Legislature(2015 - 2016)CAPITOL 120
03/17/2015 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Bristol Bay Economic Development Corporation | |
| Confirmation Hearing: Commissioner Alaska Department of Fish & Game (adf&g) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
March 17, 2015
10:02 a.m.
MEMBERS PRESENT
Representative Louise Stutes, Chair
Representative Neal Foster
Representative Bob Herron
Representative Charisse Millett
Representative Jonathan Kreiss-Tomkins
Representative Dan Ortiz
MEMBERS ABSENT
Representative Craig Johnson
COMMITTEE CALENDAR
PRESENTATION(S): BRISTOL BAY ECONOMIC DEVELOPMENT CORPORATION
- HEARD
CONFIRMATION HEARING(S):
ALASKA DEPARTMENT OF FISH & GAME (ADF&G), COMMISSIONER
Sam Cotten - Juneau
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
NORMAN VAN VACTOR, President and Chief Executive Officer
Bristol Bay Economic Development Corporation (BBEDC)
Dillingham, Alaska
POSITION STATEMENT: Provided a presentation regarding the loss
of limited entry fishing licenses from the Bristol Bay region.
ROBIN SAMUELSON, Chairman
Bristol Bay Economic Development Corporation (BBEDC)
Dillingham, Alaska
POSITION STATEMENT: Provided a presentation regarding the loss
of limited entry fishing licenses from the Bristol Bay region.
SAM COTTEN
Commissioner Designee
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Testified as the Commissioner Designee for
the Alaska Department of Fish & Game, discussed his
qualifications and answered questions.
ACTION NARRATIVE
10:02:29 AM
CHAIR LOUISE STUTES called the House Special Committee on
Fisheries meeting to order at 10:02 a.m. Representatives
Stutes, Kreiss-Tomkins, and Ortiz were present at the call to
order. Representatives Millett, Herron, and Foster arrived as
the meeting was in progress.
^PRESENTATION: BRISTOL BAY ECONOMIC DEVELOPMENT CORPORATION
PRESENTATION(S): BRISTOL BAY ECONOMIC DEVELOPMENT CORPORATION
10:03:11 AM
CHAIR STUTES announced that the first order of business is a
presentation from the Bristol Bay Economic Development
Corporation.
10:03:55 AM
NORMAN VAN VACTOR, President and Chief Executive Officer,
Bristol Bay Economic Development Corporation (BBEDC), provided a
presentation from the Bristol Bay Economic Development
Corporation regarding the ongoing loss of limited entry fishing
licenses from Bristol Bay communities and region. He
paraphrased from a prepared statement, which read as follows
[original punctuation provided]:
The ongoing exacerbation of the loss [of] ownership of
our Salmon resource is not a problem that is unique to
Bristol Bay and our communities but is a pain shared
but most of coastal and rural Alaska. That said as
Bristol Bay has the largest sockeye salmon fishery in
the world we tend to get referenced and cited more
than the next. In the context of permit ownership
coastal Alaska has developed a trend that needs to be
first stopped in its tracks and reversed. While the
facts and statistics I cite are specific to Bristol
Bay I know the same trends are playing out in
communities such as Kodiak, Cordova, Hoonah, Angoon,
and Petersburg just to name a few.
I had the pleasure several months ago of serving on
the Governor's Fisheries Transition team and in fact
chaired the group of dedicated community and industry
participants. One of the 5 major issues that this
group asked the new administration to address was the
goal of "returning the ownership" of Alaska's
Fisheries resources to the communities of coastal
Alaska.
What's the Need and why the importance.
-Locally held permits & salmon fishing revenue are
vital to the economic health of the region
-Locally held permits continue to decline and sharply.
-Residents lack access to capital and financing that
allow entry to our fisheries.
-Existing programs are still not meeting the needs of
our residents to compete for permits.
-Bristol Bay as a region depends heavily on fishing as
the major revenue contributor.
-As ownership of permits leave the region so does the
revenue they generate. I'm sure the multiplier effect
needs no explanation. The $100,000 gross revenue that
a permit might generate actually stimulates several
hundred thousand dollars of economic activity.
-We have over time started perpetuating a negative
feedback loop that further perpetuates the decline of
permits & crews.
-Some of these statistics are dated now by a few years
but let me share a few.
