Legislature(2017 - 2018)BUTROVICH 205

04/18/2018 03:30 PM RESOURCES

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        SB 135-COOK INLET: NEW ADMIN AREA;PERMIT BUYBACK                                                                    
3:48:03 PM                                                                                                                    
CHAIR GIESSEL announced consideration of SB 135.                                                                                
3:48:31 PM                                                                                                                    
SENATOR COGHILL moved to adopt  CSSB 135( ), version 30-LS1047\D,                                                               
as the working document.                                                                                                        
CHAIR GIESSEL said  she would not object, because  she wanted the                                                               
sponsor to be able to work  from this committee substitute as his                                                               
first presentation. Finding no other  objections, she said the CS                                                               
was before the committee.                                                                                                       
3:49:04 PM                                                                                                                    
SENATOR  PETER   MICCICHE,  Alaska  State   Legislature,  Juneau,                                                               
Alaska, sponsor of  SB 135, quipped that long before  he got into                                                               
the  legislature  he  heard  that some  folks  disagree  on  some                                                               
fishing issues and that wading into  a bill like this seemed like                                                               
the furthest  thing from something that  he would want to  do. He                                                               
stated that two sides that  normally don't hang out together came                                                               
up  with an  idea that  could work.  The set  netters routed  the                                                               
interest to their membership in the form of two questions:                                                                      
     1.  Do  you  support  the concept  of  voluntary  fleet                                                                    
     reduction program  for the Cook  Inlet set  net fishery                                                                    
     that   would  cost   nothing  to   those  who   do  not                                                                    
     participate  and remain  fishing? 79.6  percent of  the                                                                    
     respondents answered yes; 20.3 percent said no.                                                                            
      2. Do you oppose any form of fleet reduction at this                                                                      
     time? 17.7 percent said yes, and 82.3 percent said no.                                                                     
SENATOR MICCICHE said those poll  responses sent a strong message                                                               
to him that it was okay to start this conversation.                                                                             
3:51:11 PM                                                                                                                    
He said  you know about  the competition  for fish in  Cook Inlet                                                               
and about the  issues between in-river fishermen  and set netters                                                               
when it comes to king salmon catches along the east side.                                                                       
SENATOR  MICCICHE explained  the goal  of this  legislation is  a                                                               
voluntary buy-back  that reduces  the amount  of people  that are                                                               
fishing on  the east  side to the  pre-1980s migration  east when                                                               
people from all over Cook Inlet  moved into the east side because                                                               
the fishery was  more lucrative there. It  seemed more manageable                                                               
then and  it was more  profitable for the commercial  set netters                                                               
who were fishing at  the time and in the view  of many, there was                                                               
less negative interaction between the two groups.                                                                               
The plan in SB 135 would  reduce the number of fishermen by about                                                               
40 percent.  For interested parties,  there would be  three years                                                               
of a  lottery; each year  the number in  the lottery would  be 65                                                               
with a target  of around 200. If a fisherman  decided to sell his                                                               
operation, it would come with the  piece of water where he fishes                                                               
-  from  a  DNR  shore  lease,  a  buoy-tag  system,  or  another                                                               
identifying system -  it would take that piece of  water and that                                                               
permit  out of  fishing the  east side.  It would  separate these                                                               
districts from  the rest  of Cook  Inlet set  netters and  no new                                                               
fishermen could come into the area that was bought.                                                                             
A whole operation  has been valued at $260,000  realizing that it                                                               
would be  the ending of  a business that  in some cases  has been                                                               
there for many  generations. The payments would  be received over                                                               
three  years for  tax considerations.  The result  would be  that                                                               
that site  would be  removed from active  fishing along  with the                                                               
SENATOR MICCICHE  said they believe  that coming back to  that 60                                                               
percent range  would eliminate a  significant amount  of negative                                                               
interaction between  the two groups  and it would  make remaining                                                               
set net operations more efficient  and, therefore, survivable. It                                                               
would increase the amount of  in-river opportunities for both the                                                               
Kasilof and the Kenai Rivers.                                                                                                   
CHAIR GIESSEL asked for a sectional analysis Of SB 135.                                                                         
