02/08/2011 05:00 PM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Division of Subsistence, Alaska Department of Fish and Game | |
| Overview(s): Division of Habitat, Alaska Department of Fish and Game | |
| HB121 | |
| HB59 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 121 | TELECONFERENCED | |
| *+ | HB 59 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
February 8, 2011
5:01 p.m.
MEMBERS PRESENT
Representative Steve Thompson, Chair
Representative Craig Johnson, Vice Chair
Representative Alan Austerman
Representative Bob Herron
Representative Lance Pruitt
Representative Scott Kawasaki
Representative Bob Miller
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
OVERVIEW(S): DIVISION OF SUBSISTENCE~ ALASKA DEPARTMENT OF FISH
AND GAME (ADF&G)
- HEARD
OVERVIEW(S): DIVISION OF HABITAT~ ALASKA DEPARTMENT OF FISH AND
GAME (ADF&G)
- HEARD
HOUSE BILL NO. 121
"An Act establishing the commercial charter fisheries revolving
loan fund, the mariculture revolving loan fund, and the Alaska
microloan revolving loan fund and relating to those funds and
loans from those funds; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 59
"An Act relating to loans made to commercial fishermen under the
Commercial Fishing Loan Act for product quality improvements and
energy efficiency upgrades; and providing for an effective
date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 121
SHORT TITLE: LOAN FUNDS: CHARTERS/MARICULTURE/MICROLOAN
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/24/11 (H) READ THE FIRST TIME - REFERRALS
01/24/11 (H) FSH, RES, FIN
02/08/11 (H) FSH AT 5:00 PM CAPITOL 120
BILL: HB 59
SHORT TITLE: COMMERCIAL FISHING LOAN ACT
SPONSOR(s): SEATON
01/18/11 (H) PREFILE RELEASED 1/7/11
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) FSH, FIN
02/08/11 (H) FSH AT 5:00 PM CAPITOL 120
WITNESS REGISTER
JIM SIMON, Acting Director
Division of Subsistence
Alaska Department of Fish & Game (ADF&G)
POSITION STATEMENT: Provided an overview of the Division of
Subsistence, for the Alaska Department of Fish and Game (ADF&G).
MIKE DAIGNEAULT, Regional Supervisor
Anchorage Area Office
Division of Habitat
Alaska Department of Fish & Game (ADF&G)
Anchorage, Alaska
POSITION STATEMENT: Provided an overview of the Division of
Habitat, on behalf of the Alaska Department of Fish & Game
(ADF&G).
KERRY HOWARD, Director
Division of Habitat
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Provided comments in conjunction with the
overview of the Division of Habitat, on behalf of the Alaska
Department of Fish & Game (ADF&G).
CURTIS THAYER, Deputy Commissioner
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Provided comments on HB 121, on behalf of
the Department of Commerce, Community & Economic Development
(DCCED).
WANETTA AYERS, Manager
Office of Economic Development
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Provided comments on HB 121, on behalf of
the Department of Commerce, Community & Economic Development
(DCCED).
RUSSELL DICK, President and CEO
Haa Aani, LLC
Sealaska Corporation
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 121.
RODGER PAINTER, President
Alaska Shellfish Growers Association
Juneau, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during the hearing on HB 121.
RICHARD YAMADA
Vice President
Alaska Charter Association
Auke Bay, Alaska
POSITION STATEMENT: Testified in support of HB 121.
ACTION NARRATIVE
5:01:31 PM
CHAIR STEVE THOMPSON called the House Special Committee on
Fisheries meeting to order at 5:01 p.m. Present at the call to
order were Representatives Thompson, Austerman, Herron, and
Pruitt. Representatives Kawasaki, Johnson, and Miller arrived
while the meeting was in progress.
^OVERVIEW(S): Division of Subsistence, Alaska Department of
Fish and Game
OVERVIEW(S): Division of Subsistence, Alaska Department of Fish
and Game (ADF&G)
5:01:43 PM
CHAIR THOMPSON announced that the first order of business would
be an overview from the Division of Subsistence, of the Alaska
Department of Fish and Game (ADF&G).
5:02:34 PM
JIM SIMON, Acting Director, Division of Subsistence, Alaska
Department of Fish & Game (ADF&G), paraphrased from a prepared
statement, which read as follows [original punctuation provided]
with accompanying slides:
The Division of Subsistence became Alaska's lead
agency in collecting information about customary and
traditional subsistence uses because of state and
federal statutes passed as a compromise following the
settlement of Alaska Native land claims.
