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