Legislature(2017 - 2018)BARNES 124

03/21/2018 01:00 PM RESOURCES

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Audio Topic
01:03:11 PM Start
01:05:01 PM HB354
01:46:20 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HCR 23 PROTECT WILDLIFE FROM FOREIGN PATHOGENS TELECONFERENCED
Scheduled but Not Heard
-- Testimony <Invitation Only> --
+= HB 315 CONFIDENTIALITY OF ANIMAL & CROP RECORDS TELECONFERENCED
Scheduled but Not Heard
-- Testimony <Invitation Only> --
+= HB 260 FISH & GAME LICENSES;ELECTRONIC FORM TELECONFERENCED
<Bill Hearing Canceled>
-- Testimony <Invitation Only> --
+ HB 354 DIVE FISHERY ASSESSMENTS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 21, 2018                                                                                         
                           1:03 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Andy Josephson, Co-Chair                                                                                         
Representative Geran Tarr, Co-Chair                                                                                             
Representative John Lincoln, Vice Chair                                                                                         
Representative Justin Parish                                                                                                    
Representative Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative George Rauscher                                                                                                  
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Harriet Drummond                                                                                                 
Representative Mike Chenault (alternate)                                                                                        
Representative Chris Tuck (alternate)                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 354                                                                                                              
"An Act relating to dive fishery management assessment                                                                          
procedures."                                                                                                                    
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 23                                                                                              
Supporting enhanced efforts to protect wildlife and domestic                                                                    
animals in the state from infectious diseases, foreign                                                                          
pathogens, and nonendemic parasites.                                                                                            
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 315                                                                                                              
"An Act relating to the confidentiality of certain records on                                                                   
animals and crops; and providing for an effective date."                                                                        
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 260                                                                                                              
"An Act relating to electronic possession of certain licenses,                                                                  
tags, and identification cards issued by the Department of Fish                                                                 
and Game; and providing for an effective date."                                                                                 
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 354                                                                                                                  
SHORT TITLE: DIVE FISHERY ASSESSMENTS                                                                                           
SPONSOR(s): REPRESENTATIVE(s) ORTIZ                                                                                             
                                                                                                                                
02/16/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/18       (H)       FSH, RES                                                                                               
03/08/18       (H)       FSH AT 10:00 AM GRUENBERG 120                                                                          
03/08/18       (H)       Moved HB 354 Out of Committee                                                                          
03/08/18       (H)       MINUTE(FSH)                                                                                            
03/09/18       (H)       FSH RPT 3DP 1NR                                                                                        
03/09/18       (H)       DP: TARR, KREISS-TOMKINS, STUTES                                                                       
03/09/18       (H)       NR: NEUMAN                                                                                             
03/21/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE DAN ORTIZ                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Speaking as the sponsor, introduced HB 354.                                                              
                                                                                                                                
LIZ HARPOLD, Staff                                                                                                              
Representative Dan Ortiz                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Ortiz, sponsor,                                                              
further introduced HB 354 and answered questions.                                                                               
                                                                                                                                
PHIL DOHERTY, Co-Executive Director                                                                                             
Southeast Alaska Regional Dive Fisheries Association (SARDFA)                                                                   
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 354.                                                                          
                                                                                                                                
JERRY MCCUNE, President                                                                                                         
United Fishermen of Alaska (UFA)                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 354.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:03:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   GERAN  TARR   called  the   House  Resources   Standing                                                            
Committee meeting  to order  at 1:03  p.m.  Representatives  Tarr,                                                              
Josephson, Parish,  Talerico, Rauscher,  and Lincoln  were present                                                              
at the call to  order.  Representatives Birch  and Johnson arrived                                                              
as the meeting was in progress.                                                                                                 
                                                                                                                                
                HB 354-DIVE FISHERY ASSESSMENTS                                                                             
                                                                                                                              
1:05:01 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR announced  that the only order of  business would be                                                              
HOUSE BILL  NO. 354, "An Act  relating to dive  fishery management                                                              
assessment procedures."                                                                                                         
                                                                                                                                
1:05:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAN ORTIZ, Alaska  State Legislature,  speaking as                                                              
the sponsor  introduced HB  354.   He said  the bill is  necessary                                                              
for  the  Southeast Alaska  Regional  Dive  Fisheries  Association                                                              
(SARDFA),  the   only  dive  fishery  association   in  the  state                                                              
regulated  by AS 43.76.150-210,  to amend  the process  undertaken                                                              
to modify the tax  assessed on the geoduck, sea  cucumber, and sea                                                              
urchin fisheries  that the association  represents.   Each fishery                                                              
can tax itself at a different rate.                                                                                             
                                                                                                                                
