Legislature(1993 - 1994)
03/15/1993 08:00 AM House RES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
March 15, 1993
8:00 a.m.
MEMBERS PRESENT
Representative Bill Williams, Chairman
Representative Bill Hudson, Vice Chairman
Representative Con Bunde
Representative Pat Carney
Representative John Davies
Representative Joe Green
Representative Jeannette James
Representative Eldon Mulder
MEMBERS ABSENT
Representative David Finkelstein
OTHER LEGISLATORS PRESENT
Representative Fran Ulmer
COMMITTEE CALENDAR
HB 123: "An Act relating to loans for the purchase of
individual fishery quota shares."
CSHB 123 (FSH) WITH LETTER OF INTENT MOVED FROM
COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS
WITNESS REGISTER
Representative Fran Ulmer
Alaska House of Representatives
State Capitol
Court Building, Room 601
Juneau, Alaska 99801-1182
Phone: 465-4947
Position Statement: Prime sponsor of HB 123
Greg Winegar, Loan Manager
Division of Investment
Department of Commerce and Economic Development
P.O. Box 34159
Juneau, Alaska 99803-4159
Phone: 465-2510
Position Statement: Supported HB 123
Kris Norosz, Director
Petersburg Vessel Owners Association
P.O. Box 232
Petersburg, Alaska 99833
Phone: 772-9323
Position Statement: Supported HB 123
Geron Bruce, Special Assistant
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99802-5526
Phone: 465-4100
Position Statement: Supported HB 123
Linda Behnken
Alaska Longline Fishermen's Association
403 Lincoln St., Suite 237
Sitka, Alaska 99835
Phone: 747-3400
Position Statement: Supported HB 123
Eric Forrer
P.O. Box 34383
Juneau, Alaska 99803
Phone: 789-2024
Position Statement: Supported HB 123
Chris Moss
P.O. Box 1115
Homer, Alaska 99603
Phone: 235-8053
Position Statement: Supported HB 123
Rick Lauber, Member
North Pacific Seafood Processors Association
Chairman, North Pacific Fisheries Management Council
321 Highland Drive
Juneau, Alaska 99801
Phone: 586-6366
Position Statement: Supported HB 123
Jerry McCune
United Fishermen of Alaska
211 Fourth Street, No. 112
Juneau, Alaska 99801
Phone: 586-2820
Position Statement: Supported HB 123
Drew Scalzi
41685 Redoubt Circle
Homer, Alaska 99603
Phone: 235-6359
Position Statement: Supported HB 123
Rick Williams
P.O. Box 1321
Petersburg, Alaska 99833
Phone: 483-4830
Position Statement: Opposed HB 123
PREVIOUS ACTION
BILL: HB 123
SHORT TITLE: LOANS FOR IFQ'S
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) ULMER,Grussendorf,Navarre,
Sitton,Mackie,Davies,Davidson,Brown
TITLE: "An Act relating to loans for the purchase of
individual fishery quota shares."
JRN-DATE JRN-PG ACTION
02/03/93 215 (H) READ THE FIRST TIME/REFERRAL(S)
02/03/93 215 (H) FISHERIES, RESOURCES, L&C,
FINANCE
02/05/93 241 (H) COSPONSOR(S): BROWN
02/19/93 (H) FSH AT 08:00 AM CAPITOL 17
02/19/93 (H) MINUTE(FSH)
03/03/93 (H) FSH AT 08:30 AM CAPITOL 17
03/03/93 (H) MINUTE(FSH)
03/05/93 546 (H) FSH RPT CS(FSH) NEW TITLE 3DP
1NR
03/05/93 546 (H) DP: OLBERG, MOSES, NICHOLIA
03/05/93 546 (H) NR: DAVIDSON
03/05/93 547 (H) LETTER OF INTENT WITH FSH
REPORT
03/05/93 547 (H) -FISCAL NOTE (F&G) 3/5/93
03/15/93 (H) RES AT 08:00 AM CAPITOL 124
03/15/93 645 (H) RES RPT CS(FSH) NEW TITLE 4DP
4NR
03/15/93 645 (H) DP: CARNEY, DAVIES, WILLIAMS,
JAMES
03/15/93 645 (H) NR: HUDSON, GREEN, MULDER, BUNDE
03/15/93 645 (H) FISHERIES LETTER OF INTENT
ADOPTED
03/15/93 645 (H) -PREVIOUS FN (DCED) 3/4/93
ACTION NARRATIVE
TAPE 93-30, SIDE A
Number 000
The House Resources Committee was called to order by
Chairman Bill Williams at 8:15 a.m. Members present at the
call to order were Representatives Williams, Hudson, Bunde,
Carney, Davies, Green, and James. Members absent at the
call were Representatives Finkelstein and Mulder.
