03/16/2005 08:30 AM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| SB25 | |
| HB218 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 218 | TELECONFERENCED | |
| += | HB 192 | TELECONFERENCED | |
| + | SB 25 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
March 16, 2005
8:33 a.m.
MEMBERS PRESENT
Representative Gabrielle LeDoux, Co-Chair
Representative Bill Thomas, Co-Chair
Representative Jim Elkins
Representative Peggy Wilson
Representative Mary Kapsner
MEMBERS ABSENT
Representative Woodie Salmon
Representative John Harris
COMMITTEE CALENDAR
SENATE BILL NO. 25
"An Act relating to labeling and identification of genetically
modified fish and fish products."
- MOVED SB 25 OUT OF COMMITTEE
HOUSE BILL NO. 218
"An Act relating to cost recovery fisheries for private
nonprofit hatchery facilities."
- HEARD AND HELD
HOUSE BILL NO. 192
"An Act relating to requirements to obtain and maintain a
fisheries business license; relating to security required of
fish processors and primary fish buyers; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 25
SHORT TITLE: GENETICALLY MODIFIED FISH
SPONSOR(S): SENATOR(S) ELTON, STEVENS G
01/11/05 (S) PREFILE RELEASED 12/30/04
01/11/05 (S) READ THE FIRST TIME - REFERRALS
01/11/05 (S) L&C, RES
02/01/05 (S) L&C AT 1:30 PM BELTZ 211
02/01/05 (S) -- Meeting Rescheduled to 02/08/05 --
02/08/05 (S) L&C AT 1:30 PM BELTZ 211
02/08/05 (S) Moved SB 25 Out of Committee
02/08/05 (S) MINUTE(L&C)
02/09/05 (S) L&C RPT 4DP 1NR
02/09/05 (S) NR: BUNDE
02/09/05 (S) DP: ELLIS, DAVIS, SEEKINS, STEVENS B
02/23/05 (S) RES AT 3:30 PM BUTROVICH 205
02/23/05 (S) Moved SB 25 Out of Committee
02/23/05 (S) MINUTE(RES)
02/24/05 (S) RES RPT 4DP
02/24/05 (S) DP: WAGONER, DYSON, STEDMAN, ELTON
03/07/05 (S) TRANSMITTED TO (H)
03/07/05 (S) VERSION: SB 25
03/09/05 (H) READ THE FIRST TIME - REFERRALS
03/09/05 (H) FSH, L&C, RES
03/16/05 (H) FSH AT 8:30 AM CAPITOL 124
BILL: HB 218
SHORT TITLE: PRIVATE HATCHERY COST RECOVERY FISHERIES
SPONSOR(S): REPRESENTATIVE(S) THOMAS
03/15/05 (H) READ THE FIRST TIME - REFERRALS
03/15/05 (H) FSH, RES
03/16/05 (H) FSH AT 8:30 AM CAPITOL 124
BILL: HB 192
SHORT TITLE: FISHERIES BUSINESS LICENSE; BOND
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
03/02/05 (H) READ THE FIRST TIME - REFERRALS
03/02/05 (H) FSH, L&C, FIN
03/09/05 (H) FSH AT 8:30 AM CAPITOL 124
03/09/05 (H) Heard & Held
03/09/05 (H) MINUTE(FSH)
03/16/05 (H) FSH AT 8:30 AM CAPITOL 124
WITNESS REGISTER
SENATOR KIM ELTON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 25 as bill sponsor.
DENNIS KELSO, Ph.D., Assistant Professor
Environmental Studies Department
University of California, Santa Cruz
Santa Cruz, California
POSITION STATEMENT: Testified in support of SB 25.
IAN FISK, Staff
to Representative Bill Thomas
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 218 on behalf of Representative
Thomas, sponsor.
GARY FANDREI
Soldotna, Alaska
POSITION STATEMENT: Expressed concerns regarding HB 218.
JASON WELLS, Executive Director
Valdez Fisheries Development Association (VFDA)
Valdez, Alaska
POSITION STATEMENT: Expressed concerns regarding HB 218.
MIKE ROUND, Assistant General Manager
Southern Southeast Regional Aquaculture Association, Inc (SSRAA)
Ketchikan, Alaska
POSITION STATEMENT: Expressed concerns regarding HB 218.
