HOUSE SPECIAL COMMITTEE ON FISHERIES May 3, 1999 5:10 p.m. MEMBERS PRESENT Representative Bill Hudson, Chairman Representative Jim Whitaker Representative John Harris Representative Carl Morgan Representative Harold Smalley MEMBERS ABSENT Representative Fred Dyson Representative Mary Kapsner COMMITTEE CALENDAR CONFIRMATION HEARING Board of Fisheries Dan Kelly Coffey - Anchorage - CONFIRMATION ADVANCED * HOUSE JOINT RESOLUTION NO. 39 Urging the United States government to purchase surplus pink salmon for aid packages to the Balkans. - MOVED CSHJR 39(FSH) OUT OF COMMITTEE CS FOR SENATE BILL NO. 146(FIN) am "An Act relating to the amount and disposition of the commercial fishing license fee and to the fishermen's fund; and providing for an effective date." - MOVED OUT OF COMMITTEE HOUSE CONCURRENT RESOLUTION NO. 2 Relating to the sovereignty of the State of Alaska and the sovereign right of the State of Alaska to manage the natural resources of Alaska. - MOVED CSHCR 2(FSH) OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HJR 39 SHORT TITLE: SURPLUS SALMON TO AID BALKANS SPONSOR(S): REPRESENTATIVES(S) AUSTERMAN, Hudson, Harris, Phillips, Morgan Jrn-Date Jrn-Page Action 4/27/99 1026 (H) READ THE FIRST TIME - REFERRAL(S) 4/27/99 1026 (H) FSH 4/28/99 1058 (H) COSPONSOR(S): PHILLIPS 4/30/99 1122 (H) COSPONSOR(S): MORGAN 5/03/99 (H) FSH AT 5:00 PM CAPITOL 124 BILL: SB 146 SHORT TITLE: COM. FISH LICENSE/FISHERMEN'S FUND SPONSOR(S): FINANCE Jrn-Date Jrn-Page Action 4/15/99 931 (S) READ THE FIRST TIME - REFERRAL(S) 4/15/99 931 (S) FIN 4/21/99 (S) FIN AT 8:00 AM SENATE FINANCE 532 4/21/99 (S) MOVED CS(FIN) OUT OF COMMITTEE 4/22/99 1039 (S) FIN RPT CS 5DP 3NR SAME TITLE 4/22/99 1039 (S) DP: TORGERSON, PHILLIPS, GREEN, 4/22/99 1039 (S) PETE KELLY, WILKEN; NR: ADAMS, 4/22/99 1039 (S) LEMAN, DONLEY 4/22/99 1039 (S) FISCAL NOTE (F&G) 4/23/99 (S) RLS AT 12:25 PM FAHRENKAMP 203 4/23/99 (S) MINUTE(RLS) 4/27/99 1134 (S) FISCAL NOTE (LABOR) 4/27/99 1135 (S) RULES TO CALENDAR AND 1 OR 4/27/99 4/27/99 1136 (S) READ THE SECOND TIME 4/27/99 1136 (S) FIN CS ADOPTED UNAN CONSENT 4/27/99 1137 (S) AM NO 1 ADOPTED UNAN CONSENT 4/27/99 1137 (S) ADVANCE TO 3RD RDG FAILED Y13 N5 E2 4/27/99 1137 (S) THIRD READING 4/28 CALENDAR 4/28/99 1154 (S) READ THE THIRD TIME CSSB 146(FIN) AM 4/28/99 1155 (S) PASSED Y14 N3 E2 A1 4/28/99 1155 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 4/28/99 1155 (S) ELLIS NOTICE OF RECONSIDERATION 4/29/99 1174 (S) RECONSIDERATION NOT TAKEN UP 4/29/99 1175 (S) TRANSMITTED TO (H) 4/30/99 1102 (H) READ THE FIRST TIME - REFERRAL(S) 4/30/99 1102 (H) FSH, FIN 5/03/99 (H) FSH AT 5:00 PM CAPITOL 124 BILL: HCR 2 SHORT TITLE: SOVEREIGNTY OF THE STATE; RESOURCES SPONSOR(S): REPRESENTATIVES(S) COGHILL, Barnes, Green Jrn-Date Jrn-Page Action 4/19/00 (H) FSH AT 5:00 PM CAPITOL 124 2/24/99 300 (H) READ THE FIRST TIME - REFERRAL(S) 2/24/99 300 (H) WTR, FSH, RESOURCES 3/16/99 (H) WTR AT 5:00 PM CAPITOL 124 3/16/99 (H) MOVED OUT OF COMMITTEE 3/16/99 (H) MINUTE(WTR) 3/17/99 490 (H) WTR RPT 4DP 2DNP 3/17/99 490 (H) DP: MASEK, GREEN, COWDERY, BARNES; 3/17/99 490 (H) DNP: BERKOWITZ, JOULE 3/17/99 490 (H) ZERO FISCAL NOTE (H.WTR) 3/17/99 490 (H) REFERRED TO FSH 3/17/99 497 (H) COSPONSOR(S): GREEN 4/12/99 (H) FSH AT 5:00 PM CAPITOL 124 4/12/99 (H) 4/19/99 (H) FSH AT 5:00 PM CAPITOL 124 4/19/99 (H) HEARD AND HELD 4/19/99 (H) MINUTE(FSH) 4/26/99 (H) FSH AT 5:00 PM CAPITOL 124 4/26/99 (H) SCHEDULED BUT NOT HEARD 5/03/99 (H) FSH AT 5:00 PM CAPITOL 124 WITNESS REGISTER DAN COFFEY, Appointee to the Board of Fisheries 207 East Northern Lights Boulevard, Suite 200 Anchorage, Alaska 99503 Telephone: (907) 274-3385 POSITION STATEMENT: Testified as appointee to the Board of Fisheries. REPRESENTATIVE ALAN AUSTERMAN, Sponsor Alaska State Legislature Capitol Building, Room 434 Juneau, Alaska 99801 Telephone: (907) 465-2487 POSITION STATEMENT: Introduced HJR 39. MIKE MILLIGAN, Former Assembly Member City of Kodiak SR 9121 Kodiak, Alaska 99615 Telephone: (907) 487-4402 POSITION STATEMENT: Testified on HJR 39. LLEWELLYN LUTCHANSKY, Senate Finance Committee Aide for Senator Torgerson Alaska State Legislature Capitol Building, Room 516 Juneau, Alaska 99801 Telephone: (907) 465-3710 POSITION STATEMENT: Introduced SB 146. JIM BALDWIN, Assistant Attorney General Civil Division Department of Law P.O. Box 110300 Juneau, Alaska 99811 Telephone: (907) 465-3600 POSITION STATEMENT: Testified on SB 146. KEVIN BROOKS, Director Division of Administrative Services Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99811 Telephone: (907) 465-5999 POSITION STATEMENT: Testified on SB 146. BRUCE GABRYS, Commercial Fisherman from Cook Inlet 10229 Baffin Street Eagle River, Alaska 99577 Telephone: (907) 699-3874 POSITION STATEMENT: Testified on SB 146. JERRY MCCUNE United Fisherman of Alaska 211 4th Street, No. 112 Juneau, Alaska 99801 Telephone: (907) 586-2820 POSITION STATEMENT: Testified on SB 146. REPRESENTATIVE JOHN COGHILL, Sponsor Alaska State Legislature Capitol Building, Room 416 Juneau, Alaska 99801 Telephone: (907) 465-3719 POSITION STATEMENT: Testified on HCR 2. BILL HAGAR 1650 Steese Highway Fairbanks, Alaska 99701 Telephone: (907) 459-4025 POSITION STATEMENT: Testified in support of HCR 2. RALPH SEEKINS, President Alaska Wildlife Conservation Association 431 Gaffney Road Fairbanks, Alaska 99701 Telephone: (907) 452-6295 POSITION STATEMENT: Testified