HOUSE RESOURCES COMMITTEE April 21, 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 John Davies Representative Pete Kott Representative Irene Nicholia MEMBERS ABSENT Representative Ramona Barnes Representative Eileen MacLean COMMITTEE CALENDAR Confirmation Hearing: Frank Rue, Commissioner, Alaska Department of Fish and Game NO ACTION TAKEN WITNESS REGISTER FRANK RUE, Commissioner Designee Alaska Department of Fish and Game P.O. Box 25526 Juneau, AK 99802 Phone: 465-6141 POSITION STATEMENT: Answered questions regarding his confirmation ACTION NARRATIVE TAPE 95-52, SIDE A Number 000 The House Resources Committee was called to order by Co-Chairman Bill Williams at 8:10 a.m. Members present at the call to order were Williams, Green, Ogan, Austerman, and Kott. Members absent were Representatives Barnes, Davies, MacLean, and Nicholia. CO-CHAIRMAN BILL WILLIAMS announced the committee would hear from Frank Rue, Commissioner Designee, Alaska Department of Fish and Game (ADF&G). FRANK RUE, COMMISSIONER DESIGNEE, ADF&G, stated he believes strongly in the mission of the department which is to manage, protect, maintain, and improve fish and wildlife and their habitats on a sustained yield principle for the benefit of people. He said he will gauge his own actions and the actions of the staff on that principle. His experience includes being Director of the Division of Habitat with the ADF&G for the past seven years. He told committee members the management principle he brought to that division and one he will bring to the department is one of respecting employees and giving them a lot of responsibility. He felt the department has a strong group of professionals who know their business and do a good job, if given the responsibility and tools to do that job. He added that the best decisions on the various fish and wildlife resource issues are made in the field. MR. RUE stated the other critical issue for the department is communication, not only with the public but also between divisions, and within divisions, and between areas. He felt everyone will do their job better as they manage stocks for example, where fish move through the state up rivers between regional jurisdictions, if people are communicating between regions and between staff. Number 088 MR. RUE said the department needs to work with a tremendous number of interests including subsistence users, sportsmen, commercial users, etc., to find solutions. He stated the department is at a crossroads on a number of issues and is at a time when it could become quite polarized on issues such as predator control, subsistence, fish allocations, etc. He felt the department can avoid having those issues become so polarized that the state finds itself in a very difficult, long period of poor management and confusion which will damage both the resources and the people. He pointed out there is a need to find solutions, and communicate with people and different interest groups to find a common ground where Alaskans can live together. MR. RUE stated the other fundamental philosophy he will bring is one of a willingness to work with the legislature and public and to be very open. He felt it was important for him to give the legislature, the Governor, and the Administration the best possible information about the resources and department, so the public and legislature knows what the department is doing, how the department is doing it, and what it costs to do it. He reiterated how important the fish and wildlife resources are to the state. He stressed he would take on the commissioner's job with a great sense of humility. He noted the commissioner's position is a huge job and is important to many people. He asked that the legislature and he develop a relationship over the next four years, which allows both to do the very best job for the resources and people, given the fiscal situation the state will be in and the political situation the state will be in with federal management. Number 149 REPRESENTATIVE JOE GREEN asked Mr. Rue what his role and the plan for his role will be in regard to the subsistence issue. MR. RUE replied the Governor announced he will try to determine if the different interests are willing to get together and determine if they can find a solution they can live with. He shares the Governor's belief that Alaskans can solve the problem better than people from outside the state. He hoped everyone can see their way in finding a compromise and agreement on the issue. He said his role will be primarily of one supporting the effort. If people get hung up because of a lack of information, he can provide information. He stated he can also help by reacting to different management schemes in terms of their practicality. He added if he can help mediate as the process moves on, he will want to do that. CO-CHAIRMAN GREEN questioned Mr. Rue if he has any opinions about the Ninth Circuit Court of Appeals rendering the day before. He wondered if that decision clouds the issue of trying to solve the subsistence problem within the state. MR. RUE recalled that the Governor said it is both a state and federal law and solutions are needed for both. Therefore, Alaska's Congressional delegation will have to be involved also. (Representative DAVIES and NICHOLIA joined the committee.) CO-CHAIRMAN GREEN said normally state ownership exists in navigable waterways and now the federal government, in this case, is saying that is correct but not in Alaska. MR. RUE said he was not sure whether the reserve water rights gives the federal government jurisdiction over fish. He thought the concept of reserve water rights has been there for any reserve, whether it is a park or wildlife refuge. He said that principle was established to ensure there was enough water to support the refuge. He did not think the principle was ever intended to change the state's rights as owners of the beds of navigable water bodies. He thought the Ninth Circuit said the federal government has jurisdiction over fish but he is not sure it said the federal government has jurisdiction over the beds of a river. CO-CHAIRMAN GREEN said his concern is that if the state is trying to resolve the issue among Alaskans and the federal government keeps saying they are going to do something different regardless what Alaskans do to resolve the issue, the federal government's possible actions may cloud the issue and possibly handcuff the commissioner. Number 235 MR. RUE stated the Governor has said he will appeal the decision. He pointed out the Congressional delegation has said if Alaskans come to them with a solution they can live with and can support, the delegation will make sure the federal laws track with that