SENATE RESOURCES COMMITTEE February 10, 1999 3:10 P.M. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Pete Kelly Senator Lyda Green Senator Sean Parnell Senator Georgianna Lincoln MEMBERS ABSENT Senator Jerry Mackie Senator Robin Taylor COMMITTEE CALENDAR SENATE BILL NO. 13 "An Act relating to assessment of discrete salmon stocks and to discrete salmon stock assessment surcharges." -HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION No previous action to consider. WITNESS REGISTER Mr. Brett Huber, Staff Senator Halford State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Commented on SB 13. Ms. Mary McDowell, Commissioner Limited Entry Commission Alaska Department of Fish and Game 8800 Glacier Hwy., Ste. 109 Juneau, AK 99801-8079 POSITION STATEMENT: Mr. Rick Davis United Fishermen of Alaska 2347 Kevin Court Juneau, AK 99801 POSITION STATEMENT: Opposed SB 13. Mr. Dick Bishop Alaska Outdoor Council P.O. Box 73902 Fairbanks, AK 99709 POSITION STATEMENT: Supported SB 13. Mr. Bruce Knowles P.O. Box 873206 Wasilla AK 99687 POSITION STATEMENT: Supported SB 13. Mr. Geron Bruce, Legislative Liaison Alaska Department of Fish and Game P.O. Box 25526 Juneau, AK 99802-5526 POSITION STATEMENT: Commented on SB 13. Mr. Dale Bondurant 31864 Moonshine Soldotna, AK 99669 POSITION STATEMENT: Supported SB 13. Ms. Nancy Hillstrand P.O. Box 170 Homer, AK 99603 POSITION STATEMENT: Supported SB 13. Mr. John Merrigan Petersburg Vessel Owners Association P.O. Box 232 Petersburg, AK 99833 POSITION STATEMENT: Opposed SB 13. Mr. Cliff Judkins, President Alaska Boaters Association P.O. Box 874124 Wasilla, AK 99687 POSITION STATEMENT: Supported SB 13. Mr. John Peckham P.O. Box 8394 Ketchikan, AK 99901 POSITION STATEMENT: Opposed SB 13. ACTION NARRATIVE TAPE 99-9, SIDE A Number 001 SB 13-DISCRETE SALMON STOCK MGMT AND ASSESSMENT CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:10 p.m. and announced SB 13 to be up for consideration. MR. BRETT HUBER, Committee Aide, explained that although fishery management in Alaska has been successful over time in providing for an abundance of harvestable salmon on a state-wide basis, record catches alone don't ensure that we are fulfilling our constitutional mandate for sustained yield. This bill is different than last year's discrete stock management bill. It doesn't mandate the Board of Fisheries to adopt and implement discrete stock management in prescribed areas along specified time lines. Instead, SB 13 mandates discrete salmon stock assessment, leaving to the Board of Fisheries the determination of which stocks are appropriate by applying criteria such as biological health of the stock and the magnitude of user conflicts. MR. HUBER said that far too much of our fisheries management is being driven by allocation battles in our most contentious fisheries instead of by sound science and pertinent information. The lack of information brings the same issues before the Board year after year, leaving the issues unresolved and the user groups unsatisfied. This bill mandates discrete stock assessment that will allow the Board to target research on stocks in the fisheries for which they most need the information. MR. HUBER briefed the committee saying that Section 1(a) sets out the purpose of the bill to establish a discrete stock assessment program and provide a funding mechanism. Additional language clarifies that this program is not intended to impact the Department's base program. Section 1(b) specifies that a portion of the cost of the discrete stock assessment program will be paid by Sport Fish license revenues equivalent to $1 for each sport fish license sold. Section 2(a) delineates the Board's responsibility to determine the stocks for which discrete stock assessment is appropriate and sets out the criteria to be considered in the determination. Section 2(b)(1) delineates the development of the annual list of discrete stock assessment projects and sets out the criteria for the projects. Section 2(b)(2)provides opportunity for public comment on the project list. Section 2(b)(3) provides that the proposed project lists and corresponding costs be submitted to the governor for inclusion in the Department's budget for the following fiscal year. Section 2(c) requires the governor to include the discrete stock assessment program in a separate BRU in the Department's budget. Section 3 levies a $10 surcharge on commercial fishing crew member licenses for the discrete stock assessment program. Section 4 was language proposed by drafters to parallel the surcharge language with the existing statutes governing CFEC. permits. He noted that the Limited Entry Commission has a proposed amendment to delete this Section as well as lines 27 - 30 in Section 6. Section 6 requires the CFEC to collect a surcharge on limited entry permits and interim use permits totaling $500,000 for the discrete stock assessment program. Section 7 provides the initial discrete stock assessment list be prepared for submission in the FY01 budget and the license surcharges begin in calendar year 2000. Number 90 SENATOR PARNELL asked what the policy reason was for the $10 surcharge on the crew member fishing license. MR. HUBER responded that the Department tried to apportion the cost across the users by determining what