DEBORAH LYONS, Secretary/Treasurer
Northern Southeast Regional Aquaculture Association (NSRAA)
Sitka, Alaska
POSITION STATEMENT: Expressed concerns regarding HB 218.
ROB ZUANICH, Executive Director
Alaska Seine Boat Owners Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 218.
BOB THORSTENSON, Executive Director
Southeast Alaska Seiners Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 218.
ACTION NARRATIVE
CO-CHAIR GABRIELLE LEDOUX called the House Special Committee on
Fisheries meeting to order at 8:33:36 AM. Representatives
LeDoux, Thomas, Wilson, and Elkins were present at the call to
order. Representative Kapsner arrived as the meeting was in
progress.
SB 25-GENETICALLY MODIFIED FISH
8:34:25 AM
CO-CHAIR LEDOUX announced that the first order of business would
be SENATE BILL NO. 25, "An Act relating to labeling and
identification of genetically modified fish and fish products."
8:34:49 AM
SENATOR KIM ELTON, Alaska State Legislature, presented SB 25 to
the committee on behalf of himself and Senator Gary Stevens,
bill cosponsors. He explained that the bill was a work product
of the [Joint Legislative Salmon Industry Task Force], and it
was introduced at the end of last session, but didn't pass out
of committee. He noted that this session's version of the bill
is in the exact same form as last year's version. He said:
What it does is it provides that genetically modified
[GM] fish that are sold in the State of Alaska at the
retail level will have to be [labeled] that it is a GM
fish. ... The other name for them is Frankenfish
because it involves a modification at the genetic
level that can't occur naturally. At present there is
only one GM ... fish that is allowed in the
marketplace, and that's a glow in the dark aquarium
fish, but there is an application pending in front of
the [U.S. Food and Drug Association (FDA)] for GM ...
Atlantic salmon. There is a U.S./Canadian company
that right now is working to establish some salmon
farms in Nova Scotia [carrying GM Atlantic salmon].
They would put the Atlantic salmon not only to the
marketplace but they would distribute the eggs
worldwide to other ... industrial salmon farms. There
isn't an awful lot that Alaska can do when it comes to
regulating the global trade in [GM] fish, but what
this bill does is provide if those GM ... finfish or
shellfish are sold in Alaska, the Alaska consumers
will know what they're buying. It also has an
ancillary benefit that it provides a very bright line
between Alaska's wild salmon and industrially produced
Atlantic salmon.
SENATOR ELTON noted that Aqua Bounty was quoted recently as
saying that they expect to get a permit for GM Atlantic salmon
within the next year.
8:37:46 AM
REPRESENTATIVE WILSON read from the sponsor statement which
stated that the European Union, Japan, New Zealand, and
Australia already require labeling on food containing GM
products. She commented that it was really important for the
[Alaska legislature] to pass this bill.
SENATOR ELTON noted that those countries make the distinction
between GM and non-GM on vegetable products, but not on fish
products yet. He said, "At its heart this is a consumer-
notification bill."
8:38:48 AM
CO-CHAIR THOMAS pointed out that both finfish and shellfish are
named on page 4, line 4, but the title only says "fish." He
asked if both should be included in the title.
SENATOR ELTON responded, "I think in statute elsewhere 'fish' is
... a kind of umbrella term."
8:39:44 AM
DENNIS KELSO, Ph.D., Assistant Professor, Environmental Studies
Department, University of California, Santa Cruz, stated that
his research is on the impacts of salmon farming on the wild
salmon sector, particularly in Alaska, and on the implications
of genetically engineered fish in commercial aquaculture. He
said
I believe this is an important consumer choice
opportunity. Fish are subject to a great deal of
research right now with respect to making genetically
engineered versions. And the reason is that they're
relatively easy to work with; they have a short
generation time, the eggs are easy to manipulate, and
so there are a number of species that are being worked
with. ... The one that's currently proposed for [FDA]
approval ... is Atlantic salmon that's basically
constructed from genetic material taken from Atlantic
salmon, from the ocean pout ... and king salmon, which
supplies growth hormone DNA. The claim of the owners
of the patent on this fish is that it will reduce the
production time for Atlantic salmon in commercial
salmon farms by roughly half, the idea being that it
would reduce the producers cost and allow them to put
more Atlantic fish on the market faster. So the bill
before you actually provides consumers a choice by
informing them so that they know what kind of
production methods they're actually supporting through
their purchases.
