HOUSE SPECIAL COMMITTEE ON FISHERIES April 16, 1993 8:30 a.m. MEMBERS PRESENT Representative Carl E. Moses, Chairman Representative Harley Olberg, Vice-Chairman Representative Gail Phillips Representative Irene Nicholia MEMBERS ABSENT Representative Cliff Davidson COMMITTEE CALENDAR HB 251 "An Act relating to the management and allocation of fishery resources." HEARD AND HELD IN COMMITTEE FOR FURTHER CONSIDERATION WITNESS REGISTER Steve White, Assistant Attorney General Alaska Department of Law P.O. Box 110300 Juneau, AK 99811-0300 Phone: 465-3600 POSITION STATEMENT: Believed HB 251 is unconstitutional Tom Elias, Chairman Alaska Board of Fisheries P.O. Box 25526 Juneau, AK 99802-5526 Phone: 465-4110 POSITION STATEMENT: Agreed with the concerns raised by Mr. White regarding HB 251 Robin Samuelsen, Resources Director Bristol Bay Native Association P.O. Box 310 Dillingham, AK 99576 Phone: 842-5257 POSITION STATEMENT: Opposed HB 251 Peggy Osterback Aleutians East Borough P.O. Box 101 Sand Point, AK 99661 Phone: 383-2696 POSITION STATEMENT: Had difficulty analyzing HB 251 Norman Anderson General Delivery Naknek, AK 99633 Phone: 246-4423 POSITION STATEMENT: Opposed HB 251 Andy Rauwolf Southeast Herring Coalition P.O. Box 8555 Ketchikan, AK 99901 Phone: 225-3697 POSITION STATEMENT: Opposed HB 251 Tate Hayes Upper Cook Inlet Setnetter 2310 20th Avenue Anchorage, AK 99508 Phone: 272-3943 POSITION STATEMENT: Would like to see more conservation elements in HB 251 Dale Kelley, Executive Director Alaska Trollers Association 130 Seward St., No. 505 Juneau, AK 99801 Phone: 586-9400 POSITION STATEMENT: Opposed HB 251 PREVIOUS ACTION BILL: HB 251 SHORT TITLE: MANAGEMENT AND ALLOCATION OF FISH BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MOSES TITLE: "An Act relating to the management and allocation of fishery resources. JRN-DATE JRN-PG ACTION 03/24/93 761 (H) READ THE FIRST TIME/REFERRAL(S) 03/24/93 761 (H) FISHERIES, RESOURCES, JUDICIARY 03/29/93 (H) FSH AT 08:30 AM CAPITOL 17 03/29/93 (H) MINUTE(FSH) 04/16/93 (H) FSH AT 08:30 AM CAPITOL 17 ACTION NARRATIVE TAPE 93-23, SIDE A Number 000 CHAIRMAN CARL MOSES called the meeting to order at 8:40 a.m. He noted Representatives Moses and Olberg in attendance and said the committee would hear once again HB 251, relating to the management and allocation of fishery resources. HB 251: MANAGEMENT AND ALLOCATION OF FISH Number 008 CHAIRMAN MOSES reminded the committee they had heard from the Alaska Department of Fish and Game concerning some of the history behind HB 251 in Bristol Bay. He indicated his intention was to hear further testimony on the bill over the teleconference, generate discussion, and hold the bill for further consideration. Number 014 STEVE WHITE, ASSISTANT ATTORNEY GENERAL WITH THE DEPARTMENT OF LAW, who has the responsibility of advising the Alaska Department of Fish and Game and the Board of Fisheries, testified that although HB 251 looked pretty innocuous on the face of it, there were potential constitutional problems with it. He said the constitutional problem arises in section 2 of the bill, which directs the Board of Fisheries to allocate resources in a manner that has the least adverse impact on the people of the state. He believes the intent of that section is to create a resident preference in fisheries allocation. MR. WHITE alleged the Department of Law has consistently held that preferences for residents over non-residents, when in a commercial context, probably run up against several constitutional problems, number one being the privileges and immunities clause of the U.S. Constitution. That clause has been the principal reason that the state's local hire bills have been struck down by the Alaska Supreme Court. MR. WHITE said the privileges and immunities clause guarantees that a citizen of one state may do business in another state on terms of substantial equality. According to MR. WHITE, the federal constitution allows discrimination against non-residents, but only if several conditions are found. There has to be a legitimate difference for the discrimination against non-residents. MR. WHITE said the courts have held that merely economic protectionism is not a legitimate purpose. There has to be another purpose for legislation of this type, such as conservation of the resource. The non-residents would have to be shown to be a "peculiar source of the evil" if the evil is conservation, and it would have to be shown that the non-resident component of the fishery creates a greater conservation problem than the resident population does. MR. WHITE advised that if the non-residents do create a greater problem than the residents, it would have to be shown that there