Legislature(2003 - 2004)

02/09/2004 09:02 AM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                        February 9, 2004                                                                                        
                           9:02 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Paul Seaton, Chair                                                                                               
Representative Peggy Wilson, Vice Chair                                                                                         
Representative Dan Ogg                                                                                                          
Representative Ralph Samuels                                                                                                    
Representative David Guttenberg                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Cheryll Heinze                                                                                                   
Representative Les Gara                                                                                                         
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative William K. Williams                                                                                              
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE JOINT RESOLUTION NO. 34                                                                                                   
Requesting the  United States Department  of Agriculture  and the                                                               
United  States Department  of Labor  to  extend Trade  Adjustment                                                               
Assistance benefits  to Alaska  fishermen; requesting  the United                                                               
States Congress  and the United States  Department of Agriculture                                                               
to  extend  additional disaster  and  price  support benefits  to                                                               
Alaska  salmon  fishermen;  and   requesting  the  United  States                                                               
Department  of  Agriculture  to  establish  terminal  markets  in                                                               
Alaska for all covered commodities including salmon.                                                                            
                                                                                                                                
     - MOVED CSHJR 34(FSH) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 410                                                                                                              
"An  Act relating  to the  administration  of commercial  fishing                                                               
entry permit buy-back programs."                                                                                                
                                                                                                                                
     - MOVED HB 410 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 409                                                                                                              
"An Act relating  to the maximum length of  salmon seine vessels;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: HJR 34                                                                                                                  
SHORT TITLE: FED TRAINING AND ASSISTANCE FOR FISHERMEN                                                                          
SPONSOR(S): REPRESENTATIVE(S) OGG BY REQUEST OF SALMON INDUSTRY                                                                 
TASK FORCE                                                                                                                      
                                                                                                                                
01/28/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/28/04       (H)       FSH, L&C                                                                                               
02/09/04       (H)       FSH AT 9:00 AM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB 410                                                                                                                  
SHORT TITLE: ENTRY PERMIT BUY-BACK PROGRAM                                                                                      
SPONSOR(S): REPRESENTATIVE(S) WILLIAMS BY REQUEST OF SALMON                                                                     
INDUSTRY TASK FORCE                                                                                                             
                                                                                                                                
01/28/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/28/04       (H)       FSH, RES, FIN                                                                                          
02/09/04       (H)       FSH AT 9:00 AM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB 409                                                                                                                  
SHORT TITLE: SEINE VESSEL LENGTH                                                                                                
SPONSOR(S): REPRESENTATIVE(S) WILLIAMS BY REQUEST OF SALMON                                                                     
INDUSTRY TASK FORCE                                                                                                             
                                                                                                                                
01/28/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/28/04       (H)       FSH, RES                                                                                               
02/09/04       (H)       FSH AT 9:00 AM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
MELISSA DOVER, Staff                                                                                                            
to Representative Dan Ogg                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HJR 34 on behalf of                                                                              
Representative Ogg, sponsor by request of the Joint Legislative                                                                 
Salmon Industry Task Force.                                                                                                     
                                                                                                                                
MATT PANCRATZ, Commercial Salmon Fisherman                                                                                      
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified on HJR 34 and HB 410.                                                                            
                                                                                                                                
MARK VINSEL, Executive Director                                                                                                 
United Fishermen of Alaska (UFA)                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke in favor of HJR 34.                                                                                  
                                                                                                                                
TIM BARRY, Staff                                                                                                                
to Representative William K. Williams                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 410 and HB 409 on behalf of                                                                   
Representative Williams, sponsor by request of the Joint                                                                        
Legislative Salmon Industry Task Force.                                                                                         
                                                                                                                                
MARY McDOWELL, Commissioner                                                                                                     
Commercial Fisheries Entry Commission (CFEC)                                                                                    
Alaska Department of Fish and Game (ADF&G)                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in favor of HB 410.                                                                              
                                                                                                                                
DOUG MECUM, Director                                                                                                            
Division of Commercial Fisheries                                                                                                
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions about HB 409.                                                                           
                                                                                                                                
GERALD McCUNE, Lobbyist                                                                                                         
for United Fishermen of Alaska (UFA)                                                                                            
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:  Originally had supported HB 409, but voiced                                                                
several concerns about the bill.                                                                                                
                                                                                                                                
SCOTT McALLISTER, Seiner                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in favor of HB 409.                                                                              
                                                                                                                                
BRUCE WALLACE, Purse Seine Vessel Owner                                                                                         
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Testified in favor of HB 409.                                                                              
                                                                                                                                
DAVE AUSTERBACK, Member                                                                                                         
Sand Point Advisory Committee (SPAC)                                                                                            
Sand Point, Alaska                                                                                                              
POSITION STATEMENT:  Testified in opposition to HB 409.                                                                         
                                                                                                                                
JOHN FOSTER, President                                                                                                          
Sand Point Advisory Committee;                                                                                                  
Member, Board of Directors                                                                                                      
Peninsula Marketing Association                                                                                                 
Sand Point, Alaska                                                                                                              
POSITION STATEMENT:  Testified in opposition to HB 409.                                                                         
                                                                                                                                
TIM MOORE, Seiner                                                                                                               
Homer, Alaska                                                                                                                   
POSITION  STATEMENT:    Spoke  about   HB  409  not  having  much                                                               
relevancy for his area; spoke in favor of the 66 percent vote.                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-4, SIDE A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  PAUL   SEATON  called  the  House   Special  Committee  on                                                             
Fisheries meeting to order at  9:02 a.m.  Representatives Seaton,                                                               
Wilson, Ogg, Samuels, and Guttenberg  were present at the call to                                                               
order.  Also in attendance was Representative Williams.                                                                         
                                                                                                                                
HJR 34-FED TRAINING AND ASSISTANCE FOR FISHERMEN                                                                              
                                                                                                                                
Number 0042                                                                                                                     
                                                                                                                              
CHAIR SEATON announced that the  first order of business would be                                                               
HOUSE  JOINT  RESOLUTION NO.  34,  Requesting  the United  States                                                               
Department  of Agriculture  and the  United States  Department of                                                               
Labor to  extend Trade Adjustment  Assistance benefits  to Alaska                                                               
fishermen; requesting  the United States Congress  and the United                                                               
States Department  of Agriculture  to extend  additional disaster                                                               
and  price  support  benefits to  Alaska  salmon  fishermen;  and                                                               
requesting  the  United  States   Department  of  Agriculture  to                                                               
establish terminal markets in Alaska  for all covered commodities                                                               
including   salmon.      [The   resolution   was   sponsored   by                                                               
Representative  Ogg by  request of  the Joint  Legislative Salmon                                                               
Industry Task Force.]                                                                                                           
                                                                                                                                
Number 0108                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG   moved  to  adopt  the   proposed  committee                                                               
substitute  (CS), Version  23-LS1408\S, Utermohle,  2/3/04, as  a                                                               
work draft.  [No objection was  stated, and Version S was treated                                                               
as adopted.]                                                                                                                    
                                                                                                                                
Number 0180                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG moved  [to  adopt Amendment  1],  on page  3,                                                               
line 9,  to delete  "salmon".   He  said it  was a  typographical                                                               
error.                                                                                                                          
                                                                                                                                