3:55:17 PM                                                                                                                    
KONRAD  JACKSON, staff  to Senator  Peter Micciche,  Alaska State                                                               
Legislature, Juneau, Alaska, provided  a sectional analysis of SB                                                               
Section 1:  Establishes the  short title  of this  legislation as                                                               
the East Side of Cook Inlet Set Net Fleet Reduction Act.                                                                        
Section 2: Adds  a findings section to the uncodified  law of the                                                               
state establishing  that it is  in the public interest  to reduce                                                               
the number  of commercial  set net  fishers on  the east  side of                                                               
Cook Inlet  to allow more  fish for  in-river users and  create a                                                               
more economically viable and sustainable se net fishery.                                                                        
Section  3: Amends  AS  16.43.200(b)  granting Alaska  Commercial                                                               
Fisheries  Entry Commission  (CFEC)  the authority  to divide  an                                                               
existing administrative area.                                                                                                   
Section 4: Amends AS 16.43.200 by adding 2 new subsections:                                                                     
     (c)Establishes  the  new  Eastern Set  Net  Subdistrict                                                                    
     (ESNS)as  distinct  administrative area  separate  from                                                                    
     the Cook  Inlet Central District.  This rea is  made up                                                                    
     of the  statistical areas currently identified  as 244-                                                                    
     21, 244-22, 244-31, 244-32, 244-41, and 244-42.                                                                            
     (d)Restricts those  who have  not previously  fished in                                                                    
     the newly  established ESNS from  beginning to  fish in                                                                    
     that area.                                                                                                                 
Section 5: Amends AS 38.05.082 by adding a new subsection:                                                                      
     (g)Not withstanding (a)-(d)  of this section, restricts                                                                    
     the DNR director  of the Division of  Mining, Land, and                                                                    
     Water  from  entering  into  a   new  lease  for  shore                                                                    
     fisheries in the statistical  area established under AS                                                                    
     16.43.200(c),  enacted by  sec. 4  of this  Act, of  an                                                                    
     exiting shore  fishery lease. Does allow  for accepting                                                                    
     assignment  or  sublease,   extension,  or  renewal  of                                                                    
     existing leases.                                                                                                           
Section 6: Adds new transition  sections to the uncodified law of                                                             
the State:                                                                                                                      
     (a)  Directs CFEC  to issue  new permits  for the  Cook                                                                    
     Inlet Central District set net fishery.                                                                                    
     (b)  If  an  individual  shows  satisfactory  proof  of                                                                    
     fishing  in  the  new administrative  area  established                                                                    
     under  AS 16.43.200(c)  within the  two years  prior to                                                                    
     12/31/18, they  will be granted  a permit for  that new                                                                    
     administrative area.                                                                                                       
3:58:13 PM                                                                                                                    
Section 7: Adds a new section  to the uncodified law of the State                                                             
which requires an  election be held on March 1,  2019, to approve                                                               
or  disapprove  the  fleet  reduction  program.  Establishes  the                                                               
criteria for the  election process. The ballot  will determine if                                                               
the  program  will  be  implemented;   it  will  indicate  region                                                               
boundaries, details  of buy-back program,  effective date  if the                                                               
program is  approved, and the date  by which the ballots  must be                                                               
3:59:08 PM                                                                                                                    
Section 8: Adds a new section  to the uncodified law of the State                                                             
which defines the east side setnet fleet reduction program:                                                                     
     -Defines  the qualifications  for participation  in the                                                                    
     -Establishes that the program is voluntary;                                                                                
     -Establishes that  the commission shall hold  a lottery                                                                    
     each year for three years;                                                                                                 
     -Sets permit value at $260,000;                                                                                            
     -Establishes  a payment  plan for  the purchase  of the                                                                    
     -Program  shall terminate  when permit  count has  been                                                                    
     reduced by 40 percent of the permits fished in 2017;                                                                       
     Permits   purchased  under   this   program  shall   be                                                                    
     cancelled and  not reissued in  place of  the cancelled                                                                    
     -A  three-year  installment  payment  option  shall  be                                                                    
     -DNR shall, without penalty,  terminate the shore lease                                                                    
