Legislature(2017 - 2018)GRUENBERG 120
03/08/2018 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s):|| Fishermen's Fund Advisory and Appeals Council (ffaac)|| Commercial Fisheries Entry Commission (cfec) | |
| HB354 | |
| HB379 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 354 | TELECONFERENCED | |
| *+ | HB 379 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
March 8, 2018
10:04 a.m.
MEMBERS PRESENT
Representative Louise Stutes, Chair
Representative Jonathan Kreiss-Tomkins
Representative Geran Tarr
Representative Mark Neuman
Representative David Eastman
MEMBERS ABSENT
Representative Zach Fansler
Representative Bryce Edgmon
Representative Mike Chenault
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Commercial Fisheries Entry Commission (CFEC)
Vance "Fate" Putman - Juneau
Dale Kelley - Juneau
- CONFIRMATION(S) ADVANCED
Fishermen's Fund Advisory and Appeals Council (FFAAC)
Mark Saldi - Skagway
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 354
"An Act relating to dive fishery management assessment
procedures."
- MOVED HB 354 OUT OF COMMITTEE
HOUSE BILL NO. 379
"An Act relating to claims against protection and indemnity
insurance policies of vessel owners."
- MOVED HB 379 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 354
SHORT TITLE: DIVE FISHERY ASSESSMENTS
SPONSOR(s): REPRESENTATIVE(s) ORTIZ
02/16/18 (H) READ THE FIRST TIME - REFERRALS
02/16/18 (H) FSH, RES
03/08/18 (H) FSH AT 10:00 AM GRUENBERG 120
BILL: HB 379
SHORT TITLE: COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS
SPONSOR(s): REPRESENTATIVE(s) ORTIZ
02/21/18 (H) READ THE FIRST TIME - REFERRALS
02/21/18 (H) FSH, L&C
03/08/18 (H) FSH AT 10:00 AM GRUENBERG 120
WITNESS REGISTER
VANCE "FATE" PUTMAN, Appointee
Commissioner; Chairman
Commercial Fisheries Entry Commission (CFEC)
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Testified as appointee to the Commercial
Fisheries Entry Commission (CFEC).
DALE KELLEY, Appointee
Commercial Fisheries Entry Commission (CFEC)
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Testified as appointee to the Commercial
Fisheries Entry Commission (CFEC).
MARK SALDI, Appointee
Fishermen's Fund Advisory and Appeals Council (FFAAC)
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Testified as appointee to the Fishermen's
Fund Advisory and Appeals Council (FFAAC).
REPRESENTATIVE DAN ORTIZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 354 as prime sponsor of the
bill.
LIZ HARPOLD, Staff
Representative Dan Ortiz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the prime sponsor of
HB 354, Representative Dan Ortiz.
VANCE FATE PUTMAN, Chairman; Commissioner designee
Commercial Fisheries Entry Commission (CFEC)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 354.
PHIL DOHERTY, Executive Director
Southeast Alaska Regional Dive Fisheries Association (SARDFA)
Ketchikan, Alaska
POSITION STATEMENT: Testified during the discussion of HB 354.
SCOTT KELLEY, Director
Division of Commercial Fisheries
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 354.
REPRESENTATIVE DAN ORTIZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, introduced HB 379.
LIZ HARPOLD, Staff
Representative Dan Ortiz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the sponsor of HB
379, Representative Dan Ortiz.
MARIE MARX, Director
Division of Workers' Compensation (DWC)
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 379.
ROBERT KEHOE, Executive Director
Purse Seine Vessel Owners Association (PSVOA)
Seattle, Washington
POSITION STATEMENT: Testified during the discussion of HB 379.
MARK VINSEL, Executive Administrator
United Fishermen of Alaska (UFA)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 379.
CLAY BESENEK
Ketchikan, Alaska
POSITION STATEMENT: Testified during the discussion of HB 379.
ACTION NARRATIVE
10:04:52 AM
CHAIR LOUISE STUTES called the House Special Committee on
Fisheries meeting to order at 10:04 a.m. Representatives
Stutes, Kreiss-Tomkins, Neuman, and Eastman (telephonically)
were present at the call to order. Representative Tarr arrived
as the meeting was in progress.
^CONFIRMATION HEARING(S):
^CONFIRMATION HEARING(S):
^Fishermen's Fund Advisory and Appeals Council (FFAAC)
^Commercial Fisheries Entry Commission (CFEC)
Commercial Fisheries Entry Commission (CFEC)
Fishermen's Fund Advisory and Appeals Council (FFAAC)
10:05:52 AM
CHAIR STUTES announced that the first order of business would be
confirmation hearings for appointees to the Commercial Fisheries
Entry Commission, and the Fishermen's Fund Advisory and Appeals
Council. She identified the appointees as V. Fate Putman and
Dale Kelley to the Commercial Fisheries Entry Commission (CFEC);
and Mark A. Saldi to the Fishermen's Fund Advisory and Appeals
Council.
CHAIR STUTES advised the committee that both appointees to the
CFEC attended last week's committee hearing on February 27, 2018
and answered questions. The public may wish to review the
hearing, she said. She explained that Vance "Fate" Putman was
appointed by the Governor on December 1, 2017 and was
reappointed to a different seat on January 29, 2018. If
confirmed his term would expire on March 1, 2021.
10:07:31 AM
VANCE "FATE" PUTMAN, Appointee, Commercial Fisheries Entry
Commission (CFEC), Alaska Department of Fish & Game (ADF&G),
stated he was the commissioner designee for the CFEC, and was
appointed as chairman of the CFEC by the governor last month.
