02/25/2002 03:52 PM House FSH
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
February 25, 2002
3:52 p.m.
MEMBERS PRESENT
Representative Gary Stevens, Co-Chair
Representative Peggy Wilson, Co-Chair
Representative Drew Scalzi
Representative Fred Dyson
Representative John Coghill
Representative Mary Kapsner
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 368
"An Act authorizing the commissioner of community and economic
development to refinance and extend the term of a fishery
enhancement loan."
- MOVED CSHB 368(FSH) OUT OF COMMITTEE
HOUSE BILL NO. 390
"An Act extending the termination dates of certain activities
and salmon marketing programs of the Alaska Seafood Marketing
Institute and of the salmon marketing tax; expanding the
allowable use of that tax for the salmon marketing programs of
the Alaska Seafood Marketing Institute; relating to the Alaska
Seafood Marketing Institute's salmon marketing committee; and
providing for an effective date."
- MOVED HB 390 OUT OF COMMITTEE
HOUSE BILL NO. 283
"An Act relating to appointments to the Board of Fisheries and
to the ex officio secretary of the Board of Fisheries."
- MOVED CSHB 283(FSH) OUT OF COMMITTEE
HOUSE BILL NO. 284
"An Act relating to participation in matters before the Board of
Fisheries by members of the board; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 368
SHORT TITLE:FISHERY ENHANCEMENT LOANS
SPONSOR(S): REPRESENTATIVE(S)HARRIS
Jrn-Date Jrn-Page Action
02/01/02 2116 (H) READ THE FIRST TIME -
REFERRALS
02/01/02 2116 (H) FSH, RES
02/01/02 2116 (H) REFERRED TO FISHERIES
02/08/02 2192 (H) COSPONSOR(S): WILSON
02/13/02 2257 (H) COSPONSOR(S): MCGUIRE
02/15/02 2292 (H) COSPONSOR(S): KERTTULA
02/25/02 (H) FSH AT 3:30 PM CAPITOL 124
BILL: HB 390
SHORT TITLE:ASMI SALMON MARKETING
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE
Jrn-Date Jrn-Page Action
02/08/02 2181 (H) READ THE FIRST TIME -
REFERRALS
02/08/02 2181 (H) FSH, RES
02/08/02 2181 (H) REFERRED TO FISHERIES
02/25/02 (H) FSH AT 3:30 PM CAPITOL 124
BILL: HB 283
SHORT TITLE:APPOINTMENTS TO BOARD OF FISHERIES
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
01/14/02 1949 (H) PREFILE RELEASED 1/4/02
01/14/02 1949 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1949 (H) FSH, RES
01/14/02 1949 (H) REFERRED TO FISHERIES
01/16/02 1991 (H) COSPONSOR(S): STEVENS
01/30/02 2100 (H) COSPONSOR(S): FATE
02/08/02 2191 (H) COSPONSOR(S): WILSON
02/11/02 (H) FSH AT 3:30 PM CAPITOL 124
02/11/02 (H) Heard & Held
MINUTE(FSH)
02/11/02 (H) MINUTE(FSH)
02/25/02 (H) FSH AT 3:30 PM CAPITOL 124
BILL: HB 284
SHORT TITLE:BOARD OF FISHERIES CONFLICTS OF INTEREST
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
01/14/02 1949 (H) PREFILE RELEASED 1/4/02
01/14/02 1949 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1949 (H) FSH, RES
01/14/02 1949 (H) REFERRED TO FISHERIES
01/16/02 1991 (H) COSPONSOR(S): STEVENS
01/18/02 2014 (H) COSPONSOR(S): HUDSON
01/30/02 2100 (H) COSPONSOR(S): FATE
02/01/02 2127 (H) COSPONSOR(S): LANCASTER
02/08/02 2191 (H) COSPONSOR(S): WILSON
02/11/02 (H) FSH AT 3:30 PM CAPITOL 124
02/11/02 (H) Heard & Held
MINUTE(FSH)
02/25/02 (H) FSH AT 3:30 PM CAPITOL 124
WITNESS REGISTER
PETER FELLMAN, Staff
to Representative John Harris
Alaska State Legislature
Capitol Building, Room 513
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of Representative
Harris, sponsor of HB 368.
GREG WINEGAR, Director
Division of Investments
Department of Community & Economic Development
P.O. Box 34159
Juneau, Alaska 99803-4159
POSITION STATEMENT: Testified on behalf of the department on HB
368.
GERALD (JERRY) McCUNE, Lobbyist
for United Fishermen of Alaska (UFA)
211 Fourth Street, Suite 110
Juneau, Alaska 99801-1143
POSITION STATEMENT: Testified on behalf of the UFA in favor of
HB 368 and HB 390; also testified on HB 283.
JOHN CARTER, Director
Douglas Island Pink & Chum, Incorporated (DIPAC)
3835 Killewich Drive
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of DIPAC in favor of HB
368.
DAVE COBB, Business Manager
Valdez Fisheries Development Association
P.O. Box 125
Valdez, Alaska 99686
POSITION STATEMENT: Testified on behalf of the Valdez Fisheries
Development Association in favor of HB 368.
CHERYL SUTTON
P.O. Box 39214
Ninilchik, Alaska 99369
POSITION STATEMENT: Testified on behalf of herself in support
of HB 368 and HB 390.
ROBERT HEYANO
Bristol Bay Economic Development Corporation (BBEDC)
P.O. Box 1409
Dillingham Alaska 99576
POSITION STATEMENT: Testified on behalf of BBEDC on HB 368;
testified in support of HB 390 and HB 283.
PAUL SHADURA
Kenai Peninsula Fisherman's Association
P.O. Box 1632
Kenai, Alaska 99611
POSITION STATEMENT: Testified on behalf of the Kenai Peninsula
Fisherman's Association in support of HB 368 and HB 390; also
testified on HB 283 in support of the original bill but not
Version L.
