Legislature(2017 - 2018)GRUENBERG 120

04/25/2017 10:00 AM FISHERIES

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10:00:41 AM Start
10:01:27 AM HB188
11:47:07 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                         April 25, 2017                                                                                         
                           10:00 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Louise Stutes, Chair                                                                                             
Representative Zach Fansler                                                                                                     
Representative Jonathan Kreiss-Tomkins                                                                                          
Representative Geran Tarr                                                                                                       
Representative Mike Chenault                                                                                                    
Representative David Eastman                                                                                                    
Representative Mark Neuman                                                                                                      
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 188                                                                                                              
"An   Act  relating   to   commercial   fishing  entry   permits;                                                               
establishing  regional  fisheries   trusts  and  fisheries  trust                                                               
regions; relating  to commercial  fishing entry permits  held and                                                               
leased by a  regional fisheries trust; relating to  the duties of                                                               
the  Alaska   Commercial  Fisheries  Entry  Commission   and  the                                                               
Department of Commerce, Community,  and Economic Development; and                                                               
providing for an effective date."                                                                                               
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 188                                                                                                                  
SHORT TITLE: COMM. FISH. ENTRY PERMITS; LOANS; TRUSTS                                                                           
SPONSOR(s): REPRESENTATIVE(s) KREISS-TOMKINS                                                                                    
03/20/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/20/17       (H)       FSH, L&C                                                                                               
04/13/17       (H)       FSH AT 10:00 AM GRUENBERG 120                                                                          
04/13/17       (H)       -- MEETING CANCELED --                                                                                 
04/20/17       (H)       FSH AT 10:00 AM GRUENBERG 120                                                                          
04/20/17       (H)       -- MEETING CANCELED --                                                                                 
04/25/17       (H)       FSH AT 10:00 AM GRUENBERG 120                                                                          
WITNESS REGISTER                                                                                                              
REPRESENTATIVE JONATHAN KREISS-TOMKINS                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 188, as sponsor.                                                                            
REID MAGDANZ, Staff                                                                                                             
Representative Jonathan Kreiss-Tomkins                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Responded to questions during the                                                                        
presentation of the proposed committee substitute (CS) for HB
188, on behalf of Representative Kreiss-Tomkins, sponsor.                                                                       
NORM VAN VACTOR, CEO/President                                                                                                  
Bristol Bay Economic Development Corporation (BBEDC)                                                                            
Dillingham, Alaska                                                                                                              
POSITION STATEMENT:  Testified in support of HB 188.                                                                          
RACHEL DONKERSLOOT, Program Director                                                                                            
Alaska Marine Conservation Council                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support HB 188.                                                                             
JIM BRENNAN, Attorney                                                                                                           
Law Offices of Brennan and Heideman                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on the constitutionality of HB
RALPH TOWNSEND, Director                                                                                                        
Institute of Social and Economic Research (ISER)                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 188.                                                                  
CLAY BEZENEK, Fisherman                                                                                                         
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Testified with opposition to HB 188.                                                                     
NATASHA HAYDEN                                                                                                                  
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 188.                                                                          
ELSA SEBASTIAN, Fisherman                                                                                                       
Sitka, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 188.                                                                          
ALYSSA RUSSELL                                                                                                                  
Alaska Longline Fisherman's Association                                                                                         
Sitka, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 188.                                                                          
TYLER EMERSON, Fisherman                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 188.                                                                          
HEATHER MCCARTY, Representative                                                                                                 
Central Bering Sea Fisherman's Association                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 188.                                                                          
ACTION NARRATIVE                                                                                                              
10:00:41 AM                                                                                                                   
CHAIR  LOUISE  STUTES  called  the  House  Special  Committee  on                                                             
Fisheries  meeting  to  order  at  10:00  a.m.    Representatives                                                               
Stutes,  Fansler,   Kreiss-Tomkins,  Neuman,  and   Eastman  were                                                               
present at  the call  to order.   Representative Tarr  arrived as                                                               
the meeting was in progress.                                                                                                    
        HB 188-COMM. FISH. ENTRY PERMITS; LOANS; TRUSTS                                                                     
10:01:27 AM                                                                                                                   
CHAIR STUTES announced  that the only order of  business would be                                                               
HOUSE BILL NO. 188, "An  Act relating to commercial fishing entry                                                               
permits;  establishing regional  fisheries  trusts and  fisheries                                                               
trust regions; relating to commercial  fishing entry permits held                                                               
and leased by a regional  fisheries trust; relating to the duties                                                               
of  the  Alaska Commercial  Fisheries  Entry  Commission and  the                                                               
Department of Commerce, Community,  and Economic Development; and                                                               
providing for an effective date."                                                                                               
10:01:54 AM                                                                                                                   
REPRESENTATIVE  FANSLER moved  to  adopt  the proposed  committee                                                               
substitute  (CS)  for  HB   188,  labeled  30-LS0389\R,  Bullard,                                                               
4/18/17, as the working document.                                                                                               
CHAIR STUTES objected for discussion.                                                                                           