     and prohibit future leases of the property;                                                                                
     -Acquisition  of permits  is not  subject to  the State                                                                    
     Procurement Act;                                                                                                           
     -Establishes that "commission"  means Alaska Commercial                                                                    
     Fisheries Entry Commission.                                                                                                
4:00:58 PM                                                                                                                    
Section 9: Adds a new section  to the uncodified law of the State                                                             
which  directs  the  chair  of  the  commission  provide  written                                                               
notification to the Lt. Governor of the results of the election.                                                                
Sections 10, 11, and 12: Effective Date Clauses.                                                                                
SENATOR WIELECHOWSKI  asked if a  set net entry permit  gives one                                                               
the right to have one set net in the water or is it an area.                                                                    
SENATOR MICCICHE  replied that one permit  typically allows three                                                               
nets wherever you are permitted  to fish, unless there is another                                                               
SENATOR WIELECHOWSKI  said he knows  people own  multiple permits                                                               
and have maybe  six or nine nets  in the water and  asked if they                                                               
could sell just one permit and keep the other two.                                                                              
SENATOR  MICCICHE  replied selling  a  permit  means selling  the                                                               
ability to  fish those three nets  and that piece of  water would                                                               
have  to go  with  it. They  would  not have  to  sell the  other                                                               
permits. The  important thing is  that in the 40  percent removal                                                               
they will know  who is registered and whether  they are qualified                                                               
by the criteria, so the number  of permits and sites in that area                                                               
is known.  The goal  is to  reduce number by  40 percent.  No new                                                               
permits would be issued to backfill.                                                                                            
SENATOR   GIESSEL   recognized    Representative   Rauscher   and                                                               
Representative Knopp in attendance.                                                                                             
4:03:14 PM                                                                                                                    
SENATOR VON IMHOF said section 8  is part of the mechanics of the                                                               
bill and says, "establishes that  this program is voluntary," and                                                               
asked what if no one wants to sell his permit.                                                                                  
SENATOR MICCICHE  replied if  no permits  are sold,  people would                                                               
continue  fishing as  they  have, but  that  probability is  non-                                                               
existent. Some  are worried about "voluntary"  being removed, and                                                               
this bill  really is about  all the users  in Cook Inlet  and his                                                               
intention  is   to  protect  the  rights   of  everyone  involved                                                               
including those set net fishermen who have brought this forward.                                                                
SENATOR VON  IMHOF said  if a  whole lot of  people want  to sell                                                               
their permits,  who is  paying this $260,000  per permit  and how                                                               
much is going to be paid per year.                                                                                              
SENATOR  MICCICHE replied  that  this bill  has  no funding,  the                                                               
total  price tag  for  the  full 40  percent  reduction would  be                                                               
around  $50 million,  and he  is working  with the  congressional                                                               
delegation on getting federal conservation funds.                                                                               
SENATOR STEDMAN said  it is late in the session  and asked why he                                                               
introduced this buyback  bill now, because it takes  time to work                                                               
through.  The last  one, which  he thought  was on  the verge  of                                                               
being "crooked,"  was the  Southeast seine  buyback, and  when he                                                               
sees  a buyback  bill,  it  brings those  bad  memories back.  He                                                               
wanted to hear  why there is interest in the  buyback; maybe data                                                               
showing  pressure on  the  fishery -  lack of  fish  or too  many                                                               
permits. He also wanted to know  how they arrived at the $260,000                                                               
valuation  and what  those permits  trade for  over the  last few                                                               
years for background, and how  many trades per year. He cautioned                                                               
that the Resources  Committee should proceed with  caution and do                                                               
a  thorough job.  He also  cautioned the  committee on  the title                                                               
being too broad.                                                                                                                
SENATOR STEDMAN  also recalled  that for  the last  buyback there                                                               
was a  lot of interest in  the funding coming out  of Washington,                                                               
4:09:31 PM                                                                                                                    
SENATOR  MICCICHE replied  that  he  didn't know  if  he heard  a                                                               
question, but  he would take a  stab at an answer.  He lives with                                                               
these people every  day; this isn't a game. No  one is proceeding                                                               
