Legislature(1999 - 2000)
04/28/1999 01:15 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE April 28, 1999 1:15 p.m. MEMBERS PRESENT Representative Jerry Sanders, Co-Chair Representative Beverly Masek, Vice Chair Representative John Harris Representative Carl Morgan Representative Ramona Barnes Representative Reggie Joule Representative Mary Kapsner MEMBERS ABSENT Representative Scott Ogan, Co-Chair Representative Jim Whitaker COMMITTEE CALENDAR CS FOR SENATE JOINT RESOLUTION NO. 20(RES) Relating to the removal of beaver from Washington, D.C. - MOVED CSSJR 20(RES) OUT OF COMMITTEE * 2d SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 203 "An Act relating to loans from the agricultural revolving loan fund; and providing for an effective date." - MOVED 2d SSHB 203 OUT OF COMMITTEE HOUSE BILL NO. 104 "An Act revising the procedures and authority of the Alaska Commercial Fisheries Entry Commission, the Board of Fisheries, and the Department of Fish and Game to establish a moratorium on participants or vessels, or both, participating in certain fisheries; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: SJR 20 SHORT TITLE: SAVE THE BEAVER IN WASH D.C. SPONSOR(S): SENATOR(S) TAYLOR, Ward Jrn-Date Jrn-Page Action 4/08/99 828 (S) READ THE FIRST TIME - REFERRAL(S) 4/08/99 828 (S) RES 4/08/99 828 (S) RES WAIVED PUBLIC HEARING NOTICE, RULE 23 4/09/99 (S) RES AT 3:00 PM BUTROVICH 205 4/09/99 (S) MOVED CS (RES) OUT OF COMMITTEE 4/09/99 (S) MINUTE(RES) 4/12/99 884 (S) COSPONSOR(S): WARD 4/13/99 (S) RLS AT 11:40 AM FAHRENKAMP 203 4/13/99 (S) MINUTE(RLS) 4/13/99 898 (S) RES RPT CS 3DP 2NR SAME TITLE 4/13/99 898 (S) DP: HALFORD, TAYLOR, GREEN; 4/13/99 898 (S) NR: MACKIE, PETE KELLY 4/13/99 898 (S) ZERO FN TO SB AND CS (S.RES) 4/14/99 (H) RES AT 1:00 PM CAPITOL 124 4/14/99 (H) <PENDING REFERRAL> SCHU BUT NOT HEARD 4/23/99 1063 (S) RULES TO CALENDAR AND 1 OR 4/23/99 4/23/99 1066 (S) READ THE SECOND TIME 4/23/99 1067 (S) RES CS ADOPTED UNAN CONSENT 4/23/99 1067 (S) ADVANCED TO THIRD READING Y15 N5 4/23/99 1067 (S) READ THE THIRD TIME CSSJR 20(RES) 4/23/99 1068 (S) PASSED Y13 N7 4/23/99 1068 (S) ELLIS NOTICE OF RECONSIDERATION 4/26/99 1120 (S) RECONSIDERATION NOT TAKEN UP 4/26/99 1120 (S) TRANSMITTED TO (H) 4/27/99 1019 (H) READ THE FIRST TIME - REFERRAL(S) 4/27/99 1019 (H) RESOURCES 4/28/99 (H) RES AT 1:00 PM CAPITOL 124 BILL: HB 203 SHORT TITLE: AGRICULTURE LOANS SPONSOR(S): REPRESENTATIVES(S) HARRIS, James Jrn-Date Jrn-Page Action 4/16/99 843 (H) READ THE FIRST TIME - REFERRAL(S) 4/16/99 843 (H) RESOURCES, FINANCE 4/20/99 883 (H) SPONSOR SUBSTITUTE INTRODUCED 4/20/99 883 (H) READ THE FIRST TIME - REFERRAL(S) 4/27/99 1026 (H) 2D SPONSOR SUB INTRODUCED 4/27/99 1026 (H) READ THE FIRST TIME - REFERRAL(S) 4/27/99 1026 (H) RESOURCES, FINANCE 4/28/99 (H) RES AT 1:00 PM CAPITOL 124 BILL: HB 104 SHORT TITLE: ENTRY MORATORIA ON PARTICIPANTS/VESSELS SPONSOR(S): REPRESENTATIVES(S) HUDSON, Austerman Jrn-Date Jrn-Page Action 2/19/99 260 (H) READ THE FIRST TIME - REFERRAL(S) 2/19/99 260 (H) FSH, RES 3/08/99 (H) FSH AT 5:00 PM CAPITOL 124 3/08/99 (H) MOVED CSHB 104(FSH) 3/08/99 (H) MINUTE(FSH) 3/10/99 408 (H) FSH RPT CS(FSH) NT 4DP 3/10/99 408 (H) DP: KAPSNER, MORGAN, WHITAKER, HUDSON 3/10/99 408 (H) ZERO FISCAL NOTE (F&G) 3/10/99 408 (H) REFERRED TO RES 4/14/99 (H) RES AT 1:00 PM CAPITOL 124 4/14/99 (H) HEARD AND HELD 4/14/99 (H) MINUTE(RES) 4/21/99 (H) RES AT 1:00 PM CAPITOL 124 4/21/99 (H) HEARD AND HELD 4/21/99 (H) MINUTE(RES) 4/28/99 (H) RES AT 1:00 PM CAPITOL 124 WITNESS REGISTER MEL KROGSENG, Legislative Assistant to Senator Robin Taylor Alaska State Legislature Capitol Building, Room 30 Juneau, Alaska 99801 Telephone: (907) 465-3717 POSITION STATEMENT: Presented SJR 20 on behalf of sponsor. PETER FELLMAN, Researcher for Representative John Harris Alaska State Legislature Capitol Building, Room 110 Juneau, Alaska 99801 Telephone: (907) 465-4859 POSITION STATEMENT: Provided in-depth discussion of 2d SSHB 203, on behalf of sponsor. TERESSA KANDIANIS P.O. Box 1547 Kodiak, Alaska 99615 Telephone: (907) 486-3309 POSITION STATEMENT: Testified in support of HB 104. LIZ CABRERA, Researcher for Representative Bill Hudson and Committee Aide, House Special Committee on Fisheries Alaska