REPRESENTATIVE WILSON asked Dr. Kelso to leave his address so
that her office could contact him later.
8:43:02 AM
CO-CHAIR LEDOUX closed public testimony.
REPRESENTATIVE WILSON moved to report SB 25 out of committee
with individual recommendations and the accompanying zero fiscal
notes. There being no objection, SB 25 was reported from House
Special Committee on Fisheries.
HB 218-PRIVATE HATCHERY COST RECOVERY FISHERIES
8:43:27 AM
CO-CHAIR LEDOUX announced that the next order of business would
be HOUSE BILL NO. 218, "An Act relating to cost recovery
fisheries for private nonprofit hatchery facilities."
IAN FISK, Staff to Representative Thomas, Alaska State
Legislature presented HB 218 on behalf of Representative Thomas,
bill sponsor. He explained that there are 29 private, nonprofit
[PNP] hatcheries statewide which produced over 50 million fish
that were harvested in 2003. This accounts for about a third of
the statewide harvest by volume and about a quarter of the state
harvest by value. Sport fishermen caught 481,000 hatchery fish
in 2003. "It's truly been a very successful program," he
opined.
What we're here to discuss today is the method by
which hatcheries recover their costs. ... Cost
recovery is currently done by a system whereby
hatcheries contract with certain processors and the
processor, through a bid process, is selected. ...
Typically very few fishing vessels actually
participate in the harvest. Now there's different
hatcheries that have different circumstances by which
they actually recover their costs, and what this bill
will do is it will provide permissive language that
will allow them to ... make more fish available to
common property harvest. In Section 2 of the bill,
you'll see that there's permissive language, and this
is one of the keys to HB 218. [On page 1, lines 11-
14] it specifies that a hatchery permit holder may
harvest salmon for a facility in a special harvest
area through agents, contractees, or employees of the
permit holder as provided under regulations of the
Board of Fisheries or through common property
fisheries. The remainder of the bill sets out the
process by which rates will be set for the common
property cost recovery fishery. It specifies that as
the bill currently reads, ... [Alaska Department of
Revenue] will annually, in conjunction with ...
hatchery permit holders and affected fishermen ... set
the rate for the cost recovery harvest, and they'll
collect and distribute the funds.
MR. FISK continued:
In Section 2 ... the regulations to govern this cost
recovery fishery will be set out by both the [Alaska
Department of Fish and Game] and in certain
circumstances by the [Board of Fisheries]. [The Board
of Fisheries] will be involved if there is anything
that will alter allocation plans that allocate fish
between different user groups. In subsection (c)
there's language that sets out that a fisherman who
participates in the fishery agrees to the payment of
the assessment and so that there'll be a method by
which ... the assessment will be determined annually.
And that's to give some flexibility because of
changing market circumstances.
8:47:32 AM
MR. FISK reviewed the findings in Section 1, which reads:
The Alaska State Legislature finds that the economic
interests of the commercial salmon fishery are best
served by the harvest of salmon returning to private
nonprofit hatcheries in common property fisheries and
the reduction or elimination of the direct sale of
salmon by hatchery permit holders, especially when all
fisheries enhancement loan obligations incurred for a
hatchery facility have been repaid.
8:48:14 AM
REPRESENTATIVE ELKINS asked, "If a fisherman ... exports his own
fish, how do you know you're going to get your money?"
MR. FISK replied, "The enforcement details of this bill are
something that still need to be worked out." He noted that
there is a provision near the end of the bill that states that
violations of this law would be a class A misdemeanor, which is
similar to other fishing violations.
8:49:37 AM
GARY FANDREI noted that he is the Executive Director of Cook
Inlet Aquaculture Association (CIAA), but because the CIAA has
not reviewed the bill, he was speaking for himself only. He
stated that he wanted to make three major points on HB 218.
First of all, I applaud the concept. I think this is
something that some members of the fleet have
expressed an interest in. It is also something that
we have looked at a number of times but we haven't
quite been able to figure out how to make it work.
