Legislature(1993 - 1994)
03/09/1994 08:30 AM House FSH
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* first hearing in first committee of referral
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HOUSE SPECIAL COMMITTEE ON FISHERIES
March 9, 1994
8:30 a.m.
MEMBERS PRESENT
Representative Carl E. Moses, Chair
Representative Cliff Davidson
Representative Gail Phillips
Representative Harley Olberg, Vice Chair
Representative Irene Nicholia
MEMBERS ABSENT
None
OTHER LEGISLATORS PRESENT
Senator Bert Sharp
Senator Loren Leman
COMMITTEE CALENDAR
Overview Presentation from the Community Development Quota
Groups.
WITNESS REGISTER
JOHN JEMEWOUK, Executive Director
Norton Sound Economic Development Corporation
Elim, Alaska 99739
MARK SNIGAROFF, Chairman
Aleutian Pribilof Island Community Development Association
116 Gold Street
Juneau, Alaska 99801
AGAFON KRUKOFF, Jr., President
Central Bering Sea Fishermen's Association
1500 West 33rd, Suite 110
Anchorage, Alaska 99503
NELS ANDERSON, JR., Executive Director
Bristol Bay Economic Development Corporation
P.O. Box 1446
Dillingham, Alaska 99576
RAGNAR ALSTROM, Member
Yukon Delta Fisheries Development Association
P.O. Box 112
Alakanuk, Alaska 99554
FRED PHILLIP, Board Member
Coastal Villages Fishing Cooperative
204 N. Franklin #1
Juneau, Alaska 99801
CARL OHLS
Fisheries Development Specialist
Bering Sea Fishermen's Association
725 Christensen Dr.
Anchorage, Alaska 99501
ACTION NARRATIVE
TAPE 94-13, SIDE A
Number 001
CHAIRMAN CARL MOSES called the House Special Committee on
Fisheries meeting to order at 8:40 a.m. He noted members in
attendance. Chairman Moses announced that the committee
would be hearing from individuals of the Community
Development Quota (CDQ) groups. He noted Senators Sharp and
Leman were also present.
The first person to come before the committee was JOHN
JEMEWOUK. He explained he is the chairman of the Western
Alaska Fisheries Development Association which represents
four CDQ groups in Western Alaska. He introduced members of
other CDQ groups who also participated in the overview. Mr.
Jemewouk said the different groups will explain the benefits
of the CDQ Program and how they impact the villages in
Western Alaska. The CDQ Program was started in 1992. The
State of Alaska and the U.S. Department of Commerce
developed joint regulations authorizing the program. Mr.
Jemewouk noted that the program is run by the U.S.
Department of Commerce and is managed by the North Pacific
Fisheries Management Council. The program allocates a
certain percentage (7.5 percent) of the total amount of
polluck that is available from the Bering Sea. This relates
to 100,000 tons of polluck. An application is made to the
state, the state reviews it, and then makes recommendations
as to the percentages which are given to each CDQ group. It
is a competitive process, and out of the process some unique
programs have been accomplished. Mr. Jemewouk said the
program is authorized until December, 1995. He said they
are doing some work to hopefully expand the program into
other fisheries and to extend the program beyond 1995.
MR. JEMEWOUK explained that there are two CDQ fishing
seasons. The "A Season" is a roe fishery which is open to
all of the fleets. This year the fishery started February
17. The "B Season" opens April 15 and goes until the end of
the year.
Number 146
The next person to come before the House Special Committee
on Fisheries was MARK SNIGAROFF, Chairman, Aleutian Pribilof
Island Community Development Association (APICDA). He said
his company has been working on several projects in the
Aleutian Islands. Mr. Snigaroff said they are currently
moving forward with a Nelson Lagoon dock. He noted they are
hoping to receive some money from the legislature for this
project.
MR. SNIGAROFF referred to a proposal for a major dock
facility in Atka and said his association is holding back on
it due to the fact that the cost is very high, in excess of
$3 million. He noted they are still committed to the
project pending additional funding sources to be identified.
