Legislature(1997 - 1998)

03/11/1998 05:04 PM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        HOUSE SPECIAL COMMITTEE ON FISHERIES                                   
                   March 11, 1998                                              
                     5:04 p.m.                                                 
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Representative Alan Austerman, Chairman                                        
Representative Scott Ogan                                                      
Representative Mark Hodgins                                                    
Representative Gene Kubina                                                     
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Representative Ivan Ivan                                                       
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
HOUSE BILL NO. 318                                                             
"An Act relating to waste of salmon."                                          
                                                                               
     -SCHEDULED BUT NOT HEARD                                                  
*HOUSE BILL NO. 423                                                            
"An Act relating to the Alaska access fishery trust, purchase of               
commercial fisheries permits, vessels, gear, equipment, and leases             
by the Department of Fish and Game, sport fishing license                      
surcharge, and the entry permit surcharge; and providing for an                
effective date."                                                               
                                                                               
     -HEARD AND HELD                                                           
                                                                               
HOUSE JOINT RESOLUTION NO. 55                                                  
Relating to the allocation of pollock and Pacific cod.                         
                                                                               
     -HEARD AND HELD                                                           
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
BILL: HB 423                                                                   
SHORT TITLE: ACCESS FISHERY TRUST/LIC. PERMIT SURCHARGE                        
SPONSOR(S): REPRESENTATIVES(S) MULDER                                          
                                                                               
Jrn-Date    Jrn-Page           Action                                          
02/16/98      2333     (H)  READ THE FIRST TIME - REFERRAL(S)                  
02/16/98      2334     (H)  FSH, RESOURCES                                     
03/09/98               (H)  FSH AT  5:00 PM CAPITOL 124                        
03/09/98               (H)  MINUTE(FSH)                                        
03/11/98               (H)  FSH AT  5:00 PM CAPITOL 124                        
                                                                               
BILL: HJR 55                                                                   
SHORT TITLE: ALLOCATION OF POLLOCK AND PACIFIC COD                             
SPONSOR(S): REPRESENTATIVES(S) AUSTERMAN, Moses, Elton                         
                                                                               
Jrn-Date    Jrn-Page           Action                                          
01/30/98      2180     (H)  READ THE FIRST TIME - REFERRAL(S)                  

01/30/98 2181 (H) FISHERIES 02/11/98 2293 (H) COSPONSOR(S): ELTON 02/16/98 Text (H) FSH AT 5:00 PM CAPITOL 124 02/16/98 Text (H) MINUTE(FSH) 03/11/98 Text (H) FSH AT 5:00 PM CAPITOL 124 WITNESS REGISTER REPRESENTATIVE ELDON MULDER Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99801 Telephone: (907) 465-2647 POSITION STATEMENT: Sponsor of HB 423. DAN COFFEY, Vice-Chairman Board of Fisheries 207 Northern Lights Anchorage, Alaska 99503 Telephone: (907) 274-3385 POSITION STATEMENT: Testified on HB 423. JEROME SELBY, Mayor of Kodiak 710 Mill Bay Road Kodiak, Alaska 99615 Telephone: (907) 486-9301 POSITION STATEMENT: Testified in support of HJR 55. AL BURCH P.O. Box 884 Kodiak, Alaska 99615 Telephone: (907) 486-3910 POSITION STATEMENT: Testified in support of HJR 55. DAN JAMES 511 Mozart Circle Kodiak, Alaska 99615 Telephone: (907) 486-3910 POSITION STATEMENT: Testified in support of HJR 55. MITCH KILBORN 1724 Simeonoff Kodiak, Alaska 99615 Telephone: (907) 486-4112 POSITION STATEMENT: Testified in support of HJR 55. OLIVER HOLMS, Commercial Fisherman P.O. Box 3856 Kodiak, Alaska 99615 Telephone: (907) 486-6957 POSITION STATEMENT: Testified in support of HJR 55. CHRIS BLACKBURN Alaska Groundfish Databank P.O. Box 2298 Kodiak, Alaska 