Legislature(1995 - 1996)
04/23/1996 03:10 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
April 23, 1996
3:10 p.m.
MEMBERS PRESENT
Representative William K. "Bill" Williams, Co-Chairman
Representative Joe Green, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative Alan Austerman
Representative John Davies
Representative Don Long
Representative Irene Nicholia
Representative Ramona Barnes
MEMBERS ABSENT
Representative Pete Kott
COMMITTEE CALENDAR
HOUSE BILL NO. 406
"An Act relating to waste and use of salmon and parts of salmon;
relating to permits for and operation of a salmon hatchery; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 548
"An Act authorizing, approving, and ratifying the amendment of
Northstar Unit oil and gas leases between the State of Alaska and
BP Exploration (Alaska) Inc.; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
SENATE BILL NO. 199
"An Act relating to environmental audits and health and safety
audits to determine compliance with certain laws, permits, and
regulations; and amending Alaska Rules of Appellate Procedure 202,
402, 602, 603, 610, and 611."
- SCHEDULED BUT NOT HEARD
(* First Public Hearing)
PREVIOUS ACTION
BILL: HB 406
SHORT TITLE: WASTE & USE OF SALMON; HATCHERIES
SPONSOR(S): REPRESENTATIVE(S) WILLIAMS
JRN-DATE JRN-PG ACTION
01/09/96 2392 (H) READ THE FIRST TIME - REFERRAL(S)
01/09/96 2393 (H) FISHERIES, RESOURCES
04/15/96 3782 (H) FSH REFERRAL WAIVED
04/15/96 3782 (H) REFERRED TO RESOURCES
04/17/96 (H) RES AT 8:00 AM CAPITOL 124
04/17/96 (H) MINUTE(RES)
04/23/96 (H) RES AT 3:00 PM CAPITOL 124
WITNESS REGISTER
CHERYL SUTTON, Legislative Assistant
to Representative Bill Williams
Alaska State Legislature
Capitol Building, Room 128
Juneau, Alaska 99801
Telephone: (907) 465-3424
POSITION STATEMENT: Gave sponsor statement for CSHB 406(RES).
FRANK RUE, Commissioner
Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99801
Telephone: (907) 465-6141
POSITION STATEMENT: Answered questions on CSHB 406(RES).
GERON BRUCE, Legislative Liaison
and Special Assistant
Office of the Commissioner
Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99801
Telephone: (907) 465-6143
POSITION STATEMENT: Answered questions on CSHB 406(RES).
STEVEN DAUGHERTY, Assistant Attorney General
Natural Resources Section
Civil Division
Department of Law
P.O. box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3600
POSITION STATEMENT: Answered questions on CSHB 406(RES).
KAY ANDREW
United Southeast Alaska
Gillnetters Association
P.O. Box 7211
Ketchikan, Alaska 99901
Telephone: (907) 225-2463
POSITION STATEMENT: Testified in support of CSHB 406(RES).
RUDY FRANULOVICH, Fisherman
P.O. Box 23076
Ketchikan, Alaska 99901
Telephone: (907) 225-6240
POSITION STATEMENT: Testified in support of CSHB 406(RES).
DAVID LAWLER
P.O. Box 6533
Ketchikan, Alaska 99901
Telephone: Not provided
POSITION STATEMENT: Testified in support of CSHB 406(RES).
JOHN CHILDS, Commercial Fisherman
2091 Yellow Snow Road
Fairbanks, Alaska 99709
Telephone: (907) 455-6028
POSITION STATEMENT: Testified against CSHB 406(RES).
JERRY MCCUTCHEON
P.O. Box 190144
Anchorage, Alaska 99519-0144
Telephone: Not provided
POSITION STATEMENT: Testified on CSHB 406(RES).
KEVIN MCDOUGALL, Commercial Fisherman
P.O. Box 240714
Douglas, Alaska 99824
Telephone: (907) 364-2273
POSITION STATEMENT: Testified on CSHB 406(RES).
JOHN GEORGE, Member
Territorial Sportsmen;
Member, Board of Directors
Douglas Island Pink and Chum (DIPAC)
3328 Fritz Cove Road
Juneau, Alaska 99801
Telephone: (907) 789-0172
POSITION STATEMENT: Testified in support of CSHB 406(RES).
RICHARD LAUBER
Pacific Seafood Processors Association
321 Highland Drive
Juneau, Alaska 99801
Telephone: (907) 586-3636
POSITION STATEMENT: Testified against CSHB 406(RES).
GEOFF BULLOCK
United Southeast Alaska Gillnetters
204 North Franklin, Number 2
Juneau, Alaska 99801
Telephone: (907) 586-5860
POSITION STATEMENT: Testified on CSHB 406(RES).
KATHRYN L. HANSEN, Commercial Gillnetter
5875 Glacier Highway, Lot 21
Juneau, Alaska 99801
Telephone: Not provided
POSITION STATEMENT: Testified on CSHB 406(RES).
ACTION NARRATIVE
TAPE 96-63, SIDE A
Number 000
CO-CHAIRMAN BILL WILLIAMS called the House Resources Committee
meeting to order at 3:10 p.m. Members present at the call to order
were Representatives Nicholia, Long, Green, Austerman and Williams.
Members absent at the call to order were Ogan, Barnes, Davies and
Kott.
HB 406 - WASTE & USE OF SALMON; HATCHERIES
Number 050
CO-CHAIRMAN WILLIAMS announced the first order of business would be
HB 406, "An Act relating to waste and use of salmon and parts of
salmon; relating to permits for and operation of a salmon hatchery;
and providing for an effective date," sponsored by Co-Chairman
Williams. He said the committee members have a proposed committee
substitute dated April 18, 1996. He said he would entertain a
motion to adopt the committee substitute for the purpose of
discussion.
Number 083
CO-CHAIRMAN JOE GREEN moved to adopt CSHB 406, Version C.
CO-CHAIRMAN WILLIAMS asked if there was an objection. Hearing
none, CSHB 406(RES), Version C, was before the committee.
Number 167
CHERYL SUTTON, Legislative Assistant to Representative Bill
Williams, Alaska State Legislature, came before the committee to
address the CSHB 406(RES). She noted the bill has been subtitled
"The Heavy Roe Bill." Ms. Sutton explained the bill was before the
legislature during the Hickel Administration, but didn't make it to
the floor of the Senate. She read excerpts from the sponsor
statement:
"House Bill 406 will allow some measure of relief and provide for
utilization of roe from pink and chum salmon that might otherwise
reap no economic return for those who have paid the costs of
rearing the fish.
"Hatchery pinks and chums along with other hatchery fish are paid
for by commercial fishermen through either a 2 percent or 3 percent
tax on the gross value of a fisherman's harvest. These fish are
made available to the common property fishery for harvest
opportunity.
"The pink and chum salmon must have originated from a hatchery; be
harvested in a designated area; have matured to the point that
their flesh cannot be marketed profitably and cannot be put to any
other lawful use at the hatchery site or be given away.
"House Bill 406 will assist fishermen and hatchery operators as
they move through this difficult transition to the future. This
bill should not be viewed any differently than other incentives and
assistance rendered by the legislature to struggling industries."
MS. SUTTON said she would like to review the history of HB 448,
which was transmitted to the legislature by Governor Hickel. She
then read from Governor Hickel's transition statement:
"It is anticipated that persons who would be authorized under such
a permit are commercial fishermen who are participating in a
designated terminal fishery and, perhaps, hatchery operators or
fish processors."
MS. SUTTON explained this follows along the line of the committee
substitute in that there are fish unfit for human consumption.
They're hatchery originated fish. Ms. Sutton continued to read
from the transition statement:
"Because of present market conditions, it is important for the
fishing industry and hatchery operators to be able to recover as
much value as possible from salmon resources. The bill will
contribute to this goal and, at the same time, will allow the state
to more effectively enforce the statute on waste of salmon."
MS. SUTTON informed the committee she would talk about some of the
things that were said in the House Resources Committee regarding
Governor Hickel's bill. She explained Geron Bruce of the
Department of Fish and Game testified stating that HB 448 provides
for an exemption to the statutory requirement that the carcass of
a salmon be utilized when it is harvested. He had explained that
the hatchery program begins with the most important decision made
in hatchery development which is sighting of the hatchery which
goes to where these fish can be harvested. Mr. Bruce also said the
bill would not jeopardize the sustained yield of any wild stock
because the fish are harvested in terminal areas where they have
separated and are returning and they are at their final point at
that time. Ms. Sutton explained Mr. Bruce testified that in 1993,
the value of frozen red salmon exported from Alaska was $627.5
million and the value of salmon roe was $177 million. She noted
she has some figures for 1995 relative to the pounds and they did
not have the value in terms of money, but stated that a comparison
could be made between 1993 in pounds also.
