05/06/2002 10:35 AM Senate RLS

SENATOR  THERRIAULT  moved  to  calendar  CSHB  288(FIN)am-LIMITED                                                          
ENTRY  BUY-BACK PROGRAM/ASSESSMENT  at  the Chairman's  discretion                                                          
with its accompanying fiscal notes.                                                                                             
                                                                                                                                
MS. MARY MCDOWELL,  Commercial Fisheries Entry  Commission (CFEC),                                                              
explained that this measure corrects  several flaws in the current                                                              
state permit buy-back program. One  of the main issues is that the                                                              
funding  mechanism  in  current  statute  has  been  found  to  be                                                              
unconstitutional,  like a dedicated  fund, because it  essentially                                                              
says the CFEC would declare a buy-back  program, tax fishermen and                                                              
the money  would go  straight into  the buy-back  fund to  buy out                                                              
permits and vessels. This bill creates  a mechanism similar to the                                                              
salmon enhancement  tax and the ASMI  tax in which the  CFEC would                                                              
declare a  buy-back program, the  money would be collected  out of                                                              
fish  tickets, and  fishermen's  earnings would  go  to the  state                                                              
general fund  and the legislature  may appropriate it back  to the                                                              
buy-back fund to buy out permits.                                                                                               
                                                                                                                                
MS. MCDOWELL  explained that  current law  says that the  buy-back                                                              
program  funds could  be  used to  buy-back  permits, vessels  and                                                              
gear.   This bill  only allows the  funds to be  used to  buy back                                                              
permits, so the  money will go much further.  It  also removes the                                                              
mandate  that CFEC  initiate a  state-run buy-back  program if  an                                                              
outcome study determines  there are too many permits  in a fishery                                                              
and instead  allows CFEC  to do so. This  will allow  fishermen to                                                              
seek  other  ways of  consolidating  the  fleet, either  using  an                                                              
industry-run buy-back  program or  some other method.  It provides                                                              
CFEC with a tool  with which to do a study and  do a determination                                                              
about  what  number  of  permits would  be  defensible  under  the                                                              
Constitution and explore alternatives to the state run program.                                                                 
                                                                                                                                
MS. MCDOWELL said the bill contains  one other significant change.                                                              
Current law requires  CFEC to do a study of the  optimum number of                                                              
permits in a  fishery. That mandate implies that  CFEC determine a                                                              
perfect  number.  CSHB  288(FIN)am  allows CFEC  to  determine  an                                                              
optimum range,  so that CFEC  can take fluctuating  variables into                                                              
account.  She noted  CFEC  initially issues  a  certain number  of                                                              
permits  in  a  fishery  and, later  on,  if  permits  become  too                                                              
exclusive  CFEC   must  issue  more  permits;  for   the  opposite                                                              
scenario, CFEC can buy back permits.                                                                                            
                                                                                                                                
CHAIRMAN PHILLIPS  asked where  that provision  is located  in the                                                              
bill.                                                                                                                           
                                                                                                                                
MS. MCDOWELL  said it is in  Section 7. She informed  members that                                                              
this bill is  essentially a clean  up bill. CFEC has never  done a                                                              
buy  back but  this  bill  will make  a  buy back  functional  and                                                              
constitutional.                                                                                                                 
                                                                                                                                
CHAIRMAN PHILLIPS  asked, "Are  we going to  get sued on  this one                                                              
too?"                                                                                                                           
                                                                                                                                
MS. MCDOWELL said she believes CFEC  is more likely to get sued if                                                              
this bill doesn't pass.                                                                                                         
                                                                                                                                
CHAIRMAN PHILLIPS  asked if  there were  any objections  to moving                                                              
the  bill  from  committee. There  were  none,  therefore  Senator                                                              
Therriault's motion carried.