HOUSE RESOURCES STANDING COMMITTEE April 19, 1995 8:10 a.m. MEMBERS PRESENT Representative Joe Green, Co-Chairman Representative Bill Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative Pete Kott Representative Irene Nicholia MEMBERS ABSENT Representative Ramona Barnes Representative John Davies Representative Eileen MacLean COMMITTEE CALENDAR Presentation on Major Mining Projects *HB 256: "An Act authorizing the commissioner of fish and game to establish free sport fishing days." HEARD AND HELD (* First Public Hearing) WITNESS REGISTER JERRY BOOTH, Vice President Energy & Minerals Cook Inlet Region, Inc. 2525 C Street Anchorage, AK 99503 POSITION STATEMENT: Introduced Presenters BILL JEFFERS, Chief of Environmental Services Fairbanks Gold Mining Company Fairbanks, AK POSITION STATEMENT: Gave briefing on the Fort Knox Mine CHARLOTTE MACCAY, Manager Environmental Affairs Cominco-Alaska/Red Dog Mine P.O. Box 1230 Kotzebue, AK 99752 Phone: 426-9143 POSITION STATEMENT: Gave briefing on the Red Dog Mine TOM CRAFFORD, Manager Minerals and Coal Cook Inlet Region, Inc. 2525 C Street Anchorage, AK 99503 POSITION STATEMENT: Gave briefing on Wishbone Hill project PAUL VALENTI, Vice President USMX Denver, CO Phone: (303) 985-4665 POSITION STATEMENT: Gave briefing on Illinois Creek Mine STEVE BORELL, Executive Director Alaska Miners Association 501 W. Northern Lights Anchorage, AK 99503 Phone: 276-0347 POSITION STATEMENT: Made general comments on the mining industry BRUCE CAMPBELL, Administrative Assistant Representative Pete Kelly Alaska State Legislature State Capitol, Room 513 Juneau, AK 99801 Phone: 465-2327 POSITION STATEMENT: Prime Sponsor HB 256 JOHN BURKE, Acting Director Sport Fish Division Alaska Department of Fish and Game P.O. Box 25526 Juneau, AK 99802 Phone: 465-4180 POSITION STATEMENT: Supported HB 256 and answered questions regarding HB 256 PREVIOUS ACTION  BILL: HB 256 SHORT TITLE: FREE SPORT FISHING DAYS SPONSOR(S): REPRESENTATIVE(S) KELLY,Austerman JRN-DATE JRN-PG ACTION 03/15/95 742 (H) READ THE FIRST TIME - REFERRAL(S) 03/15/95 742 (H) FISHERIES, RESOURCES, FINANCE 03/29/95 (H) FSH AT 05:00 PM CAPITOL 124 04/05/95 (H) FSH AT 05:00 PM CAPITOL 124 04/05/95 (H) MINUTE(FSH) 04/07/95 1172 (H) FSH RPT 3DP 2NR 04/07/95 1172 (H) DP: G.DAVIS, OGAN, AUSTERMAN 04/07/95 1172 (H) NR: ELTON, MOSES 04/07/95 1172 (H) ZERO FISCAL NOTE (F&G) 04/07/95 1172 (H) REFERRED TO RESOURCES 04/19/95 (H) RES AT 08:00 AM CAPITOL 124 ACTION NARRATIVE TAPE 95-51, SIDE A Number 000 The House Resources Committee was called to order by Co-Chairman Green at 8:10 a.m. Members present at the call to order were Representatives Green, Williams, Ogan, Austerman, and Kott. Members absent were Representatives Barnes, Davies, MacLean, and Nicholia. PRESENTATION ON MAJOR MINING PROJECTS JERRY BOOTH, VICE PRESIDENT, ENERGY & MINERALS, COOK INLET REGION INC. (CIRI), stated four different people will present an overview to give the committee a scope of what is happening in the mining industry in Alaska. Number 058 BILL JEFFERS, CHIEF OF ENVIRONMENTAL SERVICES, FAIRBANKS GOLD MINING COMPANY (FGMC), said the FGMC will do the operating for the Fort Knox Project. He stated the company just received all the necessary permits and the project is under construction. He explained the project is located entirely on state and private land, covering an area of approximately 7,600 acres. The project will process about 36,000 metric tons through a mill, with an equal amount of waste that will be mined every day. Initially, the mine will produce between 300,000 and 350,000 ounces. The mine life is estimated at approximately 12 and one-half years, although there is potential for more. MR. JEFFERS said the FGMC went through a process the state had set up called project team. The team comprised of people from different agencies involved with permitting. He stated the project team method was very productive to permit a mine and his company would highly recommend the method for other projects involving state land. He noted one suggestion he would make is that people who are appointed to the project team on the state side should be familiar with mining and permitting processes. The Fort Knox project permitting process was a three year process. MR. JEFFERS stated approximately 150 people are working on the project currently and by mid-summer there will be 500 people employed. Actual production will begin October 1996 and at that time, there will be approximately 250 permanent employees. Number 113 REPRESENTATIVE ALAN AUSTERMAN asked what the normal process time is for completing the permitting. MR. JEFFERS stated as a comparison, AMAX Gold purchased a project in South America approximately three months after the