HOUSE SPECIAL COMMITTEE ON FISHERIES January 28, 1994 8:30 a.m. MEMBERS PRESENT Representative Carl E. Moses, Chairman Representative Cliff Davidson Representative Gail Phillips MEMBERS ABSENT Representative Harley Olberg, Vice Chairman Representative Irene Nicholia COMMITTEE CALENDAR Overview: Reorganization of the Department of Fish and Game HB 134: "An Act relating to temporary transfers of commercial fisheries entry permits." NOT HEARD WITNESS REGISTER CARL L. ROSIER, Commissioner Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Position Statement: Participated in Department of Fish and Game overview. JEFF KOENINGS, Director Division of Commercial Fisheries Management and Development P.O. Box 25526 Juneau, Alaska 99802-5526 Position Statement: Participated in Department of Fish and Game overview. JERRY MCCUNE, President United Fishermen of Alaska 211 Fourth Street, Suite 112 Juneau, Alaska 99801 Position Statement: Asked questions regarding the Department of Fish and Game overview. PREVIOUS ACTION BILL: HB 134 SHORT TITLE: TEMP TRANSFER OF ENTRY PERMITS SPONSOR(S): REPRESENTATIVE(S) MOSES JRN-DATE JRN-PG ACTION 02/05/93 236 (H) READ THE FIRST TIME/REFERRAL(S) 02/05/93 236 (H) FISHERIES,RESOURCES,JUDICIARY, FINANCE 02/15/93 (H) MINUTE(JUD) 02/17/93 (H) FSH AT 09:00 AM CAPITOL 17 03/22/93 (H) FSH AT 08:30 AM CAPITOL 17 03/22/93 (H) MINUTE(FSH) 03/22/93 (H) MINUTE(FSH) 01/19/94 (H) FSH AT 08:30 AM CAPITOL 17 01/28/94 (H) FSH AT 08:30 AM CAPITOL 17 ACTION NARRATIVE TAPE 94-3, SIDE A Number 001 CHAIRMAN CARL MOSES called the House Special Committee on Fisheries meeting to order at 8:45 a.m. He noted members in attendance. CHAIRMAN MOSES announced the first order of business would be an overview of the Department of Fish and Game regarding their reorganization. CARL L. ROSIER, COMMISSIONER, DEPARTMENT OF FISH AND GAME, came forward to address the committee. He introduced Jeff Koenings, Director, Division of Commercial Fisheries. COMMISSIONER ROSIER explained that the reorganization was a result of some efficiency moves the department was considering in terms of combining the Division of Fisheries Rehabilitation Enhancement and the Division of Commercial Fisheries Management. He explained that over the years the fisheries of the state have changed significantly. The department structure has been in place since statehood. There has been significant changes brought about as a result of growth in individual communities, and federal laws such as the Magnuson Fisheries Conservation Management Act. COMMISSIONER ROSIER said as the department began to look at how the services of the department could be delivered to the public, it became obvious that the department's structure should be reviewed to make sure there is efficient structure to deliver services to the people of Alaska that have an interest and involvement in fisheries. The state must assume a full partnership role under the Magnuson Act and the implementation of the management plans. Commissioner Rosier said the department is seriously looking at and planning what is referred to as "The Fifth Region" within the department. COMMISSIONER ROSIER said the fifth region would separate the Being Sea and the Aleutian Island fisheries out of the current structure, which is presently managed out of Kodiak, and move it into a separate region to be managed by a fifth regional supervisor. He noted the fisheries involved are salmon fisheries in Bristol Bay and the Alaska Peninsula area, shellfish programs, king crab, tanner crab in the Bering Sea, and a major groundfish fisheries. Commissioner Rosier said Jeff Koenings would present an overview in more detail. Number 134 JEFF KOENINGS, DIRECTOR, DIVISION OF COMMERCIAL FISHERIES MANAGEMENT AND DEVELOPMENT, said the commissioner discussed the merging of the Commercial Fisheries Division and the Fisheries Rehabilitation, Enhancement and Development Division (FRED). He referred to a document he had given to committee members and said it is a part of a larger document that is almost ready for release. The larger document will contain more detail on the process that the department went through in reviewing ways of bringing the missions of both divisions together into a common mission within the commercial fisheries arena. MR. KOENINGS explained on January 11, 1993, an Executive Order was introduced into the legislative process by the Governor that would transfer the duties of the FRED Division into the Department of Fish and Game. Because the order wasn't overturned by the legislature, it went into effect on March 13. Mr. Koenings said the goal of the reorganization is to increase program efficiency and effectiveness while responding to changes. This would include: 1. Increasing efficiency by aligning those missions of the two divisions that deal with commercial fisheries; 2. Positioning the new division so that it can effectively respond to locally based management to the seafood industry which could substantially change over the next decade; and 3. Determining an organizational framework that will not structurally impede the merged division from carrying out its mission. MR. KOENINGS said fishing in Alaska is changing as there are new and expanding challenges facing Alaska's commercial fishing industry. He said there are changes in the worldwide supply of salmon. Mr. Koenings