Legislature(2021 - 2022)SENATE FINANCE 532
04/12/2022 01:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB45 | |
| SB98 | |
| SB29 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 98 | TELECONFERENCED | |
| + | SB 29 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 45 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 12, 2022
1:50 p.m.
1:50:04 PM
CALL TO ORDER
Co-Chair Bishop called the Senate Finance Committee meeting
to order at 1:50 p.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson [via teleconference]
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Natasha von Imhof
Senator David Wilson
ALSO PRESENT
Senator Peter Micciche, Sponsor; Konrad Jackson, Staff to
Senator Micciche; Ken Coleman, President, Eastside
Consolidation Association, Kenai; Amber Every, Set Net
permit holder, Kenai; Sarah Frostad-Hudkins, Set Net permit
holder and fisherwoman, Kenai; Shannon Martin, Executive
Director, Kenai River Sportfishing Association.
SUMMARY
SB 29 COOK INLET: NEW ADMIN AREA;PERMIT BUYBACK
SB 29 was HEARD and HELD in committee for further
consideration.
SB 45 AGE FOR NICOTINE/E-CIG; TAX E-CIG.
CSSB 45(FIN) was REPORTED out of committee with
one "do pass" recommendation and with three "no
recommendation" recommendations; and with one new
zero fiscal note from the Department of Health
and Social Services, one new fiscal impact note
from the Department of Revenue, and one new
Statement of Zero Fiscal Impact from the Office
of the Governor and Combined Departments.
SB 98 ADULT FOSTER CARE FOR DISABLED
CSSB 98(FIN) was REPORTED out of committee as
amended with four "do pass" recommendations and
with one zero fiscal note from the Department of
Health and Social Services and two fiscal impact
notes from the Department of Health and Social
Services.
SENATE BILL NO. 45
"An Act raising the minimum age to purchase, sell,
exchange, or possess tobacco, a product containing
nicotine, or an electronic smoking product; relating
to transporting tobacco, a product containing
nicotine, or an electronic smoking product; relating
to the taxation of electronic smoking products; and
providing for an effective date."
1:51:10 PM
Co-Chair Bishop relayed that it was the third hearing for
SB 45. He intended to review the fiscal notes and look to
the will of the committee.
Co-Chair Bishop discussed a new fiscal note from the
Department of Revenue, OMB Component 2476. He cited a
projected $2.2 million increase in revenue with the 45
percent tax rate and by year 2028 it was estimated to be at
$2.4 million per year. There was no implementation cost or
added cost to update the tax revenue management system.
Co-Chair Bishop discussed a new zero fiscal note from the
Department of Health, OMB Component 2818. He detailed that
the bill would raise the minimum legal age to purchase
tobacco and nicotine products from 19 to 21. He read from
the fiscal note Analysis on page 2:
The bill strengthens restrictions on underage access
by requiring licensed tobacco retailers to verify age
at the time of purchase and at delivery when
transporting or shipping tobacco products in Alaska.
Co-Chair Stedman MOVED to report CSSB 45(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSSB 45(FIN) was REPORTED out of committee with one "do
pass" recommendation and with three "no recommendation"
recommendations; and with one new zero fiscal note from the
Department of Health and Social Services, one new fiscal
impact note from the Department of Revenue, and one new
Statement of Zero Fiscal Impact from the Office of the
Governor and Combined Departments.
1:53:23 PM
AT EASE
1:55:07 PM
RECONVENED
SENATE BILL NO. 98
"An Act relating to medical assistance for recipients
of adult foster care services; establishing an adult
foster care home license and procedures; and providing
for the transition of individuals from foster care to
adult foster care homes."
1:55:10 PM
Co-Chair Bishop relayed that it was the third hearing of SB
98. It was the committees intention to consider an
amendment, cover fiscal notes, and look to the will of the
committee.
1:55:36 PM
AT EASE
1:55:43 PM
RECONVENED
Senator Wielechowski MOVED to ADOPT Amendment 1, 32-
GS1708\G1 (Foote, 4/7/22).
Co-Chair Bishop OBJECTED for discussion.
Senator Wielechowski spoke to Amendment 1. He referenced a
short email from a constituent (copy on file). He read from
the email, which communicated a story about a man being
denied the right to legally adopt a child he raised because
he was married to a person other than the legal mother, and
his spouse did not propose to be part of the adoption.
Senator Wielechowski relayed that he drafted Amendment 1 in
response to the email. The amendment was simple and would
allow an adult person to be adopted if the adopters spouse
consented to the adoption.