State Legislature Capitol Building, Room 108 Juneau, Alaska 99801 Telephone: (907) 465-6890 POSITION STATEMENT: Discussed intent of HB 104 on behalf of sponsor. GORDON BLUE P.O. Box 1064 Sitka, Alaska 99835 Telephone: (907) 747-7967 POSITION STATEMENT: Testified on HB 104. JOE KYLE Pacific Associates 234 Gold Street Juneau, Alaska 99801 Telephone: (907) 586-3107 POSITION STATEMENT: Testified in support of HB 104. JERRY McCUNE P.O. Box 372 Cordova, Alaska 99574 Telephone: (907) 586-2820 (Juneau) POSITION STATEMENT: Testified on HB 104. ACTION NARRATIVE TAPE 99-29, SIDE A Number 0001 CO-CHAIR JERRY SANDERS called the House Resources Standing Committee meeting to order at 1:15 p.m. Members present at the call to order were Representatives Sanders, Masek, Morgan, Barnes and Joule. Representatives Harris and Kapsner arrived at 1:20 p.m. and 1:27 p.m., respectively. Co-Chair Sanders noted that Co-Chair Ogan was attending another meeting. SJR 20 - SAVE THE BEAVER IN WASH D.C. CO-CHAIR SANDERS announced that the first item of business would be CS for Senate Joint Resolution No. 20(RES), relating to the removal of beaver from Washington, D.C. Number 0090 MEL KROGSENG, Legislative Assistant to Senator Robin Taylor, Alaska State Legislature, came forward on behalf of the sponsor to explain the resolution, noting that Senator Taylor was in Washington, D.C. She recounted how first one and then three beavers had inhabited the tidal basin in Washington, D.C., and were gnawing down "alien cherry trees" planted there that were in bloom. Senator Taylor had felt that because these beavers apparently had been eradicated from the area some years ago, they should be allowed to inhabit the area. MS. KROGSENG stated, "After all, in Alaska, we've had our timber industry shut down to protect various birds, and in other areas of the Western states, there have been many projects that have been stopped, and people have been removed to protect endangered species in those areas." Acknowledging the somewhat tongue-in-cheek aspect, she said there is a serious situation, where numerous projects have been stopped by the National Park Service. She concluded, "The feeling is: If it's good enough for Alaska, then it should be good enough for Washington, D.C." Number 0259 REPRESENTATIVE BARNES asked how the beavers may have arrived back. MS. KROGSENG replied that from the large amount of information obtained from supporters of the resolution, news articles said the National Park Service believes the beavers floated down the Potomac River on some brush during a flood. She added that U.S. Representative Helen Chenoweth of Idaho has asked the U.S. Fish and Wildlife Service to begin a study of these animals, to determine whether this is a unique subspecies that should be placed on the endangered species list. Number 0502 REPRESENTATIVE JOULE recounted a trip to New York City, where he witnessed a gay-rights parade attended by people who were thoroughly disgusted. He had wondered why, if those people were really disgusted, they were at the parade. He suggested the best statement of disapproval would have been not being there. He equated that situation to this resolution. Noting the important issues that need to be addressed, he concluded, "We don't need to be here with this." Number 0665 REPRESENTATIVE BARNES agreed there are many important issues. However, she believes it is important to make a point to Washington, D.C., she said, that Alaska has important issues relating to the Endangered Species Act and fish and wildlife, for example. While this is a bit tongue-in-cheek, she believes it does really send a message. Number 0792 REPRESENTATIVE BARNES made a motion to move CSSJR 20(RES) from the committee with individual recommendations and the attached zero fiscal note; she asked unanimous consent. There being no objection, CSSJR 20(RES) moved from the House Resources Standing Committee. HB 203 - AGRICULTURE LOANS CO-CHAIR SANDERS announced that the next item of business would be 2d Sponsor Substitute for House Bill No. 203, "An Act relating to loans from the agricultural revolving loan fund; and providing for an effective date." Number 0904 REPRESENTATIVE HARRIS, sponsor, explained that HB 203 attempts to help