Legislature(2005 - 2006)SENATE FINANCE 532

04/27/2005 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 76 BIG GAME SERVICES & COMM. SERVICES BD TELECONFERENCED
Moved SCS CSHB 76(FIN) Out of Committee
+ SB 113 GULF OF ALASKA GROUNDFISH FISHERY TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ HB 102 MEDICAL LICENSE: APPLICATION/FOREIGN GRAD TELECONFERENCED
Moved HB 102 am Out of Committee
+ SB 124 FISHERIES BUSINESS LICENSE; BOND TELECONFERENCED
Moved CSSB 124(L&C) Out of Committee
+ SB 153 INTERNATIONAL AIRPORTS REVENUE BONDS TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          April 27, 2005                                                                                      
                             9:06 a.m.                                                                                        
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Green convened the meeting at approximately 9:06:27 AM.                                                              
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
Also  Attending:   SENATOR  BEN  STEVENS;   HENRY  WEBB,   Staff  to                                                          
Representative Ralph Samuels;  BEN MILLIGAN, Staff to Representative                                                            
Bill Stoltze;  JIM JORDAN, Executive Director, Alaska  State Medical                                                            
Association;   RICK  URION,  Director,   Division  of  Occupational                                                             
Licensing, Department  of Community and Economic Development;  CHUCK                                                            
HARLAMERT,  Juneau  Section  Chief,   Tax Division,   Department  of                                                            
Revenue; PATRICK SHIER,  Acting Deputy Director, Employment Security                                                            
Tax,  and Chief,  Division  of Employment  Security,  Department  of                                                            
Labor and Workforce  Development of Employment Security,  Department                                                            
of Labor and Workforce Development                                                                                              
                                                                                                                                
Attending  via  Teleconference:   From  Anchorage:  BOBBY   FITHIAN,                                                          
Representative,   Alaska  Professional  Hunters  Association;   RICK                                                            
THOMPSON, Resource Manager,  Department of Natural Resources; GEORGE                                                            
STEWART  MD; From  Kodiak:  DONNA  JONES;  From Offnet  Sites:  GLEN                                                            
CAROLL;  JULIE  BONNEY,   Representative,  Alaska  Groundfish   Data                                                            
Association;  LANCE NELSON, Assistant  Attorney General,  Department                                                            
of Law; ED DERSHAM, Vice-Chairman, Alaska Board of Fisheries                                                                    
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 76-BIG GAME SERVICES & COMM. SERVICES BD                                                                                     
                                                                                                                                
The  Committee heard  from  the bill's  sponsor,  the Department  of                                                            
Natural  Resources, and  the industry.  A committee  substitute  was                                                            
adopted and the bill reported from Committee.                                                                                   
                                                                                                                                
HB 102-MEDICAL LICENSE: APPLICATION/FOREIGN GRAD                                                                                
                                                                                                                                
The Committee  heard  from the  bill's sponsor,  the Alaska  Medical                                                            
Board,   the  Department   of  Commerce,   Community  and   Economic                                                            
Development,  and took industry  testimony.  The bill reported  from                                                            
Committee.                                                                                                                      
                                                                                                                                
SB 113-GULF OF ALASKA GROUNDFISH FISHERY                                                                                        
                                                                                                                                
The Committee  heard from  the sponsor, the  Department of  Law, the                                                            
Alaska Board of  Fisheries, and took public testimony.  The bill was                                                            
held in Committee.                                                                                                              
                                                                                                                                
SB 124-FISHERIES BUSINESS LICENSE; BOND                                                                                         
                                                                                                                                
The  Committee  heard  from  the  Department   of  Revenue  and  the                                                            
Department  of Labor and  Workforce Development.  The bill  reported                                                            
from Committee.                                                                                                                 
                                                                                                                                
SB 153-INTERNATIONAL AIRPORTS REVENUE BONDS                                                                                     
                                                                                                                                
The bill was scheduled but not heard.                                                                                           
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 76(FIN) am                                                                                           
     "An Act relating to  the Big Game Commercial Services Board and                                                            
     to   the  regulation   of  big   game  hunting   services   and                                                            
     transportation services;  and providing for an effective date."                                                            
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
HENRY  WEBB,  Staff to  Representative  Ralph  Samuels,  the  bill's                                                            
sponsor,  explained that  this bill  would re-establish  a Big  Game                                                            
Commercial  Services  Board  within  the  Division  of Occupational                                                             
Licensing,   Department   of  Commerce,   Community   and   Economic                                                            
Development,  to oversee the professional  hunting and transporting                                                             
industry. When the previous  such Board terminated in the mid 1990s,                                                            
its powers had  been transferred to the Division.  In the year 2003,                                                            
both a Legislative  Budget & Audit report, Audit Control  Number 08-                                                            
30025-03, dated October  16, 2003 [copy on file] and a letter, dated                                                            
March  18, 2003 [copy  on file]  from the  Board of  Game to  Senate                                                            
President Gene  Therriault and House Speaker Pete  Kott, pointed out                                                            
many of the problems  facing the industry. The Audit  suggested that                                                            
the Legislature  re-establish  the Board. While  a similar  bill had                                                            
passed  the Senate  the previous  Legislative  Session,  it had  not                                                            
progressed   through  the   committee  process   of  the  House   of                                                            
Representatives.  "Extensive work" has been conducted  on this bill,                                                            
which balances  the concerns  of the industry,  the public,  and the                                                            
agencies  that manage the  resources. The  majority of this  29-page                                                            
bill relates to transferring  the authority from the Division to the                                                            
Board.                                                                                                                          
                                                                                                                                
9:09:13 AM                                                                                                                    
                                                                                                                                
Mr.  Webb  stated  that the  differences  in  the  bill  before  the                                                            
Committee  and the bill  that passed  the Senate  the previous  year                                                            
would include  increasing the membership of the Board  from seven to                                                            
nine members;  requiring that the  Board issue a license  to someone                                                            
who satisfied  license requirements,  and increasing the  level of a                                                            
fine that  would have  precluded an  individual  from being able  to                                                            
receive or  renew a guide or transfer  license for a violation  of a                                                            
hunting,  guiding, or transporting  statute  or regulation  that had                                                            
been  received  in the  previous  twelve  month period  from  $1,000                                                            
to$2,000.                                                                                                                       
                                                                                                                                
Co-Chair Wilken moved to  adopt the committee substitute Version 24-                                                            
LS0332\Y as the working document.                                                                                               
                                                                                                                                
There being no  objection, the Version "Y" committee  substitute was                                                            
ADOPTED as the working document.                                                                                                
                                                                                                                                
Mr. Webb  noted  that one  of the three  differences  between CS  HB                                                            
76(FIN)  am, Version  24-LS0332\F.A  and the  Version "Y"  committee                                                            
substitute  is the  elimination of  the requirement  that the  Board                                                            
must award a license  at their next meeting. This  change, which was                                                            
suggested by the  Division of Occupational Licensing,  would provide                                                            
some  flexibility  to the  Board  and the  Department  of  Commerce,                                                            
Community and Economic Development.                                                                                             
                                                                                                                                
9:12:01 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  understood therefore that the phrase  "first meeting                                                            
of the  Board" had  been eliminated  from language  in Version  "Y",                                                            
Sec. 4((a)(2)  beginning on  line four, page  three, which  reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     (2) authorize the issuance of [ISSUE] registered guide-                                                                
     outfitter [GUIDE], class-A assistant guide, assistant guide,                                                             
     and transporter licenses after the applicant for the license                                                             
     satisfies the requirements of the license;                                                                               
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
Mr. Webb affirmed.                                                                                                              
                                                                                                                                
Mr. Webb continued that  the second change that would be implemented                                                            
by the Version  "Y" committee substitute  would be the inclusion  of                                                            
the phrase  "an unsuspended  fine" in Sec.  6(a)(1)(ii), (iii),  and                                                            
(iv), lines 23, 25, and  27 respectfully. This language was included                                                            
at the suggestion of the Department of Public Safety.                                                                           
                                                                                                                                
9:12:39 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked whether the  levels of the fines specified  in                                                            
those sections were new.                                                                                                        
                                                                                                                                
Mr. Webb stated  that the fine levels were included  in the previous                                                            
version of the bill, Version "F.A".                                                                                             
                                                                                                                                
Co-Chair Green  clarified therefore  that the inclusion of  the term                                                            
"unsuspended fine" was the issue at hand.                                                                                       
                                                                                                                                
Mr. Webb concurred.                                                                                                             
                                                                                                                                
Mr. Webb stated  that the third change  included in Version  "Y" was                                                            
the expansion  of  some of  the criteria  that must  be included  in                                                            
guide and transport contracts.  The new language is included in Sec.                                                            
17(c) beginning  on line 26, page  11 of the bill; specifically  the                                                            
language reflected on lines six through 19 on page 12.                                                                          
                                                                                                                                