99615-0948 Telephone: (907) 486-3033 POSITION STATEMENT: Testified in support of HJR 55. JIM INGRAM, Commercial Fisherman P.O. Box 851 Dillingham, Alaska 99576 Telephone: Not Provided POSITION STATEMENT: Testified against HJR 55. STAN SMALL, Commercial Fishermen P.O. Box 1670 Dillingham, Alaska 99576 Telephone: (907) 842-5460 POSITION STATEMENT: Testified against HJR 55. KENNY WILSON, Commercial Fisherman P.O. Box 766 Dillingham, Alaska 99576 Telephone: (907) 842-2219 POSITION STATEMENT: Testified against HJR 55. CHRIS ARNIM, Manager Trident Seafoods P.O. Box 9 Akutan, Alaska 99685 Telephone: (907) 383-4848 POSITION STATEMENT: Testified in support of HJR 55. DAVE AVBASIAN, Assistant Akutan Plant Manager Trident Seafoods P.O. Box 9 Akutan, Alaska 99685 Telephone: (907) 698-2211 POSITION STATEMENT: Testified in support of HJR 55. JOE BERESKIN, Mayor of Akutan P.O. Box 52 Unalaska, Alaska 99685 Telephone: (907) 698-2228 POSITION STATEMENT: Testified in support of HJR 55. JUDE HENZLER, Executive Director Bering Sea Fishermen's Association 725 Christensen Drive Anchorage, Alaska 99501 Telephone: (907) 279-6519 POSITION STATEMENT: Testified against HJR 55. BOB JUETTNER, Representative Aleutians East Borough 1600 A Street Anchorage, Alaska 99501 Telephone: (907) 274-7555 POSITION STATEMENT: Testified in support of HJR 55. GRANT YUTRZENKA, Employee Unisea P.O. Box 920008 Dutch Harbor, Alaska 99629 Telephone: (907) 581-7303 POSITION STATEMENT: Testified in support of HJR 55. SHIRLEY MARQUARDT At-sea Processors Association P.O. Box 920021 Unalaska, Alaska 99685 Telephone: (907) 581-1696 POSITION STATEMENT: Testified against HJR 55. FRANK KELTY, Plant Manager Alyeska Seafoods P.O. Box 530 Unalaska, Alaska 99685 POSITION STATEMENT: Testified in support of HJR 55. DON GRAVES, Employee Unisea P.O. Box 9210021 Unalaska, Alaska 99692 Telephone: (907) 581-2378 POSITION STATEMENT: Testified in support of HJR 55. EMIL BERIKOFF, Commercial Fisherman P.O. BOX 81 Unalaska, Alaska 99692 Telephone: (907) 581-2378 POSITION STATEMENT: Testified against HJR 55. SINCLAIR WILT, Surimi Plant Manager Alyeska Seafoods P.O. Box 530 Unalaska, Alaska 99685 Telephone: (907) 581-1211 POSITION STATEMENT: Testified in support of HJR 55. DON STILES, Chairman Board of Directors Norton Sound Economic Development Corporation Telephone: (907) 443-4383 POSITION STATEMENT: Testified against HJR 55. CHRIS BERNS P.O. Box 26 Kodiak, Alaska 99615 Telephone: (907) 486-5091 POSITION STATEMENT: Testified in support of HJR 55. JOHN IANI, Employee Unisea 15400 Northeast Redmond, Washington 98073 Telephone: (425) 861-5308 POSITION STATEMENT: Testified in support of HJR 55. DAVID STANCHFIELD, Owner Catcher Boat F/V Morning Star 127 3rd Avenue Kirkland, Washington 98030 Telephone: (425) 739-6999 POSITION STATEMENT: Testified on HJR 55. TERRY SHAFF, President Unisea 15400 North East 90th Street Redmond, Washington 98073 Telephone: (425) 861-5311 POSITION STATEMENT: Testified in support of HJR 55. DAVE GALLOWAY, Representative F/V Ocean Phoenix 4421 Forest Avenue Mercer Island, Washington 98040 Telephone: (206) 286-8584 POSITION STATEMENT: Testified in support of HJR 55. DOUG FORSYTH, Representative F/V Ocean Phoenix 333 1st Avenue West Seattle, Washington 98119 Telephone: (206)286-8584 POSITION STATEMENT: Testified in support of HJR 55. HEATHER McCARTY, Lobbyist At-Sea Processors Association 319 Seward Street, Suite 2 Juneau, Alaska 99801 Telephone: (907) 586-4260 POSITION STATEMENT: Testified against HJR 55. ACTION NARRATIVE TAPE 98-10, SIDE A Number 0001 CHAIRMAN ALAN AUSTERMAN called the House Special Committee on Fisheries meeting to order at 5:04 p.m. Members present at the call to order were Representatives Austerman, Ogan and Hodgins. Representative Kubina arrived at 5:30 p.m. He stated that because Representative Ivan, sponsor of 318, was absent the committee would not hear that bill. HB 423 - ACCESS FISHERY TRUST/LIC. PERMIT SURCHARGE Number 0038 CHAIRMAN AUSTERMAN stated that due to the sponsors's time constraints he will hear an introduction to HB 423 and then table it and hear the other items on the agenda. He stated that HB 423 is "An Act relating to the Alaska access fishery trust, purchase of commercial fisheries permits, vessels, gear, equipment, and leases by the Department of Fish and Game, sport fishing license surcharge, and the entry permit surcharge; and providing for an effective date." Number 0113 REPRESENTATIVE ELDON MULDER stated that he introduced HB 423 at the request of the Board of Fisheries, due to the conflict in relation to the harvest of fish and because of the potential solution that buy-backs can provide. House Bill 423 sets up a funding mechanism to do so. He said, "The substance of the bill that pertains to the actual operations of a buy-back, as you will hear in testimony later, they don't work and that is not the purpose of the bill." He explained that it was