more carefully  on this  issue than the  him. He  assured Senator                                                               
Stedman this  will go forward slowly,  which is why it  has taken                                                               
four years to  get this point from the initial  contact. This has                                                               
to be done right. These are people's lives.                                                                                     
There is nothing  dishonorable about this approach  he said. This                                                               
is the  result of the second  version of the bill.  The first one                                                               
was drafted  earlier and pre-filed.  The folks from home  and the                                                               
CFEC sent  lots of comments and  they heard from people  all over                                                               
the state. All of the comments  that made sense that seemed to be                                                               
remotely  related  to  this  bill  are  included  in  the  second                                                               
4:11:22 PM                                                                                                                    
SENATOR   STEDMAN  clarified   that  his   comment  referred   to                                                               
legislative games at  the end of session not  the district games.                                                               
He assured  Senator Micciche that  the Southeast  buyback program                                                               
smelled; it  smelled so  bad that  it drew  the attention  of the                                                               
Attorney General's office  and he didn't want to  see that happen                                                               
CHAIR  GIESSEL said  that  is  the purpose  of  this hearing  and                                                               
people are online to respond to those concerns and questions.                                                                   
SENATOR BISHOP said  section 6 directs CFEC to  issue new permits                                                               
for the Cook  Inlet central district net fishery and  asked if he                                                               
was looking for a third party  to buy the permits from the people                                                               
who want to voluntarily sell them.  Could he, as someone from the                                                               
Interior, purchase one of these permits?                                                                                        
SENATOR  MICCICHE replied  that Senator  Bishop could  purchase a                                                               
site any  time; they are  open to the  public. But the  reason it                                                               
goes  through CFEC  is because  they  are trying  to stay  within                                                               
acceptable  practices.  The  reason  they  have  to  reissue  the                                                               
central district  permits is because  today all permits  are Cook                                                               
Inlet set net permits.                                                                                                          
SENATOR BISHOP asked if he bought  one of these permits, could he                                                               
fish it on  the east side, because that is  where they are trying                                                               
take permits out. Could he fish in the central district?                                                                        
SENATOR MICCICHE  replied today he  can fish wherever  he'd like.                                                               
Today, a set net permit in  Cook Inlet can move anywhere it wants                                                               
to as  long as the site  is a legal  site in which to  fish. This                                                               
measure would  separate the east  side district from the  rest of                                                               
Cook Inlet. So,  they would have to reissue the  other Cook Inlet                                                               
permits.  Senator Bishop  could  purchase an  east  side set  net                                                               
permit, but it would cost  more. He could likely purchase another                                                               
Cook Inlet  set net permit outside  of that area -  Calgon Island                                                               
and the Northern District - for a lower price.                                                                                  
SENATOR BISHOP asked  how the value of $260,000  for three pieces                                                               
of gear was calculated.                                                                                                         
SENATOR MICCICHE  replied that  some of the  sites are  worth far                                                               
more than  that and  some are  worth less.  Keeping in  mind that                                                               
when a  site is being retired,  it is a small  business in Alaska                                                               
that will  be retired forever, that  value was brought to  him by                                                               
the groups that put this together.  The sites that are worth more                                                               
will not  be interested  in this, and  the stakeholders  want the                                                               
productive efficient sites to stay in place.                                                                                    
This  bill  does not  allow  a  target; a  person  has  to win  a                                                               
lottery. They hope  the productive sites that are  worth far more                                                               
stay in production. If someone  wants to keep fishing, they could                                                               
invest in a more productive site  and keep those active and would                                                               
be able to do that after the election.                                                                                          
SENATOR COGHILL asked  if reducing the fleet would  make a vacuum                                                               
somewhere else and  incent people to rush in. And  if someone has                                                               
an exclusive area, does that become a right?                                                                                    
4:19:24 PM                                                                                                                    
SENATOR  MICCICHE  replied   at  this  point  the   bill  uses  a                                                               
constitutional approach  that doesn't  have those  challenges. He                                                               
is a  "drifter" and once  the fish hit  the beach, they  are gone                                                               
for drifters; they are heading for  the river. If and when a site                                                               
is removed,  a certain proportion of  fish will be caught  by the                                                               