Fort Knox project was purchased. He said that project has the same engineering design criteria as Fort Knox but that project has been in production since November 1993. The Fort Knox project will not begin production until October 1996. He noted as an American project, the Fort Knox project has been considered by many to be fast-tracked. He observed it gives everyone an idea how the bureaucracy has a choke-hold on resource development in the U.S. CO-CHAIRMAN JOE GREEN asked if there was a comparison which could be made to another American project. MR. JEFFERS replied there are a couple of projects in Nevada which have been in the permitting process for four or five years. REPRESENTATIVE AUSTERMAN asked Mr. Jeffers to explain the team process again. MR. JEFFERS responded the project team comprised of people from the Alaska Department of Fish and Game (ADF&G), the Department of Natural Resources (DNR), and the Department of Environmental Conservation (DEC). REPRESENTATIVE AUSTERMAN wondered if the project team helped speed up the process. MR. JEFFERS replied it did. He said the team did a thorough review, covering all the questions and contingencies needing to be addressed. He stated having a group so clearly focused expedited the entire process. Number 174 CO-CHAIRMAN GREEN noted the Fort Knox project has all its permits in place. He wondered why it was going to take 18 months for the project to go into production. MR. JEFFERS responded the project is very large. He stated the mine will average 36,000 tons per day but will actually have the capacity to do 50,000 tons per day. He said the size of the project and the construction time needed due to Arctic conditions will require 18 months to complete construction. CO-CHAIRMAN GREEN said it is exciting to see the project going forward. CO-CHAIRMAN GREEN noted for the record that Representative NICHOLIA had joined the committee. Number 208 CHARLOTTE MACCAY, MANAGER, ENVIRONMENTAL AFFAIRS, COMINCO- ALASKA/RED DOG MINE, stated the Red Dog mine currently employs 350 people, with 51 percent being shareholders from the NANA Regional Corporation. The mine is processing between 6,000 and 7,000 tons of ore which produces approximately 1,700 tons of concentrate per day. She said at present prices, the mine is still not a profitable endeavor. She noted the price of zinc did go up but now is back down again. She told committee members Cominco did expand to put more concentrate through which is bringing the company closer to the break even point. She pointed out that when prices do rise, the company should do much better. She noted the world stockpiles of zinc metal are decreasing, so prices subsequently should be going up. MS. MACCAY noted although the Red Dog mine was on a similar schedule as the Fort Knox project back when things were easier, the Red Dog is still encountering permitting problems at the federal level. She has been in the renewal process on a permit for six years. There are some state issues associated with that permit dealing with the state criteria for total dissolved solids, which strongly affect the mine's ability to discharge water. She has been working with the DEC for over three years trying to resolve the issue and a strategy is in place, even though it will take another year or two before an actual working solution will be in place, which will allow the mine to discharge the amount of water accumulated behind the tailings dam. To deal with that, Cominco had a tailings dam that was to be built over 30 years. However, all stages had to be built within five years to keep storing the water they were not allowed to discharge. She stated there continues to be a permitting problem both at the state and federal levels and permits can take many years to obtain. MS. MACCAY said the Red Dog mine is doing well and has a 30-35 year life expectancy. CO-CHAIRMAN GREEN wondered which government is contributing the most problems. MS. MACCAY replied the worst problems are coming from the Environmental Protection Agency (EPA) and the second slowest has been the DEC. She noted that ADF&G has been the most helpful. She said the Habitat Division has been the driving force, pushing the DEC and EPA with positive, constructive information. CO-CHAIRMAN GREEN wondered if the holdups involve delays in getting the permit or delays in something which a company is required to do in order to get the permit. MS. MACCAY replied both kinds of delays are involved. She noted the permit she referred to earlier sat for a couple of years, as the EPA wanted an environmental assessment, which was done. After that was done, the permit writer started to research the project. She said in regard to state issues with the mixing zone, a better