Co-Chair Bishop WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered. Amendment 1 was
ADOPTED.
Senator Wielechowski discussed a zero fiscal note from the
Department of Health, OMB Component 3234.
Senator Wielechowski discussed a fiscal note from the
Department of Health, OMB 245, with $119,000 cost projected
for FY 23, composed of: $95,000 in personal services for a
range 16 Community Care licensing Specialist I, $10,000 for
travel, $10,000 for services, and $4,000 for commodities.
The note dropped to $116,000 in FY 24 through FY 28 due to
a decrease in commodities.
Senator Wielechowski discussed a fiscal note from the
Department of Health, Senior and Disability Services, OMB
Component 2663, which showed zero fiscal impact for FY 23.
There was a projected fiscal impact of $127,000 in FY 24
through FY 28 composed of $117,000 in personal services,
$2,300 for travel, $4,700 for services, and $3,000 for
commodities. The funding source for the note was $63,500 in
federal receipts and $63,500 from a General Fund match from
FY 24 through FY 28.
Senator Wielechowski MOVED to report CSSB 98(FIN) out of
Committee as amended with individual recommendations and
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
CSSB 98(FIN) was REPORTED out of committee as amended with
four "do pass" recommendations and with one zero fiscal
note from the Department of Health and Social Services and
two fiscal impact notes from the Department of Health and
Social Services.
2:00:51 PM
AT EASE
2:02:33 PM
RECONVENED
SENATE BILL NO. 29
"An Act relating to the powers of the Alaska
Commercial Fisheries Entry Commission; relating to
administrative areas for regulation of certain
commercial set net entry permits; establishing a buy-
back program for certain set net entry permits;
providing for the termination of state set net tract
leases under the buy-back program; closing certain
water to commercial fishing; and providing for an
effective date."
2:02:42 PM
Co-Chair Bishop relayed that it was the first hearing for
SB 29. The intention of the committee was to hear a bill
introduction and Sectional Analysis, take invited
testimony, and set the bill aside.
2:03:12 PM
SENATOR PETER MICCICHE, SPONSOR, relayed that he did not
like the fact that a bill such as SB 29 had to be brought
forth. He recounted that his community had struggled in
previous years and currently community members were lucky
if they had a few days of the year to fish due to
regulations and other occurrences. He asserted that twelve
generations of Alaskans had fished in the area, and the
value of the peoples investment was gone. The bill would
remove about half of the set netters in the Eastside setnet
fishery, which was the fishery of contention. He recounted
that there was a reduction in the amount of King salmon,
which were linked to what individuals were allowed to catch
in Sockeye salmon. He discussed investment in fishing
preparation.
Senator Micciche asserted that the bill was unique. He
relayed that the sport, commercial, and personal use
fisheries groups had come together in agreement on a bill
that would reduce the amount of gear used on the East side,
bring more King salmon to the river, and provide some
compensation for fishers to retire or go on to other
activities.
Senator Micciche reiterated that he wished he were not in
the position to sponsor the bill, since all of the families
involved wanted to continue fishing. He hoped that if the
bill were to pass, some families could continue to fish.
2:07:28 PM
KONRAD JACKSON, STAFF TO SENATOR MICCICHE, addressed a Bill
Summary document (copy on file):
Section 1: Amends the uncodified law of the State of
Alaska by adding a new section which establishes that
this legislation may be known as the East side of Cook
Inlet Set Net Fleet Reduction Act.
Section 2: Amends the uncodified law of the State of
Alaska by adding new Legislative findings and intent
relating to the bill.
Section 3: Amends AS 16.43.200(b), clarifying the
Alaska Commercial Fisheries Entry Commission's
(commission) specific authority to divide an existing
commercial fishing administrative area into two or
more separate areas.
Section 4: Amends AS 16.43.200 by adding 2 new
subsections:
(c) Establishes an area of the Upper Subdistrict of
the Cook Inlet Central District as a distinct
administrative area separate from the Cook Inlet
Central District on December 31, 2019.
This area is made up of the statistical areas
identified on January 1, 2019 as 244-21, 244-22, 244-
31, 244-32, 244-41 and 244-42.
(d) Provides that an individual who has a set net
permit for the Cook Inlet Central District on
December 31, 2019 is not entitled to set net in
the administrative area created under this
section as of January 1, 2020 unless the permit
has been reassigned to that new administrative
area.