sites upstream/downstream from them  and a higher proportion will                                                               
escape  and make  it  into  the river.  For  every  site that  is                                                               
removed,  some of  those fish  will  be caught  by others,  which                                                               
increases the  efficiency of the  remaining sites, but  more fish                                                               
will inevitably  end up within the  river. The sites will  not be                                                               
patchwork  but will  represent a  general reduction  in gear.  He                                                               
said Anchorage is  two hours and twenty minutes away  and the two                                                               
(three, if  one includes  personal use)  user groups  have really                                                               
struggled with this issue for the  last 40 years and believe this                                                               
is a way  to take the pressure off while  still giving someone an                                                               
honorable way to go "do something else, perhaps."                                                                               
SENATOR  WIELECHOWSKI   said  he  appreciated   Senator  Micciche                                                               
bringing  this bill  forward; and  while it  probably won't  pass                                                               
this session, it  is a good conversation starter.  He thought the                                                               
pressure is  for kings more  than anything  else and asked  if he                                                               
had given  any thought to changing  the structure so as  to offer                                                               
the ability  to the state  or conservation  groups to go  out and                                                               
buy [permits]  instead of having  a lottery.  Conservation groups                                                               
could  be willing  to  pay  millions of  dollars  for  that on  a                                                               
conservation basis.  However, he didn't  know if this  idea would                                                               
be constitutional.                                                                                                              
4:23:44 PM                                                                                                                    
SENATOR  MICCICHE responded  that it's  certainly constitutional;                                                               
anyone can buy  the sites, but that's not how  it works. The most                                                               
effective  way  to  manage  interception   of  kings  is  through                                                               
reduction of gear and experts agree with that.                                                                                  
He added  that he brought this  forward at this late  date in the                                                               
session because he wanted to get  it heard and get something real                                                               
on the  table and take  it back  to the experts  and stakeholders                                                               
and talk about it over the interim - and make sure it works.                                                                    
4:26:44 PM                                                                                                                    
ANDY  HALL,  Executive   Director,  Kenai  Peninsula  Fisherman's                                                               
Association (KPFA), Chugiak, Alaska, said  they are neutral on SB                                                               
135, mostly  because they  just got  their first  look at  it. He                                                               
supported  Senator  Micciche's  statistics and  added  that  KPFA                                                               
represents all  set netters  in Cook  Inlet but  Senator Micciche                                                               
seems to  primarily represent east  side set netters, which  is a                                                               
majority of their  membership. There are 736 permits  in the Cook                                                               
Inlet and 440 of  them fish in what is defined  as the east side,                                                               
but  only  193 people  responded  to  the  KPFA survey,  the  one                                                               
Senator Micciche referred  to. He didn't know if that  was a good                                                               
representation of stakeholders,  but it at least  tells him there                                                               
is  interest. Of  those  who responded,  80  percent support  the                                                               
concept of a fleet reduction.                                                                                                   
The bill  seems to  be a  move in the  right direction,  but some                                                               
issues remain. If it's a  placeholder and fishermen can work with                                                               
Senator Micciche and  his staff to improve it, it  could get to a                                                               
point where KPFA  would support putting it in  front of fishermen                                                               
and let  them decide  their own fate.  It's remarkable  that both                                                               
sides of this  "interminable fish war" seem to be  talking and he                                                               
would hate to miss this opportunity.                                                                                            
4:29:17 PM                                                                                                                    
KEN   COLEMAN,  Vice   President,  Kenai   Peninsula  Fisherman's                                                               
Association  (KPFA),   Kenai,  Alaska,   said  he   is  currently                                                               
president of the  East Side Consolidation Association  which is a                                                               
qualified  salmon  association  of  interested  parties  who  are                                                               
limited entry permit holders; it  is also a 501(c)(5) non-profit.                                                               
He and his  wife are commercial set netters and  fish on the east                                                               
side beach near the mouth of  the Kenai River. He has fished here                                                               
for 45 years  and been involved in fish politics  in almost every                                                               
way  imaginable  since  the  advent   of  the  Upper  Cook  Inlet                                                               
Management Plan  in 1977. He  is currently president of  the East                                                               
Side Consolidation Association.                                                                                                 