CHAIR SEATON  asked about the  effect of  removing it on  page 3,                                                               
but not in the title [page 1, line 6].                                                                                          
                                                                                                                                
Number 0235                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG  said he'd  amend Amendment  1 to  also delete                                                               
"salmon" from  [page 1, line  6, in  the title].   The "Resolved"                                                               
section was  to expand the  resolution to include  all commercial                                                               
fishermen;  the first  part addresses  just the  salmon industry.                                                               
He explained  that he was  trying to  get the U.S.  Department of                                                               
Commerce to  establish a Trade Adjustment  Assistance program for                                                               
commercial fishermen across  the spectrum, as seen  in the fourth                                                               
"Resolved" [page 3, lines 7-9].                                                                                                 
                                                                                                                                
REPRESENTATIVE OGG  said he'd remove  his original  [Amendment 1]                                                               
and restate it as follows:                                                                                                      
                                                                                                                                
     Page 1, line 6                                                                                                             
     Delete the word "salmon"                                                                                                   
     Page 3, line 9                                                                                                             
     Delete the word "salmon"                                                                                                   
                                                                                                                                
Number 0369                                                                                                                     
                                                                                                                                
CHAIR SEATON  asked if there  was any objection to  adopting [the                                                               
new] Amendment 1.  There being no objection, it was so ordered.                                                                 
                                                                                                                                
Number 0413                                                                                                                     
                                                                                                                                
MELISSA  DOVER, Staff  to Representative  Dan  Ogg, Alaska  State                                                               
Legislature, explained  the changes to Version  S.  On page  2 of                                                               
the  original resolution,  lines 17-19  were deleted  because the                                                               
coordinating  "Resolved" statement  had been  previously removed,                                                               
and [lines 17-19]  were accidentally left in, she said.   On page                                                               
2  [of  the  original  resolution],  line  24,  after  the  first                                                               
"years",  she  said  the  words   "due  to  import-related  price                                                               
fluctuations" were  added.  And  [on page  2, line 24]  after the                                                               
[second]  "years", the  words "due  to loss  of market  caused by                                                               
import-related price fluctuations" were added.                                                                                  
                                                                                                                                
MS.  DOVER,  in  response  to   a  question  from  Chair  Seaton,                                                               
clarified that the changes in Version  S were on page 2, lines 21                                                               
and  22;  those   changes  were  made  to   make  [the  language]                                                               
specifically related to imports.                                                                                                
                                                                                                                                
Number 0625                                                                                                                     
                                                                                                                                
MS. DOVER said  in the original resolution, on page  3, lines 7-9                                                               
were deleted.   She  said it  ended up  being a  very complicated                                                               
issue when it was discovered  that it was impossible to establish                                                               
terminal markets in Alaska.                                                                                                     
                                                                                                                                
Number 0679                                                                                                                     
                                                                                                                                
MS. DOVER  pointed out  that in  Version S on  page 3,  lines 7-9                                                               
were  added  to request  that  the  U.S. Department  of  Commerce                                                               
pursue the establishment of a  TA [Trade Adjustment] program that                                                               
is  specific  to commercial  fishermen,  because  the current  TA                                                               
program was designed for farmers.                                                                                               
                                                                                                                                
Number 0772                                                                                                                     
                                                                                                                                
MATT PANCRATZ,  Commercial Salmon Fisherman, mentioned  that he'd                                                               
heard retraining was the goal  for fishermen who've suffered from                                                               
the loss of  market price.  He said the  fishermen and processors                                                               
in Cook  Inlet don't have  the money  for their occupations.   He                                                               
asked if the  legislature would consider providing  funds to help                                                               
fishermen  create  a better  product,  rather  than spending  the                                                               
money on retraining.                                                                                                            
                                                                                                                                
CHAIR SEATON responded that the  resolution does have a provision                                                               
for  the  [United  States]   Department  of  Agriculture  (USDA),                                                               
program,  as well  as  the [United  States]  Department of  Labor                                                               
(USDOL)  program.   The  USDA  program  is  the cash  payment  to                                                               
fishermen,  based   on  the  depressed  prices   or  losses  from                                                               
competition  with  imported  products,   he  explained,  and  the                                                               
(USDOL) program is the retraining money.                                                                                        
                                                                                                                                
Number 0976                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WILSON  commented  that over  the  weekend  she'd                                                               
talked to  someone involved with  the university who  was excited                                                               
by the  numbers of fishermen  who were taking classes  to enhance                                                               
their fishing businesses.                                                                                                       
                                                                                                                                
CHAIR SEATON  noted that last  year, legislation was  passed that                                                               
allowed processors to take a  tax credit on their corporate taxes                                                               
for investments  in value-added  products; small  operations were                                                               
included.    He  said  [this resolution  relates  to]  a  federal                                                               
program, and the  legislature doesn't have a lot  of influence on                                                               
the  way  the  federal  program  allocates  money;  however,  the                                                               
intent,  as  stated  by  Representative  OGG, is  to  ask  for  a                                                               
"fisherman-specific   program,   instead  of   just   shoehorning                                                               
fishermen into  the agricultural program."   He said he  hoped to                                                               
discuss  some  of  the  issues  brought up  by  Mr.  Pancratz  in                                                               
negotiating for the fishermen's program.                                                                                        
                                                                                                                                
MR.  PANCRATZ  remarked  that  he   believed  the  committee  had                                                               
addressed most of the difficult issues.                                                                                         
                                                                                                                                
CHAIR SEATON asked  Mr. Pancratz to keep his eyes  open for other                                                               
legislation coming up.                                                                                                          
                                                                                                                                
Number 1180                                                                                                                     
                                                                                                                                
MARK  VINSEL,  Executive  Director, United  Fishermen  of  Alaska                                                               
(UFA), spoke  in favor of  HJR 34.  He  said, "I also  think that                                                               
the  resolution addresses  the concerns  that we  heard the  most                                                               
from,  both  from  fishermen,  directly,  and  through  the  Farm                                                               
Service Agency and marine advisory  program that are implementing                                                               
the program."                                                                                                                   
                                                                                                                                
Number 1232                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG asked if  the retraining and relocating                                                               
programs  were designed  to take  fishermen out  of the  industry                                                               
indirectly and then shut it down.                                                                                               
                                                                                                                                
MR. VINSEL  responded, "I don't  think that it's  necessarily the                                                               
intention  of the  program  to reduce  the  number of  commercial                                                               
fishermen."  He spoke about  the technical-assistance part of the                                                               
program,  which includes  information  on  improving quality  and                                                               
diversification  in order  to remain  in the  [fishing] business.                                                               
He continued:                                                                                                                   
                                                                                                                                
     The  retraining is  part of  the  [U.S.] Department  of                                                                    
     Labor program that  is provided in the  USDA program to                                                                    
     people who qualify  for the cash benefits.   One of the                                                                    
     points of  the resolution  is to apply  that retraining                                                                    
     assistance even to fishermen who  don't qualify for the                                                                    
     cash,  under   the  understanding  that   everybody  is                                                                    
     affected by  the increased imports.   And, in  my mind,                                                                    
     and I  believe it's in  the spirit of the  program that                                                                    
     it  should  be  allowing  that  retraining  benefit  to                                                                    
     people that are salmon  fishermen because the salmon is                                                                    
     a  commodity that's  been affected  by imports  as they                                                                    
     determined in the petition certification.                                                                                  
                                                                                                                                