Section 5: Amends the uncodified law of the State of
Alaska by adding a new section which provides how the
commission will determine whether an individual who
holds a set net entry permit in the Cook Inlet Central
District on January 1, 2022 is reassigned an entry
permit for the administrative area established under
AS 16.43.200(c) (added by sec. 4 of the bill) or the
portion of the Cook Inlet Central District that was
not assigned into the administrative area established
under AS 16.43.200(c).
Section 6: Amends the uncodified law of the State of
Alaska by adding a new section which defines the
appeals process in the new administrative area. This
section provides that a provisional license will be
issued pending resolution of an appeal and the
provisional permit holder may cast a provisional
ballot in the election established under section 7.
Section 7: Amends the uncodified law of the State of
Alaska by adding a new section which requires on April
1, 2022 an election be conducted by the commission
among persons holding permits in the new
administrative area, to affirm support or opposition
to a buy-back program.
Requires the commission provide public notice of the
election, hold public meetings concerning the
election, and clarify the details of the buy-back
program to those participating in the election.
2:11:46 PM
Mr. Jackson continued to address the Bill Summary:
Section 8: Amends the uncodified law of the State of
Alaska by adding a new section which establishes the
set net entry permit buy-back program for certain
permits fished in the administrative area established
under AS 16.43.200(c) (added by sec. 4 of the bill).
This section will only take effect if approved in an
election by the set net entry permit holders in the
administrative area established under AS 16.43.200(c).
If it is approved, the buy-back program will become
law 30 days following notification of the Lt. Governor
(see secs. 10 and 12). Sets qualifications for
participation in the program, provides the buy-back
price for permits, requires that the purchased permits
be cancelled and not re-issued, provides that certain
waters that were fished with permits purchased under
the program will be closed to future commercial salmon
fishing, and specifies other details of the buy-back
program.
Section 9: Amends the uncodified law of the State of
Alaska by adding a new section which requires the
commission to provide a written report to the
Legislature on the status of the program not later
than January 15, 2028.
Section 10: Amends the uncodified law of the State of
Alaska by adding a new section which requires the
chair of the commission to notify the Lieutenant
Governor and the Revisor of Statutes of the outcome of
the election held under section 7.
Section 11: Repeals sections 1, 2, 8 and 9 on June 30,
2028.
Section 12: Amends the uncodified law of the State of
Alaska by adding a new section which provides that
secs. 1, 2, 8, and 9 take effect only if notice is
provided under section 10 that the buy-back program
established under section 8 was approved.
Section 13: Effective Date Clause. Section 4 of the
bill takes effect January 1, 2022.
Section 14: Effective Date Clause. Provides if
sections 1, 2, 8 and, 9, take effect under section 12,
they take effect 30 days following the date of the
notice provided in section 10 that the buyback program
was approved.
Section 15: Effective Date Clause. Except as provided
in sections 13 and 14, the bill takes effect
July 1, 2021.
2:14:52 PM
Senator Hoffman expressed that the problem with the lack of
Chinook salmon was statewide and thought that the problem
needed to be addressed. He had met several times with the
Department of Fish and Game commissioner and had emphasized
following the constitution in managing resources under the
sustainability clause. He thought the matter was not being
addressed by the department nor by the Board of Fisheries.
He understood that problems existed in commercial
fisheries, and referenced numerous conversations with the
Co-Chair Bishop regarding the subsistence lifestyle being
wiped out on the Kuskokwim River and Yukon River. He
pointed out that salmon fishing was a predominant
livelihood for those that lived along the river. He cited
that the situation had gotten so bad on the Yukon River
that the Bristol Bay Native Corporation had to provide
assistance to communities. He stressed that people in the
area had reliance on salmon to live.
Senator Hoffman asserted that any efforts should be how to
reverse the current situation for Chinook salmon throughout
the state. He thought trying to come up with monetary fixes
for the issue was ignoring the problem. He thought the
state needed to redirect itself to be in a position of
having the most prized salmon in the world. He questioned
what kind of precedent the bill would set. He represented
the Bristol Bay area, which constituted the largest salmon
harvest in the world. He pondered that law already existed
for a buy-back program, and that to change the law as
proposed would set a bad precedent and was not a solution
to the real problem.