-Bristol Bay has now lost almost 44% of all the
permits originally issued to watershed residents.
Bristol Bay Residents now hold under 25% of all
Bristol Bay permits. Originally 28% of all residents
held one type of permit or another. Today it's less
than 10%.
How do Permits Leave?
Transfers - About 62% of all permits are lost due to
transfers. Most of these transfer are made up of
Sales.
Migration - Migration constitutes about 25%.
Other - Makes up the difference of about 13%. This is
largely made-up of foreclosures, revocations, and
forfeits.
Why do Permits Leave?
Permits are randomly distributed based on economic
principles amongst potential owners. Most of these
potential owners are non-residents who have greater
access to capital and credit giving them a competitive
acquisition advantage.
Average local permit owners harvest 25% less than non-
residents. Higher earning mean non-residents view
permits as having a higher intrinsic economic value.
Our people are not any less the fisher people than the
next, they just approach the fishery from a different
social perspective rooted in resource protection and
subsistence.
Sales and transfer of permits tend to rise both at the
top of the fish price curve and at the bottom.
Without a retention program both these price points
result in a significant acceleration of loss's.
Prior to joining BBEDC a little over two years ago I
had spent close to 30 years working for Seattle based
major processor. One of my major accomplishments
during that tenure was building what was the largest
resident Alaska fleet in the industry. To cite just
one community as an example, the community of New
Stuyahok, they had over 24 permits that fished for us.
I believe today that number is closer to 8.
Some say that turning this trend around is impossible,
accept it and move on. This for us is a completely
unacceptable response and we do believe that are
options.
23 years ago 98% of the Bering Sea's fisheries
resource was owned and controlled by Non-Alaskans
living in the Pacific Northwest. Today 6 Alaskan
Community Development Corporation, 100% owned by
resident Alaskan's of all stripes and skin color own
over 30% of the resource and growing. We did it
offshore with the Federal's governments help and a 10%
stake, why can't we do something near shore with the
State's help.
The onshore offshore issues are certainly different
and our onshore coastal issues will require a very
different solution set. I think I'm also smart enough
to know that now is also NOT the best time to coming
to the State with our hands out and we are NOT. I
reiterate. We are not.
Bristol Bay Economic Development Corporation has been
trying to help turn the tide. For the last 7 years we
have had an active permit retention plan in place. We
are making progress but have a long way to go and but
we need your help. We estimate that we are currently
loosing approximately 15 resident permits a year. In
the year 2014 just completed we had 7 saves, our best
year yet. That said until that number is 15 or higher
we still aren't even breaking even.
The cause of permit losses are complex and so are the
solutions. Restoration will require a mix of long
term programs. With that however will come the
opportunities to restore the ownership of this
tremendous economic engine to our communities. Well
trained and adequately financed fishermen will succeed
and we hope to be part of the solution. We ask that
when you our legislature see opportunity's that
support the goal of returning the ownership of
Alaska's coastal fisheries to Coastal Alaskans we can
get your bipartisan and unequivocal support.
Let's "Bring it All Back Home".
10:12:25 AM
REPRESENTATIVE ORTIZ addressed Mr. Van Vactor's statement that
the solutions are complex and will require a variety of options.
He asked whether there is one particular area of legislation or
legislative focus that is needed to get things back on track.
MR. VAN VACTOR replied there is not one silver bullet, but said
many ideas are being floated. It merits an ongoing serious
conversation, whether it is a task force or the continuance of
some very specific conversations. He said BBEDC is extremely
grateful to what the Commercial Fisheries Entry Commission
(CFEC) has accomplished over time for the fisheries resource,
and urged that the concerns of all parties be heard. Although
community permit banking is in its infancy and needs to be
pursued, he advised, it is a concept that appears to have merit.
REPRESENTATIVE ORTIZ noted there are existing state loan
programs to assist Alaska fishermen in gaining access to permits
and boats. He inquired whether these programs are working
effectively or need changes that would help meet BBEDC's goals.