response is received from the northern office than the Juneau office. She noted the Juneau office is reluctant to move on reclassification of stream issues. Number 293 REPRESENTATIVE AUSTERMAN wondered if the high percentage of hires from the regional corporation is normal. MS. MACCAY stated Cominco is in partnership with the NANA Regional Corporation, who is the landowner for the mine. Part of the agreement is to work toward Native shareholder hire, eventually hoping to reach 100 percent. She noted the current 51 percent is much better than most places. REPRESENTATIVE AUSTERMAN asked how long the mine has been in operation. MS. MACCAY replied the mine has been operating for five years. REPRESENTATIVE AUSTERMAN clarified the goal is to increase the Native shareholder hire to 100 percent. MS. MACCAY said the original goal was to be at 100 percent in about 12 years. She stated there are some positions where there does not seem to be any shareholders looking into the type of education needed to fulfill them, so those positions might be difficult to fill. She noted there is also a turnover issue, as a Native shareholder stays on an average about one and one-half years. She pointed out in many cases, they do come back. CO-CHAIRMAN GREEN asked if Cominco trains its own people or does the company go to where the talent exists. MS. MACCAY replied it depends on the position. She said many positions involve training people on site, others have been trained at training centers in the region, and some involve hiring people already having the experience. She stated entry level positions are Native shareholder positions and those people are trained. CO-CHAIRMAN GREEN clarified there are certain positions requiring finite expertise. He wondered if Cominco has to go outside the state to find people for those positions or is local hire involved. MS. MACCAY said the hire preference is Native shareholders, then in-state and finally out-of-state. Number 342 TOM CRAFFORD, MANAGER, MINERALS AND COAL, CIRI, stated CIRI is one of the Native regional corporations established under the Alaska Native Claims Settlement Act (ANCSA). He said there are seven villages, five groups and one historical village within CIRI. Although chartered under standard Alaskan business corporation laws, CIRI is significantly different in that it has 6,700 Native shareholders and many of the corporation's activities go beyond the standard business practices in providing various types of benefits for shareholders. He noted CIRI is the fifth largest of the Alaska regional corporations, in terms of population. MR. CRAFFORD stated CIRI's principle lines of business include natural resource development, real estate in the Lower 48 and Alaska, broadcast communications in the Lower 48 and oil field services. CIRI owns and manages 524,000 acres of surface estate and over 1.6 million acres of subsurface estate. He said within its natural resources group, CIRI has a mining subsidiary, North Pacific Mining Corporation (NPMC), which is active in a variety of mineral projects throughout the state. MR. CRAFFORD said CIRI's mineral holdings within the state include the Illinois Creek gold and silver deposit, which is located near Galena, Alaska. He stated in addition to Illinois Creek, CIRI has the Johnson River occurrence on the west side of Cook Inlet, which is a gold, copper, and zinc occurrence. CIRI also has the Red Mountain Chrome occurrence near Seldovia. He noted that recent interest has been shown for not only the chrome, but also for the mineral olivine. CIRI is a 10 percent owner in the Beluga Coal Company, which has extensive coal holdings at Beluga on the west side of Cook Inlet. MR. CRAFFORD stated for some time CIRI has been owner of a small portion of lands included in the Wishbone Hill coal project being conducted by Idemitsu Alaska, Inc. He said on April 3, 1995, CIRI signed a letter of intent with Idemitsu to acquire all the assets of the Wishbone Hill coal project. He explained the Wishbone Hill coal project was originally slated for development in 1990. The project has a small to modest reserve of approximately 14 million metric tons of recoverable clean coal. He pointed out the Wishbone Hill coal has the advantage of being very low in sulphur content and has an additional advantage over other Alaskan coals of having a higher heating value. He explained Wishbone Hill coals contain about 11,700 BTUs per pound of coal as opposed to an average of 8,100 BTUs per pound for the Beluga and Healy coals. MR. CRAFFORD said the development of the Wishbone Hill coal project, which was originally slated to go into development in 1990, was delayed in large part to the Mental Health Trust lands dispute. He noted the