02/13/2002 01:00 PM House RES
| Audio | Topic |
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 13, 2002
1:00 p.m.
MEMBERS PRESENT
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 Beverly Masek, Co-Chair
Representative Mary Kapsner
COMMITTEE CALENDAR
HOUSE BILL NO. 288
"An Act relating to commercial fisheries limited entry permit
buy-back programs."
- MOVED CSHB 288(RES) OUT OF COMMITTEE
HOUSE BILL NO. 286
"An Act allowing a person to hold more than one commercial
fishing entry permit for a fishery; relating to the power of the
Board of Fisheries to establish fishing periods and areas for
subgroups of commercial fishing permits and commercial fishing
permit holders and to establish limits on the amount of fishing
gear that may be used by certain commercial fishing permit
holders; and providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 288
SHORT TITLE:LIMITED ENTRY BUY-BACK PROGRAM
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
01/14/02 1950 (H) PREFILE RELEASED 1/4/02
01/14/02 1950 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1950 (H) FSH, RES, FIN
01/16/02 1991 (H) COSPONSOR(S): STEVENS
01/18/02 2015 (H) COSPONSOR(S): HUDSON
01/30/02 2101 (H) COSPONSOR(S): FATE
02/01/02 2128 (H) COSPONSOR(S): DYSON
02/04/02 (H) FSH AT 3:30 PM CAPITOL 124
02/04/02 (H) Moved Out of Committee
MINUTE(FSH)
02/06/02 2163 (H) FSH RPT 5DP 1NR
02/06/02 2163 (H) DP: KERTTULA, SCALZI, DYSON,
WILSON,
02/06/02 2163 (H) STEVENS; NR: KAPSNER
02/06/02 2163 (H) FN1: ZERO(DFG)
02/06/02 2170 (H) COSPONSOR(S): WILSON
02/13/02 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 286
SHORT TITLE:OWNERSHIP OF MORE THAN ONE FISHERY PERMIT
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
01/14/02 1949 (H) PREFILE RELEASED 1/4/02
01/14/02 1949 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1949 (H) FSH, RES
01/30/02 2100 (H) COSPONSOR(S): FATE
02/04/02 (H) FSH AT 3:30 PM CAPITOL 124
02/04/02 (H) Heard & Held
MINUTE(FSH)
02/11/02 (H) FSH AT 3:30 PM CAPITOL 124
02/11/02 (H) Moved CSHB 286(FSH) Out of
Committee
MINUTE(FSH)
02/13/02 (H) FSH RPT CS(FSH) NT 4DP 3NR
02/13/02 (H) DP: DYSON, SCALZI, WILSON,
STEVENS;
02/13/02 (H) NR: COGHILL, KERTTULA,
KAPSNER
02/13/02 (H) FN1: ZERO(DFG)
02/13/02 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
MARY McDOWELL, Commissioner
Commercial Fisheries Entry Commission (CFEC)
Alaska Department of Fish and Game (ADF&G)
8800 Glacier Highway, Suite 109
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 288.
GERALD (JERRY) McCUNE, Lobbyist
for United Fishermen of Alaska (UFA)
211 4th Street, Suite 110
Juneau, Alaska 99801-1172
POSITION STATEMENT: Testified in support of HB 288 and HB 286.
SUE ASPELUND, Executive Director
Cordova District Fishermen United (CDFU)
P.O. Box 939
Cordova, Alaska 99574
POSITION STATEMENT: Testified in support of HB 288 and HB 286.
BRUCE WALLACE, Commercial Fisherman
P.O. Box 8572
Ketchikan, Alaska 99901
POSITION STATEMENT: Testified in support of HB 286.
RUDY JOHANSEN
P.O. Box 23359
Ketchikan, Alaska 99901
POSITION STATEMENT: Testified in support of HB 286.
BRENNON EAGLE
P.O. Box 576
Wrangell, Alaska 99929
POSITION STATEMENT: Testified on HB 286.
ALAN REEVES
P.O. Box 741
Wrangell, Alaska 99929
POSITION STATEMENT: Testified on HB 286.
DAVID BEDFORD, Executive Director
Southeast Alaska Seiners Association (SASA);
and Member, Board of Directors
United Fishermen of Alaska (UFA)
526 Main Street
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 286.
GORDY WILLIAMS, Legislative Liaison
Office of the Commissioner
Alaska Department of Fish and Game (ADF&G)
PO Box 25526
Juneau, Alaska 99801-5526
POSITION STATEMENT: Testified in support of HB 286.