people in agriculture who have borrowed money from the Agricultural Revolving Loan Fund (ARLF). It would lower the ARLF interest rate from 8 percent to 5 percent, to be more in line with other lending institutions. It would also provide guidelines regarding drought affecting agriculture for three years, intended to help individuals meet their loan payment schedules. Furthermore, Section 5 provides for $50,000 loans by approval of the board. Representative Harris deferred to Pete Fellman for a more in-depth explanation. Number 1053 PETER FELLMAN, Researcher for Representative John Harris, Alaska State Legislature, came forward, noting that he lives in Delta Junction. Involved in agriculture in Alaska for 12 years, he said although agriculture hit bottom in the late 1980s, many farmers have survived. Not unlike that elsewhere in the world, agriculture in Alaska is highly volatile and subject to the climate. However, when the ARLF was instituted, some provisions in statute weren't understanding of that volatility. Therefore, this bill tries not only to bring the ARLF in line with other lending institutions, but also to make it a little more farmer-friendly. MR. FELLMAN advised members that the Farm Service Agency (FSA), a federal lending agency that has come into Alaska in the last three years, has significantly lower interest rates than the ARLF's. Consequently, many [farmers] have turned to the FSA to borrow money, both for annual operations and long-term loans. That has reduced the number of loans made by the ARLF, which may shorten the life of the fund. Mr. Fellman pointed out that the Division of Agriculture's operating funds come from the ARLF, which has a projected life of about five years. Reducing interest rates could affect that. However, if another drought is suffered in Delta Junction, or another catastrophic event wipes out a crop, the likelihood of farmers' inability to make payments would greatly increase, which could significantly shorten the life of the fund. Number 1240 MR. FELLMAN told members they are looking at a reduction to no less than a 5 percent interest rate. A provision would also raise emergency loan amounts from $25,000 to $50,000. Furthermore, there is an important provision whereby loans can be restructured. In statute now, a farmer who has a problem for up to three years can roll a loan over, although that doesn't reduce the interest rate, stop the interest or reduce the principal; after that three-year period, there are no options. In all likelihood, the state would lose that money in a bankruptcy court. What HB 203 does is make it possible that if there are three disastrous years out of five, the ARLF could restructure loans, thereby saving the state's interest in agriculture. Number 1333 REPRESENTATIVE BARNES asked what the balance is in the ARLF. MR. FELLMAN said he believes it is $5 million. REPRESENTATIVE BARNES recounted that when the Delta barley/rape seed project was first before the legislature and the ARLF was enhanced, she believes that farmers had only agricultural rights, not fee simple title to the lands. They therefore could not go to a bank to borrow money. To her recollection, Senator Lyda Green's bill had changed that, to where the land is now owned by the farmers in fee simple title. She asked if Mr. Fellman knows whether that is the case. MR. FELLMAN replied, "Somewhat." He said the changes in Lyda Green's bill, which he believes was SB 109, have not attracted commercial lenders; he knows of only one loan to date by a commercial bank, National Bank of Alaska (NBA), based on those changes. The intentions were good, he said, and it did change the agricultural designation on land. However, it also attached an agricultural covenant that still ties up many aspects of mineral rights, water rights, and so on, and also makes restrictions on buildings. It has enticed the FSA, however, by making it possible for that agency to lend money to farmers. Number 1495 REPRESENTATIVE BARNES suggested that those covenants are similar to those for any land in Alaska owned by individuals, because of inability to own the subsurface mineral rights; many subdivisions have restrictive covenants, as well. She said at her last count, investments