in support of HCR 2. DALE BONDURANT 31964 Moonshine Drive Soldotna, Alaska 99669 Telephone: (907) 262-0818 POSITION STATEMENT: Testified in support of HCR 2. HERMAN FANDEL 702 Lanton Drive Kenai, Alaska 99611 Telephone: (907) 283-4501 POSITION STATEMENT: Testified in support of HCR 2. DICK BISHOP Alaska Outdoor Council P.O. Box 73902 Fairbanks, Alaska 99707 Telephone: (907) 463-3830 POSITION STATEMENT: Testified in support of HCR 2. ACTION NARRATIVE TAPE 99-14, SIDE A Number 0001 CHAIRMAN BILL HUDSON called the House Special Committee on Fisheries meeting to order at 5:10 p.m. Members present at the call to order were Representatives Hudson, Whitaker, Morgan, and Smalley. Representative Harris arrived at 5:25 p.m. CONFIRMATION HEARING CHAIRMAN HUDSON announced that the committee would consider the last nominee for the Board of Fisheries; Dan Coffey, who was unable to attend the last confirmation hearing. He said that the testimony at the last hearing was fairly extensive so the committee will not be taking public testimony today. Number 0178 DAN COFFEY, Appointee to the Board of Fisheries, testified via teleconference from Anchorage. He stated that he want to remain on the Board of Fisheries for three main reasons: first, they are in the middle of working a sustainable fisheries policy, which the board has spent alot of time on and feels will benefit the fishery sources of the state; second, the subsistence issues that are arising with federal takeover of the state's fisheries, and he wants to try to make sure that it won't have too detrimental of an effect on the fisheries; finally, the process and procedure changes that have occurred over the last three years. He explained that when he first came on the board they were unable to finish the work they were given due to the volume of the work; they never seemed to get done with their work load. He said that they tried reorganizing and one of the strengths he brings to the board is his organizational skills. He wants to see those three things to conclusion and he feels that his work on the board is only half done. He hopes to have the opportunity to finish the work that he has started. Number 0447 REPRESENTATIVE SMALLEY asked what Mr. Coffey's viewpoint is on the responsibility of the Department of Fish and Game in terms of the management of fisheries compared to the responsibility of the Board of Fisheries. MR. COFFEY explained that the Board of Fisheries responsibility is stated in statute, which is to conserve and develop the fisheries of the state of Alaska for sustained yield for the maximum benefit of the people of Alaska. The interface between the department and the board is that the board is a regulatory body that should adopt regulations that meet the statutory charge and then the department should implement those regulations. Number 0530 REPRESENTATIVE SMALLEY asked what Mr. Coffey's view is on the Cook Inlet fishery, with the potential declining resource there, specifically the commercial fishing industry and the sport guide industry. MR. COFFEY responded, "We sat here between the Senate hearing and now with a commercial fisherman and the director of the sport fish division and talked about that for the last hour and fifteen minutes." He explained that what they came up with was that they hoped that the people of goodwill on all sides of the fishing interest, be they Northern district setnetters or drifters or sport fisherman, could work together to find some solutions so there aren't these contentious allocation battles going on forever. So that when someone with one persuasion believes one thing the fishery swings to that side and then someone with another set of opinions swings it back to the other side; it goes back and forth with no certainty for anyone. He indicated that his ideal would be that the stake holders could overtime work out a system that would sustain the fish and provide harvestable resources for the sport and commercial interests that would recognize the legitimate concerns of each other. He said that they need to further the dialogue between the reasonable people so that solutions can be brought forward. The first issue is to sustain the resource, because without the fish there is nothing to talk about. Secondly, they need people from both the commercial fisheries side and the sport fisheries side that will talk with each other. He said that he saw a glimmer of it at the Board of Fisheries subcommittee meetings where people of goodwill and reason talked to each other and as a result he feels some good regulation came out of the last meeting. Number 0764 CHAIRMAN HUDSON stated that the Fisheries Committee, a few weeks ago, contemplating the pending federal takeover of subsistence fisheries, had the federal managers and the state managers together at the same table. He asked Mr. Coffey what he thought would be the primary concern between the two levels of management; state and federal, and what will the relationship of the Board of Fisheries have in that process. MR. COFFEY explained that the biggest problem is that the federal subsistence board's charge is to manage for subsistence and they have no other duties or responsibilities to any other fishery, which means they could manage for subsistence only. The other concern is the ability of the federal system to respond to in season management. The strength of area managers and