Number 1354                                                                                                                     
                                                                                                                                
MR. VINSEL explained that relocation  is one aspect of the normal                                                               
USDOL  TAA program  not  provided  in this.    The fishermen  who                                                               
qualify  [under this  TAA program]  are eligible  for retraining,                                                               
but not the relocation aspect.  He added:                                                                                       
                                                                                                                                
     In general,  I think  the spirit of  the program  is to                                                                    
     allow farmers to  continue to farm.  The way  I look at                                                                    
     these price support programs is,  it's to help retain a                                                                    
     industry sector of small individual  farmers, or in our                                                                    
     case,  fishermen, as  the heart  of  the nation's  food                                                                    
     supply, which I  think is a good goal  because it keeps                                                                    
     a diversified food  supply for the country,  not in the                                                                    
     hands of just a few.                                                                                                       
                                                                                                                                
Number 1413                                                                                                                     
                                                                                                                                
CHAIR SEATON drew attention to the  letter from UFA in support of                                                               
HJR 34.  He asked Mr. Vinsel if the UFA agreed with Amendment 1.                                                                
                                                                                                                                
MR. VINSEL said yes.                                                                                                            
                                                                                                                                
CHAIR SEATON noted  that the USDOL program,  although it conjoins                                                               
with  the  USDA's,  also   exists  independently;  fishermen  can                                                               
qualify  if  they  were  working for  a  processor  that  applied                                                               
separately.   Even if [fishermen]  weren't eligible for  the USDA                                                               
program, they could qualify for the USDOL training program.                                                                     
                                                                                                                                
Number 1510                                                                                                                     
                                                                                                                                
CHAIR SEATON  asked if anyone  else wished  to testify.   He then                                                               
closed public testimony.                                                                                                        
                                                                                                                                
REPRESENTATIVE  OGG complimented  UFA  and Mr.  Vinsel for  their                                                               
work on  HJR 34.   He also commended  Chad Padgett from  the USDA                                                               
for his hard work on the resolution.                                                                                            
                                                                                                                                
Number 1583                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WILSON  moved to  report  CSHJR  34, Version  23-                                                               
LS1408\S, Utermohle,  2/3/04, as  amended, out of  committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection,  CSHJR 34(FSH)  was reported  from the                                                               
House Special Committee on Fisheries.                                                                                           
                                                                                                                                
HB 410-ENTRY PERMIT BUY-BACK PROGRAM                                                                                          
                                                                                                                                
[Contains discussion relating to SB 315, the companion bill]                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
HOUSE BILL  NO. 410,  "An Act relating  to the  administration of                                                               
commercial fishing entry permit buy-back programs."                                                                             
                                                                                                                                
Number 1625                                                                                                                     
                                                                                                                                
TIM BARRY,  Staff to Representative  William K.  Williams, Alaska                                                               
State Legislature, introduced HB  410 on behalf of Representative                                                               
Williams, sponsor  by request.  He  explained that Representative                                                               
Williams was asked by the  Joint Legislative Salmon Industry Task                                                               
Force  and the  Commercial Fisheries  Entry Commission  (CFEC) to                                                               
sponsor  this  legislation, which  gives  CFEC  more options  for                                                               
funding and managing fishing permit buy-back programs.                                                                          
                                                                                                                                
Number 1709                                                                                                                     
                                                                                                                                
MARY   McDOWELL,   Commissioner,   Commercial   Fisheries   Entry                                                               
Commission (CFEC),  Alaska Department  of Fish and  Game (ADF&G),                                                               
spoke  in  favor  of  HB  410  as  an  additional  step  to  help                                                               
facilitate fleet  consolidation.  She  said the bill  makes minor                                                               
but potentially  useful amendments  to the existing  statute that                                                               
governs the  state-run, fishermen-funded  buy-back program.   She                                                               
provided background about the existing statute as follows:                                                                      
                                                                                                                                
     When  a fishery  first comes  under limited  entry, the                                                                    
     law  directs  CFEC to  establish  a  maximum number  of                                                                    
     permits, then  rank the  eligible applicants  and issue                                                                    
     that maximum number  of permits.  But  it also contains                                                                    
     a  provision known  as the  "optimum number  provision"                                                                    
     that provides  for subsequently changing the  number of                                                                    
     permits and  adjusting the number  of permits  that are                                                                    
     in a fishery.  That  "optimum number provision" directs                                                                    
     us  to establish  what the  optimum  number of  permits                                                                    
     would be, which is a  complicated look at the economics                                                                    
     of the  fishery and  the forecast of  fishery strength,                                                                    
     fish prices, and so on.                                                                                                    
                                                                                                                                
     If,  in determining  the optimum  number, we  determine                                                                    
     that there are too few  permits in the fishery, the law                                                                    
     provides  that the  commission  shall issue  additional                                                                    
     permits into the fishery at  fair market value, to make                                                                    
     sure that  that fishery  does not become  too exclusive                                                                    
     and   thereby   become   unconstitutional.     If   the                                                                    
     conclusion is  that there are  too many permits  in the                                                                    
     fishery,  then  the  statute   sets  up  this  buy-back                                                                    
     provision that  would develop a program;  then you seek                                                                    
     willing  sellers, permit  holders  who  are willing  to                                                                    
     sell out of  the fishery, and you reduce  the number of                                                                    
     permits down to the optimum number.                                                                                        
                                                                                                                                
MS. McDOWELL continued:                                                                                                         
                                                                                                                                
     To date,  there has  never been a  buy-back run  by the                                                                    
     state;  partly, that's  because there's  never been  an                                                                    
     optimum number  determination that a  fishery warranted                                                                    
     that kind of  a buy-back.  And also, even  if there had                                                                    
     been,  the original  statute, as  it was  designed, had                                                                    
     some flaws in it, the  major one being that the funding                                                                    
     mechanism  that   was  in   that  statute   created  an                                                                    
     unconstitutional  dedicated fund,  and the  legislature                                                                    
     corrected  that  problem  and  a  few  others  in  that                                                                    
     statute with legislation two years ago.                                                                                    
                                                                                                                                
     So now,  the buy-back provision is  technically usable,                                                                    
     but it's still  largely impractical.  And  this bill is                                                                    
     meant  to take  one step  towards ...  adding a  little                                                                    
     more  flexibility, ...  [making it]  more practical  to                                                                    
     use if circumstances arise that it would be warranted.                                                                     
                                                                                                                                
Number 1878                                                                                                                     
                                                                                                                                
MS.  McDOWELL  explained  that  the  current  statute  authorizes                                                               
[CFEC]  to establish  an assessment  of up  to 7  percent of  ex-                                                               
vessel earnings  as the funding  source for buy-back.   The money                                                               
would be collected by the Department  of Revenue to be put in the                                                               
general fund for the legislature to appropriate into the buy-                                                                   
back  fund.   The  CFEC could  then  use the  money  to buy  back                                                               
permits, a  few at a time,  or allow the money  to accumulate and                                                               
do a substantial  buy-back, she said.  Either way,  it would take                                                               
a long time,  could be self-defeating, and would  be difficult to                                                               
reach the program's goal.                                                                                                       
                                                                                                                                