kinds of programs would be included in this list and what the potential benefit would be to user groups. He said the Department would explain how the benefits of the programs and the data gathering has to be commensurate with the level of benefit to the user groups when dealing with federal or ADF&G funds. MS. MARY MCDOWELL, CFEC Commissioner, explained that their amendment requests them to delete the provision on lines 27 - 30 on page 3 which directs the Entry Commission to credit the $10 stock assessment surcharge that fishermen have paid on a crew license toward the stock assessment surcharge that persons would be charged if they obtained a limited entry permit or interim use permit later that same year. This was a new provision in the bill that the drafter inserted in an effort to be consistent with another provision in current law calling for credit of the fee paid for a crew license against the annual fee paid for a permit, if a person should happen to buy a crew license and then subsequently acquire a permit in the same year. The Entry Commission is in the process of drafting some housekeeping legislation which proposes to delete that existing credit provision along with cleaning up some other language in existing licensing statutes which have become obsolete, inconsistent, or unclear. MS. MCDOWELL explained that under current law, a limited entry or interim use permit in any fishery may be used by the holder to participate in any fishery in Alaska as a crew member. This allowance is widely known and used by fishermen. No fisherman has ever requested a credit under the crew license fee credit that is in current law. This is the provision the drafter intended the new credit incentive to mirror. Likewise, the new surcharge credit provision in SB 13 would provide little or no benefit to the public, and yet the requirement for CFEC to go through the motions of trying to implement and administer it would take considerable time and resources. They would have to try and match incompatible crew and permit data files of the Entry Commission with those of ADF&G in an effort to find any possible instances of eligibility for the $10 credit. In fact, because vendors don't turn in records immediately, the necessary crew license data from ADF&G isn't even compiled until a month after the end of the year in which CFEC would be required to grant the credit. MS. MCDOWELL concluded by asking the committee to delete the surcharge credit because it is not practicable or necessary. Number 161 MR. RICH DAVIS, United Fishermen of Alaska, said they have tracked the discrete stock management bill and oppose it now. UFA is not comfortable with an increase in license fees to conduct work they feel benefits everyone in the State whether they fish or not. Other work that needs to be done in the State, such as assessment of water flows and instream flow quantities, could be the next item if the Legislature chose to charge the fishing industry for every aspect of what the ADF&G does for their management. MR. DAVIS said he also has the written comments of the United Southeast Alaska Gillnetters who can't be here. MR. DICK BISHOP, Alaska Outdoor Council (AOC), supported SB 13. They think it's important for the Department to implement plans that will address problems of inadequate returns in salmon stocks and believe the discrete stock assessment work will be a step forward in that regard. MR. BISHOP said that the AOC is taking a more active role in fisheries work (mostly upper Cook Inlet) and have formed a fisheries committee with former commissioner of ADF&G, Carl Rosier. Number 224 MR. BRUCE KNOWLES, Wasilla resident, supported SB 13 completely. He didn't think it could be implemented too soon especially in Cook Inlet. Whenever he asks the Department why certain things can't be done, the standard comment is, "We don't have the data." He said many streams up there are suffering from low returns of chum salmon. There were concerns for pink salmon until last year when there was a healthy return. Chum salmon on the McNeil River are so low that they are having concerns for the health of the bear stocks around the river, their major food source. He would contribute from his permanent fund dividend for this and volunteered to help any way he could. MR. GERON BRUCE, ADF&G, said the Department understands that this bill sets aside a pot of money that could be used on a discretionary basis to address research needs of stocks with special or high concern. This is a good idea and they support it. He explained that the Department's commercial fisheries management program is primarily supported by general funds. There haven't been any discretionary funds in that program for some time to conduct this kind of research. Most of their funds are committed to maintaining the core in-season management program. The Division of Sport Fish also plays a major role in the salmon management of the State, but their funding sources have some restrictions on what they can be used for - both the federal aid funds and the ADF&G funds. In addition, the sport fishery has been growing very rapidly in the State and the Division is tasked just to keep up with that growth. MR. BRUCE said that this bill sets out a process involving the Board of Fisheries in setting broad goals