in Delta Junction were in excess of $200 million, perhaps closer to $300 million. Furthermore, the investment in Point MacKenzie was something like $350 million. Much of that money has been lost, she stated, and she has serious concerns about all loan programs like this. She further suggested that if farmers keep going broke and declaring bankruptcy, this will have to be recapitalized in the future. She expressed concern about rewriting the program to lower the interest rate, and said these people could probably borrow money from the banks for the same amount. Number 1612 MR. FELLMAN pointed out that the ARLF has received no funding since 1988. Although the fund revolves and the payback has been good, its life has been shortened by general fund expenditures from the ARLF, not by farmers going broke. He agreed that the state lost lots of money, partly, he said, because of restrictions put on land clearing and time limits. He said it has nothing to do with the inability to grow barley in Alaska or lack of a market, because there is a market. Without the general fund expenditures from the ARLF, it would be solvent and last indefinitely, he concluded. REPRESENTATIVE BARNES said that begs the fact of what has been put into the fund through the years. She asserted that the barley project in Delta Junction will never be commercially viable outside of Alaska because the bison eat most of the barley, although she believes there is a market in Alaska. Number 1745 REPRESENTATIVE JOULE asked whether, under the restructuring, a person could take out a series of $50,000 loans in successive bad years. MR. FELLMAN explained that to qualify to restructure under this bill, there would have to be three out of five years of suffering a disaster. After restructuring in any given year, there would be three more years before qualifying to restructure again. There are a variety of loans available, including operating loans and so-called chattel loans for equipment and cattle. Each has a specific limit, and it would be up to that limit. Number 1854 REPRESENTATIVE JOULE recalled dealing with loans relating to bad years for commercial fishing, and he asked whether the percentage rate for those loans is comparable to those under HB 203. MR. FELLMAN said he doesn't know, although he knows that the FSA rate is 5 percent, and, in some cases, 3.75 percent. REPRESENTATIVE BARNES told members she had acquired the information [from Jerry McCune, who was present]. She said it is 8 percent, plus 1.5 percent over the prime rate, whatever that may be. REPRESENTATIVE JOULE suggested that up to this point, at 8 percent, they are equal for fishing and agriculture. He restated concern about parity in those two industries. Number 1999 CO-CHAIR SANDERS asked if there were questions or comments, or if anyone else wished to testify; there was no response. Number 2034 REPRESENTATIVE BARNES made a motion to move 2d SSHB 203 from the committee with individual recommendations and attached fiscal notes; she asked unanimous consent. There being no objection, 2d SSHB 203 moved from the House Resources Standing Committee. HB 104 - ENTRY MORATORIA ON PARTICIPANTS/VESSELS Number 2082 CO-CHAIR SANDERS announced that the next item of business would be House Bill No. 104, "An Act revising the procedures and authority of the Alaska Commercial Fisheries Entry Commission, the Board of Fisheries, and the Department of Fish and Game to establish a moratorium on participants or vessels, or both, participating in certain fisheries; and providing for an effective date." Before the committee was CSHB 104(FSH), heard previously. Number 2125 TERESSA KANDIANIS from Kodiak came forward, advising members that she and her husband own and operate the F/V Provider, a scallop boat. She specified that she was also representing the interests of John Duty (ph), who owns the F/V Pursuit. Both boats have fished in the Alaskan scallop fishery for a number of years. Ms. Kandianis spoke in favor of moving HB 104 forward, explaining that the state needs a complete set of tools to manage fisheries. She believes that if there had been a tool available to the administration in 1993, when there was a huge incursion of East Coast vessels into the