10:02:15 AM                                                                                                                   
REPRESENTATIVE    JONATHAN     KREISS-TOMKINS,    Alaska    State                                                               
Legislature, explained that the  primary change, being introduced                                                               
in Version  R, is that  trusts would  be formed under  a  limited                                                               
authorization.      Only   three   fisheries   trusts  would   be                                                               
established in  the state to allow  the program to be  tested and                                                               
10:02:51 AM                                                                                                                   
CHAIR STUTES  removed her objection.   Without  further objection                                                               
Version R was before the committee.                                                                                             
10:03:09 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS outlined  the intent  of the  bill                                                               
referring to  the committee  handout titled,  "HB 188:   Regional                                                               
Fisheries Trusts."   He said fishermen don't  "just drive boats,"                                                               
as their  efforts also drive  the Alaska economy.   The fisheries                                                               
trusts maximize  Alaskans' access  to the  economic opportunities                                                               
provided by the commercial fishing  industry, particularly in the                                                               
coastal  communities.   He  said  regional  trusts would  empower                                                               
communities  to   prevent  economic  distress   among  fishermen,                                                               
promote  fisheries  conservation,  improve  Alaskans'  access  to                                                               
fisheries,  and  realize  greater  economic  self-sufficiency  by                                                               
making   entry  into   the  commercial   fishing  industry   more                                                               
accessible, as  called for  in the Constitution  of the  State of                                                               
Alaska.  Several  tools to financially aid  fishermen exist, such                                                               
as the  Commercial Fishing  Revolving Loan  Fund (CF  RLF), which                                                               
saw  225 applicants  in 2016.    The fund  currently hosts  1,700                                                               
loans, at a total of $95.2 million.   Since it began in 1972, the                                                               
CF RLF has provided roughly  8,473 fishermen with business loans.                                                               
Additionally,  the Commercial  Fisheries Agriculture  Bank offers                                                               
uniquely  fishermen-oriented   financing.    However,   with  the                                                               
greying of  the fleet, more  options are needed to  support entry                                                               
into the industry.                                                                                                              
10:07:18 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS said the  trusts are being proposed                                                               
as opt-in, self-determined decisions  that allow maximum regional                                                               
flexibility,   and  handled   through   community  and   regional                                                               
governments  via  a  board of  directors;  seating  members  from                                                               
around the region.   The initial three regions  that are expected                                                               
to  take  advantage  of  the legislation  will  not  be  expanded                                                               
without  further legislative  action.   A  fisheries trust  would                                                               
hold permits  to provide a  stepping stone by  fishermen entering                                                               
the industry.  The fishermen would  gain access to a permit for a                                                               
time  period determined  by local  authorities, but  for no  more                                                               
than six years.  The number of  permits a trust can acquire has a                                                               
hard cap to prevent distortion to  the open market.  He suggested                                                               
that  perhaps only  2.5 percent  of the  available permits  for a                                                               
given fishery could be held by a regional trust.                                                                                
10:13:00 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS said the  guiding principles of the                                                               
legislation  are:   to improve  access for  Alaskans to  Alaska's                                                               
commercial fisheries; to empower  communities; and for regions to                                                               
become   more  economically   self-sufficient.     Regarding  the                                                               
question of  constitutionality, he said  HB 188 has  gone through                                                               
two  and  a half  years  of  extensive legal  vetting,  including                                                               
opinions  from  the  Alaska  Department  of  Law  (DOL),  private                                                               
fisheries attorneys, and Alaska  Legislative Legal Services.  The                                                               
bill   has   been  crafted   and   re-crafted   in  response   to                                                               
recommendations and concerns.                                                                                                   
10:16:04 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  explained  that  Version  R  will                                                               
provide  limited  authorization,  allowing  no  more  than  three                                                               
regions  to opt-in.   After  January 1,  2018, two-thirds  of the                                                               
municipalities in any  fisheries trust region will  be allowed to                                                               
apply  to  the  Department  of  Commerce,  Community  &  Economic                                                               
Development (DCCED) to establish a  trust.  Further, if more than                                                               
three regions  apply, the  commissioner of  DCCED will  work with                                                               
the Alaska  Department of Fish &  Game (ADF&G) to pick  the three                                                               
best  candidates  to  receive  a  go-ahead,  as  based  on  their                                                               
business plans and  ability to fulfill the  legislative intent of                                                               
the trusts.                                                                                                                     
10:18:53 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  reviewed  the  process  that  has                                                               
occurred  around the  development of  this bill,  which includes:                                                               
over 1,500  hours of  work, receipt  of 2,500  individual emails,                                                               
150-200  stakeholders  were  contacted, a  statewide  summit  was                                                               
held, over  90 pages of legal  memos were generated, and  16 bill                                                               
versions  were  drafted.    Turning  to the  final  page  of  the                                                               
handout, he  acknowledged the lengthy list  of organizations that                                                               
have been involved, and consulted, for the drafting of the bill.                                                                
10:20:31 AM                                                                                                                   
CHAIR  STUTES  asked what  the  source  of  funding would  be  to                                                               
purchase the permits.                                                                                                           
REPRESENTATIVE KREISS-TOMKINS  responded that  the capitalization                                                               
of  the fund  is to  be  handled on  a regional  basis via  local                                                               
CHAIR STUTES inquired whether there  are constitutional issues to                                                               
be addressed.                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  said   the  federal  constitution                                                               
