Legislature(2001 - 2002)
04/10/2001 05:23 PM 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
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
April 10, 2001
5:23 p.m.
MEMBERS PRESENT
Representative Beverly Masek, Co-Chair
Representative Drew Scalzi, Co-Chair
Representative Hugh Fate, Vice Chair
Representative Joe Green
Representative Mike Chenault
Representative Lesil McGuire
Representative Gary Stevens
Representative Beth Kerttula
MEMBERS ABSENT
Representative Mary Kapsner
COMMITTEE CALENDAR
HOUSE BILL NO. 206
"An Act relating to a vessel-based commercial fisheries limited
entry system, to management of offshore fisheries, and to the
definition of 'person' for purposes of the commercial fisheries
entry program; and providing for an effective date."
- MOVED CSHB 206(RES) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 206
SHORT TITLE:VESSEL LIMITED ENTRY FOR COMM. FISHERIES
SPONSOR(S): RESOURCES
Jrn-Date Jrn-Page Action
03/22/01 0691 (H) READ THE FIRST TIME -
REFERRALS
03/22/01 0691 (H) FSH, RES
04/02/01 (H) FSH AT 5:00 PM CAPITOL 124
04/02/01 (H) Moved Out of Committee
04/02/01 (H) MINUTE(FSH)
04/03/01 0826 (H) FSH RPT 2DP 4NR
04/03/01 0827 (H) DP: SCALZI, WILSON; NR:
DYSON,
04/03/01 0827 (H) COGHILL, KERTTULA, STEVENS
04/03/01 0827 (H) FN1: ZERO(DFG)
04/04/01 (H) RES AT 1:00 PM CAPITOL 124
04/04/01 (H) Heard & Held
MINUTE(RES)
04/09/01 (H) RES AT 1:00 PM CAPITOL 124
04/09/01 (H) Scheduled But Not Heard
04/10/01 (H) RES AT 5:30 PM CAPITOL 124
WITNESS REGISTER
GERRY MERRIGAN
PO Box 232
Petersburg, Alaska 99833
POSITION STATEMENT: Testified in support of the proposed CS for
HB 206.
PAUL SEATON
59395 Bruce Street
Homer, Alaska 99603
POSITION STATEMENT: Expressed concerns regarding HB 206.
JOHN WINTHER
(No address provided)
Petersburg, Alaska 99833
POSITION STATEMENT: Testified in support of the proposed CS for
HB 206.
BRUCE SCHACTLER
PO Box 2254
Kodiak, Alaska 99614-2254
POSITION STATEMENT: Testified in opposition to HB 206.
OLIVER HOLM
PO Box 3865
Kodiak, Alaska 99615-3865
POSITION STATEMENT: Testified that the proposed CS for HB 206
is a major change that he would not favor.
CHRIS BERNS
PO Box 26
Kodiak, Alaska 99615-0026
POSITION STATEMENT: Testified regarding HB 206.
MAKO HAGGERTY
PO Box 2001
Homer, Alaska 99603
POSITION STATEMENT: Asked that the scallop fisheries be removed
from HB 206.
MARY McDOWELL, Commissioner
Division of Commercial Fisheries Entry Commission (CFEC)
Alaska Department of Fish & Game (ADF&G)
8800 Glacier Highway, Suite 109
Juneau, Alaska 99801-8079
POSITION STATEMENT: Answered questions regarding the proposed
CS for HB 206.
JEFFREY STEPHAN (ph), Manager
United Fishermen's Marketing Association (UFMA)
201 Marine Way
Kodiak, Alaska 99615
POSITION STATEMENT: Spoke on behalf of UFMA in support of the
hair crab and scallop fisheries options in the proposed CS for
HB 206; asked the committee to leave flexibility in the bill to
include other fisheries.
ACTION NARRATIVE
TAPE 01-33, SIDE A
Number 0001
CO-CHAIR DREW SCALZI called the House Resources Standing
Committee meeting, which had been recessed to a call of the
chair on April 9, 2001, back to order at 5:23 p.m. Present at
the call to order were Representatives Scalzi, Fate, Green,
Stevens, and Kerttula. Representatives Masek, McGuire, and
Chenault arrived as the meeting was in progress.
