Legislature(2019 - 2020)GRUENBERG 120

01/23/2020 10:00 AM FISHERIES

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Audio Topic
10:02:03 AM Start
10:03:54 AM Presentation: Seafood Workforce Training Partnership by the Alaska Research Consortium
10:40:58 AM Presentation: Commercial Fisheries Entry Commission
11:00:40 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Seafood Workforce Training TELECONFERENCED
Partnership by the Alaska Research Consortium
Update by the Commercial Fisheries Entry
The Alaska Young Fishermen's Summit in Attendance
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
                     ALASKA STATE LEGISLATURE                                                                                 
               HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                           
                         January 23, 2020                                                                                       
                            10:02 a.m.                                                                                          
MEMBERS PRESENT                                                                                                               
Representative Louise Stutes, Chair                                                                                             
Representative Bryce Edgmon                                                                                                     
Representative Chuck Kopp                                                                                                       
Representative Jonathan Kreiss-Tomkins                                                                                          
Representative Sarah Vance                                                                                                      
MEMBERS ABSENT                                                                                                                
Representative Geran Tarr                                                                                                       
Representative Mark Neuman                                                                                                      
COMMITTEE CALENDAR                                                                                                            
PRESENTATION: SEAFOOD WORKFORCE TRAINING PARTNERSHIP BY THE                                                                     
ALASKA RESEARCH CONSORTIUM                                                                                                      
     - HEARD                                                                                                                    
PRESENTATION: COMMERCIAL FISHERIES ENTRY COMMISSION                                                                             
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
JAY STINSON, President                                                                                                          
Alaska Research Consortium (ARC)                                                                                                
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:  Co-offered a PowerPoint presentation on the                                                              
Seafood Workforce Training Partnership.                                                                                         
PAULA CULLENBERG, Executive Director                                                                                            
Alaska Research Consortium (ARC)                                                                                                
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:  Co-offered a PowerPoint presentation on the                                                              
Seafood Workforce Training Partnership.                                                                                         
FATE PUTMAN, Commissioner                                                                                                       
Commercial Fisheries Entry Commission (CFEC)                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Co-offered an update on the CFEC.                                                                        
JON HAGHEYEGHI, PhD, Executive Director                                                                                         
Commercial Fisheries Entry Commission (CFEC)                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Co-offered an update on the CFEC.                                                                        
DALE KELLY, Commissioner                                                                                                        
Commercial Fisheries Entry Commission (CFEC)                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Co-offered an update on the CFEC.                                                                        
ACTION NARRATIVE                                                                                                              
10:02:03 AM                                                                                                                   
CHAIR  LOUISE  STUTES  called  the  House  Special  Committee  on                                                             
Fisheries meeting to  order at 10:02 a.m.   Representatives Kopp,                                                               
Kreiss-Tomkins, Vance,  and Stutes  were present  at the  call to                                                               
order.   Representative  Edgmon  arrived as  the  meeting was  in                                                               
CHAIR STUTES recognized the  committee's invited guests, students                                                               
from the  Alaska Young  Fishermen's Summit  (AYFS).   She thanked                                                               
them  for  their  interest  in  becoming  leaders  and  making  a                                                               
difference in an industry that drives and defines Alaska.                                                                       
^PRESENTATION:  SEAFOOD  WORKFORCE  TRAINING PARTNERSHIP  BY  THE                                                               
ALASKA RESEARCH CONSORTIUM                                                                                                      
  PRESENTATION: SEAFOOD WORKFORCE TRAINING PARTNERSHIP BY THE                                                               
                   ALASKA RESEARCH CONSORTIUM                                                                               
10:03:54 AM                                                                                                                   
CHAIR STUTES announced that the  first order of business would be                                                               
a  presentation by  the  Alaska Research  Consortium  (ARC) on  a                                                               
potential seafood workforce training partnership.                                                                               
CHAIR STUTES announced that the  ARC would be unveiling a concept                                                               
that  she intends  to pursue  legislatively, and  otherwise, with                                                               
the intention  of securing annual  dedicated funding  for seafood                                                               
industry workforce training.                                                                                                    
CHAIR  STUTES stated  that  the  processing industry  contributes                                                               
over $600,000  annually to unemployment insurance;  however, they                                                               
generally  receive less  than  $60,000  annually in  reciprocated                                                               
trainings  for the  industry.   She expressed  a need  statewide,                                                               
within  processing,  for  more   focus  and  funding  to  provide                                                               
training that  the industry needs  to be adaptive,  move forward,                                                               
and meet the changing demands of the marketplace.                                                                               
10:05:39 AM                                                                                                                   
JAY  STINSON,   President,  Alaska  Research   Consortium  (ARC),                                                               
offered  a  PowerPoint  presentation  on  the  Seafood  Workforce                                                               
Training Partnership,  [hard copy included in  documents packet].                                                               
Referencing slide  2, he explained that  the ARC is a  501 (c)(3)                                                               
educational  non-profit.    He  then  stated  that  he  has  been                                                               
involved in the  sea food business, both  fishing and processing,                                                               
for approximately 50  years.  He pointed out  that his associate,                                                               
Paula  Cullenberg,  has  previous  experience  as  the  executive                                                               
director for  Alaska Sea Grant,  and the  ARC is excited  to have                                                               
her  on board.   He  stated that  the mission  of the  ARC is  to                                                               
support  sustainable  fisheries,  marine science,  and  the  blue                                                               
economy  in  the  North Pacific  through  workforce  development,                                                               
technical assistance,  and applied  research.  He  expressed that                                                               
it is a complicated industry, and  the ARC wants to pass down the                                                               
information, which it  has acquired, to the next  generation.  He                                                               
referenced slide 3, pointing out  the experience of the ARC Board                                                               
of  Directors:   Jay  Stinson, Alan  Austerman, Shannon  Carroll,                                                               
Duncan  Fields,  Pat Jacobson,  Michael  Kohan,  Tom Lance,  Matt                                                               
Moir, Susan Saupe, Jeff Stephan, and Quentin Fong.                                                                              
10:08:22 AM                                                                                                                   
MR.  STINSON, referencing  slide  4, stated  that  he thinks  the                                                               