is no alternative way to cure that problem other than discriminating against nonresidents. The burden on the state is quite high, MR. WHITE said, and all the findings would be evidence for the record. Several other constitutional clauses are implicated, MR. WHITE said, one being the commerce clause under the U.S. Constitution which says a state cannot erect barriers against another state in matters of trade and commerce. If a non-resident discrimination would affect the travel of non-residents in a significant way, it would be considered a burden on interstate commerce. Finally, the Uniform Application clause in the resource section of the Alaska constitution says the resource laws must apply equally in similarly situated persons. If nonresidents and residents create the same management concerns, differences in how they are managed in order to favor one group over another would not be allowed, MR. WHITE said. MR. WHITE also referenced a Department of Law memo from himself to House Speaker Ramona Barnes responding to a proposal from one of her constituents concerning an uneven tax on non-resident commercial fishermen, guides and outfitters. The proposal would be to tax all those people 10% of their gross income from their businesses, but people who receive Permanent Fund Dividends (residents) would get a credit against that tax. According to MR. WHITE, that would be discrimination against non-residents. Besides the constitutional problems, MR. WHITE said HB 251 would create some internal conflicts with other state statutes. He said subsection b in Section 2 would supersede all other state laws in dealing with allocation. Theoretically it would supersede the subsistence law, MR. WHITE pointed out, and this would direct the Board of Fisheries to allocate fisheries to subsistence users in all cases as opposed to commercial, sport and personal use fisheries. The result would conflict with the existing subsistence law which creates a priority only in certain circumstances. MR. WHITE also said it may conflict with the law that sets up criteria for allocating among different user groups. He cautioned the committee to consider the far-reaching implications of HB 251 before adopting it. Number 106 TOM ELIAS, CHAIR OF THE BOARD OF FISHERIES, testified that in reviewing HB 251 he has many of the same concerns as Mr. White. The problem of resident versus nonresident always comes up before the Board of Fisheries he said, and while he sympathizes with the notion that residents should be given preferential treatment because of their ownership of the resource, he did see problems that could arise. MR. ELIAS called the residential preference a good idea, but not workable given the context of the law. Number 135 ROBIN SAMUELSEN, FORMER BOARD OF FISHERIES' MEMBER, AND CURRENTLY RESOURCES DIRECTOR FOR THE BRISTOL BAY NATIVE ASSOCIATION, testified in opposition to HB 251. According to MR. SAMUELSEN, the management and allocation of fisheries has been worked out over time among the various user groups in the proper forum - the Board of Fish, with a lot of public meetings. MR. SAMUELSEN said his concerns echo those of Mr. White. "Who will pay for these new changes in light of the budget cuts taken by the Division of Boards and the Department of Fish and Game?" MR. SAMUELSEN asked. MR. SAMUELSEN said HB 251 is quite vague on what roles the Board, the Department, and the Commissioner have, and all that needs to be spelled out. There is more than what meets the eye in this bill, MR. SAMUELSEN warned, and if adopted with these vague interpretations, it could be very disruptive to the user groups that have sat through countless board meetings coming to decisions. Number 160 PEGGY OSTERBACK, testifying on behalf of the ALEUTIANS EAST BOROUGH, said it was difficult to analyze HB 251 since its intent is not immediately clear. On the surface it looks like a paraphrasing of several sections of Article VIII of the Alaska Constitution. However, this particular paraphrasing appears to be aimed at basing fishing regulations and in-season management decisions on the basis of the number of Alaska residents in any segment of the fishery. If that is the case, MS. OSTERBACK cautioned, the amendment to Title 16 contained in HB 251 is fraught with equal protection and U.S. Commerce clause problems when it is applied to commercial fisheries management and allocations. According to MS. OSTERBACK, it is true that the legislature has provided the Board of Fisheries with allocation criteria which include a comparison of the number of residents and nonresidents in each fishery. However, the Department of Law has repeatedly warned the Board that it would be difficult, if not