Number 580
MS. SUTTON said Mr. Bruce further stated that the public and
private players and the private nonprofit salmon program have
significant investments in salmon through the salmon enhancement
tax and it would be wise management to try to recover all possible
revenue from returning fish, especially if there is no reason not
to. She said Mr. Bruce replied to a question from Representative
Carney that it would have been the most desirable circumstance to
have harvested the fish and utilized the carcass and roe relative
to perhaps not utilizing those carcasses. Ms. Sutton said the
people who support this bill have no disagreement with that
statement, in fact, things were built into the bill to try by all
means to sell and give fish away so that we have full utilization.
Ms. Sutton explained Mr. Bruce went on to say that in a shallow bay
if all those fish would have been allowed to die, speaking of
Prince William Sound, they would have caused significant
environmental problems. She stated that is yet a concern with
returning stocks. Ms. Sutton said Mr. Bruce went on to say that
the roe market is very large and healthy and he guessed the figure
would probably in the tens of millions of dollars. He added that
a hatchery might have a $1 million budget and if it can recover an
extra $200,000, it is a very significant percentage of its total
costs. Ms. Sutton said the way they would recover that is through
the sale of roe from fish that have returned whose flesh is either
no longer fit for human consumption or cannot be marketed by any
means or given away.
MS. SUTTON referred to the House floor vote of HB 448 on final
passage, and said there were 31 in favor, 1 not in favor and 1
absent. Of that membership voting in favor of the bill, the
members that are members currently on the House Resources Committee
are Representatives Barnes, Green, Kott, Williams and Davies. It
passed overwhelmingly. She noted Representative Nicholia was
absent. She said HB 448 was one of the bills that didn't make it
to the Senate floor.
Number 835
REPRESENTATIVE DON LONG referred to Ms. Sutton saying the bill
relates to waste and use of salmon, and at the same time, she is
talking about "Heavy roe."
MS. SUTTON noted that was sort of a joke. She said there is "The
Heavy Oil Bill," HB 325, so she calls this bill "The Heavy Roe
Bill," because in essence the issues are the same. We have
fishermen and hatchery operators who are in a very difficult time.
What has happened in the world market has had a devastating effect
on this industry. Ms. Sutton said she has full confidence, as a
commercial fisherman, that our market will recover. She said she
is one of the people who pays this tax for salmon enhancement. We
have new challenges ahead of us, but we are in a crises at the
present hour.
Number 924
REPRESENTATIVE SCOTT OGAN said, "I would like to maybe know why you
chose to repeal and reenact the first section of the bill and got
rid of some language about waste of salmon that - a little
concerned it might be a little problematic in that it kind of
eliminated the whole -- whole (indisc.) body eliminated the whole
section of - basically a crime to waste salmon that was intended
for sale to commercial buyer processor, consumption by humans or
domesticated animals or scientific educational display purposes and
I was kind of curious why that language was repealed and replaced
with the language that is in there."
MS. SUTTON explained that they didn't delete that. She asked him
to look further down the bill and said it is in Section 2, Article
2, under "USE AND WASTE OF SALMON." She said those sections
weren't deleted. She asked him if he was looking at the new
committee substitute.
REPRESENTATIVE OGAN indicated that he wasn't looking at the
committee substitute.
Number 1060
MS. SUTTON explained there are a couple of changes that will
probably be of concern the department. She then reviewed each
section of the bill. Ms. Sutton said, "Section 1 refers to -- we
had to put somewhere in the bill -- later on in the bill we
referenced that the commissioner may revoke a permit at anytime
that people are not doing all that they're supposed to do or that's
required in the statute and in order for him to do that, he had to
indeed have the authority which is his emergency order authority.
So that's why that is there. Section 2, it's the waste of salmon
and there are many portions of that which are similar still to
what's in statute. We go down to line 17 on page 2, "USE OF
HATCHERY PINK AND CHUM," and we made this specific to pinks and
chums because rather than all species that are produced by
hatcheries because they are the two specific species for which
we're having large market problems. And also, in Southeast in
particular, and other areas of the state, I don't diminish the
other areas of the state, but in Southeastern in particular we have
facilities producing these species who would not - you know, they
would not like to waste any fish. They would like to have full
utilization as much as possible and while we don't want to just
give a blanket authority to do these things, we thought for these
two species it would be timely to do it given the current
situation. So for hatchery pinks and chums, this bill would allow
both hatchery operators and commercial limited entry permit holders
who fish in these designated areas or hold permits in these
designated areas to fish in specific areas where these are
discretely hatchery fish and to harvest them and discard of
carcasses if the fish are no longer fit for human consumption,
cannot otherwise be sold, cannot be given away and they must
demonstrate all these things. These things must be documented.
They have to do all of these things first and the attempt here is
to allow folks not to have total waste of fish that they've already
paid for -- and Representative Barnes for your benefit I earlier
mentioned that these are fish that commercial fishermen have paid
through an assessment to raise through the hatchery programs,
either through a 2 percent or 3 percent assessment on their gross
earnings and otherwise they would be totally wasted. They would
die. They are fish that are not going to reproduce. They are fish
that are just going to die in some area and have no utilization at
all. And so we made it specific to chums and pinks in this
section. They have, you know, as it says here...."
Number 1296
REPRESENTATIVE RAMONA BARNES asked Ms. Sutton if she could say how
many millions of dollars the state of Alaska put into those
hatcheries before we ever got around to the assessment.
MS. SUTTON responded, "They may have happened at the same time that
we were actually taxed on raising it, but there are other people
here who would know better than I and I'll defer to them -- but I
do know that when the state wanted to get out of the hatchery
business per se and transferred facilities that there were private
nonprofit aquaculture associations who incurred debt to themselves
to operate these facilities and produced fish for the -- all of
these fish have to go through the common property fishery and are
available for common property harvest."
Number 1360
REPRESENTATIVE BARNES said she understands all of that. She said
she has served in the legislature since the time of the hatcheries
and she knows a lot about the hatcheries. She indicated she would
like to know not only how much money the state invested in those
hatcheries through the years, but she would also like to know what
the state of Alaska is getting in the way of utilization from that.
She said it seems to her instead of discarding fish, we could give
them to poor people if nothing else.
CO-CHAIRMAN WILLIAMS indicated that giving hatchery fish to the
poor has been done is continually being done.
MS. SUTTON pointed out that one of the provisions of the bill is
that they have to demonstrate and do that very thing.
Number 1415
REPRESENTATIVE IRENE NICHOLIA asked how much fish has to be given
away before this bill comes into place for wasting fish.
MS. SUTTON asked, "To legalize wanton waste?"
REPRESENTATIVE NICHOLIA said in her view the bill would legalize
wanton waste. She said we're giving permission for a hatchery to
waste fish. She referred to fish being given away to people that
need it and asked how much fish would be given away and how much
would be wasted.
MS. SUTTON said she couldn't answer the questions because the bill
doesn't specify those things. There is criteria which must be met
and is stringent criteria to even qualify to do this. These are
fish that would not otherwise not be harvested and would be wasted
in terms of them dying in areas. They do not reproduce and they
would die in areas where, in the past, they have demonstrated
environmental problems.
Number 1500
REPRESENTATIVE NICHOLIA said, "Do you have any records or have you
done any research on if this has happened before - how much pounds
of fish were given away and to what area - to which place were they
given to and do you have any records like that?"
MS. SUTTON said she personally doesn't have records, but noted
there are people in attendance who could perhaps give her
information about fish that they have given away. She said she
knows that there was some difficulty in Cook Inlet with attorneys
advising the Cook Inlet Aquaculture Association that it was not
recommended to give away fish that were not fit for human
consumption. She said these fish are the kind of fish the bill
addresses where the fish have deteriorated to the point where the
flesh is no longer fit for human consumption because of health
risks involved. Ms. Sutton said, "But I know that for other fish
that have not deteriorated, perhaps to that point, and we have egg
and nolt (Sp.?) removal for brood stock that fish have been
utilized and given away, but other folks would have to speak to
that."
Number 1582
REPRESENTATIVE JOHN DAVIES said, "I'm a little bit confused it.
I've been trying to follow the bill at small section (b) on page 2
and (c) at the top of page 3. We're talking about giving a permit
and it says that the fish we're talking about would be under little
(b), I guess it would be line 30, that they have matured to the
extent that the fish can't be sold or marketed profitably; and then
(5) says, `cannot be given away despite reasonable efforts to do
so.' Then (c) it says before disposing of these things that we're
giving them to food banks. I guess I'm just confused. It seems
like we're talking about fish that are perhaps not fit human
consumption, but we're still going to offer to give em away. I'm
confused by what we're trying to do in these two sections."