HB 206-VESSEL LIMITED ENTRY FOR COMM. FISHERIES
CO-CHAIR SCALZI announced that the committee would hear HOUSE
BILL NO. 206, "An Act relating to a vessel-based commercial
fisheries limited entry system, to management of offshore
fisheries, and to the definition of 'person' for purposes of the
commercial fisheries entry program; and providing for an
effective date."
Number 0059
REPRESENTATIVE GREEN moved to adopt the proposed committee
substitute (CS) for HB 206, Version L [22-LS0426\L, Utermohle,
4/9/01] for purposes of discussion. [No objections were
stated.]
CO-CHAIR SCALZI told the committee HB 206 adds a tool for the
limited entry system that allows the Commercial Fisheries Entry
Commission (CFEC) to consider a program based on a limited
license issued to the vessel, rather than to the owner-operator.
If the initial recipient of the license sells it, the [new]
owner of the license would have to be onboard, which was the
intent of the original license limitation program. He asked
Representative Stevens to explain the differences between
Version L and the original bill.
Number 0199
REPRESENTATIVE STEVENS informed the committee that the original
bill caused concern among fishermen because it was expansive and
could have [applied to] many fisheries; that would have been
more problematic, particularly in Kodiak. He stated his belief
that limiting it to the Bering Sea Korean hair crab fishery and
the weathervane scallop fishery makes everyone more comfortable,
knowing they won't be surprised by changes to their industry.
As time passes, other fisheries could come under this program if
the legislature feels it is appropriate.
CO-CHAIR SCALZI pointed out the extensive information provided
in the committee packet. He asked that those waiting to testify
speak to Version L for purposes of expediency.
Number 0324
GERRY MERRIGAN testified via teleconference. Regarding the
original bill, he said he'd thought it would be better to give
limited entry as a tool and have the legislature indicate which
fishery fit under each tool. Conversely, he stated his support
for moving the proposed CS forward.
Number 0370
PAUL SEATON, testifying via teleconference, referred to the
third paragraph of his written testimony [in the committee
packet], saying his main objection to the bill has been the
application to other fisheries. He said he understands from
other testimony that scallops are "no longer a problem," and
that there is a federal limited entry system. He added that no
testimony had been heard in [the House Special Committee on
Fisheries or the House Resources Standing Committee that the
scallop fisheries need this [bill]. Consequently, Mr. Seaton
asked that the reference to scallops be removed.
MR. SEATON stated his belief that approximately four 48- to 70-
foot vessels fish for scallops in Cook Inlet. He said, "Under
the stacking provision, if this was in place, those permits
could be bought by larger offshore vessels and change the
complexion of the fishery." He went on to say he didn't think
anything like that would happen regarding hair crab, because it
isn't the same kind of situation. He suggested most problems
with the bill could be alleviated by removing the language
regarding scallop fisheries.
MR. SEATON stated his understanding that the hair crab open-
entry system is for within five miles and applies to vessels
under 60 feet; that will be maintained. Therefore, the vessel-
owner provision isn't going to apply to state waters, but to
federal waters, and "that's kind of the federal model."
MR. SEATON referred to page 6, [subsection] (c); mentioned
ownership provisions and diverting the character of the fishery;
and stated:
If a person is changing vessels - upgrading, selling
vessels, getting new vessels - basically he's changed
his operation. And I think that if you don't allow
substitution of vessels, then you will assure this
state that, at some point in time, this will become a
person-based limited entry system like the rest of the
limited entry systems - that if you leave it to
(indisc.) to investigate ownership of corporations, it
becomes much more problematic.
Number 0665
JOHN WINTHER, testifying via teleconference, told the committee
he is a resident of Petersburg. [At this point there were
technical difficulties with the teleconference. Mr. Winther
finished his testimony later in the meeting.]
BRUCE SCHACTLER, testifying via teleconference, told the
committee most of his comments would apply to both Version L and
the original bill. He stated concern with the direction in
which limited entry is being taken, saying the entire principle
is being changed. This [concept] started four or five years ago
and is "entering every fabric of every single fishery that we've
got going here." He mentioned the American Fisheries Act,
saying it was the beginning of this piecemeal plan. He
continued:
I have to completely agree with Paul Seaton there,
that I see absolutely no reason to have either one of
these. He mentioned he didn't have a problem with the
hair crab, but specifically, neither one of these
things sunset for another couple of years, and one of
them is 2004, I see. And I'd like to make sure
whatever conversation continues at this rate goes
extremely slow.