number on the  slide [$5.4 billion] might be  incorrect, and that                                                               
the seafood industry  creates closer to $5.6  billion in economic                                                               
value for Alaska.  He said  that the seafood processing sector is                                                               
Alaska's largest  private employer, accounting  for approximately                                                               
75  percent of  manufacturing  in the  state  and providing  over                                                               
26,000  seafood  processing  jobs.    He  stated  that  a  stable                                                               
workforce,  capable  of  meeting ever  increasing  technical  and                                                               
regulatory skill requirements, is  critical to the sustainability                                                               
of the seafood  industry.  He stated that  the seafood processing                                                               
industry is  experiencing what ARC  refers to as "graying  of the                                                               
fleet,"  as  well  as  "graying  of the  process  workers."    He                                                               
explained that  among many  of the  processing plants  in Alaska,                                                               
the average  age of process  workers is  in the mid-fifties.   He                                                               
questioned  who might  be  able  to backfill  these  jobs as  the                                                               
industry  moves away  from lower  skillset  operations into  more                                                               
technically  demanding  skillset  operations.    He  stated  that                                                               
workers  with more  technically  inclined skillsets  are in  high                                                               
demand; however,  there is  no place in  Alaska to  receive [that                                                               
specific]  technical  training.    He  said  that  in  1981,  the                                                               
legislature  created  the  Fishery Industrial  Technology  Center                                                               
(FITC), with  the objective  of technical training  in mind.   He                                                               
said  that the  FITC  got  rolled in  with  University of  Alaska                                                               
Fairbanks (UAF), which  he thinks has not been a  good fit, given                                                               
the  difference between  the applied  research and  certification                                                               
the seafood industry  requires and the more  academic approach of                                                               
the UAF.    As a result  of this mismatched process,  the ARC has                                                               
tried to develop  a plan to meet some of  these educational needs                                                               
in the industry.                                                                                                                
10:11:22 AM                                                                                                                   
CHAIR  STUTES asked  Mr. Stinson  to briefly  explain more  about                                                               
Baader   equipment,   which   was  mentioned   earlier   in   his                                                               
MR.  STINSON  responded  that  there  are  several  international                                                               
brands utilized  in the ground-fishing  industry.  Baader  is one                                                               
of  these  international  brands   and  is,  probably,  the  main                                                               
supplier   of  processing   equipment   for  the   ground-fishing                                                               
industry.    Baader  is  a  German  company  that  produces  many                                                               
different processing  machines which  are all  part of  a refined                                                               
international  program.   He  explained  that  to enable  Alaskan                                                               
workers to receive  proper training on Baader  equipment, the ARC                                                               
put on a  training program in Kodiak, Alaska.   The ARC brought a                                                               
Baader  technician from  Germany to  put on  a one-week  training                                                               
program  for  six processing  plant  workers  from North  Pacific                                                               
Seafoods, Ocean Beauty Seafoods, and  Trident Seafoods.  The cost                                                               
of the  program was approximately  $21,000, which was  covered by                                                               
the  processing plants.   Mr.  Stinson explained  that it  can be                                                               
difficult,  at times,  to get  the processing  plants to  work in                                                               
concert even though it is to their benefit.                                                                                     
10:13:21 AM                                                                                                                   
PAULA CULLENBERG, Executive  Director, Alaska Research Consortium                                                               
(ARC), briefly explained her background  as the longtime director                                                               
of Alaska Sea  Grant.  She left Alaska Sea  Grant approximately a                                                               
year and a half ago and now works  with the ARC.  She stated that                                                               
she used  to work closely  with the  AYFS and expressed  that she                                                               
was thrilled  to see so  many of  them at the  committee meeting.                                                               
She  explained  that she  has  continued  working with  the  AYFS                                                               
because they  have been a group  of volunteers that work  hard to                                                               
support  the Kodiak  Seafood and  Marine Science  Center (KSMSC).                                                               
She referenced  a long history  with the AYFS, pointing  out that                                                               
the  UAF  had considered  closing  the  KSMSC  a few  years  ago;                                                               
however, the AYFS  stepped up and made the case  that the seafood                                                               
industry is an  important part of Alaska's  economy, and training                                                               
and applied research are relevant to  the industry.  As a result,                                                               
the UAF  kept the KSMSC  open, and the  ARC has since  focused on                                                               
programming and training in the KSMSC.                                                                                          
MS.  CULLENBERG   brought  attention   back  to   the  PowerPoint                                                               
presentation  begun by  Mr. Stinson.   Referencing  slide 5,  she                                                               
gave   more  background   on   the   Alaska  Maritime   Workforce                                                               
Development  Plan.    She  explained  that  the  Alaska  Maritime                                                               
Workforce Development Plan was published  in 2014, was adopted by                                                               
the Twenty-Ninth  Alaska State Legislature and  the University of                                                               
Alaska Board  of Regents,  and is  on the  Department of  Labor &                                                               
Workforce  Development (DLWD)  website.   She explained  that the                                                               
Alaska Maritime  Workforce Development  Plan is an  umbrella plan                                                               
that  covers  every  job  pertaining  to  the  ocean  and  marine                                                               
environments.  Referencing  slide 6, she listed  two reasons that                                                               
the ARC was attending the  current committee meeting.  First, she                                                               
listed that the  KSMSC's mission is to  provide training, applied                                                               
research,  and  technical  assistance  to  the  entire  state  of                                                               
Alaska,  as outlined  in Alaska  Statute  16.52.010; second,  she                                                               
said  that the  ARC  has  been looking  at  the Alaska  Technical                                                               
Vocational Education  Program (TVEP) as a  potential resource for                                                               
training at  the KSMSC.   She explained that  the TVEP is  up for                                                               
reauthorization this  year and the  legislature will have  a role                                                               
in the process.                                                                                                                 
10:16:01 AM                                                                                                                   
MS. CULLENBERG,  referencing slide 7, introduced  Alaska Seafoods                                                               
Future  Project, in  which the  ARC is  currently involved.   She                                                               
explained  that  the project  is  partially  funded by  the  U.S.                                                               
Economic  Development Administration  (EDA).   The basic  role of                                                               
the project  is to reach out  to seafood processors and  ask them                                                               