MR. PUTMAN provided a brief history, noting he was born in
Fairbanks, where his mom was a city planner and his dad was a
plumber and pipefitter. His family moved to Anchorage after the
1964 earthquake and his mom did substantial planning for
villages and towns that were damaged during the earthquake,
including Valdez. He attended Stellar Secondary School and West
High School in Anchorage, graduating in 1976. He attended
Linfield College in McMinnville, Oregon and Western Washington
University [Bellingham, Washington] and graduated with a degree
in Environmental Science. His first legislative job was in 1979
as a student intern, working for Senator Pat Rodey. He returned
to Juneau in law school, as an intern in the attorney general's
office. He worked for Tom Koester, Natural Resources Section of
the Department of Law, in 1983 where he worked on issues
including the CFEC, Dinkum Sands, Navigable Waterways, and
Mental Health Trust Land.
10:08:53 AM
MR. PUTMAN stated that he then worked as a manager of the
Commission on the Future of the Permanent Fund, working for
"Red" Boucher, who was chair of the State Affairs Standing
Committee. Also serving on that commission were Jan Faiks,
Terry Martin, Denny Kelso, Mark Langland, Hugh Malone, Steve
Frank, and others, he said. As commissioners, their jobs were
to travel throughout the state and collect testimony from
Alaskans on the future of the Alaska Permanent Fund. He was
appointed to the Anchorage Planning and Zoning Commission by
Mayor Tom Fink, serving on that commission for several years.
He then became the in-house legal counsel, political director,
lobbyist, and assistant executive director of a public employee
union from 1995 - 2015. He retired from that job and has since
served as a contract lobbyist. Since his appointment he has
focused entirely on CFEC, which is a fulltime job, he said. He
looked forward to serving on the commission [if confirmed].
10:10:03 AM
MR. PUTMAN explained his history in the commercial fishing
industry, such that he worked as a salmon hand troller in 1979
and as a halibut longline fisherman with his father through the
1970s and 1980s in Homer. He worked as a deck hand in winter
fisheries in Homer in 1984 and 1985. He served as a cash buyer
in King Salmon for the Putman Fish Company, his brother's fish
buying business, until his brother's death. He has worked as a
setnet fisherman on the Kenai Peninsula for the past twenty
years, noting that many people go through his fish camp from
June 15 - 25 of each year. He has never held a captain's
license or a limited entry permit, but since he has worked in
the attorney general's office, he has been interested in the
CFEC. He said he now can view the CFEC from the inside [if
confirmed].
10:11:06 AM
CHAIR STUTES asked for information on his work since appointment
by the governor in December.
MR. PUTMAN described the work he has performed since his
appointment in December when Commissioner Ben Brown resigned
from his seat, noting he initially had a one-year appointment.
Although he is an attorney, it is not necessary to be an
attorney to serve as a commissioner at CFEC, he said. He said
he read the Lawson Report and two legislative audits on the CFEC
to determine what other people thought was happening in the
agency. He also reviewed the structure of the agency to
determine the outstanding remaining cases, with the assistance
of the Department of Law. He has identified 20 things the CFEC
can do internally to make the commission more efficient, which
he offered to review now or to discuss them at a future hearing.
CHAIR STUTES suggested that he may have to return at a later
hearing.
10:12:28 AM
CHAIR STUTES asked whether the 13 pending cases were pending
when he started.
MR. PUTMAN answered that he would put the cases into two
different categories. At the time he arrived 18 or 19 cases
were pending from the prior year pertaining to emergency and
permanent transfers, which were initially denied by the
licensing staff, appealed to the hearing officer, and eventually
to the commission. He has handled those cases. Two cases were
remanded back from the Superior Court to the CFEC, which were
dealt with. The second group of cases were the 13 cases he
previously referred to, which are cases pending from 35 - 45
years ago on different fisheries. The CFEC would like to close
out those cases to eliminate the interim-use permits, he said.
Those cases will take more time since they are more complicated
cases; however, these cases have been adjudicated by the CFEC's
adjudication staff and are currently pending before the
commission for consideration and have been for quite some time,
he said.
10:13:54 AM
REPRESENTATIVE KREISS-TOMKINS said he appreciated the testimony
by the CFEC commissioner designee on February 27.
10:14:11 AM
CHAIR STUTES stated that she was excited to have new
commissioners to serve. She expressed an interest in having the
commissioners come before the committee to present a more
in-depth review of the CFEC.
10:14:40 AM
MR. PUTMAN pointed out the CFEC would be preparing an annual
report that should be distributed to the committee within the
next few weeks. He described the upcoming report as being like
an executive summary, approximately four pages long, with
attached appendixes. He offered to present a PowerPoint of the
annual report to the committee.
CHAIR STUTES concurred that the committee would be interested.
10:15:25 AM
The committee took a brief at-ease.
10:15:40 AM
CHAIR STUTES introduced Dale Kelley, who was appointed to serve
as commissioner of the Commercial Fisheries Entry Commission
(CFEC) on March 1, 2018, and if confirmed her term would expire
on March 1, 2022.
10:16:26 AM
DALE KELLEY, Appointee, Commercial Fisheries Entry Commission
(CFEC), Alaska Department of Fish & Game (ADF&G), stated that
she was recently appointed to the commission, in fact, today was
her one-week anniversary with CFEC. She stated that she has
lived in Alaska more than half of her life. She grew up
surfing, riding rodeo, and rock climbing in California. Her
academic training spanned from fisheries science and
aquaculture, to pharmacy and paramedicine.
MS. KELLEY stated that she worked as a pharmacy technician in
three states and one of her most unique responsibilities was
preparing drug packs for the space shuttle. She has worked in
surgery and in ambulances in Houston, Texas, which probably
helped toughen her up to be a commercial fishing deckhand. She
has lived in the bush and as a fish culturist in Prince William
Sound, and Southeast Alaska. She helped rebuild steam turbines
in Haines and Fairbanks and she enjoys fishing on a troller
based out of Craig.