impossible, to come up with a viable application of this standard for commercial fisheries, she said. Number 200 The majority of the permits for salmon fisheries in the Aleutians East Borough are held by residents, MS. OSTERBACK pointed out, with a larger percentage of Area M permits held by residents than in both Bristol Bay fisheries. However, even as potential beneficiaries of such a preference, MS. OSTERBACK said the Aleutians East Borough could not support legislation that is bound to confuse allocation and management decisions and increase the number of lawsuits filed. While they understood the desire to benefit Alaska residents, MS. OSTERBACK argued that in some cases the impediments are simply too great; in particular, the U.S. Constitution and the commerce clause. Looking closely at Article VIII, the Natural Resources Article of Alaska's Constitution, MS. OSTERBACK said the borough is not certain that the proposed statute accurately reflects the principles listed. The section 4 language, "subject to preferences among beneficial uses," does not say "subject to preferences among beneficial users." According to MS. OSTERBACK, it appears to the Aleutians East Borough that the "least adverse impact" language in HB 251 attempts to change the focus of the Constitution to provide the opportunity for the Board of Fisheries and the Department of Fish and Game to make regulatory and in-season allocation decisions based on the murky and dangerous concept that what's best for some individuals is somehow best for the state. MS. OSTERBACK also argued that Section 17 is also relevant to this issue, because there can be no legal barrier to nonresidents holding interim use or entry permits, so that all commercial fisheries are similarly situated. Given that, attempting to impose a residency standard on allocation and management decisions could not be condoned, she said. Representative Gail Phillips and Representative Irene Nicholia joined the Committee. Number 224 NORMAN ANDERSON testified in opposition to HB 251, calling it a multi-faceted bill. He believes a portion of this bill is condoning the actions of the Department of Fish and Game in over-managing the Egegik fishery, which negatively impacted the Kvichak district. Number 257 ANDY RAUWOLF, representing the SOUTHEAST HERRING COALITION, testified in opposition to HB 251, arguing that it would restrict the Board of Fisheries' ability to act on proposals aimed at conservation and enhancement of a resource. Scientific studies indicate that some harvest thresholds now being used on depleted stocks are designed as tradeoffs, he said. His organization does not believe enough consideration to enhancing depleted stocks would be given if HB 251 were adopted. Maximum benefit, consistent with sustained yield, can only be vaguely defined at best, he said. According to MR. RAUWOLF, the Alaska Constitutional Convention concluded that sustained yield is not an absolute. In fisheries it would be impossible to calculate because it is not capable of precise specification. Under HB 251, MR. RAUWOLF argued, you wouldn't be able to require enhancement of depleted stocks. Number 297 TATE HAYES, a commercial setnetter in the northern district of Upper Cook Inlet, expressed concern about the future of Alaska's fisheries. Conservation must be the most important aspect of any management plan, he said. Management plans must be implemented and carried out throughout the entire migratory range for the species if conservation is to be ensured, he added, and management plans for different areas must be incorporated throughout in order to ensure sustained yield. All fisheries harvests, as well as incidental takes, must be incorporated in those plans, he said, since they all play a role in the future of the fisheries resources. MR. HAYES also stressed that the protection of fish habitat is crucial to Alaska's fisheries. A restoration strategy is needed to be in place before a disaster occurs, MR. HAYES argued. Management of fisheries must follow the constitutional mandate and statutes, and the Board of Fisheries should follow these guidelines. Number 340 REPRESENTATIVE IRENE NICHOLIA asked to put forth an AMENDMENT to HB 251. CHAIRMAN MOSES responded that no amendments would be taken at this time since it was not his intent to act on the legislation. Number 353 DALE KELLEY, representing the UNITED FISHERMEN OF ALASKA (UFA) and the ALASKA TROLLERS ASSOCIATION (ATA), testified in opposition to HB 251 on behalf of both groups. She explained their concerns that HB 251 would increase allocation disputes among Alaska residents and that it has questionable constitutionality. Resident fishermen who fish in fisheries