SENATE RESOURCES COMMITTEE April 23, 1997 3:40 P.M. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Lyda Green, Vice Chairman Senator Loren Leman Senator Robin Taylor Senator Georgianna Lincoln MEMBERS ABSENT Senator Bert Sharp Senator John Torgerson COMMITTEE CALENDAR Confirmation Hearing: Commercial Fisheries Entry Commission Ms. Marlene Johnson - Hoonah Mr. Bruce Twomley - Juneau SENATE CONCURRENT RESOLUTION NO. 10 Supporting continued use of Alaska's renewable furbearer resources. - MOVED SCR 10 OUT OF COMMITTEE CS FOR HOUSE BILL NO. 23(RES) "An Act relating to management of state land; and relating to access to land." - MOVED CSHB23(RES) OUT OF COMMITTEE HOUSE JOINT RESOLUTION NO. 23 Relating to the seizure and sale of Alaska commercial fishing entry permits by the United States Internal Revenue Service. - MOVED HJR 23 OUT OF COMMITTEE HOUSE BILL NO. 17 "An Act establishing the Department of Natural Resources as the platting authority in certain areas of the state; relating to subdivisions and dedications; and providing for an effective date." - SCHEDULED, BUT NOT HEARD SENATE BILL NO. 40 "An Act relating to management of discrete salmon stocks, to salmon management assessments, and to the fishery business tax." - SCHEDULED, BUT NOT HEARD PREVIOUS SENATE COMMITTEE ACTION SCR 10 - See Resource Committee minutes dated 4/21/97. HB 23 - No previous action to consider. HJR 23 - No previous action to consider. WITNESS REGISTER Senator Gary Wilken State Capitol Bldg. Juneau AK 99801-1182 POSITION STATEMENT: Sponsor of SCR 10. Mr. Dick Bishop Alaska Outdoor Council 211 4th St., #302A Juneau AK 99801 POSITION STATEMENT: Supported SCR 10 and HB 23. Mr. Wayne Regelin, Director Division of Wildlife Conservation Department of Fish and Game P.O. Box 25526 Juneau AK 99802-5526 POSITION STATEMENT: Supported SCR 10. Mr. Bill Perhach Alaska Environmental Lobby P.O. Box 34 Denali Park AK POSITION STATEMENT: Opposed HB 23. Ms. Carol Carroll, Director Division of Support Services Department of Natural Resources 400 Willoughby Ave. Juneau AK 99801-1724 POSITION STATEMENT: Supported HB 23. Ms. Melinda Hofstad, Staff Representative Bill Hudson State Capitol Bldg. Juneau AK 99801-1182 POSITION STATEMENT: Staff to sponsor of HJR 23. ACTION NARRATIVE TAPE 97-28, SIDE A Number 001 CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:40 p.m. and announced a confirmation hearing for the Commercial Fisheries Entry Commission. MS. MARLENE JOHNSON said she is a life-long Alaskan and reviewed her resume for the committee. SENATOR LEMAN asked what Alaskans can do to encourage the holding of limited entry permits by Alaskans and asked if she had any comments on the IRS seizure of permits. MS. JOHNSON said the primary answer is education of rural Alaskans. They are unaware of what their rights are and what they should do. They need to be educated about how to pay their taxes. CHAIRMAN HALFORD noted that if permits are lost in the larger communities, it doesn't have the same drastic affect it does in the villages where they are the economic focus. He asked if there was some way of creating a quota of one permit per village. MS. JOHNSON said they had received questions like that and if it were legal they could find a way to assign a permit to an area. CHAIRMAN HALFORD said in five years with welfare reform you'll find the only income in some of those villages was derived from the one or two permits that were there and now they are gone. MR. BRUCE TWOMLEY , Commercial Fisheries Entry Commissioner, said he was first appointed to the Commission in 1992 by Governor Hammond. He said before that he used to sue the State and federal government on behalf of fishermen. The laws are arcane and he thought he was a help in deciding the numbers of cases that come before them. He acknowledged the problem with the IRS. CHAIRMAN HALFORD asked what he thought could be done to keep permits in small villages. MR. TWOMLEY said that is his biggest personal concern and he knows first hand the effect if those permits disappear. He thought that educating the people in the villages was the best thing the Commission could do as the law is now. He said that a local permit brokerage has been established in the Bristol Bay area to mitigate this problem. He said of the transfers that go to local people, more than half are by gift and they go from one family member to another or from one village member to another. The question is how to make more of that type of transaction go on. CHAIRMAN HALFORD asked if there was any hope of developing a quota system. MR. TWOMLEY replied it would be difficult to do a quota system in a fishery that's