HOUSE RESOURCES STANDING COMMITTEE January 22, 1993 8:00 a.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Bill Hudson, Vice Chairman Representative Con Bunde Representative Pat Carney Representative John Davies Representative Joe Green Representative Jeannette James Representative Eldon Mulder Representative David Finkelstein MEMBERS ABSENT None OTHER LEGISLATORS PRESENT Representative Irene Nicholia Representative Cliff Davidson Representative Harley Olberg COMMITTEE CALENDAR Overview of the Alaska Department of Fish and Game WITNESS REGISTER Carl Rosier, Commissioner Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4100 Position Statement: Presented overview of department Ron Somerville, Deputy Commissioner Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4100 Position Statement: Spoke about the department's budget Bob Clasby, Acting Director Division of Commercial Fisheries Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4100 Position Statement: Spoke about the Division's responsibilities Norval Netsch, Director Division of Sport Fish Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4180 Position Statement: Spoke about the Division's responsibilities ACTION NARRATIVE TAPE 93-6, SIDE A Number 000 The House Resources Committee was called to order by Chairman Bill Williams at 8:02 a.m. Members present at the call to order were Representatives Williams, Hudson, Bunde, Carney, Davies, James, and Finkelstein. Members absent at the call were Representatives Green and Mulder. CHAIRMAN BILL WILLIAMS announced Representatives Davidson, Olberg and Nicholia of the House Special Committee on Fisheries were present to hear an overview of the Alaska Department of Fish and Game (ADF&G). He then introduced the Commissioner, Carl Rosier. Number 050 CARL ROSIER, COMMISSIONER, ADF&G, noted most of the ADF&G's division directors were present. He introduced them and briefly described their roles. MR. ROSIER discussed the economic importance of commercial fisheries in the state, which had a value of about $1.2 billion annually. The subsistence economy, he said, involved thousands of Alaskans and consumed 40-45 million pounds of fish and wildlife resources each year. Recreation was a growing industry, and non-consumptive uses of fish and game included activities such as photography and wildlife- watching. Other uses of the resources included trapping, sportfishing and hunting. He said the ADF&G issued about 386,000 sport fishing licenses per year. Non-resident licenses were more numerous in 1992 than resident licenses, bringing in $6.5 million. Hunting licenses in 1992 numbered about 218,000, predominantly to Alaskan residents, accounting for $5.7 million. MR. ROSIER described the responsibilities of the ADF&G in managing and protecting the state's wildlife resources. Another goal was to optimize public use and benefits. Rehabilitation of depressed stocks and damaged habitats was also within the ADF&G's mission, he explained. The ADF&G had been charged with management of a sustained yield principle, as defined by Title 16, and the ADF&G's ability to meet its priorities depended on funding in the face of budget cuts, he added. MR. ROSIER noted protection of the state's management authority was another priority, in the face of encroaching federal agencies into fields that have historically been the responsibility of the state. The ADF&G also had the goal of promoting diversification of Alaska's economy. Number 200 MR. ROSIER told the committee that an important role of the ADF&G was to provide technical research and assistance to the seafood industry. The ADF&G also promoted user-pay philosophies through royalty assessments, he stated. MR. ROSIER said the ADF&G had been striving for improved efficiency and reduction of costs. Personnel costs and structure, in particular, have been reevaluated and streamlined. He addressed the specific restructuring of divisions within the ADF&G, and talked about the role of the ADF&G in terms of oil spill response. MR. ROSIER briefly described the upcoming combining of functions of the Fisheries Rehabilitation, Enhancement and Development (FRED) division. Those functions would be absorbed by other areas of the ADF&G, as the private non- profit sector assumed more of the responsibility of operating hatcheries in the state. He said the ADF&G had been successful in rebuilding the salmon resources through the hatchery programs and improved management. There was a continued need for technological support, he added, which would protect the state's previous investment in hatchery facilities. Number 378 MR. ROSIER referred to the ADF&G's relatively new involvement in mariculture, and described the new industry as a strong growth area, having the potential to expand into many areas of the state. Oysters have been the primary resource involved and, he said, a $9 million seed stock was currently in the water. The mariculture industry had been moving north toward Alaskan waters as pollution became more of a problem in the lower 48 states. The growth of the industry placed demands on the ADF&G, he explained, for more technological and seed stock support. He noted oysters did not have natural reproduction in Alaskan waters because of the colder water temperatures. MR. ROSIER discussed reprioritization of programs within the ADF&G, including a proactive management program. Lands