project was on hold for four years and in 1994, Idemitsu made the strategic decision to sell the project. CIRI's plans for the project at this point are not well formulated. He stated CIRI determined that first and foremost, all the work Idemitsu had done on the Wishbone Hill project needed to be preserved. He pointed out that Idemitsu has eight coal and various surface leases and all their permits are in place required to initiate development on the project, the most important of which is the federal permit to mine under the Surface Mining Control and Reclamation Act. MR. CRAFFORD told committee members if Idemitsu had walked from the project without anyone taking over the project, that permit would have lapsed, as would have some of the other permits in place, and the project would have gone back to square one. He added much of the potential for the 180 jobs the project could produce would have disappeared or been delayed for many years. He stated Idemitsu has over $12 million invested in the Wishbone Hill coal project. Number 440 MR. CRAFFORD said with recent developments on the international coal markets, it is widely anticipated that coal prices will rise substantially this year, perhaps three to four dollars per metric ton. He stressed things are moving in the right direction to foster development of the project. He noted that CIRI itself does not intend to be the operator of the project. However, CIRI has extensive mining experience and connections with mining corporations and will be looking for means to partner with other companies in the development of the project. CIRI hopes to see the Wishbone Hill coal project in production in the very near future. CO-CHAIRMAN GREEN asked if the projected four dollar increase per metric ton is for the quality type coal Mr. Crafford was referring to or coal across the board. MR. CRAFFORD replied that projection is for international steam coal prices in general. He noted coal is a very different market than other commodities--futures are not traded in coal because each coal is different from every other coal. He said that projection is in the general range for steam coals. CO-CHAIRMAN GREEN recalled Mr. Crafford had mentioned a 3,000 BTU per pound higher heating value in Wishbone Hill coal. He asked if that coal also involves low sulphur. MR. CRAFFORD said the coal has a somewhat higher sulphur content than the Healy or Beluga coals but to make a comparison, one has to calculate what the sulphur content is per BTU. He stated the Healy and Beluga coals are about 25 percent water, which is why the heating value is so much less. Number 476 REPRESENTATIVE SCOTT OGAN stated he was excited that CIRI had made a commitment to the Wishbone Hill project. He noted an area of great controversy is the coal car train set which received a capital allocation to the Alaska Railroad. He asked if it would be prudent to retain the money where it is now and also asked if there is an international market for this coal requiring the use of the train set. MR. CRAFFORD replied one of the logical, if not the most logical, markets for the coal would be the Asian Pacific Rim economies which are seeing rapidly increasing demands for electrical power and clean coal. He thought the anticipated market for the Wishbone Hill coal would be a foreign market and rail haulage would be required to get the coal to that market. Therefore, the retention of the appropriation for the train set could only help the prospects for development of the Wishbone Hill project. REPRESENTATIVE OGAN questioned if the Wishbone Hill project looks like such a good deal, why did the Japanese firm sell. MR. CRAFFORD stated he could not speak to Idemitsu's reasons for getting out of the project at this time. He speculated Idemitsu waited four years and after spending that much time waiting, a sour attitude may have been developed, particularly in a foreign country. CO-CHAIRMAN GREEN said in World War II there was a lot made of the fact that the oriental mind set was a long-range plan which was never deviated from. He noted the Mental Health Trust land uncertainty and the sudden change in the potential price of coal may have been things not in Idemitsu's decision making. MR. CRAFFORD stated the decision to get out of the project was made approximately one year ago. He reiterated that CIRI has a letter of intent with Idemitsu and hopes to conclude a sales agreement by June. REPRESENTATIVE OGAN said he was very encouraged by CIRI's plans. He told Mr. Crafford if there is anything he can do to help to let him know. Number 534 PAUL VALENTI, VICE PRESIDENT OF OPERATIONS, USMX, said the Illinois Creek property is located in west central Alaska. The property is approximately 320 miles