discussed the increases in the production of internationally farmed salmon. He said there are changes in salmon markets and prices. Sockeye salmon in Japan is currently selling for $2.09 per pound, whereas in Alaska it costs about $2.41 per pound to catch, process, and ship to Japan. MR. KOENINGS said there are changes in our dominant fisheries. With changes in the harvests and markets of salmon, crab, and groundfish, have come changes in the ex-vessel value of Alaska's catch. He noted in 1991, the groundfish catch value surpassed that of salmon for the first time and the ex-vessel value of shellfish landed in 1991 was equivalent to that of salmon. MR. KOENINGS explained that there is the emergence of new seafood industries. There is the private nonprofit enhancement program, which began in 1974, as an example of a matured industry. There is also the Aquatic Farm Act of 1988, which established the emerging mariculture industry. MR. KOENINGS explained another issue is the diversification of seafood harvests. There is a demand that the department apply increased attention to fisheries such as scallops, sea urchins, sea cucumbers, geoducks, surf clams, snails and, possibly sandfish. MR. KOENINGS said it is clear that the commercial seafood industry has changed over the last ten to twenty years. The changes were not envisioned when the Commercial Fisheries and the FRED Divisions were first organized. Given these changes, it was thought to be expedient to begin the process of reorganizing both commercially oriented components of the department into a single division that could better address the present, as well as the future. MR. KOENINGS said in carrying out its mission, the department needs to recognize and begin to respond to the growing management needs of the groundfish and shellfish industries within the federal waters of the Exclusive Economic Zone. It needs to address support of the aquaculture and mariculture industries. The department needs to respond to the increased need of having to diversify fisheries within the state. Mr. Koenings stressed that the department needs to address the division's role in federal international fisheries. Number 236 MR. KOENINGS explained that a core planning group was established to guide the merger process. He noted there is more detail in the information he had given to committee members. He discussed information entitled "Action Teams" relating to individuals who were chosen to plan the reorganization. The action teams were established by the planning process to address the four functional areas of the new division which are: Applied Science/Research; Resource Management; Planning/Permitting/Resource Development; and Administration. Number 276 MR. KOENINGS referred to information titled "Framework" which he had given committee members and continued to read: "During the FY 93 and FY 94 budget cycles, both the FRED Division and the Commercial Fisheries Division budgets were cut in anticipation of the merger between the two divisions. The total amount cut between these two budget years, nearly $500,000, was over and above, even at that point, the anticipated savings forecasted to result from a divisional consolidation. As a review of the functions of both divisions found little functional overlap, additional savings from the consolidation would more than likely accrue from possibly downsizing administrative units that support the functional elements within the division. Potential benefits of merging other functional components would result in increased program integration and consolidation that would then lead to increases in project-level coordination and result in larger-scale programmatic efficiencies. "In its approach to functioning as a combined division, it was intended that the division operate as the Commercial Fisheries Management and Development Division; i.e., that there be two primary core elements in the division's functional makeup. The first was the management and operational aspects of the state's fisheries, and the second was the applied research and development aspects of present and future fisheries. To do both requires a balanced program that would be supported by the administrative units and carried out by the resource management, planning/permitting/resource development, and applied science/research wings of the combined division." Number 303 MR. KOENINGS said he would point out some of the things that were accomplished in the merger process in the area of administration. He said at headquarters there is the recommendation to create a single administrative unit, supervised by a deputy director. Mr. Koenings continued to discuss the combining of different units in the headquarters and southeast regional offices. Number 339 MR. KOENINGS referred to information before the committee and continued to read: "At headquarters, it is my recommendation to consolidate and integrate the statewide functions of the applied research group of the Commercial Fisheries Component and the technical services group of the FRED Component into a single unit under the direction of a Deputy Director of Applied Research and Development. "A second recommendation is to take the Coded Wire Tag Processing Laboratory and the separate funding in the Commercial Fisheries of the Otolith Laboratory and consolidate them into