open to hunting and trapping have been diminished, resulting in a more aggressive management approach to the available lands, he explained. Research work had also been reprioritized, he said, with a focus on genetics that can be applied to hatchery programs and in genetic tags, useful in stock separation. Number 400 MR. ROSIER explained some of the challenges in fisheries management on the Yukon and Kuskokwim, and said a strong information base had to be developed to assure protection of the resource. He discussed revenue enhancement and fisheries development as means to economic diversification. He mentioned the potential for a sea cucumber fishery, herring and kelp, and development of a hatchery program at St. George Island. CHAIRMAN WILLIAMS noted Representatives Mulder and Green had joined the meeting. MR. ROSIER continued his overview with discussion of the Yukon Initiative, and hatchery development in the interior, as well as development of the Community Development Quotas (CDQs). The CDQs would open up economic development in depressed communities through fisheries programs. He reported that in its first month, December, 1992, the CDQ program had generated $20 million in revenue for participating communities. MR. ROSIER commented that the ADF&G was looking to expand virtually every sport fishery in the state, because this was increasingly a strong revenue source for the state. Related to this growth has been an increase in the numbers of lodges, particularly in Cook Inlet. Other areas of major emphasis were in the user-pay arena, such as the king salmon stamp program, which was anticipated to bring in an estimated $2.7 million. The program was to support king salmon research, management, and enhancement. There would also be an increase in sport fishing license fees, he noted. Non-consumptive programs to bring in user-pay revenue included a proposed conservation wildlife tag fee. Legislation for that program failed last year, but Mr. Rosier hoped such legislation could be passed during this legislative session. Number 548 MR. ROSIER mentioned the ADF&G's efforts to reach a treaty between the U.S. and Canada regarding fisheries access. This treaty had been a high priority of the ADF&G, he explained. Other important issues included subsistence and commercial fishing in Glacier Bay. He said the ADF&G had been engaged in dialogue with the communities involved in the face of federal legislation. Other impending federal legislation was expected to have an impact on management of Alaska's fish and wildlife, he said. One example was the re-authorization of the Magnuson Act, the Endangered Species Act, Marine Mammals Protection Act, and new legislation on biodiversity. Number 606 MR. ROSIER discussed the funding sources available to the ADF&G. He touched on changes in general fund support, which was decreased about 14% from 1985 to the 1994 fiscal year, in actual dollars. With inflation, he explained this translated to about a 30-40% reduction. For 1993-94, he said the ADF&G was looking at a 5.6% decrease, which resulted in a decrease in the ADF&G's flexibility to react to unanticipated management scenarios. He referred to the coho fishery as an example, where programs have had to be discontinued for lack of funding. TAPE 93-6, SIDE B Number 000 MR. ROSIER addressed the issue of hatchery closures related to the FY 94 budget cuts. Four hatcheries were slated for closure, including Crooked Creek, Big Lake, Klawock, and Deer Mountain. Other hatcheries were slated for full transfer to the private sector, he added. Three facilities were under the reorganization of the two fisheries' divisions, and would be transferred to the Division of Sport Fish. Four remaining facilities would stay in the department, including Snettisham, Crystal Lake, Clear, and a facility near Kotzebue. Eventually, he anticipated more hatcheries would be transferred to the private sector. Number 143 MR. ROSIER commented on commercial fisheries issues related to the Magnuson Act. Shellfish fisheries in the Bering Sea continue to be operated under that act, he explained, and added there had been tremendous growth in that fishery. Regarding groundfish, he said there was an increasing capacity for harvesting those fish. Some larger vessels have switched from groundfish to shellfish, he said, which has increased competition in the Bering Sea. The Board of Fish has been looking into setting pot limits for the current season. He said the Secretary of Commerce found against the Board, citing discrimination against larger vessels. MR. ROSIER told the committee the Division of Commercial Fisheries had redirected funds to the CDQ program and to on- shore/off-shore fisheries. The ADF&G was working with the Department of Community and Regional Affairs on these projects, he said. He believed it would be to the state's benefit for the ADF&G to monitor the programs. He also noted a substantial amount of the Division of Sport Fish's funding into in-season management, as well as to the Division of Boards, going through the implementation of the new subsistence law passed in the 1992 special session. Number 250 RON SOMERVILLE, DEPUTY COMMISSIONER, ADF&G, displayed graphs for the committee, and referred them to hand-outs in their files that showed the ADF&G's fiscal background. The general fund portion of the budget comprised about 46%. In 1985 it made