Mr. Webb  stated that this  criterion was  not exclusive; the  Board                                                            
could develop additional criteria "as they deemed appropriate".                                                                 
                                                                                                                                
9:13:41 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  recalled that a vast  amount of time had  been spent                                                            
discussing  this legislation the previous  year. To that  point, she                                                            
asked  for confirmation  that  other  than the  language  identified                                                            
today, the remainder  of the language mirrored that  of the previous                                                            
Session's bill.                                                                                                                 
                                                                                                                                
Mr. Webb affirmed.                                                                                                              
                                                                                                                                
Senator Dyson  asked permission to  abstain from voting on  the bill                                                            
due to a conflict  of interest. The bill would affect  his business.                                                            
                                                                                                                                
Co-Chair Green overruled the request.                                                                                           
                                                                                                                                
Senator  Dyson noted  that while  the bill  might "make  his life  a                                                            
little more miserable", he would probably vote in favor of it.                                                                  
                                                                                                                                
9:14:50 AM                                                                                                                    
                                                                                                                                
BOBBY   FITHIAN,   Representative,   Alaska   Professional   Hunters                                                            
Association, testified  via teleconference from Anchorage and stated                                                            
that this  bill "is supported  by every State,  federal, or  private                                                            
entity that has  any stewardship" involving such things  as wildlife                                                            
or  wildlife  resources.  It  would  enhance  "proper  stewardship,                                                             
accountability,  and sustainability"  to one of the State's  "oldest                                                            
and most recognized  industries". A tremendous amount  of discussion                                                            
has transpired  in regards  to this  issue, and  he appreciated  the                                                            
Committee's attention to the bill.                                                                                              
                                                                                                                                
RICK THOMPSON,  Resource Manager,  Department of Natural  Resources,                                                            
testified   via  teleconference  from   Anchorage,  to  notify   the                                                            
Committee of the Department's support of the bill.                                                                              
                                                                                                                                
Co-Chair  Wilken  moved  to report  the  committee  substitute  from                                                            
Committee with  individual recommendations  and accompanying  fiscal                                                            
notes.                                                                                                                          
                                                                                                                                
There being  no objections,  SCS CS  HB 76 (FIN)  was REPORTED  from                                                            
Committee with zero Fiscal  Note #1, dated February 4, 2005 from the                                                            
Department of Fish and  Game, zero Fiscal Note #2, dated February 4,                                                            
2005 from  the Department  of Public  Safety, zero  Fiscal Note  #4,                                                            
dated February  11, 2005 from the  Department of Natural  Resources,                                                            
and  $20,000  Fiscal Note  #5,  dated  February  11, 2005  from  the                                                            
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
9:18:02 AM                                                                                                                    
                                                                                                                                
AT EASE: 9:18:08 AM / 9:18:30 AM                                                                                            
                                                                                                                                
                                                                                                                                
     HOUSE BILL NO. 102 am                                                                                                      
     "An Act relating to the licensure of foreign medical graduates                                                             
     and to applications for a license to practice medicine; and                                                                
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
BEN  MILLIGAN, Staff  to  Representative  Bill Stoltze,  the  bill's                                                            
sponsor,  explained  that this  bill  is an  effort  to address  the                                                            
shortage of doctors in  the State as measured on a per capita basis,                                                            
particularly in  specialty fields. "In order to curb  this shortage,                                                            
it is important to recognize  foreign medical school graduates." The                                                            
current  requirement  is  that doctors  must  complete  a  residency                                                            
program in the United States  (U.S.). This legislation would provide                                                            
the Alaska State Medical  Board the discretion to establish proof of                                                            
competency and  professional qualifications requirement  in order to                                                            
allow foreign  medical school graduates to practice  medicine in the                                                            
State.                                                                                                                          
                                                                                                                                
Co-Chair Green  noted that Members' packets include  a one-page bill                                                            
summary  letter  [copy on  file] dated  January  25,  2005 from  the                                                            
Alaska State  Medical Association  and addressed  to Representative                                                             
Stoltze.                                                                                                                        
                                                                                                                                
9:20:00 AM                                                                                                                    
                                                                                                                                
Senator Olson  spoke in "strong favor"  of the bill. He shared  that                                                            
during his membership  on the State Medical Board,  this issue was a                                                            
continuing  "snag",  as  many "very  good"  foreign  medical  school                                                            
graduates were unable to practice in the State.                                                                                 
                                                                                                                                
Co-Chair Wilken  asked how Alaska  compares to other states  in this                                                            
regard.                                                                                                                         
                                                                                                                                
9:20:48 AM                                                                                                                    
                                                                                                                                
Mr. Milligan deferred to  a forthcoming testifier, Jim Jordan, as he                                                            
would be more qualified to address that question.                                                                               
                                                                                                                                
GEORGE  STEWART, MD,  testified via  teleconference  from an  offnet                                                            
site  to  attest   to  the  shortage   of  doctors  in  the   State,                                                            
specifically  in specialty  areas  such as pulmonary  critical  care                                                            
medicine in which he practices.  While, ideally, there should be ten                                                            
such practitioners, there  are currently only eight and two of them,                                                            
himself  included,  are 68  years old.  This legislation  would  not                                                            
"dumb down" acceptance for medical licensure in the State.                                                                      
                                                                                                                                
Dr. Stewart  cited two  examples of very  qualified foreign  trained                                                            
medical doctors  who could  not practice in  the State due  to their                                                            
not meeting  the  State's U.S.  training program  requirement.  This                                                            
legislation  would have allowed  the Medical  Board to review  these                                                            
doctors'  qualifications  and allowed  the issuance  of licenses  to                                                            
these  doctors.   The  Board  was  disappointed  that   the  current                                                            
interpretation  to existing requirements disallowed  such action. In                                                            
response  to   Co-Chair  Wilken's   question  as  to  how   Alaska's                                                            
requirements  compared  to other states,  he noted  that most  other                                                            
states require  24-months  of U.S. training.  Alaska requires  three                                                            
years of training.                                                                                                              
                                                                                                                                
9:24:53 AM                                                                                                                    
                                                                                                                                
Co-Chair Green pointed  out that a letter [copy on file] dated April                                                            
7, 2005,  from Dr.  Stewart and  addressed to  herself and  Co-Chair                                                            
Wilken included the examples presented by Dr. Stewart.                                                                          
                                                                                                                                
JIM JORDAN,  Executive Director, Alaska  State Medical Association,                                                             
noted  that  the  aforementioned  letter  from  the  Association  is                                                            
indicative  of the Association's support  of the bill. He  urged the                                                            
committee to adopt  the legislation as it would provide  the Medical                                                            
Board "the  needed flexibility" that  is required in regards  to the                                                            
qualification of foreign graduates.                                                                                             
                                                                                                                                
9:25:48 AM                                                                                                                    
                                                                                                                                
Mr.  Jordan  added  that  a March  third  issue  of  the  USA  Today                                                            
newspaper [copy  not provided] cautioned that by the  year 2020, the                                                            
nation would  experience a  shortage of between  85,000 and  200,000                                                            
physicians. The State must  be able to attract quality, well-trained                                                            
physicians, including  those who might not have been  trained in the                                                            
U.S.                                                                                                                            
                                                                                                                                
Mr. Jordan stated that  some "very positive unintended consequences"                                                            
could  occur  were   this  legislation  adopted.  Eighty   different                                                            
languages  have  been  reportedly  spoken  in  the  Municipality  of                                                            
Anchorage  school  district.  "That  is reflective  of  the  diverse                                                            
ethnicity   of  our  population."   It  is   "very  critical"   when                                                            
administering  medical  care  "that the  care  that is  provided  be                                                            
culturally  competent". This bill  would be an opportunity  for some                                                            
foreign nationals  to provide such  culturally competent  care. They                                                            
would also  serve as teachers for  the physicians in the  community.                                                            
                                                                                                                                
9:27:56 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  asked  Mr. Jordan  how  the  State's requirements                                                             
compare with other states.                                                                                                      
                                                                                                                                
9:28:20 AM                                                                                                                    
                                                                                                                                
Mr.  Jordan understood  that  numerous  other states  require  fewer                                                            
years  of graduate  level  training  programs.  In  addition,  other                                                            
states'  medical  boards  are  allowed  "the latitude  to  adopt  by                                                            
regulation  different standards that  would provide for competency"                                                             
of foreign trained medical doctors.                                                                                             
                                                                                                                                
Mr.  Jordan  noted  that competency   considerations  could  include                                                            
licensure   in  another  state  for   a  period  of  time;   English                                                            
competency;  specialty  certifications  or passage  of  a U.S.  core                                                            
clinical  competency  examination.   "The  key  is  to  provide  the                                                            
discretion  to the State  Medical Board to  adopt by regulation  the                                                            
standards"   that  would  assure   that  the  State  has   competent                                                            
physicians.                                                                                                                     
                                                                                                                                