When the legislature passed the 1978 state subsistence
law, it found that "it is in the public interest to
clearly establish subsistence use as a priority use of
Alaska's fish and game resources and to recognize the
needs, customs, and traditions of Alaska residents."
The duties of the Subsistence Division are laid out in
statute.
ANILCA requires a priority for subsistence uses on
federal lands, which make up about 60percent of
Alaska's land base. ANILCA also requires a system for
providing scientific support data to management and
advisory bodies.
Subsistence, as defined in both state and federal law,
is not limited to Alaska Natives. In 1989, the Alaska
Supreme Court ruled that a rural priority for
subsistence is a violation of the Alaska Constitution,
which led to the passage of the current state
subsistence law in 1992. All Alaskan residents are
eligible to participate in subsistence hunting and
fishing opportunities.
The Subsistence Division's mission is to
scientifically quantify, evaluate, and report
information about customary and traditional uses of
Alaska's fish and wildlife resources.
We accomplish our mission through systematic human
dimensions research following international social
science research and ethical standards. These
standards include: systematic data collection methods,
data analysis methods, and scientific reporting.
The Subsistence Division's professional ethics
standards include following established community and
tribal consultation policies to promote extensive
community involvement in our research and adherence to
state statutes pertaining to confidentiality. We
obtain community approval prior to initiating a
community study. We hire local research assistants to
help conduct household surveys, which provide some
limited but much needed winter employment
opportunities. We also provide communities with
public review drafts of research reports.
The Subsistence Division has identified two core
services to accomplish our mission: (1) research and
publish research results on customary and traditional
uses of fish and wildlife resources; and (2) provide
research results to the Alaska Boards of Fisheries and
Game and management programs to support implementation
of Alaska's subsistence law.
This slide provides an example of some of our research
products resulting from comprehensive subsistence
research conducted in the community of Kivalina as
part of the environmental impact statement associated
with expanding the Red Dog Mine. The dots represent
180 resource harvest locations by 35 households and
the shape represents the search areas of those same 35
households.
[NOTE: A map was projected from the TP 354 Subsistence
Harvests in Northwest Alaska, Kivalina and Noatak,
2007.]
This slide illustrates our budgetary receipt
authorities from last fiscal year and for the current
fiscal year. This year's increase in General Fund
stems from a one-year increment to study the
socioeconomic impact of declining returns of Yukon
River king salmon and a new program to develop a
method of harvest monitoring by using index
communities. This year's increase in interagency
receipt authority relates to expanding subsistence
research associated with the proposed Donlin Creek
Mine.
Subsistence Division maintains staff in six Fish and
Game offices throughout the state, including Juneau,
Anchorage, and Fairbanks, as well as field offices in
Dillingham, Kotzebue, and once again in Bethel. Our
permanent full-time staff has decreased from 27 in
FY09 to 24 in FY10 to 22 in FY11. Correspondingly, we
have increased the number of both part-time permanent
and nonpermanent staff in an effort to continue to
provide core services in an uncertain competitive
grant environment.
From Management Plan:
FY11 = 22 Permanent Full Time
16 Permanent Part Time
7 Non-Permanent
FY12 = 22 Permanent Full Time
16 Permanent Part Time
8 Non-Permanent
The division conducts field studies and gathers
harvest survey information in communities almost
entirely with special project funding. The funding is
generally obtained through a competitive proposal
process to address questions related to customary and
traditional uses of specific fisheries and wildlife
resources to assist with providing hunting and fishing
opportunities for Alaskans.
Systematic region wide surveys can occur only when
relatively larger funding support is available, a rare
occurrence in the past 10 years, although recent
partnerships with industry has facilitated the
division's efforts to meet core service targets.
The target is to have scientific information collected
and analyzed in each region at a consistent level each
year; and develop a balance across regions,
recognizing geographic differences. Specifically, our
target is to conduct a minimum of 5 studies in at
least 3 of the six regions at a 5-year average.
Targets were exceeded only in 2 regions due to
limitations in human resources and continuation of
multi-year studies in the regions associated with
proposed development projects, where we have been
focusing our research activities.
The division's Technical Paper series is the
cornerstone of detailed scientific reporting of
information to the public and the Board of Fisheries
and Board of Game. These reports provide harvest and
other information on customary and traditional uses of
fish and wildlife. The information in these studies
is used by the Board of Fisheries, Board of Game, and
fisheries and wildlife managers for their allocation
among uses and to provide for the sustained yield of
resources regulated by the state.
In FY10, the Subsistence Division released 30 new
technical reports and special publications to the
public, exceeding the most recent 5-year average of 21
reports. This target has been met in all of the five
prior fiscal years.