MS. SUTTON explained it goes back to the discussion she just had
with Representative Nicholia. There are folks who say they don't
mind taking these fish in that condition. The overriding intent of
the bill is to use fish which otherwise would not be utilized and
would have no value reaped from these fish. She said she thinks
the committee will hear some public testimony that would shed more
light on his question. She noted the Department of Fish and Game
has issued a public notice and published regulations for public
comment. They have the same language in the regulations that they
have published for public comment.
Number 1734
REPRESENTATIVE NICHOLIA questioned that if these fish were going to
food banks and different places where they're feeding a 100 people,
who is going to foot the bill. These different places barely have
money to stay open.
MS. SUTTON said there are people from food banks and other
organizations who have indicated that they'd be more than glad to
come and retrieve these fish if they're made available to them.
REPRESENTATIVE NICHOLIA said Ms. Sutton had stated that some of the
hatcheries are in trouble or are having problems and that is why
the bill is before the committee. She asked which hatcheries they
are and where the locations are.
MS. SUTTON said she thinks that there are hatcheries all over the
state that are in trouble in one form or another, no differently
than commercial fishermen are in trouble, processors are in
trouble, people who transport our fish are in trouble. Support
industries are in trouble because of the downturn in the entire
industry.
Number 1852
REPRESENTATIVE OGAN referred to page 2, line 30, and said it talks
about fish that have deteriorated to the extent that the flesh
cannot be sold or marketed profitably. He said this bill is
essentially a roe stripping bill and the roe really isn't mature to
make into a product until the fish are mature. He asked if they're
a darker less desirable when they're caught and used for this.
MS. SUTTON explained, "Normally when fish move to a terminal area
and they are either ready to spawn or -- and this is instance these
fish are not spawning fish, they're sort of put and take fish and
designed for that purpose -- they do mature and the roe actually
becomes more valuable at that point or it's more recoverable at
that point. It's the same in herring fisheries. They test
continually for an opening on the maturity of the roe, and so that
is the case. And these fish can only -- in this bill these fish
can only be harvested in special areas that are hatchery special
harvest areas, areas set aside that are at the very terminal...."
REPRESENTATIVE OGAN said, "Ya, I'm aware of that. I guess what I
was leading up to that I essentially just -- one of these
hatcheries or one of these areas could essentially hold off on
harvesting these fish and let them mill around out there in the
pond or out in the bay till they ripe enough to strip roe and then
essentially not harvest. Just essentially manipulate it so that
they just would simply harvest the roe and dump the fish. Is that
correct?"
MS. SUTTON said that is not the intent of the bill. There are
circumstances that happen. We have no control over what happens in
nature. There are years when fish return all at once. No one
knows why. There are years when they come in over short periods of
time. It is certainly the desire of anyone who is involved in
fisheries to harvest these fish in a more orderly manner. She said
that is not the intent of the bill and to her knowledge, there is
no one that she has spoke with who has that intent either.
Number 1994
CO-CHAIRMAN WILLIAMS said, "The answer is that this isn't a bill to
do just that. In fact, today the department can do what we're
saying through regulations and we will have the commissioner here
to talk about just that. Maybe some of the questions can be
directed to the commissioner on this."
Number 2017
REPRESENTATIVE BARNES said, "I want you to tell me again that the
department is promulgating regulations that would do what this bill
is doing and I want you to tell me under what authority that the
department has to do this."
MS. SUTTON said, "We asked the same question of our legal services,
in terms of under what authority. Their regulations that they're
attempting to promulgate do not exactly mirror the bill here, but
have very similar elements and I'm sure Commissioner Rue could
speak to that."
REPRESENTATIVE BARNES said the bill is perhaps one of the worst
bills she has ever seen and to think that the department is trying
to promulgate regulation that we carry out the intent of the bill
is beyond her. She said she doesn't think the department has, in
any way whatsoever, the power to promulgate such regulations.
Number 2069
CO-CHAIRMAN WILLIAMS informed Representative Barnes the legislature
voted on this bill two years ago and it passed the House.
REPRESENTATIVE BARNES indicated she didn't remember.
Number 2100
FRANK RUE, Commissioner, Department of Fish and Game, was next to
address the committee members. He said he would talk about the
philosophical underpinnings of the bill and where the department
would like to go. Commissioner Rue explained there currently is an
existing statute on waste and it is very much more open for abuse
than HB 406. He said the regulations the department is proposing
would tighten up the ability to waste fish. Commissioner Rue
indicated the department appreciates the attempt to tighten down
abuses of waste and waste of fish. They think that is important
and conceptually, our fisheries throughout the state and in the
offshore areas needs to reduce waste. He stated they are working
hard, through the Magnuson Act and other arenas, to reduce the
waste of fish. Conceptually, he thinks it is very important, as a
state, that we reduce waste of fish and realize full utilization of
fish. It is a resource that if we're creative we can find ways to
use heads, tails, etc., and make a profit. Commissioner Rue said
he would suggest that there be more limited circumstances than the
current version of HB 406 would allow for - an exemption to a waste
statute. He stated that is one area where he thinks the department
and the Administration would have a difference with this committee
bill. Commissioner Rue said another area is he thinks that any
language for the commissioner allowing for an exemption to a waste
statute ought to be "may" for the very reasons that Representative
Ogan mentioned. If there is a "shall," he has to give a permit,
but somebody sitting there letting fish mill around and they have
this permit, they may be abusing the statute. He stated he thinks
there ought to be very limited circumstances and it should be, "May
authorize the disposal of carcasses." Commissioner Rue said he
believes the enforcement provisions would be difficult to enforce
if someone were wasting fish. He said the concept that they have
talked about is that for hatcheries, they would like to phase the
need to have to dispose of any carcasses. He stated that as they
would like to phase out the need to have to dispose of any
carcasses, they think that we need to find ways to use that
product. Commissioner Rue pointed out that there are circumstances
that hatcheries, because they are limited to very specific
geographic areas and they can only harvest in those terminal areas,
they may not have a way to actually sell the fish. The department
thinks that for hatcheries who can't fish out in the open water as
they aren't part of a common property fishery, they can't make
their cost recovery needs in that common property fishery. They're
forced to fish in these terminal areas to get their cost recovery
back. There may be circumstances where they can't sell the flesh;
however, the department thinks that they ought to be required to
try and sell the flesh and ought to be required to handle the fish
and offer it for use by the public.
Number 2280
REPRESENTATIVE ALAN AUSTERMAN said the original concept behind
hatcheries was to do an assessment on fishermen to (indisc.)
hatcheries. So the idea of taking of extra fish to pay for the
operation of the hatchery is something that has come up because of
the cost recovery aspect that was brought on because there was not
enough money from the assessments. He asked if this is why we're
having to deal with the carcasses.
COMMISSIONER RUE noted Mr. Bruce was in attendance to help him with
that question. He said the history of the hatchery cost recovery
goes past his experience as to when that first began because there
is an assessment. Commissioner Rue asked Mr. Bruce when the cost
recovery kicked in.
Number 2306
GERON BRUCE, Legislative Liaison and Special Assistant, Office of
the Commissioner, Department of Fish and Game, explained the cost
recovery portion was always a part of the nonprofit private
hatchery program. When the program was developed the intention of
it was to fund this program without it requiring general fund
support. There were two parts of that. One part involved a salmon
enhancement tax which only some corporations get. Other
corporations do not get any of the salmon enhancement tax and those
corporations depend entirely on the cost recovery portion on their
cost recovery receipts to pay the cost of their operations. It has
always been a part of the concept of this program. It had three
funding sources. Representative Barnes is correct as there were
very generous contributions from the state treasury that went into
establishing these programs.
REPRESENTATIVE BARNES questioned how much in contributions where
there in state treasury contributions.
MR. BRUCE indicated he couldn't currently answer that question, but
he could generate some figures. He noted it would be a hefty
amount.
Number 2351
CO-CHAIRMAN WILLIAMS added that the fishermen did take those
hatcheries out of the state's hands and are making them work.
COMMISSIONER RUE said their concept is to narrow the times when
they would have to use this. He said they do not condone the idea
of waste and they do not want to go in that direction.
Commissioner Rue noted the department is not running any commercial
hatcheries, just sport fish hatcheries at this point. It is the
nonprofit organizations that are contributing to the common
property fishery. Commissioner Rue said there should be some
limited situations where you might allow a hatchery operator to
dispose of fish and that would be after they tried to sell or give
them away. There is the fact that they do benefit the common
property fishery.
Number 2395
REPRESENTATIVE DAVIES asked if the nonprofit corporations are
forbidden from operating common property fisheries.
