Legislature(2011 - 2012)CAPITOL 120
02/17/2011 05:00 PM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): North Pacific Fisheries Management Council (npfmc) | |
| HB141 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| *+ | HB 141 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 141-LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS
The committee took an at-ease from 5:56 p.m. to 5:57 p.m.
5:57:36 PM
CHAIR THOMPSON announced that the final order of business would
be HOUSE BILL NO. 141, "An Act relating to loans for the
purchase of fishing quota shares by certain community quota
entities; and providing for an effective date."
5:57:51 PM
REPRESENTATIVE AUSTERMAN, introduced HB 141, paraphrasing from
the sponsor statement, which read as follows [original
punctuation provided]:
The Community Quota Entity (CQE) program was developed
in 2004 by the federal North Pacific Fishery
Management Council to help communities maintain and
build involvement in the halibut and black cod
longline fisheries. The CQE program provided the
legal opportunity for communities to form non-profit
organizations to purchase individual fishing quota
(IFQ), anchoring fishery participation in these
coastal communities. In response, the 23rd
Legislature modified the Commercial Fishing Revolving
Loan Fund to provide authorization to finance fishing
quota for CQEs.
Despite the Alaska Legislature's initial efforts to
provide financing to the communities, only two of 42
eligible communities have procured quota share to
date. In fact, small coastal communities continue to
see a significant out-migration of fisherman and quota
shares, leaving them with limited or no access to
fisheries occurring just off their shores.
House Bill 141 will modify the financial instruments
the state has previously provided, to assist
communities to participate in the program and bolster
their economies. By establishing an independent
revolving loan fund modeled upon the existing
Commercial Fishing Revolving Loan Fund, HB 141 will
enable the state to structure a successful loan
program that supports rural community development and
strengthens Alaska's coastal regions.
An active commercial fishing fleet in a rural
community employs residents, provides tax revenues,
and spends income locally, which has a substantial
multiplier effect in small communities. This piece of
legislation is an important tool to support rural
coastal communities and develop sustainable economies
throughout the state.
6:02:23 PM
DUNCAN FIELDS, Vice President, Fisheries and Economic
Development, Old Harbor Native Corporation, introduced himself
as a fisheries advocate and active fisheries consultant.
6:03:08 PM
OLE OLSEN, Board Member, Gulf of Alaska Coastal Communities
Coalition (GOAC3), stated that, being born into a Kodiak fishing
family, he has a lifelong history with Alaskan fisheries, and
has been involved with the Gulf of Alaska Coastal Communities
Coalition (GOAC3) since it was formed.
6:03:44 PM
MR. FIELDS stated support for HB 141, and pointed out that the
committee packet includes [five] pages of written testimony and
supplemental material, which he submitted. He underscored that
HB 141 is a culmination of six years of work; not a new concept.
6:04:49 PM
MR. OLSEN directed attention to the committee packet handouts
titled "Community Quota Entities (CQEs)," dated 2/17-18/09,
prepared by the Restricted Access Management (RAM) division of
the National Oceanic & Atmospheric Administration (NOAA), which
contain a history of CQEs and supporting statistical
information. He described the development of individual fishing
quotas (IFQs), beginning with the inception of limited entry and
the effect it has had on the coastal community fishing fleets,
as a continual erosion of fishery access to these areas. In
1998 CQE's were created under federal law to address the
situation and assist coastal communities to rebuild the local
industry.
6:07:46 PM
MR. OLSEN provided an example of what occurred in Old Harbor and
the effect that the IFQ has had through the rationalization
program. The fleet has been significantly reduced, and every
coastal community has felt similar effects. The CQE was seen as
a means to level the playing field and regenerate opportunities.
Forty-five coastal communities, with less than 1,500
inhabitants, and not connected to the road system were
identified as eligible to organize into CQE's. He further
explained how the CQEs were formed using a point system to
distribute an equitable quota, and allow community governance.
MR. FIELDS interjected that the issue has been funding.
