SENATE RESOURCES COMMITTEE February 25, 1998 3:37 P.M. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Lyda Green, Vice Chairman Senator Loren Leman Senator Bert Sharp Senator Robin Taylor Senator Georgianna Lincoln MEMBERS ABSENT Senator John Torgerson COMMITTEE CALENDAR Confirmation Hearings: Ms. Mary McDowell, Commercial Fisheries Entry Commission Mr. Robert Curchill, Board of Game Mr. Peter Garay & Mr. Michael White, Board of Marine Pilots Ms. Camille Oechsli, Alaska Oil and Gas Conservation Commission ACTION NARRATIVE TAPE 98-14, SIDE A Number 001 CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:37 p.m. MS. MARY MCDOWELL, Commercial Fisheries Entry Commission, said she has a background that has prepared her for this job and reviewed her resume' for the committee. She thought it important for Entry Commissioners to be fair-minded and objective, to have good understanding of how fisheries work, and be able to work with all kinds of people with diverse backgrounds. SENATOR LEMAN said he appreciated the work she has done over the years in fisheries issues and noted he might be perceived as having a conflict of interest since he is the holder of a commercial fishing license. SENATOR SHARP asked how many people are on the Commission. MS. MCDOWELL answered three full-time paid commissioners. SENATOR LINCOLN noted for the record that she has the exact same card that Senator Leman has, a setnet card for 1998. CHAIRMAN HALFORD asked how an enforcement system that would devalue the permit as the record of violations increased would work in terms of the Commission. MS. MCDOWELL said the Commission has been working closely with the House Committee on HB 285 to come up with something that would be enforceable and workable. They have removed the part that would actually devalue the permit at a certain point. CHAIRMAN HALFORD said if the violations travel with the permit, someone who is an aggressive line fisherman, who thinks he might get caught, would pay less for a permit that has only one more strike as opposed to one that has three strikes. He didn't mean that the Commission necessarily does the devaluation, but he thought the marketplace might do it. MS. MCDOWELL said the Commission would have to keep track of the demerits by getting information from the Department of Public Safety and the Court System. She said it's tougher to make it work with the traveling demerits. There are various kinds of permits that would have to be noticed at every transaction. A computer system would be needed to keep track of all of everything. CHAIRMAN HALFORD said some Supreme Court opinions dealing with equal access have referred, sometimes obliquely, to limited entry, and there have been some statements made in those opinions that the primary reason limited entry is not in conflict with other provisions of the Constitution is the conservation section that allows for the elimination of permits. He asked if she saw any danger to the system in a Constitutional challenge, because they have taken no action to eliminate permits. MS. MCDOWELL said that they had looked at the buy back program provisions, because there is a lot of interest in it now. There is a problem with the current buy back statute in the way the dedicated fund is set up. However, there should be legislative ways to get around that and the other problem is the John's case and equal access. Supreme Court cases have pointed out that there are ways to add permits to fisheries, but it's very difficult to take them back out. If you did take permits back out of a fishery, if there's a challenge later on equal access, you might be forced to put them back in. CHAIRMAN HALFORD said unless something is done at some point, the justification that the Supreme Court used for holding that limited entry was constitutional will no longer be there. He thought this should be a significant consideration. SENATOR TAYLOR said that each of the moratoriums, the most recent being the dungeness crab, were a mess. He asked if the Commission was ever going to start acting like a commission and going out and saying this is a limited fishery and that they were exercising the authority they have based upon a logical realistic basis. Number 205 MS. MCDOWELL responded that she appreciated the frustration. Emerging fisheries are developing so quickly, because people are trying to get into new fisheries as the old ones don't support them any more. The moratorium statutes are so cumbersome that it is very difficult to act quickly enough when something is happening that fast. The limited entry statutes were designed with salmon fisheries in mind, so they are hard sometimes to apply to the other fisheries. The Commission has a bill before the legislature right now to streamline the process. The problem with the threat of a moratorium is that speculators do jump in. She said there are trade-offs in any scenario. She said that over half of the permits in the dungeness fishery are transferable. CHAIRMAN HALFORD asked why any permits should be transferable. MS. MCDOWELL said the legislature struggled with that question when they first enacted the limited entry statute and the main reason for that was to establish a system that was constitutional, would meet interstate commerce laws, and still favor Alaskans. She noted that 77 percent of the permits still belong to Alaskans today. CHAIRMAN HALFORD asked what percent of the total gross permit value is still in Alaska. He thought it was substantially less than 77 percent. MS. MCDOWELL responded that the fisheries that are extremely high percent of Alaskans are small fisheries. She said one of the arguments used in enacting this is that people who have a financial stake in the fishery may have a larger interest in the long term health of the fishery and sound management over the long term. The Legislature by statute gave the Commission the responsibility to determine what constitutes a significant economic hardship and a minor economic hardship. In establishing point