There are now 330 technical papers. Additional
Technical Papers and Special Publications will be
available by June 2011.
In addition to our technical reports, the Subsistence
Division established an on-line searchable database in
2006 called the "Community Subsistence Information
System," where the public, fishery and wildlife
managers, and division research staff, among others,
can access community harvest information from all
previous Subsistence Division research. This is the
single largest source of subsistence harvest
information for Alaskan communities.
Our target is to update the CSIS with all research
results from all studies completed during the year.
In FY10, information from an additional 64 communities
was added to the CSIS, exceeding the target.
The pie chart on the slide is an example of the type
of information that can be obtained from the CSIS, in
this case, Lime Village harvests in usable pounds from
2007 resulting from research we conducted associated
with the proposed Pebble Mine. For example, one can
see here the majority of wild resources harvested by
Lime Village residents were salmon.
The division's highest priority is reviewing and
analyzing 100 percent of all fish and game regulatory
change proposals that have subsistence implications.
The division continues to review all proposed state
regulations pertaining to customary and traditional
uses of fisheries and wildlife and assists the Alaska
Boards of Fisheries and Game in implementing the
subsistence law by providing the best available
information. In the past 5-year period, 170 to 277
regulatory change proposals were reviewed annually for
all regions of Alaska. In FY10, we reviewed 252 BOF
and BOG proposals.
The division is involved in fisheries and wildlife
management planning, as necessary, where customary and
traditional use information, including harvest data,
is required for Board of Fisheries, Board of Game, and
management divisions. Also included are studies and
plans related to economic development projects that
may affect customary and traditional uses of fish and
wildlife resources.
Subsistence Division's regulatory support targets
include reviewing and contributing to all relevant
management plans requiring customary and traditional
use information. On average, the division contributes
to 25 plans per year for fisheries and wildlife
management. In FY10, we contributed information to 31
management plans.
Key accomplishments by the Subsistence Division in the
current fiscal year include:
(1) Completed interviews with salmon fishing
households in 5 Yukon River communities representing
the lower, middle, and upper Yukon River fishing
districts to evaluate the socioeconomic impact of poor
returns of Yukon River king salmon. (Emmonak,
Marshall, Nulato, Beaver, Eagle)
(2) Initiated a new study to develop a method to
comprehensively monitor subsistence harvests of fish
and wildlife in all areas of the state through a
system of index communities. Data collection is
ongoing in Nunam Iqua, St. Marys, Marshall, Nulato,
Galena, and Ruby.
(3) Successfully recruited and hired a Subsistence
Resource Specialist to reopen the Division's Bethel
field office.
5:16:16 PM
MR. SIMON, in response to a question from Representative Herron,
regarding the key accomplishments around the Yukon River Chinook
salmon disaster research, said data collection was recently
completed and is entering the analysis stage. A final report
will be completed by June 30, 2011, which will be presented to
the board of fisheries and the Yukon panel.
REPRESENTATIVE HERRON whether the division will develop
[recovery] efforts based on the research.
MR. SIMON responded that the technical reports will be provided
to the board and panel. The division is a source for
information, and consideration is being given to further
research regarding the Yukon Chinook salmon.
5:17:47 PM
REPRESENTATIVE AUSTERMAN asked whether anything more is being
done regarding the disaster.
MR. SIMON explained that the research specifically focuses on
the socio-economic impacts of the declining salmon return. The
investigation is not limited to the subsistence implications.
The data collection process included lines of questioning
regarding the loss of commercial fishing opportunities and how
that has had effects on other subsistence activities.
REPRESENTATIVE AUSTERMAN inquired about the cost of the study.
MR. SIMON answered $260,000.
5:21:19 PM
^OVERVIEW(S): Division of Habitat, Alaska Department of Fish
and Game
OVERVIEW(S): Division of Habitat, Alaska Department of Fish and
Game (ADF&G)
5:21:54 PM
CHAIR THOMPSON announced that the next order of business would
be an overview from the Division of Habitat, of the Alaska
Department of Fish and Game (ADF&G).
5:21:56 PM
MIKE DAIGNEAULT, Regional Supervisor, Anchorage Area Office,
Division of Habitat, Alaska Department of Fish & Game (ADF&G),
paraphrased from a prepared statement, which read as follows
[original punctuation provided], with accompanying slides:
Anadromous fish habitat and fish passage
responsibilities legislated shortly after statehood.
Over the years, 32 refuges, critical habitat areas and
sanctuaries were also established.
Functions initially distributed throughout Department.
"Sections" created in Sport Fish (Access Section),
Comm. Fish (Water Rights), and Game Divisions (Lands).