Now, the whole policy shift that CFEC is going with
this, and that rationalization throughout all the
other fisheries, is leaving all of us [who] have been
stuck with limited entry as it is for 30 [years] in
the dust.
Now limited entry wants to turn around and hand these
out to corporations .... The owners of these will
continue to sit in whatever surroundings they are
sitting in, while their boats are out fishing.
Meanwhile, the salmon fisheries, the herring fishery,
and all the other ... limited entry fisheries are
relegated to sit on our boats and fish 'til we're
dead, literally.
I have no way that I can take my assets - as the
scallop fishermen or the crab fishermen are hoping to
do with this tool, ... as it was called - and ... put
those assets out to younger people to ... use. We're
stuck with our business. So, I'm going to be against
this thing forever and ever and ever, amen, until you
want to come up with a comprehensive plan to redo the
entire limited entry system and bring the rest of us
that have been sitting [since] 1970 along with it.
I believe that ... there's no reason for things to
stay as they were 30 years ago, if we're going to
rationalize every other fishery and come up with a new
plan for every other fishery. Let's not do things
piecemeal; let's start from scratch. ... I'd like to
be able to take my kids to Disneyland and see those
scallop fishermen ... with their kids, too, in the
middle of August, instead of being on my boat. Thank
you.
Number 1028
CO-CHAIR SCALZI responded that although Mr. Schactler was
correct about the moratorium, to implement any kind of plan the
CFEC will need time to formulate the plan and have public
hearings and testimony; therefore, it is timely that the bill is
being heard now.
Number 1075
OLIVER HOLM, testifying via teleconference, expressed concern
about the shift in policy of allowing absentee or corporate
ownership, and not having the permit holder on the vessel. He
stated his belief that it was one thing the state did in its
management of limited entry, versus [how Canada handled it]; he
reads Pacific Fishing magazine, which addresses problems with
corporate ownership, permits, and vessels, and he indicated
[Alaska] is ahead in this regard. While it is convenient for
the owner not to have to be on the vessel to fish, he thinks it
is a serious change in the social policy in our fisheries, and
more thought should be given to the issue.
MR. HOLM said the plans of the federal system are yet unknown.
"We may want to have something in the future that's compatible
with that, and we might not, depending on how it turns out," he
told members. He said there are numerous problems involved in
tracking concentration of ownership of the resource rights; as
soon as corporate ownership is allowed, it becomes extremely
difficult to track the real ownership and control.
MR. HOLM mentioned the American Fisheries Act [AFA] and the
"tangled web of ownership" in AFA-qualified pollock vessels. He
suggested Kodiak likely will end up with a limited entry
program, through the state, for Tanner crab, which hopefully
will become a significant fishery again. He added that he would
be concerned how that would operate if [the bill] were passed.
He concluded by saying there are many questions and he hasn't
completely read [Version L]. He said [Version L] is a major
change which he would not favor.
Number 1220
CHRIS BERNS, testifying via teleconference, told the committee
he appreciated that the bill had been narrowed to scallop and
hair crab [fisheries], rather than being generic. He referred
to page 3 [lines 5-8] of Version L, which read:
The commission shall adopt criteria as appropriate,
for determining
(1) how restrictions on fishery resources,
types of gear, and areas fished are established for
individual vessel interim-use permits and vessel entry
permits; and
MR. BERNS cited as an example the Kodiak Tanner [crab] fishery,
in which he estimated 25 percent of owners are corporate owners
and 75 percent are owner-operators. He asked the committee to
clarify whether only the owner-operators would get the permits,
based on a point system. He asked if there would be two classes
of boats: a corporate boat that the owner could lease out, and
"the rest of the guys [who] would have to be on their boat until
they're 70 years old."
MR. BERNS voiced concern that the many "unknowns," "shalls," and
"maybes" [in Version L] leave it wide open for future
interpretation by another commissioner less trustworthy than
Commissioner McDowell. Therefore, he would like to see the
language be more concrete. He voiced his understanding that if
[Version L] is adopted specific to hair crab and scallop
[fisheries], there wouldn't be so much worry about other state-
managed fisheries for now; however, he still would like to see
it tightened further.