COMMISSIONER RUE answered in the affirmative. He said the
fishermen provide fish to the common property fishery, but they are
benefitting and selling hatchery caught fish. The hatchery
operators are not out there. They are making their money from the
enhancement tax.
REPRESENTATIVES DAVIES asked if they are forbidden from doing that.
COMMISSIONER RUE answered in the affirmative. He noted the
department restricts them to terminal areas so they're not fishing
on wild stocks. He said you don't want the cost recovery to be
interfering with the wild stocks. You want the hatcheries to be
harvesting hatchery stocks and not wild stocks.
CO-CHAIRMAN WILLIAMS said, "For the information of the committee
members, this bill was introduced to help the fishermen. We've
been helping the oil people, in fact we're having North Star oil
right after this bill is taken care of. As you all know what the
fishermen are up against today and we have to find ways to help the
fishermen. Give em incentives to go out there. We probably will
not have a fishery this year if it keeps up the way it is. This
type of bill is to help the fishermen. If we can get away from who
put the most money into it and why, and focus on the direction that
we're trying to go with this - to help the fishermen gain more out
of the fish that is dying and dead and not helping the industry in
any way. I would hope that this committee can do that."
TAPE 96-63, SIDE B
Number 001
COMMISSIONER RUE responded to a question asked by Representative
Barnes. He said he agrees that we need to help fishermen, but he
isn't sure that allowing the fishermen as opposed to the hatchery
operators, to get exemptions for wasting fish is a good idea. One
reason is they do get to fish in the common property fishery
outside the terminal areas. Commissioner Rue noted the state is
looking at ways to get through this year where the prices are low
by working with processors and having the department's management
help to make sure that the fishermen get fish that are marketable.
He said he thinks by keeping the hatcheries alive, it will help the
fishermen in Southeast and Southcentral Alaska because they do put
fish out into the common property fishery.
CO-CHAIRMAN WILLIAMS said this is a transition and he believes we
have to look for ways to get the fish (indisc.) and look for other
creative ways to use the carcasses that are not marketable. He
said today we have 4 million cases of salmon in storage areas and
by June 1, we'll have 1.5 or 1.7 million. The processors are
telling us that they are not going to buy pink salmon. He asked
what we are going to do with them. He said if we can help the
fishermen through this crises the bill should be passed.
Number 097
REPRESENTATIVE DAVIES referred to river fisheries and said we have
commercial fishers who harvest fish. He asked if we allow any
waste of these fish.
COMMISSIONER RUE responded that we don't. We allow the taking of
roe, but they have to use the carcass for food.
REPRESENTATIVE DAVIES asked why we don't make the same requirement
for the hatcheries. If they're going to use the roe, why don't we
require them to utilize fish in the same way it is required for the
up river fishermen.
COMMISSIONER RUE said, "I would not have fishermen given an
exemption for a couple of reasons. One, I wouldn't want to create
a group of folks at that gets larger and larger and demands that
they'd be allowed to discard carcasses and just harvest the roe.
It's not the direction we want to go with all our fisheries. But
with the hatcheries, they're somewhat different than the river
fisheries."
Number 139
CO-CHAIRMAN WILLIAMS asked him to explain why he doesn't want to
get the fishermen involved in this.
COMMISSIONER RUE said he believes that currently there are
approximately 40 fishermen who have, as processors under the
present law which allowed a potential exemption to processors under
an earlier interpretation of the currently law, who have done this
in the past - who have used the roe and discarded the carcasses.
He said he believes that if you allow too broad of an exemption,
you will have more fishermen participating. If said he would be
concerned if we created a large group of fishermen who depend on
the sale of roe and are allowed to discard the carcasses.
Commissioner Rue said he thinks we need to use the carcasses. He
pointed out that the only difference between the river fishermen
and the hatcheries is the fact that the hatcheries can only catch
fish from a very constricted area where the fish are way at the end
of their life cycle when they have been milling for a long time, as
opposed to a river fishermen who can still catch them when there in
good shape and marketable. He noted they are going to have trouble
finding markets as well.
Number 200
REPRESENTATIVE DAVIES referred to the fish that mill around in
terminal areas and asked what happens to them if the hatcheries
don't take them.
COMMISSIONER RUE explained they would die and be eaten by crabs or
whatever. He noted the hatcheries have to try and sell them. He
said in the regulations the department is proposing under the
current law, hatcheries would have to handle the fish, try and sell
them and if they couldn't sell them they would have to try and give
them away. He said the department wants to encourage the
utilization of these fish.
REPRESENTATIVE DAVIES asked how the fish carcasses would be
disposed of.
COMMISSIONER RUE said he would imagine that they would be barged
out or taken out on a tender offshore under the Department of
Environmental Conservation (DEC) regulations. They would need to
get a permit from DEC to discard the carcasses.
Number 253
REPRESENTATIVE OGAN said he is hearing a couple of different
things. He is hearing that this bill was introduced just in case
there is some fish they can't get rid of. He said, "I'm hearing
another thing saying that well it's because we're not going to be
selling any fish that we're letting them do this. So it appears to
me that the intent is to, with this year's harvest at least - you
know allow this procedure. We also heard testimony that you are
currently drafting regulations to do this and this statute was
pretty much taken out of regulation. Do you have the authority I
guess, you know -- Representative Barnes was asking do you have the
authority to do this and if you do have the authority, then why
don't we just draft some emergency regulations for a year or two to
- you know, allow this roe stripping to go on and, you know, on
hatchery fish only and -- it's a long question but....
Number 301
COMMISSIONER RUE said he thinks the reason for a statute, whether
or not we agree on all the parts of it, is the current statute is
ambiguous. The Department of Law, at one point, gave an informal
opinion that processors were exempt from the waste law. They later
interpreted it that you can bring processors under it. Fishermen
were getting processor licenses and discarding the carcasses.
Commissioner Rue said the department doesn't want that to happen.
He said it needs to be tightened down. So a statute that tightens
down the current waste law is needed. It also needs some other
housekeeping fixes to allow, for instance, to use some salmon for
bait. If a hatchery has the fish that they use for egg take, that
because they've handled they might not be able to sell them.
Technically you're not allowed to use them for bait, but in Alaska
people have been using them for bait forever. He stated there are
some technical reasons why we need a law that's better.
Commissioner Rue said the promulgation of regulations would be one
way to handle this.
Number 391
STEVEN DAUGHERTY, Assistant Attorney General, Natural Resources
Section, Civil Division, Department of Law, came before the
committee. In referring to the authority issue, Mr. Daugherty said
under AS 16.05.831 (c) it states "A person who violates this
section or regulation adopted under it is punishable by a fine of
not more than $10,000 or imprisonment for not more than six months
or by both..." He said there isn't a direct statement that says
the commissioner has authority to adopt regulations. This is an
implied authority because it says that a person who violates this
section or regulation adopted under it. That gives the
commissioner implied authority to adopt regulations to implement
and interpret this section. Mr. Daugherty pointed out that is a
rather old statute and does not have the language that we use today
directly granting the authority, but that authority is implied in
the existing statute. The commissioner is also relying on the
general authority of the commissioner to do things that are
necessary to implement the statutes, etc., under AS 16.05.020,
which is the general grant authority and the functions of the
commissioner to manage, protect, maintain and improve the fish and
game and aquatic resources of the state for the interest of the
economy and general well-being of the state. Mr. Daugherty said
the Department of Law believes that the commissioner does have the
authority to adopt regulations to implement and interpret this
section. They believe these regulations are necessary because of
enforcement problems with the current statute, which is very
ambiguous. The Department of Law has issued an opinion on the
interpretation of this.
Number 509
REPRESENTATIVE AUSTERMAN asked Mr. Daugherty if he is saying that
the Department of Law is interpreting AS 16.05.831 (c) as the
authority to change the existing statute by regulation.
MR. DAUGHERTY indicated that is incorrect. He said they are saying
that the commissioner has authority to implement and interpret the
existing statute. The commissioner does not have authority to do
anything that is inconsistent with the existing statute.
REPRESENTATIVE AUSTERMAN asked if the ability of a fisherman right
now to get a processors license and strip roe is strictly in
regulation.
MR. DAUGHERTY explained that there currently is nothing that
authorizes a fisherman to get a processing license and go out and
strip roe. He said the opinion that the Department of Law issued
on the interpretation of this statute, as it currently exists, is
applicable to all persons including processors. There is a
possibility under the existing law for the commissioner to
authorize roe striping. There have been some authorizations in the
past for hatcheries. There may have been other authorizations, but
AS 16.05.831 (b) provides that the commissioner, upon request, may
authorize other uses of salmon that would be consistent with the
maximum and wise use of the resource. Mr. Daugherty explained this
is the section that has been used in the past to authorize some roe
striping by hatcheries under conditions similar to those that the
commissioner has talked about attempting to sell the fish,
attempting to give the fish away and then having to dispose of the
carcasses in compliance with all the applicable federal and state
regulations. At this time there is nothing in regulation or
statute that would allow someone to go out and get a processing
license and strip roe.