10:17:24 AM
MS. KELLEY advised that she has no financial tie to a fishing
business nor is she a permit holder. She has worked as a
commercial fishing deckhand and said if she was fortunate to be
able to continue in that area that she would do so without pay.
For the past three decades she has worked as the executive
director of a commercial fishing organization representing
fishermen who fish in federal and state waters. These fishermen
are touched by state, federal and international regulatory and
statutory processes so she has become familiar with the many
policies, rules, regulations, and laws that underpin all
fisheries across Alaska. It has been an interesting and
informative career, she said.
10:18:13 AM
MS. KELLEY stated that she supports all types of fishing and has
worked on behalf of all fishermen during her career. She
detailed her fishing industry positions, noting that she served
for 12 years as a commissioner with the Pacific States Marine
Fisheries Commission (PSMFC). She said she serves on the
Pacific Salmon Commission, which is the commission that
implements the United States - Canada treaty. She chairs the
U.S. Advisors for a five country, international commission that
works on research and enforcement of high-seas interception of
anadromous fish stocks. Over the years she has helped start and
manage many blended state and national fishing organizations,
including working on fish habitat or anything that affects
conservation and management of fish.
10:19:03 AM
MS. KELLEY explained her experience with respect to CFEC, in
that she has spent various times and stages of her fishing
industry career working with commission staff on projects. She
acknowledged that she has a lot to learn at the CFEC. She has
been assessing the direction of the CFEC during her first week,
noting that she has reviewed both audits on the CFEC and has
asked many questions during the audit timeframe. She applauded
Commissioner Putman and his staff for changes that were already
being put into place. She noted that some efficiency changes
were in process, so she felt it was a good time to be joining
the commission and to be part of the team addressing some of the
concerns outlined in the Lawson Report [Commercial Fisheries
Entry Commission Review, prepared for the ADF&G by Tom Lawson,
Special Projects Coordinator, ADF&G, January 2015]. She offered
her support for the Lawson Report and anticipated there will be
good changes ahead. She found the staff to be welcoming and
productive. She characterized the staff as being "a pretty
happy crew," which she was glad to report because she had heard
comments to the contrary.
CHAIR STUTES said she was happy to hear about the CFEC staff's
morale.
10:20:30 AM
MS. KELLEY stated that her goals coming in are simple since she
knows she has a lot to learn. She said she would like to boost
staff morale and re-polish the CFEC's public image, because it
has been a tremendous organization over the years, and to find
ways in which the CFEC could be of service to the fishing
public, communities, and state agencies. She said she has some
ideas to work with the other commissioner on, noting that she
thinks she and Mr. Putman have complementary skills. She
concluded by stating she was excited to be working with him and
she thinks they will make a great team, if [confirmed].
10:21:12 AM
CHAIR STUTES reiterated her excitement at the new appointments.
She offered her belief that having new commissioners would be
good for everyone. She commented that when people perform the
same job repetitively over time, it sometimes means that the
person can look past something right at one's feet. She offered
her belief that CFEC would be experiencing a new horizon and
that there has been great groundwork laid by previous
commissioners.
10:21:50 AM
REPRESENTATIVE KREISS-TOMKINS appreciated the opportunity to
speak at the previous committee meeting [on February 27, 2018].
He commended Ms. Kelley's long history and service to commercial
fishing, particularly in Southeast Alaska, and deep knowledge of
fishing industry issues. He said he was pleased to have this
leadership going forward and was glad she wanted to serve as
commissioner.
10:22:51 AM
REPRESENTATIVE EASTMAN, in response to Chair Stutes, responded
that he did not have any questions at this time.
10:23:00 AM
REPRESENTATIVE STUTES thanked Ms. Kelley for her willingness to
serve.
10:23:07 AM
CHAIR STUTES introduced Mark Saldi, appointee to the Fishermen's
Fund Advisory and Appeals Council (FFAAC). She said that Mr.
Saldi was testifying telephonically from Skagway. Mr. Saldi has
been a long-standing member of the FFAAC, having served since
2008 for two five-year terms. He was reappointed on March 1,
2018, and if confirmed his third term would expire on March 1,
2023.
10:23:46 AM
MARK SALDI, Appointee, Fishermen's Fund Advisory and Appeals
Council (FFAAC), Department of Labor & Workforce Development
(DLWD), explained his work history. He stated that this year
would be his 40th year of fishing in Alaska and that he has
participated in numerous fisheries ranging from Prince William
Sound (PWS) to Southeast Alaska and Chignik on the Alaska
Peninsula.
10:24:07 AM
MR. SALDI said that he moved to Alaska in 1979 after graduating
from Colorado State with a degree in business administration.
In his ten years of service on the [Fisherman's Fund Advisory
and Appeals Council] he said he has never missed a meeting. He
indicated that he has previously held permits and an IFQ
[Individual Fishing Quota]; however, he lives in Skagway and no
longer travels to Western Alaska. He asked whether the
committee would like him to discuss the fund.
10:24:50 AM
CHAIR STUTES responded that he could discuss the fund if he so
desired but cautioned that the committee had time constraints.
10:25:00 AM
MR. SALDI briefly reviewed that the Fishermen's Fund was
established in 1951, prior to statehood, as one of the few
dedicated funds in Alaska. The state does not contribute any
funding and the fund receives its funding from a percentage of
deckhand licenses or limited-entry permits. Thus, the
Fisherman's Fund receives checks periodically from ADF&G and the
CFEC, he said. The state received some benefit from the fund,
since the Fishermen's Fund currently has a surplus of $11
million. He was unsure of the exact mechanics of the fund. He
stated his ongoing goal has been to preserve the Fishermen's
Fund, so that it remains solvent. He explained that the
Fishermen's Fund is a payer of last resort, which means
fishermen must exhaust other means such as private insurance, or
workers' compensation, or the boat's PNI [Protection and
indemnity insurance], and once that's refused, the Fishermen's
Fund can assist the fishermen.