Number 1360
MR. WINTHER, reconnected to the teleconference, told the
committee he has been involved in the hair crab fishery near the
Pribilof Islands. Currently, it is the only fishery "not under
an effort limitation by the council." It also is the only one
without any catcher-processors involved, which means all the
crabs [are brought] to shore [to be processed]. That is under
the current moratorium, which expires in 2003.
MR. WINTHER mentioned the bill's passing in time for CFEC to
implement a system before the moratorium expires. He also
mentioned catcher-processors, and stated his belief that
presently, regarding everybody who qualifies, it is "a catcher-
vessel-only fishery." He mentioned vessels that have multiple
skippers and the magnitude of the licenses generated.
MR. WINTHER suggested if eligible vessels were given a vessel
license under the current limited entry laws, there would be
three to five times the current [fishing] effort. He urged the
committee to pass [the proposed CS], because it is a logical way
to cap the effort in these fisheries.
Number 1485
MAKO HAGGERTY testified via teleconference. A commercial fisher
for a total of twenty years and currently a water-taxi operator,
Mr. Haggerty said he is always nervous when "we" redefine what a
fisherman is, and [HB 206] makes him nervous for that reason.
The scallop fishery in Homer is a small one that contributes
quite a bit to the community. As an example, it is enjoyable to
go once or twice a year to buy a bag of fresh scallops off the
boat, and he would like to continue to do so.
MR. HAGGERTY said although he is not familiar with the hair crab
fishery, he is familiar with the scallop fishery and would like
to see scallop fisheries removed from the bill. In response to
questions by Representative Kerttula, he said the scallop boats
range in size from 50 to 70 feet. Bigger than those in the
salmon fleet, they hold larger crews and bigger equipment, and
they have to withstand "a little bit more weather."
Number 1637
MARY McDOWELL, Commissioner, Division of Commercial Fisheries
Entry Commission (CFEC), Alaska Department of Fish & Game
(ADF&G), offered some clarifications regarding HB 206. She said
some of the fears expressed about the original bill are
understandable because it is a departure from the current
program. The fact that it is the fishermen who get the permits
is a very important part of the state program, and one embraced
by fishermen. She stated her belief that the constraints in the
original bill were so tight that it is unlikely it would be used
in any other fishery. She continued:
As far as limiting it to these two fisheries, ... I
think it was ... Bill Kyle who spoke last time and
mentioned that maybe that was taken care of, but ...
that was a mistake, in that there is still a state-
waters fishery that's under moratorium right now.
It's a separate state moratorium, and when that
moratorium ends, that will either be an open-access
fishery or a closed fishery, or we have to come up
with some kind of a limited entry program for it. So
we do have to have a tool for that fishery.
There was a concern about the stacking provisions in
the bill and how they would pertain to [scallop
fisheries], and ... the fear that big high-seas
vessels might buy those permits under the stacking
provision.
That isn't a concern as far as I can tell. The
stacking provision says that the only time ... two
permits could be on one vessel, for the state
(indisc.) fishery, would be if ... the vessel
obtaining it was an initial "issuee" to start with.
Additionally, these will have capacity constraints;
these will be limited to certain sizes of vessels, so
that the original permit would be issued for vessels
in this size range [and] couldn't have a ... much
larger vessel come in and buy it up to use on their
vessel. The vessel that it would be used on would
have to be the ... kind of vessel that was permitted
under that ... particular permit.
There's a question about whether initial issuees would
be treated differently - that if the initial issuee
happened to be a person, would they be stuck having to
be on the boat, whereas an initial issuee who's an
entity wouldn't have that constraint. And that's not
the case. Initial issuees would all be treated the
same. ...
The provision that the holder of the permit must be
onboard kicks in upon the first transfer of that
permit. And at that first transfer it has to go into
the hands of a human being who will be onboard.
Initial issuees would all be treated equally.
MS. McDOWELL told the committee [CFEC's] preference would be the
generic bill, but she understands it is a big policy call for
the legislature to make. She added that if this were as far as
[CFEC] could go right now, it would at least provide a tool for
these two fisheries that are currently under a vessel-based
moratorium. She noted that the dilemma is that they've been in
the vessel-based program for years, so this is a matter of how
to transition into a permanent solution for those fisheries.
Number 1799
CO-CHAIR MASEK asked Ms. McDowell to look at page 7, lines 6-15,
regarding substitution of vessels. She asked if any language in
the bill addresses leasing vessels, and whether that would be
allowable.