a single Mark/Tag Laboratory to be located in Juneau. Consolidating the programs of each division into a single unit within the merged divisional structure will prolong programmatic efficiency by minimizing duplication of effort and noncomplimentary programs." MR. KOENINGS stated that basically the same thing was done for the activities of the two Genetics Programs. They are being consolidated into one particular unit to achieve some programmatic efficiency and a lack of duplication of effort. Number 369 REPRESENTATIVE GAIL PHILLIPS referred to the Coded Wire Tag Processing Laboratory and the two Genetics Programs, and asked if there will be personnel cuts or personnel savings. MR. KOENINGS explained that the department is trying to bring those two units together. He said they are trying to merge the Otolith Laboratory with the Coded Wire Processing Laboratory. REPRESENTATIVE PHILLIPS asked what the Otolith Laboratory is. MR. KOENINGS said the Otolith is the earbone of a fish. He said the department is doing a mass marking program where the temperatures can be adjusted in places such as hatcheries. Those temperature adjustments leave unique marks on the earbones of a fish and different year classes can be marked with different patterns. Number 398 CHAIRMAN MOSES noted that Representative Phillips arrived at the meeting at 8:55 a.m. MR. KOENINGS continued to read from information before him: "Team members agreed that more resources and support needs to be developed to aquaculture permitting and planning in the reorganized division. Included within this category is not only the private nonprofit hatchery program, but also the emerging mariculture program which supports Alaska's shellfish and aquatic plant farming industry." MR. KOENINGS said it was recommended that former FRED area biologists be reassigned to both of the two resource development biologist functions. The regional resource development biologist would be responsible to administer the Resource Development Program. He noted that is an emerging program which is based on an active partnership with fishermen and processors to carefully develop Alaska's fisheries. MR. KOENINGS referred to the area resource development biologists and said they would be responsible for carrying out a lot of the activities in the locally based management programs. They would also coordinate the wild hatchery stock questions with the PNP (private nonprofit) hatchery programs. He noted they would also provide preseason planning, inseason management, and post-season evaluation of PNP salmon production. Mr. Koenings said that is a focus of the FRED employees going into a new arena to help the department carry out their mission. Number 429 COMMISSIONER ROSIER referred to a commitment that was made last year and said the objectives of the FRED Division, as they were originally created in Title 16, are still there. The Executive Order didn't change that in any way. MR. KOENINGS referred to resource management and said there is a recommendation that the hatchery program be consolidated into a single statewide hatchery group which would be supervised by a statewide culturist. This will ensure leadership by knowledgeable personnel, provide an integrated hatchery research program, and maintain a core group of culture expertise within the department. Number 451 MR. KOENINGS said a Statewide Enhancement Evaluation Review Panel will be set up, which will help the department coordinate research evaluation activities such as when new increments of production are proposed. MR. KOENINGS referred to the Statewide Fish Culture Unit and said it used to be the single largest component of the former FRED Division. He noted a bulk of the layoffs, fifty-five, came from this unit. MR. KOENINGS referred to Resource Management and stated it is his recommendation that a fifth region be created that would include shellfish, salmon, herring programs, as well as vessels used to support those programs. MR. KOENINGS said three of the four existing regions within the department were formed at statehood when salmon management issues and the value of salmon harvest were at the heart of the seafood industry. Within the last thirty-five years, Alaska's fisheries have changed. First came the recognition of the developing salmon fisheries of the Yukon and Kuskokwim Rivers, which was the result of the formation of the department's Arctic Yukon Kuskokwim Region in 1971. MR. KOENINGS said the shellfish and groundfish harvests have become increasingly valuable. Marine herring has also formed an important fishery throughout the state. He stated a great deal has been learned about salmon migration routes since statehood. In response, the department proposes a fifth region, the Bering Sea/Aleutians Region, which will seek to match administrative oversight and focus on the shellfish and salmon resources of the resource rich region. MR. KOENINGS read from the information he gave the committee: "A Bering Sea/Aleutians (BSA) region would focus science and budget related resources on the area of the state where much of the economic value of salmon and shellfish are harvested. "The fishers of that particular area would like the regional staff to address concerns of their particular fisheries in terms of management, science, and budgets. "Dividing the groundfish and