solution. He felt the subsistence issue is still in the state's hands. He said the state has a delegation in Washington that has the ability to achieve anything Alaskans agree to. He thought the court case will make the system of managing fish very difficult, if it is carried out, because there will be a very confused management system, as well as litigation constantly because reserve water rights will have to be exerted on a case-by-case basis around the state. Each of those reservations will be litigated if there is another interested party feeling they are not being served by it. REPRESENTATIVE JOHN DAVIES asked Mr. Rue's views on how the state might resolve the controversy over intensive game management issues and what role he plans to take. MR. RUE responded his belief is there is a place for predator control as a management tool. The question is where, at what cost, and for what benefit. He noted the Governor has outlined three good principles on when he would support predator control: Where it is scientifically defensible; where there is broad public acceptance; and where it is cost effective. He felt this issue is helped with information. He thought the ADF&G, as a wildlife management agency, needs to begin educating the public and working with the public to explain where predator control and intensive management makes sense and listen to them to determine where they believe it is needed. MR. RUE also felt intensive management is an issue bigger than just one small region. He did not think the issue could be resolved satisfactorily if intensive management is discussed for just a small part of the state. Intensive management is something too many Alaskans care about. Therefore, a dialogue and education process with Alaskans is needed. He noted the department has done polls in the past which show very strong opinions on both sides of the issue. Close to a majority of Alaskans think predator control or intensive management may be a good idea. However, it is not a strongly held belief. He said there is a large segment of Alaskans who think intensive management may be a good idea but they would only support it if they felt it was worth doing and was cost effective. REPRESENTATIVE DAVIES asked Mr. Rue if he sees the department fostering that discussion. MR. RUE said he did not see an alternative. He stated the ADF&G is the wildlife management agency for the state and it is the department's responsibility, as professional wildlife managers, to work with the Board of Game to determine when predator control should or should not happen. He noted the legislature has set a broad policy through the intensive management bill but added that the bill is not real specific. In terms of how that policy is implemented, he feels the Board of Game and the department need to be the focus of that debate. Number 338 CO-CHAIRMAN GREEN thought perhaps the department was thinking about doing a statewide, expensive survey. He recalled Mr. Rue said there is a need to get a consensus but also heard him say the department is the management group. He wondered if the department is going to take a consensus view through the poll to see what is desirable or is the department going to manage by technical statistics. MR. RUE responded as the professional wildlife management agency that has to implement the programs, the department, along with the Board of Game ought to be initiating the debate about the specifics about how, where, and when to do intensive management. He said no decision has been made as to how to accomplish that. The department has discussed doing a deliberative poll, which is a poll where information is given to people so they learn about the issue and then they are asked questions. He noted anything the department might do will be expensive but doing nothing will also be expensive. MR. RUE stated he would rather spend money up-front, educating the public about the science of predator control, listening to the public who have heard from various people on the issue and have an opinion about the issue, and then have them help guide the department on when, where, and how to do predator control. He felt that was a more durable solution, and will allow the department to carry out a policy over time which will last. CO-CHAIRMAN GREEN observed most polls can be skewed depending on the survey group. He wondered who would be surveyed. He expressed concern about who the survey is sent to, who responds, and what those responding represent. MR. RUE stated a survey is not something the department has decided to do. He agreed a poll can be manipulated. If the department does something like a poll, the poll would need to be done in cooperation with the Board of Game and involve lots of people and a broad set of interest groups. He said the survey would have to involve a fair set of questions. CO-CHAIRMAN GREEN clarified a survey would involve a broad spectrum of people and would not involve only special interest groups. MR. RUE said that is correct. Number 406 REPRESENTATIVE PETE KOTT recalled when Mr. Rue was appointed commissioner of the ADF&G, there was at least one group that came out in opposition to his appointment. He asked Mr. Rue if he is aware of any interest groups opposed to his appointment. MR. RUE replied he did not know of any. REPRESENTATIVE KOTT noted he had a bill on the Senate floor the day before--HB 169, a mining bill. He said the bill had gone through its last committee of referral on April 10. He stated the bill was pulled from the Senate floor because the fiscal note was not submitted until late in the day. The minority leader in the Senate had a copy of the fiscal note yet he, as prime sponsor, did not have a copy of it. He pointed out that is in violation of AS 24.08. He wondered what Mr. Rue's policy is within the department on the timely preparation of fiscal notes. MR. RUE stated the general policy is to get fiscal notes completed within the limits of the law. He said it is to everyone's benefit to get the fiscal notes in front of everyone throughout the process. MR. KOTT said the limit is five days and one of the requirements is to provide the prime sponsor a copy of the fiscal note. He wondered why someone on the Senate floor had a copy of the fiscal note and he did not. MR. RUE replied he would have to look into what happened. Number 441 REPRESENTATIVE IRENE NICHOLIA stated there have been many fishery problems on the Yukon River. She said at one time, the fishermen on the upper Yukon were fighting with the fishermen on the lower Yukon. She pointed out that the most recent administration in fisheries was able to bring those groups together and they were able to build a consensus on fishery