important to get a framework established to bring the affected parties to the table to work out a buy-back program that does work. Number 0296 CHAIRMAN AUSTERMAN asked Mr. Coffey if he would see a need for this bill. MR. DAN COFFEY, Vice-Chairman, Board of Fisheries, said "Yes, Mr. Chairman. Basically what lead us to this was, we have had discussions, over the two plus years that I've have been on the board, with members of the Commercial Fisheries Entry Commission and of course we see the issues in the winter time, when we are in cycle, we see monthly the kind of battles that result from the circumstances in which our fisheries currently find themselves, which is a combination of -- some instances reducing availability of resources but in more instances just the overcapitalization and the efficiencies of our fishing fleets. The gear is better, the positioning is better, the boats are better, all the equipment is better and that has made our fishermen much more efficient at their jobs. And as a result we find shorter seasons, less opportunity on all the allocation battles that go on between not only different types users, sport, commercial and so on, but also within the commercial industries between the various different gear types, those allocation battles become as sacrimonious and as divisive as any between different types of users. So, we needed -- we wanted to express to the legislature was some of our frustration and to express the hope that in some manner the legislature would be able to deal with this. We know it is a very intractable problem, Mr. Chairman, because of our discussions with Commercial Fisheries Entry Commission and the problems intended on any such buy-back and when we heard of the possibility of a funding mechanism being established we wanted to lend our support because we think the problem is significant enough that it needs to be addressed by the legislature. As to any particular solution the Board of Fisheries had no -- has no agenda in terms of do this don't do that -- its just that we very much have to face the problem consistently and regularly and we were hoping that the legislature could find a solution to this problem. Mr. Chairman, thank-you." Number 0469 CHAIRMAN AUSTERMAN asked if he had any thoughts if the legislation should look at this as a statewide proposal or should the legislature look at this on a region to region basis. Number 0500 MR. COFFEY replied "Well -- when the board discussed it, it was -- Mr. Chairman, the discussion was generally that it would be statewide because although there are some fisheries in our state which are not necessarily overcapitalized, the vast majority of them are and so we felt it would be more appropriate to be statewide. But there's -- the flip side of the coin could be, there's some that are more overcapitalized and more intensive than others and so it might be appropriate, after the plan and the funding mechanisms are established, to maybe focus on this area and not another area because of the matter of degree of overcapitalization." Number 0535 CHAIRMAN AUSTERMAN stated the burning issue is the Cook Inlet issue and asked if the Board of Fisheries would be receptive if this ended up to be just a Cook Inlet issue that the legislature tried to resolve. DAN COFFEY replied, "That -- you are correct when you say it is a burning issue. I mean that's where the biggest conflicts exist between sport and commercial users and to the extent that the endeavor of-- the goal of buy-back would be to resolve disputes between sport and commercial users and that would be an appropriate place to start. To that degree, yes, that would certainly be helpful to the board. Ya, I agree with that." Number 0595 CHAIRMAN AUSTERMAN asked if he visualized this as more of an overcapitalization of the fleet in reference to commercial fishing or if it is more of an issue of overcapitalization in reference to allocation between the sport fish industry and commercial fishing industry. For example, the bill had an allocation of the sportfish licence of $1 plus the 5 percent of the commercial fishing fees, which indicates that sportfish is involved in this. He asked if it was the Board of Fisheries intention, whether this is an overcapitalization of the commercial fishing industry issue or is it a sportfishing versus commercial fishing issue that they are trying to resolve. Number 0638 MR. COFFEY replied "No, I think the main and thrust of it was that it is a commercial fisheries issue and the rub point, resulting from it are found at not only the commercial levels and the allocation battles between commercial users but also at the level of where the sport and commercial interests conflict. And that of course, is you have properly identified, is to the greatest degree found in Cook Inlet, that is were most of the sport fishermen (Indisc.