REPRESENTATIVE AUSTERMAN said he thought that was what was
currently happening.
MR. DAUGHERTY explained at one point, the Department of Fish and
Game was telling people that they did not believe that this law
applied to processors, so fishermen were going out and getting
these processing licenses and were stripping roe.
REPRESENTATIVE AUSTERMAN asked if we currently have a different
interpretation.
MR. DAUGHERTY indicated that is correct. He said the department
went back and looked at the legislative history for this bill and
that history indicated that is law was intended to prevent waste of
salmon. It wasn't intended to allow someone to go out and waste
salmon just because they had a processing license.
REPRESENTATIVE AUSTERMAN said depending on which lawyer you're
talking to, you get one interpretation or another.
Number 645
COMMISSIONER RUE explained the current law is ambiguous and people
read it differently. He said he would applaud any effort to try
and clarify that statute and make it clear as to what the intent
was.
Number 667
REPRESENTATIVE LONG said he has a problem with some of the
statements that have been made. He said his reading of the bill
indicates that Commissioner Rue will be issuing a permit to discard
carcasses of pink or chum salmon. He said there is not authority
to strip roe from those carcasses other than the commissioner would
issue another permit on top of a salmon permit, interim use permit
or even hatchery permit, just to discard those fish.
COMMISSIONER RUE said he has taken a quick look at the bill, but
they haven't done a detailed analysis of some of those specific
questions. He said he has talked about some of the concepts the
department agrees with in the idea of tightening down the waste
statute and some of the concepts that he thought the department
didn't disagree with which was the broadness and enforceability of
it. He stated he has not looked at the details of the bill and how
it is structured. Commissioner Rue referred to the requirement
that he has to issue a permit if someone meets all the
qualifications and said that is another conceptual issue for him.
REPRESENTATIVE LONG said he was trying to get to Commissioner Rue's
interpretation of the reading of the bill and what the sponsor's
intent is.
Number 736
COMMISSIONER RUE explained his interpretation is that it is trying
to allow for the use of the roe when you can't sell or give away
the carcass. He said that is his understanding of the intent of
the bill.
CO-CHAIRMAN WILLIAMS stated that is the intent of the bill. He
said, "You keep saying you don't want anymore fishermen involved in
this roe stripping. Maybe if you could say it a different way
maybe it might come in this time commissioner. You haven't given
me reason yet - at least I haven't heard it."
COMMISSIONER RUE said, "Here is why I would limit it to just
hatcheries rather than fishermen. Fishermen have the opportunity
to fish in the common property fishery outside of these terminal
harvest areas. We are trying to reduce the waste of the resource,
not encourage the discarding of salmon carcasses as opposed to
hatcheries who are very limited in where they can get their fish
plus our nonprofit organizations that contribute a lot to the
common property fishery. So I see fishermen as a different kill of
fish, if you will, not that they aren't having trouble this year
and we were doing what we can to help. The other thing is I think
for fishermen, right now, when we're trying to change the Magnuson
Act to sustain offshore fisheries and reduce waste, we don't need
salmon fishermen accused of wasting fish. The Canadians would love
more excuses to beat up on us - to, you know, cut back our harvest
of fish by using `Gee whiz, they're just throwing fish away,' but
we're not talking about the same fish and it's not the same issue,
but I don't think the fishermen need that perception thrown at them
either. And I also am concerned that we would start creating a
larger class of people who have come to depend on just using the
roe and not using the carcass, and the pressure would be to
continue that practice rather than the pressure there to try and
find a good use for those carcasses. I would rather see the
pressure on finding a use for the carcass, whether it be fishmeal,
protein, you know, different processing techniques. There are lots
of different ways that that raw resource can be used. So I'd
rather have the pressure that direction than the pressure the other
direction."
Number 862
CO-CHAIRMAN GREEN said we've heard that the roe is enhanced the
older the fish get, yet by the same token, the fish meat is at or
beyond its peak. He asked what amount of time there is so that the
carcasses could be utilized in some other fashion.
COMMISSIONER RUE explained it is a continuing scale. At some
point, the marketability is going to go way down and at some point,
people's willingness to accept the fish will go down. You would
have to look a the individual situation and that's part of the
reason he thinks it shouldn't be mandatory situation where he has
to give them a permit.
CO-CHAIRMAN GREEN said at some period of this roe harvest, the
value of the fish would go beyond "can able" to something that
would have to be used as fishmeal or fertilizer or something other
than edible. He asked if the canning of the fish would even be a
function.
COMMISSIONER RUE stated that at some point it does not do well in
a can.
CO-CHAIRMAN GREEN asked if that would be right in the middle of
this roe harvesting period.
COMMISSIONER RUE explained there are probably other people in
attendance that could probably answer that question better than he
could, but at some point towards the tail end when the fish had
been there for a long time, at some point they will not be suitable
for a can.
Number 961
REPRESENTATIVE AUSTERMAN said one of his concerns with the bill is
at what point in time do you allow those fish to get to where
they're prime roe fish and when they become prime roe fish, they
are no longer good fish. He said with a bill that is geared toward
roe fishing, his concern is do you let those fish come in at $5.50
a pound for roe or 20 cents a pound for fish. There will be some
tendency to take the roe. Once the roe is really prime, the fish
are no good.
CO-CHAIRMAN WILLIAMS said his concern is that it isn't going to be
an ongoing process and we know that. It can stop at any time. He
said to tell when it is a prime roe fish is could be you pick it up
and in the middle it bends down and touches it's tail to the head.
It's soft and they're going to die. As the commissioner said, some
of the fish die in the terminal areas today and that's rotten
waste. Co-Chairman Williams said he has been talking to the
commissioner for about two months about this issue. He said he
still doesn't by the commissioner's argument about not letting the
fishermen go into the terminal areas for this season. Co-Chairman
Williams referred to the Pacific Salmon Treaty and said he believes
it is probably the commissioner's best argument. He said he still
hasn't bought the argument on why the fishermen can't be a part of
this process.
Number 1094
REPRESENTATIVE OGAN read from page 3, line 8, "A permittee is not
required under this subsection to transport the salmon to a
location other than the permittee's normal place of business; or a
point of landing in the vicinity of the place where the salmon are
harvested; or preserve or process the salmon." He said it seems to
him that there would be no incentive or motivation. Essentially
what they've got to do is notify the public that they can jump in
their boat and come out to the area where they're harvesting these
fish at the hatcheries and pick up the fish if they want them.
They don't have to be delivered. They would have to arrange
transportation from the hatchery if they want these fish.
CO-CHAIRMAN WILLIAMS said the hatchery located in downtown
Ketchikan puts out the word that there will be these carcasses
available and people come and get them. He noted these are black
king salmon.
REPRESENTATIVE OGAN said some of the hatcheries are only accessible
by a boat or seaplane.
CO-CHAIRMAN WILLIAMS stated what he is trying to do with the bill
is help the fishermen.
Number 1248
REPRESENTATIVE AUSTERMAN explained the original concept behind the
hatcheries was (indisc.), they catch them and they take eggs and
milt and then let more fish come back. He referred to the
carcasses from that process and asked if those carcasses are dumped
at sea with a DEC permit.
MR. BRUCE referred to the brood stock carcasses and said there is
a specific exemption in regulation for them and they do not have to
be consumed or used. They can be disposed of considering the
advanced state of sexual maturity and deterioration that they are
in. Mr. Bruce said that they are offered for bait and one or two
hatchery corporations, over the course of time, have actually tried
to can them. They actually ran into concerns from the canning
industry and regulators in that they were putting up a product that
wasn't unwholesome, but was a product that was so altered from what
you think of when you think of canned salmon. It almost consisted
of misrepresentation of the product as it was almost more like a
juice, so they stopped doing that.
Number 1322
REPRESENTATIVE AUSTERMAN asked if there has been any current
requests from the hatcheries to process any of these fish for
canning or freezing them for resale.
COMMISSIONER RUE said he doesn't think there would need to be a
request. If they want to use them, they can use them. They could
can them as part of their cost for (indisc.) effort.
Number 1366
CO-CHAIRMAN WILLIAMS informed the committee the department does
have management control over the issue of where the opportunities
may be. He said he hopes the department keeps in consideration
what fish die in the terminal areas.
REPRESENTATIVE OGAN asked Commissioner Rue what the department's
position is on the bill.