2:19:24 PM
Senator Micciche strongly agreed with Senator Hoffman
regarding the big picture issue. He suggested that the
problem in the case of the East side setnet fishery was
that there was a flood of Sockeye salmon that individuals
were unable to participate in catching. He contended that
the problem had been present in the Kenai area for 35
years. He thought each case needed to be considered
individually. He agreed that bycatch and other matters that
affected fisheries needed to be understood and funded. He
explained that there were no state dollars proposed in the
bill. He mentioned there were private companies interested
and he knew there were programs that could participate.
Senator Micciche continued his remarks. He emphasized that
people had invested in an opportunity that had gone away.
He referenced the fishery being adjacent to an urban
environment. The bill proposed to save in part of the
fishery, allow some people to find funding for a different
enterprise, and to find balance. He mentioned individuals
that were present for invited testimony, who he thought
might be able to answer some questions. The stakeholders
had worked together on a solution, and he did not see
another way to address the problem.
Senator Wielechowski was willing to support efforts to
increase King salmon coming back to the Yukon-Kuskokwim
Delta and across the state. He noted that his constituents
relied on fish, albeit not on a subsistence level. He
mentioned Cook Inlet and the Kenai River, and closures due
to a reduction in King salmon. He asked if there was
invited testimony that might be able to speak to how the
bill might impact the number of King salmon returning to
Kenai, Kasilof, or the Matanuska-Susitna Valley.
Senator Micciche thought the testifiers had anecdotal
information about the catch over time. He thought the
valley might be affected somewhat. He knew that all five
species of salmon that came to Cook Inlet took erratic
routes of travel to get to home rivers. He thought if half
of the fishing gear was removed from the pathway of King
salmon getting to the Kasilof River and Kenai River, there
would be additional returns.
2:24:47 PM
Senator Micciche recounted that he had looked into other
buyback programs that had been done in the state and around
the country. He conveyed that the bill proposed that the
East side set netters would have to vote to approve the
program. He discussed the mechanics of a successful vote,
and up to 200 permits could be sold with a random drawing
amidst applicants for sale. He discussed a tax protection
provision. He commented on the depressed price of a Cook
Inlet setnet permit. He mentioned that some families had
spent up to $1 million in expenses for the fishery. There
were large private sector companies interested and two
federal programs that participated in buybacks.
Senator Micciche discussed alternate ways that buy-backs
had taken place and mentioned the fear of corruption. He
described the bill proposal as a Commercial Fisheries Entry
Commission (CFEC) supervised and managed program, which did
not allow people to speculate. He asserted that the
individuals actively fishing were eligible.
Co-Chair Stedman referenced Senator Micciche's mention of
$1 million in costs for fishing operations. He hoped the
presentation would address the historical value of permits
and expenses, as well as why the current structure was not
sufficient to allow reduction in permits. He asked about
recent studies.
2:29:41 PM
AT EASE
2:30:08 PM
RECONVENED
Co-Chair Bishop thanked the sponsor and his staff.
2:30:34 PM
KEN COLEMAN, PRESIDENT, EASTSIDE CONSOLIDATION ASSOCIATION,
KENAI, explained that he was a 52-year fisher from Kenai.
He explained that the Eastside Consolidation Association
was a qualified salmon association formed for the sole
purpose of exploring permit reduction on the East side of
Cook Inlet. He explained that the goal of the association
was to seek to reduce or change a fishery through reduction
of permits from 440 to 240 that fished exclusively on the
East side of Cook Inlet. He mentioned the goal of a
sustainable escapement goal for all salmon species in all
rivers and a reasonable harvest opportunity for all user
groups. He emphasized that the association had worked
collaboratively with different user groups including sport
fishing.
Mr. Coleman discussed a presentation entitled "EASTSIDE
CONSOLIDATION ASSOCIATION - Senate Bill 29: Cook Inlet: New
Admin Area: Permit Buyback" (copy on file).
Mr. Coleman turned to slide 2, Goals:
• Reduce the number of setnet permits and nets on the
Eastside of Cook Inlet
• An economically viable and sustainable setnet
fishery
• Sustainable escapements into our rivers
• Reasonable harvest opportunity for ALL user groups
• Work Collaboratively in Upper Cook Inlet for the
FISH
• Passage of SB 29: Cook Inlet: New Admin Area: Permit
Buyback and Gear Reduction Act
Mr. Coleman discussed slide 3, "Eastside Consolidation
Association":
The Eastside Consolidation Association. Who are we?
The Eastside Consolidation Association (ECA) is a
Qualified Salmon Fishery Association as identified in
AS 16.40.250.
The ECA was formed as a non-profit and is licensed by
the State of Alaska as required by AS 10.20, in
addition is registered with the federal and the
Internal Revenue Code as a Section 501(c)(5) non-
profit.