He said the mission of  the Commercial Fisheries Entry Commission                                                               
(CFEC) is  to limit  the number of  participants in  a particular                                                               
fishery to allow  for sustainable and economic  viability, and as                                                               
a further  product, conservation of  the resource for  the common                                                               
property into the future.                                                                                                       
East side  set netters have  been discussing gear  reductions for                                                               
many  years and  in  the last  few years  have  been pursuing  it                                                               
formally.  The  CFEC  has  a   method  for  reduction  called  an                                                               
optimization study, which in part,  considers numbers of permits,                                                               
their value, the economic value of  the catch, and the history of                                                               
the  fishery. Such  a  study is  typically  lengthy and  whatever                                                               
reduction is  proposed or not or  limited must be applied  to the                                                               
entire fishery and cannot be  overlaid or applied to a particular                                                               
area. This  method doesn't  work in most  set net  fisheries. The                                                               
Cook  Inlet set  net fishery  has 736  permits spread  throughout                                                               
five different  districts in Cook  Inlet: the  northern district,                                                               
Calgon  Island  district,  the  western  district,  the  southern                                                               
district,  and the  eastern district  where the  fish wars  occur                                                               
every year.                                                                                                                     
He said  the CFEC  method of optimization  is suitable  for other                                                               
fisheries that  are more homogenous  in nature such as  the seine                                                               
fisheries or drift fishery that  "scooch around" together whereas                                                               
set netters  used fixed gear and  in the case of  Cook Inlet, are                                                               
spread over five districts that  have little commonality. The one                                                               
thing they  seem to all  agree on  is that a  voluntary reduction                                                               
would result in increased viability.                                                                                            
He said the  east district has a keen interest  in moving forward                                                               
with the fleet reduction program  and another poll sent out three                                                               
years ago  came back  with an 88  percent favorability  rating on                                                               
gear reduction in Cook Inlet.                                                                                                   
MR. COLEMAN  said 440 fishers are  spread over 50 miles  of beach                                                               
in the eastern  district and as the result of  their inability to                                                               
affect  an outcome  through the  CFEC optimization  process, they                                                               
approached Senator  Micciche a  couple years  ago and  this draft                                                               
evolved.  It has  the  elements  of what  could  be a  successful                                                               
program. He has  some "tweaks" if they were able  to move forward                                                               
with it;  one is price.  They arrived  at the $260,000  figure by                                                               
taking the  average earnings of a  set net permit each  year over                                                               
the prior  ten years, and  those averaged a little  above $20,000                                                               
per year per  permit and added a number which  seemed at the time                                                               
to  be the  tax implications,  so that  if volunteer  fishers are                                                               
included in  a program  that comes to  fruition they  would leave                                                               
with a $200,000  sale for small business that in  many cases have                                                               
been around for generations.                                                                                                    
Historically in  1980, the fishery  was about half the  size that                                                               
it is  today and for  many reasons including  increased bio-mass,                                                               
limitations  on area,  aquaculture inclusions  into the  fishery,                                                               
and an  historically high price.  In many cases, set  net permits                                                               
came into the area from other parts of Cook Inlet.                                                                              
In summary, Mr.  Coleman said the bones of a  good program are in                                                               
this bill and he would stand by for questions.                                                                                  
4:37:07 PM                                                                                                                    
RICKEY  GEASE,  Executive  Director, Kenai  River  Sport  Fishing                                                               
Association (KRSFA), Soldotna, Alaska,  supported SB 135. He said                                                               
this  is the  first  time  that set  netters  have  had a  common                                                               
purpose and appreciate the time  working with Senator Micciche in                                                               
moving towards a voluntary buyback program.                                                                                     
KRSFA  supports  the  concept  of  a  voluntary  fleet  reduction                                                               
program he said and that back  in the 1980s about half the number                                                               
of  permits were  fishing in  the Kenai  and Kasilof  Rivers. Now                                                               
they are  in a situation where  the runs have returned,  but to a                                                               
lower  level,  and there  is  a  lot of  gear  in  the water  not                                                               
catching enough  fish. In  Cook Inlet that  is reflective  of the                                                               