9:29:38 AM                                                                                                                    
                                                                                                                                
Senator Olson questioned  the reason that "such a good bill" had not                                                            
been introduced before.                                                                                                         
                                                                                                                                
9:29:58 AM                                                                                                                    
                                                                                                                                
Mr. Jordan  responded that,  the fact that  medical doctors  such as                                                            
Dr. Stewart, have  stepped forward and provided "specific  hard core                                                            
examples" of need have furthered the cause.                                                                                     
                                                                                                                                
9:30:30 AM                                                                                                                    
                                                                                                                                
RICK   URION,  Director,   Division   of   Occupational   Licensing,                                                            
Department  of  Community  and  Economic  Development  testified  in                                                            
strong  support of the  bill. He  acknowledged the  comments  of the                                                            
testifiers   and  stated  that  providing   the  Board  the   needed                                                            
discretion  would be "a  step in  the right direction".  "This  is a                                                            
good fix."                                                                                                                      
                                                                                                                                
9:31:27 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There being no objection,  HB 102am was REPORTED from Committee with                                                            
zero Fiscal  Note #1 dated February  2, 2005 from the Department  of                                                            
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
9:32:04 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 113(RES)                                                                                            
     "An Act relating to entry into and management of Gulf of                                                                   
     Alaska groundfish fisheries."                                                                                              
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
SENATOR  BEN  STEVENS,  the  bill's   sponsor  "by  Request  of  the                                                            
Managers",   stated  that   this  bill  "is   a  process  piece   of                                                            
legislation"  that would  authorize  the Alaska  Board of  Fisheries                                                            
(the Board)  and the Alaska  Commercial  Fisheries Entry  Commission                                                            
(the  Commission)  "to develop  a new  fisheries  management  regime                                                            
called  the  direct access  privilege  program"  pertaining  to  the                                                            
development of groundfish fisheries in the Gulf of Alaska.                                                                      
                                                                                                                                
Co-Chair Green asked that  the term "managers" be further explained.                                                            
                                                                                                                                
Senator B.  Stevens communicated that  the term managers  includes a                                                            
combination of representative  from the Department of Fish and Game,                                                            
the  Alaska Board  of  Fisheries, the  Alaska  Commercial  Fisheries                                                            
Limited   Entry  Commission,   and  the   North  Pacific   Fisheries                                                            
Management  Council. This legislation  is the outcome of  a two-year                                                            
process conducted  by the Gulf of Alaska Groundfish  Rationalization                                                            
Management  Team,  which  includes  representatives  from  the  four                                                            
aforementioned  entities. The purpose of this endeavor  was to align                                                            
the  State's   fisheries  resource   management  with  the   federal                                                            
fisheries management plans  that are being developed and implemented                                                            
for the  federal fisheries  outside of the  State's three-mile  from                                                            
shore oversight limit.                                                                                                          
                                                                                                                                
Senator  B.  Stevens   stated  that  the  bill  would   provide  the                                                            
Department of  Fish and Game (the Department) and  the Commission to                                                            
explore and  develop a plan  to limit access  privileges to  harvest                                                            
fish within the State's three-mile "zone".                                                                                      
                                                                                                                                
Senator  B.  Stevens  referred  the  Committee  to  the  April  2005                                                            
Memorandum of  Understanding (MOU) [copy on file]  between the Board                                                            
and the  Commission which  details the process  through which  those                                                            
entities would conduct  public hearings to evaluate the criteria for                                                            
participation  in the  Gulf of  Alaska Groundfish  Fisheries  direct                                                            
access privilege program (the Program).                                                                                         
                                                                                                                                
9:34:49 AM                                                                                                                    
                                                                                                                                
Senator B.  Stevens avowed that anything  affecting fisheries  would                                                            
be a "controversial" issue  in this State; this legislation would be                                                            
no  exception.  One of  the  primary issues  is  the fact  that  the                                                            
legislation would "allow  the managers to explore the development of                                                            
a  new system".  People  become afraid  and  leery,  and resist  any                                                            
change to  the existing system:  these are  the reasons behind  "the                                                            
controversy  and the passion  and the objection"  to advancing  this                                                            
plan.                                                                                                                           
                                                                                                                                
Senator  B. Stevens shared,  as a  personal note,  that he has  been                                                            
personally  criticized due  to his father's  (United States  Senator                                                            
Ted Stevens)  involvement  in federal  fisheries  management  plans.                                                            
"The same people  that are criticizing  the federal management  plan                                                            
are again criticizing me  at this level of implementation." It is "a                                                            
sad fact" that the criticism  could not be targeted towards the plan                                                            
or the  implementation  or development  rather  than being  personal                                                            
criticisms.  Nonetheless, the  proposed process  "would explore  new                                                            
ways of  managing  fisheries into  the future"  while continuing  to                                                            
protect  the biomass  and seek  new efficiencies  in the  fisheries.                                                            
Efforts to  protect the "historical  participants" and to  determine                                                            
how to  allow new entries  into the fishery  would be sought  within                                                            
the constraints of maintaining an economic fishery.                                                                             
                                                                                                                                
Senator B. Stevens  noted that numerous individuals,  both those who                                                            
support and oppose the plan, would be presenting testimony.                                                                     
                                                                                                                                
9:37:51 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked that  the legislation  be explained in  layman                                                            
terms,  specifically what  it would  attempt to  do and why  someone                                                            
might support or disapprove of the effort being proposed.                                                                       
                                                                                                                                
9:38:06 AM                                                                                                                    
                                                                                                                                
Senator B.  Stevens explained  that the bill  would address  how the                                                            
State's  fisheries management  policies  could best  align with  the                                                            
management  of  the fisheries  outside  of  the  State's  three-mile                                                            
coastal  water management  zone boundary.  The Alaska Department  of                                                            
Fish and Game and the Commission  manage the fisheries inside of the                                                            
three-mile  boundary  and the  North  Pacific  Fisheries  Management                                                            
Council manages  the fisheries conducted outside of  that three-mile                                                            
boundary.                                                                                                                       
                                                                                                                                
Senator B. Stevens  continued that a federal Rationalization  of the                                                            
Fisheries  effort  would  be  implemented  this  year  to  fisheries                                                            
outside  of the  three-mile  boundary. This  bill  "would allow  the                                                            
inside of  the three-mile  fisheries managers  to develop a  plan to                                                            
react to what's  going on outside" of that zone. "The  ultimate goal                                                            
… of this  bill is to protect  the State  water fishermen"  from the                                                            
activities  conducted outside of the  three-mile zone. There  is "an                                                            
invisible  barrier"  there:  "the  fishermen  from inside  can't  go                                                            
outside, but there's  nothing to prevent the outside  fishermen from                                                            
coming inside."                                                                                                                 
                                                                                                                                
9:39:49 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green  asked  whether  the change  might  create  a  worse                                                            
scenario than that incurred by maintaining the status quo.                                                                      
                                                                                                                                
Senator  B.   Stevens  responded   that  many  individuals   support                                                            
continuance of  the status quo. "The question is whether  the status                                                            
quo would make  us better off or worse off." It is  both his and the                                                            
managers opinion  that the State would fare worse  by continuing the                                                            
status quo.                                                                                                                     
                                                                                                                                
Co-Chair Green  understood that those supporting this  proposal base                                                            
their position on the fact  that the fisheries outside of the three-                                                            
mile limit would  change while the fishery inside  of the three-mile                                                            
limit would  remain the  same and  thus could  not react to  changes                                                            
occurring in the outside waters.                                                                                                
                                                                                                                                
Senator B.  Stevens affirmed. "The  theory is … that there  would be                                                            
an invasion  or an influx of those  outside fishermen coming  in and                                                            
harvesting the fish inside and then going out to the outside."                                                                  
                                                                                                                                
Co-Chair  Green understood  therefore  that this  legislation  would                                                            
serve "to neutralize" that activity.                                                                                            
                                                                                                                                
Senator B. Stevens  responded that this legislation  would "attempt"                                                            
to do that".                                                                                                                    
                                                                                                                                
9:40:48 AM                                                                                                                    
                                                                                                                                
Senator Stedman  asked for information regarding the  public process                                                            
that has occurred  on the bill, specifically  whether this  would be                                                            
"the end or basically the beginning" of that process.                                                                           
                                                                                                                                
Senator B. Stevens  characterized this legislation  as being neither                                                            
of those;  "this is  a step  in the evolution  of  it". The Gulf  of                                                            
Alaska  Ground  Fish   Rationalization  Management   Team  has  been                                                            
discussing  this issue for approximately  three years and  more than                                                            
nine public meetings have  been held. Those activities have "evolved                                                            
into this legislation".  This bill "has evolved" from a similar bill                                                            
that was  introduced but  did not advance  the previous Legislation                                                             
Session, even though "extensive public hearings" had occurred.                                                                  
                                                                                                                                