MR. VAN VACTOR responded the state and the Alaska Commercial
Fishing and Agriculture Bank (CFAB) currently have loan programs
that are the backbone of what BBEDC is currently doing, and the
seven saves made by BBEDC in 2014 were done by working within
that system. Currently, BBEDC is working with qualified
residents, assisting them with the process, and assisting them
with a significant portion of the down payment required in the
form of a gift to the individuals. Then, for a period of time,
BBEDC will continue working with them and even assist them with
the financial payments, specifically the interest payments every
year. It is a huge undertaking for an individual to step into
this fishery because permits are currently priced at $160,000
together with a competitive fishing vessel being a couple
hundred thousand dollars. He described it as a significant
barrier to entry that BBEDC is trying to help its people
overcome, he advised. He pointed out that at the end of the
day, there is nothing that precludes BBEDC from assisting an
individual, pouring a tremendous amount of money into that
individual's specific operation, and then five or six years
later still see that permit leave the region.
10:17:28 AM
ROBIN SAMUELSON, Chairman, Bristol Bay Economic Development
Corporation (BBEDC), provided a brief biography, stating that
his great, great grandfather started the first cannery in
Bristol Bay and prior to that his relatives were subsisting off
Bristol Bay fish. He noted he has served three years on the
Board of Fisheries and nine years on the North Pacific Fishery
Management Council. He started fishing in a 22 foot skiff when
he was 14 years old and recounted that the Japanese high seas
driftnet fleet once threatened the region's fishery by corking
off the rivers. He pointed out that it was so bad that Governor
Egan notified the federal government [and eventually] there was
a withdrawal of the high seas driftnet fleet. Limited entry
came into play and he got his permit as a young person, plus he
helped other people in the bay get a permit. It is a good
program, but now at age 64 he is seeing permits exit the bay
every year. He has been chairman of BBEDC since its inception
and was the president and chief executive officer prior to Mr.
Van Vactor. Most of the people he represents are subsistence
people, Alaska Natives who live in villages where there is 80
percent unemployment, making every dollar very important and, he
said, at 40 cents a pound nobody makes money, not even the
topnotch fishermen. The people he represents cannot go borrow
money and the only thing they have for sale are their Native
allotments and their drift or set net permits; therefore, a lot
of the sales in Bristol Bay were in desperation from local
residents. He allowed there were speculators who got permits in
Bristol Bay and sold them. He said he foresees a future in the
state of having a limited entry program in Bristol Bay where
probably 90 percent of the permits are going to be non-residents
which was never the intent of the limited entry program.
Sustainable economies need to be created within the communities
of Bristol Bay and elsewhere in the state and one way to
accomplish that is to figure out a way to get more permits into
the hands of the watershed residents, he explained. He related
that [Bristol Bay] is losing hundreds of millions of dollars by
folks coming up, fishing the resource, and taking that money
back to their respective communities.
MR. SAMUELSON said BBEDC has done everything it can. The first
permit sale he made at BBEDC to a watershed resident was to a
20-year-old woman who met the qualifications and she is still
fishing today, but what BBEDC is doing is not enough, he said.
The current limited entry program needs to be reviewed and
different avenues figured out for getting more permits into the
hands of watershed residents. As oil prices dwindle there will
be budget cuts and Rural Alaska will feel those extra hard. In
the last 20-30 years there has been a tidal wave of prosperity
in Alaska due to oil, but what is being faced today is scary to
Rural Alaskans. He said, this year 54 million sockeye salmon
will return to Bristol Bay and no other place on earth has that
kind of resource which is why residents don't like Pebble Mine
as they don't want that mine to ruin their waters. Bristol Bay
has a fish-first policy that has carried the residents through
for thousands of years, and he urged the committee to use
extreme caution in dealing with limited entry and give residents
ample time to respond to any proposals. He explained there are
1,800 drift permits and 1,000 set net permits in Bristol Bay and
what is left is very important. He expressed that ownership of
permits by watershed residents must be increased.
^CONFIRMATION HEARING: COMMISSIONER ALASKA DEPARTMENT OF FISH &
GAME (ADF&G)
CONFIRMATION HEARING(S):
COMMISSIONER ALASKA DEPARTMENT OF FISH & GAME (ADF&G)
10:24:38 AM
CHAIR STUTES announced that the final order of business is a
confirmation hearing for the commissioner of Alaska Department
of Fish & Game.
10:25:29 AM
SAM COTTEN, Commissioner Designee, Alaska Department of Fish &
Game (ADF&G), stated he has had extensive hands-on experience
with many different types of fisheries and fairly extensive
experience working with local governments and advocating on
their behalf in front of fishery boards. He said he was a
member of the North Pacific Fishery Management Council (NPFMC)
for six years, which gave him a lot of hands-on experience with
fisheries management issues. He then cited his experience as a
representative in the Alaska State Legislature and noted that in
addition to serving in the legislature he has worked with the
legislature, especially in the fish and game arena.