issues. She asked Mr. Rue if he plans to carry on that process. She also questioned if those groups will still have a voice in the ADF&G issues. MR. RUE responded he does plan to continue that process as it is a good idea which has worked well. He said he will encourage department employees to work with them as the resource moves up the river. He noted another change made was to have a manager manage the fishery from the bottom of the river to the top, so the resource is not handed off between regions. He stated he also wants to make sure that the department uses all the good and helpful information when managing the fisheries. There have been complaints the department often uses technology instead of talking to the people who may be fishing. REPRESENTATIVE ALAN AUSTERMAN noted that all departments are going to be in a tight budget crunch. He said given the current scenario on the budget, the ADF&G will be looking at a $1.5 million to $2 million cut to its budget. He asked Mr. Rue how he will handle that cut in regard to the overall management of the resources. He stated one of the concerns always talked about is that most agencies are top heavy in management and the cuts usually are made down in research, and the lower echelon of the crew. MR. RUE noted the ADF&G has gone from nine divisions to six, one division has no deputy director and another division has two professionals at headquarters with no support staff. He felt the department has a lean operation. He said his priority as the habitat director was to keep money in the field. If the habitat division headquarters office is looked at, there is a director, a deputy director, some clerical help, an administrative assistant and a part-time biologist. He noted the division has taken a 23 percent budget cut. MR. RUE said as those cuts were taken over the past four years, his priority was to keep the headquarters office as lean as possible and keep the money at the biologists level. He stressed that would be his general philosophy now. He stated he cannot tell the committee how the department will specifically take a particular level of budget cut. He pointed out a general fund cut will fall heavily on the commercial fisheries division because that division has 75 percent of the department's general funds. He noted a RIP (retirement incentive program) bill would help in that area because as the department consolidated two divisions into one, there are a number of employees who have been there a long time who have a long tenure and might retire with an incentive, allowing the department to reconfigure that division more efficiently. CO-CHAIRMAN WILLIAMS said the Forest Practices Act (FPA) requires a 66-foot buffer zone on private land. He noted some ADF&G biologists have suggested increasing this requirement to 100 feet or even 300 feet. He asked Mr. Rue if he believes that would be appropriate and if so, is his opinion based on verifiable data indicating a significant gain in salmon habitat protection. MR. RUE responded he does not know where the department has proposed changing the law to 100 feet or 300 feet, as that is the standard on public lands. He noted he was involved heavily in negotiating the riparian standard and developing the standard of 66 feet for private land. He said 66 feet was a compromise between the protection of the public resource (fish) and private land. Science would show that the 66-foot buffer zone will not give all the fish protection needed. On private lands, the philosophy behind the 66 feet was that it is private land and therefore, it is the responsibility of the private landowner to protect a public resource and was perhaps lower than public lands, where there is a higher standard of protecting the public resources. MR. RUE stated the U.S. Forest Service just finished a study of the Tongass National Forest which basically says on forest lands, not enough is being done to protect the fish resources, particularly in the headwater streams, and that 100 feet is not enough on public lands if there is a desire to maintain full productivity of those fish streams. He said science would say that if the overwhelming interest is to protect fish, the buffer zone would be larger on private lands. MR. RUE noted that was not the overwhelming interest of private lands. Rather, the desire was to determine a compromise, acceptable to private landowners which still gave significant protection to fish. He explained research shows that 95 percent of the large woody debris, which is one of the main components for fish habitat protection, comes from 66 feet. Therefore, a lot of protection is coming from the 66 feet, particularly on average streams. Number 568 CO-CHAIRMAN WILLIAMS clarified Mr. Rue has scientific data to backup the fact that the 66-foot zone will protect habitat. MR. RUE replied yes. CO-CHAIRMAN WILLIAMS said in a letter from the Habitat Division to the Kodiak Island Borough dated January 25, 1995, Mr. Rue's department suggested a minimum buffer of 100 feet, with larger buffers where appropriate. He stated that is nothing new but expressed concern that the letter also suggested that standard should be applied to waters containing resident fish populations, as well as anadromous fish streams. He felt that would seem to greatly expand the application of buffer zones and result in what could be a significant impact on property use and value. He asked Mr. Rue to comment on his views in that regard, including how he sees such a move affecting economic development and the personal use of private property. MR. RUE asked if the recommendation was for private land or the borough. CO-CHAIRMAN WILLIAMS replied private land...the borough. MR. RUE stated the reason for the larger buffer on public lands was because wildlife was also being dealt with. He said on private lands, the FPA made no provision, except voluntary, for wildlife. Therefore, there is no requirement for private landowners to protect wildlife habitat on private lands. On public lands, there is a higher standard because wildlife is a publicly owned resource and it was felt that wildlife is important to the public. Therefore, there is a 100 foot to 300 foot management zone on state lands south of the Alaska range. MR. RUE felt that maintaining the quality of the state's fish habitat is essential to the continued health of the state's commercial, sport and subsistence fisheries and wildlife use. He said those are tremendous economic endeavors for people. He noted a Japanese mariculturist once said if his country had a natural factory producing fish like Alaska does, the country would make sure the factory lasted forever. He said many Alaskans take it for granted