REPRESENTATIVE  ORTIZ  explained   that  under  current  policy  a                                                              
majority  of  the   permit  holders  is  required   to  change  an                                                              
assessment tax.   This  is problematic, he  said, because  many of                                                              
the  permits  are  nontransferable  and  less  than  half  of  the                                                              
Commercial  Fisheries Entry  Commission (CFEC)  permit holders  in                                                              
these   fisheries  are   actively   participating   in  the   said                                                              
fisheries.   Due  to  the low  involvement  of  permit holders,  a                                                              
majority  participation  of permit  holders  is unrealistic.    He                                                              
said  HB 354 would  allow for  a change  in assessment  tax  to be                                                              
initiated  by a  three-quarter vote  from the  board of  directors                                                              
and the  vote to accept  the change pass  with a majority  vote of                                                              
permit holders participating in the vote.                                                                                       
                                                                                                                                
REPRESENTATIVE  ORTIZ further explained  why this proposed  change                                                              
in self-assessment  is needed.  These permits  are nontransferable                                                              
and a larger  percentage of permit holders were  participating [at                                                              
the start of]  the fishery.  Now,  20-30 years later,  some of the                                                              
folks owning these  nontransferable permits have  transitioned out                                                              
of  the  fishery and  so  are  not participating  in  the  regular                                                              
activities  of   the  fishery,   including  the  voting   process.                                                              
Therefore,  he said, under  the current  rules it  is hard  to get                                                              
the vote threshold required to do any change in assessments.                                                                    
                                                                                                                                
1:08:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER inquired whether  there are  other [dive]                                                              
fisheries not regulated by AS 43.76.150-210.                                                                                    
                                                                                                                                
1:09:08 PM                                                                                                                    
                                                                                                                                
LIZ  HARPOLD,  Staff,  Representative   Dan  Ortiz,  Alaska  State                                                              
Legislature,  replied  that  the Southeast  Alaska  Regional  Dive                                                              
Fisheries  Association   is  the  only  regional   dive  fisheries                                                              
association  in  the state  and  it  oversees  all of  the  permit                                                              
holders  within  Southeast  Alaska.   There  may  be a  small  sea                                                              
cucumber  fishery,   say  in  Kodiak,   but  it  would   not  fall                                                              
underneath the jurisdiction of this regional dive association.                                                                  
                                                                                                                                
MS.  HARPOLD,   on  behalf  of  Representative   Ortiz,  continued                                                              
introducing HB 354.   She explained SARDFA is  a private nonprofit                                                              
economic   development  organization   representing  the   harvest                                                              
divers,  processors, and  communities  of Southeast  Alaska.   The                                                              
number of  permit holders  is just  shy of 400,  she noted.   This                                                              
was  established  in  1998 after  the  legislature  fashioned  the                                                              
framework   to  create  a   dive  fisheries   association.     The                                                              
association is  governed by a board  of directors that  makes up a                                                              
good  collection of  different people  within the  industry.   The                                                              
association  works cooperatively  with  the  Alaska Department  of                                                              
Fish and Game  (ADF&G) to develop an annual operating  plan, which                                                              
determines how  the dive assessment,  this self-imposed  tax being                                                              
talked  about, will  be spent.    Without these  taxes going  into                                                              
ADF&G,  she continued,  ADF&G doesn't  have  the money  to do  the                                                              
assessments  to  manage  these   fisheries.    The  assessment  is                                                              
collected  by the  Department  of Revenue  (DOR)  and then  passed                                                              
along to ADF&G.                                                                                                                 
                                                                                                                                
MS. HARPOLD pointed  out that anyone who is a  dive fishery permit                                                              
holder in Southeast  Alaska belongs to SARDFA.   She elaborated on                                                              
the   difficulties   of   having   permit   holders   participate,                                                              
explaining that  the permit holders are  the only ones  who can be                                                              
fishing.   The permit  holder must physically  get into  the water                                                              
and harvest  the sea cucumbers or  geoducks with their  own hands.                                                              
Permit  holders cannot  be standing  on the  boat letting  someone                                                              
else do  the diving for  them, she said.   As people get  older or                                                              
less   interested   in   diving   they  cannot   pass   on   their                                                              
nontransferable  permits.  She noted  that there  are transferable                                                              
permits  within  this industry  that  are being  actively  fished.                                                              
She reiterated  that HB 354 only  affects SARDFA and it  is SARDFA                                                              
that is encouraging the sponsor to move forward with the bill.                                                                  
                                                                                                                                