9:42:20 AM                                                                                                                    
                                                                                                                                
Senator B. Stevens stated  that the aforementioned "MOU outlines the                                                            
public hearing  process that would  be" conducted before  the direct                                                            
access privilege criteria  is developed. "In a step one through ten"                                                            
process,  this could be regarded  as step  one-and-a-half or  two. A                                                            
long process would be anticipated.                                                                                              
                                                                                                                                
9:43:00 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  whether  testimony  from those  opposing  the                                                            
legislation would be forthcoming.                                                                                               
                                                                                                                                
Senator B. Stevens affirmed.                                                                                                    
                                                                                                                                
Senator Hoffman understood  that the legislation would be limited to                                                            
the  Gulf  of Alaska  fishery;  specifically  that  the  Bering  Sea                                                            
fishery would not be addressed.                                                                                                 
                                                                                                                                
9:43:24 AM                                                                                                                    
                                                                                                                                
Senator B.  Stevens affirmed that  the legislation would  be limited                                                            
to the Gulf of Alaska groundfish  fishery. "The underlying piece" to                                                            
this  legislation  is  that   it would   allow  the  Board  and  the                                                            
Commission  "to develop  a  plan, but  only  at the  request of  the                                                            
participants in  that fishery. It would not develop  a plan and then                                                            
impose it on the fishery."  Were the fishermen "to come forward with                                                            
a  proposal or  request  to be  included"  then the  Managers  would                                                            
develop  a  plan and  the  criteria.  That sequence  of  events  "is                                                            
probably the most misunderstood piece of this legislation".                                                                     
                                                                                                                                
Senator Hoffman referenced  the "excusive harvest shares to persons"                                                            
language  in Section  1(a)(7), page  two, line 14,  and the  "access                                                            
limitation for  the dedicated access privilege program"  language in                                                            
Section  1(b) page two,  line 21,  and voiced  concern about  how an                                                            
individual could  become a participant in the fishery,  as, were the                                                            
program a success,  it might be expanded to the Bering  Sea fishery.                                                            
                                                                                                                                
9:45:50 AM                                                                                                                    
                                                                                                                                
Senator  B. Stevens  expressed that  the language  in "Section  1 is                                                            
Legislative  findings and  intent".  "The actual  heart and soul  of                                                            
the"  bill is  included  in Sec.  2(c) on  page three,  lines  seven                                                            
through 20.                                                                                                                     
                                                                                                                                
Senator Hoffman acknowledged  that the heart and soul of the program                                                            
is the  dedicated  access  privilege concept.  The  question is  how                                                            
would  people who  grow up in  the State  be granted  access to  the                                                            
program.                                                                                                                        
                                                                                                                                
Co-Chair Green  asked whether the concern is to whether  the program                                                            
might be extended to the Bering Sea fishery.                                                                                    
                                                                                                                                
Senator  Hoffman  responded that  were  the program  successful,  it                                                            
might expand to the Bering  Sea; however, the question is in regards                                                            
to the process that would allow new participants in the program.                                                                
                                                                                                                                
Senator  B.  Stevens   recognized  Senator  Hoffman's   question  as                                                            
addressing  a  valid  concern.  The only  fisheries  that  would  be                                                            
included  in the program  would be those  that requested  inclusion:                                                            
those  would be  the fisheries  which  require  significant  capital                                                            
investment   and  are   experiencing  "extensive   competition   and                                                            
pressure…" such as the  Gulf of Alaska Pollack trawl fishery and the                                                            
rockfish  and  flatfish  industries.  Entry-level   fisheries  would                                                            
continue to be available even were this program implemented.                                                                    
                                                                                                                                
Senator  B.  Stevens voiced  that  it  is understood  that  not  all                                                            
fishermen  begin   their  fishing  career  in  the  offshore   trawl                                                            
industry. To that  point, he identified the mechanical  jig fishery,                                                            
which  is the  largest  fishery  in the  Gulf  of Alaska,  as  being                                                            
excluded  from the  legislation.  He noted  however,  that, at  some                                                            
point  in the  future, that  fishery could  be included  were  those                                                            
fishermen  to request such  action. Both  the entry-level  fisheries                                                            
and the  mechanical jig  fishery, which is  "the most controversial                                                             
gear type", are opposed to this legislation.                                                                                    
                                                                                                                                
9:48:36 AM                                                                                                                    
                                                                                                                                
Senator B. Stevens  stated that both his and the Managers'  position                                                            
is that if "those who participate  in fisheries across the State and                                                            
in the Gulf  of Alaska want to have  the fisheries managers  explore                                                            
new ways  to manage  their  fish to  make it more  economic,  safer,                                                            
higher value products,  then" they should be provided  "the right to                                                            
explore the  development of a new  management regime. If  they don't                                                            
want it, then they don't  have to have it imposed on their fishery."                                                            
                                                                                                                                
Senator B. Stevens  quoted a [unspecified] harvester  from Homer who                                                            
labeled  the  legislation  as  "a  tool that  we  are  allowing  the                                                            
managers to  create and then implement  once the participants  agree                                                            
to it through the public process" detailed in the MOU.                                                                          
                                                                                                                                
9:49:40 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  understood that the  Alaska Department of  Fish and                                                            
Game,  the Commission,  and  the  Board manage  the  fisheries  area                                                            
within three  miles of shore, and  that the North Pacific  Fisheries                                                            
Management Council manages  the fisheries outside of that three-mile                                                            
zone.                                                                                                                           
                                                                                                                                
Senator B. Stevens affirmed.                                                                                                    
                                                                                                                                
Co-Chair  Wilken asked for  clarification as  to which of those  two                                                            
areas the dedicated access privileges would apply.                                                                              
                                                                                                                                
Senator B. Stevens  stated that those privileges would  apply to the                                                            
inside three-mile from shore zone.                                                                                              
                                                                                                                                
Co-Chair Wilken asked to whom the privileges would be granted.                                                                  
                                                                                                                                
9:50:37 AM                                                                                                                    
                                                                                                                                
Senator B.  Stevens clarified  that, depending  on their history;  a                                                            
person  could be a  participant in  the federal  fishery, the  State                                                            
fishery, or both.  While a fisherman might be limited  in regards to                                                            
what area  they could  fish, the fish  biomass moves  in and  out of                                                            
each zone and  an agreement between  the Department and the  Council                                                            
allows the  fish to be  caught on either  side. This legislation  is                                                            
specific to the fish caught in the three-mile from shore zone.                                                                  
                                                                                                                                
Co-Chair Wilken  understood that the privilege "would  be granted by                                                            
the group" fishing the three-mile zone.                                                                                         
                                                                                                                                
Senator B.  Stevens clarified that  the privilege "would  be granted                                                            
to the group" inside the three-mile limit.                                                                                      
                                                                                                                                
Co-Chair  Wilken ascertained,  therefore,  that  the Managers  would                                                            
grant the privilege.                                                                                                            
                                                                                                                                
Senator B. Stevens affirmed.                                                                                                    
                                                                                                                                
Co-Chair Wilken  theorized that a  fisherman fishing outside  of the                                                            
three-mile  zone could  apply for  a dedicated  access privilege  to                                                            
fish within the three-mile zone.                                                                                                
                                                                                                                                
Senator  B. Stevens  stated  that  that was  correct,  provided  the                                                            
applicant  met the qualifications  that would  be developed  through                                                            
the process  allowed by this legislation.  This process is  outlined                                                            
in Sec. 5 page four of the bill.                                                                                                
                                                                                                                                
Co-Chair  Wilken understood  therefore that  this legislation  would                                                            
provide  a method to  "manage those  that are  outside that  want to                                                            
come into the three-mile zone".                                                                                                 
                                                                                                                                
Senator B. Stevens affirmed.  In addition, it would also "manage the                                                            
ones inside to protect them from the outside".                                                                                  
                                                                                                                                
9:52:21 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  asked whether the dedicated access  privilege would                                                            
have value in that it could be sold.                                                                                            
                                                                                                                                
Senator  B. Stevens stressed  that that  issue, "is  one of  the big                                                            
challenges in  this program", as the State's Constitution  prohibits                                                            
the State from allocating  the resource. To that point, "this is the                                                            
right to harvest  the resource; it's a privilege not  a perpetuity".                                                            
                                                                                                                                
Senator B.  Stevens shared that some  of the criteria that  would be                                                            
developed  would address how  often the privilege  must be  renewed,                                                            
the circumstances  through  which transfers  of the privilege  might                                                            
occur, or whether  the privilege would  be reassumed into  a pool to                                                            
be redistributed  to future participants. These are  things that the                                                            
Board and  the Commission  must develop  in the  plan. This  is "the                                                            
root of the opposition"  to the bill; "we are giving  them the right                                                            
to develop  a plan but we don't know  what the outcome of  the plan"                                                            
might be. The  question is "how do  we know the outcome of  the plan                                                            
until we give them the authority to develop it".                                                                                
                                                                                                                                