MS. McDOWELL replied that the bill does not address leasing, but
would allow CFEC to adopt regulations for substituting another
vessel if the vessel sinks, or if the owner wants to replace the
vessel with one of similar characteristics.
MS. McDOWELL, in response to follow-up questions, surmised that
letting a person use a permit on a vessel that he or she did not
own could be allowed by regulation. She said she thought
nothing in the bill would prohibit it, and it would not be
difficult to do. That person would have to own the vessel
permit, show documentation for the vessel, and use it only on a
vessel that "meets those same criteria."
CO-CHAIR MASEK asked Ms. McDowell to clarify page 14, lines 20-
24 [Version L], which read as follows:
*Sec.17. AS 16.43.990(5) is amended to read:
(5) "person" means a natural person;
"person" [AND] does not include a corporation,
company, partnership, firm, association,
organization, joint venture, [BUSINESS] trust,
[OR] society, or other legal entity other than a
natural person;
MS. McDOWELL answered that under current limited entry law is a
definition of "person" as being a natural human being. [Version
L] clarifies that anything that is not a human being doesn't fit
into the definition. Upon the initial issuance, the permit
would go to the person or entity - including a corporation or
partnership - that owns the vessel at the time. Any transfers
after that must go to a human being - a person under this
definition.
MS. McDOWELL explained that historically the only entity that
could receive a permit is a living human being, from the initial
issuance on. That has worked very well in all fisheries limited
to date, because in almost all cases the vessel owner is the
person who operates the boat. Now, however, [CFEC] must deal
with fisheries that have evolved differently: the vessel is not
operated by the person or entity that owns it.
Number 2092
CO-CHAIR MASEK turned to page 7 [lines 9-10] and again stated
concern that [Version L] still did not [allow for leasing].
MS. McDOWELL responded that she understood Co-Chair Masek's
point, and referred to a portion of lines 12-13, which read:
The commission may require that the permit holder have
an ownership interest in a temporarily substituted
vessel.
MS. McDOWELL emphasized the word "may". She then referred to
[lines 9-10], which read:
A permit holder must have a legal ownership interest
in the vessel that is permanently substituted for the
vessel identified on the permit.
MS. McDOWELL surmised that it would be a problem for someone who
doesn't own a vessel at all. She explained that the provision
is meant to "push" it towards the current owner-operator program
when someone has a vested interest in the operation but is not
just a hired skipper.
Number 2203
REPRESENTATIVE GREEN asked for a definition of ["temporarily" as
used in Version L].
MS. McDOWELL replied that "temporarily substituted vessel" means
if someone's vessel breaks down in mid-season and is in the
shipyard for part of the season, another vessel would be
substituted temporarily while the first one is being fixed.
Number 2256
REPRESENTATIVE McGUIRE told the committee she is 30 years old.
People in her generation are just coming home after college and
don't have $1 million to invest in a scallop boat. She asked,
"What are we doing, as far as limiting the access of our future
generations to this way of a livelihood?" She stated her
opinion that "essentially what you're doing is you're locking it
up with one particular company." She said a person would not be
able to buy a new boat without an ownership interest.
REPRESENTATIVE McGUIRE said she understands this is trying to
create a system around a fishery that has been operating in a
certain way; however, she isn't sure it is the right way. She
added, "These operations are owned in large part by people in
the Lower 48 [who] are going to have these permits."
Number 2346
MS. McDOWELL responded that it sounds as though the
philosophical question is limited entry in general, not just
vessel limited entry. She noted that she'd done a briefing for
the [House Special Committee on Fisheries] earlier this year
regarding what the legislature had in mind when it did the
original limited entry program. She said it was a pragmatic
solution to realizing that unchecked growth in a fishery can
destroy the fishery, for example, by reducing the time of an
opening to 24 hours so that no one can make a living.
MS. MCDOWELL listed variables considered to create some
stability in the fisheries: length of season, amount of gear,
and number of participants, for example. She stated that she
thinks the number of participants is one variable with which the
legislature thought it could effect change. She said the
legislature carefully crafted that program to empower the
fishermen in their rights.
MS. McDOWELL, in further response to Representative McGuire,
said the current limited entry program is based on
grandfathering-in those with the most participation. A point
system was developed to figure out who is the most "currently
economically dependent on that fishery," and those are the ones
who get the initial permits. From then on [those permits] are
fully transferable, either by gift or by sale.
