Prepared Remarks House Speaker Representative Gail Phillips gave to the Resource Development Council's Subsistence Panel on November 20, 1997

Most of us who have followed subsistence fully realize the immense social conflicts that have developed as this issue continues unresolved. The polarization between Alaskans has intensified as this political, social and economic issue continues. We read or hear about the subsistence debate almost daily and it isn't too difficult to understand the deep emotions expressed on all sides of this issue. From the social side, it is easy to see the benefits that will flow from a permanent and rational solution to subsistence in Alaska. The subsistence problem does present, however, a host of potential issues for Alaskan businesses.

The likely benefit to the business community of resolving the subsistence conflict are not as clear -- especially for those businesses not directly linked to subsistence allocation decisions such as our sport and commercial fisheries.

The development of a permanent and workable solution to the existing subsistence crisis will have a major impact on those resource uses that frequently or occasionally conflict with subsistence uses. Alaska is now faced with threat of federal preemption of some or many of our commercial fisheries in order to carry out the mandates of the Ninth Circuit Court of Appeals. Although this preemptive strike has been delayed until December of 1998 by Congressional action, it is still imminent if the state fails to craft a rational solution.

One of the immediate concerns is the uncertain impact of federal management on specific fishery economies. We do not know what fisheries or which navigable waters will be targeted by the Secretary of the Interior. We do know that the multi-million dollar False Pass, Yukon River and Copper River Fisheries will be near the top of the list. It isn't too far fetched to assume that other major conflicts will develop especially when and if resource stocks take an eventual downturn and escalating conflicts with subsistence uses develop.

We must remember that although it is well documented that subsistence uses consume only about 5% of our fisheries resources, there are relatively few fisheries that do not compete with some subsistence use somewhere.

Without a rational solution, we are stuck with a court ruling which states that "all competing uses must be eliminated before restricting subsistence uses." The question is, would all intercept fisheries be eliminated to guarantee that subsistence uses are continued on relatively small segments of the total stocks? Under this scenario, the guarantee of terminal fisheries for 5% of a stock may eliminate the other 95% intercept fisheries. Apply this to Chignik and Karluk River reds, Nushagak kings and cohos, Iliamna reds, Southeastern kings and Cook Inlet kings and reds and you will quickly get the picture.

Can these conflicts be eliminated -- probably not, but it may be possible to set some standards for decision-making which will assure that economic issues are considered and the courts and regulatory boards have some leeway to balance uses. Lacking some regulatory stability, it is assured that the economies surrounding our commercial fisheries will deteriorate. Fishermen and processors will be hard pressed to predict and prepare for volatile seasonal fluctuations designed to eliminate every conceivable conflict with subsistence uses. Financial markets will certainly become more concerned about the fisheries economy when it comes time to finance new gear and new vessels. The greatest insecurity will be evident in the many small and large businesses which depend on commercial fishermen for their livelihood.

Of major concern to most commercial fishermen is the potential impacts on the value of their limited entry permits. The unaltered existing interpretation of the federal court system over the definition of "customary trade" in the existing federal subsistence law could result in a massive influx of new unpermitted commercial fishing. Under existing federal law, cash sales of subsistence caught resources is not prohibited. The result could be worthless limited entry permits in some areas of the state.

Additional concern has been raised about the tourist oriented industries focused around sport hunting and fishing. Predictably, these industries will experience similar impacts. In reality, hunting guides have already seen the effects of tighter federal control and restrictive regulations. Unless there is some permanent solution to the subsistence dilemma, however, it is inevitable that more and more direct conflicts with subsistence uses will occur and areas will be permanently closed or restricted to non-residents in particular and non-subsistence resident hunters and fishermen as well.

The potential economic losses resulting from the closure of trophy sport fishing in Bristol Bay, Southcentral or Southeast Alaska are enormous. Coupled with economic impacts to air taxi operators, lodges, hotels, and other related service industries, the losses become severe and widespread.

One of my major concerns is the fact that unlike our state laws on resource management, the Secretary of Interior has virtually no legal responsibility to sound conservation principles and the sustained yield of any segment of our economy, except for subsistence. The unparalleled fish and wildlife management advances made by the state since statehood could well be lost incrementally due to overly conservative management decisions in some instances and overly permissive subsistence only considerations in others. Only the State of Alaska should manage our valuable resources. We have proven that we can do it properly, and the federal government has demonstrated it cannot.

Before leaving the direct conflict subsistence use arena, I want to emphasize something extremely important. It is critical, in our struggles to construct a permanent long term solution to this crisis, that we do it right. Resolving the issue does not mean caving in to one side or the other nor does it mean only placing a temporary bandage on an open wound. If we do not construct a solution which provides stability to all competing uses and we do not provide functional and effective regulatory and management processes, we are only going to exacerbate the existing situation. Alaska must be given the flexibility to manage its economic and social affairs without the heavy hand of the federal government.

I have already touched on the potential impact on service oriented industries which cater to commercial, sport or other consumptive uses of our fish and game resources. That may well be just the tip of the iceberg, however. Losses in revenues generated from non-resident hunting and fishing help pay for many programs in the state which directly or indirectly benefit other users. Non-resident hunter revenues help pay for non-game programs and non-resident fisheries funds help finance hatchery programs which benefit all users, including subsistence users.

Although the bulk of our revenue in Alaska comes from oil development, many communities around Alaska are dependent on annual commercial fisheries taxes to make ends meet. As revenue sharing funds have become more scarce, these funds become critical financial pillars to the economies of many small coastal communities.

Certainly the solvency and economic contribution of many communities might be at risk if both oil and fisheries revenues decline at the same time.

From a statewide perspective, it is not too difficult to predict that the continued strife over subsistence issue will invade the total fabric of our society. Endless litigation may serve the legal profession well but it takes its toll on the rest of us. Endless battles over constitutional rights and racial inequalities can only serve to divide us permanently with immeasurable economic and social impacts -- most of which are closely integrated. In the long term, it is questionable whether a state or country which is torn apart socially can retain its economic health.

Whether we admit it or not, the repercussions of expanded conflicts between our urban and rural communities is going to spill over into the political arena. Rather than focusing on the problems of jobs and basic services to many rural areas, the major focus of our energies is directed at social and economic conflicts spawned by the subsistence debate. Dividing Alaskans along geographic lines may fit the agenda of the federal bureaucracy but it does nothing to provide the unity desperately needed to solve all of our other problems.

I, like many Alaskans, believe the single best use of our wildlife resources is to put food on the table for the people who need it the most. Who is best suited to make this decision - Uncle Sam of the IRS fame? Or your neighbor, the one you've always counted on when times get tough?