Co-Chair Wilken  asked whether the dedicated access  privilege would                                                            
be awarded to a fishery group or to a boat.                                                                                     
                                                                                                                                
Senator  B. Stevens  stated that under  the current  version  of the                                                            
bill, anyone  with "historical participation  would be eligible  for                                                            
consideration". This would not pertain to a processor.                                                                          
                                                                                                                                
9:53:41 AM                                                                                                                    
                                                                                                                                
Senator B. Stevens  stated that the federal approach  to determining                                                            
one's future participation  level is a percentage based on the years                                                            
of participation  and  the percent  of those years'  quota that  was                                                            
caught. The  State of Alaska  would "face  different challenges"  in                                                            
this regard as  the State is prohibited from allocating  that right;                                                            
the State's approach  must be to grant the privilege  to participate                                                            
in that fishery.                                                                                                                
                                                                                                                                
Co-Chair  Wilken  asked  for  clarification  regarding  whether  the                                                            
"they" being referred to is a boat.                                                                                             
                                                                                                                                
Senator B.  Stevens stated that the  privilege to participate  could                                                            
be granted  to a boat  or to an  individual.  The conditions  of the                                                            
bill  would  allow  the  term  "they"  to  include  anybody  who  is                                                            
currently participating.                                                                                                        
                                                                                                                                
Senator Hoffman concluded that this would include vessel owners.                                                                
                                                                                                                                
Senator B. Stevens stated  it could include vessel owners, the boat,                                                            
or  the individual.  The  provisions  in the  bill would  allow  the                                                            
managers  to  develop  "the  criteria  to  quantify"  who  would  be                                                            
eligible.                                                                                                                       
                                                                                                                                
Co-Chair  Wilken surmised,  therefore that  "they who are  eligible,                                                            
will possess a dedicated access privilege at some time".                                                                        
                                                                                                                                
Senator B. Stevens affirmed.                                                                                                    
                                                                                                                                
Co-Chair Wilken asked whether that privilege could be sold.                                                                     
                                                                                                                                
Senator B.  Stevens responded  that that is  one of the issues  that                                                            
would  be determined.   That is  why  the renewal  option  would  be                                                            
available.  He reiterated that the  privilege could not be  given to                                                            
them, as the State is prohibited from allocating its resources.                                                                 
                                                                                                                                
Co-Chair Wilken thanked the sponsor for the clarifications.                                                                     
                                                                                                                                
Senator Olson  asked whether this legislation would  have any affect                                                            
of  the  Individual   Fishing  Quotas  (IFQs),  since   the  State's                                                            
Constitution prohibits the allocation of specific resources.                                                                    
                                                                                                                                
Senator B.  Stevens replied in the  negative, as the IFQ  program is                                                            
specific to the  halibut and sablefish fisheries,  both of which are                                                            
managed  by  the federal  fisheries  management   plan. There  is  a                                                            
separate fisheries  management program in effect for  the groundfish                                                            
fishery, which includes Pollock, codfish, and flatfish.                                                                         
                                                                                                                                
Senator Hoffman  noted that it could  be very costly to participate                                                             
in  many of  the  fisheries.  To that  point,  he asked  whether  an                                                            
individual's  financial  interest  in  a vessel  would  qualify  the                                                            
person for the dedicated access privilege.                                                                                      
                                                                                                                                
Senator B. Stevens stated  that this issue would be addressed by the                                                            
criteria specified  in Sec. 5(a)(b)(c),  page four and specifically                                                             
Sec. 5(d) on page  five of the bill. The Managers  must address each                                                            
of  the  concerns  listed  in  Sec.  5(d)   while  they  develop  an                                                            
individual  plan  for implementation  for  each  fishery.  Different                                                            
management plans are currently  developed now for each region of the                                                            
State.                                                                                                                          
                                                                                                                                
9:58:30 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman determined  therefore  that it would  be up  to the                                                            
Board to develop the plan.                                                                                                      
                                                                                                                                
Senator  B. Stevens affirmed,  and stated,  that, more importantly,                                                             
the  outcome  would  be  determined   by  the  industry  working  in                                                            
conjunction  with the Board.  He reiterated  that the industry  must                                                            
request  the implementation  and  the development  of  the plan  for                                                            
their fishery.  Were a fishery to not desire the plan,  it would not                                                            
be developed or implemented.                                                                                                    
                                                                                                                                
Senator   Hoffman  commented   that  the   bill  contains   language                                                            
specifying that the program  must be "in the best interest of Alaska                                                            
and Alaskans".                                                                                                                  
                                                                                                                                
Senator B. Stevens avowed  that that is the purpose of the proposal.                                                            
                                                                                                                                
9:59:15 AM                                                                                                                    
                                                                                                                                
Senator  Stedman  reviewed historical  events  in which  the  United                                                            
States assumed  control of fishing  grounds within 200 miles  of its                                                            
coastline. Russian and  Korean fishermen had previously fished those                                                            
grounds. Following  the U.S. control  of those grounds, the  federal                                                            
IFQ  program was  implemented.  Continuing,  he asked  whether  this                                                            
situation could have evolved  as an effort "to improve upon the past                                                            
restrictive entry systems".                                                                                                     
                                                                                                                                
10:00:10 AM                                                                                                                   
                                                                                                                                
Senator B. Stevens characterized  the comments "as a fair analysis".                                                            
The 200-mile limit  was established by the Madison  Act of 1976. The                                                            
management  conducted by  the North Pacific  Management Council  was                                                            
once referred  to as the Total Allowable Fishing for  Foreign Fleets                                                            
(TAFFF).  "All these fisheries"  were included  in that allocation.                                                             
This evolved into  a Joint Venture Fishing in which  U.S. harvesters                                                            
caught the  fish and sold and transferred  them at sea to  a foreign                                                            
factory ship.  The next program  was the  Total Allowable Catch  for                                                            
American Fishing Fleets  (TACAFF), which evolved to include the U.S.                                                            
owned foreign factory ship  and then the shore-based investments for                                                            
groundfish  fisheries in the  Bering Sea and  Kodiak. "Now  there is                                                            
pressure  in capitalization,  for all the fish  can be harvested  by                                                            
U.S. fleets and not only  that", there is competition between Alaska                                                            
fleets and other U.S. vessels.                                                                                                  
                                                                                                                                
Senator B. Stevens stated  that this legislation is, as suggested by                                                            
Senator Stedman,  "another  evolution of an  attempt to say  we want                                                            
the fish harvested" within  three-mile limit to be caught by Alaska-                                                            
based fisherman,  and managed  by the Department  of Fish and  Game.                                                            
"There is competition at  every level now. It's just an evolution of                                                            
efficiency"  and  processing capacity  and  demand  for the  State's                                                            
products.                                                                                                                       
                                                                                                                                
Senator Hoffman  opined therefore that, as the fisheries  beyond the                                                            
three-mile  limit  were  Americanized;  this  legislation  could  be                                                            
characterized as an attempt to Alaskanize fisheries within three-                                                               
mile limit.                                                                                                                     
                                                                                                                                
Senator B. Stevens  characterized the legislation  "as an attempt to                                                            
protect  the Alaskan participants".  There  is an invisible  barrier                                                            
three  miles  offshore:   the  federal  side  has  limited   license                                                            
participants and a quota  system. The joint federal/State management                                                            
regime has specified  that a certain amount of fish  could be caught                                                            
inside the  three-mile zone  and a certain  amount of fish  could be                                                            
caught outside  that zone. Those who  participate in the  three-mile                                                            
limit  fishery are  not permitted  to participate  in the  fisheries                                                            
outside of  that zone. However, there  is nothing in law  that would                                                            
prevent those  who fish  outside the three-mile  limit from  fishing                                                            
inside  the   three-mile  limit.   The  State  currently   has  open                                                            
participation.  Those who  can fish  outside  the three-mile  limit,                                                            
fish inside  the three mile  limit first and  then fish outside  the                                                            
zone and harvest their  fish. Alaskan fishermen are not permitted to                                                            
participate outside that three-mile zone.                                                                                       
                                                                                                                                
Senator B. Stevens concluded  therefore, that this legislation is an                                                            
attempt to  say that those  who fish outside  could not come  inside                                                            
the three-mile  limit and  harvest the fish  in those waters  first.                                                            
This act  shortens the  season and  eliminates the  ability for  our                                                            
shore-based fishermen to earn a living.                                                                                         
                                                                                                                                
10:04:08 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green understood  therefore  that  "that  is the  ultimate                                                            
risk": Fishery openings could become shorter and shorter.                                                                       
                                                                                                                                