those in the field is that they can do what is needed to protect the resource in season. The federal system has no ability to act or respond with speed to any in season considerations. He indicated, "We met with the federal subsistence board, by we I mean the department, the commissioner, and myself and Chairman White(ph), met with them on Friday in an all day meeting to discuss these problems. We agreed to appoint a working group of the department and of the federal agencies to come back to all of us on the 28th of June with a lengthy -- or with a program to develop an integrated management system that would answer these concerns. If the feds can come back with something that addresses both in season management and the other concerns that I expressed, then we may have a system that will work, or at least have the chance of working, because they will be required to at least address the other fisheries and to address this question of in season management." Number 0988 CHAIRMAN HUDSON said that he views this as probably the greatest concern, and especially the fisheries side, so he appreciates Mr. Coffey's comments. He indicated that they heard a great deal of testimony last week, and the committee will be sending forward the confirmation to the joint House and Senate. HJR 39 - SURPLUS SALMON TO AID BALKANS CHAIRMAN HUDSON announced that the first order of business was House Joint Resolution No. 39, urging the United States government to purchase surplus pink salmon for aid packages to the Balkans. REPRESENTATIVE ALAN AUSTERMAN, Sponsor, Alaska State Legislature, stated that the conflict in the Balkans between the Serbian and Albanian people has left many Albanians homeless as they flee their homeland of Kosovo. He pointed out that the United States is taking part in a massive relief effort to shelter, feed and clothe the refugees. He indicated that Alaska has a surplus of pink salmon and it is fitting for the United States government to provide them with surplus salmon during this time of relief operations. Number 1242 REPRESENTATIVE WHITAKER stated that he thinks it is a good idea and looks forward to moving it along. REPRESENTATIVE AUSTERMAN acknowledged Mike Milligan and said that he brought forward the concept of HJR 39 and he sent forward both resolutions from the Kodiak City and Borough to the federal government as well. CHAIRMAN HUDSON wondered if the committee needed to adopt the amendment to add "Secretary, U.S. Department of Agriculture" to HJR 39. REPRESENTATIVE AUSTERMAN replied yes. Number 1328 REPRESENTATIVE HARRIS made a motion to adopt Amendment 1, which read: Page 2, line 10, following "States;": Insert "and to Dan Glickman, Secretary, U.S. Department of Agriculture;" CHAIRMAN HUDSON asked whether there was any objection. There being none, Amendment 1 was adopted. Number 1396 MIKE MILLIGAN, Former Assembly Member, City of Kodiak, testified via teleconference from Kodiak. He thanked Representative Austerman for introducing HJR 39. He said that they had tried to get pink salmon into an aid package following Senator Stevens speech a couple of years ago on his trip to North Korea. When the Kosovo issue came up they tried to put something together that would try to deal with the humanitarian aspects and not address the political issues of whether or not the United States should be fighting over there. He stated that it is important to understand that Alaska does produce a very suitable food, because it is already cooked and the people of that area are familiar with it. He pointed out that salmon is also a contributor to the general fund; therefore, if there is a possibility of selling salmon the entire state benefits. It also sends a message to the world that Alaska cares about humanitarian efforts. Number 1525 REPRESENTATIVE HARRIS made a motion to move HJR 39 as amended with individual recommendation. There being no objection, HJR 39 was move from the House Special Committee on Fisheries. SB 146 - COM. FISH LICENSE/FISHERMEN'S FUND CHAIRMAN HUDSON announced that the next order of business was CS for Senate Bill No. 146(FIN) am, "An Act relating to the amount and disposition of the commercial fishing license fee and to the fishermen's fund; and providing for an effective date." LLEWELLYN LUTCHANSKY, Senate Finance Committee Aide for Senator Torgerson, Alaska State Legislature, read the sponsor statement: Senate Bill 146 increases the cost of a crew-member's fishing license from $30 per resident and $90 per non-resident to $60 for a resident and $125 for a non-resident license. At the current time, 60 percent of the crew-member license fees goes into the Fisherman's Fund. Senate Bill 146 reduces the percentage of license fees that goes into the fund from 60 percent to 39 percent. At the 39 percent level, the Fisherman's Fund will have the same amount of funding it receives now. The current balance of the fund is over $9 million. Senate Bill 146 directs 61 percent of the crew license fees to the Fish and Game Fund to be made available for appropriation to Commercial Fisheries Management in the FY 2000 operating budget. The intent is to direct the crew license fees to benefit the commercial fisheries industry. MS. LUTCHANSKY added that people from the Department of Law and the Department of Fish and Game were present to answer questions on calculations. REPRESENTATIVE HARRIS referred to the fiscal