disallows the  bill to  be Alaska  centric, and  deferred further                                                               
10:22:51 AM                                                                                                                   
REID  MAGDANZ,  Staff,  Representative  Jonathan  Kreiss-Tomkins,                                                               
Alaska  State Legislature,  added that  legal opinions  are still                                                               
being assembled and satisfied.                                                                                                  
10:23:59 AM                                                                                                                   
CHAIR STUTES asked whether ADF&G supports HB 188.                                                                               
REPRESENTATIVE KREISS-TOMKINS  said the bill has  been drafted in                                                               
close  consultation with  the  department,  and Commissioner  Sam                                                               
Cotton has  testified in  previous hearings on  the measure.   He                                                               
refrained from  providing official  support, but said  that ADF&G                                                               
supports Alaskans having access to Alaska fisheries.                                                                            
10:25:24 AM                                                                                                                   
REPRESENTATIVE FANSLER  asked which entities would  be recognized                                                               
in a village  that is governed by tribal  and municipal entities,                                                               
which can at times be at odds.                                                                                                  
REPRESENTATIVE KREISS-TOMKINS pointed out  that the bill language                                                               
addresses incorporated  governments, but  Native tribes  could be                                                               
included and have a seat at the table.                                                                                          
10:27:43 AM                                                                                                                   
REPRESENTATIVE  EASTMAN noted  that  the trust  is being  modeled                                                               
somewhat on  the fisherman's revolving  loan fund, and  asked why                                                               
it was decided to step away  from similar management at the state                                                               
REPRESENTATIVE KREISS-TOMKINS  responded that  it was  decided to                                                               
organize  the trusts  under regional  control  rather than  state                                                               
management,  in order  to best  serve local  needs.   Without the                                                               
local buy-in it would not work as intended.                                                                                     
REPRESENTATIVE EASTMAN  inquired about  consequences if  a buy-in                                                               
is  lost after  the trust  has  been developed  and perhaps  goes                                                               
"sideways;"  are  there  checks  in  place  to  ensure  continued                                                               
REPRESENTATIVE  KREISS-TOMKINS answered  that the  guidelines for                                                               
the regional  trust to follow  would be in statute,  limiting the                                                               
possibility of an effort going  sideways.  However, a disillusion                                                               
section is included in the legislation, he assured.                                                                             
MR.  MAGDANZ   added  that  the  bill   provides  sideboards  for                                                               
operating within certain tenants.                                                                                               
10:32:50 AM                                                                                                                   
CHAIR STUTES asked whether discussions  have ensued regarding the                                                               
potential for opening up the limited entry act.                                                                                 
REPRESENTATIVE  KREISS-TOMKINS  said discussions  have  occurred,                                                               
and  legal  counsel has  indicated  that  the  act would  not  be                                                               
10:33:46 AM                                                                                                                   
REPRESENTATIVE NEUMAN  made a request to  have the constitutional                                                               
questions  that have  come forward,  during the  crafting of  the                                                               
bill, as previously mentioned,  distributed to committee members.                                                               
He  established that  the  community trust  would  be the  permit                                                               
holder and asked how the permits would be obtained.                                                                             
REPRESENTATIVE KREISS-TOMKINS  said different regions  would need                                                               
to  take  on  the  mission of  creating  local  trusts,  generate                                                               
funding, and  acquire permits  from the open  market.   The trust                                                               
would hold  title to any permits  and lease them out  for no more                                                               
than six years.                                                                                                                 
REPRESENTATIVE  NEUMAN   queried  the   source  of   funding  for                                                               
acquisition,  and  established  that   any  private  industry  or                                                               
individuals would  be making  a donation,  not an  investment, to                                                               
support the purchase and community ownership of permits.                                                                        
10:37:53 AM                                                                                                                   
REPRESENTATIVE TARR asked about  the boundaries of the Commercial                                                               
Fisheries Entry Commission (CFEC) management areas.                                                                             
REPRESENTATIVE   KREISS-TOMKINS   offered  to   provide   further                                                               
REPRESENTATIVE  TARR questioned  what  type of  permits might  be                                                               
REPRESENTATIVE  KREISS-TOMKINS  said  fisheries  vary  widely  by                                                               
region and  the proposed process  may be best suited  for smaller                                                               
REPRESENTATIVE TARR  asked whether  a trust  would be  limited in                                                               
the number and types of permits it could hold.                                                                                  
REPRESENTATIVE   KREISS-TOMKINS  responded   yes,  and   said  AS                                                               
16.440.60, establishes limits.                                                                                                  
10:41:15 AM                                                                                                                   
REPRESENTATIVE NEUMAN  assumed that  DCCED would  have applicable                                                               
bylaws to consider.                                                                                                             
MR. MAGDANZ responded that the  municipalities would draft bylaws                                                               
and provide them to DCCED.                                                                                                      
10:42:56 AM                                                                                                                   
REPRESENTATIVE   EASTMAN   asked  about   constraints   regarding                                                               
regional growth.                                                                                                                
MR. MAGDANZ  said the  requirement in  the bill  is that,  at the                                                               
outset,   DCCED  sets   the  boundaries,   in  conjunction   with                                                               
ADF&G/CFEC.   Each community  will be tied  to a  fisheries trust                                                               
region  similar  to the  structure  of  the Regional  Educational                                                               
Attendance  Areas (REAA).   Trusts  could only  hold permits  for                                                               
their region.  If the CFEC  changes borders of a management area,                                                               