what their  training and applied  research needs are.   She named                                                               
Pacific Seafood  Processors Association, North  Pacific Seafoods,                                                               
Alaska  Seafood   Marketing  Institute  (ASMI),   Alaska  Process                                                               
Industry Career  Consortium, Sun'aq  Tribe, and Alaska  Sea Grant                                                               
as partners on the project.                                                                                                     
10:16:41 AM                                                                                                                   
REPRESENTATIVE EDGMON  asked Ms.  Cullenberg whether  her comment                                                               
that  the   TVEP  needed  reauthorization  was   prefaced  around                                                               
changing  the   current  the  TVEP  allocation   scheme  or  just                                                               
reauthorizing the program.                                                                                                      
10:17:01 AM                                                                                                                   
MS.  CULLENBERG  replied  that  the  focus  is  on  changing  the                                                               
allocation scheme,  in a way.   She jumped  ahead to slide  16 in                                                               
the  presentation  to  explain  that the  TVEP  is  derived  from                                                               
employee contributions to unemployment  insurance.  She said that                                                               
the employee contribution is approximately  0.5 percent, and 0.16                                                               
percent of that  is allocated to the TVEP fund.   She stated that                                                               
when the ARC  was launching its program, she reached  out to DLWD                                                               
and asked how  much the seafood industry contributes  to the TVEP                                                               
fund annually.  She pointed out  that the Taxable Wages column on                                                               
slide 16 represents  the employee contribution to  the TVEP fund,                                                               
and  0.16 percent  of that  is  approximately $600,000  annually,                                                               
which is  the seafood industry  contribution.  She said  that the                                                               
amount of  funding allocated to  training for  seafood processing                                                               
in Alaska  is minimal, averaging approximately  $60,000 annually.                                                               
This amounts to approximately 10  percent of the overall industry                                                               
contribution to the TVEP fund.                                                                                                  
10:18:44 AM                                                                                                                   
REPRESENTATIVE  VANCE stated  that she  was looking  at the  most                                                               
recent  Alaska  labor  statistics,  from  2017  she  thinks,  and                                                               
determined  that   approximately  74   percent  of   the  seafood                                                               
processing  workforce  are  non-residents.   She  expressed  that                                                               
these jobs  should be held  by Alaska  residents.  She  asked Ms.                                                               
Cullenberg whether  the large percentage of  non-residents in the                                                               
workforce is a result of  the seafood processors' preference or a                                                               
lack of education and training.                                                                                                 
10:19:20 AM                                                                                                                   
MS. CULLENBERG  replied that she  thinks it  is a result  of both                                                               
issues.    She  explained  that there  are  approximately  26,000                                                               
people  working in  the seafood  processing  industry in  Alaska,                                                               
many of  them entry level,  and it is  difficult to come  up with                                                               
that many workers  from in state.  That said,  she feels that the                                                               
workers in  Alaska who could  benefit the most from  training are                                                               
those holding skilled positions.   She pointed out that there are                                                               
many  year-round  workers  in  the  seafood  processing  industry                                                               
living  in Alaska  communities, such  as Petersburg,  Kodiak, and                                                               
Ketchikan.   She said that the  ASMI report shows that  the year-                                                               
round  Alaska   residents  working  in  the   seafood  processing                                                               
industry are  those with higher  incomes, because they  hold more                                                               
skilled positions.                                                                                                              
MS. CULLENBERG  expressed that training provides  the opportunity                                                               
to ensure  careers in the  seafood processing industry  for year-                                                               
round Alaska  residents.  She  stated that she thinks  there will                                                               
continue to be  a need for entry level workers  from out of state                                                               
to fill thousands of seasonal  positions; however, there are many                                                               
communities throughout the state  with career positions that need                                                               
training.    She  mentioned refrigeration  training,  electrician                                                               
training, quality  control training, and government  relation and                                                               
compliance training as specific examples.   She said that the ARC                                                               
has been surveying  seafood processors from across  the state and                                                               
getting information on what kinds of training are required.                                                                     
MS. CULLENBERG  talked about  how she had  very recently  been in                                                               
Kenai and  interviewed two plant  managers from E&E  Seafoods and                                                               
North Pacific  Seafoods, both of  whom eloquently spoke  to their                                                               
specific training needs.   Ms. Cullenberg said  that the training                                                               
needs  that  stood  out  to  her the  most  were  the  need  for:                                                               
management  level  training,  conflict resolution  training,  and                                                               
safety  training.    She  referenced  slides  9  and  10  of  the                                                               
presentation, pointing  out that she has  questioned 40 different                                                               
processing plant managers throughout  Alaska, asking whether they                                                               
have any  employees that would  be able to advance  their careers                                                               
if  they  received  training.     She  said  that  she  found  it                                                               
interesting  that every  plant manager  she spoke  with responded                                                               
that  they  have  multiple  employees   who  could  advance  with                                                               
additional training.   She expressed  that she thinks there  is a                                                               
lot  of  interest and  potential  for  more training  in  seafood                                                               
processing plants in Alaska.                                                                                                    
10:22:31 AM                                                                                                                   
REPRESENTATIVE  KOPP  stated  that   he  really  appreciates  Ms.                                                               
Cullenberg   highlighting  the   need   for  targeting   training                                                               
resources  toward  Alaskan  residents  to  fulfill  career  level                                                               
positions.  He agreed with Ms.  Cullenberg that it can be hard to                                                               
fill  26,000  entry-level   jobs  in  a  rural   community.    To                                                               
underscore a  point Ms.  Cullenberg had made  earlier, he  told a                                                               
story from his  experience as a commercial fisherman.   Two years                                                               
ago, when the  Bristol Bay processor he was  working with stopped                                                               
taking fish  it had a  Human Resources (HR) crisis  that resulted                                                               
in 600  employees walking  off the  job.   He explained  that the                                                               
issue  had nothing  to  do with  the facility  itself  but was  a                                                               
result  of the  plant not  being  able to  negotiate through  the                                                               