1:12:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER  asked whether  a permit  is  owned by  a                                                              
family or by an  individual.  For example, he asked  whether a son                                                              
could use the permit to vote or harvest the products.                                                                           
                                                                                                                                
MS. HARPOLD answered  it is only the individual who  is the permit                                                              
holder.  In the  case of a nontransferable permit,  the individual                                                              
is unable to pass it along to a family member or to sell it.                                                                    
                                                                                                                                
1:12:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON inquired whether  there is any  opposition                                                              
to HB 354.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  ORTIZ replied  he  has received  no complaints  or                                                              
concerns about  the bill.  He  added that it seems  unlikely there                                                              
would  be concern  given  it deals  only  with  an internal  issue                                                              
within  SARDFA itself.    The issue,  he said,  is  that as  these                                                              
nontransferable permit  holders have aged out of  the fishery they                                                              
are participating less in the fishery and the votes.                                                                            
                                                                                                                                
1:13:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH asked  about the  number of  people on  the                                                              
SARDFA board of directors and how they are selected.                                                                            
                                                                                                                                
REPRESENTATIVE ORTIZ deferred to Mr. Phil Doherty for an answer.                                                                
                                                                                                                                
1:14:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH inquired whether  dive fishing  is permitted                                                              
for crab and scallops and whether HB 354 addresses these.                                                                       
                                                                                                                                
MS.  HARPOLD responded  that the  Southeast  Alaska Regional  Dive                                                              
Fisheries   Association   represents   permit  holders   for   sea                                                              
cucumber, geoduck, and urchin divers only.                                                                                      
                                                                                                                                
1:15:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR opened invited testimony.                                                                                         
                                                                                                                                
1:15:43 PM                                                                                                                    
                                                                                                                                
PHIL  DOHERTY, Co-Executive  Director,  Southeast Alaska  Regional                                                              
Dive Fisheries  Association (SARDFA),  testified in support  of HB                                                              
354.   He noted he  has been the  co-executive director  of SARDFA                                                              
for the past  11 years.  He  thanked Representative Ortiz  and Ms.                                                              
Harpold for  their time on  HB 354 and  stated the bill  was under                                                              
SARDFA's request.                                                                                                               
                                                                                                                                
MR. DOHERTY  said SARDFA has  a nine-member board  that represents                                                              
several  regions within  Southeast  Alaska    the Ketchikan  area,                                                              
the  Petersburg-Wrangell  area,  the  Prince of  Wales  area,  the                                                              
Sitka area,  Southeast Alaska at-large,  and Washington  state at-                                                              
large since a  number of members are  from out of state.   Also on                                                              
the  board are  a  processor and  a representative  for  Southeast                                                              
Alaska municipalities,  who are  voted in via  a majority  vote of                                                              
the permit  holders.  The board  is active and meets six  or seven                                                              
times a year,  he continued.  Underneath the  board are committees                                                              
that help  the board in directing  the association's  fisheries as                                                              
well  as the  association's  direction.    The fisheries  are  sea                                                              
urchin,  geoduck clam,  and sea  cucumber, with  the geoduck  clam                                                              
and  sea cucumber  committees being  the  most active.   About  20                                                              
divers  on  the  committees,  he   continued,  so  there  is  good                                                              
representation  throughout the  suite  of dive  fisheries and  the                                                              
number of divers involved in the committees.                                                                                    
                                                                                                                                
MR. DOHERTY  pointed out that SARDFA  proposed this change  in its                                                              
regulatory  laws.  It  was voted  on at  the committee  levels and                                                              
involved the  geoduck and sea cucumber  committees, he said.   The                                                              
committee votes  as well as  the board  votes were 100  percent in                                                              
favor  of working  with Representative  Ortiz to  get this  change                                                              
passed.    There   is  no  opposition  within   the  association's                                                              
committees or divers who are not on the committees, he noted.                                                                   
                                                                                                                                