MS.  McDOWELL discussed  the purpose  of HB  410:   to allow  the                                                               
state to  be in a  better position  to do an  effective buy-back.                                                               
She  said  it  retains  the   current  funding  approach  as  one                                                               
available  option,   but  also  adds  language   that  opens  the                                                               
possibility  of using  another funding  source to  initially fund                                                               
the buy-back  and then  assess the earnings  of fishermen  to pay                                                               
back any obligated portion, such as a loan.                                                                                     
                                                                                                                                
MS. McDOWELL emphasize  that, in itself, the  bill doesn't create                                                               
a  new funding  source, but  does position  the state  to utilize                                                               
other funds  to jump-start  a buy-back.   She listed  examples of                                                               
upfront   funding   sources   such   as  a   federal   or   state                                                               
appropriation,  a private-sector  loan,  or  a court  settlement,                                                               
sources  of money  available on  the  condition that  at least  a                                                               
portion of it be paid back.                                                                                                     
                                                                                                                                
MS. McDOWELL explained that the  bill [positions the state to use                                                               
other sources  of funding]  by changing  the language  about when                                                               
the assessment  of fishermen would  end.  Under the  current law,                                                               
the  buy-back program  and  assessment stop  when  the number  of                                                               
payments  in the  fishery has  reached the  optimum number.   The                                                               
bill amends [the  buy-back program] slightly to  allow for either                                                               
[the current] process, when the  assessment ends when the optimum                                                               
number is reached,  or [the new process], when  the obligation to                                                               
repay any upfront funding is  fulfilled.  Although it isn't known                                                               
whether the upfront money will  become available for fishery buy-                                                               
backs, it  puts the  state in  a better position  to make  use of                                                               
that  opportunity if  it does  come along.   She  reiterated that                                                               
CFEC supports HB 410.                                                                                                           
                                                                                                                                
REPRESENTATIVE WILSON  asked if the  bill was "putting  things in                                                               
place if something happens to come  by, and right now there isn't                                                               
anything waiting in the wings."                                                                                                 
                                                                                                                                
MS. McDOWELL replied that was correct.                                                                                          
                                                                                                                                
Number 2158                                                                                                                     
                                                                                                                                
CHAIR SEATON  asked if the main  crux of the bill  started on the                                                               
bottom of page  1, line 14, "including repayment of  any debt the                                                               
commission  was authorized  to incur  to capitalize  the buy-back                                                               
fund for the fishery".                                                                                                          
                                                                                                                                
MS.  McDOWELL replied  that it  did,  but also  critical was  the                                                               
removal of language on page 2,  line 2 ["THE BUY-BACK PROGRAM FOR                                                               
A FISHERY  SHALL TERMINATE WHEN  THE NUMBER OF ENTRY  PERMITS FOR                                                               
THE FISHERY IS REDUCED TO THE OPTIMUM"].                                                                                        
                                                                                                                                
Number 2179                                                                                                                     
                                                                                                                                
CHAIR  SEATON  asked  if  the   words  "authorized  to  incur  to                                                               
capitalize" refer to a separate legislative Act.                                                                                
                                                                                                                                
MS. McDOWELL pointed out that it  would be an appropriation.  She                                                               
said if  there was a  source of  federal money, for  example, the                                                               
legislature would  have to  authorize CFEC to  set up  a buy-back                                                               
program with the money.                                                                                                         
                                                                                                                                
CHAIR SEATON  clarified that  if there is  a capital  source that                                                               
the legislature  authorizes to  go forward,  the bill  allows the                                                               
repayment of those funds.                                                                                                       
                                                                                                                                
Number 2227                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SAMUELS asked:   If  the state  chose to  issue a                                                               
revenue  bond to  be  repaid by  the  7 percent,  to  buy back  a                                                               
certain  number of  permits,  would it  have  to keep  collecting                                                               
until the revenue bond is paid off?                                                                                             
                                                                                                                                
[Ms. McDowell nodded in affirmation.]                                                                                           
                                                                                                                                
REPRESENTATIVE SEATON asked who determines the optimum number.                                                                  
                                                                                                                                
MS. McDOWELL said CFEC does.                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  inquired on what basis  the optimum number                                                               
was determined,  and if it  was based on economic  and biological                                                               
factors.                                                                                                                        
                                                                                                                                
MS. McDOWELL replied  that it was.  She cited  a current study of                                                               
optimum numbers in  the Bristol Bay drift  gillnet salmon fishery                                                               
and  explained  factors  involved;  she said  it's  a  matter  of                                                               
finding  a balance.   She  noted that  the statute  used to  say,                                                               
"optimum  number"; however,  it was  extremely difficult  to pick                                                               
only  one number.   Two  years ago  the legislature  made several                                                               
amendments to  that statute,  and the  definition was  changed to                                                               
"optimum  number  range", which  allows  for  fluctuation in  the                                                               
variables.                                                                                                                      
                                                                                                                                
Number 2319                                                                                                                     
                                                                                                                                
REPRESENTATIVE SAMUELS asked if the  price for the buy-back would                                                               
be at market value.                                                                                                             
                                                                                                                                
MS. McDOWELL replied  that the price would have  to be determined                                                               
through work with a  fleet that was going to be  bought out.  She                                                               
surmised it would  be somewhat higher than fair  market value for                                                               
the permit  because the boat  would be  put out of  business, and                                                               
boats  in the  fleet  [would be]  devalued without  compensation.                                                               
She said there could be a  bid process, but [CFEC] had never done                                                               
one and would have to figure out what method would work best.                                                                   
                                                                                                                                
Number 2384                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  asked:  As  HB 410 is written,  would CFEC                                                               
have to  come before  the legislature  for approval  if a  pot of                                                               
money became available?                                                                                                         
                                                                                                                                
MS. McDOWELL answered that she  believed there would only need to                                                               
be an appropriation;  the money would come to the  state, and the                                                               
legislature would  have to appropriate  it to the  commission for                                                               
this purpose.                                                                                                                   
                                                                                                                                
Number 2416                                                                                                                     
                                                                                                                                
CHAIR   SEATON  asked   if  the   optimum   study  included   the                                                               
differential in  the value  of the permits  and the  higher price                                                               
for  permits, or  just whether  they  are at  the optimum  number                                                               
instead of a larger number.                                                                                                     
                                                                                                                                
MS. McDOWELL said the study looks  at the right number of permits                                                               
- not at the permit value, but at earnings.                                                                                     
                                                                                                                                
CHAIR  SEATON suggested  economic factors  should be  considered,                                                               
especially when considering the value of the permit.                                                                            
                                                                                                                                
MS. McDOWELL  noted that debt load  is one research factor.   She                                                               
said  she didn't  know  if research  is  considering future  debt                                                               
loads if  the buy-back hikes the  prices of the permits.   Making                                                               
the point  that debt  loads are based  on higher  prices already,                                                               
she used  the example of  Bristol Bay, where permits  were bought                                                               
at high  prices and  are now  valued much  lower.   She remarked,                                                               
"Given the  current salmon price  situation, it would be  hard to                                                               
imagine that  permit values will  ever get back, even  after buy-                                                               
back, to what they were at their peak."                                                                                         
                                                                                                                                
Number 2561                                                                                                                     
                                                                                                                                
CHAIR SEATON asked  if Ms. McDowell could have  the CFEC research                                                               
staff look  into it.  He  asked if the "old  system" required the                                                               
buy-back  to include  boats and  gear.   He  mentioned that  only                                                               
permits are included in the buy-back now.                                                                                       
                                                                                                                                