northwest of Anchorage, about the same distance west of Fairbanks, and 25 miles east of the Yukon River. He told committee members the property is on state leased land. There are two parcels totaling approximately 62,000 acres that are wholly owned by North Pacific Mining Company, a subsidiary of CIRI. He explained USMX will be the operator of the property. MR. VALENTI stated USMX has developed five open pit gold heap leach operations since 1987 in the Lower 48 and feels well qualified to undertake the challenges of Illinois Creek. He said the Illinois Creek property was discovered in 1980 by Anaconda who explored the property for five years and then withdrew from the minerals business. The property was subsequently explored by Goldmore North Pacific Mining Company and Echo Bay Mining. USMX got started on the property in August 1994. He noted Anaconda spent a lot of money providing infrastructure to the property, developing living facilities for exploration personnel and a large airstrip to handle big aircraft. He stressed that infrastructure has enabled subsequent developers to explore the property very efficiently. MR. VALENTI said as a result of the drilling and engineering done in more recent times, USMX has developed a reserve of approximately 4.5 million tons of ore containing 300,000 ounces of gold and (indiscernible) ounces of silver. He exhibited photographs showing the deposit and a map indicating the engineering plan for the development of facilities for the property. The deposit will be mined over a five year period and the mining will be conducted on a seasonal basis--six months out of the year--using conventional open pit methods. He stated gold and silver will be recovered by the heap leach process. Ore will be transported from the pit to the heap leach pad. The heap will be built behind an engineered dam. The pad will be doubly synthetic lined over compacted sub- base. Gold will be recovered by (indiscernible) sprinklings dilute sodium cyanide solution which will percolate through the rock, be collected behind the dam above the synthetic liner and pumped to a recovery plant for extracting the gold and silver. MR. VALENTI stated the wastes will be stored and ultimately reclaimed adjacent to the pit itself. He said USMX is going through the engineering process currently and is placing special emphasis on designing both mining and processing facilities so there will be no impact or detriment to ground water surface water quality. He noted the (indiscernible) operations will outlast mining by two or three years. USMX will need that period of time to continue to recover gold and silver from the heaps and will need additional time to rinse out the ore and detoxify the solution so the facility can be closed in a proper manner. He explained USMX will be reclaiming the mine concurrently as they operate. He added that in 1992, USMX received an award from the state of Nevada for reclamation efforts at its Green Spring Mine and will receive another award from the state of Utah for reclamation work done at its Gold Strike Mine in Southwest Utah. Number 607 MR. VALENTI told committee members the Illinois Creek project will employ approximately 100 people. Many of the jobs will be seasonal since mining will only occur during the six month summer season. USMX will attempt to process throughout the year and plans to employ 30-40 people during the winter months. He stated last week, a group representing USMX toured villages along the river and held six public meetings in three days. The attendance at the meetings was good and people expressed interest in the jobs which will be available to them. MR. VALENTI said USMX is currently going through the permit process and like Fairbanks Gold, USMX is also using a project agency team to facilitate the permitting process. The team is being led by the DNR. USMX hopes to achieve its permits in approximately one year. He stated if that is possible and if certain logistical issues can be resolved with transporting equipment to the site, production may begin by 1996. CO-CHAIRMAN GREEN asked if USMX will be flying the equipment in and flying the gold and silver out rather than trying to connect by a road system. MR. VALENTI replied USMX is currently reviewing two alternatives for transporting big equipment to the site. The preferred situation would be to fly everything in but there is difficulty in fitting some of the equipment into a C-130. USMX is looking at the possibility of using a larger aircraft. He said the other alternative is to transport equipment up and down the Yukon River by barge to a landing site and bring things into the mining site by winter trail. CO-CHAIRMAN GREEN asked what USMX uses to detoxify the