About 1969 or 1970, the above sections were
consolidated into the "Habitat Section".
Division responsibilities expanded in late 70s-early
80s when state and federal planning efforts escalated.
Habitat granted "Division" status in 1981.
In 2003, Habitat was moved to DNR, and renamed the
"Office of Habitat Management and Permitting." The
division also sustained an 18percent reduction in
staff and an 11percent reduction in budget.
In 2008, Habitat was moved back to ADF&G, and re-
established as the "Habitat Division".
The Division currently has 49 positions, 3 Regional
Offices, and 3 Area Offices.
5:24:33 PM
MR. DAIGNEAULT provided the mission statement, which is:
To protect Alaska's valuable fish & wildlife resources
and their habitats as Alaska's population and economy
continue to expand.
MR. DAIGNEAULT cited the division's statutory authority, to wit:
AS 16.05.841 Fish Passage
AS 16.05.871 Fish Habitat
AS 16.20
Legislatively Designated Special Areas
5:25:23 PM
MR. DAIGNEAULT established the division's core services, which
are [original punctuation provided]:
Review applications and issue permits for activities
in anadromous water bodies and fish-bearing waters and
legislatively designated Special Areas (Title 16);
provide expertise to protect important fish and
wildlife habitat; monitor authorized projects and
conduct compliance actions.
Maintain and revise the Catalog of Waters Important
for the Spawning, Rearing, or Migration of Anadromous
Fishes.
Manage Alaska's Special Areas in accordance with
legislative guidelines; prepare and update management
plans for these areas.
Review proposed timber harvest activities; conduct
field inspections; work cooperatively with timber
operators and other governmental agencies.
Review development projects (e.g., oil and gas, hard-
rock mining, roads, T16 elements of hydropower
projects) authorized under other agencies'
authorities.
Conduct applied research to develop methods and means
to minimize impacts of development projects on fish
and wildlife resources.
5:26:23 PM
MR. DAIGNEAULT said the end result is to protect Alaska's
valuable fish and wildlife resources and their habitats during
resource development activities. The first target is to have
100 percent of resource developers meet agency requirements for
protection of fish, wildlife, and their habitats; in FY10, 99.6
percent of all developers were in compliance with issued Fish
Habitat and Special Area permits.
5:26:53 PM
MR. DAIGNEAULT continued, explaining the three strategies that
the division has developed, the associated targets and status
updates. Beginning with strategy A1 and the four associated
targets, he paraphrased [original punctuation provided]:
Enhance our Fish Habitat and Special Area review
processes by reviewing projects in a timely manner,
adding appropriate conditions to protect resources,
and monitoring, as needed.
Target 1: 8.2-day average permit review timeframe for
Fish Habitat Permits
Status 1: In FY10, Fish Habitat permits were reviewed
and issued in an average of 9.1 days, statewide,
almost meeting the performance target.
Target 2: 100percent of Fish Habitat permit
applications received are reviewed and acted on by
either: 1) approving as proposed; 2) approving after
modification with appropriate conditions to protect
resources; or 3) denying if resources could not be
protected.
Status 2: In FY10, 100percent of Fish Habitat permits
were reviewed and completed, meeting the target.
Target 3: 15 day average permit review time for
Special Area permits.
Status 3: In FY10 Special Area permits were reviewed
and issued in an average of 12.4 days, statewide,
exceeding the 15 day average permit review time
performance target.
Target 4: 100 percent of Special Area Permit
applications received are reviewed and acted on by
either: 1) approving as proposed; 2) approving after
modification with appropriate conditions to protect
resources; or 3) denying if resources could not be
protected.
Status 4: In FY10, 100 percent of Special Area
permits were reviewed and completed, meeting the
performance target.
5:28:24 PM
MR. DAIGNEAULT continued with strategy A2, and the two
associated targets, he paraphrased [original punctuation
provided]:
Actively and timely participate in coordinated project
reviews to ensure appropriate protection of important
habitats.
Target 1: 11.5 day average timeframe for a
coordinated project review.
Status 1: In FY 10, coordinated project reviews were
completed in an average of 12.9 days, statewide, just
short of the 11.5 day average timeframe for a
coordinated project review performance target.
Target 2: 93.2 percent of projects in a coordinated
process are reviewed to ensure appropriate protection
of important habitat.
Status 2: In FY10, 92.2 percent projects in a
coordinated process were reviewed to ensure
appropriate protection of important habitat, almost
meeting the performance target to review 93.2 percent
of projects in a coordinated process.