ACTION NARRATIVE
TAPE 02-7, SIDE A
Number 0001
CO-CHAIR DREW SCALZI called the House Resources Standing
Committee meeting to order at 1:00 p.m. Representatives Scalzi,
Fate, Chenault, McGuire, and Stevens were present at the call to
order. Representatives Green and Kerttula arrived as the
meeting was in progress.
HB 288-LIMITED ENTRY BUY-BACK PROGRAM
[Contains discussion of HB 286]
Number 0010
CO-CHAIR SCALZI announced that the first order of business
before the committee would be HOUSE BILL NO. 288, "An Act
relating to commercial fisheries limited entry permit buy-back
programs."
Number 0094
REPRESENTATIVE SCALZI moved to adopt the proposed committee
substitute, version 22-LS1108\L, Utermohle, 02/13/02, as the
working document. There being no objection, Version L was
before the committee.
Number 0276
MARY McDOWELL, Commissioner, Commercial Fisheries Entry
Commission (CFEC), Alaska Department of Fish and Game (ADF&G),
informed the committee that the addition of Sections 1, 3, 4,
and 7 is to make other sections of the limited entry law
consistent with a change that HB 288 makes to [AS 16.43.]320.
She explained that under HB 288 only transferable limited entry
permits are eligible for a buy-back program under state buy-
back. In addition, current law allows nontransferable permits
to be bought out.
MS. McDOWELL indicated it was discovered during the drafting of
[Version L] that the other references to nontransferability need
to be cleaned up. Section 2 adds specific language to clarify
that the permit holder may voluntarily relinquish a permit.
Currently, the Limited Entry Act specifies that a permit is
forfeited to the state if the permit holder fails to make
his/her annual renewal fee payment for two consecutive years.
She explained that most people who want to relinquish their
permits stop making renewal payments, and after two years the
permit is relinquished.
Number 0389
MS. McDOWELL said there are occasions when a person may want to
relinquish his/her permit immediately, and those requests have
always been honored. She indicated since this is likely to be
used more frequently, there should be a provision that allows
voluntary relinquishment. She suggested this may be a
cornerstone for some of the buy-back programs and some of the
other fleet-consolidation programs that are anticipated in the
future. The final change in [Version L] adds a definition of
"optimum number" to the definition section of the Limited Entry
Act; current law speaks only to an optimum number and the
standards for establishing one.
MS. McDOWELL explained that the implication is that the
commission must choose one number, which is deemed the optimum
number of permits in a given fishery for all time. However,
that standard doesn't seem to recognize the variability in
factors that go into making that determination: fish prices,
harvest levels, the cost of harvesting, and other overhead
expenses that fluctuate from year to year and over time. Since
all of those variables affect what constitutes the ability of a
fisherman to make a reasonable rate of economic return in a
fishery and the number of permits it takes to harvest the
allowable commercial take in a fishery, those are the standards
that have to be used to set an optimum number. If any variable
changes significantly, the optimum number of participants in a
fishery would also vary.
MS. McDOWELL suggested it would be much more reasonable to
require the commission to determine the optimum-number range and
set the parameters - a more reasonable standard. She reiterated
that this would add an ability to set a number range, which the
commission thinks would make the optimum-number process more
meaningful and less subject to challenge. She stated that the
commission fully supports [Version L].
Number 0591
REPRESENTATIVE STEVENS suggested the word "optimum" means the
best, the ideal; therefore, it's not an optimum specific number,
but an ideal range of numbers.
MS. McDOWELL concurred, adding that standards in AS 16.43.290
set forth the determining [factors]. She explained that it is
what would create a reasonable return to a fisherman, avoid
economic distress, and keep enough fishermen "in the water" to
harvest the allowable take and so forth. Currently, the statute
allows one number that meets all of those criteria. She said
due to the fact that those [criteria] vary, the commission
thinks the foregoing would make more sense.
REPRESENTATIVE STEVENS suggested that optimum means the very
most; therefore, the very most and the range would be a
contradiction of words. He asked Ms. McDowell for
clarification.