wastes. MR. VALENTI responded when USMX is finished rinsing the heaps, peroxide will be used to destroy the cyanide. Number 638 REPRESENTATIVE AUSTERMAN (indiscernible). MR. VALENTI said after the heap is rinsed out, USMX will recontour, cover it with topsoil, and revegetate. REPRESENTATIVE AUSTERMAN clarified a big pit will remain. MR. VALENTI replied there would be a big pit remaining. He said the pit is approximately 5,000 feet long by 500 feet wide. He reiterated the wastes will be stockpiled as mining is ongoing. REPRESENTATIVE AUSTERMAN asked if the pit could be revegetated. MR. VALENTI stated USMX will revegetate the wastes, reclaim all of the roads, and revegetate the roads but there is nothing which can be done with the pit except ensure there is no water remaining. Number 660 STEVE BORELL, EXECUTIVE DIRECTOR, ALASKA MINERS ASSOCIATION, said much of the encouragement and excitement the mining industry has been given came from three bills that have gone through the committee. He stated this is the most exciting time for the minerals industry seen since the early part of the century. He noted many companies are re-looking at Alaska. In addition to the projects just described, another project in Representative Nicholia's district is being constructed currently. It will be a small high grade underground gold mine. TAPE 95-51, SIDE B Number 000 MR. BORELL stated in the Fairbanks district this winter there was some drilling going on in the cold weather and it is hopeful that will convince companies they can also explore during the winter months. He noted another bill, HB 197, will not make or break a project but provides one more encouragement for mineral companies. He said there still is a major perception throughout the industry that Alaska is a bad place to do business and Alaska is all federal land. He pointed out that trying to convince the industry...the experience of Idemitsu Kosan, with the Wishbone Hill project, was a bad piece of press for Alaska. MR. BORELL passed out an article on the success of airborne geophysical mapping (may be found in the House Resources Committee Room, Capitol Room 124, and after adjournment of the second session of the Nineteenth Alaska State Legislature, in the Legislative Reference Library). He pointed out as of March 8, 1995, a total of 80.81 square miles of mining claims and upland prospecting sites were staked in the Fairbanks mining district. He said the excitement that has caused is quite incredible. He noted the cost of the Fairbanks airborne geophysical work was $365,000 and more than that has already been spent by industry, staking claims and doing some initial drilling. He added one important aspect is that this has been close to the infrastructure, whereas some of the others had not been and companies, especially the Fairbanks district...they have watched the Fort Knox go into construction...a lot of things are happening in a positive way to encourage the industry. Number 102 MR. BORELL showed photos of gold mined last year. One of the pictures showed a 41 ounce gold nugget mined in 1994 on Nolan Creek. He stated placer mining continues to be adversely affected by regulations. He felt the influx of major companies and the strength they will bring to resource issues is a real positive. He noted the Governor's budget has only $100,000 budgeted for airborne geophysical mapping. He said because of the amount of money it takes to mobilize for the program, a minimum of $600,000 to $700,000 is needed. He stressed if $100,000 is the final number, the Division of Geological and Geophysical Surveys will have to hold the project until next year. MR. BORELL noted several additional areas have been identified for mapping, including nine different areas throughout the Mat-Su borough. He stressed there are many targets in the state that are very prospective and meet the criteria of being near the infrastructure. He stated the mining opportunities in the state are great. He felt there is a lot more that mining can do for the economy of the state than what is being seen currently. Number 164 REPRESENTATIVE IRENE NICHOLIA asked where Eureka pit is located. MR. BORELL stated Eureka pit is the name of the pit at Nolan Creek, which is right outside Coldfoot. REPRESENTATIVE NICHOLIA questioned what the industry's relationship is with the Division of Habitat. MR. BORELL stated many experiences have been very positive and noted there are very high quality professionals in the Fairbanks office, which is not necessarily indicative of the entire habitat division. He stressed the people in the Fairbanks office should remain because all of the placer permits have to be evaluated for Title 16. He noted ADF&G has veto power if any anadromous