CHAIRMAN BILL WILLIAMS noted the meeting was being held by
teleconference with sites in Sitka, Petersburg, Kodiak,
Valdez, Wrangell and Homer. He announced the committee
would take up HB 123, and introduced the bill's prime
sponsor, Representative Fran Ulmer.
HB 123: LOANS FOR IFQ'S
Number 035
REPRESENTATIVE FRAN ULMER, PRIME SPONSOR OF HB 123,
described the bill as a simple step to make loans available
for Alaskans to participate in the Individual Fisheries
Quota (IFQ) program through the purchase of quota shares.
She noted the program would work in a way similar to the
limited entry permits, and remarked that although many
Alaskans were opposed to IFQs, the program is now law and HB
123 would allow more Alaskans to participate. She also
noted the bill was sponsored in response to a suggestion by
Juneau halibut fisherman, Eric Forrer.
Number 079
VICE CHAIR BILL HUDSON questioned whether the IFQ program
was still before the U.S. Secretary of Commerce. He
understood the program had not been formally adopted by the
secretary.
REPRESENTATIVE ULMER understood the IFQ program had been
adopted approximately six weeks ago. She said Rick Lauber,
a member of the North Pacific Fisheries Management Council,
could explain the status of the IFQ program to the
committee.
Number 104
GREG WINEGAR, LOAN MANAGER, ALASKA DEPARTMENT OF COMMERCE
AND ECONOMIC DEVELOPMENT (DCED), expressed the DCED's
support of the legislation and described HB 123 as an
extension of the DCED's existing loan program. He said the
IFQ loans would help promote a predominantly resident
fishery. The fiscal note submitted by the DCED, he said,
was based on an anticipated starting date in March, 1994.
Although the number of loans to be made is not known, he
said the DCED expected a lot of activity. Funding was
requested for three positions: a loan examiner in Juneau,
one in Anchorage, and a loan closer to handle documentation,
he advised.
Number 134
REPRESENTATIVE CON BUNDE asked whether additional general
funds would be required, or if the program would be self-
sustaining.
MR. WINEGAR replied that the DCED anticipated a surplus of
approximately $5 million in the commercial fishing loan
fund. Historically, he explained, more money has come into
the fund than has gone out. Normally, the funds are
reappropriated back to the general fund, but the $5 million
will have to be amended so it would not go to the general
fund. The net effect, he said, would be zero in terms of
new funds.
Number 154
REPRESENTATIVE BUNDE asked whether the reappropriation had
already been calculated into the present budget.
MR. WINEGAR confirmed the reappropriation was in the budget
bill.
REPRESENTATIVE BUNDE commented that it would look as if $5
million were being taken from the general fund, even though
it came from the commercial fishing loan fund to begin with.
REPRESENTATIVE ULMER interjected that it would show as a
reduction in revenues, not as an expenditure.
Number 180
CHAIRMAN WILLIAMS announced the committee would begin to
hear testimony from the teleconference sites.
Number 184
KRIS NOROSZ, DIRECTOR OF THE PETERSBURG VESSEL OWNERS
ASSOCIATION, testified from Petersburg by teleconference in
support of HB 123. She told the committee now that the IFQ
program has been adopted for the sablefish and halibut long-
line fisheries, the association believes it is in the
state's best interest to assist fishers in obtaining quota
shares. She referred to the present state loan system for
the purchase of limited entry permits, and called it a
tremendous way to allow Alaskans to participate in the
fishery. Expanding the loan system to include loans for the
purchase of quota shares, she added, is a logical step for
the state to take.