note and wondered why it would be a savings of $20,900 versus the following year of $53,300. MS. LUTCHANSKY deferred the question to the department that prepared the fiscal notes. Number 1673 JIM BALDWIN, Assistant Attorney General, Civil Division, Department of Law, said that he wanted to familiarize the committee with a legal issue that is raised in SB 146. He explained that the bill proposes to change the rate of dedication for a pre-existing dedicated fund. The Fisherman's Fund, by law, takes a percentage of the license fees. The dedication existed before statehood, which means that it was grandfathered in under the Constitution of the State of Alaska. The opinion of the Department of Law is that any change in the rate of dedication has the potential of destroying it, since the constitution talks about continuing dedications in there present state; therefore, the effect would be that the revenues derived, if they are to be sent to the Fisherman's Fund, would have to be appropriated there, because they would no longer be dedicated. Basically, the way a dedication works is that the money cannot be used for another purpose. It was the policy when the state was formed and the constitution was adopted that dedicated funds should be minimized as much as possible; the Fisherman's Fund being an exception. MR. BALDWIN continued. He indicated that there is a difference of opinion between the Department of Law and the Legislative Affairs Agency. The Legislative Affairs Agency places emphasis on the ability to change the rate of the dedication. This was of importance a couple years ago when there was a considered change in the tobacco tax. At that point the Department of Law advised the relevant standing committees that the way to approach it was if they disagreed with the departments advise that an appropriate safeguard would be to have some backup provisions. In case of a successful legal challenge of the change in rate of the dedication they should have a backup that would impose the increase in the license fee, or tax, and that increase in revenues would go to the general fund subject to the discretion of the legislature to appropriate the Fish and Game Fund. The benefit of doing that, at least in the case of the tobacco tax, is that it removes any incentive for someone to sue to try to reverse it, because the outcome would be that the increase would be imposed and the revenue would go to a specified source. With regards to the tobacco tax there has been no incentive to sue to reduce the tax, because there is a backup to deal with that situation. In SB 146, Senator Torgerson, chose not to do that. He noted that he doesn't think Senator Torgerson is really against resolving the legal problems, but he didn't want to change the bill when they brought it to his attention in the Senate Finance Committee. He feels that without at least a disincentive to sue the bill proposes a risk for the ability to continue the dedication for the Fisherman's Fund. He added that there is no requirement to continue a dedicated fund if the legislature chooses not to, but the department wouldn't want them to just stumble into that without having been informed of the risks. Number 1964 CHAIRMAN HUDSON asked, in the event there was a challenge and the court found that it was unconstitutional or legally improper, whether or not it would have any impact on the fund as it is currently constituted. MR. BALDWIN replied that the answer to that question involves the consideration of two issues; one, could the dedication continue or the stream of revenue, which he thinks the answer is clearly "No", and two, the question about the balance in the fund, which he feels intuitively would do in the dedication and make those funds apart of the general fund, but he is unsure. There has not been a problem like that arise in the state where the power to dedicate on a pre-existing fund was lost. He explained that what has happened in the past is whenever the legislature say fit to increase the tobacco tax, before the legislature embraced the opinion of the Legislative Affairs Agency, they would incrementally change the law and leave the existing law alone; add new sections to the law. He indicated that it is the type of thing he would propose for the backup, but it is a financial matter and might be better addressed in the Finance Committee. CHAIRMAN HUDSON pointed out that there is a letter from Mr. Baldwin in the packet addressed to Senator Torgerson. Number 2091 KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game, stated that the department has worked with Senator Torgerson's office throughout the subcommittee process on their budget trying to mitigate general fund reductions within the Division of Commercial Fisheries Management and Development. He indicated that the department supports the measure to move the revenue from the sale of crew member licenses to the Fish and Game Fund. The department has also been consistent in their testimony that they do not want to do anything to harm the Fisherman's Fund; it has been the general consensus throughout the process. He referred to the question asked by Representative Harris on the differences in amounts in the first couple of years and said that it is attributed to the fact that the bill takes effect in relation to the calender year, which is halfway through the fiscal year and so the first year