issue quickly enough.   As a result, the plant  was shut down for                                                               
48  hours during  the fishing  season.   He explained  that well-                                                               
trained HR  people could have helped  to see an issue  coming and                                                               
intervene before  it became a crisis.   He said that  these might                                                               
not be things normally thought  about regarding fishing; however,                                                               
as a fisherman  it becomes a crisis when the  processor is unable                                                               
to buy fish because of an HR issue.                                                                                             
10:23:32 AM                                                                                                                   
CHAIR  STUTES asked  Ms. Cullenberg  to explain  what the  ARC is                                                               
proposing  for the  TVEP funds  and how  it might  affect current                                                               
recipients.  She said that she  thinks the effect of the proposal                                                               
is  a  big concern  for  anyone  paying attention  and  currently                                                               
receiving the TVEP  funds, and that Ms. Cullenberg  might want to                                                               
address those concerns.                                                                                                         
10:24:01 AM                                                                                                                   
MS. CULLENBERG replied that it was  interesting to the ARC to see                                                               
that the  seafood processing  industry contributes  $600,000 into                                                               
the TVEP  fund, which  is a  significant amount.   She  said that                                                               
being involved in a research  project identifies a strong demand,                                                               
need,  and specifics  for training,  and  the TVEP  being up  for                                                               
reauthorization  presents a  great  opportunity.   She said  that                                                               
coming from the UAF, she has  seen the TVEP funds used very well;                                                               
they  "compete them  across the  entire system."   She  expressed                                                               
that it  is not really the  ARC's intent to take  money away from                                                               
those programs.   She  said that someone  from the  UAF presented                                                               
the  idea that  the 0.16  percent of  the taxable  wage could  be                                                               
increased to 0.17  percent, which would add $700,000  to the TVEP                                                               
fund.    She  stated  that   she  recalls  this  being  done  two                                                               
reauthorizations  ago when  Ilisagvik  College was  added to  the                                                               
list  of  recipients.    She  suggested that  this  might  be  an                                                               
effective way to  grow the fund without taking  away from current                                                               
10:25:24 AM                                                                                                                   
CHAIR  STUTES  asked  who  would be  paying  the  increased  0.01                                                               
percent to the TVEP fund.                                                                                                       
MS. CULLENBERG replied  that it would be a  0.01 percent increase                                                               
from the employee contribution to unemployment insurance.                                                                       
CHAIR STUTES  suggested that this  would then go right  back into                                                               
employee training, so to speak.                                                                                                 
10:25:47 AM                                                                                                                   
MS.  CULLENBERG,  referencing slide  17,  said  that the  ARC  is                                                               
interested  in  developing  what   they  are  calling  a  Seafood                                                               
Workforce Training  Partnership, with  the goal of  ensuring that                                                               
Alaskans will be able to compete  for skilled jobs in the seafood                                                               
industry.   She further explained  that the ARC is  interested in                                                               
training  for  high school  students  that  provides exposure  to                                                               
careers in  the seafood  industry.   She stated  that one  of the                                                               
results  from  their research  generated  a  lot of  interest  in                                                               
recruitment.    She expressed  that  very  few companies  in  the                                                               
seafood  industry  have  relationships   with  their  local  high                                                               
schools.   She  said she  was  surprised that  even large  Alaska                                                               
communities,  such as  Kenai, have  very  little engagement  with                                                               
high school students.                                                                                                           
MS.  CULLENBERG   explained  that  it  is   different  for  small                                                               
communities, such as False Pass,  where the plant manager she had                                                               
spoken with  told her there are  six students, only one  of which                                                               
is in high  school, in the entire community.   She expressed that                                                               
the ARC  would like  to create a  career exposure  and internship                                                               
program for  high school  students.  She  referenced slide  19 in                                                               
the  presentation, pointing  out the  Baader technician  training                                                               
which  Jay Stinson  spoke about  earlier, as  well as  the Alaska                                                               
Seafood Processing  Leadership Institute (ASPLI).   She mentioned                                                               
that the  ASPLI is  leveraged through the  Alaska Sea  Grant, and                                                               
the industry pays approximately $3,000  a person to send students                                                               
to train.   She  said she  thinks companies  are very  willing to                                                               
invest in  training programs, but  what is missing is  a skeleton                                                               
or  backbone  for training  programs.    She explained  that  she                                                               
thinks having the KMSMC and the  funds from the TVEP would enable                                                               
the ARC to  coordinate a training program that would  come out of                                                               
Kodiak but be  available across the entire state.   She explained                                                               
that  it doesn't  always make  sense  to send  people from  rural                                                               
communities  like Sitka,  Homer, or  Dutch Harbor  to Kodiak  for                                                               
10:28:13 AM                                                                                                                   
CHAIR STUTES addressed Ms. Cullenberg,  saying that she heard her                                                               
mention earlier that  some of the processing  companies in Kodiak                                                               
have  been participating  financially,  when  possible, with  the                                                               
MS.  CULLENBERG responded  that the  Baader technician  training,                                                               
mentioned  earlier,  was  an   example  of  processing  companies                                                               
participating financially with  the ARC.  She  explained that the                                                               
Baader  technician training  has been  a priority  for processing                                                               
companies for  years, as it had  been a long time  since they had                                                               
received any  training from Germany.   She  said that as  soon as                                                               
the ARC  had orchestrated  the Baader  training in  Kodiak, three                                                               
companies  immediately sent  six  people to  train  and paid  the                                                               
entire  $21,000 cost,  as previously  mentioned  by Jay  Stinson.                                                               
She expressed that  the missing piece has really  been someone to                                                               
organize and  put together  a training  program.   She summarized                                                               
the  proposal,  stating  that  the   ARC  thinks  that  the  TVEP                                                               
resources  are a  good way  to get  things started  and move  the                                                               
process forward.                                                                                                                
10:29:19 AM                                                                                                                   
REPRESENTATIVE VANCE  said that  she has  a recommendation  for a                                                               