MR. SNIGAROFF explained a major purchase that APICDA has
made is that they have purchased three 32' long line vessels
which will be operated this summer in area "4 B," the Atka
area. He said APICDA owns the vessels and members of the
community of Atka will operate two of them, and one of the
vessels will be operated by people from Nikolski.
MR. SNIGAROFF said they are conducting a feasibility study
in Nikolski, which is a market assessment for a tourist
lodge. It is in conjunction with a tourist push by the City
of Unalaska.
MR. SNIGAROFF said the APICDA board is developing a joint
venture business with St. George Traditional Council where
they are investing into a multipurpose facility at Zapadni
Bay where investments have been made to dredge the boat
harbor. When that project is completed, they will be
looking at servicing the fishing fleet with washers, dryers,
recreational facilities, etc.
MR. SNIGAROFF informed the committee members that APICDA has
allocated money for a drug and alcohol abuse program within
their region. They hope to have the program in place by the
fall. The treatment for people will be paid for and when
they are through, they will have a job waiting or them.
MR. SNIGAROFF said their goal for employment for 1993 was
forty jobs. To date, seventy-nine jobs have been created
with gross wages totalling over $517 thousand. There is a
training program in place where sixteen people have been
trained for a cost of approximately $36 thousand. All
sixteen people completed their training. He explained four
people from False Pass were trained in emergency medical
services. Twelve people were sent to California Maritime
Academy for winch operating training. Four people have been
put through vocational education training. The maximum
limit of funding is $2 thousand per student, and the
criteria for funding is that the students have to maintain a
2.0 average or better.
MR. SNIGAROFF explained that APICDA sends out a quarterly
newsletter. He said their partners, Trident Seafoods and
Starbonds, have done a very commendable job in keeping their
by-catch rates very low. For the year, less than 300
Chinook Salmon were taken and less than 1,500 Chum.
MR. SNIGAROFF noted that APICDA received a favorable ruling
on their tax issue.
MR. SNIGAROFF said they have developed grant programs for
their schools. There are seven schools in their region and
they are granted $6 thousand per year for fisheries related
education. He continued to discuss the grant program.
REPRESENTATIVE PHILLIPS referred to sending people out of
state for winch training and asked if there was anywhere in
Alaska where they could get the training.
MR. SNIGAROFF said California was the cheapest place that
they could find.
Number 286
The next person to address the committee members was AGAFON
KRUKOFF, JR., President, Central Bering Sea Fishermen's
Association (CBSFA). Mr. Krukoff referred to St. Paul and
said the state has given tremendous help in developing the
boat harbor. About a year ago, one of the major shortfalls
was there was a lack of space in the harbor. The state
assisted with the dredging problem in which $1.8 million was
appropriated. Mr. Krukoff explained that CBSFA is actively
involved in trying to make themselves a self-sufficient
organization that could survive beyond the CDQ Program. He
informed the committee that his organization created a
for-profit subsidiary which is currently involved in support
services, such as marine repair for the industry. He said
they are looking at a ship supply service to expand on the
local grocery service. A car/truck rental service already
exists. As of March 1, CBSFA became a 51 percent partner in
a NAPA Auto Parts Store at Dutch Harbor and they plan to
build another NAPA Auto Parts Store at St. Paul. Mr.
Krukoff said they are currently building a 12,000 square
foot retail store in St. Paul that will include that NAPA
store as well as additional space for more retail services.
MR. KRUKOFF said they have three plants in St. Paul for
processing Opilio crab and other crab. It is an opportunity
for people from other villages to come and work versus
hiring people from California.
MR. KRUKOFF urged that the committee and the legislature
continue to support the state in administering the CDQ
Program.