will be a partial year. Number 2165 CHAIRMAN HUDSON stated that there is no decrease according to the bill to the current recipients of the fund. He asked if that is correct. MR. BROOKS replied that is correct. He explained that by changing the amount from 60 percent to 39 percent, it is anticipated that 39 percent of the new fees will result in a modest increase to the contributions to the Fisherman's Fund. REPRESENTATIVE HARRIS wondered if Mr. Brooks has worked in cooperation with the commercial fisherman and whether they believe this is something that is going to be better for them. MR. BROOKS indicated that he would not presume to speak for the commercial fisherman. He pointed out that nobody likes increased fees, but he feels that there is a recognition that the state is in serious times with the general fund and this is one area where the increase is designed to go into the commercial fisheries budget, which will benefit the crew members. He said that they haven't built a consensus with all the fisheries groups, but there has been input by those groups in previous hearings and in working with Senator Torgerson's office. Number 2287 BRUCE GABRYS, Commercial Fisherman from Cook Inlet, testified via teleconference from Anchorage. He stated that the concern from the commercial fishing perspective is that if the increase is necessary the addition money should go back into the fishery; if it goes back into the commercial fisheries budget the net benefit of that to the commercial fisheries will be seen if those revenues are returned and used in fisheries management. CHAIRMAN HUDSON asked Mr. Brooks what the amount is that the resident fisherman pay presently compared with what the payment would increase to. Number 2352 MR. BROOKS replied that the resident fee would go from $30 dollars to $60 and non-residents would go from $90 to $125 per year. CHAIRMAN HUDSON asked Ms. Lutchansky if they have a record of testimony from commercial fisherman throughout the state. MS. LUTCHANSKY replied that they have received no testimony except from the Alaska Gillnetters Association here in Southeast. CHAIRMAN HUDSON wondered what the intent is of SB 146; to increase revenue or meet expenses. MS. LUTCHANSKY said that they were given a target in the fish and game budget during the department's subcommittee meeting and they were having a difficult time finding ways to cut the budget without hurting various divisions in the department. They thought if they could find a way to raise revenues and spend them on commercial fisheries that would be the best approach. CHAIRMAN HUDSON wondered if it is the intention of Senator Torgerson to pass on the additional revenues to the management of fish and game. MS. LUTCHANSKY replied yes. The additional revenues would go right back into the commercial fisheries management. Number 2471 JERRY MCCUNE, United Fisherman of Alaska, stated that his concern is that the Fisherman Fund continues to be fully funded at the same rate, because it is very valuable to the crew member. He said that even though they do not like increased fees, they recognize that SB 146 is a creative way to fund more money into fish and game. He pointed out that there is also the question being asked of why not charge the non-resident three times as much or $180 instead of $60. He referred to the "Carlson Case" and limited entry and said that they do not want to bring up another case, so that is why it is at the current rate. He indicated that they are not supporting SB 146, but they did work with Senator Torgerson to get some money that would go directly to fish and game. He added that if they were at the whim of the general fund he believes most groups would not be supportive of SB 146. Number 2560 REPRESENTATIVE HARRIS asked Mr. Baldwin if he thinks there is a way that the amount of money can be dedicated to the Division of Commercial Fisheries Management and Development. MR. BALDWIN stated that he is not sure it works that way. He explained that the way SB 146 works is it will be set up as a front section operation, meaning that in the front section of the budget there will be an appropriation that will appropriate the revenues to the Fish and Game Fund and then out of the fund; therefore, it is not going to be a dedication, but it will be a fairly routine matter. It basically hard wires it in, but it doesn't dedicate it. REPRESENTATIVE HARRIS stated that the concern of the fisherman and of the Department of Fish and Game is that they are going to be fully protected, but just because the appropriation is in the front section of the budget this time does not mean that the front section of the budget is guaranteed to remain there. He indicated that after being through a number of meetings he can guarantee that there is nothing sacred in the front section of the budget as the budget gets tighter. It is really the whim of the legislature to ensure that the money is appropriated and he hopes that intention remains there, because if the fishermen are asked to pay more, then the money should go towards helping the fishing industry. CHAIRMAN HUDSON indicated that he would like to move SB 146 along with the letter from the Department of Law, in order to draw the concern to the Finance Committee, as well as the comments by the committee. REPRESENTATIVE HARRIS made a motion to move CSSB 146(FIN) am out of committee with individual