the fisheries trust borders might also be altered.                                                                              
REPRESENTATIVE  KREISS-TOMKINS   added  that  the   current  CFEC                                                               
regionalization  shows  about  a dozen  communities  that  aren't                                                               
included in a region.   However, these communities are very small                                                               
and located  far from  salt water.   Although it  may only  be an                                                               
academic exercise, the language of the bill allows DCCED to                                                                     
include every small community into a trust region, he stressed.                                                                 
10:46:40 AM                                                                                                                   
NORM VAN VACTOR, CEO/President,  Bristol Bay Economic Development                                                               
Corporation  (BBEDC), stated  support  for  HB 188,  paraphrasing                                                               
from  a  prepared  statement, which  read  as  follows  [original                                                               
punctuation provided]:                                                                                                          
     My  name is  Norman Van  Vactor from  Dillingham Alaska                                                                    
     who  for   the  last  40  years   has  participated  in                                                                    
     different capacities in  the Alaskas  fisheries.   That                                                                    
     said Bristol Bay  and our sockeye fishery is  what I am                                                                    
     most familiar with.                                                                                                        
     2  ?  years ago  in  November  of 2014,  24  committed,                                                                    
     Fisheries   Passionate   and   knowledgeable   Alaskans                                                                    
     gathered  together in  Anchorage. We  commented at  the                                                                    
     time that  for several of  us the only other  time that                                                                    
     we  might be  found  in  the same  room  was in  either                                                                    
     arguing opposing positions before  the Board of Fish or                                                                    
     in  Court.  That  long weekend  together  produced  not                                                                    
     acrimony   or   divisiveness   but   amazing   positive                                                                    
     consensus.  We  were  there  at  the  request  of  then                                                                    
     Governor Elect Walker and Lt.  Governor Mallott to help                                                                    
     them  in the  capacity  of  their Fisheries  Transition                                                                    
     Team. I was honored to Chair of this esteemed group.                                                                       
     Over the next  two days our group hammered  out what we                                                                    
     felt were  the top  5 priorities  facing the  State and                                                                    
     they  were   in  order  of  identified   importance  as                                                                    
     1.  Clear Fish  First  Policy  for Alaska.  Chairperson                                                                    
     Stutes  thank  you  for  your  leadership  in  bringing                                                                    
     forward HB 199 that  speaks specifically to having this                                                                    
     2.   Prioritize  and   Improve  Fisheries   Access  for                                                                    
     Alaskans,  Develop policies,  and strategies  to return                                                                    
     access opportunities  to residents of  Alaska's fishing                                                                    
     3.  Provide adequate  Funding for  ADF&G and  Fisheries                                                                    
     4. Science over Politics                                                                                                   
     5. Locally based Adaptive Fisheries Management.                                                                            
     House Bill  188 speaks directly to  what was identified                                                                    
     as  the  second most  important  Fishery  Issue in  the                                                                    
     State.  "To  prioritize and  Improve Fisher  Access for                                                                    
     Alaskans,  Develop policies,  and strategies  to return                                                                    
     access opportunities  to residents of  Alaska's Fishing                                                                    
     We  are  all   familiar  with  conversations  centering                                                                    
     around  "The   Greying  of  the  Fleet",   "Permit  Out                                                                    
     Migration",    and     closing    communities.    These                                                                    
     conversations  are not  new but  ongoing.  HB 188  will                                                                    
     provide us the opportunity  in our varied and different                                                                    
     regions  to   focus  on  positive   conversations.    A                                                                    
     conversation of reconstruction and growth.                                                                                 
     I first  met the principal  author and sponsor  of this                                                                    
     Bill a little over 3  years ago.   What you have before                                                                    
     you today  was not created in  a vacuum but has  been a                                                                    
     vision and work in  progress for Representative Kreiss-                                                                    
     Tomkins for several years.  Individuals from across the                                                                    
     State  with  a  variety of  backgrounds  have  provided                                                                    
     input,  concerns, and  suggestions and  the author  has                                                                    
     been receptive and adaptive.                                                                                               
     Is this  Bill perfect  and a  Silver Bullet  to address                                                                    
     our  communities concerns?  Certainly  not perfect  but                                                                    
     with a  few tweaks pretty  darn good. A  silver bullet,                                                                    
     NO,  but  a significant  compliment  to  all the  other                                                                    
     programs that  many of us  are working on  in different                                                                    
     regions to address the issues.                                                                                             
     Groups   like   Bristol    Bay   Economic   Development                                                                    
     Corporation who  I work  for have  significant programs                                                                    
     in place  but in my opinion  this Bill would be  a huge                                                                    
     and significant compliment.                                                                                                
     For most of our  rural coastal communities our cultural                                                                    
     and  economic base  is  in Fisheries  and  the loss  of                                                                    
     access  comes with  significant  costs.   This Bill  is                                                                    
     about providing  support for an initiative  that is all                                                                    
     about Economic  empowerment. This is all  about helping                                                                    
     us  to most  importantly  HELP OURSELVES.  We know  our                                                                    
     fisheries.   I know Bristol Bay.                                                                                           
     I  just  don't see  the  downside  especially when  the                                                                    
     other  ongoing  alternative,   our  reality,  is  doing                                                                    
     nothing.  This allows  regions by  region to  decide if                                                                    