MS.  McDOWELL  replied  that   only  transferable  limited  entry                                                               
permits are included in the state's buy-back program.                                                                           
                                                                                                                                
CHAIR  SEATON offered,  "This makes  a  huge difference  because,                                                               
before, a  person might  own permits in  several areas,  but they                                                               
wouldn't be  able to sell  a permit  in one area  without selling                                                               
their boat and gear."                                                                                                           
                                                                                                                                
Number 2606                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG   questioned  the  stability   of  the                                                               
assessment.                                                                                                                     
                                                                                                                                
MS. McDOWELL said,  "The statute says that the  money you collect                                                               
from buy-back  is for the purpose  of funding a buy-back  in that                                                               
given fishery."   She asked  Representative Guttenberg if  he was                                                               
suggesting all fishermen be assessed.                                                                                           
                                                                                                                                
REPRESENTATIVE  GUTTENBERG said  no,  he was  asking  if, in  any                                                               
given fishery, an  assessment is done, and, over  the years, [the                                                               
amount] can  be looked at  as cash flow.   He asked if  that data                                                               
could be used to borrow against for a loan.                                                                                     
                                                                                                                                
MS. McDOWELL replied that [CFEC] has not looked at that.                                                                        
                                                                                                                                
REPRESENTATIVE GUTTENBERG said  the funds would still  have to be                                                               
appropriated for [CFEC] to spend them.                                                                                          
                                                                                                                                
MS. McDOWELL replied:                                                                                                           
                                                                                                                                
     The  commission does  not have  the ability  to collect                                                                    
     funds  itself; only  the Department  of Revenue  can do                                                                    
     that, which is one of  the things the legislature fixed                                                                    
     in the  buy-back a  couple of years  ago.   The statute                                                                    
     used to  say CFEC shall  collect money and fund  a buy-                                                                    
     back,   which  makes   a  dedicated   fund,  which   is                                                                    
     unconstitutional.   So, the  legislature two  years ago                                                                    
     changed that  to say  the money  is collected  from the                                                                    
     fish tickets and doesn't come directly to us.                                                                              
                                                                                                                                
     The  revenue department  collects  it, puts  it in  the                                                                    
     general  fund, and  then  [the  legislature] added  the                                                                    
     language "the  legislature may appropriate."   It works                                                                    
     the  same way  as  the ASMI  [Alaska Seafood  Marketing                                                                    
     Institute]  1  percent  marketing tax,  the  2  percent                                                                    
     salmon  enhancement  tax,   where  [the  Department  of                                                                    
     Revenue]   collects  it   from  fish   tickets.     The                                                                    
     legislature has the power to appropriate it.                                                                               
                                                                                                                                
Number 2721                                                                                                                     
                                                                                                                                
MARK PANCRATZ, Commercial Salmon  Fisherman, suggested that there                                                               
be a specific timeframe, such as two years, for the buy-back.                                                                   
                                                                                                                                
CHAIR  SEATON  said   he  believes  the  bill   does  allows  for                                                               
capitalization so that  [permits] can be bought up  at one period                                                               
of time.                                                                                                                        
                                                                                                                                
MR.  PANCRATZ  asked  how  the   optimum  number  of  permits  is                                                               
determined and how long the buy-back time period lasts.                                                                         
                                                                                                                                
CHAIR SEATON  answered that the  specific buy-back  program would                                                               
deal with those  questions, and the bill  was general legislation                                                               
that authorizes another way of funding the buy-back.                                                                            
                                                                                                                                
MR. PANCRATZ  said he was  hoping that  time would be  taken into                                                               
consideration   so  the   buy-back  program   would  not   go  on                                                               
indefinitely and become ineffective.                                                                                            
                                                                                                                                
CHAIR SEATON added  that if there was a buy-back,  there would be                                                               
public hearings to determine specifics for each fishery.                                                                        
                                                                                                                                
CHAIR SEATON  asked whether  anyone else wished  to testify.   He                                                               
then closed public testimony.                                                                                                   
                                                                                                                                
Number 2888                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG moved  to report HB 410 out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, HB  410 was  reported from  the House                                                               
Special Committee on Fisheries.                                                                                                 
                                                                                                                                
HB 409-SEINE VESSEL LENGTH                                                                                                    
                                                                                                                                
CHAIR SEATON announced that the  final order of business would be                                                               
HOUSE BILL  NO. 409, "An  Act relating  to the maximum  length of                                                               
salmon seine vessels; and providing for an effective date."                                                                     
                                                                                                                                
Number 2925                                                                                                                     
                                                                                                                                
TIM BARRY,  Staff to Representative  William K.  Williams, Alaska                                                               
State Legislature, introduced HB  409 on behalf of Representative                                                               
Williams,  sponsor by  request of  the  Joint Legislative  Salmon                                                               
Industry  Task Force.   Mr.  Barry  explained that  the bill  was                                                               
discussed in the "production subcommittee"  and by the task force                                                               
as  a  whole  to  give  the  [Board  of  Fisheries]  and  Alaskan                                                               
fishermen another  tool to  diversify and  increase the  value of                                                               
their products.                                                                                                                 
                                                                                                                                
MR. BARRY  emphasized that  this bill  doesn't eliminate  the 58-                                                               
foot  length limit  on salmon  seiners.   He  said as  far as  he                                                               
knows,  this  is the  only  commercial  boat limit  enshrined  in                                                               
statute.   The  Board of  Fisheries  has authority  to impose  or                                                               
change length  or gear  limits on commercial  fishing boats.   If                                                               
the  bill became  law,  the  Board of  Fisheries  would still  go                                                               
through the public process before  changing the length limit.  He                                                               
pointed out  that HB 409  says at least  66 percent of  the entry                                                               
permit holders must favor the adoption of the regulation.                                                                       
                                                                                                                                
TAPE 04-4, SIDE B                                                                                                             
Number 2998                                                                                                                     
                                                                                                                                
MR.  BARRY referred  to  an opinion  from  Legislative Legal  and                                                               
Research Services  written by George  Utermohle that says  the 66                                                               
percent  vote requirement  might  be unconstitutional.   He  also                                                               
brought  attention  to  the  zero fiscal  note  from  the  Alaska                                                               
Department of Fish  & Game (ADF&G).  Noting that  HB 409 says the                                                               
Board of Fisheries  would conduct the vote of  permit holders, he                                                               
said he'd  like Mr.  Mecum [from ADF&G]  to address  the possible                                                               
extra expense to conduct a referendum.                                                                                          
                                                                                                                                
Number 2947                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG asked about  the history of the 58-foot                                                               
length requirement.                                                                                                             
                                                                                                                                
MR. BARRY  said he didn't know  the entire history, but  had been                                                               
told it predated statehood.                                                                                                     
                                                                                                                                
CHAIR SEATON added that it was a long and bitter history.                                                                       
                                                                                                                                
Number 2865                                                                                                                     
                                                                                                                                
DOUG MECUM,  Director, Division  of Commercial  Fisheries, Alaska                                                               
Department of Fish & Game (ADF&G), testified as follows:                                                                        
                                                                                                                                