recommendation and the attached fiscal note. There being no objection, CSSB 146(FIN) am was moved out of the House Special Committee on Fisheries. HCR 2 - SOVEREIGNTY OF THE STATE; RESOURCES CHAIRMAN HUDSON announced that the next order of business was House Concurrent Resolution No. 2, relating to the sovereignty of the State of Alaska and the sovereign right of the State of Alaska to manage the natural resources of Alaska. Number 2847 REPRESENTATIVE JOHN COGHILL, Sponsor, Alaska State Legislature, stated that HCR 2 is dealing with the sovereign right of the state to manage its natural resources and it gives some history of the Alaska Statehood Act, the Submerged Land Act, and some of the constitutional provisions in the Constitution of the State of Alaska. There are several court cases cited throughout HCR 2 and it makes the observation that there is definitely a legitimate dispute between Alaska and the U.S. Congress as to whether Congress can require Alaska to violate its own constitution or end up having a discriminatory allocation of fish and game resources forced on it by the federal government. REPRESENTATIVE COGHILL presented an amendment to HCR 2, which would delete lines 19 - 24, page 2. TAPE 99-14, SIDE B CHAIRMAN HUDSON pointed out that Scott v. Sanford was addressed in Joanne Grace's letter. He asked Representative Coghill if he had received a copy of Joanne Grace's written testimony. REPRESENTATIVE COGHILL stated that it was from her written testimony that he decided Scott v. Sanford would be problematic. REPRESENTATIVE WHITAKER made a motion to adopt Amendment 1, page 2, lines 19 - 24, delete: WHEREAS the United States Supreme Court in Scott v. Sanford, 60 U.S. 393(1856), ruled that the property clause of the Constitution of the United States cannot be used to destroy or in any way impair the civil and political rights of citizens of the United States or to provide the power to establish inequalities among those citizens by creating privileges in one class of citizens by disenfranchisement of other classes, thus degrading those other classes from positions they previously occupied; CHAIRMAN HUDSON asked whether there was any objection. There being none, Amendment 1 was adopted. He asked Representative Coghill if he would speak to some of the items that Joanne Grace, Assistant Attorney General, brought up in her letter. Number 2817 REPRESENTATIVE COGHILL referred to the first page of Joanne Grace's letter where it states, "The Governor has consistently stated since he took office that he does not believe litigation is the answer to Alaska's subsistence dilemma." He referred to a letter titled "State To Sue Interior Department over Glacier Bay Fishing, Knowles Asserts Claim to Submerged Lands within Park." The first paragraph reads, "Seeking to protect the rights of Alaska commercial and subsistence fishermen, the State of Alaska will file suit against the federal government to establish its ownership of the submerged lands underlying the marine waters of Glacier Bay National Park, Governor Knowles announced today." He pointed out a list of cases that are pending the ANILCA. In the cases of the Ninth Circuit Court of Appeals there is Alaska v. Babbitt, Stevens Village v. McVee and Rosier, Native Village of Quinhagak v. United States, Peratrovich v. United States, Fish and Game Fund v. Alaska and United States, Kluti Kaah v. Alaska and Arctic Reginal Council v. United States. He indicated that these seven court cases dealing with ANILCA have been stayed until October 1, 1999, which shows that since the Governor took office he has consistently said that he doesn't believe that litigation is the answer, which is due to the fact that the Governor agrees with the federal government. He said that the reason he is bringing HCR 2 forward is a legitimate dispute that needs to be taken to original jurisdiction. Joanne Grace is the lawyer named on five of the seven court cases, which means that she is very aware of the litigation that is happening and that has been stayed. He pointed out that it is pretty well answered that the Governor does believe in litigation, just not in this particular area. REPRESENTATIVE COGHILL further stated that he agrees with Joanne Grace's feelings on Scott v. Sanford. He referred to page 3 of her letter under United States v. New York & Printz v. United States where it states, "Both cases hold that the federal government may not compel the states to implement federal law." He indicated that it is true and the federal government has got a jurisdictional problem in making the states implement federal law. He pointed out that what the state has done typically is offer incentives. The mandate coming down on title VIII of ANILCA does not offer an incentive. It just says amend the Constitution of the State of Alaska and the federal government will give the state money to implement federal regulations. He referred to page 4 of Joanne Grace's letter, where it states, "The Court concluded that Congress could not constitutionally require the states to do either. At the same time, the Court noted that it did not violate the Tenth Amendment for Congress to offer states the choice of regulating an activity according to federal standards or having state law preempted by federal regulation." He said that it is one thing to offer incentives, but it is another thing to demand that