     this tool  might work for  them. For  those individuals                                                                    
     that  are  thinking  of retirement  and  transitions  I                                                                    
     strongly believe  that with a Regional  Fisheries Trust                                                                    
     in place that not only  will values be enhanced but new                                                                    
     entrants facilitated.                                                                                                      
     Once this Bill  is passed then the real work  for us in                                                                    
     our towns and communities begin.  We are not asking the                                                                    
     State to do this for  us. Regions that have an interest                                                                    
     in opting in will have to  go thru a public process and                                                                    
     get a  majority of  the communities  and municipalities                                                                    
     to  support. Once  this step  is completed  and if  not                                                                    
     happening concurrently, business plans  will need to be                                                                    
     developed  and  financial  resources  secured  and  not                                                                    
     banking  on  State or  Federal.  With  that in  hand  a                                                                    
     competitive  application  would  be  submitted  to  the                                                                    
     Department of Commerce for review and approval.                                                                            
     There are ON  ramps and there are off ramps.  I ask for                                                                    
     your support  in addressing this critical  issue of our                                                                    
     time and for your help in Helping us Help ourselves.                                                                       
10:52:46 AM                                                                                                                   
REPRESENTATIVE TARR asked how long it might take before a trust                                                                 
could purchase permits.                                                                                                         
MR. VAN VACTOR said making a purchase would depend on the fund                                                                  
raising possibilities, and expressed optimism that money would                                                                  
be forthcoming.                                                                                                                 
10:55:15 AM                                                                                                                   
RACHEL DONKERSLOOT, Program  Director, Alaska Marine Conservation                                                               
Council, stated support for HB  188, paraphrasing from a prepared                                                               
statement,   which   read   as  follows   [original   punctuation                                                               
     I'm  an  anthropologist by  trade,  I  grew up  in  the                                                                    
     fishing community of Naknek in  southwest Alaska, and I                                                                    
     work  for the  Alaska Marine  Conservation Council.  My                                                                    
     time  is largely  devoted  to  research, education  and                                                                    
     policy  work   on  fishing   community  sustainability,                                                                    
     marine resource  governance (especially  fishery access                                                                    
     issues)  and  rural  youth issues  in  Alaska  and  the                                                                    
     Global  North. I'm  currently  co-leading two  projects                                                                    
     relevant to HB  188: One focuses on the  graying of the                                                                    
     fleet and  loss of fishing rights  and opportunities in                                                                    
     Alaska  fisheries.  This   project  includes  a  global                                                                    
     review of  potential responses  to address  the graying                                                                    
     of the  fleet in  Alaska, including  policy provisions,                                                                    
     alternative  management  structures, and  training  and                                                                    
     mentorship programs.  This review should be  coming out                                                                    
     in a few weeks' time.                                                                                                      
     In  our  study, we  found  that  the need  to  purchase                                                                    
     permits  and quota  has created  expensive barriers  to                                                                    
     entry   into   commercial   fisheries  for   the   next                                                                    
     generation  of  fishermen.  This,  with  the  resulting                                                                    
     increased financial  capital and  risk needed  to enter                                                                    
     into  fisheries  are  primary factors  contributing  to                                                                    
     current trends  in Alaska. The cost  and financial risk                                                                    
     of entry  into most  fisheries is prohibitive  for many                                                                    
     young  or  new  fishermen  seeking to  make  fishing  a                                                                    
     career or diversify into new fisheries.                                                                                    
     Our   research   shows  intergenerational   access   is                                                                    
     eroding.   Fishing   permits    are   leaving   coastal                                                                    
     communities and our  state, which reduces opportunities                                                                    
     for Alaska youth to enter  into fisheries. This loss of                                                                    
     opportunity  for residents  has important  implications                                                                    
     for the future of these  communities and our state as a                                                                    
     I  would  stress here  that  Alaska  has implemented  a                                                                    
     number   of  programs   and   provisions  intended   to                                                                    
     facilitate entry  and Alaska ownership, but  what we're                                                                    
     seeing, across the state, is  that additional tools are                                                                    
     Regional  trusts as  designed in  HB 188  are a  highly                                                                    
     controlled tool that can provide  an additional path to                                                                    
     local and  independent ownership for  Alaska residents.                                                                    
     This is not an untested  idea. Other fishing regions in                                                                    
     the US and around the  globe have created similar tools                                                                    
     to  address  similar   challenges,  tools  that  anchor                                                                    
     access  rights  and   entry  opportunities  in  fishing                                                                    
     regions to bolster economies and  support new and rural                                                                    
     fishermen. Examples include  Norway's recruitment quota                                                                    
     and   coastal    district   quota,    Maine's   lobster                                                                    
     apprenticeship and  island license program,  and leased                                                                    
     access through the Cape Cod Fisheries Trust.                                                                               
     Today, more  than three-quarters of Bristol  Bay salmon                                                                    
     permits  are  held  by nonlocals.  In  one  generation,                                                                    
     Kodiak's   Alutiiq  villages   have  suffered   an  84%                                                                    
     decrease  in the  number of  young people  owning state                                                                    
     fishing permits,  and a 67%  decrease in the  number of                                                                    