SUE ASPELUND, Executive Director
Cordova District Fisherman United (CDFU)
P.O. Box 939
Cordova, Alaska 99574
POSITION STATEMENT: Testified on behalf of CDFU in support of
HB 368 and HB 390.
KATE TESAR, Lobbyist
for Prince William Sound Aquaculture Corporation (PWSAC)
Alaska Service Group
P.O. Box22754
Juneau, Alaska 99802
POSITION STATEMENT: Testified on behalf of PWSAC on HB 368.
CHRIS BERNS
Kodiak Regional Aquaculture Association
P.O. Box 3407
Kodiak, Alaska 99615
POSITION STATEMENT: Testified on behalf of the Kodiak Regional
Aquaculture Association on HB 390 and gave support to HB 368.
VIRGINIA ADAMS
United Salmon Association
P.O. Box 762
Kodiak, Alaska 99615
POSITION STATEMENT: Testified on behalf of the United Salmon
Association on HB 368.
REPRESENTATIVE LESIL McGUIRE
Alaska State Legislature
Capitol Building, Room 418
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of HB 390.
BARBARA BELKNAP, Executive Director
Alaska Seafood Marketing Institute (ASMI)
Department of Community & Economic Development
311 North Franklin, Suite 200
Juneau Alaska 99801-1147
POSITION STATEMENT: Testified on behalf of ASMI in favor of HB
390.
JIM KALLANDER, Vice Chairman
Alaska Seafood Marketing Institute (ASMI)
P.O. Box 2272
Cordova, Alaska 99574
POSITION STATEMENT: Testified in favor of HB 390.
DON JOHNSON
P.O. Box 876
Soldotna, Alaska 99669
POSITION STATEMENT: Testified against HB 390 and HB 283.
FRANK LIBAL
P.O. Box 1071
Homer, Alaska 99635
POSITION STATEMENT: Testified in favor of HB 283.
LANCE NELSON, Assistant Attorney General
Natural Resources Section
Civil Division (Anchorage)
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
POSITION STATEMENT: Testified on HB 283 on behalf of the
department.
NANCY HILLSTRAND
P.O. Box 170
Homer, Alaska 99635
POSITION STATEMENT: Testified on HB 283.
ACTION NARRATIVE
TAPE 02-4, SIDE A
Number 0001
CO-CHAIR PEGGY WILSON called the House Special Committee on
Fisheries meeting to order at 3:52 p.m. Members present at the
call to order were Representatives Scalzi, Coghill, Kapsner,
Kerttula, Stevens, and Wilson. Representative Dyson arrived as
the meeting was in progress.
HB 368-FISHERY ENHANCEMENT LOANS
CO-CHAIR WILSON said the first matter before the committee would
be HOUSE BILL NO. 368, "An Act authorizing the commissioner of
community and economic development to refinance and extend the
term of a fishery enhancement loan." She asked for a motion to
adopt the proposed committee substitute (CS) for the bill.
Number 0158
CO-CHAIR STEVENS moved to adopt the proposed CS, 22-LS1311\F,
Utermohle, 2/22/02, as the working document. There being no
objection, Version F was before the committee.
Number 0185
PETER FELLMAN, Staff to Representative Harris, Alaska State
Legislature, testified before the committee on behalf of
Representative Harris, sponsor. He said the bill was designed
to allow the commissioner of the Department of Community &
Economic Development to restructure loans for hatcheries. He
said the Fisheries Enhancement Revolving Loan Fund has the
ability to reduce interest rates on its loans, but it is not
able to restructure its loans. He said the bill would affect
many communities in the state with small hatcheries. They
currently have loans at 9.5 percent interest. He said with the
ability to restructure, they could possibly get their loans down
to 6 percent interest and enhance their ability to do business,
increase efficiency, and help the overall economies of coastal
Alaska.
MR. FELLMAN told the committee that over 40 percent of the fish
caught in the state are the product of the hatchery system. He
said this fact makes it important to support them by allowing
them to restructure their loans and enjoy lower interest rates.
Number 0400
REPRESENTATIVE KAPSNER asked if the bill had a zero fiscal note.
MR. FELLMAN said the fund takes its operating monies from the
fund itself. He said that it should not have a fiscal impact.
Number 0476
GREG WINEGAR, Director, Division of Investments, Department of
Community & Economic Development, testified before the
committee. He said that his agency administers the Fisheries
Enhancement Revolving Loan Fund that would be affected by the
bill. He said the bill would allow the aquaculture associations
to take advantage of lower interest rates available now. He
said rates were higher when the loans were made, but now they
have dropped significantly. He said the Commercial Fishing
Revolving Loan Fund had a similar provision passed in 1993.
MR. WINEGAR said there would be an impact on the fund because
less interest would be collected, but he said it would have no
impact on the general fund. He said the enhancement fund would
not be adversely affected; it does very well and is self-
sufficient. He said it has not received general fund monies
since 1994. Mr. Winegar characterized the process as very
streamlined and said the fund will not be impacted from an
operations standpoint. He added that no new staff would be
needed.
Number 0612
REPRESENTATIVE SCALZI asked if the savings would be directly
attributed to the common-property fishery.
MR. WINEGAR said that it would probably turn out that way. He
said that each individual aquaculture association would decide
how the savings would be utilized. He said there would be
smaller interest expenses and hatcheries would need less cost
recovery to support the debt.
REPRESENTATIVE SCALZI surmised that there would be more revenue
available for the harvesters.
MR. WINAGER said that Representative Scalzi's statement was
correct.
REPRESENTATIVE SCALZI asked for a figure on the total amount
paid back by aquaculture associations throughout the state.
MR. WINEGAR said the department had loaned out about $114
million and received about $51 million in repayments from the
program.