     With regard  to the 58-foot  limit, if there  were any,                                                                    
     say,   fishery   management  or   conservation   issues                                                                    
     associated  with   repealing  that  by  the   Board  of                                                                    
     Fisheries,  I guess  we feel  like we  could adequately                                                                    
     address those  through that public process.   The other                                                                    
     issues  associated  with  it are  really  socioeconomic                                                                    
     issues, allocation issues, and,  of course, that's what                                                                    
     the board deals  with all the time.  So,  we don't have                                                                    
     any issues with that part of the bill.                                                                                     
                                                                                                                                
MR.  MECUM  reported that  ADF&G  submitted  a zero  fiscal  note                                                               
because it  didn't know whether there  would ever be a  cost.  He                                                               
said there  were only five  or six  seine fisheries in  the state                                                               
that meet every three years, and it would entail a minimal cost.                                                                
                                                                                                                                
Number 2816                                                                                                                     
                                                                                                                                
MR. MECUM wondered,  from a process standpoint,  if "a regulation                                                               
adopted by  the board  to authorize  the use  of a  vessel" would                                                               
become valid  only after the  vote took place.   He said  the way                                                               
the Board of Fisheries works  now, the proposal gets submitted by                                                               
the public or by the department,  and then the board considers it                                                               
and  goes through  the  Administrative Procedure  Act.   If  [the                                                               
board]  adopts  the  regulation,  it  is  drafted  by  ADF&G  and                                                               
submitted  to the  Department  of Law,  which  makes changes  and                                                               
sends it  to the  lieutenant governor  for signature;  it becomes                                                               
law 30 days later.                                                                                                              
                                                                                                                                
MR. MECUM  said it is a  unique situation whereby the  board goes                                                               
through the public  process; if [the regulation]  is adopted into                                                               
law, it  then can be  invalidated by a vote.   He felt  that [the                                                               
invalidation process]  might be the issue  [Legislative Legal and                                                               
Research Services] is raising, as well.                                                                                         
                                                                                                                                
Number 2761                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  asked Mr.  Mecum to explain  the reasoning                                                               
behind the 66 percent vote requirement.                                                                                         
                                                                                                                                
MR. MECUM replied  that it was a longstanding  provision and that                                                               
there are a lot  of fishing regulations tied to it.   He said the                                                               
board  used  the  [66  percent]   limit  to  create  slower-paced                                                               
fisheries.   He opined that  the concern involves  the allocation                                                               
issues, and offered an example:                                                                                                 
                                                                                                                                
     If there were  400 seiners and only  about 200-220 were                                                                    
     actively  fishing,   and  the  board   was  considering                                                                    
     repealing  [an authorization  to  use  a vessel  longer                                                                    
     than  58  feet],  there would  be  concerns  from  some                                                                    
     members  of  the  fleet about  people  coming  in  with                                                                    
     bigger boats.   You  could have a  permit and  no boat,                                                                    
     and  then  you could  just  fish  your permit  on  that                                                                    
     larger boat, some boat from outside or inside Alaska.                                                                      
                                                                                                                                
MR. MECUM  said he thinks  fishermen are  torn on this  issue and                                                               
concerned  about their  ability to  compete.   He added  that the                                                               
task force wanted a supermajority  of [permit holders] to support                                                               
it.                                                                                                                             
                                                                                                                                
Number 2661                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WILSON  asked  whether   it  is  typical  that  a                                                               
fisherman  might want  to do  something on  board that  is value-                                                               
added like [adding a] freezer, but lack the room.                                                                               
                                                                                                                                
MR. MECUM  answered in the  affirmative, adding that  having more                                                               
room is  one impetus suggested  by [fishermen].  He  said another                                                               
forthcoming bill  dealt with the  idea of fishermen's  ability to                                                               
"do   something  more   with  the   fish"  such   as  value-added                                                               
processing.                                                                                                                     
                                                                                                                                
Number 2599                                                                                                                     
                                                                                                                                
CHAIR SEATON suggested the length could  be 90 feet or longer for                                                               
volume processing, not just an increase [to] 65 feet or so.                                                                     
                                                                                                                                
REPRESENTATIVE   SAMUELS   asked   if  there   were   also   gear                                                               
restrictions included in the 58-foot limitation.                                                                                
                                                                                                                                
MR. MECUM replied  in the affirmative.  He said  the [increase in                                                               
boat length]  doesn't require  a change  in the  size of  the net                                                               
used.   He  mentioned remote  fisheries in  the Aleutians,  False                                                               
Pass, Southeast  Alaska, and  Kodiak that are  catching a  lot of                                                               
fish  and having  to offload  them to  a tender.   With  a larger                                                               
vessel, they  wouldn't have  to offload  because they  could pack                                                               
more  fish.     He  reiterated  that   concerns  with  particular                                                               
fisheries could be dealt with by the Board of Fisheries process.                                                                
                                                                                                                                
Number 2477                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG mentioned  that the  Bristol Bay  fishery was                                                               
currently  under  regulation for  32-foot  [vessels].   He  asked                                                               
about  the   history,  including  whether  there   had  been  any                                                               
proposals  to  make  changes,  and  what,  if  any,  impacts  the                                                               
proposals had.                                                                                                                  
                                                                                                                                
MR. MECUM said it was a  good question; many times over the years                                                               
people  have  proposed changes  to  the  vessel length  limit  in                                                               
Bristol  Bay, as  recently as  a few  months ago.   The  Board of                                                               
Fisheries rejected those proposals.                                                                                             
                                                                                                                                
Number 2422                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG asked  about the  conservative nature  of the                                                               
board's response to the proposals.                                                                                              
                                                                                                                                
MR. MECUM  said he believes  it relates to  socioeconomic issues,                                                               
the allocation issues, where local  people don't have the capital                                                               
to invest in a larger boat or have just bought a new boat.                                                                      
                                                                                                                                
REPRESENTATIVE  OGG wondered  about  comments from  the board  on                                                               
other gear types, supportive or not.                                                                                            
                                                                                                                                
MR.  MECUM asked  if Representative  Ogg was  still asking  about                                                               
Bristol Bay.                                                                                                                    
                                                                                                                                
REPRESENTATIVE OGG said yes.                                                                                                    
                                                                                                                                
MR. MECUM mentioned  setnets and driftnets, but  said he couldn't                                                               
remember the various comments from the board members.                                                                           
                                                                                                                                
Number 2325                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  asked if  gillnetters and trollers  had no                                                               
limit on boat lengths.                                                                                                          
                                                                                                                                
MR.  MECUM said  that was  correct.   Noting that  Mr. Barry  had                                                               
given  a good  summary, he  said  there are  other vessel  length                                                               
limits  such as  in the  scallop fisheries,  but no  limits other                                                               
than practical  limits on  gillnetters and  trollers, or  even on                                                               
seiners.                                                                                                                        
                                                                                                                                
CHAIR  SEATON mentioned  tuna  seiners in  the  140- to  160-foot                                                               
range in Alaska years ago that were tendering, but not seining.                                                                 
                                                                                                                                
MR.  MECUM,  in  response  to   a  question  from  Representative                                                               
Samuels,  said, "There  are  a variety  of  vessel length  limits                                                               
scattered throughout the regulations  for different purposes, but                                                               
this is the only one, that I'm aware of, that's in statutes."                                                                   
                                                                                                                                