MS. MCDOWELL said under statute, the word "maximum number" is
what is used in setting a limitation. She explained that
optimum-number provisions presume that once a fishery is
limited, a study is performed on the conditions in the fishery
and set at the optimum number - not meaning most, but under this
circumstance, meaning the best number for that fishery to meet
the standard set out in [AS 16.43.]290. She said then [CFEC] is
obligated under that statute; however, without this bill, [CFEC]
would be obligated to kick into the state buy-back program if
the optimum number were lower than the number already issued -
"if the optimum number shows that there are not enough permits
in the fishery."
CO-CHAIR SCALZI, speaking as the sponsor of HB 288, suggested it
is difficult because when [optimum] is applied to this
[provision] it has a different definition than if it were
applied to maximum sustained yield. He said they are both
subjective, but [ADF&G] doesn't have the authority to [determine
the definition] of optimum; it would be up to the courts to
decide that, if it were ever challenged.
Number 0774
REPRESENTATIVE McGUIRE suggested that in interpreting law, a
judge may refer to the actual definition. She referred to the
American Heritage Dictionary of the English Language for the
definition of optimum and read, "Optimum is the best or most
favorable condition, degree, or amount for a particular
situation; the most favorable or advantageous."
Number 0842
GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska
(UFA), informed the committee that UFA supports HB 288, which
allows each [individual] fishery to decide whether it wants to
use this option. As the bill is written, it allows the [permit
holder] to get an optimum number and look at it to see whether
it is satisfactory. It creates an option for a fishery to
institute a state buy-back; however, it also gives the [fishery]
an option to get out anytime.
MR. McCUNE said under the old statute, once the [fishery] orders
an optimum number, it is almost locked into a buy-back.
Therefore, [HB 288] cleans this up and gives the fleets an
option that all of the permit holders can look at to see if they
want to use this option for their particular fishery. He stated
that UFA supports [legislation] that gives fleets the choice to
be more viable and more efficient in their area; this is one
option available for people to pick from and consider, whether
it will fit their fishery or not.
CO-CHAIR SCALZI said HB 288 and HB 286 are for consolidation
purposes. He referred to a picture that he said was a good,
graphic example of a fishery in Bristol Bay. He said a 25- to
50-percent reduction in gear and effort there would [maximize]
some of the fisheries currently before the committee.
Number 0980
REPRESENTATIVE FATE asked what will prevent this situation from
continuing if it is a voluntary option; also, why would a person
volunteer to relinquish a permit or sell it back to the
commission?
CO-CHAIR SCALZI said statutes allow that to happen now; in a
buy-back of permits, also purchased must be the boat, net, and
all of the equipment - a cumbersome and expensive process. He
said HB 288 would streamline the current process available to
the fishing industry. He said there has not been a buy-back
program from the inception of limited entry because of some of
these [issues]. He said the hope is that fleets want to
consolidate and [maximize]; HB 288 may help by [streamlining]
the process. He said the language that allowed the program to
buy back the boats, gear, and so forth had been removed from
statute; only the permits may be bought back. He explained that
because the program is voluntary, it does not stop boats and
gear from being sold as a package; the decision is left to the
seller. However, HB 288 alleviates the burden if just the
permit is sold.
REPRESENTATIVE FATE suggested that HB 288 is directed toward the
big fleets and the blue-water fishery. He asked whether it is
also going to be applicable to the fisheries along rivers.
CO-CHAIR SCALZI said yes; it is applicable to any limited entry
fishery in the state.
Number 1194
SUE ASPELUND, Executive Director, Cordova District Fishermen
United (CDFU), testified via teleconference. She told the
committee CDFU views this legislation as "clean-up" language.
Furthermore, CDFU appreciates the effort to make the buy-back
provision more flexible and responsive to the changing needs of
the salmon industry. She said she was excited to see that the
proposed committee substitute (CS) [Version L] provides for an
optimum range rather than a fixed number. The range more
accurately reflects the variability that occurs in any seafood
harvest. She urged the committee's support in [moving out] the
proposed CS.
CO-CHAIR SCALZI noted that Kathy Hansen had presented a letter
of support from the Southeast Alaska Fishermen's Alliance to the
committee; the Alaska Trollers Association had also presented a
letter of support.
Number 1270
REPRESENTATIVE FATE moved to report CSHB 288 [version 22-
LS1108\L, Utermohle, 2/13/02] out of committee with individual
recommendations and a zero fiscal note.
Number 1321
CO-CHAIR SCALZI said his intent would be to bring HB 288 to the
floor at the same time as HB 286. He said he thought
consolidation, staffing, and so forth fit into one category and
should be heard at the same time.