Number 200
CHAIRMAN WILLIAMS noted Representative Jeannette James
joined the meeting at 8:16, and Representative Eldon Mulder
arrived at 8:22 a.m.
GERON BRUCE, SPECIAL ASSISTANT TO THE COMMISSIONER OF THE
ALASKA DEPARTMENT OF FISH AND GAME (ADF&G), told the
committee the ADF&G supports HB 123. He said the
legislation would help ensure maximum participation in the
IFQ program, and noted 80% of existing limited entry permits
are held by Alaskans. He explained that the state's loan
program has been important in keeping the percentage high.
Number 220
LINDA BEHNKEN, ALASKA LONGLINE FISHERMEN'S ASSOCIATION,
testified by teleconference from Sitka in support of HB 123.
She urged the legislation be moved forward quickly. She
commented that the loan program would allow Alaskans to
participate in the IFQ program to the maximum extent
possible, and would ensure that Alaskan fishermen remain
competitive in the market, as well as help ensure coastal
communities continue to receive the product they depend
upon. Participation in the IFQ will provide revenues both
to the communities and to the state, she added. Since
recipients could begin to receive notification of their
allocations as early as 1994, and the program could be
implemented as early as 1995, she again urged the state to
move forward with HB 123 as quickly as possible.
MS. BEHNKEN noted a high level of transfers could be
expected in the early stage of the program, so it would be
important to have a quota share financing program in place
by then. She also added her organization's support for the
state's effort to organize a meeting of fisheries, economic
and mining experts to better define the loan program. She
understood there is a move in that direction that Paul Fuhs
has been working on to organize a program which would be
followed by workshops in the different communities. Ms.
Behnken said this would be beneficial to the state and the
initial participants in the loan program.
Number 273
REPRESENTATIVE BUNDE asked Ms. Behnken to speculate on the
demand once the IFQ shares are available for transfer, and
an estimate on what prices might run.
MS. BEHNKEN responded that she has reviewed quota share
programs in other countries and other areas where they have
been implemented. It seems the price often ran
approximately one to three times the ex-vessel price on a
per pound basis. She expected initially there would be some
inflation of prices as people scramble to grab whatever
quota share they can find, followed by a lowering of prices
as the program settles into place.
Number 287
REPRESENTATIVE BUNDE asked whether having a loan program in
place such as the one proposed in HB 123 might encourage the
inflation of prices.
Number 290
MS. BEHNKEN had heard similar concerns from people who had
been involved in the limited entry loan program. It seemed
to her that prices might be limited by the ceiling the state
puts on the amount it will lend for shares. She speculated
banks or loan programs in other areas, particularly
Washington and Oregon, will make loans available to
residents of those states to participate in the quota
system.
VICE CHAIR HUDSON asked Ms. Behnken whether she agreed that
economic and social impact studies should be done to look at
the effects of the IFQs, particularly in areas like Kodiak
and Cook Inlet.
Number 325
MS. BEHNKEN responded that the IFQ program had been approved
by the Secretary of Commerce, but the funding had not yet
been appropriated, and the final rules were not signed off
on by the Office of Management and Budget. The program as a
whole was adopted, and she cited economic studies on the
distribution of initial quota share allocations. She said
the state seems to be calling for a more predictive study of
who is likely to buy, to sell, and where the quota shares
might go. She believed that kind of study would be
difficult to do. Her suggestion for directing who might buy
and where the shares might go, was through a loan program as
proposed in HB 123. She cautioned that conducting another
study might slow down progress in preparation for the
implementation of the IFQ program.
Number 351
CHAIRMAN WILLIAMS announced the committee would next hear
testimony in Juneau.
ERIC FORRER testified in support of HB 123, and said as an
independent halibut fisherman, he believes it is absolutely
necessary for Alaskans to participate in the IFQ program,
which he characterized as a response to problems in the
fisheries, not the cause of them. He referred to his
experience in the early 1960's as a fisherman on the lower
Yukon River, which he said taught him the importance of
connections between local resource-based industry and
communities.