5:29:19 PM
MR. DAIGNEAULT continued with strategy A3, and the associated
target, he paraphrased [original punctuation provided]:
Continue to actively manage legislatively designated
Special Areas by developing and updating management
plans.
Target 1: One Special Area management plan completed
or revised each fiscal year.
Status 1: No new Special Area management plans were
completed in FY10; target not met.
5:29:42 PM
REPRESENTATIVE HERRON noted that the division has a timely
turnaround time for permits, and asked how they are handled in
such an efficient manner.
MR. DAIGNEAULT responded that the permit applications are a
focus, and are prioritized as they are received.
5:30:31 PM
REPRESENTATIVE AUSTERMAN, referred to strategy A3, targeting one
Special Area management plan for completion and revision each
year, and asked how many Special Area management plans exist.
MR. DAIGNEAULT answered six, which are in the management
planning development process. He said that given the various
stakeholder groups, planning teams, and public involvement, the
process time is lengthy. The division is currently engaged in
the planning process for five Special Areas in the Bristol Bay
region and one for a critical habitat area in the southeast
region.
REPRESENTATIVE AUSTERMAN asked how many legislatively designated
Special Areas exist.
MR. DAIGNEAULT said there are a total of 32; six of which are in
the active management plan process.
5:31:57 PM
MR. DAIGNEAULT presented the FY12 proposed fiscal authority, in
the form of a pie chart. The majority of the funding is
received from state general funds, and interagency receipts. A
small percentage is received from four other funding sources.
5:32:36 PM
REPRESENTATIVE AUSTERMAN asked for an example of interagency
receipts.
MR. DAIGNEAULT explained that funds may be received from other
agencies, such as the Department of Natural Resources (DNR).
The funds are received at DNR directly from an industry, for
example mining, and remitted to the Division of Habitat for
permit review and related research projects.
5:33:42 PM
KERRY HOWARD, Director, Division of Habitat, Alaska Department
of Fish & Game (ADF&G), interjected that the division has been
relocated to ADF&G, but no operating policies, or priorities,
have been changed.
HB 121-LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN
5:35:25 PM
CHAIR THOMPSON announced that the next order of business would
be HOUSE BILL NO. 121, "An Act establishing the commercial
charter fisheries revolving loan fund, the mariculture revolving
loan fund, and the Alaska microloan revolving loan fund and
relating to those funds and loans from those funds; and
providing for an effective date."
5:35:46 PM
CURTIS THAYER, Deputy Commissioner, Department of Commerce,
Community and Economic Development (DCCED), paraphrased from a
prepared statement, which read as follows [original punctuation
provided]:
The Department of commerce, Community and Economic
Development (DCCED) is on a mission to foster a
business climate in this state that is conducive to
job creation and economic growth. We have been
actively and introspectively engaged in examining how
we operate, in an effort to be more responsive to the
needs of the business community and deliver services
that are relevant and useful to the private sector.
Recent realignment of resources and services within
the department has bolstered the state's economic
development toolbox and is helping us aggressively
reassert the state's role in creating a business-
friendly environment in Alaska.
We have spent a lot of time listening to the private
sector. The governor's recently formed Economic
Advisory Council, comprised of industry leaders from
around the state, has been instrumental in helping
this administration plot a productive course to
economic development. Additionally, we solicited
input from NGOs and trade associations, regional
development organizations (ARDORs), CDQs, ANSCA
corporations and legislators. A commonly heard theme
has been to increase financing options for small
businesses. Access to critically needed capital can
be the difference between simply getting by and
thriving.
House Bill 121 is a step in the right direction. The
proposed legislation would create a suite of three new
revolving loan funds: to incentivize development of
the shellfish mariculture industry; to assist Alaska
charter operators in acquiring halibut permits to
transition to the new regulatory and management regime
instituted by NOAA; and to seed microenterprise
development across the state.
The Commercial Fisheries Revolving Loan Fund would:
provide access to capital for Alaskan-owned charters;
repatriate permits to Alaska; increase economic
benefits to Alaska from this sector from recirculation
of earnings.
The Mariculture Revolving Loan Fund would: provide a
spark to the growing industry with great year-round
potential for coastal Alaska communities and
entrepreneurs. (Currently, there are 67 permitted
farms in the state, but only 25 producing farms - 10
in Southeast, 15 in Southcentral.)
The Microloan Revolving Loan Fund would: Help small
businesses grow by providing loans for start-up costs,
working capital, inventory expansion, or a variety of
other commercial purposes; -Alaska one of few
remaining states without a microloan program, -Proven
track record in other states and through SBA.