CO-CHAIR SCALZI asked if there was any objection to the motion.
There being no objection, CSHB 288(RES) was moved out of the
House Resources Standing Committee.
HB 286-OWNERSHIP OF MORE THAN ONE FISHERY PERMIT
[Contains discussion of HB 288]
Number 1351
CO-CHAIR SCALZI announced that the next order of business before
the committee would be HOUSE BILL NO. 286, "An Act allowing a
person to hold more than one commercial fishing entry permit for
a fishery; relating to the power of the Board of Fisheries to
establish fishing periods and areas for subgroups of commercial
fishing permits and commercial fishing permit holders and to
establish limits on the amount of fishing gear that may be used
by certain commercial fishing permit holders; and providing for
an effective date."
Number 1355
[There was a motion to adopt CSHB 286(FSH), but that version was
already before the committee.]
CO-CHAIR SCALZI, speaking as the sponsor of HB 286, pointed out
that the bill has been changed from a "stacking" bill to a
"consolidation" bill. He explained that there was concern that
giving too much latitude at this early stage of the
revitalization of fisheries to the Board of Fisheries may result
in some unnecessary harm, although well-intended by the board.
He referred to the "Chignik proposal" in which the board was
trying help the industry benefit but may have inadvertently
caused some downstream problems.
CO-CHAIR SCALZI reported that United Fishermen of Alaska (UFA)
didn't wish to move forward with the stacking provision, but
felt HB 286 was important for consolidation reasons. He
explained that it doesn't require a buy-back permit to take
place, which requires optimum numbers and the state's entering
into the buy-back program and administering it. He said [CSHB
286(FSH)] would allow an individual in an area to hold more than
one permit. Aside from the statutory language, there would be
no other cumbersome regulations included. It also would allow
fishermen to form associations within their gear group in a
limited entry area; therefore, the fishermen can assess
themselves a tax. He indicated this would provide the fishing
industry the tools to modify their business practices, be
innovative, and be more self-sufficient.
Number 1599
REPRESENTATIVE KERTTULA asked how HB 286 corresponds with HB
288.
CO-CHAIR SCALZI explained that sometimes a buy-back plan would
work in one area, whereas it may not work in another; this is
the situation with HB 286. He indicated that if a group of
people owned permits, they could purchase an additional permit
without having to formulate a large buy-back program. He said
the incentive for a person to [purchase an additional permit] is
questionable because it would require one boat to be taken out
of the water. He added that there is a distinction between the
two programs.
REPRESENTATIVE KERTTULA asked if the two can be used together;
more specifically, can a [person] take a consolidation and then
have a buy-back?
CO-CHAIR SCALZI said yes; a buy-back plan is voluntary. He said
in the instance that a [person] owned two permits and there was
a buy-back plan allowed, that [person] could choose to keep or
sell both [permits].
Number 1706
BRUCE WALLACE, Commercial Fisherman, testified via
teleconference. He told the committee he appreciates the
simplicity [consolidation] allows and would support that.
However, if the stacking component isn't there, and the ability
to modify the fleet regardless of where it might be located and
how the [modification] might be done, it probably diminishes the
basic property that he supports, although he does support the CS
[CSHB 288(FSH)].
Number 1765
RUDY JOHANSEN testified via teleconference. He told the
committee that he supports the testimony given by Mr. Wallace.
He said he thought that the stacking program should provide more
to gain than just a permit; in addition, he would like to see
something that [promotes] the fishery.
Number 1799
BRENNON EAGLE testified via teleconference. He told the
committee he would like them to consider adding the Southeast
pot shrimp fishery, allowing it some of the same tools that the
salmon fishery would be allowed. He said a number of
individuals in the [Southeast pod shrimp fishery] have talked
about wanting to do some type of consolidation or [maximization]
ever since limited entry became available five years ago;
however, they didn't have a "vehicle" to do it. He said this
would be the exact vehicle needed.
CO-CHAIR SCALZI said initially HB 286 was not discriminatory to
other fisheries; however, since the UFA board met, they
requested it be modified to just salmon fisheries. He added
that he supports the concept of [adding other fisheries]; this
is something that the committee would be considering in the next
few weeks. He remarked that the committee needs to ensure that
there is consolidated support across all group users.