MR. FORRER cautioned that unless financing was available to
local fishermen, the quota would end up in the hands of
others. He noted the critical point would be whether the
halibut fishery could support the debt service incurred to
get into the fishery. Better financed outside fishermen
will be able to afford a longer pay-off term if the halibut
fishery itself does not have to support the quota share. A
state loan program, he said, is probably the only
alternative for fishermen who do not have the financing
options of larger fishing interests.
MR. FORRER added economists have made the point that the IFQ
program is an opportunity for the state only if the state
and communities make financing available that will let local
fishermen participate in the program.
Number 415
REPRESENTATIVE JOE GREEN asked whether, under the current
state loan system, there were no other loans available for
the purchase of IFQ shares.
MR. FORRER understood individuals could not currently borrow
for the purpose of purchasing halibut shares.
CHRIS MOSS testified by teleconference from Homer in support
of HB 123. He noted the loan program would provide equal
access to the shares to Alaskans who might not qualify for
other types of loans.
Number 457
RICK LAUBER, MEMBER OF THE NORTH PACIFIC SEAFOOD PROCESSORS
ASSOCIATION, AND CHAIRMAN, NORTH PACIFIC FISHERIES
MANAGEMENT COUNCIL, referred to Representative Hudson's
question regarding the status of the IFQ program's approval
by the U.S. Secretary of Commerce. He confirmed the program
was approved, but delays in implementation were due to the
pending nature of funding. Mr. Lauber did not argue with
the possibility of implementation as early as 1995. He
agreed the state legislature should move ahead with HB 123,
and suggested the program could use more funding.
MR. LAUBER referred to Ms. Behnken's estimate of the sale
price of quota shares, and speculated the price will
actually be higher. He agreed the initial price will be
inflated, and stressed the importance of this. The initial
go-round, he said, would be crucial to Alaskans, and whether
they would be able to buy shares while a large number of
them are available.
MR. LAUBER called the proposed loan program in HB 123 a "no-
lose" situation because the permits would be so valuable.
He expressed concern with the implications of the North
American Free Trade Act, and the possibility for Canadian or
Mexican sham companies purchasing shares and getting into
the fishery "through the back door."
Number 510
REPRESENTATIVE GREEN asked Mr. Lauber to clarify whether 80%
of the catch under the program would be allocated to Alaskan
fishermen.
MR. LAUBER did not have the figures, and said the
allocations differed between the black cod and halibut
fisheries. In neither scenario, he said, would Alaska get
anywhere near 100%. He tentatively estimated closer to a
70% allocation for Alaskans in the halibut fishery, and 50%
in the black cod fishery. He added a number of people will
qualify for quota shares who are not now in the fishery.
REPRESENTATIVE GREEN asked if Mr. Lauber could forecast what
might prohibit the IFQ shares allocated among Alaskans now
from being sold to outside interests in the future.
MR. LAUBER replied there was no residency restriction on the
sale of the shares, and it would be illegal to do so.
Number 552
REPRESENTATIVE GREEN asked whether such a provision could be
put on the program.
MR. LAUBER clarified the IFQ program, as a federal law,
cannot have provisions attached by states.
Number 570
REPRESENTATIVE BUNDE referred to Mr. Lauber's suggestion
that more money be put into the loan program. He asked
specifically whether Mr. Lauber meant more money overall, or
a larger loan per individual, than the current $300,000
amount.
MR. LAUBER answered that the quota shares will initially be
worth between three and ten times the value of the sale of
fish. With the $300,000 amount, crew members who are
otherwise qualified for the IFQ share system, would be able
to obtain funds to participate. He said more funding should
be concentrated on the total amount available in the loan
program.
Number 587
REPRESENTATIVE BUNDE commented that with the way the market
works, the price tends to become equal to the amount of
money available for loans. He referred to a letter from
Jerry Murray which quoted Clem Tillion as saying that he
would not want to loan money on the IFQ shares because the
borrowers would never be able to repay the loans. He
qualified his comments by saying he could not verify the
accuracy of the quote, or what the context was.