up 68% of the ADF&G's total budget. He described the ADF&G's other revenue sources and how they were used within the ADF&G's budget. He told members the information he referred to in graphs was contained in their bill files. Number 351 REPRESENTATIVE JOE GREEN raised a question about the costs for hatchery operations versus revenues from licensing, and asked if those expenses and revenues balanced out. Number 355 MR. ROSIER replied that revenues and expenses were about even. Number 371 REPRESENTATIVE CON BUNDE expressed a concern with the use of the term "non-consumptive use" in reference to Alaska's wildlife resources. He hoped a more accurate and acceptable term could be found. He referred to a conservation tag program, but noted such programs had failed in other states. He favored the privatization of hatcheries, and asked for clarification on which type of hatchery would remain in state operation. MR. ROSIER said those facilities the state would continue to operate would be directed toward the sport fisheries. He explained the ADF&G's intention was to eventually turn those over to the private non-profit sector also. REPRESENTATIVE BUNDE shared his concerns with allotments and the new king salmon tag. He doubted that program would produce much revenue. CHAIRMAN WILLIAMS asked that given the time constraints of the meeting, members limit their questions to one. Number 423 REPRESENTATIVE CLIFF DAVIDSON noted that 40,000 or more Alaskans relied on fisheries' resources for their livelihoods. He suggested the ADF&G prepare graphics showing the value of fish and game resources in Alaska, compared to that of other states, and what the other states spent to manage those resources compared to what Alaska spent. He suggested such a graph might show how inadequately Alaska funded the management of its fish and game resources. Referring to the state's rush to turn over hatchery programs to the private non-profit sector, he was concerned the state would lose technical and management control of the resources. He noted some of the private non- profits had offered to assume the costs of keeping state technicians on board, but that plan had been rejected. He asked Mr. Rosier to comment on that situation. Number 454 MR. ROSIER acknowledged the state and private sector have maintained a good relationship, and said the private hatcheries should have a strong voice in personnel, operations and standards. REPRESENTATIVE DAVIDSON reiterated his concern that the state might lose its oversight to protect the resources. Number 476 MR. ROSIER stressed that the ADF&G would continue to be a participant in monitoring the programs. He said state fish and game employees would be in the hatcheries in a monitoring and technical advisory capacity, but the state would not be operating the hatcheries. Number 496 REPRESENTATIVE ELDON MULDER asked where funds would be spent from the king salmon stamp program. MR. ROSIER responded that a number of programs statewide would benefit from the program, with the goal of improved information and data bases to support management and enhancement of king salmon. Regarding habitat restoration programs on the Kenai, he said the ADF&G had the funding to operate the programs for this year (1993). Number 518 REPRESENTATIVE IRENE NICHOLIA asked for an explanation of the impact of the merger of the FRED division with the Division of Commercial Fisheries, and its effect on commercial fisheries throughout Alaska. Number 549 MR. ROSIER said there would be no effect on commercial fisheries' functions. He said the basic functions that have been performed by FRED would continue to be retained. Number 565 REPRESENTATIVE JOHN DAVIES requested a written overview of that issue. Regarding the commercial hatcheries, he asked for a definition of the state's regulatory control in such areas as genetics and disease control. MR. ROSIER responded that the ADF&G had the means to regulate those areas, through an extensive review process. Number 579 CHAIRMAN WILLIAMS noted the committee would hold a hearing on Executive Order 86 on January 29. He then asked Mr. Rosier what the legislature could do to facilitate the treaty. He also asked the commissioner to comment on the hatcheries in the Ketchikan area, and how they might affect the treaty. MR. ROSIER, in terms of what the legislature could do, noted fishing groups had been pushing hard for the maintenance of traditional fisheries. Legislative support for those positions was important, he said. Part of the reason for maintaining Crystal Lake and Snettisham, was that those programs were aimed at providing additional fish. Hatchery fish were excluded from the cap, he explained. The recreational fishery, he said, was a major beneficiary of the hatchery production. He said the department was trying to find a balance of programs to support both recreational and commercial fishing. MR. ROSIER said the charter boat industry and traditional Alaskan sports fishermen were increasing the pressure on the fisheries, particularly king salmon stocks. There might not be sufficient resources to give the commercial fishery more king salmon in the short run, he said. The power troll fishery wanted to extend their season, and that issue would be examined by the Board of Fisheries, he added. Number 639 CHAIRMAN WILLIAMS raised the issue of transient king salmon stocks, as that issue related to the impending treaty between the U.S. and Canada. He wished to see the ADF&G assure sufficient numbers of biologists in the field, to help balance the demands by the various fishery interests. Specifically, he was concerned with the King Salmon and Noise Island fisheries, and said these had seen low harvests. Number 667 VICE CHAIRMAN BILL HUDSON commented on the Northern Panel, which met last year on the U.S.