Number 1886
ALAN REEVES testified via teleconference. He told the committee
he agreed with Mr. Eagle's testimony. He said he thought any of
the tools could be beneficial, although the [permit holder]
doesn't have to use them. He commented that he would like to
see the Dungeness [crab] fishery be added. He explained that he
had been in this fishery for 20 years, and has seen the fishery
go from relaxed to really aggressive. He said he'd also heard
many discussions on trying to solve some of the overcrowding
issues; therefore, he thinks this would be beneficial to have HB
286 as a tool.
MR. REEVES explained that when the fisheries were originally
divided up amongst all of the fishermen, the division was
according to high abundance, the top amount of pots in the
fishery - fishermen actually participating at the time. He said
possibly because of a high abundance and a high price, fishermen
might have survived during that time; however, now that it has
become a high abundance and a low price with the same amount of
permits, it is [difficult] to survive; consequently, it is a
"starvation" effect. He said he would applaud any tools that
can be used to fix the fisheries and get them healthy again.
Number 2014
DAVID BEDFORD, Executive Director, Southeast Alaska Seiners
Association (SASA); and Member, Board of Directors, United
Fishermen of Alaska (UFA), informed the committee that he is
licensed to practice law in Alaska. He said he believes HB 286
is of great importance to the commercial fishermen in Alaska; in
addition, [SASA] had a great deal to do with the current form of
HB 286. He told the committee that these are hard times in the
commercial salmon fisheries in Alaska; consequently, in Bristol
Bay permits are currently selling for one-tenth of the value
they sold for ten years ago. The price the permit commands is a
benchmark for the value that people think the fishery will
produce in the future; over [the past] ten years, the estimate
of that value has dropped to 10 cents on the dollar.
MR. BEDFORD said this year in Southeast Alaska dozens of purse-
seine vessels won't have markets; they will be tied to the dock,
and each vessel employs five people. Hundreds of jobs will be
lost in small communities that cannot afford to lose those jobs
because there's no market for the fish. Fishermen around the
state see the value of the fish that they harvest plummeting.
He explained that sockeye salmon in Bristol Bay, which brought
over a dollar a pound ten years ago, brought 40 cents a pound in
2002. He said in Southeast Alaska, pink salmon sold for 33
cents a pound in the mid-1980s; this year, the price is expected
to be approximately 10 cents a pound or less.
Number 2125
MR. BEDFORD said these sorts of facts underscore the kinds of
concerns that commercial fishermen have for the state of their
industry. However, the problem is not just for commercial
fishermen, but also for coastal communities and Alaska as a
whole. The commercial fishing industry is the largest private-
sector employer in the state. In many coastal communities, over
50-percent of the basic private-sector employment is in the
commercial fisheries. He suggested that as the salmon fisheries
go either up or down, so goes the economy in those regions of
the state. He said HB 286 is part of commercial fishermen's
efforts to structure a program to help themselves in the face of
difficult times, not asking for money but offering some simple
tools through legislation to allow fishermen to deal with these
problems.
MR. BEDFORD suggested the solution is conceptually very simple:
if there are fewer fish and a lower price, then one way to deal
with this is by having fewer nets in the water - reducing the
number of fishermen. He offered Bristol Bay as an example where
there was high production in the early 1990s that has dropped
off; it is still a substantial, harvestable surplus but not the
huge bounty of prior years. He suggested [reducing the number
of fishermen] would assist fishermen in getting a reasonable
rate of return on their capital investment.
MR. BEDFORD said in developing HB 286, SASA had a number of
concepts in mind. Primarily, SASA felt that fishermen should
bear the primary responsibility for dealing with these problems;
therefore, SASA believes the proposed consolidation program
should be voluntary and regional, and that the programs put in
place should be accountable to the fishermen and to Alaska.
Number 2225
MR. BEDFORD offered an overview of [CSHB 286(FSH)]. It allows
fishermen to hold two permits for the purpose of fleet
consolidation. It makes no other changes to the limited entry
laws; the idea is to make this a low-impact program. It also
allows fishermen to set up a nonprofit association - an
association under existing law, such as a (c)(5) nonprofit
corporation - and proceed from there. It allows fishermen to
vote on whether to tax themselves to pay for consolidation, with
a two-thirds majority required - not of those voting, but of all
permit holders - before a levy can be assessed. In addition, it
establishes administrative procedures to protect the interests
of fishermen and of the state.