shellfish fisheries between two regions will allow state management to be more effective under a full partnership with federal programs. "The merger has increased both the complexity of the programs managed by the regional supervisors and their supervisory loads by assigning components of the FRED Division to their regions. A fifth region would reduce the supervisory workload and would enable them to evaluate their programs more effectively." MR. KOENINGS discussed a chart titled "Commercial Fisheries Management and Development Division." In conclusion, MR. KOENINGS reminded the committee that the department will be forwarding a more complete document on the whole process. Number 519 REPRESENTATIVE CLIFF DAVIDSON said what he is hearing as far as services being provided to the fishermen, is that the fishermen want more people out in the field and not more supervisors and administrators. He noted concern with more middle managers and travel budgets. MR. KOENINGS referred to the fifth region concept and said there is basically personnel from two separate regions which are being consolidated to focus on some real needs that haven't been met. REPRESENTATIVE DAVIDSON asked why needs haven't been met. MR. KOENINGS said there have been problems in terms of budgets and trying to get some resources and focus into those areas. He explained that Alaska fisheries are getting more and more complicated because of the supply and demand, and because of the increasing importance of some of the other fisheries, rather than a nontraditional fishery. He said he doesn't think the department will decrease their presence in those areas. Mr. Koenings said it is time that the department focuses on that area and a fifth region gives them the platform to do that. Number 555 REPRESENTATIVE DAVIDSON said if the fisheries are becoming more complicated, then why is the department focusing on the concentration of personnel in the urban areas where there are not fishermen who need to be more educated of the complications. He said it seems there is an argument for decentralizing and getting people out into the field more than just trying to focus in on an area that caters more to outside fishermen than the local fishermen. He noted that is the same message they got from the Southwest Municipal Conference Meetings in Anchorage. COMMISSIONER ROSIER informed Representative Davidson that he doesn't believe in centralization. There needs to be an administrative supervisory unit somewhere, but wherever the unit is set up, whether it is in Kodiak, Anchorage, etc., you will see a consolidation around that headquarters office in terms of dealing with the public. He referred to the structure and said it would allow some department people to be in those outlying areas on a full-time basis. The actual access to the department will be increased to a broader number of communities. REPRESENTATIVE DAVIDSON asked where the resources are going to come from to have a new fifth region, administrative support staff, as well as sending more people out to the different areas. COMMISSIONER ROSIER said the department is looking at a reemphasis of existing positions within two of the other regions. Number 622 JERRY MCCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA, asked if there would be an evaluation of the existing hatcheries and what they are contributing to the common property. MR. KOENINGS explained that there are two angles to the new unit. One is the best hatchery management practices will be handled through a technical unit that will focus on those particular issues. It will create new ways of best hatchery practices in terms of disease control and timing. He explained the other aspect is the programmatic oversight, the permitting and the rest of it that needs to be aligned. TAPE 94-3, SIDE B Number 001 COMMISSIONER ROSIER referred to the existing facilities and said there are increased management costs that come with the hatcheries, and the direction has been associated with the protection of wild stocks, etc. He said in a lot of the facilities there was very large numbers of fish being produced by some of the facilities that were impacting management. That particular issue was never resolved in terms of how those additional management costs were going to be dealt with within the structure. Currently, we have a private nonprofit industry that has some significant problems. Commissioner Rosier stated it is not the time, in his view, to interject that kind of thinking into the process. There are additional management costs involved and now is not the time to deal with that particular issue within that industry. MR. MCCUNE commented that he hopes in the future the department looks at the commissioner going out to different areas, as it is very important to the people. Talking to the fishermen personally is a lot more effective than trying to deal with personnel at the local level. COMMISSIONER ROSIER said he explained at his confirmation hearing that he would be a hands-on commissioner, and he has tried to be that. He noted that it is his intention to visit several communities in the near future. CHAIRMAN MOSES thanked Commissioner Rosier for the presentation. Number 094 CHAIRMAN MOSES announced that CSHB 134 (FSH) would be heard the following Wednesday, February 2. He adjourned the meeting at 9:35 a.m.