Number 2181                                                                                                                     
                                                                                                                                
GERALD  McCUNE, Lobbyist  for United  Fishermen of  Alaska (UFA),                                                               
said originally his  agency supported HB 109, but  there was some                                                               
confusion:   some thought every  permit holder would  vote, while                                                               
others thought  just seiners would  vote.  He said  fishermen who                                                               
own  two  different-sized boats  who  want  to consolidate  their                                                               
operations and  save money have  been trying to make  this change                                                               
for a long time.   He explained that he doesn't  see a big change                                                               
with this  bill because some  fishermen are locked into  the size                                                               
of their boats.   Suggesting that getting seiners  together for a                                                               
vote may  be a  problem, he  remarked, "A lot  of guys  in Prince                                                               
William  Sound  don't  want  it."    He  closed  by  saying  some                                                               
fishermen would  prefer that a  public hearing with the  Board of                                                               
Fisheries take the place of voting.                                                                                             
                                                                                                                                
Number 2047                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON asked if 66 percent is a realistic number.                                                                
                                                                                                                                
MR. McCUNE  replied that many  people are comforted  knowing that                                                               
most of the [boat owners] in  the area support this change.  Some                                                               
people  think votes  shouldn't be  taken to  change statute,  and                                                               
others  think  it shouldn't  be  in  statute,  but should  be  in                                                               
regulation.  He added that  he's still awaiting the [UFA] board's                                                               
decision on whether to proceed with a vote.                                                                                     
                                                                                                                                
CHAIR SEATON asked if there  was any controversy within the [UAF]                                                               
board about decreased value of  58-foot boats if Canadian ex-drum                                                               
seiners are brought into the U.S. market.                                                                                       
                                                                                                                                
MR. McCUNE  said there  was some concern,  but drums  couldn't be                                                               
used,  even if  the 58-foot  limit were  changed.   He reiterated                                                               
that he didn't predict a big change due to this bill.                                                                           
                                                                                                                                
Number 1857                                                                                                                     
                                                                                                                                
CHAIR SEATON asked if it  was Mr. McCune's understanding that the                                                               
purpose of the bill was to allow seiners to haul more fish.                                                                     
                                                                                                                                
MR. McCUNE  replied that if the  only reason for the  bill was to                                                               
increase  the volume  [of fish],  that would  be a  poor business                                                               
plan because  most seiners operate  under limits,  especially for                                                               
pink salmon,  and so  a bigger boat  won't solve  their problems.                                                               
Many would  like to  process on  board and  need a  bigger vessel                                                               
because  fish,  once  cleaned,  can't  go  in  RSW  [refrigerated                                                               
saltwater].   The boats out  westward are looking  to consolidate                                                               
their business, he added.                                                                                                       
                                                                                                                                
CHAIR SEATON  surmised that the  committee would hear  from those                                                               
fishermen.                                                                                                                      
                                                                                                                                
Number 1745                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG mentioned that Mr.  McCune had said there'd be                                                               
a vote  before going to  the board,  but offered his  own reading                                                               
that the regulation would be adopted and then voted on.                                                                         
                                                                                                                                
MR. MCCUNE acknowledged that he might have had it backwards.                                                                    
                                                                                                                                
Number 1690                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG stated  concerns:  the focus on  the vote, the                                                               
testimony from Bristol  Bay, and knowing the  concerns and nature                                                               
of salmon fishermen.   He said the issue of  allocation starts to                                                               
play  into  it.   Saying  he  thought  the  intent of  the  Joint                                                               
Legislative Salmon Industry Task Force  was to add flexibility to                                                               
the  fishing industry  so it  could adapt,  he expressed  concern                                                               
that the 66 percent vote, given  what he said is the conservative                                                               
nature of fishermen  and the fisheries, empowers  the minority to                                                               
stop flexibility.                                                                                                               
                                                                                                                                
MR.  McCUNE reflected  that he  didn't  have a  position at  this                                                               
time.   He  said he  was still  waiting to  hear from  the board.                                                               
Some  think  the  vote  should  be  taken  out,  and  others  are                                                               
comfortable with it,  he noted.  He agreed the  salmon task force                                                               
came up  with a high threshold,  but said it could  be changed by                                                               
these discussions.                                                                                                              
                                                                                                                                
Number 1481                                                                                                                     
                                                                                                                                
CHAIR SEATON  asked how votes  taken with regard to  previous tax                                                               
bills were structured.                                                                                                          
                                                                                                                                
MR. McCUNE replied  that the aquaculture tax had to  be a vote of                                                               
the  permit  holders  in  the  area  conducted  by  the  regional                                                               
hatchery; it was a majority vote.                                                                                               
                                                                                                                                
CHAIR  SEATON  asked if  other  restructuring  bills had  the  66                                                               
percent vote.                                                                                                                   
                                                                                                                                
MR. McCUNE said he wasn't sure.                                                                                                 
                                                                                                                                
Number 1381                                                                                                                     
                                                                                                                                
SCOTT McALLISTER, Seiner,  spoke in favor of HB 409.   He said he                                                               
has felt for  years that the 58-foot length  limit has restricted                                                               
the quality of  his business.  He emphasize how  important it was                                                               
to get the [issue] to the Board  of Fisheries.  He noted he was a                                                               
big fan of the Board  of Fisheries process whereby fishermen have                                                               
the access  to regulation  and can take  control of  fisheries in                                                               
ways that are meaningful to them.   He said he believes this bill                                                               
works as part of that process.                                                                                                  
                                                                                                                                
REPRESENTATIVE OGG asked Mr. McAllister  how he felt about the 66                                                               
percent vote requirement.                                                                                                       
                                                                                                                                
MR. McALLISTER  answered that  he didn't  think it  was necessary                                                               
and had  never seen  the board  move brashly  and go  against the                                                               
majority.  He felt decisions were best left up to the board.                                                                    
                                                                                                                                
Number 1184                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  asked Mr.  McAllister what size  of vessel                                                               
he needs to accomplish the operations he referred to earlier.                                                                   
                                                                                                                                
MR.  McALLISTER replied  that he  had a  design in  his head;  he                                                               
described his current boat and said  there is plenty of room on a                                                               
58-foot boat to  handle the largest legal purse  seine allowed in                                                               
Southeast Alaska.  He'd like at  least another 10 feet forward of                                                               
the current  well deck, the working  deck.  He explained  that he                                                               
has "big-gulped"  30,000-40,000 pounds  [of fish]  and, in  a few                                                               
minutes, turned  around and  got more.   Volume  is the  goal, he                                                               
explained.   He needs the room  to slow down and  turn the volume                                                               
into quality.   He  explained how he  would create  a value-added                                                               
fish hold with  the extra 10 feet, and how  he then wouldn't have                                                               
to deliver the fish "in rigor."                                                                                                 
                                                                                                                                
MR. McALLISTER  explained that the  bulk of salmon  are harvested                                                               
by seiners  who have to deliver  "abused" fish.  Using  the extra                                                               
10 feet,  he would sort, hydrate,  and bleed the fish,  and store                                                               
them in  a chilled  environment, thus avoiding  any abuse  to the                                                               
fish.  He said his goal is  to deliver a quality fish, similar to                                                               
farmed fish, and not crude "h &  g" [headed and gutted] fish.  In                                                               
reply to questions  from Chair Seaton, Mr.  McAllister said space                                                               
is  the  requirement  he  doesn't  have  now;  he  needs  another                                                               
apparatus to  bring the fish out  of the water and  elevate them.                                                               
Chances are, his sets would be  the same size, but the pace would                                                               
slow  down.   [The added  space] would  allow him  to be  market-                                                               
driven.                                                                                                                         
                                                                                                                                