MR. BEDFORD said in regard to responsibility, fishermen want to
set up a consolidation program in which they would bear the
upfront costs. If fishermen establish a nonprofit association,
then they will pay to do that; they will bear the burden of
communicating to the people of the fishery what they have in
mind and trying to persuade them to vote in order to have a two-
thirds majority. Subsequently, through a consolidation program,
fishermen would have the choice of assessing themselves to pay
for it, if the tax is supported by two-thirds of those in the
fishery. Fishermen would tax themselves and then use that to
accomplish their objectives; they will then monitor and be
responsible for administering the program.
MR. BEDFORD explained that the two-thirds-majority requirement
for the assessment was put into place because it was felt a high
bar was appropriate before assessing people this [type] of tax.
The program is voluntary not only at the outset; anytime they
feel the program isn't operating to their [advantage], if 25-
percent of them petition, then another vote will be held and
they can vote to repeal the assessment, should they choose to do
so.
Number 2370
MR. BEDFORD said in regard to the program's being regional, it
was felt that it was really important that people have autonomy
in this; thus they have control over their local interests. In
each region of the state, each particular fishery should conduct
it's own program. For example, Southeast Alaska has a seine
fishery, troll fishery, and gillnet fishery; each would have to
speak for itself, and no other fishery could impose anything
upon it. Similarly, should the gillnet fishery decide to do
something, that bears no implication for the gillnet fishery in
Prince William Sound, Cook Inlet, or Kodiak.
MR. BEDFORD said accountability is the bulk of HB 286; the
substantive part of that is a couple of paragraphs, but the bulk
of it is that a vote will be set up that kind of "sidebars"
where they have to be on that. An association will be set up
that [allocates] responsibility; in addition, an annual business
plan is [required] and an annual report of their activities. He
said these things will be provided to the members of the
organization and all of the fishermen, and to the state so that
it is available to the public. He recommended HB 286 as a
really good step forward in trying a solution.
Number 2474
REPRESENTATIVE KERTTULA asked how the permits will flow - in
particular, in relationship to the buy-back at the same time.
MR. BEDFORD said it depends on that particular group's decision.
He indicated if there are more permits than the fishery can
support, then they could collect an assessment from the
fishermen and possibly extinguish some permits.
MR. BEDFORD offered another approach: collect an assessment and
contract with people who hold a second permit to not fish that
permit. He indicated that doing so would pull a certain number
of permits out; consequently, if a lot of fish start coming in
and a whole bunch of money is made, it's of more value to those
people to sell that permit than to retain it. He suggested
there would be a free-market control on how many permits would
be able to be pulled out; however, if the fisheries really
bottomed out, permits could be bought or contracts could be made
cheaply. He indicated if the fishery is going better, however,
then the permits are going to be sold because they are going to
be worth a lot of money.
REPRESENTATIVE KERTTULA asked Mr. Bedford if that puts him at
the stead of the Commercial Fisheries Entry Commission (CFEC) in
making decisions on how many permits should be issued.
Number 2586
MR. BEDFORD said no. T He said they are going to tax themselves
and then use that to accomplish their objectives; they will then
monitor and be responsible for administering the program.he
ultimate authority for that lies with CFEC. He indicated the
supreme court had ruled on a case that there cannot be a fishery
that is too exclusive. He said any fishery that is going to put
this type of program together is going to have to "bear that in
the back of their minds." He suggested that commercial
fishermen aren't afraid of being too exclusive right now; a lot
of permits aren't being fished because there is no money in the
fisheries.
MR. BEDFORD said some of the elements in determining how many
permits are out there include economic viability; if it isn't
economically viable, then it's not an immediate concern. He
remarked that the people he works for would love to see the day
when there are not enough permits out there because too much
money is being made; however, they don't think that is going to
happen soon. He added that there is a constitutional sidebar on
this.
REPRESENTATIVE KERTTULA asked if CFEC determines the number of
permits issued.
MR. BEDFORD said there is a process by which CFEC can determine
the optimum number; however, CFEC doesn't determine any more
than "we" would on how many permits to fish. He indicated CFEC
does not designate a specific number of permits for fishing, but
discloses the number of permits out there. He said that would
not change under HB 286. He cited the Kodiak fishery as an
example of the current economics: 50 percent of the purse-seine
permits are pieces of paper in somebody's filing cabinet. He
said that is a response to economic circumstances. He added
that [HB 286] is a slightly different way of doing exactly the
same thing; it gives people more control instead of just flowing
with the immediate market circumstance.