that the state has a tremendous factory pumping out fish for people. He stressed it has been very hard to protect that. The department has been criticized heavily for trying to maintain the health of the streams. He pointed out that maintenance has a strong economic benefit. CO-CHAIRMAN WILLIAMS asked Mr. Rue to respond to the concern regarding the resident fish populations. MR. RUE said he was not sure the letter referred to private land. If it did, on private lands there is no requirement for buffers on resident fish habitat. Number 617 CO-CHAIRMAN GREEN noted the committee recently had the larger mining operations in Alaska give an overview of their operations in the state. He said one of the people testifying, quoting from the minutes, said in regard to the Red Dog Mine, "in regard to state issues with the mixing zone, a better response is received from the northern office than the Juneau office. The Juneau office is reluctant to move on reclassification of stream issues." He wondered why there would be different response times in different offices and why the Juneau office would be so much more reluctant than the Northern office. He also wondered why the permits are taking three to five years to get. MR. RUE said he could not recall when an ADF&G permit has taken three to five years. He stated in the case of the Red Dog Mine, he is not sure what classification question would have taken a long time in Juneau. CO-CHAIRMAN GREEN observed the comment was that the responses in general from the northern office were much more timely than those from the Juneau office. MR. RUE stated the department tracked 1,600 Title 16 permits issued in a year and the average response time was two weeks. REPRESENTATIVE DAVIES said when the chum crash occurred a few years ago on the Yukon River, he called the ADF&G to ask what happened and their response was they did not know, as they did not have enough data or research. He wondered if that was a fair characterization of that situation and if it is, has the department done anything to improve it. MR. RUE felt that was a fair response back then. He said in response to that particular situation, the department spent $500,000 to get better information on the Yukon/Kuskokwim stocks and also began the genetic stock verification program to determine where those fish were being caught and what kind of fish were being caught--Japanese, Russian, West Coast fish, etc. He stated the department plans to continue gathering that information, so there is better data on the Yukon/Kuskokwim fish. However, the department is still a few years away from feeling as confident as desired on its predictions on run strength. He stressed more information is always desired. TAPE 95-52, SIDE B Number 000 REPRESENTATIVE SCOTT OGAN told Mr. Rue he had inherited a mess with the sport fisheries in the Mat-Su Valley. He said the sport fisheries is an important part of the economy and basically the fishery has been cancelled. As a result, there will be an increased amount of pressure on the Kenai River. He asked Mr. Rue to name five things he might do to correct the problems. MR. RUE thought there was still a small king season in the Valley. He said getting a better handle on where the Susitna fish are going, where they are being caught, and determining who is catching them will help the issue. He felt there is a need to determine how to have more people enjoy a sport fishery without killing more fish. He said ensuring there is access to areas so people are more spread out would be helpful. Finally, he said where possible, enhance fishing opportunities and alternate fishing opportunities, such as trout fishing. Number 073 REPRESENTATIVE OGAN said people have accused the department, especially the habitat division, of being adversarial with industry, specifically the timber and mining industries. He noted that attitude is not universal as the committee has heard testimony indicating the department has been very helpful. He asked if the department, under Mr. Rue's leadership role, will work to help solve industry problems, enabling timber harvests, mining, and community development activities to move forward. MR. RUE stated several years ago, a review of the habitat division was conducted and 46 different people were interviewed including people from mining, timber, and oil industries. He found that two things tended to guide whether or not the division was successful and whether or not things became controversial--the department's attitude and the applicant's attitude. He said permitting and working out development projects while also maintaining fish and wildlife depends on two people having the right attitude. MR. RUE noted he can control the attitude of the department to some extent. He said the principles he set out for the employees include three things: The department should know its business; the department should know industry's business; and the department needs to be flexible. He pointed out in the seven years he was habitat director, the division reviewed 21,000 permit applications. He felt the division did well, although there were problems, including employees being overzealous or not having time to deal with people. MR. RUE noticed that in his tenure at habitat, the load kept going up and the budget kept going down, which means stressed people who do not have time to get out into the field and work with individuals trying to get something done. He gave a specific example. He expressed concern that as the department's budget is reduced, employees will have too much to do, they will become unable to deal with people well, and there will be more and more confrontation and less ability to deal with things in the field where it makes most sense to work things out. Number 199 CO-CHAIRMAN WILLIAMS noted the ADF&G's staff has a good reputation with industry people in evaluating variance tree requests. Most variance tree requests, since the FPA went into effect, have been granted. He said the system has worked well in the field, to the satisfaction of the affected private landowners. He noted unfortunately, last year's media flap gave the general public a different impression. He felt it appears that event was triggered by the belief, above the field staff level, that too many variance tree requests were being granted. CO-CHAIRMAN WILLIAMS pointed out it seems that the state's only interest in whether or not a particular variance tree is cut is whether it will have an adverse effect on fish habitat. He noted that is what field staff are required to help determine. He stated the appearance is that philosophical opposition to timber harvest plays a role in the department's position on variance