MS. McDOWELL reported that over the 27 years of limited entry,
30-40 percent of all transfers have been by gift, not by sale;
it keeps [permits] in families. She added that the fact that
they are freely transferable is what keeps the program
constitutional. She pointed out that the permits cannot be used
for collateral and are not "lienable" property except in the
state loan programs under C-FAB (Commercial Fisheries and
Agricultural Bank) and the Division of Investments. Both those
loan programs are only available to Alaskans. Ms. McDowell said
although [the limited entry program] is well crafted, the
downside is that some people are excluded.
MS. McDOWELL went on to say that under this program, people do
get in. They often start out in the smaller-boat fisheries
until they can work their way up and afford a bigger vessel.
The program has been successful: 77 percent of all permits are
in the hands of Alaskans.
TAPE 01-33, SIDE B
Number 2470
MS. McDOWELL responded to a question by Representative McGuire
by admitting that [Version L] is "tough" for her to defend
because her heart is in the other program. She stated that the
legislature directed [CFEC] to do this bill. It is a pragmatic
response to dealing with programs that don't fit the original
model - they're not mom-and-pop operations, and they have hired
skippers.
MS. McDOWELL explained that most fisheries which evolved that
way in the past were high-seas fisheries managed by the federal
government. They were managed by the North Pacific [Fishery
Management] Council, and CFEC didn't have to deal with them.
Now, however, there are state-managed fisheries in the EEZ
(exclusive economic zone). The state didn't have tools to deal
with them, so fishermen came to the legislature in 1996 and got
a moratorium based on vessels. These two fisheries, under a
vessel-based moratorium since 1996, primarily involve vessels
run by the skippers but owned by partnerships and companies.
Ms. McDowell elaborated:
The legislature directed us to come up with a generic
bill for creating a vessel-based program to use only
when a current program couldn't meet the purposes of
limited entry, which is conservation and avoiding
economic distress in the fishery.
The generic bill that we did bring forth was tightly
constructed to say "you will always default to the
original program unless you can demonstrate that
there's no way to get a handle on it in that program."
So, this is ... a significant policy call for the
legislature. It is a departure from our current
program. ... We think it is a useful tool to have for
fisheries that you want to keep a handle on .... In
some of these fisheries, if they remain open-access,
they'll have to be closed because eventually [we]
can't manage them.
Another option is to let the feds have them to manage;
let them preempt state management.
Number 2385
REPRESENTATIVE McGUIRE restated options: doing nothing and
letting the federal government step in, which it may or may not
do; reenacting the moratorium, which really doesn't solve the
problem; or passing the legislation. She asked Ms. McDowell if
she knew of any other alternative that would give young Alaskans
who want to come into a big-boat fishery [a chance].
Number 2349
MS. McDOWELL replied that the big-boat fisheries require
enormous investments; they are not entry-level fisheries.
People don't go into them unless they've worked their way up
through a lot of other fisheries. She stated her belief that
there isn't any way to turn the Korean hair crab and scallop
fisheries into entry-level fisheries.
Number 2299
JEFFREY STEPHAN (ph), Manager, United Fishermen's Marketing
Association (UFMA), testified via teleconference on behalf of
UFMA's members, many of which are crab fishermen. He said UFMA
would support HB 206 and would like to see the flexibility left
in it, to allow the vessel limited entry to be applied in
fisheries other than those for hair crab and scallops.
MR. STEPHAN provided some history. He said UFMA's members
supported the legislation that established the moratorium back
in 1996 because they thought there was a good rationale. At the
time, UFMA was interested in having the flexibility extended to
other fisheries, but CFEC lacked the ability to do limited entry
in vessels, so it had to ask the legislature for a moratorium.
He added, "At that time we asked for some language, which was
included, that asked CFEC to do a study and provide a bill
several years later."
MR. STEVEN suggested that if the need exists [for this
legislation] for hair crab and scallop [fisheries], it likely
indicates the need may exist elsewhere. He encouraged the
committee to look for options for vessel limited entry in other
fisheries; UFMA believes CFEC would be better equipped to have
that flexibility and those additional tools, and should be able
to work with participants of each fishery to decide what is the
best basis: vessel, permit-holder, or some kind of hybrid. He
mentioned that he had discussed the hybrid idea with some
commissioners in the past and recalled advocating the concept to
former commissioner Dale Anderson (ph). He also mentioned the
"salmon model" at a time when canneries owned a lot of the
vessels, to get the permits into the hands of individual permit
fishermen.