Number 0704
CO-CHAIR STEVENS asked how many aquaculture associations would
be looking at refinancing their loans and how long it would take
to process those loan packages.
MR. WINEGAR told the committee that there are approximately 12
different borrowers. He said the refinancing could happen
quickly, as long as the loan is in good standing.
Number 0760
REPRESENTATIVE COGHILL referred to paragraph 11 of Version F.
He asked what the criteria would be for a commissioner to extend
the term of the loan.
MR. WINEGAR said that there were no criteria at present. He
said that regulations are an option. He used the commercial
fishing program as an example. Under that program, each
individual case is examined and the term is extended only when a
situation arises in which it is necessary to provide a level of
debt that can be supported by the particular fishery.
Number 0844
GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska
(UFA), testified before the committee. He told the committee
that the UFA supports the bill and said it was important to
commercial fishermen as well as other users of fish resources.
He said hatcheries are economic generators.
Number 0900
JOHN CARTER, Director, Douglas Island Pink & Chum, Incorporated
(DIPAC), testified before the committee. He said he was
speaking on behalf of DIPAC and that he was also "trying to
speak for the other hatcheries" that were not represented at the
meeting. He urged the committee to pass the bill. Mr. Carter
said the private nonprofit hatchery program was created by the
legislature to replace the Fisheries Rehabilitation, Enhancement
and Development Division (FRED). This division operated through
annual appropriations to the Alaska Department of Fish & Game.
He said the idea of the private nonprofit (PNP) was created as a
"user-pay entity." To get the program started, the state gifted
some existing hatcheries to regional corporations, but primarily
it created the Fishery Enhancement Revolving Loan Fund. He said
this fund, along with a tax on commercial fishermen, was to
provide for construction and operational funds as the
enhancement program developed.
MR. CARTER said that 25 years and a billion dollars' worth of
fish later, PNP hatchery programs are described as some of the
best in North America. He described the concept of a PNP as a
"public trust." He said that the facilities are run much like a
public utility. He said that DIPAC is asking that it be able to
refinance its debt, and he said it is going on in other
businesses across the country. Refinancing will strengthen the
hatcheries' financial position, make them better able to pay
their debt, and make them more able to continue their job of
providing fish to the commercial and sport fishers across the
state, said Mr. Carter. He said that this will result in a
slower payment of principal and interest to the state, but he
added that loan demand has slowed dramatically, so the fund will
still be financially sound.
Number 1102
REPRESENTATIVE COGHILL said that he did not have a problem with
the refinancing, but he added that he was still hung up on the
criteria. He asked Mr. Carter how he might describe "financial
hardship." He said insolvency can be the result of bad
management or a poor fishing year. He asked "how it might look
going to the revolving fund" from Mr. Carter's perspective.
MR. CARTER said getting the loan is a very involved process in
which a hatchery must show how many fish are being produced, how
much it costs to produce the fish, and what the market is. He
said the department reviews the types of job the hatcheries are
doing. He said that he imagined the state would look out for
its interest in the total picture.
REPRESENTATIVE COGHILL said he agreed with Mr. Carter, and he
added that perhaps the language in the bill is poor because it
does not address any of what Mr. Carter had just described.
Number 1255
REPRESENTATIVE KERTTULA posited that if a hatchery were asking
for an extension, it would have to be in good standing with the
department or the loan could be pulled. She said all of the
other rules would apply.
MR. WINAGER said Representative Kerttula was correct. He said
the department would look at many factors; the hatchery would
have to be in good standing, and in a case where the department
did not believe in a hatchery's success, the department would
most likely deny an extension.
REPRESENTATIVE KERTTULA asked if, in a case where a hatchery was
not in good standing, it would receive an extension.
MR. WINAGER said that a hatchery in poor standing would receive
neither the extension nor the interest-rate reduction.
CO-CHAIR STEVENS asked what the difference was between the
proposed CS and the original bill.
Number 1370
MR. WINAGER said there are some reporting requirements in the
proposed CS whereby the department would report on changes made
to loan terms. He said it also ties the language together and
clarifies the extension provision.
Number 1420
DAVE COBB, Business Manager, Valdez Fisheries Development
Association, testified via teleconference. He said the bill is
needed by the commercial fishing industry and the hatchery
system to remain competitive in today's global fishing
environment. Refinancing at the prevailing interest rate will
allow most hatcheries to reduce their annual loan payment, as
well as their operating costs. He said a reduction of the cost
to the Valdez Fisheries Development Association will result in
more fish for commercial fishermen of the area because cost
recovery needs will go down.
MR. COBB said that while the bill is very important to the state
hatchery system, it is only one of many changes that must occur
if commercial fishing in Alaska is to survive. He said he
believes the hatchery system developed by the legislature in
1974 has met or exceeded the expectations placed on the program,
however, the competitive playing field has changed from one
where Alaska has had a strong market presence, to one of massive
global competition, with the dumping of products at less than
the cost of production. He said the state and industry must
change to survive in the competitive marketplace. He said that
this bill begins the process of change.
Number 1545
CHERYL SUTTON testified before the committee. She said she
strongly supports the bill. She characterized it as "one more
tool in that box of tools we need to try to get a grip on what
is going on in our industry." She said that these are secured
loans and that the division would be prohibited from refinancing
loans to those who are not in good standing.
MS. SUTTON said this bill allows businesses to refinance and
that she does not know why that should be prohibited. She
strongly urged support of the bill. She said, "This is common
property. It helps everyone from subsistence, personal use,
sport fisheries, charter operators, to commercial fishermen."
Number 1649
ROBERT HEYANO, Bristol Bay Economic Development Corporation
(BBEDC), - a Community Development Quota (CDQ) group
representing 17 communities in Bristol Bay - testified via
teleconference. He said the BBEDC supports the bill in general.
