MR. REGELIN said the State has a contract for them to pay the Subsistence Division for several different projects where they are collecting data on subsistence use. They pay for five months of the state liaison person who works with the Federal Subsistence Board. They don't pay for our costs to attend the federal advisory committees. They might pay, if pushed because the feds think it's valuable for the State to be there. The State thinks it's in our own best interests to be there. We haven't asked for that reimbursement. Number 315 MR. CARL ROSIER, former Commissioner of ADF&G, said he had about 40 years of experience in the management of our fish and game resources in Alaska. He said these resources are really close to his heart and their continued welfare under a good management system is something every Alaskan should be fighting for and yet today we find ourselves on the threshold of possibly using another portion of the outstanding state management program that has served these resources and all the people of the state so well for 40 years. This potential loss is through an invasive ill conceived federal law that doesn't even contain a sustained yield mandate. Some provisions of ANILCA call for healthy populations and in some cases, natural and healthy populations, but what these standards mean is anyone's guess at the present time. MR. ROSIER said it seems to him that concepts in SB 68 requiring the federal agencies to pay for support services that impinge on state management is a reasonable demand. Since 1959 the State has built a capability for fish and wildlife management that has involved hundreds of millions of dollars. The bulk of the State's program has been carried by State general fund dollars. This is especially true for the world class commercial fisheries of our state which are now at risk. It is not reasonable to expect free access to the state's system without paying for that service and the federal system requires information, data, or analysis that is not in the best interest of all users of the resource. In this information age, nothing comes for free and it must always be remembered that the federal mandate under ANILCA is one that discriminates against 80 - 90 percent of our state's population. There should be little incentive for the state system to be cooperative when the federal agencies seek help that negatively impacts state management and many of our residents. On the other hand, programs such as Dingle/Johnson, Wallop/Breaux, and the PR programs currently carried out by the State are examples of state/federal relations that have been a good partnership and we must be vigilant that they not become pawns in this federal move to interject itself into the management program for a single user group. He believe the basic concept of SB 68 to be good in that the basic conflicts between the state and federal system require some sideboards from the legislature on how the state agencies should interact with the federal agencies. ADF&G's mandate is for sustained yield of the resources. The federal mandate, ANILCA, lacks such a resource mandate and speaks only to providing an allocation to a single user group. During his stint as commissioner from 1991 - 1995, he consistently advocated for what was right for the resources and Alaska's general population knowing that the federal system would, in many instances, use our information to allocate resources away from the urban population centers of Anchorage, Fairbanks, Juneau, and Ketchikan. As the federal agencies move into fisheries, the number of these actions will, in his mind, undoubtedly increase and legislative direction will be helpful. ANILCA has imposed tremendous costs on many state programs and the reimbursement to the state has been both minimal and intermittent. A congressionally authorized annual $5 million slated for state implementation of ANILCA mandates has never materialized. We all know it is frequently a long stretch between what congress authorizes in a bill and what is finally appropriated. Ongoing litigation carried out by the Department of Law is tied directly to the subsistence and ANILCA issue. One has to consider federal dollars as soft money that frequently have a short life, especially those appropriations that lack an organic act to support them. Our experience in the early nineties saw the federal agencies helping to fund the state board system for nearly a half million dollars annually. By FY94, however, those dollars had shrunk to under $100,000. The Federal Board and newly established regional councils were in place. The state system was no longer required and funds were withdrawn. But a strong interest initially in supporting the Subsistence Division was operational and overhead costs, the Division was receiving again nearly a half million dollars in FY92, but by FY94 those dollars had been reduced to zero. Specific projects requiring data collection, studies, or analytical work on subsistence use and users fared better with the federal dollars leveling off at about $700,000 in FY93. He didn't think federal dollars had increased significantly since then. Generally, though, the federal agencies were obtaining information from the management divisions during this period pretty much at no cost while supporting the subsistence and state regulatory systems financially until they could gear up for their own programs. He thought a criticism of this bill could be that it is mean- spirited. It is not. This is a business arrangement. The federal agencies today do not hesitate to take administrative costs off the top of virtually every federal program. It's now the cost of doing business with the feds. SB 68 gives the commissioner significant latitude in determining what the cost will be of a given piece of information or a program will be to the federal government. It should be remembered, also, that literally hundreds of hours of staff time have gone into preparation of appeals to the Federal Subsistence Board for what would be considered bad resource decisions. Despite these efforts he didn't recall every getting a positive reversal during his time as commissioner and he questioned whether his predecessor had been much more successful. Relationships between our state professionals and some of the regional councils have been reported by ADF&G staff to be "down- right antagonistic and in some cases personally insulting." The state agency people need the legislature's support in this area and he believes SB 68 is a step in the right direction. SENATOR MACKIE asked how he thought situations like the Kodiak cod fishery would be handled and to comment on Mr. Regelin's feeling that the federal government already pays its way, as Mr. Regelin was one of Mr. Rosier's directors when he was commissioner. MR. ROSIER responded that he was part of the Kodiak cod fishery process and it was a jurisdiction issue in which the State was going to establish its right to manage at least some of those species inshore. Most of the fishery was offshore and under the Magnuson Act the management plan calls for the management agency to be where the bulk of the fish is actually being caught. It was a situation where the offshore fleet was not necessarily coming in and there were large stocks of cod that were not being touched. They were part of the biomass. The State saw the opportunity, but there was a reluctance on the part of the federal government to recognize the fish were there and weren't being harvested. There was a small Alaskan fleet that wanted to harvest them. As the federal government was moving towards an IFQ system, the small boat owners found that they might not qualify for any of the groundfish species offshore. Under those circumstances, the State was very interested in getting some fisheries going in state waters. It was the Board of Fisheries that forced the issue and set up the first season. The Council then said they would make an allocation. SENATOR MACKIE asked if he thought it had an adverse affect on that kind of situation, did he think it should be clarified in the legislation. He would hate to think that benefits to communities would not be adequate rationale for having a fishery like that. MR. ROSIER agreed with him. He thought there would always be situations to negotiate, but the commissioner has the authority to make that determination in SB 68. He also thought the State was getting its money's worth on those inshore fisheries. SENATOR MACKIE asked Mr. Rosier if he disagreed with Mr. Regelin's comments about the wildlife understandings and agreements they have right now. MR. ROSIER answered that he thought the federal government had administered the funds that had been collected from the sale of sporting arms and ammunition and fishing gear pretty well. Those funds have been extremely valuable to the State. He didn't, however, see those funds being jeopardized by this legislation. The commissioner has the authority under this legislation to do the financial analysis which he didn't think had to be that detailed or involved. Generally, the agencies have a good feel for what a program is going to cost. CHAIRMAN HALFORD commented that some people in ADF&G seem almost intent on working for or cooperating with federal preemptive management and he asked why that was. MR. ROSIER said there were a lot of new people with a lot of different ideas. Some people think the feds can do a better job, but they haven't gone through the pain and anguish of seeing the state program through its infancy and seeing how these resources have rebounded through state management. CHAIRMAN HALFORD asked what his experience was with the federal government following the master Memorandum of Understanding with regard to Park Service or Fish and Wildlife Service. MR. ROSIER said the Memorandum is fairly specific in some areas and one of the things that grates on him is from the Memorandum itself says they agree to use the state's regulatory process to the maximum extent possible allowed by federal law in developing new or modifying existing federal regulations governing or effecting the taking of fish or wildlife on service lands in Alaska. That went out the window a long time ago. SENATOR HALFORD noted that the committee was running over it's time limit and said they would continue the discussion at another time.