ECA was formed to promote the consolidation of the
Cook Inlet setnet fishery, primarily by fleet
reduction through buyback of permits and locations.
Further, our position is that such reduction occurs in
the Upper Subdistrict of the Central District,
commonly known as the "Eastside Setnet Fishery". Our
Board of Directors is comprised of limited entry
permit holders as required
Mr. Coleman referenced Co-Chair Stedman's question about
the method proposed in the bill instead of addressing the
matter in a traditional approach.
Mr. Coleman referenced slide 4, "WE ARE EASTSIDE
SETNETTERS":
We are fathers and mothers, we are grandparents, we
are children, sons and daughters, we are families. We
are a community filled with generations of setnetting
families. We are an important part of our local
history. Setnetting is not just a job to us.
Setnetting defines us, it is who we are.
Mr. Coleman spoke to slide 5, "EASTSIDE SETNET HISTORY":
For over 150 years these salmon have been feeding
people both locally and all over the world. This rich,
renewable resource was first exported in the 1840's
when ships from America and other nations began
fishing in Alaskan waters and delivering salted salmon
to ports around the world. The first cannery in Cook
Inlet was built at the mouth of the Kasilof River in
1882. Six years later the first salmon cannery was
constructed on Kenai River. By 1892, thirty-seven
canneries had been built in Alaska. Gillnets had been
used to some degree in the silty waters of Cook Inlet
from the beginning. After fish traps were outlawed,
independent fishermen caught the salmon with gillnets
to be sold at the canneries.
2:34:59 PM
Mr. Coleman displayed slide 6, "UPPER COOK INLET SETNET
AREA":
• 732 set net permits
• 5 districts:
o Northern District
o Kalgin Island District
o Western District
o Southern District
o Central District Upper (Eastside)
• The Eastside spans approximately 80 miles and is
home to the two most popular rivers in the State of
Alaska: The Kenai and Kasilof Rivers.
• The Cook Inlet fleet reduction opportunity will only
be available to the Eastside
Mr. Coleman addressed the map on slide 6. He noted that
there were five different districts, but permits were all
common setnet permits. He explained the necessity of
segregating the East side permits, which was not possible
by traditional means. He discussed the longstanding issue
faced by user groups.
Mr. Coleman noted that there was a smaller fishing
footprint in the 1970s, after which fishing had expanded
because of enhancement and improved enhancement that
brought many more Sockeye into the area.
2:38:27 PM
Co-Chair Bishop asked about the migration from the West to
the East of Cook Inlet in the 1980s.
Mr. Coleman indicated that the migration came from all four
other areas in the Cook Inlet.
Co-Chair Bishop asked how many permit holders there were in
Cook Inlet in 1980.
Mr. Coleman cited that there were approximately 742 permit
holders in Cook Inlet in 1980.
Co-Chair Bishop presumed that the maximum salmon run
strength was on the East side.
Mr. Coleman stated that the predominant streams were the
Kasilof River and the Kenai River.
Mr. Coleman showed slide 9, "MECHANISM FOR REDUCING PERMITS
& CLOSING WATERS":
SB 29 Cook Inlet: New Admin Area: Permit Buyback and
Gear Reduction Act
"An Act relating to the powers of the Alaska
Commercial Fisheries Entry Commission; relating to
administrative areas for regulation of certain
commercial set net entry permits; establishing a buy-
back program for certain set net entry permits;
providing for the termination of state set net tract
leases under the buy-back program; closing certain
water to commercial fishing; and providing for an
effective date."
Mr. Coleman commented that the bill may or may not be a way
to effect change in other areas. He thought the same issue
would occur other places, in that affecting change in one
focused area was not possible in area-wide permit zones. He
referenced a commercial fisheries entry bill in the 1970s,
which he thought had not had enough focus on setnet
fisheries. He referenced a buyout in Icy Bay.
2:41:23 PM
Mr. Coleman spoke to slide 10, "REDUCING PERMITS":
• 732 Cook Inlet Permits
• 440 permits registered to the Eastside (2018
Season)
• Senate Bill 29 proposes to remove 200 Eastside
permits (45%)
• 440 permits = 1,320 nets on the Eastside today
• 200 permits = 600 nets on the Eastside removed
• After fleet reduction: 240 permits = 720 Eastside
nets may remain
Mr. Coleman clarified that the selling of permits would
mean closed waters around the fishing site, estimated to
equate to about 400 acres of permanently closed area to
commercial fishing. He suggested that without segregating
the East side, there could be an influx of other permits.