10:26:15 AM
CHAIR STUTES asked how many members serve on the [council].
MR. SALDI responded that the FFAAC consists of five members, who
are selected from different parts of the state, including Nome,
[Manokotak, District 4, Areas west of Alaska Peninsula to Cape
Newenham, including Bristol Bay], Homer, Skagway, and Ketchikan.
Since board members - all fishermen - serve in regional
districts it was likely one board member will know the claimant,
he said. Further, board members serve for five years, with
staggered terms, so each year a new member would be appointed,
or an existing member would be reappointed, he stated.
10:27:05 AM
REPRESENTATIVE EASTMAN, in response to Chair Stutes, indicated
he did not have any questions for Mr. Saldi.
CHAIR STUTES thanked Mr. Saldi for his willingness to serve
another term on the Fishermen's Fund Advisory and Appeals
Council.
10:27:38 AM
The committee took a brief at-ease.
10:27:57 AM
CHAIR STUTES said the House Special Committee on Fisheries has
reviewed the qualifications of the governor's appointees, Vance
"Fate" Putman and Dale Kelley to the Commercial Fisheries Entry
Commission and Mark Saldi to the Fishermen's Fund Advisory and
Appeals Council and recommends that the names be forwarded to
the joint session of the House and Senate for consideration.
There being no objection, the confirmations of Vance "Fate"
Putman, Dale Kelley, and Mark Saldi were advanced from the House
Special Committee on Fisheries.
CHAIR STUTES reminded the committee that member's signatures do
not reflect intent by any of the members to vote for or against
these individuals during any further sessions for the purposes
of confirmation.
10:28:38 AM
The committee took an at-ease from 10:28 a.m. to 10:30 a.m.
HB 354-DIVE FISHERY ASSESSMENTS
10:30:00 AM
CHAIR STUTES announced that the next order of business would be
HOUSE BILL NO. 354, "An Act relating to dive fishery management
assessment procedures."
10:30:42 AM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, read from a
prepared sponsor statement, which read as follows [original
punctuation provided]:
This bill is necessary for the Southeast Alaska
Regional Dive Fisheries Association, the only dive
fishery association in the state regulated by AS
43.76.150-210, to amend the process undertaken to
modify the tax on the geoduck, sea cucumber and sea
urchin fisheries it represents. Each fishery can tax
itself at a different rate. At present, a majority of
permit holders are required to initiate the petition
to change an assessment tax and then vote on the
change. Many of the permits are nontransferable and
less than half of the CFEC permit holders in these
fisheries are actively participating in said
fisheries. Due to the low involvement of permit
holders, a majority participation of permit holders is
unrealistic. The proposed legislation allows for a
change in assessment tax to be initiated by a 3/4 vote
from the Board of Directors and the vote to accept the
change pass with a majority vote of permit holders
participating in the vote.
REPRESENTATIVE ORTIZ said the bill would allow the Southeast
Alaska Regional Dive Fisheries Association to take their votes
in a more workable manner. He asked his staff to elaborate on
the bill.
10:33:07 AM
LIZ HARPOLD, Staff, Representative Dan Ortiz, Alaska State
Legislature, stated the Southeast Alaska Regional Dive Fisheries
Association (SARDFA) was the only regional dive fishery
association affected by the bill. She said that SARDFA was a
private non-profit economic development organization established
in the late 1990s, representing the harvest divers, processors,
and communities of Southeast Alaska, south of Yakutat. There
were approximately 380 permit holders participating in the dive
fisheries, she said. The SARDFA organization oversees the
geoduck, sea cucumber and sea urchin fisheries and has a self-
assessed tax. She related that the association works with the
Alaska Department of Fish & Game (ADF&G) to develop its annual
operating plan, which determines how the dive assessment
collected by the Department of Revenue would be spent. An
assessment also goes to the ADF&G to manage the fishery, she
noted.
10:34:41 AM
MS. HARPOLD reviewed the voting process, such that the
assessment would be initiated by 25 percent of the permit
holders who voted in the previous election. This process worked
well in the 1990s, because the dive fisheries had switched to a
limited-entry fishery and most of the permit holders were
actively fishing. Since permit holders must actively be engaged
in the fishery to vote, many of the permit holders with non-
transferable permits cannot vote, since the individuals no
longer dive in the fisheries.
MS. HARPOLD said that the dive permit holders in Southeast
Alaska belong to SARDFA. The bill would change the initiation
process for the assessment tax by allowing the SARDFA Board of
Directors to initiate a change with 75 percent support of the
board. The assessment change would need a majority vote by
permit holders, as outlined in the bill. The election process
would not change, she said.
10:36:24 AM
CHAIR STUTES asked whether the vote is determined by 75 percent
of the received ballots.
MS. HARPOLD responded that at least 25 percent of the permit
holders who participated in the previous election must initiate
the change. It would require a majority vote of permit holders
to pass an assessment change. She explained the response rate
has declined since many diver permit holders no longer
participate in the fisheries, with less than half of the permit
holders sending in their ballots.
10:37:30 AM
REPRESENTATIVE ORTIZ added that in the 1990s there was a much
higher participation rate in voting on assessments. Currently,
the overall industry activity by permit holders has shown less
activity. As these permit holders cease fishing, they cannot
sell the permits, but choose not to participate in the vote.