model  program in  Homer.   She  explained  that Kenai  Peninsula                                                               
College  (KPC), through  the University  of  Alaska (UA),  offers                                                               
courses,  deck   hand  experience,  certifications,   and  marine                                                               
electronics.  She added that  the Homer Marine Trades Association                                                               
is sending leaders  in marine fields from the  community into the                                                               
school to expose  students to different marine trades.   She gave                                                               
an example of an electrician  bringing in something that students                                                               
can take apart  and put back together and  explaining to students                                                               
that  they don't  have to  take a  long road  to get  into marine                                                               
trades.  She mentioned Bayweld  Boats, stating it has been making                                                               
quite a  name for itself  "making welding cool again"  and really                                                               
engaging with community members and  partners, such as the UA, to                                                               
interact with high  schools in a direct way.   She explained that                                                               
this  exposes students  to marine  trades in  a way  they haven't                                                               
seen before.   She  said that these  community members  have been                                                               
volunteering their  time so  that it  has not been  as much  of a                                                               
financial burden on the people  who are training.  She summarized                                                               
that  this  might  be  a   good  example  of  how  other  coastal                                                               
communities can further expand awareness of marine training.                                                                    
10:30:56 AM                                                                                                                   
MS.  CULLENBERG  replied  that  she is  very  familiar  with  the                                                               
program in Homer.   She shared that the program  was initiated by                                                               
the  TVEP funding.   She  said that  she thinks  Homer is  a role                                                               
model around the  state, and she understands that  there are many                                                               
coastal communities around Alaska interested  in what is going on                                                               
in Homer.   She  said that what  Representative Vance  said about                                                               
making fishing cool again has a  lot of relevance for the seafood                                                               
processing  industry.    She mentioned  that  Dr.  Larry  LeDoux,                                                               
Superintendent of Schools in Kodiak,  met with several processing                                                               
companies a  couple of  years ago  and noted  that 75  percent of                                                               
kids that  graduate from  Kodiak high school  do not  receive any                                                               
further educational training beyond high  school.  She noted that                                                               
this is  a strong population  that could potentially work  in the                                                               
six seafood plants  that are based in Kodiak.   She restated that                                                               
none  of  the   seafood  processing  plants  in   Kodiak  have  a                                                               
relationship with  the high  school.  She  said that  "there's no                                                               
pipeline,  there's no  internship program,"  processing companies                                                               
don't really know  how to reach out to students,  and they do not                                                               
think their  occupation is cool.   She  said she thinks  there is                                                               
tremendous  room to  grow in  Kodiak by  creating a  pipeline and                                                               
recognizing that  the processing  plants can be  very cool.   She                                                               
then said that Homer really has  done a great job addressing many                                                               
of these issues.                                                                                                                
10:32:22 AM                                                                                                                   
CHAIR  STUTES asked  if  the increase  of  0.01 percent  employee                                                               
contribution would mean that employees are paying a higher tax.                                                                 
10:32:40 AM                                                                                                                   
MS. CULLENBERG responded  that workers would not  be paying more;                                                               
a larger part of their contribution  overall would go to the TPEV                                                               
fund.   In response  to a follow-up  question from  Chair Stutes,                                                               
she offered her understanding following  a conversation with DLWD                                                               
that the unemployment fund is  well capitalized, and the increase                                                               
should not  result in loss to  workers.  She reiterated  that the                                                               
percentage would increase from 0.15 to 0.16.                                                                                    
10:33:43 AM                                                                                                                   
CHAIR STUTES  confirmed that  the change  would not  increase the                                                               
amount  being  contributed  by the  employee  but  would  instead                                                               
redistribute 0.01 percent.                                                                                                      
10:34:00 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS  asked for clarification  that this                                                               
is not an additive change, but a redistributive one.                                                                            
10:34:16 AM                                                                                                                   
MS. CULLENBERG responded that it is  both.  She continued that it                                                               
is  adding  to the  TVEP  fund  and redistributing  the  employee                                                               
contribution  fund.    She  offered  her  understanding  that  an                                                               
employee   contributes   0.5   percent  of   his/her   wages   to                                                               
unemployment  insurance, 0.16  percent  of  that contribution  is                                                               
distributed to the  TVEP fund.  An increase from  0.16 percent to                                                               
0.17 percent would change how the employee contribution is used.                                                                
10:34:57 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS asked whether  this was, in effect,                                                               
a redistribution  from an over  capitalized unemployment  fund to                                                               
the TVEP and whether this marginal  increase to the TVEP would be                                                               
going toward seafood processing and workforce development.                                                                      
10:35:12 AM                                                                                                                   
MS.  CULLENBERG responded  that she  is not  the one  to say  the                                                               
unemployment fund is  over capitalized, but that is  what she had                                                               
been told.  She then  said that Representative Kreiss-Tomkins was                                                               
correct  that that  is the  general theory.   She  added that  it                                                               
depends  on  wages,   but  recently  that  would   amount  to  an                                                               
additional $700,000 being directed to the training fund.                                                                        
10:35:32 AM                                                                                                                   
CHAIR STUTES thanked the presenters from the ARC.                                                                               
10:35:49 AM                                                                                                                   
The committee took an at-ease from 10:35 a.m. to 10:40 a.m.                                                                     
^PRESENTATION: COMMERCIAL FISHERIES ENTRY COMMISSION                                                                            
      PRESENTATION: COMMERCIAL FISHERIES ENTRY COMMISSION                                                                   
10:40:58 AM                                                                                                                   
CHAIR STUTES announced that the  final order of business would be                                                               
a  presentation  by  the Commercial  Fisheries  Entry  Commission                                                               
10:42:16 AM                                                                                                                   
FATE PUTMAN, Commissioner,  Commercial Fisheries Entry Commission                                                               