average price  for permits. In  2016 they were about  $15,000 and                                                               
earnings are  about $20,000. So,  one of the  improvements coming                                                               
from a gear  reduction is that the remaining  permits become more                                                               
valuable  and will  have  a  higher price  point  in their  gross                                                               
earnings per year.                                                                                                              
As an association of sport  anglers, KRSFA would be interested in                                                               
decreasing the harvest of king  salmon, a primary fishery for the                                                               
in-river  sport  fisheries  and  think that  a  reduction  of  45                                                               
percent would  reduce interceptions of king  salmon. The regional                                                               
ADF&G biologist indicated that with  about 55 percent of the gear                                                               
he  still feels  comfortable that  the east  side set  net fleet,                                                               
itself, would still  have the historical harvests  of their money                                                               
fish, which is sockeye salmon.                                                                                                  
4:39:54 PM                                                                                                                    
Typically, you can  figure out how many permits  are necessary to                                                               
catch  100,000 salmon  by taking  the average  around the  state,                                                               
which is  around 3.2 salmon  permits for every 100,000  fish. But                                                               
in  Cook Inlet,  it's  close to  25  permits. A  lot  of gear  is                                                               
concentrated in that water.                                                                                                     
4:40:53 PM                                                                                                                    
CHAIR  GIESSEL  thanked  him and  finding  no  further  comments,                                                               
closed public testimony.                                                                                                        
4:42:09 PM                                                                                                                    
SENATOR  BISHOP asked  when limited  entry started  and what  its                                                               
purpose was.                                                                                                                    
DALE KELLEY, Commissioner,  Commercial Fisheries Entry Commission                                                               
(CFEC),  Alaska  Department of  Fish  and  Game (ADF&G),  Juneau,                                                               
Alaska, replied  it was started  in 1973  and its purpose  was to                                                               
protect  sustained  yield of  our  salmon  resources and  protect                                                               
commercial fishermen from economic dislocation.                                                                                 
SENATOR BISHOP asked  her to help him understand  that after 1973                                                               
no new permits were issued.                                                                                                     
MS. KELLEY said that wasn't  correct. She explained that in 1973,                                                               
most  of the  fisheries were  open  to being  limited except  the                                                               
salmon hand troll fleet that  wasn't limited until the early 80s.                                                               
Since that time, other non-salmon fisheries have been limited.                                                                  
SENATOR BISHOP asked  how the Cook Inlet east side  fleet grew by                                                               
50 percent under a limited entry program.                                                                                       
MS. KELLEY  answered because the  east side doesn't have  its own                                                               
permit; it's a Cook Inlet set  net permit, and people are free to                                                               
M.Ovi around.  So, if the  north side wasn't as  lucrative, maybe                                                               
people would migrate to another area in the Inlet.                                                                              
SENATOR BISHOP  said so those  permits already existed,  but they                                                               
just got word that the fishing was better on the east side.                                                                     
MS. KELLEY answered yes.                                                                                                        
SENATOR BISHOP asked if DNR leases these sites.                                                                                 
MS. KELLEY  replied that she  wasn't sure but suspected  that DNR                                                               
leased some sites and others were privately owned.                                                                              
4:45:01 PM                                                                                                                    
FATE PUTMAN, Commissioner,  Commercial Fisheries Entry Commission                                                               
(CFEC), added  that he wasn't  familiar with DNR permits,  but he                                                               
knows that  most fishermen have  an upland permit and  they often                                                               
fish three nets and  often stack them. So, they may  go out up to                                                               
a mile offshore  from the permit site. The upland  sites are very                                                               
valuable; DNR handles the leases.  He reported that they had seen                                                               
four east  side set  net permits turn  over since  last September                                                               
for an average cost of $14,500.                                                                                                 
SENATOR BISHOP said he would direct his questions to DNR.                                                                       
SENATOR VON  IMHOF asked if he  was saying one permit  site would                                                               
be sold for $14,500 and how that figures.                                                                                       
MR. PUTMAN replied that is the  price of the permit not the site.                                                               
Buying  a set  net  permit  in the  Cook  Inlet  area would  cost                                                               
$14,500  and then  you  would also  have to  buy  the upland  DNR                                                               