Senator B.  Stevens affirmed that  fishery openings get shorter  and                                                            
shorter  each year.  He disclosed  that the  mechanical jig  fishery                                                            
once opened  in March and closed in  October. Then it was  shortened                                                            
to March to June, and currently it is March to April.                                                                           
                                                                                                                                
Co-Chair Green surmised  that openings could be as short as a month.                                                            
                                                                                                                                
Senator B. Stevens  informed that the duration of  some fisheries is                                                            
less than 12 hours.                                                                                                             
                                                                                                                                
10:05:00 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken asked  for  an explanation  of the  mechanical  jig                                                            
machine fishery and why that fishery was excluded.                                                                              
                                                                                                                                
10:05:17 AM                                                                                                                   
                                                                                                                                
Senator B. Stevens  expressed that that fishery is  "a controversial                                                            
topic. A mechanical  jig fishing machine is a machine  that's set on                                                            
the  side of  a smaller  vessel  that", either  through  the use  of                                                            
electronics or hydraulics,  "jigs and as soon as there's pressure on                                                            
the jig, it automatically winds the fish up".                                                                                   
                                                                                                                                
Co-Chair Wilken  asked for an example of what would  be considered a                                                            
small vessel.                                                                                                                   
                                                                                                                                
Senator  B. Stevens  stated that  a 26  to 42-foot  vessel would  be                                                            
considered a small  vessel. The equipment has been  referred to as a                                                            
hook and  line type  of equipment.  A vessel  manned  by one or  two                                                            
crewmembers could operate up to eight jig machines.                                                                             
                                                                                                                                
Senator  B. Stevens  stated  that there  are  differing allocations                                                             
specified for  gear types: jig fisheries;  long line fisheries;  cod                                                            
fisheries;   and   trawl  fisheries   would   each   have   separate                                                            
allocations. The  jig fishery is typically the entry-level  fishery,                                                            
as it  would not  require a lot  of capital  investment. People  get                                                            
into that  fishery at a young  age and then  could move through  the                                                            
various  fisheries.  Some people  have stayed  in  that fishery  and                                                            
earned  a good  wage for  many years.  This fishery  is the  perfect                                                            
example of the harder you work, the more fish you catch.                                                                        
                                                                                                                                
Senator  B.  Stevens  stated  that   the  main  concern  about  this                                                            
legislation  by people in  the jig fishery  is the belief that  this                                                            
program would be imposed  on them. Since this was the concern and no                                                            
effort  in support  of the  program  was forthcoming,  the  Managers                                                            
therefore  excluded  this  entry-level  fishery  from  the  program.                                                            
Following that  action last year, the group was satisfied.  However,                                                            
"it's a different story this year".                                                                                             
                                                                                                                                
10:07:22 AM                                                                                                                   
                                                                                                                                
Senator Olson  asked which fish the jig fishery primarily  harvests.                                                            
                                                                                                                                
Senator B.  Stevens responded that  they primarily fish Pacific  Cod                                                            
as well as some rockfish.                                                                                                       
                                                                                                                                
Senator Stedman remarked  that the jigs resemble downriggers used by                                                            
sport fisherman to fish salmon.                                                                                                 
                                                                                                                                
Senator B.  Stevens reiterated  that this  is a controversial  bill;                                                            
however,  it would allow  the Managers  to develop  a new regime  of                                                            
management at the request  of participants in certain fisheries. "It                                                            
is contingent  upon"  the Legislature  to provide  them the  ability                                                            
they deem  necessary while  insuring that the  program would  not be                                                            
forced on those fisheries that do not desire it.                                                                                
                                                                                                                                
Co-Chair Green  voiced appreciation for the explanation  provided by                                                            
Senator B. Stevens.                                                                                                             
                                                                                                                                
Senator B. Stevens provided  a handout titled "Table 10:South Alaska                                                            
Peninsula  Area state-waters  Pacific  Cod fishery  openings,  1997-                                                            
2004" [copy  on file] which depicted  the fishery opening  dates for                                                            
the various years.                                                                                                              
                                                                                                                                
10:09:46 AM                                                                                                                   
                                                                                                                                
DONNA JONES  testified via teleconference  from Kodiak and  spoke in                                                            
opposition to the bill.  This legislation is contrary to the State's                                                            
Constitution  in two ways: it would  deny citizens the right  to the                                                            
legislative  process  by allowing  the Board  of  Fisheries and  the                                                            
Limited Entry  Commission "to make decisions that  should be made at                                                            
the  Legislative  level";  and  it would  allow  an  "allocation  or                                                            
harvest  use privilege  to  our fleet  fishery resources",  many  of                                                            
which would  be given  to out-of-State  recipients. This  allocation                                                            
system of  dedicated access  privilege would  seriously" reduce  the                                                            
State's  fishery   resource  benefits  to  State  residents:   these                                                            
benefits  are  an entitlement  that  is guaranteed  by  the  State's                                                            
Constitution.  "Both of these issues  are seriously infringing  upon                                                            
my rights as an Alaskan  citizen." In recent testimony to the Senate                                                            
Resource  Committee, she  had declared  that, "the  true purpose  of                                                            
this bill is not  to end the race for fish, but it's  about the race                                                            
to get the fish allocated".                                                                                                     
                                                                                                                                
Ms. Jones stated that the  federal Rationalization Plan and its plan                                                            
to allocate fishing quota  to boat owners according to their history                                                            
would exert "great pressure"  on the State to allocate its fisheries                                                            
with  the  hope  "of  slowing  down the  number  of  fish  going  to                                                            
processing  plants".  However, such  allocations  would not  control                                                            
"the amount  or time of the  deliveries to  the docks. The  flood of                                                            
fish which fueled this  bill and the federal Rationalization is that                                                            
of  the  trawl  Pollock  and  long  line  cod  fleet."  Due  to  her                                                            
experience as a plant and  fleet manager of a local Alaskan cannery,                                                            
she could  attest  "to the need  to limit  the trawl  and long  line                                                            
fleet  to avoid the  flood of  fish to  the dock".  Efforts such  as                                                            
setting gear,  weight, and time limits  such as limiting  catches to                                                            
5,000 pounds  of black  cod within  any five-day  period in  certain                                                            
areas of  the State are already  in place  to control the amount  of                                                            
fish going to  the docks. These things could be accomplished  within                                                            
the   existing  State   regulatory   systems.   Annual  quotas   are                                                            
established  that  both  protect   the overall   biomass  and  allow                                                            
fishermen  to fish.  She suggested  that instead  of establishing  a                                                            
fleet with no  fish limits, a preferred alternative  could be to set                                                            
the amount of  fish that could be brought in within  a time specific                                                            
period. For  example: one  delivery per vessel  per seven days.  The                                                            
fishing vessel  would continue to maximize its profits  for the trip                                                            
and the  seafood processing  plants could  accommodate one  load per                                                            
vessel per  week instead of a rush  of three or four deliveries  per                                                            
week.                                                                                                                           
                                                                                                                                
Ms. Jones stated  that other things that should be  considered would                                                            
be the safety  issue and  "the slowing down  of the total amount  of                                                            
pounds which  would allow the processing  plants to focus  on better                                                            
quality and value added products".                                                                                              
                                                                                                                                
Ms. Jones  continued that  the differences  between the federal  and                                                            
State interests  are significant. "The federal government  caters to                                                            
national interests  and recipients,  that being every person  in the                                                            
United States. The State  of Alaska represents the best interests of                                                            
its citizens";  that is the basis of her opposition  to the bill. It                                                            
is not in her  "best interest for the State to allow  the allocation                                                            
of our  fishery resources,  let  alone to outside  interests".  Were                                                            
this legislation  enacted, the State would suffer  the "loss of jobs                                                            
due  to  consolidation,  the  loss  of  jobs  due  to  the  possible                                                            
formation  of co-ops or associations,  the  loss of equal access  to                                                            
entry level fishermen,  the loss of revenue to our  communities, and                                                            
the loss of  control over our State  fishery resources all  of which                                                            
could  ultimately   cause  the  demise   of  many  of  our   coastal                                                            
communities  and the  families  that are  reliant  upon our  fishery                                                            
resources."                                                                                                                     
                                                                                                                                
Ms.  Jones   opposed  "the  privitization   of  the  State's   pubic                                                            
resources".   The  State  "must  implement   the  State's   existing                                                            
regulatory tools to control  the problems" that it is facing. Due to                                                            
the magnitude of the changes  that would be imposed by the dedicated                                                            
access privilege  specified in this bill, she would  request that "a                                                            
socio economic  impact study" be conducted  prior to the  passage of                                                            
this bill.                                                                                                                      
                                                                                                                                
[NOTE: Co-Chair Wilken assumed chair of the meeting.]                                                                           
                                                                                                                                