Having said that, I'm not sure that this bill does it
either. Another point I'd like to make is the bill
seems to encourage loans in that it does not allow for
the development of any type of a reserve associated
with the facility. In other words, if you come up
short on your cost recovery one year, and you don't
have money some place else, you're going to have to go
out and get a loan to make the project work for that
year. The last thing I'd like to say on the major
points is that the option to use this type of cost
recovery strategy, I feel, must be at the initiative
or the option of the hatchery operator. I'd hate to
get into a position where we're forced into doing
something like this, because it may not work in all
situations.
8:51:22 AM
MR. FANDREI continued:
For this to work for the hatcheries, I think in some
instances we may need to redefine our cost recovery
harvest areas, and so that should be something that
people should be aware of. ... I also have a question
on how buyers will keep up with the assessment
program; it seems a little bit cumbersome to be
dealing with an assessment program that's going to
vary area-by-area and year-to-year. ... The last
comment I would make is that the 40 percent assessment
rate probably is a fairly reasonable rate to be
dealing with. We have looked at our programs and that
40 percent rate represents a 1:2.5 cost benefit ratio
and that it's pretty reasonable for many of the
programs that we do; we're usually in that 1:3 to 1:6
cost benefit ratio with most of the programs that we
run.
8:52:20 AM
CO-CHAIR THOMAS asked Mr. Fandrei to describe the make up of the
CIAA board.
MR. FANDREI replied, "We are a regional association and we have
a number of commercial fishermen on the board. And we also have
representatives from the local communities, the borough, and a
number of other groups in the area such as ... [Cook Inlet
Region, Incorporated (CIRI)]."
CO-CHAIR THOMAS asked, "When you have put your cost recovery out
to bid, do you get more for your bid for your fish than the
common property fishermen get, or so they get more?"
MR. FANDREI responded that on the average, [CIAA] usually gets
less because:
In Cook Inlet, our cost recovery programs are set up
where we are the last ones in line. In other words,
the commercial fishery goes first and if there's
anything left ..., we're allowed to cost recover those
fish and we don't really have predefined set of goals
for some of them. So on the average we probably do a
little bit less than the fleet because our fish tend
to be a little bit more mature."
8:53:36 AM
CO-CHAIR THOMAS asked what fish [CIAA] produces.
MR. FANDREI replied that they produce sockeye for commercial
harvest and coho for sport harvest.
REPRESENTATIVE WILSON pointed out that Section 2 of the bill
relating to the cost recoveries, and stated, "It definitely is
permissive. I think I see the word more than five times."
8:54:23 AM
CO-CHAIR THOMAS asked who formed CIAA.
MR. FANDREI answered that it was formed by the commercial
fishing industry. He stated, "Our goal is to produce fish for
the common property fishermen. We don't necessarily recognize
any particular user group in establishing that goal. But the
reality of it is [that] our income comes from the commercial
fishing industry."
CO-CHAIR THOMAS asked why [CIAA] would have problems with giving
more fish to the common property fishery if [CIAA] was the
originally started by fishermen.
MR. FANDREI replied, "That is our goal whenever we're trying to
do a common property fishery; ... to try to get the best price
we can for our fish so that we can get the greatest number of
fish back into the common property hands."
8:55:44 AM
JASON WELLS, Executive Director, Valdez Fisheries Development
Association (VFDA), stated that he was representing Valdez
Hatchery. Regarding the findings in Section 1 of the bill, he
said:
I feel that these findings are inaccurate and set a
bad precedent for the PNP hatchery system. Valdez
Fisheries Development conducted preseason sales
agreements with two strong buyers with whom we have
developed strong track records. In the past 11 years,
despite the bad pricing, we've managed to save $10
million or 86 million pounds of pink salmon by selling
our cost recovery above the grounds price. The
aforementioned savings have been returned to the
common property fishery via their catch. As you can
see there is a significant economic interest in the
hatchery conducting its own cost recovery and
conducting direct sales. The hatchery preseason sales
contracts are the last vestige of competition between
processors to purchase Alaska salmon. The fishermen
no longer have viable organizations to put upward
pressure on grounds price. My major problem with this
legislation is the issue of whether it is voluntary on
the part of hatchery operators or whether it will
morph into a mandatory program. Our corporation,
through the Board of Directors, is obligated to the
State of Alaska for loan repayment. We're obligated
to our personnel, properties, and to several small
businesses. These obligations have been made under a
set of assumptions, ... that we remain in control of
our revenue stream. If this legislation hinders our
ability to perform our fiduciary responsibility, it
needs to have a fiscal note attached. The Board of
Directors of a private, nonprofit hatchery corporation
must be allowed to choose ... to use this legislation
or not. Further, if a PNP elects to investigate a
common property fishery for cost recovery and it
cannot negotiate agreement suitable to the
corporation's financial responsibilities, there must
be a back-out mechanism.