He said that his group would like to see some added language
that would require hatcheries to carry out a socioeconomic study
of the impact of their operation on communities and the resource
before they are allowed to expand production from their current
rate.
Number 1731
PAUL SHADURA, Kenai Peninsula Fisherman's Association, testified
via teleconference. He said that he was also a board member of
the Cook Inlet Aquaculture Association, a group that helps the
largest population base of communities in Alaska. He said the
groups he represents support the bill. He said it is important
to maintain an aquaculture association that gives opportunities
to all users within the area.
MR. SHADURA told the committee that the ability to restructure
is another tool that can help, and characterized the bill as a
way to look toward the future. He said that the Cook Inlet
Aquaculture Association has worked hard to secure funding at the
national level, but said it does not seem enough to continue in
the future. He said this bill is not a re-appropriation, but
rather a way to revitalize the aquaculture industry.
Number 1845
SUE ASPELUND, Executive Director, Cordova District Fisherman
United (CDFU), testified via teleconference. She gave many
examples of how the Prince William Sound Aquaculture Corporation
(PWSAC) has positively affected the economy of the Prince
William Sound area. One of the examples given was $109 million
in total output and 1,280 jobs. She said that most of the
benefit goes to commercial fishermen. She said that from 1990
to 2000, PWSAC salmon were worth over half a billion dollars to
commercial processors. She said the value of the sport fish
harvest in 2000 was $2 million and it supported 54 jobs in the
area. She also said that PWSAC contributed over 140,000 sockeye
salmon to Copper River subsistence and personal users.
MS. ASPELUND said:
These facts provide a graphic demonstration of PWSAC's
importance as a regional and statewide economic
engine. However, the changing global marketplace and
a faltering Japanese economy have resulted in lower
ex-vessel values, which require Alaska's hatcheries to
take greater percentages of production in cost
recovery in order to operate and make their loan
payments. We need the ability to refinance hatchery
debt to take advantage of decreased interest rates as
provided for in this bill. This will result in the
immediate ability of hatcheries to provide more fish
into the common-property harvest, getting more fish
into the nets of commercial fishermen, as well as to
sport, commercial-sport, personal use, and subsistence
users of the resource. This legislation makes good
business sense for Alaska.
Number 2045
REPRESENTATIVE KAPSNER said she wanted to follow up on Robert
Heyano's question on the matter of a socioeconomic study on the
impact of hatchery expansion. She called on Kate Tesar.
Number 2068
KATE TESAR, Lobbyist for Prince William Sound Aquaculture
Corporation (PWSAC), testified before the committee. She told
the committee that most nonprofit associations have produced, or
are in the process of producing, reports regarding the economic
impacts of the hatcheries. She said the new reports could
include some of the information talked about by Mr. Heyano.
REPRESENTATIVE KERTTULA asked Ms. Tesar if she felt confident
that the economic impact studies would happen.
MS. TESAR said the economic impacts are constantly talked about
and "it is something that is being looked at right now."
REPRESENTATIVE KAPSNER asked if the studies were made available
to the public. She asked if the BBEDC could get a copy.
MS. TESAR said that she assumed so. She said it would be up to
the corporations to release them, but said she saw no problem in
sending a copy to BBEDC.
REPRESENTATIVE COGHILL asked if a 30-year loan from other
sources outside of the revolving loan fund is that far out of
reach for hatcheries.
MS. TESAR said that she was not able to address that issue. She
said the idea behind the bill was to allow the associations to
take advantage of the low interest rates happening worldwide.
She said that she could not speak to what other lending
institutions are doing. She added that the whole reason behind
the revolving loan fund was because the associations had nowhere
else to go for funds.
Number 2331
CHRIS BERNS, Kodiak Regional Aquaculture Association, testified
via teleconference. He said the association supports debt
restructuring for hatcheries. He said his group has never taken
a loan out. His group has been financed by a one-time cost
recovery in 1989 when the Kodiak fishery was shut down as a
result of the Exxon Valdez oil spill. He said that his group
thinks it would be fair to restructure for the same reasons that
other testifiers had already mentioned.
Number 2379
VIRGINIA ADAMS, United Salmon Association, testified via
teleconference. She said her association represents a
significant percentage of salmon harvesters in Kodiak and many
other areas around the state. She said the association supports
the bill. She said the bill makes good economic "common sense"
in difficult financial times when many in the legislature are
striving for such common sense.
REPRESENTATIVE KAPSNER asked Robert Heyano if the earlier
discussion was a satisfactory answer to his question about a
study on the socioeconomic impacts of hatcheries. She asked if
he would like the Department of Environmental Conservation and
the Alaska Department of Fish & Game as well as the industry to
look into them.
Number 2461
ROBERT HEYANO said that he would like to see a study on the
impact of hatchery fish to "other fisheries." He said there is
a feeling among Western Alaska fishermen that they have lost
their chum salmon market to hatchery fish, and that hatchery fry
are somewhat superior to wild fry as they compete in the ocean
for survival. He said that he would like to see those concerns
addressed in a socioeconomic impact study.
Number 2515
MS. TESAR said that Mr. Heyano's question was regarding the
socioeconomic impacts of what is happening in the ocean. She
said that the issue is much greater than one that could be
answered at a local hatchery level. Ms. Tesar said that these
questions are being taken up in studies at the federal level.
She said that this issue should not be put on small, nonprofit
hatcheries that are "struggling as everyone is in these times of
lower fish prices."
Number 2567
REPRESENTATIVE KERTTULA said that she felt the need for
hatcheries but said she also felt concern for those in Western
Alaska. She asked Ms. Tesar to work with Representative
Kapsner's office so that the Representative could be a conduit
of information to her constituents in Western Alaska with
concerns on the matter.