scallop fishery, it would have cut back dramatically on the number of nonresident vessels that entered and stayed in the fishery. MS. KANDIANIS explained their chief concern: If the legislation were to fail, and the fishery were to revert to open access when the current moratorium expires, a number of new vessels would enter the fishery again. Virtually every fishery in the state is limited now, and when a new area is opened, people move in, to do so-called portfolio building. She noted that although the fishery is fairly limited in Alaska, with only 20 percent occurring inside state waters, those grounds are very important. MS. KANDIANIS pointed out that the rules since 1993 have managed their small fishery conservatively and effectively, more so than before that time. However, with a new influx of vessels in the limited area inside three miles, she believes that the department would have a difficult time managing it. If the department closed the area inside three miles, for example, that would be disastrous for the fishermen. MS. KANDIANIS said they are barely making it now, especially since 1995, when the Mr. Big incident closed the entire fishery for about 18 months. They are waiting for the fishery to settle down, and for some of the conservation tools to bring the resource back up. They are also learning to fish more wisely and more conservatively, she indicated, to be able to break even with their vessel again. MS. KANDIANIS pointed out that theirs is a highly specialized fishery. If there is another influx of boats, the owners will probably mostly be nonresidents, and she believes that what happened in 1993 would happen again. She emphasized that those in the fishery the longest don't have "deep pockets" and couldn't wait it out as well as some who are merely portfolio building, or who want to "get a leg into the fishery" and then ultimately get something out of it. MS. KANDIANIS told members that both boats and crews have become specialized. Their crews have spent 25 years in this fishery, and although highly skilled, they don't know how to do other fisheries. She asked for consideration that HB 104 provides another two years to get a permanent system in place, to replace this temporary moratorium and to let this fishery survive. Number 2404 REPRESENTATIVE BARNES said she has looked at the list of boats holding permits in that fishery, and the lion's share of owners live outside of Alaska. She emphasized that she won't support anything that allows Alaska's resources to be controlled by people outside the state. She suggested that there are many ways to manage under the sustained yield principle without establishing a moratorium that grandfathers in all of these out-of-staters. She will oppose this bill going out of committee, she said, and will oppose it on the floor. She added that she had supported the first moratorium, and she believes that lasted long enough to get this fishery under control. MS. KANDIANIS responded that if the Commercial Fisheries Entry Commission (CFEC) had had a tool in 1991, when boats first started heading to Alaska from the East Coast, all those out-of-staters wouldn't be on the list. She emphasized that there is nothing she can do about what already happened. However, she asks that the legislature give the scallopers another couple of years, because the moratorium's expiration will make the fishery unmanageable inside three miles, and more nonresidents will come in. The people who will go bankrupt will be Alaska residents who don't have deep pockets. REPRESENTATIVE BARNES restated that the Board of Fisheries is charged by the legislature to manage those resources under the sustained yield principle, which she believes they must do through limiting the harvest amounts, making it more difficult for out-of-state boat owners to come to Alaska to harvest the resource. She said she is tired of Alaskans' paying to manage the resources through the Department of Fish and Game (ADF&G), while nonresidents reap the benefits. She restated concern that by allowing another moratorium, they will be in the same place after another two years. Number 2601 MS. KANDIANIS replied that she didn't want to be back here. She noted that the board made some