Number 409
NELS ANDERSON, JR., Executive Director, Bristol Bay Economic
Development Corporation (BBEDC), explained that his
organization was formed in October 1992 and he has been the
executive director since May 1993. Mr. Anderson said BBEDC
is a fourteen member CDQ group and is a nonprofit
corporation. He said there are two members who are staff, a
secretary and himself. Since he has been working for the
corporation, they have accomplished receiving their
nonprofit status in June, and they have received a private
letter ruling from the Internal Revenue Service stating that
their initial funds from their first royalty payment are not
subject to taxation. The BBEDC has established a vocational
technical training program. In order to avoid duplication
of effort they decided to contract with the local Bristol
Bay Native Association so that the funds they have for
vocational/technical training could be supplemented and,
thereby, reduce the overhead that BBEDC would have incurred
if they started their own programs.
MR. ANDERSON said BBEDC has a scholarship program. In 1993,
they issued two $10 thousand scholarships. He continued to
discuss their scholarship program. Mr. Anderson explained
their goal was to have sixty people hired. That goal was
missed by eight. This year there will be a total of
seventy-eight people working. People are trained on board
the vessels and are given very intensive and processing
training. Mr. Anderson said two significant changes have
occurred from what there is now and what there was five
years ago. Young people now have hope, as there is now work
in the winter where there was none. Approximately $500
thousand have been earned in wages during the winter. The
second change is that a lot of people had been testing
positive on their drug tests, and now they are testing
negative.
MR. ANDERSON said last year they were in the process of
developing the Alaska Seafood Investment Company. In
November that company was incorporated. He said BBEDC is
currently in the process of evaluating several joint
ventures and they are hopeful that they will conclude an
agreement soon. He explained they joined with three other
groups and put together the Western Alaska Fisheries
Development Association.
MR. ANDERSON said there is a very serious "out migration" of
Bristol Bay fishery permits. The Bristol Bay Native
Association has established a blue ribbon commission to take
a very close look at the permit association and what needs
to be done. In addition, the Bristol Bay group has just
established a Bristol Bay permit brokerage. The purpose is
to get a handle on all the movement of all the permits
within Bristol Bay, get them in the hand of the village and
local residents, and to develop the financing and training
so that the permits can stay within the region.
MR. ANDERSON said their total by-catch of salmon was 470.
There were 94 Chinook, 338 Chum, 28 Coho, and 10
unidentified salmon. He noted that the unidentified salmon
means there was probably an observer who had no training.
REPRESENTATIVE NICHOLIA commended the BBEDC for setting up
the blue ribbon committee and said they are setting a
precedence for the rest of the coastal communities.
Number 514
RAGNAR ALSTROM, Member, Yukon Delta Fisheries Development
Association, explained the area he represents has no timber
and there are no known mineral reserves. He noted that even
if there were mineral reserves, they are in the middle of
one of the largest wildlife preserves in the United States.
The only resource is the fish in the Yukon River and off the
coast. Mr. Alstrom explained that the unemployment rate is
70 to 80 percent, contrary to what the Department of Labor
says. He explained that his association is providing
training for people who want to work on factory trawlers.
In 1993, the people that already had been trained and worked
on factory boats brought in about $500 thousand in wages to
four villages. Mr. Alstrom noted that his association is
working with other CDQ groups in placing people on their
boats.
MR. ALSTROM explained that his group believes that what they
need is jobs in their area, so the heart of the program is
to develop the shore fisheries off of the Yukon Delta. He
informed the committee that they are in the process of
building a fleet of small combination catcher vessels. Six
boats are being built in Seattle and a couple are being
built at the Seward Skills Center. He noted they got a very
good price for the aluminum boats that are being built in
Seattle and the Seattle Company has agreed to train a number
of people in the aluminum welding process. The Yukon Delta
Association wants the boats to be individually owned. Mr.
Alstrom said they are currently working with the Emmonk
Fishermen's Co-op in processing halibut, cod, etc. His
association is also working with the Emmonk Traditional
Council to build a value added plant.