Number 2606
REPRESENTATIVE KAPSNER said she would like to know what the
bill's sponsor would think of an amendment to allow a study.
Number 2629
MR. FELLMAN said that Representative Harris is very concerned
about the industry and its survival. He said he thought
Representative Harris's position would be that "anything that
would slow the bill down would be unacceptable."
REPRESENTATIVE SCALZI said he could identify with Mr. Heyano's
concern about the carrying capacity of the ocean. He said that
the discussion belongs in the [House Resources Standing
Committee], but said that he would not include that amendment
with this bill since it is an "economic" bill. He said that the
bill is to take advantage of low loan prices, and that to mix it
up with what is happening in the oceans would be a "disconnect."
Number 2698
REPRESENTATIVE COGHILL agreed with Representative Scalzi's
comments.
REPRESENTATIVE COGHILL made a motion to move CSHB 368, version
22-LS1311\F, Utermohle, 2/22/02, out of committee.
REPRESENTATIVE KAPSNER said that she appreciated the discussion
that had taken place on the matter of a study amendment. She
said she did not think the bill should be burdened with such an
amendment but said she would be looking at a stand-alone bill in
the next session.
Number 2763
CO-CHAIR WILSON said that the issue of a study was a legitimate
concern. She asked if there was objection to moving the bill
out of committee.
There being no objection, CSHB 368(FSH) was moved out of the
House Special Committee on Fisheries.
HB 390-ASMI SALMON MARKETING
CO-CHAIR WILSON said that the next matter before the committee
would be HOUSE BILL NO. 390, "An Act extending the termination
dates of certain activities and salmon marketing programs of the
Alaska Seafood Marketing Institute and of the salmon marketing
tax; expanding the allowable use of that tax for the salmon
marketing programs of the Alaska Seafood Marketing Institute;
relating to the Alaska Seafood Marketing Institute's salmon
marketing committee; and providing for an effective date."
[There was an unnecessary motion to put the bill before the
committee.]
Number 2795
REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, sponsor
of HB 390, testified before the committee. She characterized HB
390 as relatively simple and said it was a technical bill more
than anything. She said it contains one substantive policy
decision but, primarily it extends the termination date for
certain activities of salmon marketing. It extends the ability
of the Alaska Seafood Marketing Institute (ASMI) to collect a 1
percent tax and use that money to market seafood.
REPRESENTATIVE McGUIRE said that the substantive change in the
bill was the removal of the word "domestic" from page 2, line
23, [paragraph] (9).
TAPE 02-4, SIDE B
REPRESENTATIVE McGUIRE made reference to her trip to Chile.
[This trip was made in November 2001. Representatives McGuire,
Coghill, and Scalzi as well as Mr. Paul Shadura were a few of
the industry members and policymakers who attended.] She said
that if the legislature was going to give power to a board, "We
ought to give them as many tools as we can in their tool belt,
and not try to micromanage their activities." She said the
legislature has a great deal of issues to work on and
micromanaging ASMI's marketing practices is not one of them.
She said that HB 390 is a technical bill that would extend, for
five years, the ability to collect a 1 percent tax and use it
for marketing purposes.
Number 2763
BARBARA BELKNAP, Executive Director, Alaska Seafood Marketing
Institute, Department of Community & Economic Development,
testified before the committee. She said she supported HB 390
and thanked Representative McGuire for bringing it forward.
REPRESENTATIVE COGHILL asked Ms. Belknap if she envisioned a
"shared marketing that could be a possible limitation if we
don't take 'domestic' out." He clarified by asking if she
thought of the "'domestic' language as being some degree of
hindrance."
MS. BELKNAP said that when the tax was instituted in 1993, the
domestic market was restricted in order to develop the domestic
market for Alaska salmon. She characterized it as a "developing
market." She said taking the domestic restriction out would
give ASMI more latitude. She said that it would allow ASMI to
gain federal money for oversea marketing and also would
facilitate ASMI's ability to decide where best to market. Ms.
Belknap said she did not believe the board would allow the U.S.
market to be "slighted in the least."
Number 2693
REPRESENTATIVE COGHILL said that when he went to Chile to view
its farmed salmon operations, he was told that the United
States' market was second only to Japan's. He said that it is
important to market in Japan but it is important not to ignore
the American market.
Number 2676
REPRESENTATIVE DYSON said there was no "ignore" in the bill.
REPRESENTATIVE COGHILL agreed but added that he "just wanted to
have that discussion of getting beyond that to make sure we
don't ignore it."
Number 2653
REPRESENTATIVE DYSON made a motion to move HB 390 out of
committee with individual recommendations.
CHERYL SUTTON testified before the committee. She said that
she'd authored "the bill" when she worked in the legislature in
1993. She said that at the time there was a domestic marketing
crisis. Ms. Sutton said there was a lot of federal money at the
time, and that the legislature "had not totally whacked us at
that point at ASMI." She added that she had been on the ASMI
board for seven or eight years herself. She said she believes
that micromanaging the ASMI marketing program is wrong. She
said that if this provides the latitude ASMI needs to determine
where best to market, "go for it." Ms. Sutton pointed out that
the "tax theme" seems to be something that commercial fishermen
are stepping forward with. She said they are not asking for a
lot of money from the state. She encouraged passage of the bill
to let ASMI decide how to spend the money.
Number 2575
CHRIS BERNS, Kodiak Regional Aquaculture Association, testified
via teleconference. He said he is a commercial fisherman who
has paid the 1 percent ASMI tax since 1993, as has his wife, who
also owns a salmon fishing business. He said that the tax was
marketed to Alaskan fishermen to be used in the domestic market.