-Canada treaty. He suggested the Alaska legislature be included in the representation on that panel. He noted the issue was both complicated and politically charged, and that the lower 48 states had not joined forces with Alaska. REPRESENTATIVE GREEN remarked on the question of the ADF&G's dropping the monitoring of the coho fisheries. He commented on the cyclical nature of catch levels and populations of various species. He asked if there might be any adverse effect on the habitat, specifically on fish eggs that were laid before. MR. ROSIER noted that coho had been a hardy species, but one that fluctuated widely. TAPE 93-7, SIDE A Number 000 MR. ROSIER continued his comments on the coho fishery, remarking on the pressure on the fishery. REPRESENTATIVE GREEN asked Mr. Rosier to comment on the problem of the spruce bark beetle infestation in areas near spawning areas. Specifically, he asked whether the ADF&G had any plans to avoid adverse run-off in those areas when the affected trees die and fall. MR. ROSIER answered that the ADF&G had been involved in that process. CHAIRMAN WILLIAMS then asked how the ADF&G wanted to handle requests for information from legislators. MR. ROSIER replied that Geron Bruce and Ron Somerville were the key legislative liaisons for the ADF&G. Number 063 VICE CHAIR HUDSON said he had a number of questions pertaining to various programs of the ADF&G, which he would present in writing to the ADF&G for their response. Number 114 REPRESENTATIVE BUNDE offered another question for response in writing at a later time. He asked how increased license fees would affect the overall budget. Number 135 ROBERT CLASBY, ACTING DIRECTOR, DIVISION OF COMMERCIAL FISHERIES, ADF&G, told the committee members he had provided them with two documents in their files, including an Executive Summary of a Fisheries Industry Sector Report. He said that document provided good facts and information on the economic past and current conditions of the industry. The other document, he pointed out, was the FY 94 overview of the Division of Commercial Fisheries' budgets and programs. MR. CLASBY briefly described the responsibilities of the division. They were charged, he explained, with the management of the state's subsistence fisheries and all personal use fisheries that occurred in marine waters. The goal of the Division was to manage all the fisheries to optimize production of fisheries resources. Production of sufficient product to meet the demand of both commercial and subsistence users was a primary goal. He listed the various species for which commercial fisheries management existed in the ADF&G. MR. CLASBY said the Division had individual fishery units, which were single management units based on species, gear, location or use. In Southeast, he said, there were 32 different fishery units; in Kodiak there were 60 herring units, and in Cook Inlet, there were 20 different shellfish units. The fisheries were managed through the collection of information, assessment, and identification of goals. The Division then established management plans and in-season management plans based on the anticipated harvest. Dissemination of information was another function of the Division. MR. CLASBY noted there were 24 regional and area offices throughout the state, 80 data collection field camps, and 15 large applied research vessels. He also noted the Division employed 212 permanent full-time staff, 414 seasonal staff, and 16 temporary staff. Number 248 NORVAL NETSCH, DIRECTOR, DIVISION OF SPORT FISHERIES, ADF&G, passed out an updated description of the Division to add to materials in the members' files. The Division's major responsibilities were described in the materials, he explained. Much of the Division's operation was similar to the Division of Commercial Fisheries, he said. The Division worked closely with the other divisions in the ADF&G in administering its programs, he added. One unique aspect of the Division of Sport Fisheries, he commented, was that it was strictly a user-pay program. All funding came from sports fishermen and recreational boaters. Number 288 REPRESENTATIVE BUNDE referred to the mixed stock fisheries in his district, and expressed concern that there must be some changes made there. MR. NETSCH agreed this was a major issue to the Division and the Board of Fisheries, as well as to the public. Number 307 ANNOUNCEMENTS CHAIRMAN WILLIAMS reminded members about a possible tour of the Greens Creek Mine facility. Regarding members' file for bills to be heard in committee, he told members that files would be available at 3 p.m. the afternoon prior to meetings. He also announced the committee would not meet on Monday, January 25. The next meeting would be held on Wednesday, January 27, at 8:00 a.m., with an overview on the Mental Health Lands Trust settlement, by the Department of Natural Resources and the Department of Law. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 9:50 a.m.