These programs would complement two existing small
business loan programs administered by DED - the Small
Business Economic Development Revolving Loan Fund and
the Rural Development Initiative Fund, both of which
are geared toward long-term financing. Small
businesses are the No. 1 creator of private-sector
jobs. So this legislation, which will help us in our
efforts to spur sustainable economic growth in Alaska,
will be good for our economy and for Alaska families.
5:39:02 PM
MR. THAYER pointed out that the microloan bill passed the house
in 2010, but failed to win approval in the waning hours of the
senate.
5:39:41 PM
WANETTA AYERS, Manager, Office of Economic Development,
Department of Commerce, Community & Economic Development
(DCCED), said that the role of economic development is to
address the underserved sectors of the state, where local
banking facilities may not exist, as well as support high risk
professions, such as commercial fishing. The loan funds in this
bill are geared towards these types of opportunities. The
capitalization levels, loan limits, repayment terms, interest
rates, and special features of the various funds, were developed
in consultation with stakeholders including nongovernmental
organizations (NGOs), government agencies, and the private
sector. She explained that HB 121 proposes a suite of three
loan funds for commercial charter fisheries, mariculture
development, and microloans. The loan commonalities include:
set up as revolving loans; earnings, loan repayments, and fees
to be retained by the fund for future loans; and operating
expenses are also to be paid from earnings of the fund.
5:42:44 PM
MS. AYERS explained that each fund has key functions, and
described the current situation faced by the halibut charter
industry; paraphrasing from a prepared statement, which read
[original punctuation provided]:
Effective February 1, 2011, all vessel operators in
Areas 2C and 3A with charter anglers onboard catching
and retaining Pacific halibut must have an original,
valid Charter Halibut Permit (CHP). Based on log
books NOAA estimates 532 Eligible Permitees; some 800
applications were received. Permit prices are still
being established in the marketplace. Current asking
prices range from $40,000 to over $100,000 depending
on the number of fishermen the permit allows.
Commercial Charter Fisheries Revolving Loan Fund
[will]:
-Provide access to capital for Alaskanowned Charters
-Repatriate permits to Alaska
-Increase economic benefits from this sector
By offering a loan program to Alaska residents,
business owners will have greater access to capital
when purchasing permits over nonresidents.
This in turn should allow Alaska business owners to
repatriate more permits than otherwise using
traditional financing. Additionally, with Alaska's
yearround residents owning permits, Alaska's economy
will realize more of the benefits associated with the
sport/charter industry. Resident's contribution to
the local economy will be greater than nonresident
permit holders as they circulate funds in the economy
year round.
Loan Fund Features:
Capitalization $5 million
Loan Limit $100 thousand
Term 15 years
Interest may not exceed prime + 2
Floor/Ceiling 3-10.5 percent
5:44:36 PM
MS. AYERS said the mariculture revolving loan fund will serve 67
permitted farms, and 25 producing farms, that are governed by a
number of agencies including: ADF&G Commercial Fisheries
Division/Mariculture Program; Department of Natural Resources
(DNR) Aquatic Farm Lease Program; Department of Environmental
Conservation (DEC) Food Safety and Sanitation Program/Shellfish
Section; and the Alaska Coastal Management Program. The 2009
performance report, from the existing mariculture activity,
indicates a value of approximately $473,000.
5:45:46 PM
MS. AYERS pointed out that the bill contains an industry
specific training requirement. Training resources that have
been funded in recent years include: Alaska Sea Grant/Marine
Advisory program - mariculture research education and extension
and the NOAA mariculture initiative; collaborative research;
Alaska Shellfish Growers Association - grant to write best
management practices for the industry.
5:46:20 PM
MS. AYERS reviewed the suggested mariculture loan fund features,
which are:
Capitalization $3 million
Loan Limit $100 thousand
Term 20 years
Interest may not exceed prime + 1
Floor/Ceiling 5-9 percent
Delayed repayment and accrual
MS. AYERS explained that the delayed repayment and accrual
feature is unique to the program to allow for the six year
product growing time.
5:47:20 PM
MS. AYERS proceeded to describe the microloan revolving loan
fund, stating that the 2010 bill, HB 412, passed the house
unanimously; however, it failed to pass the senate. Many states
offer microloans as a means to seed new businesses, and she
stressed the important to have this available in Alaska. The
suggested loan features are:
Capitalization $3.5 million
Loan Limit $35/$70 thousand
Term 6 years
Interest prime + 1
Floor/Ceiling 6-8 percent
5:49:23 PM
REPRESENTATIVE AUSTERMAN directed attention to the bill page 3,
[line 13], noting that it states funds may be used to purchase a
charter halibut fishing vessel.