Number 597
MR. LAUBER responded by saying he had been constantly
mystified by Mr. Tillion's statement. If what Mr. Tillion
was reputed to say was true, Mr. Lauber said, no one would
ever sell quota shares unless it was for cash. He agreed if
fishing was bad, it might be difficult for some to pay back
their loans. He discussed prudent banking practices and
noted shares will not be financed at 100%.
Number 610
REPRESENTATIVE ULMER remarked that the alleged quote does
not match the response she had in conversations with Mr.
Tillion, whom she said was in support of HB 123.
VICE CHAIR HUDSON asked for Mr. Lauber's comment on the
situation with the Internal Revenue Service (IRS) seizing
limited entry permits for tax debts, and asked whether
anything could be done to protect the IFQ shares from the
IRS.
Number 628
MR. LAUBER referred to legislative attempts to protect
salmon permits in the early 1970's, and commented that a
problem to prepare for with the program proposed in HB 123
is whether the taxes are assessed at the time of sale, or
immediately when the shares are first given out. If the IRS
came after the money immediately after shares are
distributed, it would end up owning a lot of permits. He
did not know of any way to insulate the shares from the IRS,
and suggested in jest that if the IRS did seize the permits,
it should be required to fish them.
Number 650
REPRESENTATIVE MULDER referred to page two, section C (4) of
HB 123, regarding eligibility for the IFQ share loans, and
asked Mr. Lauber to comment on whether the legislature would
be creating a high-risk program that might not be self-
sustaining. Specifically, he asked what type of people
would be eligible for the program.
MR. LAUBER said one of the advantages of the program is that
it would allow crew members to purchase IFQ shares. In
those cases, he explained, other factors would be considered
besides how much money the borrower could put up.
REPRESENTATIVE ULMER also responded to Representative
Mulder's question, and explained that the language he
referred to had been added in the Fisheries Committee
Substitute to HB 123. The intention, she said, was to help
smaller fishing enterprises participate. The bigger
fishermen would not need the state program, she said,
because they would have the collateral to find other
financing. She clarified the program in HB 123 did not
propose lending to people who were bad credit risks.
Number 685
REPRESENTATIVE MULDER commented on the high default rates of
other state loan programs, and wanted to hear from the DCED
on the lending practices that would be instituted with this
program.
Number 694
VICE CHAIR HUDSON expressed concern that some parts of the
state which might have smaller quotas, will be hit harder.
He asked whether criteria could be put in place that would
give an advantage to certain areas. He referred to the
Community Development Quota (CDQ) program, and its move to
benefit Northwest Alaskan communities.
TAPE 93-30, SIDE B
Number 000
VICE CHAIR HUDSON asked Mr. Lauber to comment on whether the
IFQ program could incorporate provisions for communities to
purchase IFQ shares, or in some other way encourage
participation in areas where people need it the most.
Number 040
MR. LAUBER replied that opponents of the IFQ program had
raised concerns about its effect on individuals. He said
the council did not discuss any mechanism for financing,
although there is a community development portion of the
program. There would be no permanent IFQs going to any
communities, he explained, but would give a short-term boost
to people in communities that had not had access to
fisheries in the past. He did not believe HB 123 could be
amended to accomplish what Representative Hudson had
suggested.
VICE CHAIR HUDSON asked whether Mr. Lauber could recommend
some other way to accomplish the goal, such as amending the
CDQ program into the IFQ area.
Number 090
MR. LAUBER explained the CDQ program was designed to provide
funds for communities to get individuals into the fisheries.
He said there would be nothing to prevent a community from
making arrangements through their own loan programs or loan
guarantees to allow individuals or groups to purchase
vessels or even to purchase IFQ shares.
REPRESENTATIVE PAT CARNEY referred to the question about
high risk loans, and suggested it is a good idea to provide
low-interest loans to Alaskans for resource development.
Number 128
REPRESENTATIVE GREEN expressed concern about the loan
criteria that might be used in making loans from the loan
program proposed in HB 123. He asked whether the state
would be willing to accept that there will be more
foreclosures if loans are available to people who cannot pay
back their loans. As a related issue, he asked whether the
IFQ shares would revert back to the state if loans were
defaulted on.