Mr. Berns said the U.S. is probably a healthier market than
Japan for a lot of Alaskan seafood products. He stated his
total opposition to removing "domestic" from the language of the
law. Mr. Berns said that the 1 percent tax had a "sunset on it
and this bill is going to extend the sunset one more time." He
said "nothing sunsets," and that he is starting to realize that
fact. He said 1 percent of gross receipts is a substantial
amount of money to his family because he and his wife own
separate businesses. He said he does not want to see the money
spent overseas because he feels the market is in the United
States. He said he was upset about the "carte blanche" approach
and misapplication of the 1 percent tax. Mr. Berns told the
committee that there are many people upset with ASMI in general.
He expressed his support of ASMI but said he would like to see
it produce some quantifiable results.
Number 2429
SUE ASPELUND, Cordova District Fishermen United (CDFU),
testified via teleconference. She said that CDFU has been
involved in the successful promotion of Copper River salmon, and
therefore they feel qualified to comment on the "absolute
importance of seafood marketing in Alaska." She said the CDFU
is in full support of the 1 percent salmon assessment
reauthorization as well as the lifting of the domestic salmon
marketing restriction. She said this would allow ASMI to adapt
to changing market conditions.
Number 2398
ROBERT HEYANO, Bristol Bay Economic Development Corporation
(BBEDC), testified via teleconference. He said the BBEDC fully
supports the bill because farmed salmon has taken over its
traditional market. He said that ASMI has been "the first and
only line of defense in this invasion" and that his group
believes ASMI has been doing an excellent job in marketing
Alaska's salmon resources. He said the BBEDC supports the
removal of the domestic restriction.
Number 2340
JIM KALLANDER, Vice Chairman, Alaska Seafood Marketing Institute
(ASMI), testified via teleconference. He gave his wholehearted
support to the renewal of the 1 percent tax. He agreed with Mr.
Heyano's assertion that "it is the only defense we have." He
spoke to Mr. Berns' claim that his prices were going down. Mr.
Kallander said his own prices were going down as well and that
he would not want to see where they would be without ASMI. He
expressed his feeling that the decline in prices had been slowed
[by ASMI].
MR. KALLANDER said some people like Mr. Berns were overly
concerned about the ASMI board taking a "carte blanche" approach
and spending money inappropriately with regard to the "domestic
only clause." He expressed his position that people should not
be concerned that ASMI will take a significant amount of money
out of the domestic program. Rather, ASMI will put monies into
the best prospects, and it will assist in meeting grant
requirements in terms of matching funds.
Number 2254
PAUL SHADURA, Kenai Peninsula Fisherman's Association, testified
via teleconference. He said his organization supports the bill,
but added it wishes that there were more fishermen on the board.
He said the bill was important for the functions of ASMI. He
told the committee that as a businessman, he does not have the
resources or abilities to find markets and be able to utilize
them in the way that ASMI allows him to do. He said that ASMI
facilitates marketing on an individual basis, and he noted the
importance of that.
MR. SHADURA made note that ASMI's domestic programs went hand-
in-hand with the grants offered by the Department of Community &
Economic Development for marketing in individual areas, and he
said he hoped those programs would continue. He said 1 percent
is a small portion to pay, but added that it was a huge amount
to a commercial fisherman at this time.
MR. SHADURA made reference to the fact-finding trip he and
several legislators took. He said he found the amount of money
spent by the countries that farm salmon was in the tens of
millions, unlike the single-digit millions spent by Alaska.
Number 2133
DON JOHNSON testified via teleconference. He stated his
opposition to changing from a domestic marketing direction to an
international one. He said the intent of the previous law had a
domestic focus, and changing to an international focus would be
a new direction. He compared it to "funneling money down a rat
hole." He said he did not believe that the State of Alaska
could slow the meteoric rise of the international farmed salmon
industry and should therefore concentrate on new techniques and
services. He gave the example of "gas guzzlers" in the 1970s
and the efforts to block more gas-efficient imports. He said he
did not support the bill.
Number 2052
GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska
(UFA), testified before the committee. He said the UFA supports
the bill as written. He said he is for keeping the domestic
market but added that there are markets opening up in Asia. He
said France and Germany are buying a great amount of frozen coho
salmon fillets. He said the state has to look at it as a global
economy. There are markets opening up in Europe, but it does
not mean that ASMI would have to spend all of its marketing
money there. He said, "Go where the fish are being sold." He
said the industry must expand markets as far as possible and
also take advantage of markets for natural foods in Europe. He
said it is important not to give up on the domestic market.
Number 1984
MS. BELKNAP told the committee that Rodrigo Infante, General
Manager of Chile's Association of Salmon & Trout Harvesters, had
recently stated that his group was slowing production because of
heavy losses in overproducing. She said that this could lead to
a slight rise in global salmon market prices.
Number 1930
VIRGINIA ADAMS, United Salmon Association, testified via
teleconference. She said her association has gone through
extensive work on the bill in conjunction with the UFA. She
said the United Salmon Association supports the bill, but it is
wholly disappointed - not blaming ASMI - with the marketing
efforts that have been made to promote Alaskan salmon worldwide.
She said there is a tremendous amount of salmon being eaten in
the rest of the United States, but "it is not ours." She said
Alaska is not spending nearly the amount of funds that its
competitors are to market its salmon. She characterized it as a
systemic problem and said that this bill would be a small
attempt to remedy it. She said she would like to see a much
greater effort, as would ASMI, but "hands are all tied by
funding."
Number 1823
REPRESENTATIVE DYSON restated his motion to move the HB 390 out
of committee with individual recommendations and attached fiscal
note. There being no objections, HB 390 was moved out of the
House Special Committee on Fisheries.
HB 283-APPOINTMENTS TO BOARD OF FISHERIES
CO-CHAIR WILSON said that the next matter before the committee
would be HOUSE BILL NO. 283, "An Act relating to appointments to
the Board of Fisheries and to the ex officio secretary of the
Board of Fisheries."