MR.  DOHERTY explained  SARDFA is  seeking  to make  it easier  to                                                              
vote on  the assessment  imposed  upon its members.   The  current                                                              
assessment  is  7 percent  on  geoduck  clams,  5 percent  on  sea                                                              
cucumbers,  and  5  percent  on  red sea  urchins.    This  is  an                                                              
internal tax,  he said, but  it is collected  by the state.   This                                                              
tax is  above and beyond  the 3  percent fisheries assessment  tax                                                              
that  is imposed  upon on  all the  fisheries in  Alaska.   [These                                                              
self-imposed  assessments], he  continued,  are based  on the  ex-                                                              
vessel value  of the  product as  it comes  off the fishing  boats                                                              
and  over  the  dock  and  are   collected  just  like  the  state                                                              
fisheries  taxes  on the  fish  ticket.   The  money  goes to  the                                                              
Department  of Revenue (DOR)  and at  the end  of the fiscal  year                                                              
DOR  sends that  money  back to  SARDFA.   The  assessment tax  is                                                              
usually  around   $250,000-$300,000  a  year  per   fishery.    He                                                              
explained  the  association  has  an annual  operating  plan  with                                                              
ADF&G that identifies  what needs to get done for  the future year                                                              
for assessment work,  for management work, and  for research work,                                                              
and then the  association gives the assessment money  to ADF&G for                                                              
both fisheries.                                                                                                                 
                                                                                                                                
1:20:30 PM                                                                                                                    
                                                                                                                                
MR. DOHERTY  further noted  that SARDFA  pays $150,000-$200,000  a                                                              
year to the  Department of Environmental Conservation  (DEC) to do                                                              
testing  for paralytic  shellfish  poisoning,  water quality,  and                                                              
arsenic for the  geoduck clams.  The geoduck  assessment money for                                                              
the  department is  about  $80,000  a year,  he  said, and  SARDFA                                                              
gives the department  about $80,000-$90,000 a year out  of its sea                                                              
cucumber  funds.   The  association  is  also  involved in  a  sea                                                              
cucumber  enhancement project  with  the Alutiiq  Pride  Shellfish                                                              
Hatchery, he  continued, which is  where some of the  other monies                                                              
go.  Lastly,  some of the monies  come back to the  association to                                                              
pay for the association's costs.                                                                                                
                                                                                                                                
MR. DOHERTY  related that the association  tried to lower  its sea                                                              
cucumber fishery assessment  from 5 percent to 3  percent a couple                                                              
years ago  because of having  quite a bit  of money in  that fund.                                                              
A vote  of 50  percent plus one  was needed  to pass that  change,                                                              
but the association  was unable to  get enough votes to  lower the                                                              
tax and  put more money  into the fishermen's  pockets.   A number                                                              
of permits are not  active these days, he explained,  but they are                                                              
renewed each  year and  so are in  the CFEC  database.   There are                                                              
about 326 permits  in the sea cucumber fishery  so, by regulation,                                                              
a vote of a  little over 150 was needed.  This  bill, he stressed,                                                              
would  drastically change  that and  make it  much easier  for the                                                              
tax structure within the association to be changed.                                                                             
                                                                                                                                
MR.  DOHERTY  pointed   out  that  the  proposed   change  in  the                                                              
regulation would  not affect anyone  else in Alaska  because there                                                              
are  no  other dive  associations  in  the  state.   He  said  the                                                              
association  would always  meet its financial  obligations  to the                                                              
State of  Alaska, ADF&G, and  DEC because  if it doesn't  pay, its                                                              
divers don't  fish.  He added  that SARDFA has enough  money built                                                              
up in its sea  cucumber fund that it can lower  its tax assessment                                                              
there, but  not in  the geoduck fishery.   He reiterated  SARDFA                                                                
support for HB 354 and said it shouldn't cost the state a penny.                                                                
                                                                                                                                
1:23:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LINCOLN offered  his understanding that  currently                                                              
there are 326 outstanding permits.                                                                                              
                                                                                                                                
MR. DOHERTY  replied there  are over  400 within the  association.                                                              
He explained  that as soon as someone  buys a CFEC card  he or she                                                              
technically  becomes a  part of  SARDFA.   There  are 110  geoduck                                                              
permits,  he continued,  and  currently  about 70  geoduck  divers                                                              
actually  fish.  Of  the 326  sea cucumber  permits, about  180 of                                                              
them are actively fished.                                                                                                       
                                                                                                                                