REPRESENTATIVE ULMER responded that Mr. Winegar of the DCED
could address that issue. She noted the limited entry
permit loan program has a very high success rate with few
loans in default. She explained that mechanisms were in
place to make wise decisions about who gets loans.
Number 170
MR. WINEGAR responded to the issue of the language on other
financing programs available. He explained that this
language parallels section B of the existing commercial
fishing loan program. Section B, he said, is targeted at
rural Alaska with the idea that individuals who could not
get loans from a bank could go through that program. He
noted the program has had a low default rate. The lender
works with borrowers having difficulty making payments, he
explained. He then referred to the criteria for making
loans, and said they look at credit, past experience, and
debt service. The statute requires 90% of the loan to value
collateral, he explained.
MR. WINEGAR, addressing Representative Green's question
about the IFQ share reverting back to the state in the event
of default, replied that the shares would come back to the
state, which would then have to sell it to recover loan
funds.
REPRESENTATIVE JOHN DAVIES asked Mr. Winegar to respond to
the IRS question.
MR. WINEGAR was not aware of anything the legislature could
put into HB 123 to prevent the IRS from having the
opportunity to seize the asset of permits or shares.
VICE CHAIR HUDSON asked about the process whereby permits or
shares come back to the state, and if they came back to the
state with IRS-implicated loans. He asked if the state
could control the re-sale of the permits.
MR. WINEGAR said in the case of an IRS problem, it would
depend on who had priority. If the IRS had priority, he
explained, it would be difficult for the state to sell that
permit. If the state's lien had priority over the IRS, the
state would be able to resell it.
Number 238
VICE CHAIR HUDSON asked whether the state could do anything
to maintain control, such as a "super-lien" that would
establish state priority and help prevent the IRS from
selling permits low.
MR. WINEGAR was not aware of any legal way to do that
because federal statutes take precedence.
Number 258
REPRESENTATIVE ULMER confirmed the IRS supercedes anyone
else's authority.
Number 270
REPRESENTATIVE DAVIES commented that he could foresee
circumstances where the IRS debt would be very small
compared to the value of the IFQ share, and the state might
be better off either paying off the tax liability or loaning
an additional amount for that purpose to prevent the IRS
from selling seized permit shares at a low price and
depressing the market.
REPRESENTATIVE GREEN remarked that as an individual, if he
loaned someone money, he could put in a condition that prior
to becoming involved in a tax delinquency, the borrower
would have to come back and let the lender buy back the
asset.
Number 293
MR. WINEGAR explained that the DCED has the ability in the
foreclosure process to expend funds in order to protect
assets.
VICE CHAIR HUDSON referred to the limited entry program and
asked Mr. Winegar if that program included a buy-back
provision. He asked whether the state had ever bought back
permits.
Number 300
MR. WINEGAR said there was a provision whereby the
Commercial Fisheries Entry Commission (CFEC) could re-
purchase those permits.
VICE CHAIR HUDSON asked whether the IFQ shares would fall
into that category.
MR. WINEGAR replied there was no buy-back provision for the
IFQ shares that he was aware of.
Number 319
REPRESENTATIVE CARNEY referred to the foreclosure issue, and
asked whether the state had a method for assuring that
Alaskans could buy back IFQ shares.
MR. WINEGAR replied there was a legal problem with requiring
sales to Alaskans. He noted the rate of limited entry
permit re-sales to residents was high.
Number 337
JERRY MCCUNE, UNITED FISHERMEN OF ALASKA (UFA), testified in
support of HB 123, although he noted the organization is not
completely in agreement with the IFQ program itself. He
said the UFA is concerned that small boat owners and small
communities should have the opportunity to participate in
the program. Regarding the question of risk involved in
making the loans to a segment of borrowers that might not
qualify for conventional loans, Mr. McCune explained it was
his understanding the division of loans would look at the
backgrounds of crew members applying for loans.