trees. He asked Mr. Rue if he believed that is the case, and if so, is it appropriate and what will he do about it. MR. RUE stated the differences have been heightened in the media. He said he is aware of a number of instances where the department felt too many trees were harvested in an area, where the department and the Department of Natural Resources (DNR) or the department and the landowner did not agree but those were particular incidents. There were a number of other places where there was agreement. He felt the process on private lands is the most workable compromise, where there can be a balance of the private land rights, while protecting the public resource, both water quality as well as fish. MR. RUE said when the FPA was passed, everyone agreed it was going to be staff intensive, as well as field intensive--requiring getting on the ground and looking at trees. It was also known that it would be contentious--there were going to be debates over trees. He noted there will be strong disagreements on some of the decisions made, which he feels is part of that kind of approach, where one is trying to squeeze the most for the private landowner out of a buffer that is intended to protect public resources. He felt it would continue to work as long as the department has people to work with companies. He noted the right attitude is important. CO-CHAIRMAN WILLIAMS clarified it is Mr. Rue's position the department supports the timber industry to a certain extent. MR. RUE replied that is correct. He said the department is trying to work with the timber industry within the confines of the law. He noted the department's job is to ensure that when trees are cut out of the buffers, it is not causing a significant problem. He stated every tree and situation is different--you are trying to predict something which is very difficult to predict and also looking at a situation where the unit has not been cut. He noted staff and industry has said if they started at the top of the stream and walked down, they might have made different decisions than if they had started at the bottom of the stream and walked up. Number 282 REPRESENTATIVE KOTT noted over the past several years, there have been regional meetings between ADF&G personnel and the public. There have also been meetings of the fish/forestry working group. He wondered if Mr. Rue, as head of the habitat division, had participated in any of those groups and if so, how did that participation play in his decision making process. He also questioned as commissioner, how Mr. Rue views these working groups and the recommendations they generate. MR. RUE replied he did not personally sit on the Southeast fish/forestry working group. He said that group looked primarily at research and coordination between industry and state/federal agencies on what kinds of research are needed on fish and timber issues. He stated he has gone to the Board of Forestry meetings. He felt those meetings are a good forum and should be used more. The Board of Forestry is one of the few forums in the state where there are broad resource interests sitting at the same table. He noted the board was designed based on the same philosophy as the FPA, where different interests came up with a solution they all could live with. That process gives him hope in regard to the subsistence issue where fishermen, environmental groups, the timber industry, tourism people, etc., could talk to each other, get to like each other, and understand each other. MR. RUE said one of the results of the FPA effort was fishermen concerned with timber harvest destroying their lifestyle, understanding that the people in the forest industry had a legitimate basis. The timber industry understood the fishermen were not trying to put them out of business. Once they came to the understanding they were not trying to get rid of each other but rather coexist, they began to come up with a compromise which allowed both interests to survive. He encouraged the continuance of those type of forums. REPRESENTATIVE KOTT stated last year the habitat division, under Mr. Rue's leadership, took part in a Kenai River bank stabilization project. He noted the project developed several problems involving significant cost overruns. The public notion is that the majority of the problems were the result of some internal decisions made by the department which circumvented the whole process being proposed by the designer of the project. He asked if that was the case, how can the internal attitude be changed and if that was not the case, how can that message be sent to the public. MR. RUE replied he is aware of the project and noted the people who worked on that project, also worked on a project upstream with a different applicant. The project upstream was extremely successful and cost about one-third of the Soldotna Creek project. He did not feel it was the attitude of the division but the design developed for the project was more of a bulkhead, not to help habitat. He noted the reason for designing bank stabilization projects is to not only allow for intensive use by people but also to create useful habitat for fish. He felt the department ran into the problem of a difficult contractor on the project and his unwillingness to look at documented successful methods of rehabilitating fish habitat, as opposed to creating walls that do not provide much habitat. He added the problem is being worked out with the city of Soldotna, the project will be finished and it will be a good project. Number 400 REPRESENTATIVE KOTT wondered if there is a public misconception, how does the department change that misconception. MR. RUE replied the department does not have a good press office and that is not something the department has money or time to spend on. He said if the department is professional and does its job well, the rest will take care of itself. He noted the department will get blamed for things, some of which will be fair, but the department will also get blamed for things it did not do. He added in the instance just mentioned, the contractor got paid $20,000 to blast the ADF&G. MR. RUE felt the department needs to be accessible to the public and have offices in areas where staff can get to know people, where people get to know staff and where each can understand what each other's jobs are. If that is done, the department will have a better relationship with the public and be better able to respond to the public. He noted if the department moves away from that and is unable to do that, there will be more opportunities for misunderstanding--the department will make more mistakes, there will be less ability to communicate and things will get