Number 569
REPRESENTATIVE PHILLIPS said she thinks the CDQ Program is
going in a good direction in developing the on-shore jobs.
She also noted her objection in building the boats in
Seattle when there are aluminum boat builders in the state.
TAPE 94-13, SIDE B
Number 001
MR. ALSTROM explained that they did check with boat builders
in Alaska and the price was so different. He said they are
one of the smaller CDQ Groups and they had to make an
economic decision.
CHAIRMAN MOSES said the mode of transportation in getting
boats to their area is a major factor. He said it is
probably easier to have them sent from Seattle rather than
Homer. Mr. Alstrom said the boats will be shipped to Dutch
Harbor.
Number 020
The next person to come before the committee members was
FRED PHILLIP, Board Member, Coastal Villages Fishing
Cooperative. He explained that his cooperative is a
for-profit organization. Mr. Phillip informed the committee
that the cooperative is in partnership with Browns Point
Joint Venture, which is a factory trawler. The reason they
are in partnership is to become an equitable participant in
the Bering Sea ground fisheries, to become an industry
participant, and to provide opportunities for employment and
advancement into management positions on the vessel and in
the industry. He explained that they have halibut and
coastal initiatives which looks at ways to help coastal
fishermen to participate in near-shore fishing for halibut
and other ground fish. Part of the program assists
fishermen in applying for the halibut IFQ and to provide
loans for purchasing to buy suitable vessels to participate
in the program. Mr. Phillip explained that the local
operations will provide employment and local markets for the
products.
MR. PHILLIP referred to the scholarship program and said
that monies from the polluck fisheries, approximately five
percent, is set aside for that program. Two scholarships
have been awarded in marketing and sociology. He noted
there are also scholarships for vocational training
programs. Mr. Phillip continued to discuss other programs
his company provides.
MR. PHILLIP referred to the area of employment and said they
targeted fifty to seventy jobs, but have only met one-third
of that goal because many people don't want to spend time
out on the water. He concluded that many programs have
really been positive for his region.
Number 102
JOHN JEMEWOUK, Executive Director, Norton Sound Economic
Development Corporation, discussed a brochure which he had
given committee members which explains their CDQ program.
He said his corporation formed a partnership with Glacier
Fish Company and explained how they arrived at the decision
to choose Glacier Fish Company.
MR. JEMEWOUK said they established an employment training
office in September 1992. He noted they utilize the Seward
Skill Center and are looking at possibly doing some training
in the region. Close to 100 people have already been
trained for the fishing industry.
MR. JEMEWOUK explained that another program is a herring
project. This year they went in joint partnership with
Glacier Fish Company and Trident Seafoods. The reason
Trident Seafoods was chosen to participate was because of
their experience in marketing herring in Japan. A custom
processing contract has been arranged with them. Mr.
Jemewouk said the program reaches out to about 170 local
fishermen. All the nets, etc., are provided to the
fishermen.
MR. JEMEWOUK said Glacier Fish Company was in the Norton
Sound area last year and targeted pink salmon. The reason
the pink population was targeted was because there is a
healthy pink population and there has never been a market
for them. With the experience from the Glacier Fish
Company, all the product was sold in Europe last year.
MR. JEMEWOUK said a loan program was established for the
local fishermen in the region. He explained that they have
a contract with National Bank of Alaska regarding this
program.
MR. JEMEWOUK referred to their scholarship program and said
over the last couple of years they have given sixty $1
thousand scholarships to people in the region. The
scholarships are given to students going to school in
Denver, California, Anchorage, Fairbanks, Seward and some of
the smaller community colleges.