Number 1761
REPRESENTATIVE SCALZI moved to adopt CSHB 283, version 22-
LS1083\L. There being no objection, Version L was before the
committee.
REPRESENTATIVE SCALZI said that the purpose of the bill was to
have designated seats, similar to other resource boards. He
said that potential board members would "have to pass the red-
face test" in front of the legislature to prove their
qualifications to serve. Representative Scalzi said that the
changes in the proposed CS were a result of discussions from the
previous meeting. He mentioned the discussion on a stronger
subsistence representation.
REPRESENTATIVE SCALZI gave a breakdown of the new makeup for the
board in Version L. There would be two members with at least
five years of commercial fishing throughout the state, engaged
in the profession of commercial fishing in the state, and they
would hold commercial fishery entry permits or interim use
permits issued by the Commercial Fisheries Entry Commission
(CFEC). Two members would have at least five year's experience
in sport fishing, personal use fishing, or a commercial-sport
operation, or combined experience in those activities, and would
hold a sport or personal fishing licenses or permits. Two
members would have to be recognized as representative of
subsistence users with at least five years of active
participation in subsistence fishing in the state. He said one
member would be at-large, giving the governor some latitude for
placing a designee on the board.
Number 1595
REPRESENTATIVE SCALZI went through the makeup of five other
boards in the state that deal with resources and gave some
examples. He said that they shared a broad approach, with
designated seats. He said he would like to see more discussion
on the bill but urged it be moved to the House Resources
Standing Committee.
Number 1451
CO-CHAIR STEVENS asked what the thinking was in deleting the
portion that designates the commissioner as the "ex officio
secretary".
REPRESENTATIVE SCALZI said that the deletion would be changed
and apologized for not catching the mistake. He said that one
public member was added and it was not his intent to take the
commissioner out.
Number 1256
PAUL SHADURA, Kenai Peninsula Fisherman's Association, testified
via teleconference. He said his association has come before the
committee "many times" to express its discontent with the Board
of Fisheries process. He said that the board's convoluted
process has destroyed the faith of Alaskan residents. Mr.
Shadura said that the commercial fishing industry has no
advocates, understanding, or justice on the Board of Fisheries.
He told of a "two-week ordeal" with the Board of Fisheries
concerning Cook Inlet issues. He read from his testimony at
that meeting:
I'm here before you now to tell you that the fishermen
in Cook Inlet would like to be able to discuss
solutions instead of being here debating who gets what
and when. That is the reason that we cannot move
forward. We have no regulatory stability. How can we
as a business community plan and develop for the
future if we are constantly re-regulated every year?
What kind of game plan can we design when the rules
are changed constantly? So let us just be honest,
straightforward men and women. Why doesn't your body,
the legislative hand of the state - and as
administrative directors because you're all appointed
by the governor - just say to us, "The State of Alaska
does not want a commercial fishing industry in Cook
Inlet, Alaska" or "The State of Alaska does not want
to allow the commercial fishing industry in Cook Inlet
a viable opportunity to harvest salmon."
MR. SHADURA said that the board answered with actions that
"destabilized and collapsed any hopes for the future." He said
habitat concerns were disregarded, and the local users were
relegated to the "backseat." He asked the committee to support
the fisheries community, residents, and the heritage and
lifestyle that make Alaska and Alaskans unique by supporting HB
283 in its original form. He said that he did not agree with
the proposed CS and that it was not in line with the original
intent.
Number 1107
DON JOHNSON testified via teleconference. He said he did not
support HB 283 because the "quota comparisons" "[smell] like an
apples and oranges case." He said that fisheries are public
trusts, unlike the examples given earlier by Representative
Scalzi. He said it should be handled differently because it is
a public issue. Mr. Johnson said that as far as the knowledge
of board members, he did not have a problem with the current
members' level of knowledge. Mr. Johnson told the committee
that he did not think the process of the board was perfect, but
he said that he had "reasonable faith" in it. He said that the
current statute requires the governor to "select people with a
diversity of interests and difference in points of views." He
said that the bill takes the same consideration into its wording
but also adds a "quota system" that defeats the goal of
diversity. He said that the allocated seats only allow
"basically three" viewpoints. He said he believes AS 16.05.221
is adequate and that the bill is not needed.
Number 0836
FRANK LIBAL testified via teleconference. He said that he
supports HB 283, and that he believes some of the problems that
emanate from the board's decisions could be corrected. He said
that he sees a problem in the current selection process for
members of the Board of Fisheries. It is currently weighted
strongly in favor of terminal fisheries advocates. He said as a
saltwater sport troller and guide, his interests would be better
served by board members with unprejudiced attitudes towards
mixed-stock fisheries. He said this bill would provide a better
representation of his interests.
MR. LIBAL said that in his opinion, as board members continue to
serve repeated terms on the board, the opportunity arises for
individuals to promote their own personal agendas. Mr. Libal
said that the reduction of resident king salmon limits to five
per year was contrary to the wishes of the advisory board for
the Cook Inlet area. These committees are elected
representatives of the residents of Alaska. He said that when
the advisory committees are disregarded, the citizens of Alaska
are disenfranchised. He said that in effect, the Board of
Fisheries stole a portion of the culture from coastal
communities. Enacting term limits would prevent similar actions
in the future.
Number 0703
LANCE NELSON, Assistant Attorney General, Natural Resources
Section Civil Division (Anchorage), Department of Law, testified
via teleconference. He said that he was assigned to advise the
Board of Fisheries in their meetings. He said the
administration's concerns were largely addressed by Don
Johnson's remarks. He said that the current board could easily
be appointed by the system outlined in the proposed CS. He said
that he was not sure if this bill would address concerns of
those who are unhappy with the makeup of the current board. He
also said that there could be seven commercial fishermen, five
of which could also be sport fishermen, subsistence fishermen,
or public members at large. He said that seat designations are
not effective in building the best possible board. Designations
are always in dispute because there are myriad types of
commercial, sport, and subsistence fishing. He said board
members should represent the entire public, not just certain
constituencies. He said seven seats are not enough to represent
all of the constituencies in the state.