Number 2133
REPRESENTATIVE GREEN asked Ms. McDowell for her opinion
regarding previous testimony that scallop fisheries should be
dropped from bill, so it focuses solely on hair crab fisheries.
Number 2156
MS. McDOWELL responded that she thought the comment that the
scallop fishery had been taken care of "came from a statement
that Joe Collin (ph) made the other day." She said it is only
taken care of in the federal waters; Alaska still has a state-
water scallop fishery currently under moratorium that needs to
be limited.
REPRESENTATIVE GREEN said, "So, you prefer it as it is, rather
than to drop it."
MS. McDOWELL concurred.
Number 2089
MR. MERRIGAN added the following:
If ... you go the operator system and you get excess
amount of permits in a fishery, ... people [should be]
aware how hard it is to go backwards ... in buy-back
programs. In fact, the state buy-back system is
defunct; it's unconstitutional. And you have to buy
back both the permits and gear. So, if you didn't go
with vessel licensing, and you did go with, say, an
owner system, and you created four or five times the
number of participants, you're kind of stuck.
And that's why ... you see lots of difficulties in
Southeast fisheries, where we're trying to get down to
the maximum number of permits. And we're having great
difficulty in retiring permits because the system
isn't there. So then you have to look outside for
federal money.
So it's ... kind of a problem: if you do end up with
too many participants, you don't have anything
available for young Alaskans [because there] won't be
a fishery. So ... instead of getting too many
operator permits in there, that's why this is the ...
option to only be used in those kind of circumstances.
Thank you.
Number 2029
CO-CHAIR SCALZI closed public testimony. He told the committee
he and the previous speaker, Jeff Stephen (ph), although long-
time friends, were "on opposite sides of the IFQ [individual
fishery quota] battle." He said it was encouraging to hear Mr.
Stephen say that he noticed that by the time a limited entry
system is needed, it's too late - there are too many
participants.
CO-CHAIR SCALZI went on to say that is why the tools are needed,
and he certainly would have supported the original bill.
However, he knows there has been concern and public testimony
[about the original version]; therefore, he was ready to support
the proposed CS [Version L]. He noted Representative McGuire's
concern for getting young people into the fishery, and said that
issue was a concern during the IFQ debate. He said it is very
important that there be an entry level in any form of limited
entry system. He continued:
Under this scenario, ... certainly the next generation
would have to be "owner onboard." What that does is
it actually lowers the level of the price that you
would pay for an entry fishery like that, because all
of a sudden you can't be an absentee owner - you have
to be there.
CO-CHAIR SCALZI told the committee he had flown out to the
[Pribilof Islands] several years ago to look into working the
hair crab fishery. He commented that he owns a 63-foot vessel.
He said, "I guarantee [there] was a lot of big water out there
that time of year." He remarked that the fishery has been well
described by testifiers, including Ms. McDowell.
Number 1920
CO-CHAIR MASEK reiterated her concern over the language on page
7, asking that the word "must" be changed to "may".
Number 1910
REPRESENTATIVE McGUIRE asked if that would conflict with the
basic concept just stated by Co-Chair Scalzi regarding keeping
the price down and owner-operators.
Number 1930
CO-CHAIR SCALZI responded that he is not sure [making that
change] would cause a conflict. He stated his belief that [Co-
Chair] Masek's intent is good, however. He elaborated:
If we're talking about just the substitution of
vessels, where the owner needs to change a vessel for
purposes of a fishery, then we might want to say
"may". If we're talking about a permanent
substitution of vessel, then I think "must" is fine
because that would require the owner onboard.
CO-CHAIR SCALZI asked Ms. McDowell for her opinion.
Number 1853
MS. McDOWELL suggested the real issue that Co-Chair Masek is
addressing relates more to the transfer. She mentioned the
second-generation provision and said the question is, "Do you
want to make sure that ... when they transfer it, the next
generation has to have ownership interest?" She referred to
[page 6, lines 9-11 of Version L], which read:
(b) Except as provided under (c) of this
section, a person or entity that received a
transferable vessel entry permit upon the initial
issuance of vessel entry permits for a fishery may
not transfer the permit to another entity.