Thus, it has been harder and harder to get to that level of
ratio of participation in an actual vote.
10:38:24 AM
REPRESENTATIVE NEUMAN asked whether there were any new
applications for permits and to describe the process to apply
for a new permit.
REPRESENTATIVE ORTIZ deferred to the Commercial Fisheries Entry
Commission (CFEC) to respond.
10:38:50 AM
VANCE "FATE" PUTMAN, Chairman; Commissioner designee, Commercial
Fisheries Entry Commission (CFEC), responded that this question
"gets to the heart" of the reason for so many legal cases
[pertaining to limited-entry fishing permits] in the Alaska
Supreme Court. He explained that when a fishery initially
becomes limited, that the CFEC issues permits to those fishermen
who participate in the fishery and have a history of
participation in the fishery. Applicants who are dependent upon
that fishery strictly for their economic survival are eligible
to obtain a transferable permit; however, applicants who have
other sources of income or do other work, are eligible for a
non-transferable permit.
10:39:50 AM
MR. PUTMAN acknowledged these limited-entry permits represent
very important decisions to the fishermen, their future, and
their families. Non-transferable permits are often challenged
in the court system. He offered his belief that in this
fishery, many dive fishermen who initially applied for a
limited-entry permit received a non-transferable permit because
they had other sources of income.
10:40:12 AM
REPRESENTATIVE NEUMAN said he was grappling over the reason for
the problem, which seemed to be a lack of new applicants. He
calculated that about 95 of 380, or 25 percent of permit holders
vote in an election. It takes about half to pass, or about 48
permit holders; however, not enough permit holders were voting
because they no longer participate in the dive fishery. He
asked again if that is the reason for the non-participation. In
response to Chair Stutes, he asked why new dive fishermen were
not applying for permits when participants aged out of the
fishery.
MR. PUTMAN agreed one of the issues with non-transferable
permits was that permit holders aged out, so over time the
number of permits diminish in a fishery. He explained that
getting new permit holders into the system was not possible
because only the permits that are transferable can be moved to
another fisherman.
10:41:39 AM
CHAIR STUTES related her understanding that once the non-
transferable permit was no longer being fished, "it's a goner"
and there was no way for a new entrant to apply.
MR. PUTMAN agreed.
10:42:02 AM
REPRESENTATIVE NEUMAN asked whether applicants could currently
apply for a transferable permit.
MR. PUTMAN answered that was correct.
10:42:10 AM
REPRESENTATIVE NEUMAN said that it seemed like the evolution
would be someone interested in the dive fishery would try to get
a temporary permit. He wondered if people were interested in
qualifying for temporary permits. He further asked how much
interest there was for the dive fisheries.
CHAIR STUTES responded that she believed that was the issue HB
354 was trying to address.
MR. PUTMAN agreed. He related his understanding, in speaking
with staff, was that the problem is that many permit holders who
were no longer participating in the fishery still maintained
their permits each year by paying the licensing fee each year,
but these permit holders may not participate in the vote. He
related his understanding that with a threshold of fifty percent
plus one to change the tax structure becomes a hurdle that
cannot be overcome without the changes in the bill.
10:43:19 AM
CHAIR STUTES opened public testimony on HB 354.
10:43:45 AM
PHIL DOHERTY, Executive Director, stated that SARDFA approached
Representative Ortiz to change an old statute with respect to
the assessment tax. The dive association was formed in 1997 to
provided management funds for the fishery because ADF&G did not
have adequate funds to research and manage the three species the
dive fisheries harvest, which were sea urchins, geoduck clams,
and sea cucumbers. The divers in Alaska recognized the value of
the resources, in part, based on fisheries in British Columbia,
Washington state, and California. These divers asked [former
Representative] Bill Williams to assist in forming SARDFA,
including establishing a mandatory assessment tax. The divers
could tax themselves at a one, three, five, or seven percent
assessment tax, he said. Currently the sea cucumber fishery,
which is the focus of this bill, has been taxing itself at five
percent. The geoduck fishery taxes itself at seven percent, and
the urchin fishery taxes itself at five percent of ex-vessel
value, meaning the fisherman comes to the dock and five percent
of the fish ticket would be removed immediately, he said. He
compared that collection process like one for state tax
collections. In addition, these fishermen also pay a three
percent state fisheries tax, he stated.
10:45:58 AM
MR. DOHERTY explained that the assessment funds goes into the
association's fund and SARDFA, in conjunction with the ADF&G
develops the annual operating plan. The ADF&G provides its
plans for assessment, management, and research needs to SARDFA,
which are discussed, if necessary, and the association provides
the department with the funds it needs to conduct the fisheries,
he said.
MR. DOHERTY further explained the hurdle has arisen due to the
number of non-transferable permits and even some of the
transferable permits. For example, the sea cucumber fishery has
156 transferable permits and 233 non-transferable permits
totaling 389 total permits. Two years ago, SARDFA had an
election to change the assessment tax in the sea cucumber
fishery from five percent to one percent but the association
could not obtain half of the 389 permit holders to vote. Even
though the active permit holders and association members wanted
to get it changed, it could not do so, he advised.
10:47:43 AM
MR. DOHERTY stated that the association requested HB 354, which
would change the voting process to allow a majority vote of the
ballots received to [count]. He characterized that as the
thrust of this bill and it does not affect any other fishery or
the state. The SARDFA has committed to pay ADF&G the funding it
needs to manage and research the fisheries. The association
also uses its assessment to fund paralytic shellfish poisoning
(PSP) and water quality testing via the Department of
Environmental Conservation (DEC). The permit holders understand
that ADF&G must provide research and management to maintain the
fisheries. He stated that the prices in the sea cucumber
fishery are up and the association does not have large overhead
costs for sea cucumbers. He briefly described some of the
programs. He indicated that lowering the tax from five percent
to one percent in the fishery, a diver would result in $1,200 to
$1,500 more for the ex-vessel value of the sea cucumbers
harvested. This bill would streamline the process. The
SARDFA's commitment to the state would always be there, he said.