Number 0532
REPRESENTATIVE SCALZI asked, since the Board of Fisheries is set
up by the legislature, and if it is the legislature's intent to
have designated seats, would it not be consistent with the
legislative process.
MR. NELSON said it would be. He added that he was not taking
issue with the legal issues of the bill. He said that he was
addressing the policy issues.
REPRESENTATIVE SCALZI said that it is very difficult to confirm
a board member who does not "pass the red-face test" of meeting
criteria to hold a seat. He gave the example of two sport-
fishing seats. He said that he did not think the legislature
would look at a commercial fisherman who holds a sport license
as passing the red-face test to sit as a sport fish member.
Number 0303
ROBERT HEYANO, Bristol Bay Economic Development Corporation
(BBEDC), testified via teleconference. He said that BBEDC does
not support HB 283. He said that the past and existing members
of the board are knowledgeable in all fishery issues and that
they support the current system of governor appointment and
legislative approval of board members.
Number 0188
NANCY HILLSTRAND testified via teleconference. She told the
committee that she has witnessed the board process as a
fisherman and processor in the state. She said that she has
seen the demise of viable fisheries because of a past board's
focus on allocation instead of biological complexity. Ms.
Hillstrand said designated seats may be a good idea, but the
fisheries are not simply an allocative process. The board needs
to have a balance between conservation and development along
with the expertise in working with joint boards, agencies, and
others within the state. She said she has never seen a board
work as hard as the present one at trying to balance the goals
of development, utilization, and conservation. It has created a
sustainable salmon policy, management plans for shellfish
protection, and nearshore fisheries for local residents. She
said that she is speaking from a statewide perspective. Ms.
Hillstrand said she does not get everything she wants, but she
said with such a complex issue, people cannot always get what
they want. She called the process of managing the fisheries
"complex." She listed many agencies and interests that must
interact in order for fisheries to be managed properly.
TAPE 02-5, SIDE A
Number 0050
GERALD (JERRY) McCUNE, United Fishermen of Alaska (UFA),
testified before the committee. He said that the UFA is not
questioning the members of the board or their work ethic. He
said that commercial fishermen are committed to be responsible
to the resource, as is the board. He said that the UFA's
frustration comes from its having put names forward for
appointment on the board for the past eight years. In eight
years there has only been one strong representative of the
industry appointed. He said that commercial fishing is a "big
use" and the UFA would like a strong voice on the board. He
said sport fishing is a big use in some areas, but commercial
fishing touches the state from Nome to Sitka. He said there is
nobody on the board who has fished all over the state or has a
sense of all the fisheries in the state.
Number 0268
REPRESENTATIVE KERTTULA asked Mr. McCune what he thought about
the possibility of having all seven members of the board being
commercial fishermen. She asked if he thought it important to
see the board "broadened out," not knowing who or what the
policies of the next administration may be.
MR. McCUNE said he was not sure what Lance Nelson was talking
about in his statement that all seven members could be
commercial fishermen.
REPRESENTATIVE KERTTULA said that to her understanding, the
concern was about sport fishers who are also holding limited
entry permits. She said that it is a problem that is not
specified, so all the members could be commercial fishermen as
well as in the other categories. She asked if that was in the
intent.
Number 0415
MR. McCUNE said that the UFA was not happy "paring it down" to
"two, two, two, one." He said that subsistence is already
protected by regional federal subsistence boards. He said that
the UFA would be open to limiting the sport fish seats to those
who do not hold a limited entry permit.
Number 0520
CO-CHAIR STEVENS asked about the issue of term limits. He said
that to his understanding, one could be appointed, serve, leave
the board, and then return and serve again later.
MR. McCUNE said that six years would provide diversity to the
board and give enough time for a member to "get their feet wet."
He said that it would not preclude a person from coming back to
the board after a period of being off of the board.
REPRESENTATIVE KERTTULA asked about the average length of a term
on the board and what the longest term was.
MR. McCUNE said that the longest was a 20-year term. He said
that the average term depends on the governor.
Number 0726
REPRESENTATIVE SCALZI said that he would like to move the bill
out of committee because it is a work in progress. He said he
would like to move the [Version L] to the House Resources
Standing Committee and take more public comment. He said that
he would not have a problem with adding language assuring that
commercial fishermen were not appointed to the board for a sport
fish seat. He went back to his assertion that the legislature
would not appoint members who did not pass the red-face test.
Number 0886
REPRESENTATIVE KERTTULA said that her other concern was whether
the bill would preclude people who had been active fishermen but
just recently quit.
REPRESENTATIVE SCALZI said that it was not his original intent,
but after the UFA met, they specified that they wanted current
fishermen. He said that it was unfortunate to lose the pool of
knowledge that members who no longer fished could bring to the
table, but he added that he went with what the UFA asked for.
REPRESENTATIVE KERTTULA proposed perhaps including those who had
fished within the past ten years for consideration.
Number 0963
CO-CHAIR STEVENS made a motion to move CSHB 283, version 22-
LS1083\L, out of committee with individual recommendations and a
zero fiscal note.
Number 0975
REPRESENTATIVE COGHILL objected to make sure there was a vote.
He said he had some concerns about the language on the makeup of
the board.
A roll call vote was taken. Representatives Scalzi, Dyson,
Kerttula, Stevens, and Wilson voted to move Version L out of
committee. Representative Coghill voted against moving it.
Therefore, CSHB 283 (FSH) was reported out of the House Special
Committee on Fisheries by a vote of 5 - 1.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 5:40
p.m.
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