worse. REPRESENTATIVE NICHOLIA recalled the representative from the Red Dog Mine had said their relationship with the habitat division was good. She also recalled the Executive Director of the Alaska Miners Association said their relationship was also good with the habitat division and he did not want to see the Fairbanks office closed due to budget cuts. She stated Del Ackels of the Alaska Minerals Commission indicated he did not appreciate the projected budget cuts because they will slow down the permit process for the mineral industry. Mr. Ackels is also opposed to the closing of the Fairbanks habitat office. She asked Mr. Rue what the future of the Fairbanks office is with these projected budget cuts. MR. RUE replied it will depend on the level of the cut. The department looked at three things in setting priorities for cuts in the habitat division. The department looked at its legal responsibilities, which include mainly anadromous fish streams where the department has the primary responsibility to maintain those streams. The second priority was where the department has a heightened legislative responsibility. The third priority was where the department participates to maintain fish and wildlife but has no responsibility or there is someone else who could potentially do it. MR. RUE said the department then looked at where the most development pressure is and where the most valuable fish resources are. He stated as the habitat division gets smaller and smaller, it will focus on those things where the department has direct legal responsibility, where the most valuable fisheries are used by the most people and where the most development is going on, such as the Mat-Su, Kenai and Anchorage areas. He stressed as the division gets squeezed down, some things will have to be forgotten. He noted that currently there are 14 permitters for approximately 13,000 anadromous streams. He added that will probably mean closing the Fairbanks office. Number 470 REPRESENTATIVE OGAN asked Mr. Rue what he means by forgetting the rest. He wondered if that means someone will be exempted from getting a permit or will they not get a permit. MR. RUE stated what it means is the law will be there but the department will not be enforcing it or will not be issuing permits. He said that puts everyone in a very difficult situation because people will be operating in streams without a permit. He noted if protection went out and found someone with a bulldozer in a fish stream where a permit had not been issued because the department was not there, he did not know how someone could successfully prosecute someone. He pointed out the other option is to rubber stamp permits, which is not satisfactory either. CO-CHAIRMAN WILLIAMS said in a recent budget memo to the Office of Management and Budget, Mr. Rue offered his response to proposed budget cuts. Mr. Rue had indicated he would have to cut FPA inspections in half, but would continue to comment on both state and federal land use plans. He noted FPA inspections are mandated by state law. He wondered if Mr. Rue considers comments on federal land use plans to be more important to his mission than activities required by state law. He also asked Mr. Rue what should determine the priorities of a state agency. MR. RUE stated the inspections are required by the DNR. The ADF&G plays a role in advising whether there is a significant effect of the riparian variation but the DNR makes the final decision. He said the ADF&G cannot eliminate that function but will just cut it in half. He explained in regard to the state land use plans, he has the responsibility under general authorities of the commissioner, to maintain, extend and protect fish and wildlife resources. He felt there is a tremendous benefit to his participating in those plans. Many permit problems can be avoided if a land use structure can be developed on public lands where the most important fish and wildlife areas are avoided. MR. RUE noted he has less of a chore trying to come up with a forest plan that maintains wildlife. Therefore, it may be to his benefit to put limited resources toward solving problems in the larger context than dealing with them piecemeal. He may need to reduce some effort on individual inspections on forest practices where he has no final responsibility, only a role, and put that effort toward participating in a land use effort where he has a responsibility but no final decision, which may bring a larger benefit per hour spent. He stated those are the kinds of trade- offs he will need to make. CO-CHAIRMAN GREEN stated there have been questions regarding restoration as to when enough is enough and at what point the environment is restored. He asked for a definition of restoration. MR. RUE replied restoration is when an area becomes useful and is not causing a significant negative effect. He said the department has had debates over gravel pits on the North Slope and how those should be restored. He stated some agencies want a gravel pit restored to the point where it was before. He does not believe that is necessarily reasonable. However, a gravel pit can be restored to a very useful state. He stressed when something is restored, it is useful. In mining restoration, he personally does not agree with the way the Bureau of Land Management is doing their business. Their focus is making the area look like a golf course as opposed to making sure the water, the drainage system, the waterway is in a stable and functional condition. CO-CHAIRMAN GREEN noted there was an incident several years ago and the state is still purchasing additional land with the damages which ensued. He asked if that was a special case or was part of the restoration buying additional lands. He wondered in the future, under normal operations, does buying additional land contribute to the restoration of a particular parcel. MR. RUE replied that incident was an unusual circumstance. He felt there may be situations that could be big enough issues, such as the Arctic National Wildlife Refuge (ANWR), where part of the revenues might be put towards a fund which restores wetlands or some other valuable habitat, as a way to compensate for the loss values. He said most often, restoration is thought of in much smaller terms and is on site. Number 575 CO-CHAIRMAN GREEN said the concern is that in some places there is no net loss. MR. RUE stated there is a need to distinguish between what is important and what is not. He noted there are some things that do not really matter if they are changed, as long as an off site problem is not being created. He said a very high value site may be found where restoration could include some more significant efforts to