8:58:45 AM
MR. WELLS continued:
If the bill remains voluntary to PNP hatchery permit
holders, there are still several problems with HB 218.
The first is that the [Alaska Department of Public
Safety] must be committed to fish hold inspections and
to show up for each and every common property fishery
in the special harvest area. Our experience is that
fisheries [indisc.] are not high on the [department's]
priority list. Secondly, [regarding] page 2, lines
16-18: not all buyers or processors pay for the fish
upon which they write fish tickets. How will the
state ensure that the hatchery gets paid for its fish,
and in what time frame will those payments be made?
Third, this legislation requires the [Alaska
Department of Revenue] to set a rate of harvest prior
to the season. ... Our experience is that there are
too many variables such as: fish size, grounds price,
exploitation rates of the common property fishery, and
ocean survivals to make accurate preseason estimates
of harvest. The problem has resulted in VFDA managing
cost recovery towards a dollar goal, not a poundage
goal or an exploitation rate. We have been doing this
since 1988 with good success. I doubt the Department
of Revenue will be better at predicting salmon returns
than [the Alaska Department of Fish & Game (ADF&G)],
who've thrown their hands up and no longer make run
predictions on hatchery stocks. Finally, this
legislation limits the assessment rate to 40 percent
of the run. What mechanism is in place to ensure that
the hatchery continues to operate should we have a run
failure and all of the return is needed to cover
hatchery operations expenses?
9:01:02 AM
MR. WELLS continued:
House Bill 218 is a piece of legislation with many
possible unintended consequences. This legislation
requires consultation with PNP operators before it is
rushed through. I think the intent of HB 218 would be
better handled in the private nonprofit boardroom by
the fishermen.
CO-CHAIR LEDOUX recommended that Mr. Wells submit his testimony
in written form as well.
9:01:33 AM
MIKE ROUND, Assistant General Manager, Southern Southeast
Regional Aquaculture Association, Inc. (SSRAA), commented that
SSRAA is not opposed to the bill but instead views it as one of
many options that the hatchery operators could use. He stated:
We do not at this time [wish], and are not likely in
the future, to change the way we do business and cost
recovery, and we found ... that we can minimize our
cost recovery by maximizing the value of our fish.
One of the things [SSRAA] does is ... make sure that
those fish do not compete with the fishermen's fish at
the dock. We retain those fish and sell them into the
market well beyond the local processor point so that
it does not compete with the commercial fishermen's
catch at the dock, as it has very little effect, if
any, on the fluctuation of the price to the fishermen.
We see this as ... another option that the hatcheries
... not only may elect to choose but should also be
able to choose to drop it at any point where it does
not any longer make sense. ... Some of the aspects of
the bill seem to make it sound as if any time you have
a special harvest area open to the common property
fishery, that all gear holders may attend that
fishery.
9:03:56 AM
CO-CHAIR THOMAS asked who formed SSRAA.
MR. ROUND replied that the commercial fishing industry formed
SSRAA, and 13 of the 21 board members are commercial fishermen.
CO-CHAIR asked if the goal of SSRAA is to provide more fish for
the common property fishermen.
MR. ROUND responded affirmatively. He stated that the ultimate
goal is that 75 percent of production would go to common
property fishery and 25 percent would be for cost recovery
operations. He noted, "However, that also assumes that all
things being equal, our debts are paid down, [and] we have our
reserves fully funded. There are a lot of other considerations,
but that is our ultimate goal."
CO-CHAIR THOMAS asked what the actual percentages are.
MR. ROUND answered that the number fluctuates each year, but
right now it is about 60 percent to common property fishery and
40 percent to the hatchery.
CO-CHAIR THOMAS asked, "I understood ... Ketchikan was doing all
cost recovery in the area where you could have had rotation of
fishery, and that wasn't occurring because of your debt. Was
that correct?"