     state  permits overall.  In the  southeast villages  of                                                                    
     Angoon,  Hoonah,  Hydaburg,  and Kake,  the  number  of                                                                    
     young people  owning state permits has  dropped sharply                                                                    
     since 1985: from 131 to only 17 in 2013.                                                                                   
     Big  picture, the  net  loss of  more  than 2300  state                                                                    
     permits   from   Alaska   rural   fishing   communities                                                                    
     represents 29%  of permits  originally issued  to rural                                                                    
     Alaskan fishermen. This loss  of access is particularly                                                                    
     stark  when  compared  to  the  7.4%  net  increase  in                                                                    
     permits  held by  non-residents of  the state  over the                                                                    
     same time period.                                                                                                          
     Our research  has led us  to make  five recommendations                                                                    
     that  could contribute  to reversing  the trend  of the                                                                    
     graying of  the fleet in  Alaska. Among these are:   1)                                                                    
     Explore new  forms of access  to commercial  fishing to                                                                    
     facilitate  entry  for  the  next  generation;  and  2)                                                                    
     Consider mechanisms to  protect community-based fishing                                                                    
     access.  Fisheries  trusts  are  within  these  realms.                                                                    
     Regional  Fisheries  Trusts  will not  single  handedly                                                                    
     solve   the  problems   affecting  our   fisheries  and                                                                    
     communities, but it  is an important part  of the suite                                                                    
     of solutions that Alaska needs  to be advancing. Trusts                                                                    
     recreate  the opportunity  that is  fundamental to  the                                                                    
     health  of   our  fishing   communities  and   help  to                                                                    
     recapture  some  of   the  benefits  currently  leaving                                                                    
     Alaska in the form of rights, income and livelihood.                                                                       
10:59:58 AM                                                                                                                   
REPRESENTATIVE TARR asked what sidebars are being referring to                                                                  
in the statement that the trusts will be highly controlled                                                                      
MS. DONKERSLOOT answered that the controls include the number of                                                                
permits a trust can hold, where the funding can come from, and                                                                  
the board structure.                                                                                                            
REPRESENTATIVE TARR noted the reference  to the trust not being a                                                               
new idea  and that similar  organizations exist elsewhere  in the                                                               
world.   She  sked if  similar controls  are found  in the  other                                                               
examples mentioned.                                                                                                             
MS. DONKERSLOOT  answered that the  other programs have  caps and                                                               
eligibility  rules, but  they've all  been developed  specific to                                                               
their locales.                                                                                                                  
11:01:59 AM                                                                                                                   
CHAIR  STUTES  cautioned  that expectations  are  possibly  being                                                               
raised that  the permit bank  will serve to promote  residency in                                                               
coastal communities,  but in actuality  much of  the outmigration                                                               
of  the permit  holders  has been  to  the Anchorage,  Matanuska-                                                               
Susitna,  Palmer, and  Wasilla, areas  where more  permit holders                                                               
reside  than   anywhere  else   in  the   state.     Pending  the                                                               
satisfaction of constitutional requirements,  the permits held in                                                               
trust may be available to  anyone, living anywhere, in the state,                                                               
she noted,  and asked how  particular regions are expected  to be                                                               
MS.  DONKERSLOOT  explained  that  a perception  exists  of  lost                                                               
opportunities in  coastal communities, and financial  hurdles are                                                               
often seen as  impassable.  She stated her belief  that using the                                                               
trust as a  stepping stone will provide  locals, especially young                                                               
adults, the assistance they need to enter the fishing industry.                                                                 
CHAIR  STUTES  stressed  that  the permit  cost  isn't  the  only                                                               
expenditure required  for fishing, as  a captain must be  able to                                                               
put together a boat, equipment,  and crew.  Further, she reported                                                               
that Community  Quota Entity (CQE)  permits exist, which  are not                                                               
being fished.                                                                                                                   
MS. DONKERSLOOT responded  that the existing CQE  dynamics are an                                                               
example  of why  a  multi-faceted approach  is  necessary to  re-                                                               
enliven  the fishing  industry.   The permits  trust will  be one                                                               
aspect of the effort.                                                                                                           
11:06:53 AM                                                                                                                   
JIM BRENNAN, Attorney, Law Offices  of Brennan and Heideman, said                                                               
the ongoing exodus  of limited entry permits  from Alaska coastal                                                               
communities is a major concern.   Reviewing the constitutionality                                                               
of the  bill has been his  primary focus, and he  has scrutinized                                                               
three   specific  areas,   which   are:  discrimination   against                                                               
nonresidents under the federal  Privileges and Immunities clause;                                                               
discrimination  in  general under  the  state  and federal  Equal                                                               
Protection clauses;  and the  creation of  an exclusive  right or                                                               
privilege  of fishery  under  the Constitution  of  the State  of                                                               
Alaska.     Although   all  three   areas   pose  concerns,   the                                                               
constitutionality of  a regional fisheries trust  system would be                                                               
upheld,  if  the  statute  is  accompanied  by  carefully  worded                                                               
legislative  findings and  purposes, he  opined, and  paraphrased                                                               
the language of Article 8, Section 16, which reads:                                                                             
     SECTION  15.    No   Exclusive  Right  of  Fishery.  No                                                                    
     exclusive right  or special privilege of  fishery shall                                                                    
     be created or  authorized in the natural  waters of the                                                                    