systems, the Commission figures out a system based on years of participation, quantities sold, consistent participation, ownership of a vessel, comparing fishing income with other incomes, etc. The law says if they hit the minor economic hardship level, that permit would be nontransferable. CHAIRMAN HALFORD reiterated that he would not vote to help, in any way create any transferable permit, to add more artificial value to the debt load of permit holders. He thought that at some point, the legislature or voters by initiative will repeal transferable permits. SENATOR TAYLOR moved to send the standard letter to the Joint Body of the Legislature regarding Ms. McDowell. There were no objections. Number 333 MR. ROBERT CHURCHILL, Board of Game, said he had hunted and fished since he was 11 years old. He reviewed his resume' for the Committee. The reason he wants to be appointed is because he has hunted all his life and he wants to pay back the benefits he has received. Hunting needs strong advocates and teaches good life lessons to the people who participate in it. SENATOR LINCOLN asked him to comment on the Alaska Resources Consulting Group which he owns. MR.CHURCHILL answered that basically he is the group and he does work in labor relations and human resources aspects and about three years ago he had people requesting him for assistance, so he established a business. Last year, due to time constraints, he didn't put a lot of time into it. He worked for small businesses that could not afford a human resources staff. SENATOR LINCOLN asked if he was planning to work around the many days he would being working on the Board with his employer. MR. CHURCHILL said he has talked it over with his family and his employer and feels confident that will not be an issue. SENATOR LINCOLN asked if he had hunted in the Interior and Southeast and asked what kind of hunting he did. MR. CHURCHILL replied that he does some moose hunting and upland birds; he has hunted as far north as the Fairbanks area. He hasn't been in units 23 or 26. CHAIRMAN HALFORD asked which areas he had hunted in since he has been a resident. MR. CHURCHILL said he had hunted the Kenai Peninsula, the greater Anchorage area, and most of the Parks Highway. SENATOR LEMAN asked if he had any thoughts about what should be done in unit 13 and off-road vehicles. MR. CHURCHILL replied that he was asked to co-chair a group of hunters regarding this issue. They have met twice and it seems there is a real lack of education among new ORV users. It doesn't seem to be a problem of people maliciously tearing up the countryside. They have talked about working with the ORV industry and putting a good video together on good techniques for their usage. One of the limiting factors right now is that there are only so many places you can park your rig and take your ORV out. There also doesn't seem to be a good general knowledge of ORV trails. CHAIRMAN HALFORD asked if he thought regulation of means of access should be one of the ways Boards should use to control the level of harvest. Number 425 MR. CHURCHILL answered in certain circumstances it could be used. It's probably more easily dealt with by using seasons and bag limits. CHAIRMAN HALFORD asked what he thought about allocation between hunting groups. MR. CHURCHILL answered that they had to keep things fair. SENATOR SHARP asked how many Board meetings he had attended and participated in. MR. CHURCHILL answered Nome, Bethel, and ORV meeting. SENATOR GREEN asked if the Legislature received a lot of information from him last year. MR. CHURCHILL answered that he had given them a lot of information on Ms. Nicole Evans, Anchorage Advisory Committee. SENATOR TAYLOR asked him to explain his position on consumptive use and management of predators. MR. CHURCHILL said one of the first things he was involved in was the predator control plan with the Anchorage Advisory Committee. Predators eat a lot of ungulates and if they want those populations to recover, they have to be dealt with. One of the surprising things he found was in order to really make a reduction in a wolf population, you have to knock down over 60 percent of the population. It's complex, but wolves are probably the easiest predator to manage. There are groups in the State that have managed them for a long time. Bears are more difficult because of counting them and their reproductive cycles. The other predator they deal with taking caribou are eagles which he wouldn't touch with a 10 foot pole. Number 468 SENATOR TAYLOR asked how effective the neutering system is with the wolves. MR. CHURCHILL said he is really unfamiliar with that system; the only one that he has dealt with is hunting with a rifle or actively trapping. He didn't think there was enough evidence to clearly establish what would happen with neutering and moving wolves. He thought the Board had to be biologically driven and economically conscious. SENATOR TAYLOR mentioned that he had helped take wolves around the 40 Mile herd and he thought that was extremely effective. MR. CHURCHILL added that they took a very large number of wolves, about 60 percent. SENATOR LINCOLN asked him to clarify when he became a resident. MR. CHURCHILL said he moved up late in 1986 and wasn't eligible until 1987 to be a resident. SENATOR LINCOLN asked if he was a trapper. MR. CHURCHILL answered that he has a trapping license so he can take fur bearers when he hunts. He hasn't actually been on a trap line. SENATOR TAYLOR asked what his views were on using the Fish and Game Advisory Committees in solving issues that come before the Board. MR. CHURCHILL answered that he thought it was a good way to get information from the communities. The average citizen shows up at a lot of those meetings. He thought they are great; they are all volunteer. It's a good return on value and they get good information. CHAIRMAN HALFORD asked what was the projected cost per wolf on the sterilization program. MR. CHURCHILL said he couldn't answer that. The 40-Mile plan