identifying stocks that they believe they have insufficient information on. This process occurs with the consultation of the Department and allows an opportunity for the public to be involved. This would probably bring in some groups that have not participated in the past, a positive element. The next step would fall to the Department to develop research projects that would address the needs for additional information for the stocks the Board has identified. This is a good process; it keeps the Department in charge of the scientific research and data collection. Their overriding concern with the funding is that the salmon program, at least in the Division of Commercial Fisheries, is primarily dependent upon general funds (GF) which have been declining and may continue to do so. Therefore, he requested additional funds raised by this bill be designated in statute as "designated program receipts" which takes them out of the general fund category and puts them into a nongeneral fund category so there is no confusion down the line. When these projects are submitted as part of the Department's budget it represents an increase in general funding from non-recurring revenue sources. It is intended that these projects would be paid for by the users. Making the funds designated program receipts is very consistent and recognizes that these are recurring revenues and would not appear as a budget increment which would result in a cut in some other element of the Division's program, a worst-case fear. In addition to program receipts, it could be some sort of continuing capital improvement project (CIP). MR. BRUCE said they are very aware and sensitive to the fact that the users pay the cost of management. In the case of the Division of Sport Fish, there is no general fund. It's all user fees. The Division of Commercial Fisheries (DCF) has a significant general fund component, but the various taxes and license fees the industry pays are more than double the entire GF element of the DCF budget. The users are already paying and sometimes the general public doesn't realize this. One other concern is the additional stock assessment projects would be included in the Governor's budget and it would look like he is asking for an increment or he would have to cut something else out of the base programs. MR. BRUCE said he couldn't suggest an alternative. Number 359 SENATOR PARNELL asked where the license fees go now. MR. BRUCE answered that a portion of them go into the general fund and a portion of them go into the fishermen's insurance fund. SENATOR PETE KELLY commented that he thought designated program receipts were one-time contributions to the general fund. MR. BRUCE explained there are a number of different designated program receipts; test fishery funds are not a designated program receipt, but they are named in statute as a non-GF source of funds, a recurring source of funds. It's an item that the Legislature appropriates and provides authority for the Department to receive, but it is an on-going source of funds that is built into the Department's budget. Essentially the resources pay for certain management activities. SENATOR PARNELL asked what the Department would actually do with the discrete stock assessment information. MR. BRUCE explained that it would be provided to the Board and would be used to develop better estimates of where the special stocks are harvested, establish levels of escapement, set up weirs and sonars, do genetic stock identification work, and sample catches in fisheries. It could be used for the range of things specified in the bill. SENATOR PARNELL asked if the Administration supported SB 13. MR. BRUCE answered they support putting together a discretionary source of funds that could be used to address these stocks. They support and recognize the need for additional research on stocks of high concern in the State. They support the process of working with the Board, the public, and the Department. They are still concerned with the exact funding mechanism and how that would work. SENATOR PARNELL asked if this was consistent with their constitutional mandate. MR. BRUCE replied that it is consistent with their basic mission and their constitutional charge. The Department collects this kind of information and uses it in its management. Number 416 SENATOR PARNELL asked how they are addressing stocks of high concern now and what other ways are there besides discrete stock assessment. MR. BRUCE answered that another way is through CIPs, for example, one they got two years ago for work on stocks in upper Cook Inlet. The funds will be gone after the end of this year. If there is no additional source of funding, they have to either re-program from within existing programs or they don't address it. MR. KEVIN DELANEY, Director, Division of Sport Fish, supported the process that would bring the Board, the Department, and the users together through the existing Board process. Last year, at the request of the Resources Committee they looked at how much of their program is committed to doing stock escapement types of work and it's a considerable part of their budget. This bill adds a chance for more people to get involved in prioritizing some segment. SENATOR PARNELL asked what kind of criteria his Division provides