REPRESENTATIVE KERTTULA asked where the money goes in the event
that a fisherman "goes in," there's not an optimal [number of
permits], there is an association, there is a consolidated
permit, CFEC does a buy-back, and in the interim the association
terminates.
MR. BEDFORD said there is a possibility that some associations
would collect an assessment and then loan money to people to buy
a second permit. He said he doesn't know exactly how they would
deal with those kinds of circumstances.
REPRESENTATIVE KERTTULA asked Mr. Bedford if he would leave that
to the association.
MR. BEDFORD said he thought [CFEC] would have to deal with that
on an individual basis and figure out what sort of program makes
sense to them. In terms of the interface between the sort of
private program and the CFEC buy-back program, he said first
off, the CFEC program is fairly cumbersome and requires an
initial assessment of what the optimum number is. There are
political steps involved, such as an appropriation to the
department. In addition, it requires resources, which is the
initial impediment.
MR. BEDFORD explained that there is a lengthy review process
followed by setting up a buy-back program; however, there is the
problem of how to fund it. He suggested CFEC would come back to
the [legislature] at that point. He said if it's a private
consolidation program, then what is the motivation for the
fishermen to go to CFEC? If [fishermen] are running a program
that is at a reasonable level, then why go to CFEC at that point
and ask for an optimum-number study in a buy-back? He indicated
CFEC may question why those scarce resources should be allocated
to [that fisherman] as opposed to somebody else.
Number 2765
REPRESENTATIVE KERTTULA said one of the "sidebars" she would
suggest to any association is that if an individual has gotten
consolidation and possibly even received money - and in the end
that person is going to try to get rid of the second permit -
then that money needs to go back to the association. She said
this isn't included in [HB 286].
Number 2795
MR. BEDFORD remarked that one thing he finds so fascinating
about HB 286 is that it is so infinitely flexible. He indicated
that any one possibility opens up all kinds of other ends, and
that people's creative efforts result in really excellent ideas.
Number 2814
CO-CHAIR SCALZI said [CSHB 286(FSH)] is radically different from
the original draft because of the stacking provisions that were
removed. He indicated that in addition to the good, there are
downstream effects that can't be foreseen. He referred to
earlier testimony about expanding HB 286 to [include] other
fisheries. He said UFA's position is to only include salmon
this year; however, he would like to hold HB 286 to give people
an opportunity to work with UFA and [SASA] to see if there is
that much concern about expanding [HB 286] to other fisheries
throughout the state. He indicated the importance of completing
HB 286 this year. He asked Mr. Bedford for his view.
MR. BEDFORD remarked that it is tremendous flattery to hear
people say that they would like to take advantage of [HB 286].
He explained that when UFA reviewed this, members felt this was
a workable and advantageous program for the salmon fisheries;
however, they didn't feel they were in a position to speak for
[other fisheries]. He said he didn't know whether HB 286 could
be [amended] to include a single Dungeness [crab] or shrimp
fishery, although it might be possible. He said the reason the
bill was drawn narrowly was because they thought their expertise
was narrow.
CO-CHAIR SCALZI said that is why there were no other fisheries
added to this; in addition, he wouldn't support writing the bill
for a specific fishery. He indicated the bill should blanket
all limited entry permits.
TAPE 02-7, SIDE B
Number 2960
GORDY WILLIAMS, Legislative Liaison, Office of the Commissioner,
Alaska Department of Fish and Game (ADF&G), informed the
committee that ADF&G supports both industry and government in
getting the kinds of tools they may need to address changing
circumstances in the salmon fisheries; HB 286 is a step in that
direction. He said the bill is permissive in nature, which
allows individuals or groups of individuals to make decisions
for themselves and for their fishery; that's important because a
one-size-fits-all doesn't necessarily work with management or
allocation in the state.
MR. WILLIAMS referred to Co-Chair Scalzi's intent to hold HB
286. He said ADF&G would continue to work with the sponsor and
some interested parties on some specific issues that relate to
the department and address those in the interim. He indicated
he would be available to answer questions the next time HB 286
is heard.
Number 2920
CO-CHAIR SCALZI reflected on Mr. Williams' comment about
expanding HB 286 to include all fisheries. He indicated he
would like ADF&G to consider expanding the bill.