(CFEC), co-offered an update on the  CFEC.  He explained that Jon                                                               
Haghayeghi was  the new  executive director  at the  CFEC, having                                                               
only been  there six months.   He said that Dr.  Haghayeghi has a                                                               
Bachelor  of  Economics and  Master  of  Economics from  Southern                                                               
Methodist  University (SMU)  and  a Doctorate  in Economics  from                                                               
Claremont Graduate University (CGU).   Mr. Putman stated that the                                                               
CFEC is focused  on economics.  He explained that  the mission at                                                               
the CFEC,  as an  agency, is to  prevent economic  distress among                                                               
commercial  fisherman,  which  it is  accomplishing  while  going                                                               
through the process of adjudicating permits.                                                                                    
10:43:08 AM                                                                                                                   
MR. PUTMAN,  referencing slide 1  of the  PowerPoint presentation                                                               
[hardcopy included in the committee  packet], pointed out some of                                                               
the things that are accomplished by  the CFEC.  He explained that                                                               
there are  over 200 open access  fisheries as well as  66 limited                                                               
entry fisheries  in Alaska.   The CFEC monitors  these fisheries,                                                               
adjudicates the permits, and sets  up the rules for who qualifies                                                               
for permits  depending on  participation and  economic dependence                                                               
on a  fishery.  He said  that the adjudication permits  often end                                                               
up in front  of the CFEC adjudication panels where  they are then                                                               
sent  to  the  commissioners,  followed by  the  Alaska  Superior                                                               
Court,  and finally  the Alaska  Supreme Court.   He  stated that                                                               
these are  just some of the  things the CFEC does  to enforce the                                                               
requirements set  up for fisheries.   He explained that  the CFEC                                                               
also enforces the statutory  requirements governing emergency and                                                               
transfer permits,  and once permits  are issued, it  monitors the                                                               
emergency  transfer requests  as well  as the  permanent transfer                                                               
requests.   He stated that permits  are not allowed to  be leased                                                               
or mortgaged and  must be transferred freely  between parties, so                                                               
the CFEC ensures this happens.   He said that the CFEC also asses                                                               
demerit  points, which  is  something it  is  very interested  in                                                               
MR.  PUTMAN  explained  that  approximately  20  years  ago,  the                                                               
legislature gave CFEC the power  to look at suspending permits of                                                               
people who are frequent  violators.  He went on to  say that at a                                                               
later point in time, the CFEC  would like to discuss an expansion                                                               
of that power; currently it  is limited to salmon fisheries only.                                                               
As a result, suspended violators  can fish in a different fishery                                                               
even if  they have been  suspended in  the salmon fisheries.   He                                                               
said that  the CFEC  also works  on implementing  regulations; it                                                               
has several packages coming through,  including the demerit point                                                               
system, which has  not had a regulation  package in approximately                                                               
20  years.    He said  that  the  CFEC  also  provides a  lot  of                                                               
information  on  the health  of  fisheries  to different  fishery                                                               
groups in Alaska.                                                                                                               
10:45:12 AM                                                                                                                   
JON  HAGHEYEGHI, PhD,  Executive  Director, Commercial  Fisheries                                                               
Entry  Commission (CFEC),  continued the  PowerPoint presentation                                                               
begun by  Mr. Putman.  Referencing  slide 2, he began  by talking                                                               
briefly about  the basics  of the  CFEC.   He explained  that the                                                               
CFEC is  a quasi-judicial agency  with 21 staff members  that are                                                               
split   into   four   interdependent  sections,   which   include                                                               
Adjudications,  Research, Licensing,  and  Data  Processing.   He                                                               
said that in  fiscal year 2019 (FY 19), the  CFEC generated $7.44                                                               
million in revenue,  of which $3.13 million was  allocated to the                                                               
CFEC  annual operating  budget.   He  said  that $321,105  passed                                                               
through the CFEC to the Fisherman's  Fund.  In addition, the CFEC                                                               
receipts provided  the following  surplus contributions  in 2019:                                                               
$4  million to  the  Division of  Commercial Fisheries  operating                                                               
budget, $236,400 to the Alaska  Department of Fish & Game (ADF&G)                                                               
capital  projects,  and  $272,100   to  Department  of  Commerce,                                                               
Community & Economic Development (DCCED) capital projects.                                                                      
10:46:35 AM                                                                                                                   
DR. HAGHAYEGHI  moved on  to slide 3,  Performance Outcomes.   He                                                               
talked about how  the CFEC has a six-member  licensing staff that                                                               
provided  service to  more than  18,000  commercial fishermen  in                                                               
2019.  The  CFEC licensing team issued  17,339 commercial fishing                                                               
permits,  8,806  vessel  licenses,  and  processed  1,884  permit                                                               
transfers in  2019.   He said  the CFEC  data processing  team is                                                               
continuing to  improve its online  renewal system,  limited entry                                                               
online network (LEON).   As of 2019, 60 percent  of renewals were                                                               
completed  online using  the LEON,  and that  trend continues  to                                                               
grow.   He said  that the data  processing team  refreshed agency                                                               
computer hardware that was over eight  years old.  He stated that                                                               
the adjudication section had 32  new cases, held 29 hearings, and                                                               
issued 25  decisions.  The  CFEC research section  produced eight                                                               
research publications  as well as  several internal  and external                                                               
DR. HAGHAYEGHI  explained that administratively, the  CFEC worked                                                               
to  be efficient  with resource  allocation.   In 2019,  the CFEC                                                               
migrated  to  Microsoft  Office 365  and  adopted  the  statewide                                                               
payroll system,  Employee Self Service  (ESS).  He said  that the                                                               
CFEC collaborated with  the CGU to address  Payment Card Industry                                                               
(PCI) compliance, to ensure that  fishermen can make their credit                                                               
card payments.  The CFEC  launched a large-scale digital scanning                                                               
project to  back up all  the active licensing files;  the project                                                               
is  approximately  20  percent  complete.    He  summarized  that                                                               
throughout 2019, the CFEC worked  to ensure timely responses to a                                                               
range of information requests.                                                                                                  
10:48:23 AM                                                                                                                   
REPRESENTATIVE KOPP  commended the  CFEC on a  specific emergency                                                               
transfer it assisted  him with during the  special session, which                                                               
