Legislature(2001 - 2002)
03/20/2002 03:35 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSHB 206(RLS)-LIMITED ENTRY FOR COMM. FISHERIES CHAIRMAN TORGERSON announced HB 206 to be up for consideration. REPRESENTATIVE DREW SCALZI, sponsor of HB 206, said in 1996 or 1997 a moratorium was placed on the hair crab and weathervane scallop fisheries and reauthorized a few years later. He explained: Under the direction of the legislature, the Commercial Fisheries Entry Commission was asked to come up with a limited entry plan for these two fisheries. The CFEC needed a different tool than was in the toolbox to come up with a plan. Currently, our limited entry permits must go to an entity, a person. Under this scenario, it was not acceptable to create a limited entry plan for these two fisheries that would not exacerbate the problem. If the limited entry system that we have currently was used, the permits would have had to go to more than one vessel, because all vessels have up to five different permit holders on them. These are Bering Sea fisheries and the owner is not usually on board and under that scenario, you would need multiple permits. That would have allowed too many entrants into the fishery. So, the CFEC felt that if we would modify the system with HB 206 and allow a vessel based permit to take place, the vessels that were involved in the fisheries for the last few years would be the potential recipients of the limited entry permits that would be made available. HB 206 changes essentially the manner in which the limited entry system can take place by attaching it to the vessel. He said the bill had been modified several times, because initially CFEC wanted a tool that could be utilized for other fisheries. Because the bill allows an entity to be an owner of a permit, they thought it best to limit it to these two fisheries. REPRESENTATIVE SCALZI said that initially, after the permit is issued to the vessel, the next generation of ownership should go back to an entity. Because of the dynamics of the Bering Sea fisheries, they realized that the owners can't operate the business while being onboard and often are not there. SENATOR STEVENS asked him to explain the concept of the Limited Liability Partnership (LLP) versus a state permit and the issue of why the state should let LLP participants in. REPRESENTATIVE SCALZI answered after an incident when one scallop vessel took the quota a few years ago, there was a drastic measure to put a moratorium on new entrants into the scallop fishery. The LLP and the federal fisheries are separate, in that [the LLP] applies to federal fisheries. This is for state managed fisheries. CHAIRMAN TORGERSON referred to Section 3, which deletes "scallop fisheries" and inserts "fisheries." He asked what else this bill would include besides the scallop fishery. REPRESENTATIVE SCALZI said this bill just applies to the scallop and hair crab fisheries and that language change was made to be consistent with another part of the bill. TAPE 02-12, SIDE B MS. MARY MCDOWELL, Commercial Fisheries Entry Commission, said: As the sponsor of the bill said, as far as the origins of the bill, this is something the Commission was directed to do by the legislature specifically. There was language in the hair crab moratorium bill asking us to come back to the legislature with language that would be generic. Originally that's what we were requested to do - to come up with a bill that would create this alternative program that would be vessel based, that could be used in fisheries that did not lend themselves to effective limitation under our current program. She explained that CSHB 206(RLS) is generic legislation that creates this program with specific criteria. The default is to the original program unless the purposes of the Limited Entry Act, conservation and avoiding economic distress among fishermen, could not be met under the current program. In that case, CFEC could consider using this alternative program, vessel based, to limit that fishery. During considerable testimony in the House Resources Committee, concerns were expressed about moving towards the possibility of a limited entry program based on vessel ownership and ownership by entities rather than by human beings. She commented: The Commission feels very strongly that we should always use the person-based program when we possibly can. That is something that has been very important to the way Alaska manages its fisheries and empowering fishermen and so on and we are very supportive of doing that whenever possible. She said CFEC recognizes that the state is faced with managing or limiting a few fisheries that just may not lend themselves well to limitation under their current program, two examples being the weathervane scallop and hair crab fisheries. She noted: These are very much unlike the kinds of fisheries the state has had to limit before. These are Bering Sea fisheries, large boat, currently corporately owned and for the most part the owners are not on board. Most of them are used by corporations and