not managed by quota. The troll fishery would be an exception. The difficulty in having a community in Alaska own a permit is with our constitution and as it is interpreted by our Supreme Court. There are a lot of pitfalls in trying to redistribute benefits. This is an issue also with local hire. SENATOR LINCOLN said she thought the answer in the villages was economic development and diversity so people have an opportunity to make money in other areas. CHAIRMAN HALFORD agreed, but he said that permits was one thing that had worked in the past. SENATOR GREEN moved to send a letter on the two members of the Commercial Fisheries Entry Commission. There were no objections and it was so ordered. CHAIRMAN HALFORD announced they would next take up the nominee for the Oil and Gas Conservation Commission. MS. MARY MARSHBURN, Oil and Gas Conservation Commissioner, submitted her resume and said it was to the benefit of Alaskans to ensure the efficient depletion of the State's hydrocarbon resource by prevent waste, both surface and below ground, by maximizing the ultimate recovery and protecting the rights of adjacent owners to produce. She said they address these through a variety of programs like the well permiting system, reservoir surveillance, the establishment of drilling units in unitized pools of operation in the field inspection program. She said a commissioner needed integrity, a judicious temperament - one that can listen and examine all sides, an ability to appraise information and evaluate alternatives, and hopefully achieve a sound and reasoned decision. She said she found a statement in enabling legislation that said the Commission was created to avoid an appearance and, in fact, a conflict or the appearance of a conflict. SENATOR LEMAN asked if there was anything new on the old order number 360 and those conflicts. MS. MARSHBURN replied no and that's part of the legal opinions and briefs she has been reading. As far as she knows the owners are working cooperatively. CHAIRMAN HALFORD commented that the State is a party in the agreement and he thought that even if they agreed with each other about the waste, they shouldn't be able to say they made a mistake and there's no waste. The pubic deserves an answer or proof that there's a resolution. SENATOR LEMAN asked if they would be getting into resolution of the kick well. MS. MARSHBURN replied that the Commission's jurisdiction is on all the properties within the State and it's all underground. So if there's drilling or if the pool extends from outside to inside, they will be involved. SENATOR LEMAN moved to send the standard letter to the full Senate regarding Ms. Marshburn's appointment. There were no objections and it was so ordered. SCR 10 SUPPORTING USE OF FURBEARER RESOURCE   CHAIRMAN HALFORD announced SCR 10 to be up for consideration. SENATOR WILKEN, sponsor,  said SCR 10 calls for the legislature's endorsement of continued harvest and use by Alaskans of the State's renewable furbearer resources, consistent with the principles of sustained yield. Not only is trapping an important management tool for helping to maintain healthy furbearer populations; it is also a traditional activity for many Alaskans that helps to promote self-reliance by providing income, food, and clothing. Trapping ties Alaska to its pioneer roots, and helps to keep alive the very values that built the forty-ninth state. CHAIRMAN HALFORD said he thought that Canada had taken action of some sort. There was an international protocol on furs. Other countries with a fur bearing interest have exempted themselves from that and the United States has not. He asked if there was some way to add that to the resolution. SENATOR WILKEN replied that he was speaking about the European sanctions which he didn't know a lot about. He understands the sanctions are against furs that we would normally get in our normal Alaskan way. Canada, specifically, has acquiesced to harvest in ways that are not compatible with our life style. We don't want to give up traditional trapping methods. MR. DICK BISHOP , Alaska Outdoor Council, supported SCR 10. He said it is extremely timely, because last fall the Fish and Wildlife Service put out a general invitation for comments on trapping on federal refuges. Eighty-five percent of the United States federal refuge system is in Alaska and this was an opportunity for anyone who wanted to restrict trapping to comment. If any restrictions were put on trapping in federal refuges, it would be a real imposition on Alaskans. People both in and outside of Alaska have started a campaign to take advantage of this opportunity and have sent out