--paper shuffling). So I view it as, from the board's perspective, my understanding Mr. Chairman, from the debate, of the boards perspective, that we were viewing it from the fact that the commercial fishing industry has become more and more efficient and in that sense overcapitalized and to some degree the number of limited entry permits that were issued at the time were probably greater than the fisheries could handle. We talked about problems like when a family that used to fish one permit went in to apply for it, Mom got a permit, Dad got a permit, and all three kids got a permit. So where before you used to have one, now you've got five. And things like in -- we've talked about in area M, where it used to be that a one fishing family would have a seine permit and a drift permit and a setnet permit and that's cause they fished different fish at different times of the year. And then they sold off their permits one at a time and kept the one they wanted to fish and you compound that with the fact that Mom, Pop and the kids all got a limited entry permit and then you compound it that the same permit that they had in the 50's and 60's was a beach seine permit and now its a power seine permit and instead of having a boat that could go out only in good weather they've got a boat that you know is 58 feet and can fish year round and so on and so on. So that's the discussion we had about the overcapitalization, Mr. Chairman." Number 0771 CHAIRMAN AUSTERMAN stated that he was going to table HB 423. HJR 55 - ALLOCATION OF POLLOCK AND PACIFIC COD Number 0801 CHAIRMAN AUSTERMAN stated that HJR 55, Relating to the allocation of pollock and Pacific cod, is before committee again and he is not aware of any amendments to it. He stated that he would take further testimony. Number 0850 JEROME SELBY, Mayor of Kodiak, testified via teleconference from Kodiak to urge passage of HJR 55 as it is appropriate and in line with a lot of the efforts that have made by coastal communities for a number of years to develop Alaska's economy of the resources. He stated that factory trawlers that hire a few Alaskans does not build an Alaskan economy. An Alaskan economy is built by having Alaskan fishermen deliver fish to the docks and by having the processing plants hire the residents of Alaska's coastal communities. Alaska's transportation system is built up by transporting the fish market. Shore-based processors build up Alaska's economy. He stated that it is ridiculous to have factory trawlers catching the fish and taking it to other countries. He reiterated the need for supporting HJR 55. Number 0967 AL BURCH, testified via teleconference from Kodiak that he urged support of HJR 55 with the understanding that it will be taken up in April by the NPFMC. Number 1027 DAN JAMES, testified via teleconference from Kodiak in support of HJR 55, as processing jobs need to be kept onshore. Number 1057 MITCH KILBORN, testified via teleconference from Kodiak in support of HJR 55, as coastal communities need this protection to keep the economies strong. Number 1081 OLIVER HOLMS, Commercial Fisherman, testified via teleconference from Kodiak in support of HJR 55. He stated that the salmon industry is in tough times and it is necessary to maintain the health of the overall shore-based salmon industry as it is all interconnected. Number 1129 CHRIS BLACKBURN, Alaska Groundfish Databank, testified via teleconference from Seattle in support of HJR 55 as it helps every Alaskan community through local hire. Number 1169 JIM INGRAM, Commercial Fisherman, testified via teleconference from Dillingham against HJR 55. He stated that in Bristol Bay the offshore fleet supports the communities as it employs the residents. He stated that they promote a drug and alcohol free work place. He stated that without the offshore fleet they will be controlled by the Japanese market. American Seafoods is now promoting Alaskan markets. Number 1287 STAN SMALL, Commercial Fisherman, testified via teleconference from Dillingham against HJR 55 because "I think whenever they put it to onshore we're going to get less money for our product." He stated that the offshore sector provides jobs for his kids in the wintertime, otherwise there is no work. Number 1380 KENNY WILSON, Commercial Fisherman, testified via teleconference from Dillingham against HJR 55 because the offshore sector employs the residents and it would hurt the community if they were allocated a greater percentage. Number 1455 CHRIS ARNIM, Manager, Trident Seafoods, testified via teleconference from Sand Point that the plant relies on groundfish and is a major employer. The local fleet and the community are dependant on the plant. He stated that more opportunity in the Bering Sea means greater tax revenue, greater job stability, and he urged support of HJR 55. Number 1522 DAVE AVBASIAN, Assistant Akutan plant Manager, Trident Seafoods, testified via teleconference from Akutan in support of HJR 55. He stated that