dominated by nonresidents would be unfairly discriminated against and cause significant problems in the state, she argued. The UFA and the ATA believes there should be equal consideration for all permit holders since they all benefit the state in significant ways, she added. Number 376 MS. KELLEY added the UFA and the ATA also believe that HB 251 totally disregards those benefits received by the predominantly resident support industry to the fleets - processing, gear sales, etc. The Board of Fish is the best forum to assess the maximum benefit to the state of Alaska, MS. KELLEY said. She pointed out that the Board is currently mandated to manage under sustained yield, with socio-economics a key part of their decision-making, based on statistical evidence and public testimony. She also questioned whether you can legally discriminate against nonresidents under the Constitution. The Board of Fisheries process is not broken and does not need to be fixed, MS. KELLEY concluded. Number 407 REPRESENTATIVE NICHOLIA offered the committee copies of a proposed amendment to HB 251. Management and allocation of our fisheries should benefit Alaskans first, she agreed. However, she suggested HB 251 be amended to include conservation because the legislature has not provided clear policy to the Board of Fisheries regarding conservation and management of Alaska's fisheries. Conservation decisions must be made at a level that includes the entire migratory range of the species, she said. REPRESENTATIVE NICHOLIA used the Yukon River fishery as an example of how conservation measures are taken now: During the fishing season, she said, conservation measures are not taken until the salmon start their way up the Yukon River. The managers decide in-season that fishing time must be cut back or eliminated, even for subsistence fishing. Yukon fishermen are the only fishermen to take conservation measures, she pointed out. The policy proposed in REPRESENTATIVE NICHOLIA's AMENDMENT would direct managers at the Department of Fish and Game to apply conservation measures throughout the entire migratory range of the fish specie. Good management decisions must be made on sound scientific information, REPRESENTATIVE NICHOLIA asserted. However, she doesn't believe that the state has adequate data to manage all its fisheries. If this information is not available, according to REPRESENTATIVE NICHOLIA, the end result is status quo management. REPRESENTATIVE NICHOLIA believed that if fisheries have conservation problems, the policy should advocate erring on the side of management, and when a fishery starts to experience conservation problems, managers must start taking preventative measures rather than waiting until a crisis occurs. REPRESENTATIVE NICHOLIA also argued that decisions made for conservation should be separated from decisions made for allocation. Conservation decisions should be made before it is ever decided who the user should be and how much fish they should be allocated, she said. REPRESENTATIVE NICHOLIA said that fisheries with strong stocks are currently managed at the expense of the weak stocks. Although she does not advocate "weak stock management," a very controversial approach, she said she does advocate the Department of Fish and Game getting a better handle on its fishery management strategies. Management of terminal stream fisheries can be done in such a way to provide conservation of the resources, she added, and recognizing this kind of management enables the state to comply with the constitutionally mandated sustained yield principle. REPRESENTATIVE NICHOLIA stated if fisheries cannot be managed to provide protection to weaker stocks, then the Department of Fish and Game needs to bite the bullet and identify management measures that should be taken. REPRESENTATIVE NICHOLIA said management plans need to include sustained harvest and allocation policies, which not only address the subsistence, commercial, sport fishing, and personal use fisheries, but also include incidental catch. Habitat is critical to the well-being of fishery resources, REPRESENTATIVE NICHOLIA pointed out. Management plans should address habitat, she said. Unless the resource is managed so that it may reproduce with a population surplus from year to year, there will, sooner or later, be no reason to quibble over allocation since the surplus or the species itself will become depleted, she added. REPRESENTATIVE NICHOLIA concluded the overriding priority of our fisheries management should be towards conservation in order to maintain the resource for future generations. HB 251 WAS HELD FOR FURTHER CONSIDERATION. ADJOURNMENT CHAIRMAN MOSES adjourned the meeting at 9:15 a.m.