REPRESENTATIVE  LINCOLN  asked what  the  cost is  to  renew.   He                                                              
further asked  whether people  are sitting on  them and  not using                                                              
the permits or coming in and out in different years.                                                                            
                                                                                                                                
MR. DOHERTY  responded that the cost  through CFEC to renew  a sea                                                              
cucumber permit is  $75.  The cost to renew a  geoduck clam permit                                                              
is [$225].   A sea cucumber  permit today sells for  about $32,000                                                              
and  a  geoduck  clam permit  sells  for  around  $60,000-$65,000,                                                              
depending on  the year.   When these  fisheries first  started, he                                                              
explained, a lot  of people got in the water because  they knew it                                                              
was  going to  go limited  entry.   One problem  with the  limited                                                              
entry fishery  is that at the beginning  a lot of people  tried to                                                              
get  a permit  and if  they didn't  get enough  points within  the                                                              
CFEC structure  they got  a nontransferable permit.   This  is not                                                              
an easy fishery  to stay in, he  continued.  The permit  holder is                                                              
the diver and as  they get older some of these  guys don't want to                                                              
get  in  the water  anymore.    However,  they do  maintain  their                                                              
permit, which has  made it difficult for the  association to reach                                                              
the majority  vote, especially  for the  assessment tax,  and that                                                              
is why SARDFA is trying to lower the standard a little bit.                                                                     
                                                                                                                                
1:25:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER  inquired why  people  hang  on to  these                                                              
permits if they aren't going to utilize them anymore.                                                                           
                                                                                                                                
MR. DOHERTY  replied that the answer  to the question would  be on                                                              
an  individual  fisherman's  basis.   He  said  if someone  had  a                                                              
nontransferable  permit and  wasn't  going to  fish  again and  it                                                              
cannot  be sold,  there  would seem  to  be little  reason  behind                                                              
holding on  to the  permit.  But,  he noted,  who knows  what will                                                              
happen.   A  medical transfer  can  be done  on a  nontransferable                                                              
permit  and  there are  permits  that  are  used  each year  on  a                                                              
medical  transfer.   So, he posited,  perhaps  some of the  permit                                                              
holders  feel that  if  they get  the  opportunity  to give  their                                                              
permit  to someone  in a medical  transfer, maybe  they feel  that                                                              
somewhere  down  the road  these  nontransferable  permits may  be                                                              
worth something.                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAUSCHER   asked  whether  there  is   a  cost  to                                                              
transfer a nontransferable permit for a medical reason.                                                                         
                                                                                                                                
MR. DOHERTY answered  he is pretty familiar with  CFEC regulations                                                              
and he  doesn't believe there  is a cost  to medically  transfer a                                                              
permit on  an emergency  basis.   He offered  his belief  that the                                                              
paperwork  is done  with the  state.   He  said he  knows that  in                                                              
Ketchikan a person  can go to the local ADF&G office  and fill out                                                              
the emergency  transfer paperwork, get  it to the CFEC,  and if it                                                              
is approved the permit is transferred for at least that season.                                                                 
                                                                                                                                
1:28:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER  inquired whether  there  is anything  in                                                              
the  bill  that  speaks to  nontransferable  permits  that  aren't                                                              
being  used.  He  further inquired  whether there  is anything  in                                                              
the bill that would end the nontransferable program.                                                                            
                                                                                                                                
REPRESENTATIVE ORTIZ replied no.                                                                                                
                                                                                                                                
MR. DOHERTY  responded no, there  is nothing in this  regulation -                                                              
unfortunately  from  his  point  of  view  -  that  addresses  the                                                              
nontransferable  permits.  He  said it  100 percent addresses  the                                                              
standards  in which  the association  can conduct  an election  to                                                              
change its assessment taxes.                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  surmised the aforementioned  is basically                                                              
a quorum.                                                                                                                       
                                                                                                                                
MR. DOHERTY  answered it is not  a quorum but 50 percent  plus one                                                              
of  the permit  holders; it  is not  a quorum  of the  board or  a                                                              
quorum of  the committees.   The association  would like  to lower                                                              
the bar  a little  bit, he  continued.   The association  wants to                                                              
get  good  participation  in  an  assessment  tax  change  and  so                                                              
doesn't want  to make it very, very  easy to do.  That  is why the                                                              
association  said it needs  at least  75 percent  of the  board to                                                              
approve  a  changing  of  the assessment  and  also  at  least  25                                                              
percent of the permit holders.                                                                                                  
                                                                                                                                