COMMISSIONER RUE said the department appreciates the effort to
narrow the current ambiguous waste law because they think it can be
abused in more ways than the public would want. He said they
appreciate the effort, but there is three areas where the
department would have a difference. One is to include fishermen as
being eligible for an exemption. The second would be the mandatory
nature of giving a permit if someone met the criteria and then
having to do an executive order to stop the waste or discard from
happening. The third is the enforceability language. Currently,
you would have to knowingly and wantonly, etc., which would be more
difficult to prosecute a waste with that kind of language in it.
Commissioner Rue explained the biggest issue is including the
larger arena of fishermen as also being able to discard fish.
Number 1455
CO-CHAIRMAN WILLIAMS said he wishes Commissioner Rue would come up
with a stronger argument as to why the fishermen can't be included
in this.
COMMISSIONER RUE noted another reason is that he is sure that the
sports fishermen, who are pushing the fish initiative, would love
to use this as another reason to bash on the commercial fishermen.
Number 1545
KAY ANDREW, United Southeast Alaska Gillnetters Association,
testified via teleconference from Ketchikan in support of CSHB
406(RES). She said she would like to speak in favor of the bill
because of the proposed regulating by the Department of Fish and
Game. Ms. Andrew said the fishermen would be left out of the
ability to market their eggs taken from terminal fisheries that are
possibly not fit for human consumption.
MS. ANDREW explained she doesn't feel the state should play the
game that it is O.K. for some people to do egg roe, but not others
including processors, fishermen, hatcheries, etc. This is a ploy
by the processors to limit the egg market. She said fishermen pay
3 percent of their gross to raise hatchery fish and they should be
allowed to market these fish in whatever manner they can get. If
the fishermen cannot compete on the market for their fish, they
cannot expect to get any kind of a price for the product. We need
to remember that the fishermen are responsible for whatever the
state has loaned the hatchery programs and if these hatcheries
close tomorrow, the fishermen would still have to pay 3 percent
until these debts are paid. So (indisc.) are getting something for
free from the state is unfounded. These fish are not left to mill
outside the terminal area until these fish are roe ready. These
fish are caught going through all fisheries, commercial, sport,
subsistence and personal use fisheries, before they reach the
terminal area.
MS. ANDREW said, "According to Mr. Rue, we should not be able to
utilize our own fish. The Governor seems to be saying he is
against commercial fishermen. What difference would it make if
these fish are not marketable to let us take the roe? Well I'll
tell you, the processors don't want us competing with them. The
governor, through the commissioner, is telling us he is favoring
the processors. Does the state not have a limited entry fishery on
the Yukon River that allows these fish to be supposedly used for
dog food? I'm sure some of them argues for dog food. In sitting
on the Board of Fisheries a few years ago I heard testimony from
the people along the Yukon River of the carcasses packed high along
this river bank simply striped of roe. So there is waste there.
And why is it? Because they can't sell those carcasses. They're
not marketable. They're not fit for human consumption. What would
the commissioner suggest we do with the terminal fisheries areas if
there is no right cost recovery in. He stated that we have the
ability to fish in the common property fishery to catch these
hatchery fish, but not all terminal harvest fisheries are utilized
by the hatcheries for cost recovery. What a (indisc.). They die
and they become, as he stated, crab food. So why can't we be
allowed to take fish and utilized what we can out of this crab food
and feed the crab with what's left that's not fish for human
consumption. I think this would be a waste to let them all die in
a terminal harvest area not be able to utilize them. I don't
believe that it's fair to the fishermen in the state of Alaska to
not utilize fish to its fullest extent and, therefore, I don't
think it's fair to shove the fishermen out of a way to market that
fish that we pay for. In closing, I'm sure that the fish
initiative would like to use this. I'm sure U.S./Canada would like
to use this, but I don't think it has anything to do with
U.S./Canada or the fish initiative - either one. We're talking
about hatchery fish that are paid through a program of 3 percent
that the commercial fishermen pay for. So I would like you to very
carefully to think about this CS. It is right in line with what
the department is going to present to you as regulation. The only
difference is it includes the fishermen instead of excluding the
fishermen. Thank you very much for your time."
Number 1840
RUDY FRANULOVICH, Fisherman, was next to testify via teleconference
from Ketchikan. He said he has gillnetted salmon in Southeast
Alaska for 27 years. Mr. Franulovich said he believes CSHB
406(RES) is a good bill. It addresses hatchery fish only. No
common property wild stock salmon can be wasted with this bill.
Fishermen fish in terminal areas only for these salmon and when the
salmon arrive in terminal areas, the quality is so poor that many
processors refuse to purchase them. He stated he fishes for EC
Phillips in Ketchikan and for the last seven years, they have
refused to purchase terminal hatchery fish from him. Mr.
Franulovich said he is in favor of the legislation because it gives
him and others the opportunity to utilize these hatchery (indisc.)
fish. He thanked the committee for listening to his testimony.
Number 2183
DAVID LAWLER testified via teleconference from Ketchikan. He said
he gathers that many of the committee members really don't
understand what is happening with the salmon market this season and
said he would like to inform them about that.
MR. LAWLER said, "During 1996, we've set to harvest about ten
million chums in Southeastern Alaska alone. Most of these are
hatchery produced chums. Tradition chum production is only about
nine million statewide. Because of this the market for dark red
meat in chums, frozen, has declined to below 40 cents a pound which
is also below the cost of production. No value whatsoever
particularly exists for small (indisc.) chums. Our local fall
chums from (indisc.) are 80 percent or more pale meated even in the
common property fishery. I know this because I do meat color
analysis. I'm a processor and I've air freighted and trucked fish
to Seattle for about 12 years now. Waste is an issue of biology
and economy. (Indisc.) to find that allowing fish surplus
(indisc.) allowing them to die and rot at the terminal area. How
can fertilization and addition of nutrients to the food chain be
called a waste? I don't understand that. When buyers for salmon
do not exist, we should utilize as much of the salmon as possible
where conservation and good management allows and dictates the need
to harvest those fish. At this time, two out of three of the
buyers of our local salmon at Tree Point do not buy any terminal
area chums. What I want the committee to answer to me is `Where
are the boats going to sell their fish?' They can't fish. The
state law allowing striping only by licensed processors should be
kept in tact. ADF&G (Alaska Department of Fish and Game) reporting
and raw fish reporting and required this. I believe, however, that
catcher vessels should be allowed to scatter carcasses and be
exempted from grinding. What harm does dumping of undesirable
salmon cause. Who stands to gain by this new law. I (indisc.)
small business (indisc.) the fishermen as well as certain
processors. The supply of salmon is bountiful. Let waste be
defined or define itself in the marketplace. What cannot be
marketed should not be totally wasted. Harvestable salmon left
uncaught are a waste. The salmon egg market is drawing and prices
are rising. The egg (indisc.) should not be wasted. It is the
(indisc.) chum salmon (indisc.) price. In Southeastern Alaska, the
chums will pay the 1996 season. I want the commissioner to tell me
does he expect the fishermen to go broke? Maybe we should make it
unprofitable to be a commissioner of Fish and Game. Times are bad
enough in the salmon industry without further (indisc.--coughing)
restriction where no harm is being done. The status quo should be
maintained and I want to reiterate that I don't see where any harm
is being done. You can't sell those salmon now if you want to sell
them. If the commissioner wants to adopt a regulation compelling
salmon marketers to by salmon for a profitable price, he certainly
can try and do it but it won't work. There is no market for those
fish. I repeat `There is no market for chum salmon.' Thank you."
Number 2177
REPRESENTATIVE AUSTERMAN said if there is no market, why are we
raising them in hatcheries?
MR. LAWLER said he appreciates that question. He explained supply
and demand dictates markets. Back when the hatcheries were
promulgated and put into being, this situation did not exist. Now
this situation exists. He said he appreciates the commissioner's
viewpoint on the utilization of salmon. We all would like to
utilize salmon. Mr. Lawler said we're not against utilization of
salmon, but at this time no market exists for dark chum salmon. It
is a very very bad market situation. The market for pink salmon is
saturated and numerous processors have put their fleet on notice
that they're not going to buy pink salmon for the prices that they
usually pay. In fact, the price of pink salmon this year is
projected to be less than what he believes is profitable for the
local seiners to fish for - about 6 cents to 8 cents.
Number 2269
JOHN CHILDS, Commercial Fisherman, testified via teleconference
from Fairbanks. He said he is a commercial fisherman on the Tanana
River. The price of their roe dropped drastically last year do to
the roe striping in Southeast Alaska. He said he was told that
over 485,000 pounds of roe was striped in the hatchery located in
Ketchikan and 100,000 pounds of roe was striped in the Juneau area.
That is more than the entire Yukon River drainage. Mr. Childs
explained their permits are becoming worthless because of this
practice. He said he sells all of his carcasses to dog mushers.