MS. AYERS said yes, that would be an eligible use of the funds.
REPRESENTATIVE AUSTERMAN expressed disagreement for this aspect
of the bill, stating that it should support existing halibut
charter operations, not assist someone to purchase a boat and
begin a halibut fishing venture. Moving to page 6, line 16, he
read "have experience or training in the mariculture industry,"
and suggested the language include a definition of
experience/training; it is a vague statement.
MS. AYERS said that the requirement for training was
specifically requested by existing operators in the industry,
who are willing to provide training and mentorship to entrants;
it is not meant to be an onerous requirement. She indicated
that the regulation process might provide further details
5:53:45 PM
REPRESENTATIVE AUSTERMAN referred to page 9, line 26, to state
that a definition for "reasonable amount" would be helpful.
MS. AYERS suggested that specifics would be set forth in
regulation rather than statute.
5:55:41 PM
REPRESENTATIVE HERRON paraphrased questions that will be
provided to the sponsor for written comment, which read
[original punctuation provided]:
Does the production from aquatic shellfish farms
contribute to common property fishery harvests?
There has been controversy relative to Geoduck farms,
having been a "grab of the resource" in some
locations. Are there similar concerns with other
mariculture activities such as mussel and oyster
farming?
Salmon farms have been opposed in this state due to
the conflicts that they potentially pose to wild
stocks and the direct competition they represent for
existing historical fisheries. Along the same lines,
have we been able to demonstrate that the expansion of
shellfish farms does not present similar risks such as
potentially lending to the spread of disease among
existing wild stocks?
5:56:52 PM
REPRESENTATIVE JOHNSON directed attention to page 7, line 17,
and read:
The department may not require the repayment of
principal on a loan made under AS 16.10.910 for the
initial period of the loan.
REPRESENTATIVE JOHNSON asked, "Does this mean they don't have to
pay anything, or any interest, for six years."
MS. AYERS answered yes; the intent is to allow the mariculture
producer to have three to six years to produce a revenue stream.
5:58:13 PM
CHAIR THOMPSON turned to bill page 7, line 1, and asked for
clarification of having a loan amount specified per year, versus
the other loans that specify a total loan limit.
MS. AYERS said that it is a feature of the mariculture loan to
allow a yearly amount of not more than $100,000 to be borrowed.
5:59:12 PM
REPRESENTATIVE MILLER inquired how the mariculture revolving
loan program would have funds replenished, given the fact that
the initial borrowers would not be making payments for six
years; how will the fund be recapitalized during the interim.
MS. AYERS confirmed that the fund may become fully subscribed
and until repayment occurs, no more loans would be available.
REPRESENTATIVE MILLER turned to page 9, line 3, and read, "make
loans to eligible applicants under AS 44.33.950-44.33.990 to be
used for working capital, equipment, construction, or other
commercial purposes by a business located in the state," and
asked whether this applies to any commercial business in the
state.
MS. AYERS responded yes.
REPRESENTATIVE MILLER asked, "Is that what is intended."
MS. AYERS answered yes.
REPRESENTATIVE MILLER inquired how defaulted loans would be
handled.
MS. AYERS indicated that seizure of property and resale is
handled through the financing office; measures are in place for
inevitabilities of this kind.
6:03:26 PM
CHAIR THOMPSON opened public testimony
6:03:45 PM
RUSSELL DICK, President and CEO, Haa Aani, LLC, Sealaska
Corporation, stated support for HB 121, and applauded the
efforts for removing the barriers of entrepreneurs to attain
affordable capital. Communities are being targeted for
mariculture development and this type of support is essential,
he stressed, and said that apprentice oyster farmers will also
benefit. Pioneering new industry is always a challenge and
gaining experience and training is important, and requires an
innovative approach, he said.
6:08:18 PM
RODGER PAINTER, President, Alaska Shellfish Growers Association,
said that the terms of the loans are very important, as it
requires a minimum of three years to generate income from a new
mariculture farm; up to eight years for certain species. Annual
expenses will need to be met, in the interim years, which can
range from $125,000 to $150,000. Many costs accrue annually,
including the purchase of seed, state fees, and labor. He
observed that the mariculture loan program is based on the
successful private salmon hatchery non-profit model. The
mariculture industry may not match the economic gains of the
salmon hatcheries; however, he reported, Canada has seen
industry growth with the private farms that have received
government support. He stated his belief that the economic
demographics, particularly in the southeast region of Alaska,
require the stimulus that will be encouraged by passage of HB
121. Regarding the industry training that the bill requires, he
said that the association is in favor of the stipulation, and is
working with the UA to provide the appropriate course work.