lease. In this case, that is what is valuable.                                                                                  
SENATOR VON IMHOF asked what the price is now.                                                                                  
MR. PUTMAN said  he wasn't an expert in DNR's  leases, but rather                                                               
knows the value of the permits.                                                                                                 
CHAIR GIESSEL said they would submit that question to DNR.                                                                      
4:46:57 PM                                                                                                                    
SENATOR STEDMAN said  the leases are transferred  not bought, and                                                               
he asked  to get the  lease terms and  rates from DNR.  They need                                                               
this  information,  and  he  would  really like  to  see  a  full                                                               
presentation on the  Cook Inlet fishery including  the history to                                                               
get a better feel for what they are dealing with.                                                                               
CHAIR GIESSEL noted  that about four years ago  the committee had                                                               
a Cook  Inlet fishery week and  had all the different  gear types                                                               
come  in  and  an  update  would be  good.  She  invited  Senator                                                               
Micciche back to  the table for additional  questions and closing                                                               
SENATOR BISHOP said this seemed  like trying to help alleviate an                                                               
overfishing issue.                                                                                                              
SENATOR MICCICHE  responded that  the returns  to Cook  Inlet can                                                               
vary dramatically from  1.5 million fish to 6 or  7 million fish.                                                               
On those  heavy years -  hence the draw of  the east side  - when                                                               
the Kenai  and Kasilof  produced phenomenal  amounts of  fish and                                                               
people on the  west side starved to death, they  moved east. Once                                                               
you move east  and find the fishing is pretty  good, it's hard to                                                               
move  back to  where the  fishing is  not nearly  as good.  Those                                                               
folks can move back if they choose  to, but that does not seem to                                                               
be working.                                                                                                                     
He explained  that the east side  is also easier to  fish because                                                               
it has  better access to  delivery facilities and  facilities for                                                               
processing, and  fishermen get a  higher price per  pound because                                                               
they don't have to worry  about transportation and ice and things                                                               
like that, and typically, it's more lucrative.                                                                                  
Regarding  overfishing,  he said  ADF&G  decides  on what  is  an                                                               
adequate return to the river and  has been very successful at it.                                                               
They don't know what the problems  are with king returns, but now                                                               
that they are challenged, they  have become more important. Hence                                                               
the  struggle has  gotten worse  not  better. The  thought is  to                                                               
reduce that  pressure. It  is fascinating to  have both  sides at                                                               
the  table, because  normally  they  don't spend  a  lot of  time                                                               
socializing together.                                                                                                           
SENATOR BISHOP  said he thought  this was a  fascinating subject,                                                               
but he thought ADF&G should be helping with this discussion.                                                                    
SENATOR MICCICHE said  the department decided to stay  out of the                                                               
fray, but thinks  it is a worthy discussion. He  noted that about                                                               
half the  permits have a  DNR lease.  People can fish  where they                                                               
want to,  but they just have  to register the area.  Some of them                                                               
are more lucrative sites and do  have a DNR lease but focusing on                                                               
the permit  value is  not point  in this  discussion. There  is a                                                               
dramatic spectrum  of income  and value.  Some permits  are worth                                                               
$15,000  and some  sites are  worth half  to three-quarters  of a                                                               
million dollars, and  there are sites with a  $15,000 permit that                                                               
are probably worth $25,000. His goal  is to have a more efficient                                                               
fishery and folks living together in  peace, at least for a time.                                                               
He thanked the chair for hearing the bill.                                                                                      
4:55:01 PM                                                                                                                    
CHAIR GIESSEL said during her time in the Senate, this was one                                                                  
of the districts she represented, and she applauded him for                                                                     
being able to bring the stakeholders all together.                                                                              
Finding no further questions, she held SB 135 in committee.                                                                     

Document Name Date/Time Subjects
Senate Resources Hearing Agenda - 4 - 18 - 2018.pdf SRES 4/18/2018 3:30:00 PM
HB315 - Version D.PDF SRES 4/18/2018 3:30:00 PM
HB 315
HB315 Explanation of Changes ver A to D.pdf SRES 4/18/2018 3:30:00 PM
HB 315
HB315 - Fiscal Note - DEC - 1 - 25 - 18.PDF SRES 4/18/2018 3:30:00 PM
HB 315
SB135 - Version D.pdf SRES 4/18/2018 3:30:00 PM
SB 135
SB135 - Sectional Summary - Version D.pdf SRES 4/18/2018 3:30:00 PM
SB 135
SB135 - Supporting document - Eastside Setnet Area Map - 4 - 18 - 18.pdf SRES 4/18/2018 3:30:00 PM
SB 135
SB135 Summary of changes ver A to ver D.PDF SRES 4/18/2018 3:30:00 PM
SB 135