the state change its constitution. He reiterated that it falls under original jurisdiction and it is a legitimate dispute that needs to be handled. He referred to the bottom of page 4 in the letter, which reads, "The Department of Interior has not interpreted title VIII of ANILCA to require state implementation, however; it interpreted title VIII to require federal implementation if state law does not grant the subsistence priority to rural residents." He pointed out that those are contradictory statements, because the federal government is demanding a change if Alaska does not implement their title VIII subsistence laws; therefore, he feels that the state has a legitimate Tenth Amendment appeal. He referred to page 5 of the letter, where it states, "It is unclear, however, why the resolution links title to submerged lands to a constitutional challenge to title VIII of ANILCA." He indicated that the reason is that the Submerged Land Act gives title to the land and the fish therein. REPRESENTATIVE COGHILL concluded that the Submerged Land Act shows that the title was transferred at statehood. He stated that the interpretation that Joanne Grace has given is worthy of challenge, but the resolution is based on the fact that there is a challenge. He pointed out that he and Joanne Grace would not agree, and the basis of the resolution is that there is a disagreement within Alaska and with the Congress and the Constitution of the State of Alaska. He noted that the federal constitution and the Constitution of the State of Alaska are in agreement, but disagree with the application of title VIII of ANILCA on subsistence use. Number 2414 BILL HAGAR testified via teleconference from Fairbanks. He stated that he has reviewed Joanne Grace's letter. He pointed out that HCR 2 has a degree of suggestive leadership to the Administration that no matter what the state does there is going to be additional adjudications, which means perhaps the best plan is to go to the top level and adjudicate the state's rights and sovereignty issues to determine what has to be done to eliminate the false adjudications that might take place in the meantime. He stated that Representative Coghill has done a fine job of research and he is very much in support of HCR 2. Number 2347 RALPH SEEKINS, President, Alaska Wildlife Conservation Association, testified via teleconference from Fairbanks. He stated that he has also reviewed Joanne Grace's letter. He indicated that they have done research with their legal counsel and they have decided that it is not an issue of subsistence, but a matter of sovereignty. He referred to two of the questions that Joanne Grace brought up in her letter, which are whether res judicata would apply and whether there would be a statute of limitations. He said, as they understand it, under circumstances where it is a matter of sovereignty there are no statute of limitations and res judicata would not take place. He stated that in United States v. New York & Printz v. United States, in Joanne Grace's letter, there is alot that does not apply to the present situation in Alaska, instead it talks alot about the disposal of radioactive waste, but the language that is important in the case is that a state official cannot act to diminish the domain of a state. He stated that the Governor was wrong when he unilaterally dismissed Alaska v. Babbitt with prejudice, because he did not have the power to bind the people of Alaska to give away their sovereign domain to the federal government. Once the legal question was raised as to who owns the lands underneath the navigable waters in the state of Alaska that legal question should have been taken all the way to the U.S. Supreme Court. In United States v. New York & Printz v. United States it is clear that the U.S. Constitution gives limited power to the federal government, and in Alaska he believes they are trying to expand those limitation beyond what the constitution would provide; that is why it is important that it gets to the courts. MR. SEEKINS continued. He referred to Joanne Grace's letter where she states that she was unable to find a case where the power to control fishing was an essential element of the state's sovereignty. He recommended that she take a look at United States v. Alaska, also known as the Dinkhum Sands case, where the U.S. Supreme Court explains how Alaska became the owner of its submerged lands and how they are sovereign lands. He stated that they know without a doubt that it is an issue that is unresolved; that there are differences of opinion, and before the political issue of subsistence can be solved the legal issue, of where is the line between state and federal power, needs to be solved. They feel that HCR 2 is going down the right path of letting the Governor, the federal government and the people of the state know that the issue of who has the power needs to be determined. DALE BONDURANT testified via teleconference from Kenai. He stated that he is in full support of HCR 2, because the only way that the subsistence issue will be truly settled is by legal findings by the U.S. Supreme Court. Alaska and its citizens have alot at stake, for instance; Alaska state sovereignty, equal footing, police powers, privilege and immunity, equal protection, due process and public trust doctrine responsibilities to the public. The Alaska Constitutional Legal Defense