the Board with in determining which assessments are needed. MR. DELANEY answered that to a large degree it is driven by the issues that come before the Board of Fisheries. There are the fiscal and realistic constraints of what you can accomplish. If the debate before the Board is centered around consistent restriction of a certain fishery or consistent failure to meet either the escapement objectives or the allocation strategies in that location, one of the questions becomes, "What happened, and where can you look, and what pot of money do you look at that question with?" SENATOR KELLY asked if a discrete stock would be measured by the tributaries of the creek rather than the larger creeks, like the Kenai River. MR. DELANEY answered that the term "stock" has a number of useful definitions; one is manageable as a unit where they look at the fishery they are talking about and the fish that are passing through at a specific time and place and what actions they can take, what precision they can expect from those actions. The other extreme is where you go into a primary tributary and then off into a secondary and tertiary tributary. There are also scientific definitions of stock based on the genetic structure. SENATOR KELLY asked how they are managing now versus managing for discrete stock. MR. DELANEY said that is a hard question, and having sat through years and years of Board meetings and hearing many questions, he knows there are far more questions out there about what's going on with our various fish than we have answers for at any time. The Department's ability is easily exhausted to give specific answers. The Department tries to look at where the major fisheries occur and at the major stocks that support those fisheries; they look at the other stocks that are harvested at the same time those major fisheries are being prosecuted. Then they look at a series of escapement objectives for the species they have; in many cases they have escapement programs for only the major species and perhaps aerial indices programs or some lesser measure of escapement for the other species. Often people ask questions the Department just can't answer. SENATOR LINCOLN noted that the bill reads the legislature "may" appropriate the money back and she wanted to know what prevented the legislature from saying they don't have enough money to achieve their discrete salmon stock goals and to put the money elsewhere. She noted the bill proposes to collect money from the already distressed fishermen and maybe that money wouldn't go where it was supposed to. CHAIRMAN HALFORD responded that language, "the legislature may," is what is used in every bill from shared taxes on. It's constitutionally up to the legislature to make the decision of whether it's designated program receipts or general funds. It is exactly the same appropriation process. Only the accounting process makes the distinction. MR. BRUCE said his concern is that this would compete with other projects in their budget and because it has this special status, it would probably prevail to the detriment of other established projects. He didn't think it was as likely that the money would go completely to another place. SENATOR LINCOLN said it wasn't fair to tax fishermen and crew... TAPE 99-9, SIDE B Number 590 who are already having difficulties. She thought they should get the money from other sources. MR. BRUCE restated that the Department is very aware and appreciative of the fact that the users have historically paid the cost of management - and then some. They don't want to do anything to jeopardize their willingness to do that. SENATOR PARNELL asked what the benefits of an assessment were to sport fishers and commercial fishers. MR. BRUCE said the benefits to both are somewhat the same - better management and better information about stocks that are subject to a lot of pressure or that they don't have as much information on right now as they would like to, will result in higher yields over the long term which means more fish to harvest. Also, if there is some downturn in productivity because of environmental conditions, they will be able to detect it soon enough to respond. SENATOR LINCOLN asked why sport fishermen would pay the same fee as commercial fishermen. CHAIRMAN HALFORD answered that he didn't know why a sport fisherman would want to pay so much more per fish than the commercial fisherman is willing to pay, but he knows that they're willing. MR. DALE BONDURANT supported SB 13 and discrete stock assessments, especially in the Kenai/Kasilof areas. In 1987 the commercial harvest was over 9 million fish, but only 66,000 got into the northern district. In 1992 there was only one million fish and 66,000 got there. Last year, when it was shut down, there were all kinds of fish in the northern district. MS. NANCY HILLSTRAND, Homer, supported assessing discrete salmon stocks. They are already seeing some stress on fish in the lower Kenai, Deep Creek, Ninilchik, and the Anchor River. She is on the Fish and Game Advisory Committee and has raised salmon for the past 18 years. She said it is critical to maintain genetic diversity. She appreciated what they were doing in the legislation, but this is only part of the complex puzzle to promote sustainability for the long term. This