Co-Chair Stedman looked at slide 10 and asked if all 732
permits were fished every year.
Mr. Coleman noted there were 440 permits on the East side,
and the other 292 permits were in the other four areas of
Cook Inlet. Within the 440 permits on the East side, each
fisher had to purchase a limited entry permit and purchase
buoy stickers to prove the location being fished. He cited
that the number of permits fished on the East side had
remained consistent for the previous 20 years. He mentioned
regulations and biomass issues, and thought it was very
difficult to estimate permit latency.
2:45:35 PM
Co-Chair Stedman asked if there were any optimum studies on
how many permits should be in Cook Inlet.
Mr. Coleman cited that there was an attempt at an
optimization program in 2020 for Cook Inlet. He was unsure
of the status of the program, and he did not think it was
complete. He opined that it would be very difficult to
overlay an optimization program that included the East
side, and then segregate the information for the East side.
He emphasized that the fishery was very complex.
Co-Chair Stedman thought he could obtain the information
from the Commercial Fisheries Entry Commission (CFEC). He
asked about the value of the permits and the amount of time
the permits had been flat.
Mr. Coleman stated that valuation had been up and down
since the inception of limited entry. In the mid-1970s the
permit was $15,000 and got to a high of $115,000 in the
mid-1980s. Due to biomass issues and regulation changes,
the permit value was back down to about $15,000. He
discussed the gear reduction, sale of a boat, and the value
up upland areas from the fishing site. He stressed that the
fishery buyback allowed for the fish to get to the river
for other user groups. He addressed Senator Hoffman's
comments about encouraging Chinook populations and
discussed voluntary mitigation efforts by fishermen.
2:50:34 PM
Co-Chair Stedman had noticed in Southeast that when
fisheries were reduced for a season or more, some permits
were not fished. He thought there was more activity when
returns were strong. He referenced a buyback in Southeast,
and a significant number of permits bought back that were
never fished. He mentioned the Department of Laws interest
in the buyback. He referenced Senator Hoffman's point that
care was warranted when changing statutes, since the change
would be setting a precedent for other fisheries.
Mr. Coleman understood Co-Chair Stedman's comments. He
referenced bill provisions that would make the proposed
buy-back different such as the CFEC being custodial of
funds and not being a jury. He shared that stakeholders
were in agreement that all sites would be treated the same
and the proposed process would be democratic. He mentioned
working with former Senator Cathy Giessel to ensure there
were protections in place.
2:54:08 PM
Co-Chair Stedman asked about slide 12.
Mr. Coleman displayed slide 12, "VOLUNTARY REDUCTION
APPROVED BY FLEET":
A survey was conducted by Senator Micciche to all
Registered permit holders in the Eastside Setnet fleet
asking the following question:
1. Do you support the concept of voluntary fleet
reduction program for the Cook Inlet set net fishery
that would cost nothing to those who do not
participate and remain fishing?
92.4 % YES
7.6 % NO
229 permit holders responded to the survey
Co-Chair Stedman asked to go to slide 13.
Mr. Coleman showed slide 13, "ESTIMATED VALUE":
When a setnet permit and the accompanying nets are
retired, the result is a small business that will be
retired forever.
The estimated value of $260,000 was determined by
taking the average earnings of a setnet permit each
year over the prior ten years, an average of a little
above $20,000 per year per permit. Adding a number for
tax implications, so that if volunteer participating
fishermen are included in a program, they would exit
with a $200,000 sale for small a business that in many
cases have been around for generations.
The remaining permits will gain value and will have a
higher price point in their gross earnings per year.
Mr. Coleman discussed the process of coming up with the
numbers on slide 13 using information from ADFG.
Co-Chair Stedman agreed that the permits could not be
valued accurately when including data years with
unreasonably low returns such as 2018. He thought it was
necessary to use data from reasonable fishing seasons. He
cited that the 2019 gross average was $21,500. The average
cost was almost $6,000, which provide a profit of
approximately $15,000. He asked how it was possible to
implement expensive capital equipment to harvest a fishery
that netted $15,000.
Mr. Coleman stated that many operations had multiple
permits in order to make the numbers work. He was not sure
what document Co-Chair Stedman referenced. He had used
numbers from ADFG to calculate the average fishing income
per year. He discussed real values versus quartile values.