6:12:17 PM
MR. OLSEN stated that, in 2004, the opportunity to purchase CQEs
was extended, but immediately met with the lack of a funding
mechanism. Lending institutions could not be approached,
federal sources were not a fit, and the state loan package
requirements were prohibitive. In the case of Old Harbor, a
fisherman was able to provide backing, and of the 20 CQE's that
have formed, it is the only one operating, due to the funding
issue.
6:15:03 PM
MR. FIELDS reviewed the provisions of the bill, stating that a
long term loan is important for a CQE, as it is about quota
share, in the community, in perpetuity. The second provision
requires a down payment of five percent, which should be
possible; a higher rate would be a barrier. The third provision
is the interest rate of prime plus two percent, which is
standard; however, he suggested, an incentive would be created
if it were lowered to prime plus one percent. Finally, he said
an essential provision is the ability, as stated in the bill,
for a CQE to ask for postponement or deferment of the interest
on the principle, for up to ten years. The deferment would
eventually be paid back, but allowing this on the front end of
the loan, is critical to enable the CQE to build up reserves;
necessary in a fluctuating fishery industry.
6:17:26 PM
TIM GREENE, Representative, Nanwalek IRA (Indian Reorganization
Act) Village Council, stated support for HB 141, and said that
the CQE has been a total failure, noting that only one is
operational. He reported that the North Pacific Fisheries
Management Council (NPFMC) has been unwilling to meet with the
village council claiming exemption from EO 13175, which states
that all federal agencies are to provide government to
government consultation to tribal entities. Finally, he said:
I support HB 141. It gives a chance for a CQE to
possibly make a purchase. ... But there's nothing to
purchase. So that can be the next thing that can be
resolved.
6:21:14 PM
BILL LUCEY, Coastal Planner, City and Borough of Yakutat, stated
support for HB 141, and said there has been an active CQE in
Yakutat for about four years. Periodically the cost is
evaluated and the numbers do not pencil out. He predicted that
HB 141 could help with the financial situation, and the program
could be a huge benefit to the area, generating upwards of
$600,000 through the CQE non-profit. The infusion of the
revenues would provide the community with a great deal of
infrastructure security.
6:23:45 PM
GALE VICK, Executive Director, Gulf of Alaska Coastal
Communities Coalition (GOAC3), stated support for HB 141, and
said the CQE would be a viable, sustainable program, if provided
with a financial mechanism. The bill will provide a positive
economic stimulus.
6:26:04 PM
PATRICIA BROWN SCHWALENBERG, Executive Director, Chugach
Regional Resources Commission (CRRC), stated support for HB 141,
and indicated that the commission has been involved in the
evolution of the CQE program. Two years ago a workshop was held
on forming CQE's, but obtaining financing has not been possible.
Funding options are essential to get this program up and
running.
6:28:28 PM
BOB HENRICKS, Board Member, Chugach Regional Resources
Commission (CRRC), stated support for HB 141, and said this loan
program is desperately needed to get the CQE groups off the
ground. He said:
We're almost back to the days before statehood, when
all of the fishermen, and all the processors, were
from the south forty-eight, and controlled our
resources.
6:29:29 PM
TONY GREGORIO, Fisherman, stated support for HB 141, and said
that it will help the villagers to help themselves, and create
an economic base.
6:31:22 PM
FREDDIE CHRISTIANSEN, Fisherman, stated support for HB 141, and
said this would make CQE's plausible, and stressed that the
program is needed in coastal communities.
CHAIR THOMPSON closed public testimony.
6:35:42 PM
REPRESENTATIVE JOHNSON stated support for HB 141, and said it is
the type of legislation that provides people a means to help
themselves.
REPRESENTATIVE PRUITT concurred and stated support for HB 141.
6:36:59 PM
REPRESENTATIVE JOHNSON moved to report HB 141 27-LS0158\I, out
of committee, with individual recommendations and the
accompanying fiscal notes. There being no objection, HB 141 was
moved from the House Special Committee on Fisheries.