Number 2903
GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska
(UFA), told the committee that owning more than one permit is
not going to fit every fishery; however, it would be a viable
option for a small setnet fishery. The fishery would have to
decide economically whether buying somebody out of that site and
holding on to that permit would foster gaining more income. He
said [HB 286] would work in fisheries where the permit prices
are currently very low, which are fully allocated fisheries
where all of the permits are fishing. He suggested [HB 286]
would not work very well if there are many dormant permits or
where it is dictated by the market how many people fish, but it
is an option to use. He said the difference is that the
voluntary one goes through the state.
MR. McCUNE suggested that even if CFEC comes up with an optimum
number, some individual could challenge the number and take it
to court. He indicated he wasn't deterred by the Johns [v.
Commercial Fisheries Entry Comm'n] case. He said this is
because there are people not fishing; furthermore, the way some
of the fisheries are currently structured makes it difficult to
make a profit. He added that if that point is reached, then
"we" are doing something positive. He explained that UFA is
trying to ensure that regional fishermen can choose these
options to use as tools in their particular fishery.
MR. McCUNE said taking the net out of the water is a good thing
anytime for anybody in any fishery; consequently, this provides
more for everybody. He indicated that a fisherman would remove
a net for himself as well as the other fishermen in that
fishery. The decision has to be made by the fisherman of
whether to hold that permit. He said the intent is to make
fleets more efficient and more viable, to get the quality up,
and to [fulfill] consumer demands. He remarked that it is no
longer a "headed-and-gutted" market, but is either frozen or
fresh fillets; farmed fish is dictating the market.
Number 2785
MR. McCUNE said in addition to making fleets efficient, [HB 286]
would ensure better quality and possibly cut costs in between
the canneries. He indicated UFA's primary intention is to make
the harvesters healthy statewide. He remarked that not every
fishery is going to be healthy overnight because some are
waiting for better returns than they had before. He remarked
that it's always a cycle, whether there are good returns or not.
MR. McCUNE said he knows that some people were disappointed in
not having incentives and stacking permits; however, UFA didn't
want to move into a whole bunch of options and ranges, which
would require going to the Board of Fisheries to do that. He
remarked that he thinks this needs to be done over so many
years. He'd told the UFA board it would be about a five-year
[process] to go through all of the options and put the options
on the table. He said the next round would be coming this fall,
and this is a good option to move forward. He indicated UFA
would be talking about other options and including other
fishermen in the discussion.
MR. McCUNE encouraged committee members to call him anytime with
questions, concerns, or comments. He also encouraged fishermen
to contact him to talk about [current activities]. He added
that UFA is trying to be responsible to everybody and to make
the best options available to the entire state and every
fishery.
Number 2700
REPRESENTATIVE McGUIRE applauded UFA's efforts. She said having
too many nets in the water has been a problem that has been
increasing yearly. She said she thought it was "neat" to see an
interested group take initiative and come to the legislature
with some solutions and ways to try to "go down that road on
your own and experiment."
MR. McCUNE remarked that fishermen are very independent;
therefore, they are trying to come up with solutions that don't
require state money and that they can institute themselves. He
added that fishermen can make those choices as to whether to
assess themselves in a particular fishery. He said if it was a
small fishery, then it would be an easy talk; however, in some
other fisheries that are fully allocated or where the permits
are not fishing, currently half are not fishing; they are going
to have to get together and figure out the best course of
action. He said he thought [HB 286] would force a lot of people
to get together and start discussing their fishery and the best
options for each fishery across the state.
CO-CHAIR SCALZI reiterated that he would like to see what
dialogue is generated by other members contacting UFA in regard
to opening HB 286 up to other fisheries.
MR. McCUNE indicated the dialogue is currently being generated
and that he would get back to the committee.
Number 2594
SUE ASPELUND, Executive Director, Cordova District Fishermen
United (CDFU), testified via teleconference. She informed the
committee that passage of HB 286 would provide fishermen with
one of the simplest and most immediate tools to take gear out of
the water in distressed fisheries. She remarked that the
fishing industry needs "a variety of tools in the box" that
provide the ability to pursue structural changes that they
believe are necessary for the fishing industry to successfully
compete in the global marketplace. However, the legislature's
support is needed for those efforts to address the concerns of
the fishing industry. She added that [CDFU] would appreciate
the legislature's support on [HB 286].
Number 2500
CO-CHAIR SCALZI indicated HB 286 would be held for further
consideration.
ADJOURNMENT
Number 2455
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:05 p.m.
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