10:50:15 AM
REPRESENTATIVE KREISS-TOMKINS thanked Mr. Doherty for his
testimony. He commented on the unique status the dive fisheries
have in Alaska. Referring to AS 16.42.40, Regional Dive
Development Associations lays out the organization, which is
what SARDFA would be, he said. He referred to page 3, lines 13-
14, of HB 354, which read," ... board members of the qualified
regional dive fishery development association ..." He said he
was curious whether multiple dive fishery associations could
form for the same dive fishery. He said he asked because
fishermen can debate among themselves and hypothetically a rival
association could arise and submit petitions to the commissioner
that could be different than what SARDFA might submit.
MR. DOHERTY responded that he had not previously considered
whether another dive association could compete on the same
fishery. He did not think it would be allowed to happen. The
only other dive fishery in Alaska could be for a small sea
cucumber fishery in Kodiak. He has spoken to the Kodiak
fishermen and they do not see the need for an association at
this point. In Southeast Alaska, he did not envision the
scenario happening.
10:53:02 AM
REPRESENTATIVE KREISS-TOMKINS agreed that there is no present
debate on this issue, but he wanted to know if technically or
legally that could happen in the future. He said that he did
not see any reason it could not happen after reviewing the
language in AS 16.42.40 since the three criteria in statute
would not be that difficult to meet. He wondered if anything
would prevent that from happening.
10:53:57 AM
CHAIR STUTES asked for further clarification as she was unsure
of the concern.
REPRESENTATIVE KREISS-TOMKINS asked whether there was anything
that prevents a group of dissatisfied fishermen from forming a
non-profit corporation and submitting a petition.
10:54:11 AM
CHAIR STUTES said she still was unsure why that would be a
problem.
REPRESENTATIVE KREISS-TOMKINS answered that one group might have
a different opinion on the preferred enhancement tax. Another
group could have a different opinion and that group could submit
a petition for a different tax amount. He expressed an interest
in learning more about the regional dive fisheries associations
and whether the statutes only allow one to exist.
10:54:44 AM
CHAIR STUTES said she was trying to apply it to this specific
bill.
REPRESENTATIVE KREISS-TOMKINS referred to page 3, lines 13-14 of
HB 354.
CHAIR STUTES acknowledged the cite but pointed out that the bill
does not identify a specific dive association such as SARDFA.
10:55:18 AM
REPRESENTATIVE KREISS-TOMKINS stated that his question related
to HB 354. He specifically asked what is "the" qualified
regional dive fisheries association as opposed to "a" qualified
regional dive fisheries association.
CHAIR STUTES offered that it might be more direct. She asked
whether the sponsor or CFEC could respond. She did not think
there was any issue.
MS. HARPOLD said she could not address the issue of if another
regional dive fishery could form but the rules would apply to
any regional dive fishery that formed. She related her
understanding that ADF&G would determine an assessment.
10:57:01 AM
MR. DOHERTY said he has not heard of anyone in Southeast Alaska
contemplating it. He explained that SARDFA's Board of Directors
has nine members who represent cities, municipalities, and areas
in Southeast Alaska, out-of-state divers, and a processor. He
characterized it as being representative plus the organization
has three committees for sea cucumbers, geoducks, and red sea
urchins. He said that about 20 divers participate in the sea
cucumber committee, which he believed was a robust committee
system. He related that the meetings are public meetings, and
discussions have been robust, but no one has ever mentioned
breaking away to form a second association.
10:58:44 AM
REPRESENTATIVE KREISS-TOMKINS said he hoped it was permissible
to ask questions to explore the overall structure. He was
interested whether anything could prevent a second association
from forming regardless of how highly unlikely it was that it
would happen. He related his understanding that it could
happen, that it was highly unlikely to happen, but he still
wanted to be certain he understood the statute.
10:59:32 AM
CHAIR STUTES asked whether an attorney from Legislative Legal
and Research Services was online.
REPRESENTATIVE KREISS-TOMKINS said he did not think this merited
further pursuit.
CHAIR STUTES wanted to be certain Representative Kreiss-Tomkins
was satisfied. She understood his intent.
REPRESENTATIVE KREISS-TOMKINS said, "It's a great bill." He
expressed an interest in the language choice between "a" or
"the" but noted in practical terms there probably was not much
difference.
11:00:16 AM
REPRESENTATIVE NEUMAN understood the concern expressed. He
highlighted his goal when reviewing any bill was to try to make
it better. He appreciated Mr. Doherty's testimony. He related
his understanding that the intent was to change the [assessment]
from five percent to one percent for sea cucumbers but not for
geoduck or sea urchins.
MR. DOHERTY answered that if HB 354 passed the SARDFA would vote
on the assessment for the sea cucumber fishery. He did not
anticipate the association would change the assessment tax on
the geoduck fishery. He explained that the geoduck fishery was
very expensive to manage. He related that due to some issues in
China, which is the destination market for geoducks, the
fisheries must also test for arsenic levels in geoducks. He
estimated that to pay for the program, including the PSP, water
quality testing, and arsenic level testing, that the divers pay
between $150,000 - $200,000 per year for the program in addition
to the $50,000 that the association pays to the ADF&G. He said
the geoduck fishery barely manages to exist. He estimated that
the sea cucumber fishermen have enough surplus funds that their
assessment tax could be reduced, between one to three percent;
probably to one percent.