Shellfish farms do not contribute to the common property
resources with the exception of geoducks; a minimal amount of
spawn may tend to drift. In response to a committee question,
he said that the existing farms started up through a state loan
guarantee program. The newest farms are a result of Sealaska's
efforts to promote mariculture, and grants from the United
States Department of Agriculture.
6:19:12 PM
RICHARD YAMADA, Vice President, Alaska Charter Association,
stated support for HB 121, saying that it will allow current
charter captains to stay in business or to purchase permits and
maintain operation. He predicted that, in the long term, it
will allow new entrance into the halibut charter industry. The
halibut industry has been an economic resource for many
communities, and increases access for the public to fishing
resources. He suggested a change to the name of the loan fund,
removing the word "commercial" and inserting "sport".
REPRESENTATIVE AUSTERMAN asked whether the term "commercial
sport charter" would be applicable.
MR. YAMADA said the term "sport" defines the business more
accurately than "commercial."
REPRESENTATIVE AUSTERMAN inquired whether a sport charter
operator is not technically considered a commercial business.
MR. YAMADA responded, according to the business license, yes.
6:23:23 PM
REPRESENTATIVE AUSTERMAN referred to the loan eligibility
allowances, and asked if the loan program would not be primarily
for operators to purchase a permit, versus as boat.
MR. YAMADA stated his belief that the cost for entering the
industry may be prohibitive considering the requirement for an
expensive permit, along with the purchase of a boat.
CHAIR THOMPSON announced that the bill would be held over.
HB 59-COMMERCIAL FISHING LOAN ACT
6:25:29 PM
CHAIR THOMPSON announced that the final order of business would
be HOUSE BILL NO. 59, "An Act relating to loans made to
commercial fishermen under the Commercial Fishing Loan Act for
product quality improvements and energy efficiency upgrades; and
providing for an effective date."
6:25:39 PM
REPRESENTATIVE SEATON paraphrased from the sponsor statement,
which read as follows:
HB 59 allows the Department of Commerce Community and
Economic Development to give Commercial Fishing Loan
Fund borrowers a reduction in the interest rate on
their loan if 50 percent of the loan is spent on a
product produced or manufactured in the State of
Alaska. The Commercial Fishing Loan Fund was created
by the State of Alaska to aid commercial fishermen in
securing new equipment, quota shares and upgrades to
their vessels. The Department already allows
reductions in interest rates for borrowers who pay on
time, and make engine and fuel efficiency upgrades or
product quality improvements.
To be eligible for the rate reduction under HB 59 at
least 50 percent of borrower's purchases with the loan
fund have to be manufactured in the State of Alaska.
The definition of manufacture is "processing,
developing, or making an item into a new item with a
distinct character and use."
HB 59 does not make the rate reduction mandatory
because the Department needs to have the discretion to
institute it when the market allows. For example, in
today's market the interest rates are so low, if the
Department were required to issue the interest rate
discount it would create a loss for the fund.
HB 59 promotes economic development in Alaska by
encouraging Alaska fisherman to purchase equipment
manufactured in the State of Alaska when using
Commercial Fishing Loan Fund dollars.
6:29:06 PM
REPRESENTATIVE MILLER directed attention to the bill, page 1,
line 7, to read "the department may," and asked what criteria
the department would use to accept or reject an application.
REPRESENTATIVE SEATON answered that the financial condition of
the fund would be the guiding factor; it is necessary that prime
interest rates be high enough to generate an income that covers
the service cost of the loan. All applicants would be eligible
during times of a healthy economy.
6:30:41 PM
REPRESENTATIVE PRUITT inquired whether competition, within the
industry, is being served by passage of HB 59.
REPRESENTATIVE SEATON stated his understanding that no
discrimination is being made regarding new versus existing
businesses; nothing that would advantage a current manufacturer
over someone new to the industry. The difference is that the
loan would provide an incentive to purchase locally. The intent
of the bill is to create and sustain jobs in Alaska, he said.
REPRESENTATIVE PRUITT queried what constitutes/defines made in
Alaska.
REPRESENTATIVE SEATON referred to the bill page 1, line 13, and
read:
In this subsection, 'manufactured or produced' means
processing developing, or making an item into a new
item with a distinct character and use.
REPRESENTATIVE SEATON said the Department of Commerce, Community
& Economic Development contributed to the bill language, to
ensure an accurate, and adequate, definition.
6:34:53 PM
CHAIR THOMPSON opened public testimony and announced that the
bill would be held in committee for further consideration.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 6:36
p.m.