called fishermen back from Bristol  Bay to the legislature during                                                               
the  peak of  the  salmon  run.   He  explained  that the  entire                                                               
transfer process took just over 24  hours, from the time he first                                                               
spoke  with the  CFEC  on the  phone  to the  time  the boat  was                                                               
fishing again.   He expressed his  belief that the work  the CFEC                                                               
does profoundly  impacts people's lives,  including his own.   He                                                               
stated that  he was impressed  with the CFEC's  responsiveness at                                                               
the time and wanted that stated for the record.                                                                                 
10:49:20 AM                                                                                                                   
MR. PUTMAN commented  that the CFEC does its best  to ensure that                                                               
nets are in the water and fishermen are fishing.                                                                                
10:49:37 AM                                                                                                                   
DALE KELLY,  Commissioner, Commercial Fisheries  Entry Commission                                                               
(CFEC),  continued  the  PowerPoint  presentation  begun  by  Mr.                                                               
Putman  and Dr.  Haghayeghi.   Referencing slide  4, she  gave an                                                               
overview  of  the  adjudications  process   at  the  CFEC.    She                                                               
explained that any of the cases  at the CFEC fall into three main                                                               
categories:   contested applications  for limited  entry permits,                                                               
permanent or  emergency transfers, and  a wide variety  of cases.                                                               
Depending on  the case involved,  up to three  different sections                                                               
of  the  CFEC may  handle  the  case.    She explained  that  the                                                               
licensing section may  be involved in the  permanent or emergency                                                               
transfers.   The statutes and regulations  that determine whether                                                               
transfers are approved are strictly  laid out for the CFEC; there                                                               
is no leeway for judgement calls.                                                                                               
MS. KELLY  explained that  if a transfer  is denied,  a fisherman                                                               
can  appeal the  decision  to the  adjudications  section of  the                                                               
CFEC, which typically conducts a hearing and issues a decision.                                                                 
She   pointed  out   that  the   decision,  if   denied  by   the                                                               
adjudications   section,  can   be   further   appealed  to   the                                                               
commissioners.   She explained that the  adjudications section of                                                               
the CFEC  has a broader  look at the  transfer; it looks  at case                                                               
law  and has  45 years  of  agency precedent.   The  commissioner                                                               
section  has an  additional layer  to  the process  where it  can                                                               
review policies and  decide within the bounds of  the law whether                                                               
to approve the  transfers or not.  She  continued that throughout                                                               
the  years,  the  CFEC  has issued  decisions  on  nearly  23,000                                                               
applications  for limited  entry  permits;  the process  involved                                                               
many  appeals  that  were  adjudicated.      A  total  of  16,723                                                               
transferable  and  non-transferable  permits  have  been  issued,                                                               
nearly  6,000 have  been  denied,  and 94  were  withdrawn.   She                                                               
stated  that   in  2019  specifically,  the   CFEC  issued  final                                                               
decisions on 11 of 13 pending permit applications.                                                                              
10:51:59 AM                                                                                                                   
CHAIR STUTES interjected that she  would like to congratulate the                                                               
CFEC on  the progress that it  has made.  She  commented that she                                                               
has  been involved  in the  process for  the past  six years  and                                                               
wants to  personally thank the  CFEC for the  11 out of  13 cases                                                               
that were adjudicated.                                                                                                          
MS. KELLY offered her thanks to Chair Stutes.                                                                                   
10:52:19 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  also expressed  appreciation  for                                                               
the CFEC.  He remarked that  he has been around these cases since                                                               
2012, and he  wasn't sure what the appropriate  metaphor was, but                                                               
they have been the "stickiest gum  on the wall that couldn't seem                                                               
to get  peeled off."   He  added that  he is  excited to  see the                                                               
progress now that it is down to the last two cases.                                                                             
10:52:46 AM                                                                                                                   
CHAIR STUTES  remarked that  she would even  venture to  say that                                                               
she is impressed with the CFEC and its new commissioner.                                                                        
10:52:57 AM                                                                                                                   
MS.  KELLY  pointed  out  that  there  are  several  reasons  why                                                               
decisions take  a lot of  time.  Most  of the cases  were decades                                                               
old and  involved complex  issues and volumes  of evidence.   She                                                               
explained that these  were not easy cases and every  case had the                                                               
potential to  disrupt the entire  fishery if it  were overturned,                                                               
which could have potentially  devastating impacts to individuals,                                                               
communities,  and  fisheries.   Therefore,  due  diligence was  a                                                               
major  part of  the  process,  which the  CFEC  and the  previous                                                               
commissioners took  very seriously.   She  remarked that  she was                                                               
happy to report that the CFEC  was moving along with these cases,                                                               
but she also understands  now why they can take a  lot of time to                                                               
MS. KELLY explained  that all decisions made  are evaluated under                                                               
an array of  laws, regulations, legal precedent, and  45 years of                                                               
administrative  practices employed  at  the CFEC  to ensure  fair                                                               
treatment and due  process for fishermen.  She  expressed that it                                                               
is essential to have multiple layers  in the process to make good                                                               
decisions.   She added that  decisions made  by the CFEC  are not                                                               
necessarily  final;  fishermen   have  other  administrative  and                                                               
judicial  remedies  that  can  be  employed  if  they  receive  a                                                               
negative result.   For example, they could appeal to  the CFEC to                                                               
reconsider, take the case to  the Alaska Superior Court, or both.                                                               
She  noted  that  86  decisions   have  been  made  on  the  CFEC                                                               
practices, many of  them on the application  cases throughout the                                                               
years.   She suggested that  it is an ongoing  litigious process,                                                               
adding that  she would  hesitate to  say it is  done yet  but the                                                               
CFEC is working its way there.   Referencing slide 4, she pointed                                                               
out the  cases that had been  solved in 2019, giving  examples of                                                               
the involved  fisheries.   She explained  that the  two remaining                                                               
cases involve Southeast crab.                                                                                                   
10:55:02 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  asked  whether   any  of  the  11                                                               