propaganda opposing trapping on federal refuges. Number 512 MR. WAYNE REGELIN, Director, Division of Wildlife Conservation, endorsed the resolution. He said for the past few years they have worked closely with a lot of Alaskan trappers, especially the three Alaska trapper associations. He thought it was time that trappers get some well-deserved recognition for the good they do, because they get a lot of negative publicity and they have a very legitimate activity. He thought the resolution should be sent to all the newspapers in Alaska, too. MR. REGELIN explained that they have been working on international humane trapping standards for almost four years through the International Union of Standards. The European Union said they wouldn't import furs that were caught unless they met an international humane trapping standard. They thought they were close a few years ago to having a standard developed and through international politics they allowed the anti-trapping people into the debate and we lost. We have been treading water since then. Canada just folded their tents and gave up saying they would ban leg-hold traps. Alaska does not want to do that; it would devastate our martin trapping industry. In Canada, he said, the decision was made in Ottawa, and he didn't think many provinces were pleased. He said the European Union is in extreme turmoil at this point and we have an alternative plan to proceed if they take action. He said there is a strong green movement in some countries over there and they will probably win. We are working on developing a standard with Russia and Greece. They are getting great support from the Alaskan delegation. SENATOR LEMAN moved to pass SCR 10 with individual recommendations. There were no objections and it was so ordered. HB 23 STATE LAND MANAGEMENT: ACCESS & RESTRICT  CHAIRMAN HALFORD announced HB 23 to be up for consideration. MR. ED GRASSER , Staff to Representative Beverly Masek, sponsor of HB 23, said HB 23 continues the effort to protect public access on public lands in Alaska. Last year this legislation had overwhelming support from the House and the Senate. They have worked on this version with DNR to make it apply to the proper sections. It protects the public's right to access public lands for traditional uses, like hunting, fishing, trapping, snow machining, and dog sledding. It also has a section protecting the interests of private property owners and people who hold a lease for mining and oil and gas exploration. He said they had received a lot of support from the public as well as the Alaska Boaters Association, the Alaska Outdoor Council, Matanuska Valley Sportsman, Tanana Valley Sportsman, Territorial Sportsman, the Alaska State Snowmachine Association, and other groups. TAPE 97-28, SIDE B SENATOR LEMAN noted they had a letter of opposition from the Environmental Lobby expressing concern about impacts from increasing helicopter activities, etc. He didn't see that as being recognized as a traditional means of access and asked if that was a valid concern. MR. GRASSER responded that the traditional means of access is predicted for traditional outdoor activities and he didn't think helicopter transportation provided a large array of traditional uses once the transportation gets you to where you are going. He didn't think the bill intended or allow for that to happen, because it ties the access to a traditional outdoor activity. MR. BISHOP testified that the Alaska Outdoor Council strongly supports HB 23. If access is limited or unavailable, the opportunities for trapping (a traditional use) are similarly limited. This insures that traditional activities, which include much more than trapping, are protected through access on State and private lands. MR. BILL PERHACH, Denali Park resident, said throughout the State, as development has intensified, the importance of professional planning and the land designation process has become more obvious. Future growth will make a case for designated use areas as well. Enacting HB 23 will make it more difficult to pursue a balance of uses; in fact, it will exacerbate conflict making it more difficult for the State to provide for common use of resources. The Alaska Environmental Lobby is opposed to CSHB 23 because it does not acknowledge the importance and value in establishing zones of quiet and areas for nonmotorized use, growing concern over impacts from ever-increasing helicopter activities, or potential impacts from motorized access to private property adjacent to State land. The majority of Alaskans and a majority of Alaska's visitors greatly value its natural landscape including the means by