their combined recovery rate is 38 percent and their goal is to raise it to 40 percent by next year. With the fish meal plants they are able to utilize the bycatch. He stated that they employ up to 800 people a year, of which 200 are employed year- round. More allocation to the onshore sector increases the contributions to the local and state economy through taxes and through the indirect services. Number 1597 JOE BERESKIN, Mayor of Akutan, testified via teleconference from Akutan in support of HJR 55 because the onshore sector provides the greater benefit to Alaska. Number 1644 JUDE HENZLER, Executive Director, Bering Sea Fishermen's Association, testified via teleconference from Anchorage that the rationale for HJR 55 is not compelling and is premature as the North Pacific Fisheries Management Council is still analyzing the bill. Most of the jobs the Bering Sea residents have are offshore. He stated that in general he does not agree with HJR 55. Number 1708 BOB JUETTNER, Representative Aleutians East Borough, testified via teleconference from Anchorage in support of HJR 55. He stated that in 1993 groundfish was valued at $29.9 million and in the past year the value was up to $54.6 million which equals $1.9 million in taxes to the Aleutian East Borough and almost the same amount to the communities. He stated that the onshore sector has created a market and economic gain for local residents. He reiterated that the plants brings in other industries and affects other industries. Number 1870 GRANT YUTRZENKA, Employee, Unisea, testified via teleconference from Unalaska in support of HJR 55. He stated that his family depends on his income made from the resource of the Bering Sea. Unisea employs about 250 year-round residents in Unalaska. He thought the direction, the mobility of the trawlers and future revenues to the state need to be thought of. He stated that the future of the fishery is headed towards comprehensive rationalization, meaning quotas, which will be awarded to those with recent fishing history. With the current, 65/35 split the majority of the fish will go to the factory trawlers. He stated that the factory trawlers are mobile as they have dropped off crew in Unalaska and then headed to Japan to deliver their products. The landing tax from Alaska's resource is then not paid to the state or in the community. He stated that the pollock fishery is very important to the shore-side sector of Alaska. Number 2019 SHIRLEY MARQUARDT, At-sea Processors Association, testified via teleconference from Unalaska that she is unsure why this decision is being made before the analysis of the North Pacific Fisheries Management Council has been finished. There are many questions that need to be answered and taken into account, it is the council's place to make this decision. She stated that there are over 4,000 people living in the community and it is a stable atmosphere, she asked what has changed or what is trying to be fixed. She stated that she was against HJR 55, as it is a premature decision. Number 2150 FRANK KELTY, Plant Manager, Alyeska Seafoods, testifying via teleconference from Unalaska in support of HJR 55. He said that it will send a strong message to the North Pacific Fisheries Council to support an increase of pollock in the Bering Sea to the onshore sector. He stated that at 35 percent for the onshore sector it is not meeting the requirements of the Magnuson-Stevens act. He said "I would also like to remind the committee that the offshore sector controls additional quota through the CDQ program. They control about 90 percent of that 7.5 percent on top of their 65 percent allocation in the Bering Sea." He stated that the onshore sector contributes locally and statewide, through taxes and employment. He stated that Alyeska Seafoods is totally dependant on the resources in the Bering Sea. Number 2250 DON GRAVES, Employee, Unisea, testified via teleconference from Unalaska in support of HJR 55 and is concerned that if reallocation is not done the onshore sector may lose some of the production facilities. He stated that he would like to see the industry become more responsible and add value to the product that they harvest. He stated that Unisea is working with manufacturers to further utilization and increase recovery. He stated that they have developed a process to produce pollock roe and utilize all recoverable meat from the fish to produce fillets or surimi. They are moving towards a 30 percent human consumption recovery product from pollock. He stated that it is not for fish meal. At-sea processors average 15 to 17 percent which is roughly half of the shore-side sector. He stated that the Unisea markets seafood to the lower 48. Number 2365 EMIL BERIKOFF, Commercial Fisherman, testified via teleconference from Unalaska against HJR 55, because it is premature. He stated that the CDQ groups went with the offshore sector because they