Mr. Childs noted he lost a few of his customers last year because
the mushers got fish for free from the hatchery stocks. The
practice of striping roe and throwing fish away is very wasteful.
It was stopped in the pollack fishery and should not be allowed in
the salmon fishery.
Number 2375
JERRY MCCUTCHEON was next to testify via teleconference from
Anchorage. He stated he thinks fish should be totally processed.
Mr. McCutcheon said he thinks it is hilarious that the hatchery
people are looking for special privileges. He said the committee
should take a look at the law and see how the hatchery section has
been designed by the people. Mr. McCutcheon informed the committee
if he could get into the hatchery business, he would love to fully
utilize the fish, but he doesn't want to fight the politics that is
involved in it. Mr. McCutcheon said the state, the hatchery people
and the fishermen's hatchery people are equally incompetent. The
state has had approximately 30 hatcheries and only three of them
every made any economic....[END OF TAPE]
TAPE 96-64, SIDE A
Number 001
MR. MCCUTCHEON said, "....it's like Exxon having to go get
permission from Arco to operate in Alaska. It's exactly it because
you've got (indisc.) and those people and you got to go before them
to do anything at all and they'll absolutely screw you every way
(indisc.), yet they can't operate their own hatchery. You should
have no problems with the hatchery that they have down there at
Ester Island. That shouldn't be a problem. Ladd McCauley was
selling his spawned out fish out of Sheep Creek for more money than
the fishermen were getting for their brights. You gotta know what
your doing and they just don't and you shouldn't give them any
special privileges - none. You really need to go back and look at
the section having to with hatcheries and the licensing of
hatcheries and get the Fishermen's Association completely out of it
and limit it to the state. The same, you ought to get the state
out of it as much as you can because you have a nest of people who
don't want anybody to get anything. For example, a hatchery pond,
Warm Springs Bay. The state had a big grand proposal, I looked at
it and they didn't want it anymore - that's it."
Number 147
KEVIN MCDOUGALL, Commercial Fisherman, came before the committee to
give his testimony. He explained he is a commercial fisherman in
Southeast Alaska, he pays the 3 percent enhancement tax, he does
catch hatchery fish and has been involved and around this issue for
about five years. Mr. McDougall explained the reason he got
involved with this whole process is that he started out five years
ago catching chum salmon in a common property fishery and when he
went to deliver them to the local processor, and when he looked at
his check after delivering 10,000 pounds of fish, he realized he
couldn't do this the following week. Mr. McDougall said he made
phone calls to markets in the Lower 48 and found markets for chum
salmon. He said he then found out that there was a byproduct,
salmon roe, and sold that also. That worked great for several
years until the market for the chum salmon collapsed. At this
point, he can go out and catch a chum salmon at any location, clean
it and send them to Seattle and not make a profit on it. Mr.
McDougall said there will be processors buying chum salmon and we
don't what the price will be. At a low ball price of 15 cents a
pound that will be paid to the fishermen, the processors will lose
money on those salmon marketing them fresh into the marketplace.
MR. MCDOUGALL informed the committee he is in support of CSHB
406(RES) because it doesn't deal with wild stock. It is anadromous
fish that is coming back to a remote release site. These fish are
supposed to be harvested at a rate of 100 percent. Mr. McDougall
explained that in Sitka, there is a remote release site that will
have fish coming back this summer. He said, "I have paid for these
fish when I arrive there. I will not have a market as I did not in
1994. I will not be able to sell to any of the traditional
processors because they will have a processing glut like they did
two years ago. I am also trying to be excluded from being able to
access the roe. This is the only opportunity I have to make any
money on these fish that I have been taxed to raise."
Number 431
REPRESENTATIVE AUSTERMAN said he is a lifetime resident of Alaska,
has been involved in the industry and understands the industry very
well. He stated he totally supports the industry, but there
becomes a limit in time when even the grocery store owner doesn't
order in bananas anymore because nobody is buying them.
Representative Austerman said he guesses that is what his point is
on when he asked Mr. Lawler why we're still producing chums.
MR. MCDOUGALL said he is glad Representative Austerman is asking
him that question because he thinks that the issue there is still
a great economic value here for the hatcheries and for the salmon
at this point. He said he agrees with what Ms. Sutton stated
earlier. Mr. McDougall said he thinks we are in very much of a
crises now and that he hopes we can come out of it. Currently,
there is great value in these fish, but it's not in the flesh, it's
in the roe. He said the processors will buy a male chum salmon
from him, they need to have access to the roe. There is great
value there.
Number 555
REPRESENTATIVE AUSTERMAN pointed out that a gallbladder of a brown
bear has great value, but we don't raise brown bears to get their
gallbladders and yet we're raising salmon to get their eggs. There
is a little bit of a difference there, but there is some
comparison.
MR. MCDOUGALL said he thinks it was never intended that we were
going to raise fish for eggs, but we've come to this crises in the
marketplace and now we have an opportunity to extract something.
He said he understands all the issues regarding the waste and he
sympathizes with those things, but it is hard to listen to the
commissioner and the Administration to say that it's going to be
legal to take a salmon and grind it into fertilizer or fishmeal,
but if we put it in the water then it becomes waste. The fishermen
needs some help here. The industry needs help, he concluded.
Number 653
CO-CHAIRMAN WILLIAMS said these hatcheries were put in when there
was a demand for fish. Today the markets have gone because the
farmed fish took over a lot of the market. Co-Chairman Williams
said what we're trying to do today is help the fishermen through
this short period of time so that the fishermen might adjust to the
changing market. Co-Chairman Williams said about six years ago,
humpies were going for about $1.05 per pound and the sockeye were
going for $5 or $6 per pound.
Number 710
REPRESENTATIVE BARNES said she would submit to the committee that
there is no lack of a market for the fish as she knows there are
people in Taiwan and China who are just dying to buy our fish. The
problem is she can't find anybody to sell the fish to them.
Number 742
JOHN GEORGE, Member, Territorial Sportsmen, came before the
committee to give his testimony. He informed the committee he also
sits on the Board of Directors for Douglas Island Pink and Chum
(DIPAC). Mr. George explained the sports fishermen will support
this bill because they support commercial fishermen making money
and making a living. Right now, this is a good way to do it. Mr.
George said DIPAC also needs to have a cost recovery and they would
like to be able to do something with the chum salmon. For years,
DIPAC has offered fish to food banks, Native organizations and
anyone else that wants it. He said they have spent their own money
to load fish into totes, ice them and loan trucks to people to
distribute those fish. He said they were instrumental in starting
Health Sea, Incorporated, in making salmon ham and salmon products
out of dark chum. Mr. George said they utilize a lot of dark chum
in that and some day maybe they can use it all, but currently, that
market isn't big enough so that they can. In the mean time we need
to do something with their cost recovery fish to make sure they get
a cost recovery so they may continue paying on their loans from the
state. He noted they have never missed a loan payment. They make
the payments sometimes with their king salmon and silver salmon.
He noted they are basically out of the pink salmon business. Mr.
George explained 50 percent of the floor space in the DIPAC
hatchery is utilized for raising king and coho salmon. He added 50
percent is designated to pink and chum salmon. Mr. George
explained roe does not compete with fish. So if DIPAC were to dump
all of its dark chums on the market, then they would be competing
against the commercial fishermen who are also trying to sell fish.
That's a problem. He said he has been told that there is no glut
on world market. He said he differs with the testimony that came
from the Yukon-Kuskokwim area that roe striping in Southeast has
deteriorated their market. He said he believes that there is
plenty of market if you can deliver a good product. Roe is a very
sensitive market as you have to get it at the right stage, you have
to take very good care of it. You have to get it striped and get
it to where it's going. DIPAC does support CSHB 406(RES) from the
standpoint that they will be able to harvest these dark chums and
utilize the flesh that they can for whatever purpose they can. He
noted he is proposing that they go on the internet. If somebody
wants to come in and put in a fishmeal plant or anything else, they
can have the fish.