fish stream is to be affected. The problem the industry has seen with the habitat division is historically there has been a reaching for additional power and an attempt to take authority away from land managers and the DNR, which has manifested itself in the area plans. He gave examples. Number 222 REPRESENTATIVE NICHOLIA asked if the Fairbanks office is closed, will the closing have a detrimental impact on mining. MR. BORELL responded it would. He said what is left open or what is closed is a management decision of the Administration. He would very much encourage them not to close the Fairbanks office. He felt there were other places and positions that could be eliminated. CO-CHAIRMAN GREEN thanked everyone for the presentation. He said the information the committee heard was quite encouraging. He felt perhaps the industry is gaining a little confidence in Alaska's government and he hoped there was something the legislature could do to further strengthen that confidence. REPRESENTATIVE OGAN stated he is very excited about possible exploration in his district because there is a lot of potential there. He said he is equally excited about the fact that many rural areas are beginning to experience economic development. HB 256 - FREE SPORT FISHING DAYS Number 262 BRUCE CAMPBELL, ADMINISTRATIVE ASSISTANT TO REPRESENTATIVE PETE KELLY, PRIME SPONSOR, said HB 256 allows the commissioner of ADF&G to select one or two days on which an individual can go fishing without being required to have a fishing license or tag. He stated HB 256 means that someone could, in conjunction with Fishing Is Fun Days or other promotional activities for fishing, take the kids along and the adult would not have to have a license. This would provide the opportunity to determine if the kids enjoy fishing. He noted HB 256 is supported by a number of sport fishing groups around the state. He urged the committee's support for HB 256. REPRESENTATIVE PETE KOTT felt there should be a substantial fiscal note attached because revenue will be lost. He noted there is a zero fiscal note attached. Number 299 JOHN BURKE, ACTING DIRECTOR, SPORT FISH DIVISION, ADF&G, said the department supports HB 256. He stated free fishing days offer people, who do not ordinarily fish, the opportunity to experience fishing without having to buy a license. He noted a free fishing day, in conjunction with National Fishing Week activities or winter fishing carnivals, can bring people into recreational fishing. He explained free fishing days are used as a centerpiece for the department's aquatic education activities, which the department sponsors in schools. MR. BURKE stressed education depends a lot on motivation. Fishing for many children in Alaska is a tremendous motivator. He felt any type of educational activity built around something kids like, they do well at. He said the department uses fishing as a motivator to teach people conservation, angling ethics, and sometimes spin-off activities such as sciences and math. MR. BURKE said there may be some initial loss of license or king salmon stamp sales but ultimately sales will be on the plus side. Over the long term, there will be more recreation fishers and at that point, there will be more license sales. He stated the only possible negative aspect of HB 256 is if the free fishing day(s) turned into a king salmon derby during the height of king salmon season where people would not fish any other day except for the one free day. He felt that would not happen. MR. BURKE showed an aquatic education handbook developed by the department which gets distributed in schools. He said the department also runs a pathways to fishing clinic often at the same time. Mentors are distributed around stations and people pass through the stations with about ten minutes per station. People are taught how to fish, how to tie knots, shown where the fish may be, etc. He showed the committee several textbooks used in the school systems. He also described several educational tools used. He showed several pictures of family fishing days which are presently held throughout the state. Number 392 REPRESENTATIVE KOTT recalled Mr. Burke mentioned that having free fishing days would bring families together and provide an outing at no cost. He thought children do not currently pay for licenses. MR. BURKE said that is correct. Children get a free license. REPRESENTATIVE KOTT felt one of the problems with having a free fishing day for parents who do not ordinarily fish is that those people may not be familiar with regulations or habitat and could do more damage than good. He asked when the department is proposing to provide these days of free fishing. MR. BURKE replied National Fishing Week occurs every