partnerships and use hired skippers and relief skippers. There are a number of different people running the boat over the course of a season. MS. MCDOWELL said that the House Resources Committee recognized the need to have an alternative program in these two instances, but it was not willing to create a generic tool that could be used in any of the fisheries. Language in CSHB 206(RLS) still largely reflects the original generic bill, but has been restricted to use in those two fisheries only. She stated: The question that arose a few minutes ago on page 9 about "scallop fisheries" being broadened to "a fishery" was in the original generic bill, but still makes sense to include here. This is just to make it clear in statute that when the state has an opportunity to manage a fishery that the feds are willing to delegate management to the state to run, that we have clear statutory authority to accept that. I think it has always been the state's position that we should manage whatever fisheries we can and in some instances, the North Pacific Council and the federal government are willing to turn over management of a fishery to the state. So, this is to make sure that generic language is in there for the state to accept that. She said that phrase really doesn't have much to do with CFEC, but rather with state management of a fishery through ADF&G. SENATOR STEVENS asked how many weathervane scallop permits would be issued with this legislation. MS. MCDOWELL answered: I guess it's important to start by recognizing that this bill doesn't limit either of those fisheries. It will only give us the ability if and when we were going to limit those, to use this alternative program if necessary. So we haven't done the research to know how we would limit these two fisheries. I think under the moratorium there are 21 boats for scallops and only one for hair crab. SENATOR STEVENS asked if this framework meets the moratorium requirement and when it sunsets. MS. MCDOWELL replied that the hair crab moratorium sunsets in 2003 and the scallop moratorium in 2004. SENATOR STEVENS asked if they would have to implement the plan by '03 and '04. MS. MCDOWELL said this would be the enabling legislation and: Once it is in place, the Commission would have to research both fisheries, determine which program - this doesn't automatically say we shall limit it under this program. At that point, we would have to determine whether there was any possible way to limit it effectively under our current program and then we would have to make a finding that we would have to use this program to limit that fishery, put out a regulatory proposal proposing a limitation and go through all of that, and then adoption of the program and have that eligibility criteria and have it adopted and in place before the moratorium expired - in order to avoid having an open access fishery happen in the meantime. SENATOR STEVENS asked if both of these biomasses in the GHLs are managed by the Alaska Department of Fish and Game (ADF&G) under a fisheries management plan from the federal government. MS. MCDOWELL said she thought that was true. SENATOR STEVENS said the reason he brought it up is because of the recent news that the entire shellfish management plan might be reverting back to the federal government anyway. He asked if she had talked to ADF&G about that potential. MS. MCDOWELL replied that she understands that there had been some conversation about what to do with the management of the fisheries that have been delegated to the state under the current budget situation, but CFEC needs to have the tools in place in case they are faced with this management dilemma. SENATOR STEVENS agreed they need to be prepared. MS. MCDOWELL said she thought the discussion he referred to had to do with where the state had been delegated authority to manage in federal waters and, in this case, they are talking about state waters. She stated, "The feds are already managing scallops; they've done the LLP. The state is managing the licensing for the scallops." SENATOR STEVENS said the point he was trying to make is if ADF&G is cut from shellfish management, all of this is for naught. MS. MCDOWELL responded that she didn't know if this would be part of that or not, since this is in state waters. CHAIRMAN TORGERSON asked what would happen without this bill. He asked if they could issue limited entry permits to the individuals under current law and not vessels. MS. MCDOWELL replied that the dilemma they would be faced with would be to decide they couldn't effectively manage and let it go back to open access, which could result in ADF&G's closing the fishery if they felt that was too risky. She said: The other option would be to explore whether there would be a way to limit it using the existing program to get the numbers down to something that was sensible. A policy call for the legislature is the fairness question of issuing permanent fishing privileges to those who have been hired skippers rather than invest in the boat. SENATOR STEVENS asked how many permits that