Number 0586                                                                                                                     
                                                                                                                                
BRUCE WALLACE,  Purse Seine Vessel  Owner, testified in  favor of                                                               
HB 409.   Concurring with  Mr. McAllister's ideas,  he emphasized                                                               
that  seine fishing  is essentially  volume-driven; the  extra 10                                                               
feet would  slow down  the process  and take  some of  the volume                                                               
away,  but the  loss  of  volume would  be  made  up in  quality.                                                               
Agreeing  that [the  58-foot limit]  ought to  be extracted  from                                                               
statute and  put into  regulation, he also  agreed with  the need                                                               
for change,  with the  desire to  have the  vote at  a 51-percent                                                               
majority, and that it has to go through the board process.                                                                      
                                                                                                                                
Number 0098                                                                                                                     
                                                                                                                                
DAVE AUSTERBACK,  Member, Sand  Point Advisory  Committee (SPAC),                                                               
noting that he has been in  the fish seine business for 40 years,                                                               
said he believes the 58-foot limit has worked well.                                                                             
                                                                                                                                
TAPE 04-5, SIDE A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                                
MR. AUSTERBACK said the 58-foot  limit has slowed down fisheries,                                                               
which he  supports.  Many 58-foot  boats in his area  are already                                                               
being widened.   As  a marine  vessel surveyor,  he spoke  of the                                                               
value,  practicality, and  stronger stability  of 58-foot  boats.                                                               
He  said because  quotas  are small,  hauling  [volumes] of  fish                                                               
isn't  an  issue  with  SPAC.   Furthermore,  the  58-foot  limit                                                               
protects  coastal  community  fisheries,  where  people  want  to                                                               
process on shore  because of a lack of market  opportunities.  He                                                               
said his  area is still  volume-oriented, with a  few value-added                                                               
programs.    Not  personally  a strong  supporter  of  the  board                                                               
process   because  of   political  motivation   and  ever-growing                                                               
restrictions, he noted that SPAC supports the 66 percent vote.                                                                  
                                                                                                                                
Number 0440                                                                                                                     
                                                                                                                                
CHAIR  SEATON asked  Mr. Austerback  to explain  the relationship                                                               
between the groundfish fisheries and the 58-foot [limit].                                                                       
                                                                                                                                
MR.  AUSTERBACK  explained  that  his  area  has  a  state  water                                                               
groundfish fishery that takes place  seven days after the federal                                                               
fishery; the  only vessels that  can participate are 58  feet and                                                               
under.                                                                                                                          
                                                                                                                                
CHAIR SEATON  asked if the  state water groundfish  fishery would                                                               
have to  be changed  for the  fleet in  Mr. Austerback's  area to                                                               
participate if the boats were longer than 58 feet.                                                                              
                                                                                                                                
MR.  AUSTERBACK answered  in  the  affirmative.   In  reply to  a                                                               
question  from  Representative  Wilson,  he  said  his  area  was                                                               
currently involved  in value-added  processing and in  new market                                                               
areas in the salmon fishing industry.                                                                                           
                                                                                                                                
REPRESENTATIVE  WILSON offered  her  understanding, "Because  you                                                               
want to be  able to use your  same boat in the  other fishery, if                                                               
this was available, most of you wouldn't take advantage of it."                                                                 
                                                                                                                                
MR. AUSTERBACK replied no [they wouldn't take advantage of it].                                                                 
                                                                                                                                
Number 0662                                                                                                                     
                                                                                                                                
JOHN FOSTER,  President, Sand  Point Advisory  Committee; Member,                                                               
Board  of Directors,  Peninsula Marketing  Association, spoke  if                                                               
decreased value  of boats if  HB 409 passes.   He said  a smaller                                                               
net won't work  on a larger vessel.   Volume is not  a problem in                                                               
his area.  He  did see a problem with the  effects on state water                                                               
groundfish  fisheries  if the  limit  size  is changed.    Asking                                                               
whether  the  66 percent  vote  requirement  was for  all  permit                                                               
holders or just  seine permit holders, he pointed  out that there                                                               
are  three  types  of  gear  in  his  area  but  75  percent  are                                                               
gillnetters.  Saying the driftnetters  and gillnetters won't vote                                                               
for the seiners to have  larger boats, he predicted court battles                                                               
over this issue.                                                                                                                
                                                                                                                                
Number 0860                                                                                                                     
                                                                                                                                
CHAIR SEATON explained that the way  the bill is set up, the vote                                                               
is 66 percent of the fishery, by gear type.                                                                                     
                                                                                                                                
MR. FOSTER asked if it applies just to seiners.                                                                                 
                                                                                                                                
CHAIR SEATON said that is correct.                                                                                              
                                                                                                                                
MR.  FOSTER added  that  many  UFA board  members  have not  been                                                               
contacted about the bill, and he suggested that be done.                                                                        
                                                                                                                                
CHAIR  SEATON  replied  that  UFA was  listening  and  had  heard                                                               
Mr. Foster's comment.                                                                                                           
                                                                                                                                
Number 0967                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON asked  if Mr. Foster's area  would not take                                                               
advantage of HB 409 either.                                                                                                     
                                                                                                                                
MR. FOSTER  replied no.   He explained  that the majority  of the                                                               
money to his area comes from bottom fishing.                                                                                    
                                                                                                                                
CHAIR SEATON  asked Mr.  Foster whether  his biggest  concern, if                                                               
the  58-foot length  were  eliminated,  would be  a  big push  to                                                               
eliminate the 58-foot restriction  for the state water fisheries,                                                               
which  is  where the  fleet  derives  its largest  percentage  of                                                               
income now, even though those same vessels fish for salmon.                                                                     
                                                                                                                                
MR. FOSTER  replied yes.   He said  he didn't see  [fishermen] in                                                               
his area cutting themselves off from the state water fishery.                                                                   
                                                                                                                                
CHAIR   SEATON  acknowledged   the   arrival  of   Representative                                                               
Williams, sponsor of HB 409.                                                                                                    
                                                                                                                                
Number 1138                                                                                                                     
                                                                                                                                
TIM MOORE, Seiner,  spoke about Prince William Sound  and the few                                                               
opportunities  for  high-grade salmon  there.    Noting that  the                                                               
majority of  the fish are pinks  and chums, he predicted  that it                                                               
would  be more  likely  for boats  to team  up  [rather than  for                                                               
fishermen to  increase the length of  their boats].  He  said the                                                               
value-added  idea  doesn't  apply  much  to  his  area,  and  the                                                               
consolidation of  vessels doesn't  apply to his  area due  to the                                                               
small number of  permits and small harvest.  The  reality is that                                                               
some [boats]  may be put out  of business in the  attempt to have                                                               
better-quality fish if  larger boats are used.  He  said with the                                                               
66 percent vote, however, the  chance of that happening was slim.                                                               
He stated support for the 66  percent vote because of the benefit                                                               
to individual areas.                                                                                                            
                                                                                                                                
CHAIR SEATON thanked participants.  [HB 409 was held over.]                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee   on  Fisheries   meeting  was   adjourned  at                                                               
10:54 a.m.                                                                                                                      

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