which we access it and this is best accomplished by maintaining a willingness to consider all viewpoints with a commitment to fairness and respect for differing interests. As an example, he said there was a squatter problem in his community. Over a period of years people, primarily summer employees from the Denali concessions, started living on State land, primarily in DOT right-of-way and the community tried to get some relief because the problem built to a point in 1992 when there were 130 -150 people living in the woods at Hornet Creek and about 40 - 50 people living in the woods at McKinley Village without no provision for sanitation or fire. Finally, when there was bear problem and one was finally killed, the State started to move which, he thought, was the first time the departments came together and closed the areas. The problem doesn't exist any more at this point and it is nice to have the process for that type of closure in place. He thought HB 23 eliminated that process. Another point, MR. PERHACH said, is that most people in his community use motorized and nonmotorized transportation on their trails and they work it out, but they don't have the level of use there is in the Park. He didn't think there was a problem in the snow machine community with having a place to ride, but it was in getting access to that place off the road system. He explained that a TRAK Board has been established made up of a combination of motorized and nonmotorized interests who work together and come up with solutions. They can also find small pots of money to fund projects and the legislature does not have time to find those federal sources of money. He wanted to see emphasis on something like TRAK rather than a divisive piece of legislation like this. CHAIRMAN HALFORD said he thought once there was private property, he didn't think they had the right to change the rules in which that private property originally got there unless the State bought it back and that's where he most strongly disagrees with his letter. MR. PERHACH responded that his intention was to call attention to the possibility that a private property owner might be affected by noise from a trail close-by or helicopter overflights. He said the bill mentions flying as if it's traditional access which fixed wing aircraft is. He was concerned that helicopters would be considered traditional access when it comes to certain operations in the Park and he would be happy to have language that excluded helicopters. Number 431 CHAIRMAN HALFORD announced an at ease from 4:45 - 4:50 p.m. MS. CAROL CARROLL, Director, Division of Support Services, said she did work with Representative Masek on this bill and agreed to not oppose the bill as it is now. It does limit some of their discretion to do some types of multiple use closures and that is something they are willing to live with. SENATOR TAYLOR asked if this bill had any retroactive affect. MS. CARROLL answered that it is prospective; however, they have not done many closures through the Division of Land. SENATOR TAYLOR asked if Representative Masek would object to including within the legislation restrictions on the same type of discretion by the Department of Fish and Game. MR. GRASSER replied that she would prefer to leave the bill intact, but HB 168 is her other bill addressing access on ADF&G closures. SENATOR GREEN moved to pass CSHB 23(RES) with individual recommendations and the accompanying fiscal note. There were no objections and it was so ordered. HJR 23 SALE OF LTD ENTRY PERMITS BY IRS  CHAIRMAN HALFORD announced HJR 23 to be up for consideration. MS. MELINDA HOFSTAD, Staff to Representative Hudson, sponsor, said it was a simple resolution. She said there have some outrageous actions on the part of the IRS to seize limited entry permits in lieu of back taxes. Representative Hudson doesn't believe that anyone should not pay their taxes, but this is a question of whether you take someone's livelihood away from them and their ability to pay those taxes. She said that the IRS has recently taken a permit valued at $30,000 and sold it for $5,000. SENATOR TAYLOR said he thought it was somewhat schizophrenic for a group of people who earned the income through the permit they have, many of whom got the permit at no cost, while others have to purchase them, and then fail to pay the taxes on the income they earn. He has a hard time specializing relief for one group of taxpayers and not for all. SENATOR TAYLOR moved to pass the resolution from committee with individual recommendations. There were no objections and it was so ordered. CHAIRMAN HALFORD adjourned the meeting at 5:00 p.m.