are getting a better price for the product and good paying jobs. He stated that local people are faced with low wages at the shore-side plants. He stated the longshoreman put in many hours off-loading fish from the trawlers and live in Unalaska year round. He stated with the Japanese ownership of the shore plants the price has been considerably lower at present they are fishing for salmon at the same price that they did 30 years ago. He stated that if the onshore plants receive a higher allocation, the price of pollock and all the other fish are going to go down. TAPE 98-10, SIDE B Number 0007 SINCLAIR WILT, Surimi Plant Manager, Alyeska Seafoods, testified via teleconference from Unalaska in support of HJR 55. He stated that he would like to point out the difference between the onshore and offshore sectors. The National Marine Fisheries Service currently uses surimi recovery rates of 16 percent in the A season and 17 percent in the B season. He stated that Alyeska Seafoods has been above 24 percent each year for the past five years, which means that they have been able to produce 50 percent more surimi from a given amount of fish than a factory trawler. He stated that it comes down to the question of who best could utilize the resource, onshore producers use more of the resource. Number 0070 MR. WILT stated that the economy of the community is dependant on the survival of the shore plants. He stated that in the late 1980s the plant operation for surimi was about 300 days a year, this year it will be less than 100 days. He explained that the build-up of factory trawlers has created a tremendous impact. The full-time employment has gone down to seasonal employment. Number 0135 DON STILES, Chairman, Board of Directors, Norton Sound Economic Development Corporation, testified via teleconference from Nome against HJR 55. The resolution is detrimental to the CDQ interest in Western Alaska and it does not take into consideration the 55 villages which rely on the offshore for employment. He stated that it does not provide jobs for the poorest regions in Alaska and logistically it makes sense to be partnered with the offshore sector. The offshore sector and Glacier Fish provides markets for the local fisheries and the revenue generated stays in the community. Regional residents have brought home $2.7 million in wages since 1992. Number 0245 CHRIS BERNS, testified via teleconference in support of HJR 55 as the dollars from the shore-based plants benefit all communities. It affects property values and stabilizes the economy. He stated that the offshore sector, at first, opposed the fish tax. He pointed out that due to the low price of oil the fishing industry needs to be looked at as a bigger tax base. He asserted that the CDQ groups will still get their 7 percent allocation and reap all the benefits. He stated that this is a political campaign with a lot of misinformation coming from the offshore sector hurting the Western Alaska villages. Number 0379 JOHN IANI, Employee, Unisea, stated that they buy fish from about 30 individual groundfish boats, buy salmon from 80 to 100 boats in Bristol Bay and buy herring from 60 to 70 seiners and gilnetters and buy crab from about 35 crab boats. He stated that the North Pacific Fisheries Management Council passed an onshore allocation which included up to 45 percent of the onshore pollock, but the factory trawlers managed to get that allocation back. He stated that if he had 65 percent of the resource for free he would also say the this resolution was premature and would want to look at this analysis until Jesus came back. He stated that the factory trawlers utilize 15 percent of the fish that they harvest compared to 35 percent with onshore sector. He stated that the allocation should go to the sector that utilizes the resource the best. Number 0525 MR. IANI stated that the offshore sector is unconscionable for whipping up the CDQ communities into a frenzy, by telling them that if the allocation changes they will not pay the communities for the fish that buy from them. He stated that they have had the opportunity to bid for some of the CDQs and have put together a proposal with a factory trawler company, based on a royalty amount to the CDQ group, paying them for their pollock and providing jobs and internships for both of the operations. He stated that the factory trawler company did not indicate that this hinged on the allocation. The proposal went in at a specific number and the allocation had nothing to do with that number. Number 0616 DAVID STANCHFIELD, Owner, Catcher Boat, F/V Morning Star, stated that he has been doing this since 1979 and has been involved with the factory trawler end of the business as well. He stated that he has had his ship in Unalaska, for three years without taking it South as he relies on the local community for services and boat repairs. He stated that when he worked with the