legislature must seriously address a comprehensive habitat integrity plan to go along with this. She noted that there is major logging going on on the Kenai Peninsula with very little protection for the salmon stocks. MS. HILLSTRAND said she had seen the legislature ignore extremely crucial pieces of the puzzle that will promote sustainability. Number 476 MR. JERRY MERRIGAN, Petersburg Vessel Owners Association, opposed SB 13. The problem identified in the bill is lack of data for fisheries management such as stock composition, i.d., escapement, assessments, and establishment of escapement goals. One solution that occurs to a number of people is to fund ADF&G at the levels it needs for necessary research to carry out its constitutional mandate of full utilization of fisheries under the principles of sustained yield. This legislation takes the distinctly different approach of taxing fishermen in order to fund ADF&G to carry on its constitutional mandate, but only on a few stocks selected by the Board of Fish. ADF&G has the capability and expertise to choose its own research projects, though funding seems to be the issue. Presently, the Board of Fisheries can request ADF&G for data or research to generate the data. This legislation seems to muddy the distinction between the Board of Fisheries and the Department of Fish and Game. MR. MERRIGAN said that ADF&G supports this bill, but he couldn't recall any time an agency would turn down a pot of a million dollars. This bill does not mention discrete stock management; however, the end result of utilizing a collection of discrete stock data is discrete stock management. What else is there to do with it? Escapement goals are generally needed, but he has spent five years representing Alaska at the US/Canada Pacific Salmon Treaty and can't recall any successful management for discrete stock or weak stock management, at least as conducted in Canada and the lower 48. Southeast Alaska fisheries are not conducted on discrete stocks; the geography here is numerous small salmon streams with an aggregate of production. Salmon streams number up to 5,000 and are utilized in our mixed stock fishery. He thought they might be called "indiscrete" stocks. Southeast fishermen who have the majority of the permits that will be taxed may receive very little benefit from this research. Additionally, Southeast fishermen have already paid for this information in the form of the Pacific Salmon Treaty which forced large reductions and restrictions on our fisheries. But as a part of the Treaty, technical committees were set up that compiled the same data needs as identified in this bill. His association would support increased fisheries research, but does not feel that this legislation is the logical course for that research. MR. MERRIGAN noted that the intent language has revenue coming from the Division of Sport Fish, but the statute addresses only commercial fishing. He noted that Senator Lincoln touched on the impacts of taxes and he said that this tax would not break people's backs, but unfortunately fishermen do not pay just one tax right now. They are assessed one percent for ASMI, three percent for aquaculture, permit and vessel renewal fees, and an upcoming three percent fee in the IFQ fisheries. This is a poor time to be accelerating taxes. Commercial fishermen are already paying their way in terms of fees collected in State management. MR. CLIFF JUDKINS, President, Alaska Boaters Association, said he had been fishing in Cook Inlet streams for 36 years and strongly supported SB 13. Whenever he has asked ADF&G how many fish a stream can handle, he is invariably told they can't say, because they don't have data on that species in that stream. MR. JOHN PECKHAM, Ketchikan, said he purse seined for salmon and opposed SB 13. He supported Mr. Merrigan's comments and added that ADF&G is widely regarded as very successful at managing salmon and he didn't know how successful they could continue to be if their funding is continually reduced. Part of their job is to do stock i.d. and data collection and it doesn't make sense to look at spending more money on things that aren't directly related to their core programs. MR. PECKAM said he also participated in the Salmon Treaty and he has seen funds available for use by other countries going into determination of allocation issues as opposed to actually improving management. It is frustrating seeing that amount of money going into something that really doesn't help the resource; and in the end it doesn't really stop the allocation arguments either. In Southeast, his stock of concern is pink salmon, but it doesn't have a lot of allocation issues and isn't a real conservation problem. It could be managed for better quality and more fish, but nothing would be spent on it under this bill, because it's not seen as a political issue. So they will be taxed on trying to solve the Kenai River's problems. MR. PECKAM concluded that we could spend more money on our fish resources and get more money for the State out of our fish resources, but this specific use of a pot of money is not the best use of additional funds. CHAIRMAN HALFORD thanked everyone for their participation and said they would take more testimony at another meeting. He adjourned at 4:20 p.m.