10:14:42 AM                                                                                                                   
                                                                                                                                
Senator  Olson asked  whether the  testifier was  a resident  of the                                                            
State.                                                                                                                          
                                                                                                                                
Ms. Jones affirmed that she was.                                                                                                
                                                                                                                                
Senator Stedman  commented that the action of moving  the regulation                                                            
of  fisheries from  "the  legislative  arena" and  to  the Board  of                                                            
Fisheries and other associated boards has "worked very well".                                                                   
                                                                                                                                
Ms.  Jones declared  that  she  has no  problem  with  the Board  of                                                            
Fisheries or  the Limited Entry Commission  "being greatly  involved                                                            
in the fishing  industry". However,  "the allocation of the  fishing                                                            
rights is something that nobody should have the right to do."                                                                   
                                                                                                                                
10:15:51 AM                                                                                                                   
                                                                                                                                
GLEN CAROLL  testified via  teleconference  from an offnet  site and                                                            
informed the Committee  that he is a lifelong Alaskan  whose who has                                                            
been involved  in fisheries for forty years with the  last ten being                                                            
in the cod fishing industry.  He spoke in support of the bill, as he                                                            
forecast no future for  the manner in which the fishery is currently                                                            
being  conducted. Under  the current  "derby style,  open to  entry,                                                            
Olympic  competitive  fishery",  the fishing  "seasons  are  getting                                                            
shorter  and  shorter"  and  the  manner  in  which  the  "fish  are                                                            
presented to the world is really backward marketing".                                                                           
                                                                                                                                
Mr.  Caroll  informed the  Committee  that  the  Kodiak Pollock/cod                                                             
season was  ten months long  in 2000, in the  year 2005, the  season                                                            
was 11  days long.  He likened  the status  quo to  "the bow of  the                                                            
Titanic,  it's already under  the water and  we just can't  keep re-                                                            
arranging the deck chairs and asking the band to keep playing".                                                                 
                                                                                                                                
Mr. Caroll shared  that he and his wife conduct direct  marketing to                                                            
customers  in Korea and  on the east  coast of the  U.S. on  a small                                                            
scale. The  marketing of  Alaskan cod "is  analogous to the  Western                                                            
states' cattlemen  slaughtering three-quarters of  their cows on the                                                            
fourth  of July  and  expecting the  market  to absorb  millions  of                                                            
pounds  all at  once". That  is how  the State  of Alaska's  codfish                                                            
resource is marketed. The  season opens January first and during the                                                            
next six to  eight weeks, three-quarters  of the allowable  catch in                                                            
the Gulf of Alaska is harvested  and "we can't figure out why we get                                                            
thirty cents for  our fish when in Boston and Iceland,  they get one                                                            
dollar".  The  entirety  of  "distributors  and  buyers  across  the                                                            
country  know immediately  that they  just have  to watch with  open                                                            
hands" because  the docks and the processors in the  State of Alaska                                                            
"are awash with fish for  six weeks". The price spirals downward, as                                                            
"desperate"  fishermen  "sell their  fish at a  cheaper and  cheaper                                                            
price".                                                                                                                         
                                                                                                                                
Mr. Caroll  attested that until the  "race for fish" is eliminated,                                                             
the quality  of Alaskan fish would  never be at the level  it should                                                            
be nor match that of other places' fish.                                                                                        
                                                                                                                                
Mr. Caroll  stated that some  have compared  the proposed system  to                                                            
the IFQ  program. Rather  than the criticisms  in this regard  being                                                            
about the IFQ  program, they are in  regard "to the implementation"                                                             
of the  system.  He avowed  that there  is "nothing  wrong with  the                                                            
concept of a quota share  program", as reflected by the price of IFQ                                                            
halibut  having  tripled  under  the process  and  the  fish's  more                                                            
frequent  availability. Elimination  of "the  race" for fish  is the                                                            
only sane  way to  conduct business".  Until  fishery resources  are                                                            
operated in a  manner other than a derby style and  are treated as a                                                            
business, the resource  would "never truly be maximized". "This bill                                                            
would begin  the process that would  lengthen and create  more shore                                                            
jobs in more  communities throughout  the State." It would  increase                                                            
the value and quality of the fish.                                                                                              
                                                                                                                                
Mr.  Caroll  stated   that  the  Task  Force  process   behind  this                                                            
legislation  has often been  criticized as  not being a real  public                                                            
process. However,  as a participant  on the Task Force, he  attested                                                            
that the work  that had been conducted for more than  one and a half                                                            
years had been an exceedingly  public process. The general tone that                                                            
prevailed  throughout the process,  which was  led by then  Board of                                                            
Fish chair Ed Dersham,  was one welcoming "good ideas". The meetings                                                            
included discussions, debates, and brainstorming sessions.                                                                      
                                                                                                                                
10:22:06 AM                                                                                                                   
                                                                                                                                
JULIE   BONNEY,   Representative,    Alaska   Groundfish    Databank                                                            
Association   and   a  23-year   Alaska   resident   testified   via                                                            
teleconference  from an offnet site and informed the  Committee that                                                            
Alaska  Groundfish   Databank  is  a  group  of  shore-based   trawl                                                            
fisherman and  shore-based processors who support  this legislation.                                                            
It would  allow  the Board  of Fish  and the Commission  to  explore                                                            
fishery restructuring  for groundfish  fisheries inside the  State's                                                            
three-mile  zone using  a dedicated  access privilege.  The  members                                                            
appreciate  the  MOU  detailing  how the  public  process  would  be                                                            
conducted as  well as the fiscal note  that would allow hearings  to                                                            
be  held  in  the  affected   communities.  The  bill   is  "process                                                            
legislation" that would  allow Association members to participate in                                                            
the effort to  develop fair and equitable plans in  conjunction with                                                            
the Board of Fish and the Commission.                                                                                           
                                                                                                                                
Ms.  Bonney  stated that  while  the  process  could be  likened  to                                                            
entering  the  unknown  with "one's  entire  livelihood  at  stake",                                                            
fishery restructuring  must occur in the Gulf Groundfish  fisheries.                                                            
"The  present management  structure  focuses  on catching  the  most                                                            
amount of fish  instead of extracting the most value  for every fish                                                            
that is  caught." The fishing  industry must  be provided the  tools                                                            
that  would allow  them to  be competitive  in the  global  markets,                                                            
specially increasing pressure  from the global farmed fish industry.                                                            
Other things that  should be addressed include 12-hour  fisheries in                                                            
which  nine  million  pounds  of fish  are  harvested  and  must  be                                                            
processed. She  noted that the only open access fishery  on the west                                                            
coast of the U.S.  is the Prince William Sound Pollock  fishery, and                                                            
this year, the  total capacity of the 12 vessels that  fished it was                                                            
twice the allowable catch.                                                                                                      
                                                                                                                                
Ms.  Bonney  stated that  another  consideration  is  the  confusion                                                            
experienced  by   those  participating  in  the  federally   managed                                                            
program: were  they to fish within  the three-mile limit  they would                                                            
be  under the  State  jurisdiction  and were  they outside  of  that                                                            
three-mile limit they would  be under the federal jurisdiction. Were                                                            
this   legislation   adopted   and  the   process   completed,   the                                                            
federal/State   components    could   be   melded.   Those   federal                                                            
participants  fishing within  the three-mile  limit under a  federal                                                            
program  would do so  with all  the appropriate  activities such  as                                                            
observer coverage and other regulations.                                                                                        
                                                                                                                                
Ms. Bonney  also urged that the historical  investment process  also                                                            
consider  the  impact  on  fishery  dependent  communities.   During                                                            
discussions  with the Alaska Attorney  General's representative,  it                                                            
was  apparent  that one  of  the biggest  hurtles  in  developing  a                                                            
dedicated  access privilege  would  be establishing  a program  that                                                            
would  be acceptable  under the  State's Constitution.  Rather  than                                                            
this process  establishing  something akin  to the IFQ process,  the                                                            
design  must be  one of a  leasing privilege  wherein  the State  of                                                            
Alaska  would  maintain  the  ownership  on  the  resource.  Further                                                            
discussions regarding  such things as the duration  of the privilege                                                            
or whether a portion  of the history would revert  back to the State                                                            
so that it  could be reallocated to  second generation fishers  must                                                            
be developed in a process in which the public could participate.                                                                
                                                                                                                                
Ms.  Bonney  highlighted   the  fact  that  an  analysis  [copy  not                                                            
provided]  conducted  by the  Department  of Fish  and  Game of  the                                                            
fishers  that  participate  within  the  three-mile   limit  clearly                                                            
reflected that,  "it is truly an Alaska fishery".  This is supported                                                            
by the  fact that 96-percent  of the Kodiak  long-line cod  fishery;                                                            
95-percent of  the Kodiak cod fishery; and 47-percent  of the Kodiak                                                            
trawl  fishery was  harvested  by Alaskan  vessel  owners and  hired                                                            
skippers.  The claim  that the  majority  of the  resource would  be                                                            
allocated to out-of-state entities "is not true".                                                                               
                                                                                                                                