2:59:22 PM
Co-Chair Stedman referenced a document with an optimum
number study update (copy on file), which was in progress.
He had looked at the net income versus the value of a
permit. He wanted further explanation to rectify the
numbers. He considered data from the CFEC and thought the
value of permits had been flat going back to 2000. He
thought the permits had gone up after the late 1980s, and
then had dropped down and stayed at the same level. He also
wanted information from CFEC regarding the workability of
the buyback system as compared to what was proposed in the
bill.
Co-Chair Bishop wanted to understand the upland areas and
business on the shoreside.
Mr. Coleman showed slide 14, "REDUCTION IN SETNET PERMITS:
For 45 years Upper Cook Inlet Setnet permits have seen
a decrease from 746 to 732 permits today. 84% of those
permits are owned by Alaska residents.
As a set net permit is retired, three nets will be
permanently removed from the waters on the Eastside of
Cook Inlet. As a result, a percentage of the available
fish on a certain day, may be harvested by the sites
around them and a higher percentage will move to the
rivers. Reducing the nets by 600 will result in a
Chinook and Sockeye harvest savings.
An ADF&G biologist indicated that with approximately
45% of the commercial setnets removed, there would be
an appreciable harvest reduction of Chinook Salmon.
The Eastside set net fleet believes that we will still
have the opportunity and capability of harvesting
sockeye while reducing the harvest of Chinook salmon.
3:02:41 PM
AMBER EVERY, SET NET PERMIT HOLDER, KENAI, spoke in support
of the bill. She thanked the sponsor. She discussed the
difficulty in obtaining consensus on the subject of Cook
Inlet fisheries, and she thought that the bill had support
from almost every user group. She shared that her children
were fourth generation Cook Inlet fishermen, and she and
her husband owned one of the larger setnet operations on
the East side with over $1.2 million invested. She relayed
that she would remain in the fishery if the proposed
buyback was enacted. She discussed declining Kenai River
King salmon in the previous ten years, and the reduced
opportunity due to changes in management plans.
She asserted that the bill would provide the East side
setnet fishery a chance to reduce its footprint. She hoped
there would be future changes to the Cook Inlet management
plan to allow remaining fishers the ability to operate a
viable business, while giving something to those that were
exiting the fishery.
Co-Chair Bishop for more background on Ms. Everys
shoreside operation.
Ms. Every detailed that her husband had been a drifter his
whole life, and she became a part of the fishery upon
marriage 20 years previously. The family had purchased the
first commercial setnet site south of the Kenai River and
had made a large investment in the fishery. The family
owned six permits which allowed for fishing 18 nets.
Co-Chair Bishop asked if Ms. Every had a shore-side
processing set-up.
Ms. Every noted that the family had a fish buyer in the
near vicinity of the fishing site.
Co-Chair Bishop asked what kind of assets the family had on
the shore.
Ms. Every explained that the location was the unique factor
in setnetting. She asserted that the site south of the
river was more lucrative. The family had five boats and ran
three tractors, and all the gear and expenses were the same
regardless of the length of the fishery each year.
Co-Chair Bishop asked if Ms. Every had an annual beach
lease from the Department of Natural Resources.
Ms. Every confirmed that she was the holder of an annual
lease.
Co-Chair Bishop asked if the lease would revert back to DNR
if the bill were to pass.
Ms. Every answered affirmatively.
3:07:29 PM
SARAH FROSTAD-HUDKINS, SET NET PERMIT HOLDER AND
FISHERWOMAN, spoke in support of the bill. She relayed that
her family had been fishing just north of the Kenai River
since the early 1900s. Her grandfather had settled in Kenai
in 1924 and fished on one of the original fish traps were
she still fished today. She shared that she planned to
remain in the fishery.
Co-Chair Bishop asked if Ms. Frostad-Hudkins would keep her
permit.
Ms. Frostad-Hudkins stated that she intended to keep her
permit. She mentioned a decline in fishing opportunity over
the previous ten years due to low numbers of King salmon.
She referenced a YouTube documentary called "The Last
Harvest" which discussed the fishery. She detailed that she
had seen only three to five fishing days per season in
recent years. She mentioned the investment of time and
funds in a fishery that was not sustainable.
Co-Chair Bishop referenced Senator Hoffman's comments about
the Yukon River and Kuskokwim River and recounted that he
grew up fishing on the Yukon River. His family had started
a fish processing plant and had not fished since 2000 due
to lack of fish.