11:02:34 AM
REPRESENTATIVE NEUMAN said that he was assuming that voting
lines do not cross between species, such that divers holding
permits for sea cucumbers do not vote for [tax assessments for
those holding permits geoducks or sea urchins]. He wondered if
part of the problem was due to reduced members or if permit
holders who were fishing for geoducks could vote for sea urchin
tax assessments.
MR. DOHERTY responded that if the association was considering a
change for the sea cucumber assessment tax, that only members
that could vote are the sea cucumber permit holders. He
reiterated that there were so many non-transferable permit
holders given out at the initial start of the sea cucumber
fishery, since it was the easiest fishery to obtain landings,
that it was difficult to get a majority vote. He recalled that
two years ago the association received 89 positive votes to
lower the tax. The remaining divers renewed their permits but
no longer dive in the fishery. He emphasized the intent is to
modernize [the statutes] to make it easier for the divers to
change their assessment. He pointed out that the dive fisheries
are very physically-demanding fisheries with the diver being the
permit holder. The permit holder must be the person doing the
diving, he said. As the divers get older, they tend to stop
diving but maintain their permits for a small fee.
11:05:00 AM
REPRESENTATIVE NEUMAN asked whether it was possible to make the
non-transferrable permits transferrable to get them back in the
market.
CHAIR STUTES suggested that would be a question for the CFEC.
11:05:24 AM
CHAIR STUTES, after first determining no one wished to testify,
closed public testimony on HB 354.
11:05:44 AM
REPRESENTATIVE KREISS-TOMKINS said it sounded like a great bill.
11:06:22 AM
SCOTT KELLEY, Director, Division of Commercial Fisheries, Alaska
Department of Fish & Game (ADF&G), introduced himself.
11:06:35 AM
REPRESENTATIVE NEUMAN stated that the fisheries are statutorily
required to cover any costs to administer their program. He
asked if the tax assessment was reduced from five percent to one
percent whether the funds would cover the program.
MR. KELLEY answered yes. He explained that the division works
closely with the SARDFA and the association and divers are aware
if the ADF&G does not have funds to assess to manage the
program, the divers cannot fish. He said the [association and
permit holders] are very motivated to ensure that the ADF&G
continues to receive its funding.
11:07:20 AM
CHAIR STUTES stated that the fiscal note for HB 354 was zero.
11:07:37 AM
REPRESENTATIVE TARR REPRESENTATIVE moved to report HB 354 out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, HB 354 was reported
from the House Special Committee on Fisheries.
11:07:52 AM
The committee took an at-ease from 11:07 a.m. to 11:09 a.m.
HB 379-COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS
11:09:24 AM
CHAIR STUTES announced that the final order of business would be
HOUSE BILL NO. 379, "An Act relating to claims against
protection and indemnity insurance policies of vessel owners."
11:10:49 AM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, introduced
HB 379, reading from his sponsor's statement, which read as
follows [original punctuation provided]:
In 2010, the Legislature amended the Fishermen's Fund
statute to allow a vessel owner to receive 50% of the
owner's Protection & Indemnity insurance deductible
from the fund in cases where an injured crewmember
made a claim against the Fund and against the P&I
policy. The intent of this amendment was to encourage
vessel owners to obtain P&I insurance to fully cover
crewmember's medical expenses in the event of an
injury, and to reduce the financial burden on the
State. HB 379 will allow an owner to fully recover the
P&I deductible from the Fund up to an amount of
$5,000. This would provide further financial incentive
for vessel owners to obtain P&I insurance to fully
cover crewmembers in the event of an injury or illness
at sea.
REPRESENTATIVE ORTIZ said this bill was brought forward at the
behest of fishermen and the fishing industry. This would
provide a means to pursue insurance and protection in the
dangerous fisheries that often exist, he said.
11:12:47 AM
REPRESENTATIVE NEUMAN asked for further clarification on the
Fishermen's Fund. He expressed an interest in learning how
claims are approved, the fund balance, the type of fund and
whether the fund earns any interest.
11:13:38 AM
LIZ HARPOLD, Staff, Representative Dan Ortiz, Alaska State
Legislature, responded that the Fishermen's Fund predates Alaska
statehood. It was established in 1951 to provide the treatment
and care of Alaska licensed commercial fishermen who have been
injured while fishing onshore or offshore in Alaska. She said
the benefits from the fund are financed from revenue received
from each resident and non-resident commercial fisherman's
license and permit fees - 39 percent but not to exceed $50 for
each license holder per year. The commissioner of Department of
Labor & Workforce Development (DLWD) oversees the administration
of the program, with assistance from the Fishermen's Fund
Advisory and Appeals Council (FFAAC). She reminded members that
Mr. Saldi, a member of the FFAAC, had testified earlier during
confirmation hearings.
11:14:27 AM
MS. HARPOLD stated that the FFAAC was comprised of the
commissioner, or designee, who serves as chairman and five
members appointed by the governor. She directed attention to AS
23.35, which outlines benefits and process for a fisherman to
file a claim. She deferred to the division to answer technical
questions about the fund.
11:15:16 AM
MARIE MARX, Director, Division of Workers' Compensation (DWC),
Department of Labor & Workforce Development (DLWD), recalled
that Representative Neuman had previously asked what benefits
were available to fishermen under the Fishermen's Fund.
REPRESENTATIVE NEUMAN clarified he was interested in the
structure of the Fishermen's Fund, for example, if it was an
enterprise fund.
MS. MARX responded that the Fishermen's Fund is a dedicated,
completely self-sustaining fund. The amount of money collected
provides enough funding to run the program and pay for the
benefits available through the fund.
REPRESENTATIVE NEUMAN asked for further clarification on the
level the division attempts to maintain the fund, noting that
medical costs continue to rise. He further asked for how the
division maintains the costs at 39 percent tax.