     State. This section does not  restrict the power of the                                                                    
     State to limit  entry into any fishery  for purposes of                                                                    
     resource  conservation,  to prevent  economic  distress                                                                    
     among  fishermen and  those dependent  upon them  for a                                                                    
     livelihood and to promote  the efficient development of                                                                    
     aquaculture in the State.                                                                                                  
The  final  provision  in  this  section,  adopted  in  1972,  is                                                               
unusually  specific, which  has  been interpreted  by the  Alaska                                                               
Supreme Court  to authorize the  limited entry  statutes, despite                                                               
the  clauses  that  prohibit exclusive  right  and  privilege  of                                                               
fishery.  Thus, the limited  entry provisions establish precedent                                                               
for  the  three   constitutional  areas  of  concern.     If  the                                                               
legislature  is   acting  to  prevent  economic   distress  among                                                               
fishermen and  those dependent  upon them  for a  livelihood, the                                                               
proposed legislation could be defended.   The bill offers a sound                                                               
approach, he opined.                                                                                                            
11:12:19 AM                                                                                                                   
RALPH  TOWNSEND,  Director,  Institute  of  Social  and  Economic                                                               
Research (ISER),  commented on  specific aspects  of HB  188, and                                                               
said ISER refrains from taking a  political stance on issues.  He                                                               
cited  how the  approach  to fisheries,  around  the world,  have                                                               
evolved regarding ways  in which they are managed.   However, the                                                               
underlying  concept that  is common  is that,  regardless whether                                                               
they choose  to or not,  someone who would  like to fish  may not                                                               
have the  choice.  Alaska was  an early adopter of  limited entry                                                               
fisheries.  Benefits of collective  efforts exist, as seen around                                                               
the world.   It's in that context  that a trust may  be formed to                                                               
offer collective decisions about a  joint resource.  The creation                                                               
of  a  permit  process  has   reduced  access  for  many  people.                                                               
However,  drawing an  analogy  is not  easy  given the  different                                                               
characteristics of  entities such as community  quotas and permit                                                               
trusts.   Assisting a  fisherman to enter  the industry  has many                                                               
facets, but  unless the  permit is  owned by  a local  trust, the                                                               
permit  owner can  sell it  to anyone,  anywhere.   Regarding who                                                               
would  finance  the permits,  he  offered  two possibilities,  as                                                               
follows:  a permit  may be willed or sold at less of  a cost by a                                                               
retired fisherman  without an  heir apparent or  need for  a high                                                               
sale  rate;  or  the  Nature  Conservancy,  which  has  acted  to                                                               
purchase permits in the past  under different rules.  One concern                                                               
he said  is that the caps  of 2.5 percent keeps  the trust agency                                                               
small,  and  if there  are  too  many  rules, they  could  become                                                               
expensive to  run.  A balance  should be struck to  create a real                                                               
opportunity  with necessary  restrictions.   The  role the  trust                                                               
will  play in  a given  fishery will  likely not  be one  of over                                                               
[Public testimony was treated as opened.]                                                                                       
11:24:45 AM                                                                                                                   
CLAY BEZENEK, Fisherman, stated opposition  to HB 188 and said it                                                               
isn't necessary.   A new  car isn't needed,  but the car  that we                                                               
have  needs tweaked,  such as  the  bill that  was introduced  to                                                               
increase the  borrowing limit through  the state program;  HB 56.                                                               
The sponsor  said that HB  188 is  for the small  boat fisheries,                                                               
but  an  entity already  exists  to  support  that endeavor.    A                                                               
division  of  investments  representative  should  visit  coastal                                                               
communities to help the young people, he suggested.                                                                             
11:29:44 AM                                                                                                                   
NATASHA HAYDEN, stated support for  HB 188 and said the evolution                                                               
of the  fishing industry  has been dramatic.   Access  to permits                                                               
may  not be  a benefit,  as  some communities  have permits  that                                                               
aren't  being fished.   One  type  of fishery  doesn't support  a                                                               
family  and it  would be  important to  have the  opportunity for                                                               
access to different types of permits.                                                                                           
11:33:33 AM                                                                                                                   
ELSA   SEBASTIAN,   Fisherman,   stated  support   for   HB   188                                                               
paraphrasing  from a  prepared statement,  which read  as follows                                                               
[original punctuation provided]:                                                                                                
     I'm  26-years old  and I  operate a  power-troller.   I                                                                    
     grew up fishing, and have  spent every summer season of                                                                    
     my life working on boats.   I started out hand-trolling                                                                    
     on a vessel  and permit that was bought  with PFD money                                                                    
     that my parents had  saved for furthering my education.                                                                    
     I  was  fortunate  to receive  a  full  scholarship  to                                                                    
     college, so  I did not  have to choose  between fishing                                                                    
     and a college education.                                                                                                   
     I'm from  a rural  community, and as  a troller  I fish                                                                    
     around  Southeast   Alaska  so   I  visit   many  small                                                                    
     communities, from Craig to  Port Alexander, to Pelican.                                                                    
     The  number  of  fishing   operations  in  these  small                                                                    
     communities is dwindling.                                                                                                  
     There's  something  about  the  way of  life  in  rural                                                                    
     Alaska  that makes  people very  risk  adverse.   Since                                                                    
     I've  been   fishing  my  own  vessel   I've  had  many                                                                    