recreate a system. He reiterated the first step is to determine what is important. Many times, it will not be worth doing more than just stabilizing the site or doing minor things. He added when there is a situation of a possible significant impact to a significant resource, the question needs to be asked if it is worth doing more. CO-CHAIRMAN GREEN clarified the merits would stand on the individual cases rather than an overall policy. MR. RUE stated there may be a general policy but it would be one at the level he just mentioned. CO-CHAIRMAN GREEN asked Mr. Rue his views on accelerated restoration. MR. RUE replied it depends on how accelerated restoration is packaged with other things. He said the acceleration of restoration on the North Slope may have some benefits. He stated oil and gas development goes on in the refuges and he may have a higher standard of restoration in a wildlife refuge than the uplands three miles away. He noted his department has been able to work with the oil industry on that issue and has come to an agreement on what is reasonable and appropriate. CO-CHAIRMAN GREEN said his question did not have to do so much with the quality but rather with the timing. MR. RUE replied accelerated restoration is a great idea but the question remains, what else is it tied to. Normally, it is tied to changing the wetland permitting program. Therefore, it might make sense but the specifics should be known on what changes would be seen in the wetlands permitting on the North Slope. He stated he can see benefits of accelerated restoration. Number 618 REPRESENTATIVE DAVIES recalled the discussion about the possible closing of the Fairbanks office and concentrating where the most development pressure is. He wondered if Mr. Rue meant he would ignore a permit application coming from other regions of the state. MR. RUE stated he did not know what will happen if the department has that fewer people. He said they may have to ignore the applications or rubber stamp them. He noted if the department approves an activity causing significant damage to a fish stream because they have not gone and looked at it, there will be problems. The choices are rubber stamping an application, not knowing what is going on, or just ignoring the application. He pointed out that other divisions may see some of these activities going on and the department may decide they will have to start dealing with them. REPRESENTATIVE DAVIES felt there were other options. He understood the financial imperative to close an office for efficiencies of scale. He thought to ignore permits coming in is a violation of equal protection under the law. He felt the other options include dealing with permits in the order received, resulting in the whole process slowing down. That would build pressure to restore the budget. He said another option is to seek industry's support in increased permit fees. TAPE 95-53, SIDE A Number 000 REPRESENTATIVE DAVIES said he would object strenuously if permits required by law for a mining or timber operator to proceed are ignored. He stressed that is not acceptable. MR. RUE replied the options discussed are good ideas and are the kinds of things the department will need to look at. REPRESENTATIVE DAVIES clarified the approval rate on variance tree requests is 80 percent. He said he has heard the comment during budget deliberations that perhaps one of the consolidations which could be made would involve instead of sending a person out from the DNR and one person from the ADF&G, one person could perform the role. He wondered if that was possible. MR. RUE felt that would weaken the public's and fishermen's confidence in how the FPA is being carried out. He said part of the compromise is that the DNR, the ADF&G and the Department of Environmental Conservation (DEC) would all look at the buffers. He added that greater flexibility was given to private lands because of the economics and private rights. Counter to that, to protect the public resource was to make sure that the ADF&G in particular was still involved in the decision of what additional trees go. He noted legally it could be done without the ADF&G's presence. He felt it would weaken the public's confidence and the level of protection of the public resources would be eroded. He stated the ADF&G does not always agree 100 percent with the decisions made by the DNR. CO-CHAIRMAN WILLIAMS felt those in leadership roles have to be strong and say what is being done and is being done correctly to build confidence. He said what is happening now is that other people are being listened to and the leaders are not standing up to say that what is being done is correct. Number 099 REPRESENTATIVE AUSTERMAN commented when funding keeps getting cut back for an agency that is enhancing and protecting a state resource whether it be timber, mining or fish, the agency is cut back to the degree where they are not able to function. In the commercial fishing industry, when there is no research available to determine if too many fish or too little fish are being taken, the response from the department is to cut the season off before it should be. He said if the legislature continues to bring the budgets back to the level where the agencies are not able to function, eventually there will not only be problems with fisheries but also with mining and timber. He hoped that message was getting sent to the committee and the committee would take it forward to the legislature. He stressed only so much can be cut before more damage is done than good is done by saving a few dollars. Number 152 REPRESENTATIVE OGAN clarified the Governor is willing to look at reevaluating the priorities for Cook Inlet since he appointed a facilitator to work with the user groups and also recognizes that the demographics and demands on the resource are changing. MR. RUE stated the Governor believes the Board of Fisheries needs to look at the issue again. The board wants to have a process that allows the user groups to come up with some recommendations for the board which will address the pressure building because of the demographics. He felt different interest groups can together look at the science and data, and determine how they can coexist and what is the most surgical way to do that, have groups agree and then go to the board with a recommendation. He noted the board is the final arbiter on any final allocation decision. REPRESENTATIVE OGAN said his constituents perception is the fish in Cook Inlet are managed with an emphasis on commercial fishing and the Kenai River. He stated there is a system in place currently that if so many fish come in, this happens and if less fish come in, something else happens. He