11:16:41 AM
MS. MARX said that the amount of increase shown in the fiscal
note is $18,900. which is not a huge increase compared to the
amount of benefits paid since this reimburses vessel owners up
to $5,000. She explained that most claims are paid to
fishermen, which would not be changed by this bill. This bill
would allow a vessel owner to be reimbursed more of the
deductible, but still with a limit of $5,000.
11:17:30 AM
CHAIR STUTES related her understanding that the bill would
provide the vessel owners with an incentive to carry the
protection and indemnity (P&I) insurance since they will receive
the deductible back.
MS. MARX agreed.
11:17:53 AM
CHAIR STUTES, in response to a question by Representative
Neuman, clarified the goal of the bill. She explained that if a
vessel owner does not have P&I insurance, an injured crewmember
would submit a claim to the Fishermen's Fund. This bill would
encourage vessel owners to carry P&I insurance since it would
reimburse the entire deductible of $5,000 when a crewmember
becomes injured. Currently, the vessel owner would be
reimbursed $2,500 of the deductible; however, under the bill,
the vessel owner would receive the entire $5,000 deductible.
This provides an incentive to vessel owners to carry the P&I
insurance.
11:18:41 AM
REPRESENTATIVE NEUMAN said his question related to the fund
balance. He asked for further clarification on whether there
would be an increase in tax to offset the additional amount of
money that would be reimbursed to vessel owners to cover their
deductible.
11:19:07 AM
MS. MARX responded that there was enough revenue to cover the
increased liability. She explained that the revenue was
approximately $1.4 million each year
REPRESENTATIVE NEUMAN asked whether the tax should be reduced
since the Fishermen's Fund might be collecting excess funds.
11:20:07 AM
ROBERT KEHOE, Executive Director, Purse Seine Vessel Owners
Association (PSVOA), stated that PSVOA fully supports HB 379.
He said the bill would expand on the legislature's effort in
2010 to provide a financial incentive to vessel owners to obtain
insurance to fully cover their crewmembers in the event of an
injury.
MR. KEHOE stated that as small, independent business owners, the
cost of liability insurance is a major fixed cost. This bill
would ease the financial burden on vessel owners in paying for
the cost of insurance. It would further promote the goal of
ensuring all the medical needs of injured crewmembers are
satisfied. He said PSVOA respectfully requests that the
committee supports HB 379 and move it forward.
11:21:40 AM
CHAIR STUTES opened public testimony on HB 379.
11:22:09 AM
MARK VINSEL, Executive Administrator, United Fishermen of Alaska
(UFA), stated that the UFA reviewed HB 379 at its board meeting
last week and the board voted to support passage of HB 379. All
fishermen are supportive of the Fishermen's Fund, which was
essentially the equivalent of workers' compensation, he said.
He emphasized that most important was the solvency of the fund.
He said in 2009 and 2010, the UFA supported increasing the
maximum claim limit [audio skip]. Ultimately the legislature
changed it to $10,000 and at the time, this concept had been
discussed but it was important to see over time how the fund
would hold up and to ensure that it was solvent. The people in
support of this have been patient, and according to those who
manage the fund, it is appropriate to do so now. The UFA offers
its support for HB 379. He urged the committee members to
support the bill.
11:23:57 AM
CLAY BESENEK stated he was testifying on behalf of himself,
although he also serves on the Fishermen's Fund Advisory and
Appeals Council (FFAAC), having been appointed by former
Governor Sarah Palin. He explained that managing the
Fishermen's Fund was a function that each council member takes
seriously. He concurred with Mr. Vinsel's testimony. He stated
that he previously served on the [council] when the
[compensation amount] was increased to $10,000 since medical
costs have not decreased. He acknowledged that some fishermen
have not always used the fund as a means of last resort. He
emphasized that the [council] has been striving for
responsibility from fishermen since the Fishermen's Fund was a
fund of last resort. He offered his belief that HB 379 would
fix a loophole. He offered his full support for HB 379;
however, he could not speak for the [council] since the bill had
not yet been discussed; however, he anticipated the full support
of the council. In response to an earlier comment by
Representative Neuman, he said the fund was formed prior to
statehood so if the FFAAC needed something from the state he
would be willing to ask for it.
11:26:32 AM
CHAIR STUTES closed public testimony on HB 379.
11:26:40 AM
REPRESENTATIVE NEUMAN indicated his support for commercial
fishermen and the issues and dangers they face, noting medical
costs were rising. He expressed concern that $1.4 million was
sitting in a fund instead of being in fishermen's pockets. He
further expressed an interest in reviewing the tax rates on
commercial fishermen. He commented that their biggest complaint
has been the amount of government that they must deal with,
noting the cost of licenses and permits was very high. He said
the legislature could take an opportunity to be more equitable
with the fund to assist fisherman. He reiterated that he would
prefer that the fishermen would have the funds rather than to
have the money sit in the Fishermen's Fund.
CHAIR STUTES offered her belief that the bill would assist the
fishermen in reducing their [medical] costs overall and help
promote carrying insurance on behalf of fishermen. She stated
her support for HB 379. She asked Representative Eastman if he
had any comments but did not receive a response.
11:28:36 AM
The committee took a brief at-ease.
11:28:55 AM
CHAIR STUTES commented that HB 379 has a fiscal note with an
estimated impact of $18,900 annually on the fund; however, from
the testimony received, the fund will remain solvent. This bill
would encourage more people to carry insurance and may represent
a cost savings to the fund in the long term due to reduced
claims against the fund.
11:29:43 AM
REPRESENTATIVE TARR moved to report HB 379 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 379 was reported from the House
Special Committee on Fisheries.
11:31:14 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 11:30
a.m.