3:10:57 PM
Senator Hoffman assumed both previous testifiers would not
be giving up fishing permits. He asked how the supporters
of the bill would get 200 individuals to participate in
proposed permit buyback.
Ms. Every emphasized that the East side fishery was no
longer viable.
Ms. Frostad-Hudkins commented that there was a large
surplus of Sockeye salmon in Cook Inlet that fed many
people. She relayed that she had a processor on her
property that was run by another company. She thought the
Sockeye should be able to be harvested by various groups to
feed people.
Senator Hoffman recognized that the bill proposed a system
in which permit holders would see the benefit of even 50
parties electing to give up permits, and that it would be
challenging to find additional buyback volunteers. He
thought there would be decreasing interest in participation
in the buyback as the number approached 200 and the
positive monetary effects were discernable. He asked if it
would be fair to say that if the program did not achieve
the buyback of 100 to 200 permits, the program was null.
Ms. Every believed that that there were more people
interested than not interested, and thought there would be
more than 200 people in the fishery to participate in the
proposed buyback.
Co-Chair Bishop understood the perspective of the
testifiers. He mentioned teaching his grandsons about the
fish wheel.
3:15:31 PM
SHANNON MARTIN, EXECUTIVE DIRECTOR, KENAI RIVER
SPORTFISHING ASSOCIATION, spoke in support of the bill. She
explained that the Kenai River Sportfishing Association
(KRSA) was a nonprofit organization dedicated to ensuring
the sustainability of the Kenai River, which she described
as the greatest sportfishing river in the world. She noted
that the associations area of responsibility encompassed
the Kenai River watershed, the greater Cook Inlet Basin,
and Alaska. She shared the same concerns as the previous
testifiers regarding the health of the fisheries and a
desire to reduce tension between user groups. She asserted
that SB 29 would reduce pressure on King salmon and
possibly allowing for sustainable commercial fishing. She
clarified that the bill effort came from her colleagues in
the commercial sector as a way to solve problems.
Ms. Martin shared that some association members had
expressed concern regarding the potential price tag
associated with the retiring of sites, and where the funds
would come from. She understood that there was federal
support for the effort. She relayed that KRSAs concern was
related to conservation of fisheries resources, and the
appropriateness of the funding was up to the participants
and overseeing bodies. She continued that KRSA considered
that fisheries in Cook Inlet were overcapitalized as a
result of management loopholes exploited in the 1980s,
drawing numerous permit holders from the West side over to
the peninsula. She asserted that the bill was designed so
that no one could game the system. She highlighted that
participation was voluntary and the retirement of
qualifying sites was randomized and made the program fair.
She thought the bill would set up a more efficient and
conservative fishery. She asserted that KRSA was a
conservation-minded organization and believed that the bill
supported conservation efforts.
3:18:21 PM
Co-Chair Bishop mentioned fish politics, and acknowledged
that he was not as familiar with the Cook Inlet area. He
thought it seemed as though there was not a fish problem
for Sockeye salmon in Cook Inlet, but rather a regulation
problem.
Mr. Coleman thought Co-Chair Bishop had made a fair
assessment.
Co-Chair Stedman commented that historically when the
committee considered similar issues, it had studies and
data presented by CFEC. He thought there would be a CFEC
study that would be completed at the end of the calendar
year. He recommended that the committee wait on any action
until the study was ready to be considered, and then
consider a solution. He urged caution because the proposed
bill would set statewide precedence. He thought it was
clear that the bill had gained the attention of CFEC.
Senator Hoffman referenced his initial remarks and
emphasized that it was essential to refocus efforts on
Chinook salmon. He relayed that he had been a member of the
Senate Finance Committee and the ADFG subcommittee for over
30 years in the Senate and the House. He referenced
declines in Chinook throughout the state, and a decline in
Chum salmon the previous year. He emphasized that the state
needed to determine a course other than accepting continued
declines. He thought it was not an option to do nothing as
a state. He emphasized that the state needed to address all
areas of the state, particularly with regard to Chinook
salmon.
SB 29 was HEARD and HELD in committee for further
consideration.
Co-Chair Bishop discussed the agenda for the following day.
ADJOURNMENT
3:22:33 PM
The meeting was adjourned at 3:22 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 98 Amendment #1 Wielechowski.pdf |
SFIN 4/12/2022 1:00:00 PM |
SB 98 |
| SB 29 ECA Presentation to SFIN 4.12.22.pdf |
SFIN 4/12/2022 1:00:00 PM |
SB 29 |