resolved cases have been appealed to the Alaska Superior Court.                                                                 
MS. KELLY responded that some of  the cases were still within the                                                               
timeline  that  they  could  be   appealed,  but  to  the  CFEC's                                                               
knowledge  none of  them have  been.   She  added that  fishermen                                                               
could  appeal to  the CFEC  before going  to the  Alaska Superior                                                               
Court,  so  it  was  still  working through  the  process.    She                                                               
expressed that  she felt it  is important to understand  that the                                                               
fishermen  still have  all appeal  options available  to them  at                                                               
this time.                                                                                                                      
MS.  KELLY  announced  that  the CFEC  also  made  30  additional                                                               
decisions  on   the  commission  itself,  on   transfers,  permit                                                               
forfeitures,  demerits, liens,  and  refunds.   In addition,  the                                                               
CFEC  completed a  project within  the adjudication  section that                                                               
resulted in  65 refunds and waivers  for a unique situation  in a                                                               
fishery that had a failure in 2018.                                                                                             
10:56:04 AM                                                                                                                   
CHAIR STUTES expressed  that she was not only  impressed with the                                                               
CFEC's   ability  to   resolve   outstanding   cases,  she   also                                                               
appreciated its utilization of time while presenting.                                                                           
10:56:18 AM                                                                                                                   
MR. PUTMAN, referencing slide 5,  touched on the question of what                                                               
the ideal number  of permits in a fishery is-  an important issue                                                               
for  the  CFEC,   and  one  that  has  not  been   looked  at  in                                                               
approximately 15  years.   He explained  that permits  are issued                                                               
based upon  participation, which  is often  much larger  than the                                                               
ideal  number, referred  to as  optimum numbers  in the  statute.                                                               
The legislature has amended the  statutes over time, in order for                                                               
the CFEC to request a range of  numbers.  He stated that the CFEC                                                               
is assisted  by the ADF&G,  giving the  example of how  many nets                                                               
the  ADF&G  need in  the  water  to  avoid over-escapement.    He                                                               
explained  that  optimum  numbers  are  acquired  scientifically,                                                               
which  is  one of  the  reasons  the  CFEC  has a  new  executive                                                               
director  with  a  Doctorate  in Economics  and  a  new  research                                                               
section leader with a Master of Fisheries Economics.                                                                            
MR. PUTMAN  said that the  first location  in which the  CFEC has                                                               
decided to launch  a study is the Cook Inlet  setnet fishery.  He                                                               
explained  that the  CFEC has  been looking  at that  fishery for                                                               
approximately 10  years and has a  lot of data, such  as how much                                                               
money the  fishermen make and  how much their permits  are worth.                                                               
The  CFEC hopes  to find  out  more about  the fishermen's  costs                                                               
incurred while  running a  setnet fishery,  through surveys.   He                                                               
said that the study won't necessarily  lead to a reduction in the                                                               
number of permits issued but might  show how to get to an optimum                                                               
number.   The CFEC is  required to study 63  remaining fisheries;                                                               
it has completed  three so far.  He added  that the new executive                                                               
director is  helping with a survey  of all Alaska fisheries.   He                                                               
explained that  when a  fisherman fills out  the permit  to apply                                                               
for a fisheries license annually, he/she  will be asked to take a                                                               
survey  regarding  expenses  incurred  in his/her  fishery.    He                                                               
reiterated that the CFEC is  planning on implementing this in all                                                               
63 remaining fisheries to obtain  the ideal number of permits but                                                               
will first be focusing on Cook Inlet.                                                                                           
10:58:31 AM                                                                                                                   
CHAIR  STUTES  thanked  Mr.  Putman and  expressed  that  she  is                                                               
anxious to see the progress on the project.                                                                                     
10:58:42 AM                                                                                                                   
REPRESENTATIVE VANCE  commented that  this study is  taking place                                                               
in her  "backyard," and many  of her constituents  were involved.                                                               
She  asked  Mr.  Putman  what   the  projected  timeline  is  for                                                               
completion of the study.                                                                                                        
10:58:56 AM                                                                                                                   
MR. PUTMAN responded  that this was the first study  for the CFEC                                                               
in 15 years, and  it was just beginning the process  of how to go                                                               
about  it.   He  expressed  that  given  the expertise  the  CFEC                                                               
currently  has in-house,  it would  be  able to  get through  the                                                               
survey portion  of the study  in approximately three months.   He                                                               
added that  there would  still be economic  data to  crunch after                                                               
that, and he estimated that it  would be three to six more months                                                               
after the  survey before the CFEC  could come up with  an optimum                                                               
number for  the Cook  Inlet setnet fishery.   He  summarized that                                                               
the CFEC  is discovering it to  be a long process;  however, they                                                               
are hoping to get the preliminary  data from the study within the                                                               
next  six to  nine months  and work  on a  regulation to  set the                                                               
range of  what the CFEC thinks  the optimum number of  permits in                                                               
Cook Inlet should be.                                                                                                           
10:59:44 AM                                                                                                                   
REPRESENTATIVE  VANCE  suggested  that  her  office  is  open  to                                                               
working with  the CFEC to  have conversations with  fishermen and                                                               
help with the study process.                                                                                                    
MR. PUTMAN thanked Representative Vance.                                                                                        
10:59:58 AM                                                                                                                   
CHAIR STUTES  thanked the AYFS  again for attending  the meeting,                                                               
expressing  that  with the  "graying  of  the fleet"  in  coastal                                                               
communities,  it was  nice to  see so  many people  interested in                                                               
keeping Alaska's  number one industry alive,  healthy, vital, and                                                               
11:00:40 AM                                                                                                                   
There being no  further business before the  committee, the House                                                               
Special  Committee on  Fisheries meeting  was adjourned  at 11:01                                                               

Document Name Date/Time Subjects
CFEC_Fisheries_Committee 1.17.20.pdf HFSH 1/23/2020 10:00:00 AM
CFEC_Fisheries_Committee_Handout 1.17.20.pdf HFSH 1/23/2020 10:00:00 AM
House Fisheries Seafood Workforce Training ARC 01.17.20.pdf HFSH 1/23/2020 10:00:00 AM