1:29:36 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR asked whether  it is  going to  become an  issue at                                                              
some point in terms  of managing the fishery if people  hang on to                                                              
these permits  and don't use them.   She further asked  whether it                                                              
is limiting people who would like to get into these fisheries.                                                                  
                                                                                                                                
MR. DOHERTY  replied it used to  be if a permit holder  didn't pay                                                              
for his/her  permit for,  he believed,  every 2  or 5  years, then                                                              
that  permit would  be retired,  but  the permit  holder could  go                                                              
back  and renew.   The  association has  worked with  CFEC to  get                                                              
some latent  permits  retired out  of this fishery,  he said,  and                                                              
was  pretty  successful.    When   these  fisheries  first  became                                                              
limited entry  fisheries in  the 1990's there  were well  over 450                                                              
permits, now  it is  down to about  350.  He  said SARDFA  is also                                                              
actively seeking  an internal buyback  program, especially  in the                                                              
sea  cucumber fishery.   The  association  has some  money in  its                                                              
fund, he  continued, and would like  to see the number  of permits                                                              
reduced in  the fisheries and is  looking at different  ways.  One                                                              
way is  a private  CFEC buyback  program and  SARDFA is  trying to                                                              
work  out the  details  with  CFEC.   However,  HB  354 would  not                                                              
affect the number of permits in the fisheries.                                                                                  
                                                                                                                                
CO-CHAIR TARR  inquired whether the  number was set too  high when                                                              
the fishery  was created and  so that is  why an imbalance  is now                                                              
being  seen  between the  number  of  permits  and the  number  of                                                              
people actually using them.                                                                                                     
                                                                                                                                
MR. DOHERTY offered  his opinion that limited entry  has done very                                                              
well for  the state  of Alaska.   But,  he continued,  when people                                                              
knew that  [unlimited] fisheries  were going  to be limited,  they                                                              
made an effort to  get out and harvest something  so they could at                                                              
least  get a  nontransferable permit,  and he  believes that  this                                                              
happened  in the  dive fisheries.    He offered  his opinion  that                                                              
most divers  would agree that when  it did go limited  entry there                                                              
were too many permits in the fisheries to begin with.                                                                           
                                                                                                                                
1:32:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH  offered his understanding that  when a fish                                                              
ticket is  issued a dive  fisherman pays  the 3 percent  tax, plus                                                              
the  fisherman  pays the  5  or 7  percent  tax depending  on  the                                                              
fishery,  which results  in $250,000-$300,000  a year.   He  asked                                                              
whether he is correct on the annual monetary figure.                                                                            
                                                                                                                                
MR. DOHERTY responded  correct, but noted it changes  year to year                                                              
because  the  guideline harvest  level  changes  year  to year  as                                                              
ADF&G does  its assessments  and sets  the quota.   Also,  the ex-                                                              
vessel value changes each year based on market.  The $250,000-                                                                  
$300,000 is about  what the association gets from each  of the two                                                              
fisheries.   He  demonstrated the  importance of  these late  fall                                                              
and winter  fisheries  by pointing  out that  the geoduck  and sea                                                              
cucumber fisheries  combined generate between $10  million and $12                                                              
million in  ex-vessel value in Southeast  Alaska.  Except  for the                                                              
Dungeness  crab fishery  in some  years, he  continued, these  are                                                              
probably   the  two   most  important   wintertime  fisheries   in                                                              
Southeast Alaska.                                                                                                               
                                                                                                                                
1:34:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH recalled  Mr. Doherty  stating that  SARDFA                                                              
pays for paralytic  shellfish poisoning (PSP) and  arsenic testing                                                              
for geoducks,  as well as the  cost of operating  the association.                                                              
He inquired as to the overall cost.                                                                                             
                                                                                                                                
MR. DOHERTY requested clarification of the question.                                                                            
                                                                                                                                
REPRESENTATIVE  PARISH said  his question  is whether  there  is a                                                              
level  to which the  association  could cut its  taxes that  would                                                              
interfere with  its ability  to adequately  fund the operation  of                                                              
the board and important testing like PSP and arsenic.                                                                           
                                                                                                                                