would amount to. MS. MCDOWELL replied that they hadn't done the research and didn't know the exact numbers. MR. JOHN WINTHER, Petersburg fisherman, said he had been a commercial fisherman since 1964 in Southeast and expanded into the Bering Sea with a crab vessel in 1973. He said the Bering Sea is unique because the majority of vessels are not owner-operated. All of the crab fisheries are under a ration program under the North Pacific Fisheries Management Council (NPFMC) except for the Korean hair crab fishery, which was delegated to state management quite a while ago. That is why they are asking for legislation to create a vessel license through the state with authorization from the legislature. They see no other way under the current system that uses personal license permits to reduce the number of permits to where it can be a rational fishery. He said, "In fact you would be expanding the effort because of multiple skippers." MR. WINTHER said another issue is with the large cost of entering the Bering Sea fisheries: You have a vessel and you have a guy that owns the permit who doesn't have any interest in the vessel. The vessel owner is held hostage to the guy that has the license. If he chooses not to go on your vessel, your vessel sits at the dock. If it's a vessel license, then you can get anybody to run the vessel. So, we have all the investment and all the risk and yet no license to fish under the current entry system. He said that every boat that goes up there is qualified to fish as a catcher vessel. All the product is taken to Alaskan shore side plants, processed in state. The state derives a fish tax off of it and jobs are created. He maintained: If the moratorium expires and there's nothing to take its place, this thing will shift to an offshore fishery where you get the catcher processors involved and the state sees little or nothing… He pointed out that a majority of the Bering Sea fisheries are out-of-state owned, but in this little fishery, about 24% of the boats are owned by Alaskans. Of the larger crab fleet about 5 to 10% of the boats are owned by Alaskans. He stated: If this does expire and it goes back to federal management, you don't want it there. By the time you get something implemented under the federal system, new entrants come into being and they won't be able to manage the fisheries. MR. JIM STONE said he is from the scallop vessel Ocean Hunter and has fished off the coast of Alaska for 15 years; 10 of those years in state waters. They were excluded from state waters after the moratorium. They have a federal license to fish outside the three-mile limit where 80% of the scallop beds exist. He supports HB 206, as the LLP vessel license limitation has done a bunch of good things for them. The boats work well together, their crab by-catch has gone way down through voluntary monitoring and they are no longer racing for fish or going out in storms. He noted, "We'd like to see the state mirror what the federal government has done in federal waters." MR. OLIVER HOLM said he is concerned about the precedent set in HB 206 in licensing vessels, because an entity is getting the right to harvest fish. He thought the concentration of ownership would be very hard to track, especially with a reduced budget. He didn't think it was necessary to have state limited entry at all. The Korean Hair Crab fishery is fairly small and insignificant. He said most of the money would go out of state if the vessels were licensed. If individuals were licensed they would contribute to the economy in Alaska more. MR.CHRIS BERNS said he opposes HB 206 because of all the reasons previously stated, along with the same concerns people had with SB 329. He believes, "It's a drastic policy shift that the state has taken." MR. YAKOV REUTOV opposed HB 206 for the reasons already stated. MR. ALAN PARKS, Homer commercial fisherman, said he is speaking on his own behalf and opposes HB 206 for a lot of reasons. He has participated in the fisheries on a variety of different sized vessels. He disagrees somewhat with what the sponsor statement (dated 3/21/01) says, "Further, it would award ongoing fishing privileges to many who have worked professionally as hired crew and not those who have invested in the fishery." By giving rights to the resource to vessel owners, he, as a hired crew, is basically a sharecropper and he didn't think that was the intent of limited entry laws. MR. MALCOLM MILNE, Homer commercial fisherman, opposed HB 206 because, "It's important that fishing rights go to the people who are fishing and not those who are at the dock out-of-state just collecting the money." MR. MAKO HAGGERTY also opposed HB 206 for the same reasons already stated. He thought the economics of the hair crab fishery determines the level of participation and he wasn't sure that limited entry was a fair way of managing that fishery. CHAIRMAN TORGERSON reiterated that he had lost a quorum so he was only taking testimony today. He thanked everyone who testified.
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