10:27:07 AM
CHAIR STUTES, in regard to conflicts between the different
fishing sectors, asked whether the commissioner designee
believes he has the ability to remain impartial and work for the
good of all the sectors.
COMMISSIONER COTTEN replied he has not been involved in any of
the fisheries that are addressed by the North Pacific Fishery
Management Council, which are federal fisheries. His commercial
fishing experience is pretty much restricted to salmon fishing.
He was a purse seiner in the Lower Cook Inlet where he had a
permit for 25 years, and has fished a few other places as well.
He advised that when he worked for the Aleutian East Borough,
the borough was often the center of allocation battles between
other areas, and as a result he came to know many of the other
areas pretty well, such as Norton Sound, Bristol Bay, the river
systems, Kodiak, and Chignik. He related that he became well
educated on the concerns of other people, especially in the Area
M fishery. He pointed out that for the fishery he participated
in, in his kids still fish there. Therefore, he signed off his
executive order authority to the deputy commissioner so there
won't be any concerns about not being impartial in that area.
As far as the rest of the state, he believes he is offering a
balanced approach and he doesn't feel he has any pre-conceived
biases. He related that the only exception is his voting on the
North Pacific Fishery Management Council where he is fairly
parochial and votes pro-Alaska because occasionally the state
must fight to remove some disadvantages that Alaska fishermen
have.
10:29:54 AM
CHAIR STUTES understood there is a promotion to pursue more
observing on the vessels in the state. She further understood
that most of the East Coast fisheries are federally funded for
their observer coverage, whereas that is not the case in Alaska
and that seems inequitable.
COMMISSIONER COTTEN confirmed the aforementioned is true, and
comments have been made on that subject as there has been a
struggle with the federal agencies on budget issues like that,
and this is still ongoing. In the Bering Sea most of the
observer coverage is paid for by the vessel owner. In the Gulf
of Alaska the new observer program taxes each fisherman
participating in the federal fisheries with a 1.25 percent gross
tax; the tax goes into a fund that pays for the observer
coverage in the gulf. So, yes, the fishermen pay for it, he
said.
CHAIR STUTES reiterated that this is inequitable.
COMMISSIONER COTTEN agreed.
10:31:12 AM
REPRESENTATIVE HERRON expressed his support for the commissioner
designee. He asked whether the designee feels confident that he
will know what to do with the commissionership now that he has
this position and will be able to lead the department.
COMMISSIONER COTTEN answered that close to 1,700 people work for
ADF&G and most are accomplished professionals, scientists, and
biologists, and he would be crazy not to immediately admit that
he has a lot to learn from them. The department is a good
professional organization with a well-defined mission in the
statutes and the constitution that he understands. He related
that he has some ideas about how to improve communications with
the public, and would like to diminish some of the polarization
taking place in Alaska on allocation issues, and open
communication will help that. He said he feels up to the task.
REPRESENTATIVE HERRON commented that he and the commissioner
designee have had some private conversations about the
challenges on the Kuskokwim and he will continue to work with
the commissioner on that.
10:33:27 AM
REPRESENTATIVE KREISS-TOMKINS requested the commissioner
designee speak to the permit losses happening in Bristol Bay and
around the state.
COMMISSIONER COTTEN replied that he met with the gentlemen
addressing the committee earlier today and understands the
issue, adding that it is not just salmon permits. He continued,
"We see access to Alaska's fisheries as a threat in a lot of
different arenas and the federal fisheries is one of them." He
said the department supports efforts to reverse the trend of
permit loss and indicated there has been a discussion about
legislation possibly introduced that would direct attention to
that issue and maybe end up with solutions to it. There are
legal and other challenges that should not dissuade [the state]
from aggressively pursuing that cause. Opportunity and access
to the fishery resources by people who live in Alaska's fishing
communities is an extremely important priority for the
department, he stressed.
10:35:33 AM
CHAIR STUTES requested the commissioner designee to address the
by-catch issue.