major conservation changes in the fishery; it is 100 percent observer-covered, and there are very restrictive TACs [total allowable catches] and bycatch limits. Furthermore, the industry has voluntary programs to monitor the fishery and bycatch. "If a permanent system were in place now, that would be our preference," she concluded. "But it's not, and the only other alternative is this expires and it goes back to open access." Number 2648 LIZ CABRERA, Researcher for Representative Bill Hudson and Committee Aide, House Special Committee on Fisheries, Alaska State Legislature, came forward on behalf of the sponsor to clarify what the bill does or doesn't do. First, it doesn't establish any moratorium for any fishery, she said. The scallop fishery moratorium, for example, was established by the legislature several years ago. And second, it doesn't extend a moratorium. Rather, it gives the CFEC the authority to extend a moratorium, if necessary. REPRESENTATIVE BARNES responded that if this is passed, the new moratorium will be adopted the day after it is signed into law. Number 2688 MS. CABRERA explained that part of the reason for the extension is that when the legislature passed the moratorium on scallops, they did it as a vessel-based limited entry. However, the CFEC doesn't have authority to limit a fishery based on vessels. Therefore, the legislature has to pass another statute establishing a vessel-based program, but it hasn't done that. As the moratorium ends, this bill is an effort to prevent that fishery from going into open access before new statutes are put into place. REPRESENTATIVE BARNES stated her belief that there is enough limited entry in Alaska's fisheries now. She said the boards should find a better way to do it. Number 2787 GORDON BLUE from Sitka came forward, noting that he is co-owner and manager of two vessels that fish Korean hair crab in the Pribilof Islands; he sometimes operates those boats, as well. He said the vessels are "partners with the community development quota holder, the association for Saint Paul Island, Central Bering Sea Fishermen's Association, and with the village Native corporation, the TDX Corporation." Mr. Blue explained that the fishery for Korean hair crab takes place almost entirely in the waters around Saint Paul Island, so it is very much of interest to the locals there. He stated: We came to you several years ago and asked you to establish a bill for limited entry for these fisheries, to try to help protect us and others in the fisheries. We also were very cognizant of the desire of people on Saint Paul to try to develop a small-boat fishery for the area. Unfortunately, the biology of the crab is such that they've been unable to do that, because when the crab are in a fishable condition, it's winter months, and that's definitely not a time or a place where small boats can be utilized. So, they've done the next-best thing and participate in these vessels with us. I hear the passion in Representative Barnes' position, and the statement ..., by and large, I agree with. I also support the fisheries that we develop bringing the most benefit to us in this state. ... In 1981, my vessel, the Ocean Cape, made some of the first deliveries of brown king crab from the Dutch Harbor area. And we stayed with that fishery until 1989. In the interim, we fished in Dutch Harbor and the Aleutian Chain, helped to develop the techniques that are used there to fish nowadays, using longline/pot systems, and so forth. And the vessel is a hundred-foot vessel, and by 1989 we were run out by larger, better-financed operations, most of them from outside the state. We moved our operation to the Pribilofs, and in 1990 we - with one other vessel, which was owned in-state at that time - helped to develop this hair crab fishery which is under discussion today. We two vessels, I think were the only ones in '91 that actually targeted that fishery. '92, the fleet began to build up a bit, and by the time there were 12 vessels involved, about half of them were actually Alaskan-registered and Alaskan-owned vessels. What happened then is pretty illustrative of ... the features of our fishery management system ... that frustrate us. We had a big influx of