MR. DOHERTY answered  that the association's board  members do not                                                              
receive any  compensation for  being on the  board.   Money coming                                                              
into the  association pays  the cost  of administration,  he said,                                                              
such  as staff  salaries and  travel, building  rent, phone,  web,                                                              
and so  forth, which is  usually about $200,000  a year.   Most of                                                              
the  association's  expenses are  for  the geoduck  clam  fishery,                                                              
which costs  between $150,000 and  $200,000 for PSP,  arsenic, and                                                              
water quality testing.   Plus, he continued, the  association pays                                                              
the department  about $80,000 a  year to conduct the  sea cucumber                                                              
fisheries.   If  the association  did not  have enough  assessment                                                              
money to pay  DEC or ADF&G then  there would not be  any fisheries                                                              
or there would be reduced fisheries the following year.                                                                         
                                                                                                                                
1:36:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH  asked whether his understanding  is correct                                                              
in that if there  were not adequate money to remit  to ADF&G, then                                                              
the following year the fishery would be limited by ADF&G.                                                                       
                                                                                                                                
MR. DOHERTY  replied  correct.   He related that  when these  dive                                                              
fisheries first  started in  the early  1990's people  were mostly                                                              
from  the Lower  48  because these  fisheries  already existed  in                                                              
Washington state and  California.  They knew there  was a resource                                                              
in Alaska  so they  started diving here  and were getting  permits                                                              
through the  department and  CFEC, but  there were no  regulations                                                              
or assessments of  the populations in place.  As  the harvest grew                                                              
over  the years  the  department  became  nervous that  maybe  the                                                              
fisheries  were getting  out  in  front of  the  resource, so  the                                                              
department put the  brakes on the fisheries.   The department told                                                              
the divers  and processors that it  didn't have the money  to look                                                              
at  big fisheries  like  this because  it takes  a  boat and  many                                                              
divers.  The department  told the divers to figure  out how to pay                                                              
for these fisheries  and that is  what the divers did    they went                                                              
to  Juneau   and  got  this   [statute]  in  place   and  assessed                                                              
themselves  a tax  and  that tax  has  turned  into fisheries  now                                                              
worth $10 million to $12 million a year.                                                                                        
                                                                                                                                
1:38:53 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR opened public testimony on HB 354.                                                                                
                                                                                                                                
1:38:59 PM                                                                                                                    
                                                                                                                                
JERRY  MCCUNE,  President,  United   Fishermen  of  Alaska  (UFA),                                                              
testified in  support of HB 354.   He noted SARDFA is  a member of                                                              
UFA and  said the  association has  built a  good record  of funds                                                              
that cover  everything.   Making  the proposed  change would  be a                                                              
good  change,   he  said.     The  association  could   lower  its                                                              
assessment  and the  fishers  and processors  in  the state  could                                                              
make a bit more money in the process.                                                                                           
                                                                                                                                
1:40:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LINCOLN  remarked that HB 354 seems to  be a decent                                                              
solution to  the problem.   He inquired  whether this  solution is                                                              
preferable to  addressing the  root cause of  the issue,  which is                                                              
that there are lots of permits that aren't being used.                                                                          
                                                                                                                                
MR.  MCCUNE  responded that  getting  into  CFEC laws  is  totally                                                              
different  than what  HB  354 is  addressing.   He  said the  bill                                                              
would address the  current permit holders that are  taking part in                                                              
the  fishery and  would help  the association.   Regarding  latent                                                              
permits,  he noted  that Alaska  has a few  fisheries with  latent                                                              
permits and  those people  are like  in this  dive fishery  case -                                                              
some  divers are  now too  old to  participate  because diving  is                                                              
dangerous.    Latent  permits  is a  whole  different  issue  than                                                              
working with CFEC laws, he reiterated.                                                                                          
                                                                                                                                
MR. MCCUNE, regarding  CFEC laws, pointed out that  a threshold of                                                              
permits needs  to remain in  a fishery  to make it  limited entry.                                                              
Too low a  number could be  too exclusive, he explained.   Limited                                                              
entry must  have enough permits  in a fishery  to turn  over every                                                              
year so  there can  be new entry.   But,  he continued,  when some                                                              
fisheries  were created  there was  more  available resource  than                                                              
there is today.   An optimum numbers  study can always  be done to                                                              
see what a fishery  is producing and how many  participants should                                                              
be in  it, he  advised.   This gives  the state  a good number  so                                                              
that if  someone challenges  whether there  are enough  permits in                                                              
the fishery    like was  done in the  Sitka herring fishery  - the                                                              
court can say that an optimum numbers study was done.                                                                           
                                                                                                                                