MS. McDOWELL said the phrase "may not transfer the permit to
another entity" captures the heart of the second-generation
language of the bill: if the permit is going to be transferred,
it has to go to a person. To Co-Chair Masek she said, "I guess
you're still saying you want it to go to a person; it's a matter
of whether that person then must have an ownership interest."
CO-CHAIR MASEK responded that it is an issue of leasing. As
currently worded, it seems one must have legal ownership of the
vessel substituted; therefore, it does not allow for leasing.
Number 1783
CO-CHAIR SCALZI suggested the question would be, "If you own the
permit, could you lease the vessel?" He asked for clarification
regarding whether this is regarding a first- or second-
generation transaction.
MS. McDOWELL pointed out a sentence on page 6, lines 5-6, which
read:
The transferee of a vessel entry permit must have a
legal ownership interest in the vessel identified on
the vessel entry permit.
MS. McDOWELL commented, "That's the real issue here, I guess:
... At first generation or second generation - anytime - does
the permit holder have to have an ownership interest in the
vessel the permit is used on?"
CO-CHAIR SCALZI stated that the first generation has to [have an
ownership interest], because [the permit] is going to the
vessel.
MS. McDOWELL said, "It'll be initially issued to the owner."
CO-CHAIR SCALZI asked if this applies to the second generation,
who may own the permit but may not own a vessel, but just has to
be onboard.
MS. McDOWELL replied, "No, they also have to have an ownership
interest."
CO-CHAIR SCALZI said he understood that was the case under this
language, but asked if it was necessary, and if it was the
intent.
MS. McDOWELL said it was the intent, but told members it was a
policy call for them to make. She explained that [Version L]
was drafted this way in an attempt to "push it towards owner-
operator"; avoid absentee ownership; and [ensure that] the
person doing the fishing has a vested ownership interest in the
fishery.
Number 1718
REPRESENTATIVE GREEN asked if an owner with a one-ninth interest
would qualify.
MS. McDOWELL answered that this allows [CFEC] to set minimum
requirements. In further response, she noted that the level at
which the requirements are set would depend upon the fishery and
ownership patterns. She added that [CFEC] has to acknowledge
that these are expensive vessels, and doesn't want to prohibit
people from pooling resources to buy a permit and vessel
together. However, beginning with the second generation,
someone who is at least a part owner would have to be onboard.
MS. McDOWELL remarked, "It doesn't turn this into our current
program - you'll never get there." She said a fishery is going
to evolve one way or another. Without these provisions, the
fear voiced by fishermen is that this would evolve toward
absentee corporate ownership.
REPRESENTATIVE GREEN presented the following possible scenario:
Several people invest together in a vessel and permit. All but
one are mature in years; one is 30 years old. They give the
younger partner a share for considerably less and want to put
[the vessel permit] in his name because he will be around a lot
longer. In response to a comment by Ms. McDowell,
Representative Green concurred that the 30-year-old partner
would be the one whom the others would want onboard the vessel.
He asked if the above scenario would qualify under this
[provision].
MS. McDOWELL answered in the affirmative. As John Winther had
testified, this provision might actually open up opportunities
for locals in the crab fisheries, because the people with all
the money may want somebody who is willing to go out and do all
the work. She added that there are no guarantees that [Version
L] would "push it" in the direction intended, but the intent is
there.
Number 1593
REPRESENTATIVE McGUIRE stated her belief that Ms. McDowell's
heart is "in the right spot." She said she hopes there will be
a continuing move to monitor [limited entry]; if something
doesn't work, regulations could be changed "to steer it back
again."
MS. McDOWELL said she could only speak for herself, but as long
as she is commissioner, her heart "is certainly there." She
added that she understands the concerns of fishermen who want
the bill to be "tight" enough to "keep a handle on it" when
other commissioners take over who "have other feelings."
Number 1539
CO-CHAIR MASEK moved to report CSHB 206 [version 22-LS0426\L,
Utermohle, 4/9/01] out of committee with individual
recommendations and the attached zero fiscal note.
[Representative Stevens clarified that the motion was on the
proposed committee substitute. There being no objection, CSHB
206(RES) was moved from the House Resources Standing Committee.]
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 6:32 p.m.
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