Conservation Fund (ACLDCF) has filed its interveners in the Alaska Legislative Council's lawsuit in Washington, D.C. and they have also filed a "friend of the court brief" on appeal, which they have forwarded to all legislators. They wish to continue to challenge the common use and equal protection clauses of the Constitution of the State of Alaska. He indicated that they appreciate the efforts to protect Alaska's rights and sovereignty. He read from Shapiro v. Thompson, which states, "Congress is without power to enlist the state's cooperation in a joint federal/state program by legislation, which authorizes the state to violate the equal protection clause of the Fourteenth Amendment." Another part reads, "The equal protection clause of the Fourteenth Amendment gives the federal courts no power to impose upon the state there views of what constitutes wise economic and social policy." He pointed out that he considers the subsistence issue to be social policy, which means they have good grounds to challenge the issue and the only place it is going to be settled is in the U.S. Supreme Court. Number 1993 HERMAN FANDEL testified via teleconference from Kenai. He stated that he is in support of HCR 2 and believes that the issue does need to be settled by the U.S. Supreme Court. It is his belief that the state will prevail in a court action in the U.S. Supreme Court. He pointed out that Alaska is being discriminated against and Alaska must be recognized as having equal rights with all of the other states. Alaskans should not even consider changing the Constitution of the State of Alaska when they could be winners in a U.S. Supreme Court decision. Number 1934 DICK BISHOP, Alaska Outdoor Council, stated that the council supports HCR 2 as well as the amendment that Representative Coghill presented which was adopted. The council has long championed the constitutional sovereign right of the state to manage its lands, waters and fish and game on an equal footing with all other states. They also have attempted to add to the effort and get the issue before the U.S. Supreme Court; they have filed "friendly briefs" on Alaska v. Babbitt and the Alaska Legislative Council's lawsuit. He indicated that they do believe it is a fundamental problem that needs to be resolved and won't be unless it reaches the U.S. Supreme Court. He said that one of the suggestions that the council has kicked around, which addresses the issue, is perhaps there should be a lawsuit that says "Yes we'll go along with the federal law as soon as Alaska is guaranteed the rights, to manage its fish and game, that all other states have." He urged the committee to pass the resolution. He also said that they have and do urge the Governor to reconsider what they feel is a counterproductive position of refusing to take the matter to court. The council believes the dropping of Alaska v. Babbitt was a calamity in terms of approaching a resolution of this issue. Number 1763 CHAIRMAN HUDSON stated that the Governor has recently indicated that he plans to go to court on the issue of the submerged lands in Glacier Bay National Park. He wondered if that is relatively the same issue that the committee has before them. MR. BISHOP replied that they are closely related and he is surprised that Joanne Grace did not point out the difficulty that also exists as a result of the conflict between the Alaska Supreme Court ruling in Totemoff v. Alaska and the Ninth Circuit Court of Appeals in Katie John. In Katie John the federal court said that the federal government had an interest in the waters of the Copper River, and therefore, had the authority to manage for subsistence fisheries in that instance, while the Alaska Supreme Court in Totemoff v. Alaska said that because of the Submerged Land Act and its relationship to the Alaska Statehood Act the federal government has no authority over submerged lands in Alaska. Another point that is not mentioned in HCR 2 is that a great deal has been said about the federal government having the authority to manage fish and game on federal lands, because of its authority under the property clause. In Alaska v. Babbitt, Judge Holland said that the state has challenged the authority of the federal government to do that under the property clause, because Congress has not included mention of that authority in the law. What is known about the property clause is that although Congress has broad powers under the property clause it is not self activating. He indicated that Judge Holland couldn't find where Congress had stated that the federal government has the authority on federal public lands to manage fish and game resources, so he thought they just forgot and plugged it in and it went unchallenged. He explained that there is no delegation, by Congress, to the federal agencies of the authority under the property clause to manage fish and game. He added that even Judge Holland couldn't find it. He stated that it is important to carry HCR 2 forward. Number 1505 CHAIRMAN HUDSON called an at-ease at 6:26 p.m. and called that meeting back to order at 6:30 p.m. REPRESENTATIVE WHITAKER made a motion to move HCR 2 as amended with individual recommendation. There being no objection, HCR 2 moved from the House Special Committee on Fisheries. ADJOURNMENT Number 1394 CHAIRMAN HUDSON adjourned the House Special Committee on Fisheries meeting at 6:32 p.m.