boats, most of them larger, better-financed, and from outside the state. Now, these boats came into the fishery because we were making some money at it. And so, it was a very attractive opportunity. By the time there were 22 boats, we'd hit a critical ... [ends mid-speech because of tape change] TAPE 99-29, SIDE B [Numbers run backwards because of tape machine] MR. BLUE reported that during the time in which all this effort built up, a number of in-state vessels left the fishery. Two sank: one, the Pacesetter (ph), sank with all hands, and one sank en route to Kodiak. As far as he knows, the moratorium permits are still in the estates, he added. In addition, one of the two vessels that helped start the fishery was bankrupted because of being a smaller, less competitive vessel. MR. BLUE noted that a major fishery involving the Bering Sea crab fleet is the Opilio crab fishery, with harvests of up to 333 million pounds. In contrast, the hair crab fishery has had a maximum harvest of 1.8 million pounds. "Real small potatoes," he said. "When you get this huge influx of effort, represented by only 22 to 25 vessels, it overwhelms that resource." He pointed out that there have been diminishing catches, even during the moratorium. They support a vessel limited entry bill that would establish a reasonable-sized fleet and also stabilize it. He believes it is necessary to reduce the number of vessels for a long-term sustainable fishery, and such a bill would enable that to occur. There is no tool to do that today. MR. BLUE mentioned efforts through the Board of Fisheries, as well as trying to resolve these sorts of difficulties for the federally managed fisheries, and stated, "We've been getting trashed." He would love to see the state maximize the benefits from this, he said, but doesn't know how. He requested help in this endeavor, asking for suggestions if a moratorium won't do it. He pointed out that a moratorium is not intended as a long-term solution; it is just a freeze while they try to work out details of vessel limited entry or whatever program will establish this stability. MR. BLUE told members there aren't too many fisheries left to develop out there. He recounted going after a sea snail fishery, using pots, in the mid-1990s, noting that it had been self-limiting because of a weak market. He concluded: I don't know what utility this general moratorium may have in the larger scheme of things, but I know, from my experience, that had we had it, we would have well-managed, stable fisheries in the interim to a more permanent solution. And so, I share your frustration, and ... rather than propose any particular solution, I ask you to help us to solve that. I think this is, in prospect, one of the tools that may do that. But without it, I despair. Number 2787 REPRESENTATIVE BARNES responded that rather than making a bad situation worse, the committee ought to invite the ADF&G to the Capitol to sit down and work out a plan that will not grandfather in all of these out-of-state boats. She restated her earlier concerns, saying there must be another way around it. MR. BLUE replied that he would welcome that, and would love to participate in that process, should it occur. He would also like to see, when they go out there with their boats to try to develop the next little niche fishery, a rule in place that will help keep it for Alaskans, which he believes this bill will accomplish. He acknowledged that the bill won't roll back the damage already done to these fisheries. REPRESENTATIVE BARNES reiterated her concern that continuing these moratoriums will give nonresidents increasingly stronger footholds in the fisheries. Number 2698 MR. BLUE agreed. "That's not what we're asking for with our vessels," he added. "What we're asking is when we do the next fishery development project, we have protection in place, so that you can put the brakes on when the time arrives. And we're asking that you solve this other problem with the hair crab and the scallop fisheries, possibly through a vessel limited entry bill, such as the one that has been introduced in the Senate." He said there are two separate problems. Number 2650 JOE KYLE, Pacific Associates, came forward. He said he represents quite