MR. JEMEWOUK said the Norton Sound Crab Company was formed
this year. Frank Johnson was hired to operate the program
and is still working on establishing the infrastructure. He
explained they leased the Nome Eskimo Freezer Plant for the
crab company. Mr. Jemewouk referred to the winter crab
fishery and said the total allowable catch of Norton Sound
red king crab is divided into two areas: the winter crab
fishery which is about 340 thousand pounds, and the summer
fishery which is about the same amount. Mr. Jemewouk said
there are a lot of regulations that affect fishermen in
Norton Sound and his organization tries to stay involved to
make sure the opportunity is there for the local fishermen.
He explained they approached the Board of Fish and proposed
a super exclusive status for the Norton Sound area, which
means if you fish there, you can't fish anywhere else.
MR. JEMEWOUK said they have worked with the International
Halibut Commission in establishing a small fishery at Saint
Lawrence Island. There is a 35,000 pound limit for halibut
that can be caught.
MR. JEMEWOUK discussed a permanent endowment fund which is
put into a permanent fund. By 1996 or 1997 there will be
revenues to continue the educational opportunities for
helping the student population in developing their skills in
the fishing industry.
MR. JEMEWOUK said when they gave their application to the
state, one of the big projects they outlined was to invest
in a major seafood processor with Glacier Fish Company. The
proposal was to process crab, herring and salmon. He
thanked the committee for listening to his presentation.
Number 288
CHAIRMAN MOSES informed the committee that the Senate Rules
Committee introduced HJR 61, which requests the North
Pacific Fisheries Council to seriously consider community
development quotas on crab and groundfish.
Number 300
REPRESENTATIVE PHILLIPS commented on how good the Opilio
crab is. She said it would be a very good thing for the
Norton Sound Economic Development Council to market across
the state.
Number 360
CARL OHLS, Fisheries Development Specialist, Bering Sea
Fishermen's Association, was next to address the House
Special Committee on Fisheries. He informed the committee
members that he has a part-time job as the Executive
Director of the Western Alaska Fisheries Development
Association. He said that organization was organized by CDQ
groups to coordinate their efforts in support of the CDQ
Program. He said there was a need to do this as there has
been opposition to the CDQ Program. Mr. Ohls said they
attend all the council meetings and most commonly there
would be somebody complaining about how much they resent the
fact that their fish are being used for a welfare program in
Western Alaska. He said it is not a welfare program, it is
an economic development program and is possibly the most
effective economic development program that the federal
government has ever created in Western Alaska. The second
response is that the fish are the nation's fish and are to
be allocated by the council in a way that meets the nation's
best interest. Mr. Ohls said the success of the projects is
what is going to determine the fate of the CDQ Program.
MR. OHLS said the council is currently working on a process
where they are trying to come up with a comprehensive
allocation scheme for all the fisheries under the management
of polluck, crab, perch and cod. He said it is the feeling
of the CDQ groups that CDQs should be a part of that final
package.
MR. OHLS explained that the biggest potential threat to the
CDQ Program right now is a lawsuit that has been filed by a
group called the Alliance Against IFQs. A key part of the
lawsuit is a challenge against the CDQ Program. Mr. Ohls
said he has been told that they have nothing against CDQs,
but CDQs are part of the halibut and sable fish IFQ package,
and if they can knock the CDQ portion out, then the whole
thing will collapse. If they get the ruling that they want,
there is no way the council could continue the CDQ Program
for any other species. Mr. Ohls said, in response to that,
the Western Alaska Fisheries Development Association
retained an attorney and filed for intervention status in
that case which was granted. Two motions have been filed.
One is to challenge the standing of the alliance to tap the
CDQ Program. In their complaint they are not asking for any
relief or asking to participate. What they are asking is
that the program be destroyed for everybody. Mr. Ohls said
they have also filed a motion that it be put aside until the
IFQ question is resolved.
MR. OHLS explained that three trips to Washington, D.C.,
were organized to brief members of Congress and the
Administration on the CDQ Program. There was a very
positive reception on those trips. He thanked the committee
for listening to him.
Number 440
There being no further business to come before the House
Special Committee on Fisheries, Chairman Moses adjourned the
meeting at 10:05 a.m.
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