     conversations with other  young people, especially from                                                                    
     Prince of Wales, who are  hoping to start running their                                                                    
     own  operations.    Always,   these  young  people  are                                                                    
     uncertain, even  those who  were from  fishing families                                                                    
     aren't sure that  they can pull it off    their parents                                                                    
     had  gotten into  fishing when  the opportunities  were                                                                    
     easier  to  come by,  and  often  in small  communities                                                                    
     there aren't many role models  of young people who have                                                                    
     bought in under the current circumstances.                                                                                 
     I think the opportunity  that could be realized through                                                                    
     leasing  a   permit  from  a  Permit   Trust  would  be                                                                    
     significant for  young people from  rural Alaska.   For                                                                    
     starters,  it  would  allow the  young  person  several                                                                    
     years to  figure out how  to run  a business.   This is                                                                    
     one  of  the  most   challenging  aspects  of  fishing,                                                                    
     figuring  out how  to  make the  numbers  work, how  to                                                                    
     invest  in your  boat and  your business,  how to  save                                                                    
     money for the years when the  fishing is poor.  This is                                                                    
     especially   daunting   to   young  people   in   rural                                                                    
     communities,  even if  they're  from fishing  families.                                                                    
     Having a  few years to  figure this out with  less risk                                                                    
     involved would ultimately allow  fishermen to be better                                                                    
     business owners.                                                                                                           
     The other practicality to this,  is that it would allow                                                                    
     a young person of limited  means to invest in a fishing                                                                    
     vessel and in  the first few years of  fishing, be able                                                                    
     to have enough  extra cash on hand to  actually get the                                                                    
     boat in  fine working  order.  Last  year was  my first                                                                    
     year fishing  my new power-troller,  it's a  nice boat,                                                                    
     but it hadn't  been fished for a couple of  years and I                                                                    
     was  pretty surprised  by how  many  things went  wrong                                                                    
     over  the course  of the  season.   The  number of  in-                                                                    
     season repairs  I had to make  took a huge toll  on the                                                                    
     probability of my operation.   After making my boat and                                                                    
     permit  payments, it's  been  difficult  to invest  the                                                                    
     money needed  to get  the boat  ready for  this season.                                                                    
     This is a well-known challenge for young fishermen.                                                                        
     Young  Alaskans  who  want  to  get  into  fishing  are                                                                    
     passionate  about it,  theyre  hard-workers,  and often                                                                    
     they see  fishing as  a way of  living in  rural Alaska                                                                    
     for the  long-term.  Leasing  a permit through  a trust                                                                    
     would get them off to a good start.                                                                                        
11:36:51 AM                                                                                                                   
ALYSSA RUSSELL,  Alaska Longline Fisherman's  Association, stated                                                               
support  of HB  188 and  said it  would provide  a good  means of                                                               
access to  young fishermen, dovetailing with  other programs that                                                               
are in place to encourage entry into the industry.                                                                              
11:40:38 AM                                                                                                                   
TYLER EMERSON, Fisherman, stated support  for HB 188 and said the                                                               
fishing dynamic  in rural communities  have seen  an outmigration                                                               
of permits.   The  bill provides an  opportunity to  address that                                                               
issue  and  will  offer  necessary  assistance  to  young  people                                                               
entering  the  industry.    It  will be  an  important  tool  for                                                               
ensuring the future of the fleet.                                                                                               
11:44:31 AM                                                                                                                   
HEATHER MCCARTY,  Representative, Central Bering  Sea Fisherman's                                                               
Association, stated support  for HB 188, and  said that, although                                                               
the  Pripilof  Islands  do  not  sustain  salmon  fisheries,  the                                                               
association  is  adding its  voice  of  support, as  a  community                                                               
development quota  (CDQ) entity.   The spirit  and concept  of HB
188 is in  keeping with the mission of the  CDQ program, which is                                                               
to provide  economic and  social benefits  to the  western Alaska                                                               
coastal communities through access  to, and participation in, the                                                               
fisheries  in the  Bering Sea.   The  CDQ program  provides these                                                               
opportunities  for fishermen  who  participate  in the  federally                                                               
managed  fisheries.   The  regional  fisheries  trust concept  is                                                               
believed to be a means  for bringing similar opportunities to the                                                               
coastal,  salmon fishermen.   Further,  the proposed  legislation                                                               
holds the potential  to keep fishing rights in  communities.  She                                                               
urged committee support for passage of HB 188.                                                                                  
11:46:42 AM                                                                                                                   
CHAIR STUTES closed public testimony and announced HB 188 as                                                                    
11:47:07 AM                                                                                                                   
CHAIR STUTES ADJOURNMENT                                                                                                      
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 11:47                                                                   

Document Name Date/Time Subjects
HB188 Sectional Analysis ver R 4.25.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Summary of Changes U to R 4.25.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 ver R 4.25.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document ALFA 4.25.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document APICDA 4.25.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document Kodiak Rural Leadership Forum Resolution 5.3.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Opposing Document SEAFA 5.10.17.pdf HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document Young Fishermen.PDF HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document CFEC Administrative Area Map.PDF HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document Native Village of Ouzinkie.PDF HFSH 4/25/2017 10:00:00 AM
HB 188
HB188 Supporting Document City of Ouzinkie.PDF HFSH 4/25/2017 10:00:00 AM
HB 188