MR. ROUND replied that SSRAA has debts that it has paid down.
He remarked:
Paying the bills is certainly ... the major factor in
cost recovery operations. ... When we did get a loan
from the sustainable salmon fund, we used that money
... to buy time in the common property fishery in the
special harvest area to do gear rotation. We do try
to get the benefits of hatchery production back to the
fishermen as we are able, depending upon our economic
circumstances.
9:06:47 AM
CO-CHAIR THOMAS commented:
When you went into ... major cost recovery there, you
shifted the gill net fleet from Ketchikan to Taku and
to Haines and to Sitka, and actually took my earnings
while you filled your coffers ... to pay off your
debt, and left me hanging out here with an extra 100-
150 boats or more because they were displaced....
MR. ROUND replied:
In the past we have received as much as $1.5 million
to $2 million on the enhancement tax, and ... even
though the enhancement tax we receive is considerably
reduced, I think this year's was around [$300,000].
The benefit to the fishermen is still about three to
one: three times the amount of fish [that] have been
caught [compared with] the value of what he pays in
enhancement tax. We would like to do better,
certainly, but it still is providing a good benefit to
the commercial fishermen.
9:08:23 AM
CO-CHAIR THOMAS asked why processors pay SSRAA more for fish
than they pay [fishermen].
MR. ROUND replied:
We do not sell our fish to the local processors,
period. We retain our cost recovery fish and sell
them into the world market at a point beyond the ...
processors at the local docks. ... We go through the
processing of the fish, freeze the fish, retain the
fish, and sell them through a broker. We do not sell
our fish locally to the processors unless we have a
run above and beyond our means to deal with at the
cost recovery site, in which case it goes out for a
second place processing, and they would bid on the
fish at that point, but that hasn't occurred in a few
years.... We usually do not receive a higher price in
that case. There might be exceptions to that, but for
the most part, our operations and cost recovery are
done in-house and processed and sold into the market
well above the point of the local processors and the
dockside price.
9:10:31 AM
DEBORAH LYONS, Secretary/Treasurer, Northern Southeast Regional
Aquaculture Association (NSRAA) commented that the NRSAA board
had just looked at HB 218 yesterday and hadn't yet completely
evaluated it. She stated that she concurred with many of the
statements made by the representatives of other aquaculture and
PNP hatcheries. The bill is so complicated that she really
wasn't sure what it meant, she opined. She stated that she was
concerned by the findings in Section 1 of the bill, and
explained:
Our aquaculture association is sort of like the state
in that, if we could run everything off of taxes off
of a resources, like the state runs off of taxes off
of oil, if we could just exist solely on the
enhancement tax that fishermen make, it would be
great; we wouldn't have to do any cost recovery. But
you know that tax values fluctuate with the value of
your commodity resource, and we couldn't build an
operations budget and maintain it solely on those tax
revenues, so there arose the need for the cost
recovery fisheries. ... I think this legislation grew
out of some dissatisfaction out of a certain fishery,
and that's the Hidden Falls seine fishery. And I
think fishermen should be maybe a little more patient.
MS. LYONS continued:
Chum salmon aren't very valuable compared to chinook
and coho, and ... we have to take a large number of
chum salmon to meet the cost recovery needs to balance
the budget. But this year a great development is
seeing our coho and chinook programs come on line, and
the value of those fish as they enter into cost
recovery. This year the total cost recovery, 25
percent of that value, came from the coho and chinook
programs. And as those mature there will be less chum
salmon that need to be taken. And Hidden Falls seine
fishermen have been before our board with three
different proposals to change the way cost recovery is
done in that particular fishery. I believe this
legislation is directed towards NSRAA because of the
language about the debt. And I think you're wading
into a little bit of a fish fight. And I've seen a
few of them, having served on the Board of Fisheries
and the Pacific Salmon Commission.
9:14:01 AM
CO-CHAIR THOMAS asked Ms. Lyons if she is a fisherman.
MS. LYONS replied that she fished for many years with her
husband, and currently she works as a crewmember on a
troller/longliner.
CO-CHAIR THOMAS remarked that to him, chum fish is money fish
even when the price is low; it's really matter of the volume of
chums that one catches. He asked if NSRAA has a reserve
account, and if so, how much it is.