Number 1388
RICHARD LAUBER, Pacific Seafood Processors Association, was next to
come before the committee. He said, "Let me bring this debate back
to where I think it ought to be, and focus on the fact that what
this legislation would do, and quite frankly my understanding what
the department's regulation would do, is make a major major policy
change in the state of Alaska. The state of Alaska has
consistently had a policy in all areas of fish and game against
wanton waste. We have statute after statute after statute on the
books that opposes wanton waste. Certainly, while I'm not any
expert in the game laws or the fowl laws - bird laws in this state,
I understand that there are statutes, criminal penalties, etc., for
wanton waste. I have personally - I have been involved in most of
the legislation regarding fisheries. As you're aware there is a
bill - legislation - a law regarding herring roe stripping. This
was a monumental battle in this legislature and the reason for it
was that many other reasons -- many other reasons that you heard
today were voiced at that time. The legislature had repeatedly
said, `No roe striping,' even though it had economic impacts, it
made good sense in some cases, but `No roe striping.' Many of you
are aware more recently of the pollack roe striping issue in the
Gulf of Alaska and in the Bering Sea, but particularly in the Gulf
of Alaska. Factory trawlers came in and found it economic to strip
the roe and discard the carcasses. That was a battle that Alaska
fought. In fact, the current governor was on the North Pacific
Fishery Management Council at that time and that was a high water
mark, apparently in his concern, because his resume on the internet
includes the statement that he was a prime sponsor and supporter of
no roe striping of pollack. The current law regarding salmon
prohibits the waste of salmon. That law was originally passed in
1975 and was amended in 1984 to make it more specific. And that
law basically, and portions of it are contained in this statute
under another section that it must go to sale to a commercial
buyer, must be consumed by human or domestic animals or must be
used for scientific educational display purposes. And then it says
that the commissioner, upon request, may authorize other uses of
salmon that would be consistent with the maximum and wise use.
Uses, I do not consider and I think that there is strong feeling,
no doubt the Department of Law has spotted this, that you cannot
consider throwing a product away as a use. Yes, Mr. Chairman, I'll
try to speed up, but I - basically about the only one that
testified today. I'd be happy to stop and then come back at a
later time if you'd like me to do that."
CO-CHAIRMAN WILLIAMS asked Mr. Lauber if he could speak to the
current regulations.
MR. LAUBER said, "I believe that the statute, which of course the
regulations must be based upon, talks about uses and if you look at
the three uses that are currently contained in the statute it
states that a use would be by a commercial buyer, that it would be
for human consumption or domestic use and/or by domestic animals or
scientific educational or display purposes. It seems logical that
there could be an interpretation, and I have all the great faith in
the attorney generals office and their lawyers, but I have had to
tell you and I'm sure, Mr. Chairman, you and other members have
known many instances where the courts have not borne out the advise
of the attorney generals office. So it's possible - just possible,
remotely so, that this is not legally considered a use, and
therefore, the commissioner would not be allowed to do that."
Number 1307
CO-CHAIRMAN WILLIAMS said, "I have a couple of questions and we've
been talking about what the fishermen are going to do. I think you
just heard one of the fishermen up here saying that he takes the
fish to the processors and the processors refuse to buy the fish.
You might even talk a little bit about what Representative Barnes
said here that there is a big demand in Asia or the process of
looking at that market. Maybe you could talk a little bit about
what's going on."
MR. LAUBER said, "The bill - the substitute, as I understand it,
would allow hatcheries and fishermen that receive permits to fish
in terminal harvest areas. To hold this bill out as a great
beneficial bill for fishermen of the state of Alaska I think would
be doing a disservice because it would be a limited number of
fishermen that would be able to participate in the terminal harvest
area and, of course, the hatcheries. So basically, what this is a
hatchery bill that would benefit and a bail out, if you like, of
hatcheries."
CO-CHAIRMAN WILLIAMS asked Mr. Lauber to talk about why the
processors won't buy fish.
MR. LAUBER said he believes all of this is market driven and the
situation may get worse. He said you don't improve that situation
by allowing hatcheries or a limited number of fishermen to go into
a terminal harvest area and strip roe. When processors or anyone
else buys salmon, they buy the whole salmon. The price of that is
based on the flesh and on the eggs. If you allow someone to dump
a lot of eggs on the roe market, it's bound to have an affect on
the overall price of salmon. So in the interest of helping the
fishermen, this legislation likely will hurt the bulk of the
fishermen because the fishermen will likely receive a very price
for chum and pink salmon. This will drive the overall price
further down which is going to hurt the vast majority of them. It
may help a few fishermen, but the bulk of fishermen it will hurt.
It may help a few fishermen in the areas where there are hatcheries
where they can roe strip. He said there was testimony from
Fairbanks and there are many other places where there will be no
market for their fish because of the availability of cheap roe and
chum salmon from the hatchery area. This will exasperate that
problem.
Number 1474
CO-CHAIRMAN WILLIAMS said, "I don't think that the a -- and I may
be wrong, you're the processor expert in this area, but the fish
that are caught on the Yukon there is a lot of problems we have as
you know in getting that fish to the marketplace and the cost is
part of the factor in that fish. I know as far as selling timber
in Ketchikan and (indisc.) you remember when the spruce mill was
operating there and we were (indisc.) drying the timber in that
area and we had to market it outside of Alaska and it just cost too
much..."
MR. LAUBER said, "I understand that, Mr. Chairman, they have other
problems, but when you have roe technicians that leave those
processors on the Yukon and up and down those rivers and go to the
hatchery sites or places that are using hatchery fish for roe, the
person that is processing those fish up there has no market and,
therefore, since they have no market then the fishermen have no
market. So it has an impact. It's a demonstrated impact and
that's before the impact of this legislation which would be
monumental.
Number 1530
CO-CHAIRMAN WILLIAMS asked Mr. Lauber to talk a little bit about
why they aren't marketing overseas. He noted Representative Barnes
said there is a big market in Asia.
MR. LAUBER said he thinks that Asia is a market. He said Asia is
a market for light fleshed chum salmon. Unfortunately, the problem
is that between us and that market there happens to be a large
hatchery area of Japan and they raise chum salmon. They are
shipping some chum salmon to China. Their shipping costs are much
lower than a buyer in Alaska would have. They have a competitive
edge. Mr. Lauber said he thinks that in the future, there is a
market for those chums in Asia. Mr. Lauber said, "If you set a
policy that allows people to make money at striping the roe, you're
going to hurt that market - the development of that market because
those people are not going to be forced to find these other
sources. And that's what we should be doing, we should be taking
this product off of the market to improve the price to the
fishermen who catch it in the common property resource, not by
allowing people to strip the roe, hurt the market, hurt the
fishermen that are in the common property resource and hurt the
processors who are trying to survive in order to buy all kinds of
salmon, not just these chums and pink salmon that are largely
spawned in hatcheries. We have a very very crucial situation, Mr.
Chairman, in this state today. The largest employer in the state
is the seafood industry and I can tell you the processors are in
dyer straights, as you are aware - you've read in the papers about
people going bankrupt, people not opening canneries. It is going
to be a very difficult situation and this is not going to help us,
and it won't help us with the fishermen that we're desperately
trying to buy fish from."
Number 1634
CO-CHAIRMAN WILLIAMS said, "I'd like to make a comment though that
1995 salmon roe for pink and chum, statewide, weight was 416,025
and the processors were the largest of that and then the Yukon was
the rest. Thank you Your Honor."
MR. LAUBER said, "Could I add just one statement and that is there
was a statement made earlier regarding the vote of this committee
and the legislature - the House of Representatives on that. I
would like to go on the record to the fact that there was no
testimony in opposition to that bill at that particular time.
There were various reasons for it. Most of them had to do with the
conflict in timing that people not being in the capital at the time
and there was opposition in the other body, but I wanted to put
that in the record that the legislators that voted for that did not
have the benefit of those speaking in opposition to the
legislation."
Number 1712
GEOFF BULLOCK, United Southeast Alaska Gillnetters, came before the
committee to give his testimony. He said this isn't an issue on
hatcheries so much as it is an issue on the fishermen. There are
problems out there and everybody would admit that, but to say to
the fishermen "You're not gunna be allowed to continue to make a
living like you have the previous one or two years," is unfair.
It's a shame, it's tragic and it's too bad that there is going to
be a large number of fishermen, not a large industry, who are going
to be curtailed in the way they make a living based on the money
they pay into those fish.
Number 1800
KATHRYN HANSEN, Commercial Gillnetter, came before the committee
members to give her testimony. She said she and her husband both
have limited entry gillnet permits. Ms. Hansen said one of the
things that she hasn't heard is that there are 41 fishermen who
have been doing marketing of their own fish out of 465 permits.
That is less than 10 percent. Those 41 people bring the price up
to those who are fishing fish in the round for the processors. She
said because they are able to market their fish and go after roe,
the processors have to pay the fishermen closer to a fair price.
Ms. Hansen said she doesn't want to have to put in the work to
market fish, clean fish and take care of the roe. She said she
would much rather go out catch fish and sell them to a processor.
If the processors don't have any competition, the fishermen won't
get any kind of price for the fish. Ms. Hansen said by being able
to market and process roe, it's the one guarantee that those few
guys out there that are doing it keeps the price up so that they
can almost make a living.
There being no further testimony, the bill was held.
ADJOURNMENT
CO-CHAIRMAN WILLIAMS adjourned the House Resources Standing
Committee meeting at 5:15 p.m.
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