MR. MCCUNE stressed the importance of ensuring the loan
program proposed in HB 123 is adequately funded and the
rates are reasonable. He urged the state to ensure small
boat owners will not lose shares to big boat owners.
Referring to the IRS problem, he commented that in most
cases the IRS is willing to work out payment plans. He said
he would object if the IRS proceeds to take permits at
random in spite of good faith efforts by the fishermen to
meet their tax obligations.
Number 397
DREW SCALZI testified from Homer in support of HB 123. He
said the initial response to the IFQ program he has observed
has been that everyone wants to buy quota shares. He noted
the focus of the loan program is on the concept and not the
criteria. He referred to the IFQ share as a tangible access
to the resource. He addressed Mr. Lauber's earlier
statement regarding the price of IFQ shares in Canada being
between $8 -$10 per pound, and said that was accurate for
the time, but noted in Canada, the average price for halibut
in 1992 was $2.85 per pound, which equates to three times
the ex-vessel value.
Number 437
RICK WILLIAMS testified in opposition to HB 123 by
teleconference from Petersburg. He has fished for twenty
years in Alaska, and objected to the IFQ program because it
would take jobs out of Alaska. He cautioned that the large
debts incurred by fishermen to acquire IFQ shares will make
it difficult for them to pay off the loans, and may force
fishermen to cut corners in ways like operating with a
shorter crew.
Number 460
VICE CHAIR HUDSON asked Mr. Williams to expand on his
comment that the loan program shows Alaska's endorsement of
the IFQ program.
MR. WILLIAMS expanded on his thoughts that the state should
not jump in and pass a bill that appears to endorse a
controversial issue. He suggested there will be extensive
litigation relating to the IFQ program.
CHAIRMAN WILLIAMS asked whether any one else wished to
testify. There being no further public testimony, he moved
to committee discussion.
REPRESENTATIVE MULDER asked Representative Ulmer what the
cost might be of forestalling action of HB 123 and delaying
the implementation of a loan program. He also asked her to
comment on Mr. Williams' testimony that the loan program
appeared to be tacit support for the IFQ program.
REPRESENTATIVE ULMER commented that although she had not
been directly involved with the development of the IFQ
program, it was her understanding that the program has been
approved by the Secretary of Commerce and will be
implemented. She said the situation was analogous to a
freight train coming down the tracks, and the only question
is whether you want to get on board, let it go by, or get
run over. Delaying HB 123, she said, meant that in the
initial sale of IFQ shares, Alaskans would not be at the
table.
REPRESENTATIVE ULMER agreed there may be lawsuits resulting
from the IFQ program, and those lawsuits may well derail the
program. She cautioned, however, that it does not hurt the
state of Alaska to be prepared, and HB 123 is not an
endorsement of the IFQ program. She suggested the bill
could be passed with a letter of intent that would express
the committee's concerns with the IFQ program.
Number 522
VICE CHAIR HUDSON reiterated his concern that more social
and economic impact studies be done in preparation for the
IFQ program. He said he would support HB 123, but would
still push for further study and possible modification of
the IFQ program itself.
Number 535
REPRESENTATIVE CARNEY MOVED and asked unanimous consent that
the committee ADOPT CSHB 123 (FSH) and the letter of intent.
CHAIRMAN WILLIAMS asked if there were any objections to the
motion, and hearing none, the MOTION PASSED.
REPRESENTATIVE MULDER made a MOTION to MOVE with individual
recommendations CSHB 123 (FSH) with the attached letter of
intent and fiscal notes, and asked unanimous consent.
CHAIRMAN WILLIAMS asked if there were objections to the
motion, hearing none, the MOTION PASSED.
ANNOUNCEMENTS
CHAIRMAN WILLIAMS announced the next meeting of the House
Resources Committee would be on Wednesday, March 17, at 8:00
a.m., at which time public testimony would be taken on the
confirmations of Boards of Fisheries and Game appointees.
He referred to the legal question regarding Jack
Didrickson's appointment to the Board of Game, and asked
committee members to be prepared to discuss that issue.
ADJOURNMENT
There being no further business to come before the House
Resources Committee, Chairman Williams adjourned the meeting
at 9:35 a.m.
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