MS. LYONS replied that the NSRAA board set a goal of reserving
$4 million for operational reserve to cover all costs of
operation if there was a catastrophic failure. She said, "In
establishing reserve accounts, we feel like we are protecting
the organization and the interests of the commercial fishermen
by being fiscally responsible in that way." She noted that
currently NSRAA has about $3.2 million in the operational
reserve. She added that a financial advisor advised NSRAA to
also save for capital projects; there is $1 million in a capital
replacement fund, but it was advised that the fund be much
larger. She noted that NSRAA also has a scholarship account of
about $100,000.
MS. LYONS noted that she didn't mean to devaluate any fishery;
she meant to demonstrate the comparative values of the fish, and
"as we are able to sell more of these coho and chinook that are
coming on line, more of the chums will be available in the
common property for the fishermen."
9:17:30 AM
CO-CHAIR THOMAS requested that all of the hatcheries send to him
a list of their cost recovery receipts. He remarked, "I want to
see if you're really there for the fishermen or [what] you're
there for." He reiterated his concern that cost recovery fish
prices are higher than prices for other fisheries.
9:18:26 AM
ROB ZUANICH, Executive Director, Alaska Seine Boat Owners
Association, commented:
In essence what this bill does is that when a hatchery
permit holder deems it appropriate ..., revenue
heretofore generated in cost recovery fisheries could
be substituted by an assessment on salmon landed in
specified regions set by the hatchery operator. ...
There may be wordsmithing that needs to get everyone
on the same page. But at the end of the day, this
legislation as it sits has the appropriate checks and
balances for the hatcheries to satisfy their fiduciary
obligations and chart a better course for Alaska's
commercial fishermen.
MR. ZUANICH, in response to Co-Chair Thomas, commented that
Alaska Seine Boat Owners is about 70 percent seine fleet, about
10-15 percent longliners, and the rest are "miscellaneous."
CO-CHAIR THOMAS noted that there is no cost recovery fishery for
longliners.
9:21:01 AM
BOB THORSTENSON, Executive Director, Southeast Alaska Seiners
Association, testified that his association strongly supports HB
218. He noted that it is not the intent of the bill to force
hatcheries to do anything. He commented, "I think this is going
to be a very progressive piece of legislation. ... The
enforcement concerns that I've heard, I believe, are going to be
very easily addressed."
9:23:47 AM
CO-CHAIR THOMAS requested that anyone interested in helping to
refine HB 218 call his staff.
REPRESENTATIVE WILSON asked for further clarification on
language in the bill regarding debt.
CO-CHAIR THOMAS pointed out that this was listed in the findings
section on page 1, lines 8-9:
when all fisheries enhancement loan obligations
incurred for a hatchery facility have been repaid.
CO-CHAIR THOMAS continued:
It is my understanding that NSRAA is one of the few
hatcheries that have probably zero-debt, and so that's
why I'm wondering why they're concerned about
enhancement debt, unless they're looking to obligate
the fishermen to build another hatchery or something.
But right now, as far as I know, they are pretty much
debt-free.
REPRESENTATIVE WILSON asked what happens after the debt is paid.
CO-CHAIR THOMAS replied, "Typically I think when they have cost
recovery fishery, it's to build the reserves for the next year
or to pay for the debt for that year. ... Several other
hatcheries I know, their debt is so huge that they need to take
every fish they can." He remarked that when hatcheries were
first built in the 1980s, fish prices were high, and so once the
prices dropped, it was difficult to pay back debt.
CO-CHAIR LEDOUX commented that she was curious why some of the
hatcheries were selling their fish above the market price. She
said, "And then you had that problem in Bristol Bay where the
cost recovery system was really driving the prices down."
CO-CHAIR THOMAS remarked that the only reason he could think of
for why hatcheries [were able to sell their fish at a higher
cost] than the gillnetters and the seiners was the tender fleet
costs. He explained, "[The hatcheries] only have to send one
big tender to a cost recovery area and haul out a million
pounds, whereas when you serve a gillnet fishery you'll have as
many as four tenders to pack maybe 100,000 pounds a day or
something, and they're rotating back and forth.
9:28:21 AM
CO-CHAIR LEDOUX announced that HB 218 would be held over.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 9:28:29
AM.
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