was worked out before he came to the Board. The only thing he can remember is a request for an agenda change. SENATOR TAYLOR asked for his thoughts on making regulations for every complaint they hear. Number 550 MR. CHURCHILL said the ORV issue was portrayed by some to be chronic. The Board met and no one provided any evidence that there was a chronic conflict. There haven't been any regulations implemented and have tried to resolve the issue in other ways. There needs to be good information to establish a conflict. TAPE 98-14, SIDE B SENATOR GREEN moved to send the standard letter to the Joint Body of the Legislature regarding Mr. Churchill. There were no objections and it was so ordered. MR. PETER S. GARAY, Alaska Marine Pilots, said the pilotage his group services is west of Kodiak Island to the end of the Aleutians and up to the Canadian Arctic border. He reviewed his resume for the Committee. He said this appointment is an honor for him. He looks forward to participating in discussions that promote a safe and efficient system of marine pilotage in Alaska. He said he is inheriting a Board where things are working smoothly. Problems are being resolved within the existing framework. He thought it was important that former Board member, Mike O'Harick, was still attending meetings to help his transition. Some of the projects he is working on are competency assessment and pilot performance evaluation. These are substantial projects that should make a better product. In the past pilots could go for 20 - 30 years and never have to open their tool bag; now they are opening them up. There is an RFP out for a simulator and there have been constructive discussions about the performance evaluation and how each pilot group will implement that. MR. GARAY said he came to realize it was important for people like him who have the experience to take part in the affairs of their business. He briefly expounded on his experience sailing around the world on different ships and assessing and handling difficult personnel situations. CHAIRMAN HALFORD asked what he thought about single port pilotage in Alaska. MR. GARAY said he didn't think it would work, because there are sporadic traffic patterns where for a three week period (in Kodiak, for example)there would be 20 ships and then nothing else for the rest of the year. Likewise for the Pribiloffs where there's six weeks of intense activity. There is only one port that sustains year-round activity and that's Dutch Harbor. CHAIRMAN HALFORD said he asked because he wants to provide benefits to local people. There are local people who know their ports very, very well, but have no interest and wouldn't have the ability to serve as pilots in any other place. A system that is region-wide makes it unreachable for many of those people. He thought they couldn't make a living at it, but could make a partial living at it. MR. GARAY explained that it's a long road to become a marine pilot. He said there is an apprentice program that can be used. Unfortunately, there isn't anyone in western Alaska that has the entry level license. That's a significant hurdle. He said they hear about the factory trawler program that employs the locals, but they are employed in the bowels of the factory ship. They don't have a chance to move up into management. They need to enter into this profession at a mid-management level. Going to the maritime Academy is a wonderful opportunity to learn and go in any direction you want. CHAIRMAN HALFORD asked if single port licensure was prohibited by State law. MR. GARAY said he thought it was. Kuskokwim used to be a single port, because there was only one man who could do the work. But he doesn't do it any more. CHAIRMAN HALFORD said there is some legitimacy in single port pilotage especially in river ports, like the Kuskokwim and maybe the Yukon - anywhere the local knowledge weighs against ship handling. SENATOR LINCOLN asked when he moved to Alaska. Number 448 MR. GARAY answered he moved his whole family to Homer in 1990 which is his only residence. SENATOR TAYLOR moved to send the standard letter to the Joint Body of the Legislature regarding Mr. GARAY. There were no objections and it was so ordered. MR. MICHAEL WHITE, Board of Marine Pilots, said he moved to Alaska in 1979 after graduating from law school. He reviewed his resume' for the Committee. He is interested with the Marine Pilot Board, because his law practice has been in and out of various maritime issues and has wanted to get back into public service and was honored that the Governor appointed him. CHAIRMAN HALFORD asked if he was a public member of this Board. MR. WHITE answered yes. CHAIRMAN HALFORD asked if his practice brought him into this area. MR. WHITE replied that his experience is very indirect as he represented the family of a marine pilot who was killed in a plane crash. When he worked on the State's legal team for the Exxon Valdez oil spill, it became apparent to him how very important it is to the State that marine pilot issues are handled well. Number 400 SENATOR TAYLOR said he knows Mr. White personally and holds him in high regard. CHAIRMAN HALFORD said the only question he has is that he's at arms link from the Board. MR. WHITE said he understands that from having been a judge in the past he is very familiar with advocate situations. SENATOR TAYLOR moved to send the standard letter to the Joint Body of the Legislature regarding Mr. White. There were no objections and it was so ordered. Number 401 MS. CAMILLE' OECHSLI, Alaska Oil and Gas Conservation Commission, said she first moved to Alaska in 1977 and reviewed her resume' for the Committee. She said she enjoys her work very much and has experience in the oil and gas field from the Attorney General's office, although she still has a lot to learn. SENATOR TAYLOR moved to send the standard letter to the Joint Body of the Legislature regarding Ms. Oechsli. There were no objections and it was so ordered. CHAIRMAN HALFORD adjourned the meeting at 4:35 p.m.