year and large celebrations are held throughout the state. He said the free fishing day(s) would occur during National Fishing Week as a centerpiece for those activities. He stated the activities are largely for children but the department has found through the pathways to fishing program, many people going through the program have never fished before. REPRESENTATIVE KOTT said his question is when specifically would the department plan to provide the free fishing days. He asked would the days be together or would there be two separate days. MR. BURKE replied the free fishing days would be at the discretion of the commissioner. He said National Fishing Week is in June. He was not sure about the time for a winter free fishing day. He felt the department would probably try to promote some unified day enabling people to become acquainted with winter fishing. He stressed HB 256 does not mandate any free fishing days. REPRESENTATIVE KOTT asked if there were other states who have similar free fishing days. MR. BURKE replied 44 states have free fishing days in conjunction with National Fishing Week activities. REPRESENTATIVE KOTT questioned why the state would want to provide the opportunity of free fishing days to nonresidents. MR. BURKE stated it would be impossible to enforce resident versus nonresident. Number 455 REPRESENTATIVE KOTT said in his fishing experience, he would guess that 60 percent of the fishers are nonresidents and they usually are the people violating some provision of law regarding fish and game. MR. BURKE stated it would be highly unlikely a nonresident, who came to the state to fish, would fish on one day only. He felt one free fishing day probably would not preclude nonresidents from buying a license. He reiterated if there is abuse, HB 256 does not mandate a free fishing day. REPRESENTATIVE KOTT felt it would be very difficult to determine if abuse was ongoing. REPRESENTATIVE NICHOLIA asked what the impacts of free fishing days would have on the Kenai River and the Copper River. She noted the declining runs of king salmon on the Yukon River and the Tanana River. She wondered if streams having low returns would be off limits during the free fishing days. MR. BURKE replied the streams with low returns would not be off limits. He said he did not know what the impact of free fishing days would be on the Kenai River. He stated free fishing days would take place at best during the king salmon fishery, not during the sockeye salmon fishery. He noted the king salmon fishery is fairly well controlled, as in order to do it, a person has to have a lot invested. He did not feel free fishing days would bring any more people than the number there now, because people fishing on the Kenai River now already have the gear required. He pointed out in regard to the Yukon and Copper Rivers, those places are fairly difficult to get to and he did not feel large groups of people would go for one specific day of fishing. He did not think free fishing days would affect those areas. Number 510 REPRESENTATIVE NICHOLIA noted people are very concerned about erosion on the banks of the Kenai River. She asked if HB 256 would have an impact on that problem. MR. BURKE replied no. He said the king salmon fishery takes place almost totally from boats. The erosion on the banks is primarily concerned with the intensive sockeye fishery occurring later in the season than when the free fishing day would occur. He stressed it is a matter of timing. REPRESENTATIVE OGAN asked what the date is for National Fishing Week. MR. BURKE replied June 6-12. REPRESENTATIVE OGAN expressed concern about the free fishing days because in his area there is a big problem with king salmon. He said the fishery is heavily fished by road access. He wondered if the department is projecting a lot of fish being caught during the free fishing days. MR. BURKE stated someone who is clearly a king salmon fisherman would be fishing anyway and have a tag. He said if the free fishing day ended up being a derby day, the department would either have to change the date and make the day earlier, or perhaps not have the free fishing day at all. He pointed out he does not know any king salmon fishermen who want to go fishing just once a year but perhaps they might take their family on the free fishing day. Number 550 CO-CHAIRMAN WILLIAMS noted there was no quorum present. He said the state has a sport fishery which is very well advertised and there are many problems with that fishery now. MR. CAMPBELL stated the sponsor's goal is not to increase problems but rather provide a mechanism for educating people about the problems. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Williams adjourned the meeting at 9:30 a.m.