noted there is not a similar plan in place for the Susitna drainage. He pointed out the perception is that the fisheries in the Susitna area are managed by default-- it gets what is left over from the Kenai. He wondered if the department is willing to begin managing for sustained yield in the Mat-Su area and is the department tough enough to take the measures necessary to protect the resource if the resource is threatened. Number 231 MR. RUE replied the department will manage for sustained yield and is already taking the steps necessary to rebuild the Chinook stocks. He felt the process he mentioned earlier, involving the different interest groups in the Cook Inlet, will help them understand what is going on and influence a change if it is needed. CO-CHAIRMAN GREEN said, "I was taken aback with the strong statement that this was going to become the sport fishing capital of the world when in fact we were in the throes of trying to resolve the issue between whether there should be a priority given to commercial fishing, sport fishing, or subsistence. At any rate, what I mentioned to the Governor's task force that he had a review with both bodies before he made the announcement on that Monday was that it might be a good idea during the interim to have input from both sides to show that the legislature was not opinionated but is trying to come to grips with a very critical issue." CO-CHAIRMAN GREEN continued, "I think it is possible because there is a plethora of studies that can say anything you want...there is either too much escapement or there is too little escapement. If you have too much escapement, the river cannot stand it and you will have an adverse effect on the yield. There are other studies that say that is hogwash and is not true. You have all this technical information by people that are far more knowledgeable than I. I think the Governor's task force with the funding that is apparently going with that is a great idea. The thing I am mentioning is that group felt there would be an enhancement...it would not only inhibit their collection of data but might help it, for a committee like the House Resources Committee to hold some interim hearings. What is your feeling about that?" MR. RUE replied it might be helpful, particularly because it might update the committee on what is going on. He said the only reason he would hesitate at all is if it became a debating forum where people were posturing for a position. He stated if user groups were being put together to discuss real sensitive issues and then they had to go to a hearing and posture for effect, he was not sure how that would play. He felt a forum where people were not making statements on the record would be helpful. CO-CHAIRMAN GREEN stated the press was given information that insinuated a possible connection between the Gold Creek fish kill and activities at the Echo Bay mine and the public believed that for quite some time. It later became obvious that Echo Bay had nothing to do with the fish kill. He did not recall any kind of effort made by the state to rectify that issue in the public's minds. He wondered if the state needs to say the fish kill was not an Echo Bay mine problem. He asked what is the state's position officially about those fish killed in Gold Greek. MR. RUE responded the DEC had the lead on that issue. The ADF&G's fish pathologist worked with the DEC to determine the cause of death. He said a determination could not be made on the first fish kill. He thought the pathologist had determined that the cause of death in the latest incident was suffocation and dewatering and that probably was the cause earlier. He felt the department's responsibility is to tell the public honestly what it knows and does not know and not exaggerate those claims. He added if the department does not know, it should tell the public it does not know. CO-CHAIRMAN GREEN stated he did not feel any of the major industries, whether it is fishing, timber, mining, oil, etc., want the department to cover up a problem they might have caused but the industry would also appreciate not being accused of something they are not guilty of. He clarified the department just wants to be factual. MR. RUE replied that is the department's goal. Number 406 CO-CHAIRMAN WILLIAMS announced the committee would hear from Mr. Rue again on Monday morning. CO-CHAIRMAN WILLIAMS said No Name Bay on Kuiu Island was selected by the state under the Statehood Act for a remote subdivision. The selection has now been designated as wildlife habitat despite studies showing the land has no special significance for wildlife health and viability. The parcel lies adjacent to more than 100,000 acres of wilderness area. He stated as it turns out, the state parcel at No Name Bay is now an impediment to the harvest of U.S. Forest Service timber already approved for harvest under an environmental impact statement which took more than a decade to develop. He asked Mr. Rue what he will do to reduce those kinds of administrative barriers to responsible use of timber resources in Southeast Alaska. He wondered if he should expect the state to block timber harvests under the guise of wildlife protection without good scientific reason. MR. RUE stated as part of the mental health trust land negotiated settlement, No Name Bay was to be classified by the DNR for wildlife habitat. He said that was something the DNR negotiated, not with the ADF&G but with the various parties involved in the mental health land resolutions. The status of No Name Bay was elevated during that settlement issue. He noted he is going to meet with the commissioner of the DNR and resolve the final issues around that issue including road location, not necessarily no timber development. He felt those are the kind of things that might be worked out. MR. RUE said he has tried in the past seven years to accommodate different uses in a way that allows the use to go ahead, while still sustaining sufficient wildlife resources as best as possible. CO-CHAIRMAN WILLIAMS clarified that is what was done with No Name Bay--the ADF&G looked at it and decided wildlife habitat protection was needed. MR. RUE replied the DNR did that in negotiating with the litigants of the mental health trust settlement. He stated there are wildlife values on No Name Bay. REPRESENTATIVE DAVIES stated he will not be at the meeting on Monday. He noted for the record he found Mr. Rue's testimony to be knowledgeable, professional and responsive. He found nothing in the discussion which would cause him to oppose Mr. Rue's nomination and therefore, will support it. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Williams adjourned the meeting at 10:05 a.m.