a few fishery clients, primarily who work in the "federal fisheries." Although a voting member of the North Pacific Fishery Management Council, he specified that he wasn't speaking on the council's behalf. As "an Alaska resident who happens to have a lot of interest and insight into the way the federal fisheries are managed," he sees this bill giving the CFEC the tools to keep what Representative Barnes is concerned about from occurring in state water fisheries. MR. KYLE explained that right now, the major problem in fisheries throughout the world is overcapitalization; there is way too much effort out there. That is happening in the federal fisheries, and those participants are looking for other places to go, including state water fisheries. Likewise, some nearshore state water fisheries in Oregon and Washington are being shut down and "pushed out," and those participants are starting to come to Alaska to get into new and emerging state water fisheries here. MR. KYLE stated that while this bill has something in it about the hair crab and scallop moratoriums passed a couple of years ago, the main thrust is preserving the state water fisheries for small-boat Alaska operators, before the influx from out of state occurs. He believes the legislature needs to give the ADF&G and the CFEC this tool to manage the nearshore state water fisheries, to close the door before it is too late. He urged that HB 104 be moved out. Number 2554 REPRESENTATIVE HARRIS noted that he had heard this in the House Special Committee on Fisheries, as well. He expressed his understanding that under this bill, a moratorium established now may be extended for two more years. However, after that there can be no moratorium for five years. He asked if that is correct. MR. KYLE said that is how he understands the bill. REPRESENTATIVE HARRIS asked if Mr. Kyle believes that two years is enough time. MR. KYLE responded that the Board of Fisheries and the ADF&G certainly have their hands full in being able to do that. "My short answer is yes," he added. REPRESENTATIVE BARNES stated that the answer to Representative Harris is that one legislature cannot bind another. Therefore, it isn't true that it couldn't be done again for another five years. Number 2445 JERRY McCUNE came forward. He recounted how he had pioneered the herring gillnet fishery in Cordova, pointing out that in such cases, word soon gets around that there may be limited entry on a fishery, or that a fishery is a potential money-maker. Therefore, there is a big influx of people. He emphasized the need for the ability, whether vessel-based or person-based, to close these small fisheries off quickly enough so that resident-owned boats are included, but before outside boats can get there. Unfortunately, in the scallop fishery the big boats jumped in, and now it will be difficult to resolve. He suggested that without a moratorium, the scallop fishery won't be able to function with that amount of boats, which will also cut out state residents. Number 2312 REPRESENTATIVE BARNES responded that, admittedly, the board might have to close it to everybody for a short time, but they could limit who comes back into it, by limiting the size of boats coming into the fishery, for example, once these permits are no longer valid under the moratorium. MR. McCUNE replied that it depends on how the program is structured by the CFEC. He agreed that those large-boat owners may perhaps lose interest if it closed, leaving a handful of locals to reenter the fishery, which could then be closed again quickly. REPRESENTATIVE BARNES restated her earlier concerns about managing the fishery for primarily out-of-state operators. She also restated the desire to get with the ADF&G to find a way to manage these programs for the benefit of Alaskans first. MR. McCUNE said he is all for that. He again emphasized the need to close off developing fisheries fast enough so that residents retain "ownership" within the three-mile limit. Number 2112 CO-CHAIR SANDERS asked if anyone else wished to testify. He announced that HB 104 would be held over. ADJOURNMENT There being no further business before the committee, the House Resources Standing Committee meeting was adjourned at 2:22 p.m.