COMMISSIONER COTTEN responded that by-catch is a multi-faceted
issue and the primary by-catch species deals with halibut and
Chinook salmon. Other salmon species, such as chum salmon, are
also by-catch targets in the Bering Sea. Of concern, he pointed
out, is that if the fleet is pulled away from the chum salmon it
might direct the fleet toward the Chinook salmon, so choices
must be made. The North Pacific Fishery Management Council is
doing its best to reduce by-catch to the extent practicable for
both species in the Bering Sea. He remarked that the limits for
by-catch will be brought up at the council's next meeting for
the Bering Sea, April 2015, and the council will address a
reduction of the by-catch limits for the pollock fishery,
primarily in the Bering Sea. Chinook salmon numbers are low and
it has been determined that at times of low abundance like this
that the by-catch caps should be lower as well. He said the
intention at next month's council meeting is to bring those caps
down significantly during these times of low abundance. The
halibut by-catch in the Bering Sea has also been a major concern
because halibut numbers have been down over the last several
years, so the quotas have gone down significantly for directed
fishermen and the people who live in St. Paul or other Alaska
fishermen who fish in the Bering Sea for halibut. However, the
halibut available as by-catch has remained pretty stable to
folks who bottom fish for species like yellowfin sole and rock
sole. These are federal fisheries, so [the NPFMC] is guided by
national standards that suggest [the NPFMC] should allow for
optimum yield; in other words, whatever the biologists say can
be harvested should try to be achieved while at the same time
reducing by-catch to the extent practicable. He noted, that
while it is a balance, it is felt that recently it has been out
of balance. For example, the St. Paul fishermen are told that
there are little or no fish left for them because they were all
used for by-catch for the trawl fleets. [The NPFMC] will be
addressing that issue at its June [2015] meeting, and is already
receiving complaints from the trawl industry that it is money
taken away from them and they don't like it.
CHAIR STUTES remarked that neither did the St. Paul fishermen
when they were told there was no halibut for them.
COMMISSIONER COTTEN noted that the Chinook salmon in the Bering
Sea is with the pollock fishery, and halibut is with the
groundfish fisheries and the Gulf of Alaska is generally the
same situation. He explained that in the midwater, the pollock
fleet catches the most Chinook salmon and limits have finally
been set there as a couple of big events within the western Gulf
of Alaska caused everyone to realize that there had to be
limits, and they are now in place. He explained there are two
different sets of limits - one for the pollock fishery, which is
25,000 fish divided about 2/3 east and 1/3 west; and the other
is the non-pollock fishery, which is a much smaller number
divided amongst gear groups, and this year is concern that those
limits might be reached or dangerously close to being reached.
He said a big difference between the Gulf of Alaska and the
Bering Sea is that within the Bering Sea, the Chinook salmon
harvested as by-catch are primarily Western Alaska fish headed
for the Yukon, Kuskokwim, Nushagak, and Unalakleet Rivers that
have a very high subsistence dependence. He said for the Gulf
of Alaska, the genetic work so far suggests that most of the
Chinook salmon harvested there are not Alaska fish, but reducing
the by-catch as much as possible is still required. He related
that many people want those fish so even though they are not
Alaska fish, the issue cannot be ignored. He remarked that the
by-catch limits for halibut in the Gulf of Alaska were recently
reduced and part of the industry petitioned for a new management
plan that would include allowing those fishermen to enter into
cooperatives as they would also like to have permanent ownership
of the fishing rights. However, he pointed out, [the Walker
Administration] isn't convinced those privileges need to be
assigned in order to accomplish the by-catch reduction goals.
10:41:35 AM
REPRESENTATIVE ORTIZ moved to forward the name of Mr. Sam Cotten
[to the joint session of the House and Senate for confirmation.
A member's signature of the report regarding appointments to
boards and commissions in no way reflects individual members'
approval or disapproval of the appointees; the nominations are
merely forwarded to the full legislature for confirmation or
rejection.] There being no objection, Mr. Cotten's confirmation
was advanced from the House Special Committee on Fisheries.
10:42:13 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 10:42
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DFG - Cotten Resume.pdf |
HFSH 3/17/2015 10:00:00 AM |
Cotten Resume DFG |
| Van Vactor Presentation.pdf |
HFSH 3/17/2015 10:00:00 AM |
|
| ATA Support Sam Cotten.pdf |
HFSH 3/17/2015 10:00:00 AM |
Cotten Support |