1:42:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LINCOLN  asked whether there  is ever a  case where                                                              
an active permit  user benefits from having latent  permit holders                                                              
who don't  use them, because it  inflates the numbers so  that the                                                              
fishing  remains  limited  and  the people  who  are  using  their                                                              
permits benefit from a restrained competition.                                                                                  
                                                                                                                                
MR. MCCUNE answered  that having lots of latent  permits is either                                                              
due  to the  price or  to  not having  enough  of that  particular                                                              
fishery    species, in which  case the  remaining people  actually                                                              
fishing  do benefit  a  lot.   He  noted Bristol  Bay  is a  fully                                                              
utilized fishery and  also noted that there are  no latent permits                                                              
in the  Copper River fishery  in which he  fishes because it  is a                                                              
very lucrative fishery  so everyone is fishing his  or her permit.                                                              
But, he continued,  in many of the little fisheries  like the dive                                                              
fisheries, there are  people who go do other things  or it doesn't                                                              
look  good for  diving so  they put  it off  for a  year.  In  any                                                              
particular  fishery, he  explained,  a permit  holder  who is  not                                                              
fishing  must renew  that permit  every  two years  or the  permit                                                              
goes away.   A permit holder  can get one  year off because  he or                                                              
she isn't  taking part  in the  fishery.   The latent permits,  he                                                              
reiterated,  help the remaining  fishermen in  the fishery  make a                                                              
little bit more money.                                                                                                          
                                                                                                                                
1:45:34 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR  closed public testimony  after ascertaining  no one                                                              
else withed to testify.                                                                                                         
                                                                                                                                
CO-CHAIR TARR held over HB 354.                                                                                                 
                                                                                                                                
1:46:20 PM                                                                                                                    
                                                                                                                                
                                                                                                                              
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Resources Standing Committee meeting was adjourned at 1:46 p.m.                                                                 

Document Name Date/Time Subjects
HB 354 Sponsor Statement 03.16.18.pdf HRES 3/21/2018 1:00:00 PM
HB 354
HB354 Fiscal Note HB354-3-3-18 03.16.18.PDF HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB 354 Supporting Document - UFA Letter 03.16.18.pdf HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB354 ver D 03.16.18.PDF HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB 354 Supporting Document - SEAFA Letter 03.16.18.pdf HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB 354 Supporting Document - SARDFA Letter 03.16.18.pdf HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB 354 Supporting Document - Leighton Letter 03.16.18.pdf HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB 354 Supporting Document - Carruth Letter 03.16.18.pdf HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HB 354
HB315 Transmittal Letter 2.9.18.pdf HJUD 2/9/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/23/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
HB315 ver A 2.9.18.PDF HJUD 2/9/2018 1:00:00 PM
HJUD 2/12/2018 1:30:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/23/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
HB315 Fiscal Note DEC-EHL 2.9.18.PDF HJUD 2/9/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/23/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
HB315 Additional Document-DEC Memo Regarding SB164 and Alaska Grown 2.12.18.pdf HJUD 2/12/2018 1:30:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/23/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
SB 164
HB 315 Additional Documentation - DEC Letter re Alaska Grown 2.14.2018.pdf HRES 3/16/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
HB 315 Supporting Documents - Homer Swift Creek Ranch 2.8.2018.pdf HRES 3/16/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/23/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
HB315 Support, AK WSF Comments.pdf HRES 3/16/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/23/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HB 315
HB260 Sponsor Statement 1.25.18.pdf HRES 3/21/2018 1:00:00 PM
HTRA 2/20/2018 11:00:00 AM
HB 260
HB260 ver A 1.25.18.pdf HFSH 2/20/2018 11:00:00 AM
HRES 3/16/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 260
HB 260 Fiscal Note-DFG- 2.16.18.pdf HRES 3/16/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 260
HB260 Resident Hunters AK Letter of Support.pdf HRES 3/21/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HTRA 2/20/2018 11:00:00 AM
HB 260
HB 260 Supporting Document - Status of Electronic Fish Game licenses, mobile apps and websites in other states 3.15.18.pdf HRES 3/16/2018 1:00:00 PM
HRES 3/21/2018 1:00:00 PM
HRES 3/26/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 260