factory trawlers, when they were done with there A season and B season they would go back to Seattle to buy their supplies and services. He stated that the onshore sector pays a fish tax on every single pound of fish that they land. The offshore sector only now pays a fish tax on part of the fish that they catch because a good share of it goes to the Seattle area. He explained that he only hires Alaskans. Number 0810 TERRY SHAFF, President, Unisea, that Unisea has been doing business in Alaska for over 25 years. He stated that he would like to represent tonight the three major shore-based processors, Unisea, Westward and Alyeska. He stated that in the A season of this year, Unisea had 2,200 employees and 32 percent were Alaskan residents and that is continuing to grow. The onshore sector can provide a variety of lifestyles from seasonal to permanent work and from processing to administrative jobs. He stated that it is just not employment for the A season because they do not leave when that season is over, they then switch to processing cod, yellow fin sole, halibut, herring, turbot and salmon. They are providing markets for the independent fishermen of Alaska. He stated that it is appropriate for the legislature to pass HJR 55 because the onshore processors have proven to be the best stewards for the resource and the best corporate citizens because they are the permanent seafood processors in the state. Number 1069 DAVE GALLOWAY, Representative, F/V Ocean Phoenix, stated that they are a mother-ship operation and a co-operative. He stated that they are the smallest vessels on the grounds. He stated that they are in support of HJR 55. He stated that they buy the fish and make the best utilization of the fish and produce a higher quality of fish. He asserted that it is critical to show support for this bill as the problem has stemmed from the huge influx of foreign factory trawlers in 1990's that crippled the traditional harvesting fleet and processors. Number 1210 DOUG FORSYTH, Representative, F/V Ocean Phoenix, stated that he has been in the seafood business for 22 years and it is his belief that the best structure of the seafood industry for Alaska is having small boats delivering their catch to processors. It is best in terms of creating jobs for Alaskan residents, for creating the largest possible tax base and is best for the resource. Number 1296 MR. IANI stated that the legislature has always been a strong supporter of the seafood processing industry in Alaska and is grateful for the support and in hearing HJR 55. Number 1314 HEATHER McCARTY, Lobbyist, At-Sea Processors Association (APA), stated that was excellent testimony preceding her. The At-Sea Processors are made up of seven processors, all the major ones with the exception of Tyson Seafoods. She stated that APA supports the status-quo in the allocation battle. She stated that the legislature should reserve their judgment until the council's analysis is done on the impacts of the allocation shift. She stated that the economic well being of the state, as a whole, is the reason to look at this issue and therefore they should have the facts from the council's and the state's analysis on the issue. Number 1444 MS. McCARTY referred to the 1991 allocation decision and stated that the 45/55 percentage was overturned due to overwhelming evidence that such a shift would have resulted in a net loss from the pollock fishery. She stated that the council came up with an alternative of 37.5/62.5 percent which was also turned down. She stated that in 1995 the council unanimously voted to maintain to 35/65 allocation. Number 1557 MS. McCARTY stated that the onshore processors and the offshore processors have both made great contributions to the communities that they serve. Communities that do not have infrastructure to maintain an onshore structure. She stated that competition is healthy. She stated that there is competition between communities because there are communities that support the offshore sector since it is logistically and economically impossible for them to gain from the onshore sector. She asked that the legislature look at the impact their decision will have on those communities. Number 1719 CHAIRMAN AUSTERMAN stated it is an emotional issue, he would like to see 100 percent allocation go to the onshore sector. He stated that he is going to hold the bill over. HB 423 - ACCESS FISHERY TRUST/LIC. PERMIT SURCHARGE Number 1816 CHAIRMAN AUSTERMAN stated that he would take up HB 423 again. Number 1829 CHRIS BERNS testified via teleconference from Kodiak that there are a lot of problems with the bill but the basis to have a fund for a buy-back should be investigated and he supports that. CHAIRMAN AUSTERMAN stated that HB 423 will be held over. ADJOURNMENT Number 1999 CHAIRMAN AUSTERMAN adjourned the House Special Committee on Fisheries meeting at 6:35 p.m.

Document Name Date/Time Subjects