[NOTE: Co-Chair Green resumed chair of the hearing.]                                                                            
                                                                                                                                
Ms. Bonney urged for passage  of the bill, as this legislation would                                                            
allow the process to begin.                                                                                                     
                                                                                                                                
10:29:01 AM                                                                                                                   
                                                                                                                                
LANCE  NELSON,  Assistant  Attorney   General,  Department  of  Law,                                                            
testified via  teleconference from  an offnet site and informed  the                                                            
Committee that,  as the attorney assigned to represent  the Board of                                                            
Fisheries, he worked on  the development of the bill with the Board,                                                            
the  Commission,  and the  sponsor.  An  informal  Attorney  General                                                            
opinion  was issued in  1995 that  stated that  a program like  this                                                            
would  allow for  the development  of a  program  that would  likely                                                            
"pass Constitutional  muster".  While there  could be the risk  that                                                            
the State Court System  could identify some flaw in whatever program                                                            
might  be developed,  the process  established by  this bill  "would                                                            
probably be the best possible  way to develop and refine a program…"                                                            
Therefore,  the Department's  position  has continued  to be that  a                                                            
dedicated access privilege  program would have a "very decent chance                                                            
at surviving any Constitutional challenge."                                                                                     
                                                                                                                                
10:31:23 AM                                                                                                                   
                                                                                                                                
ED DERSHAM, Vice-Chairman,  Alaska Board of Fisheries, testified via                                                            
teleconference from an  offnet site and reviewed the history leading                                                            
to the development  of the process  proposed in this bill.  He noted                                                            
that he had chaired the  Alaska Groundfish Rationalization Committee                                                            
task force which  had conducted nine days of public  hearings over a                                                            
one-and-a-half  year period,  in addition to  the public input  that                                                            
was heard during  regularly scheduled  Board of Fisheries  meetings.                                                            
As Ms. Bonney had testified,  it was noted early in the process that                                                            
most  of the State's  fishing  industry  participants, specifically                                                             
those in the cod fishery,  were Alaskan residents. It was clear that                                                            
finding a  way to allocate  at least partially  based on history  of                                                            
participants would  be a good thing for Alaskans in  reaction to the                                                            
federally rationalized  fishery outside of the three-mile  zone. The                                                            
Board also  realized that  current Board  authority would not  allow                                                            
such an  allocation, therefore  efforts were  undertaken to  address                                                            
the issue in an allowable manner.                                                                                               
                                                                                                                                
Mr. Dersham  stressed that "the problem"  with the Board's  "current                                                            
authority  is that, while  it works well in  regards to many  of the                                                            
Board's responsibilities,  the authority does not allow for a slower                                                            
rate  for  fish  harvesting  nor  does  it  provide  protection  "to                                                            
participants  in State  waters  in relation  to changes  in  federal                                                            
fisheries  in adjacent  waters".  The only  tools  available to  the                                                            
Board through  which to slow the rate  of fish would create  further                                                            
"economic inefficiently".  Even though additional  restrictions have                                                            
been  placed  on the  State  cod fishery,  the  times  allotted  for                                                            
harvesting fish  have worsened over the past two years  and have not                                                            
served  to slow down  the harvesting.  "Almost  ridiculous  economic                                                            
inefficiencies"  would result were  the Board to implement  "extreme                                                            
measures" to try to address  the forthcoming federal rationalization                                                            
plans;  therefore,  the  response  was  to support  the  task  force                                                            
efforts as included in this legislation.                                                                                        
                                                                                                                                
Mr. Dersham stated that  the MOU developed by the Commission and the                                                            
Board  outlined  the  public  process  that  must  occur  were  this                                                            
legislation adopted. The  desires and needs of the fisheries must be                                                            
involved  in the process.  The $45,600 Department  of Fish  and Game                                                            
fiscal note  would specifically  allow that  initial public  hearing                                                            
process to occur in communities  most affected by a dedicated access                                                            
privilege program.                                                                                                              
                                                                                                                                
Mr.  Dersham  stated  that the  overall  benefits  provided  by  the                                                            
adoption of this  process legislation would be intended  to directly                                                            
benefit coastal communities  and Alaska resident participants to the                                                            
extent possible. The result  would be a more comprehensive potential                                                            
solution to some  of these "races for fish" than could  be developed                                                            
under the current authority.                                                                                                    
                                                                                                                                
Co-Chair Green asked whether  there were any questions regarding the                                                            
April 25, 2005  Senate Resources' Letter of Intent  that accompanies                                                            
the bill or the MOU.                                                                                                            
                                                                                                                                
There being none, Co-Chair  Green stated that the bill would be HELD                                                            
in Committee in order for further review.                                                                                       
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 124(L&C)                                                                                            
     "An  Act relating  to  requirements to  obtain  and maintain  a                                                            
     fisheries  business license;  relating to security required  of                                                            
     fish processors  and primary fish buyers; and  providing for an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
10:38:03 AM                                                                                                                   
                                                                                                                                
CHUCK HARLAMERT,  Juneau Section Chief, Tax Division,  Department of                                                            
Revenue,  stated  that this  bill  would  "increase the  process  of                                                            
accountability  for  repayment   of obligations   that  support  the                                                            
industry" and improve the  protection of employees and fishermen who                                                            
work for or sell to processors.                                                                                                 
                                                                                                                                
Mr. Harlamert  stated that  current law requires  a processor  to be                                                            
current on their taxes  under Title 43 in that Section 1 of the bill                                                            
would modify  current law  to require a processor  to be current  on                                                            
their  Employment  Security  Contributions  (ESC),  current  on  any                                                            
Occupational  Safety and Health Act  (OSHA) fines, current  on their                                                            
Seafood Marketing Assessment, and current on local fish taxes.                                                                  
                                                                                                                                
Co-Chair Green  noted that Members' packets contain  a Department of                                                            
Revenue overview [copy on file].                                                                                                
                                                                                                                                
Mr.  Harlamert expressed  that  the  Department's overview  is  very                                                            
detailed.                                                                                                                       
                                                                                                                                
10:41:22 AM                                                                                                                   
                                                                                                                                
Co-Chair Green also noted  that Members' packets also include a six-                                                            
page Fisheries  License and  Bond Bill Sectional  Analysis  from the                                                            
Office of the Attorney General [copy on file].                                                                                  
                                                                                                                                
Mr. Harlamert affirmed.                                                                                                         
                                                                                                                                
Mr. Harlamert continued  that Section 2 of the bill would modify the                                                            
process  through  which  the  Department   of  Labor  and  Workforce                                                            
Development  could collect any unpaid  ESC from a processor's  labor                                                            
bond in  that it could allow  a processor  to secure payment  of the                                                            
estimated tax for the year  using security that had been provided to                                                            
the Department for the prior year.                                                                                              
                                                                                                                                
Mr.  Harlamert  noted  that  Section  3  of the  bill  is  the  most                                                            
complicated   section  of   the  bill.  It   would  change   bonding                                                            
requirements and  the conditions through which employees  could gain                                                            
satisfaction  from the bond. Such  efforts would assist in  aligning                                                            
processors'  bond levels  with  the risks.  It would  ease the  bond                                                            
rules  involved   when  a  processor  fails  to  pay   employees  or                                                            
fishermen.                                                                                                                      
                                                                                                                                
[NOTE: Due to poor recording  quality, the testifier's comments were                                                            
difficult to discern.]                                                                                                          
                                                                                                                                
Co-Chair  Green  understood   that  the  primary  objective  of  the                                                            
legislation is located in Section 3 of the bill.                                                                                
                                                                                                                                
Mr. Harlamert  affirmed. Section 3 would make "the  bond levels more                                                            
responsive  to  processors  behavior".  A  processor  who  fails  to                                                            
compensate fishermen  or employees "would be more  likely under this                                                            
bill to  have their bond  level go up." In  addition, they  would be                                                            
unable to utilize real property in lieu of bonds.                                                                               
                                                                                                                                
Co-Chair   Green  ascertained   that   a  processor's   bond   level                                                            
requirement  could be  increased.  She asked  the point  at which  a                                                            
processor's  obligation would create  a warning that could  prohibit                                                            
them  from  obtaining  and  maintaining  their  fisheries   business                                                            
license or might subject them to prosecution.                                                                                   
                                                                                                                                
Mr.  Harlamert stated  that  a processor  would be  prohibited  from                                                            
getting their license were  they delinquent on their Title 43 taxes,                                                            
ESC, OSHA fines, or the  Seafood Marketing Assessment. This would be                                                            
a very effective tool in getting those payments.                                                                                
                                                                                                                                
Co-Chair  Green understood  that the bond  requirement component  of                                                            
the bill is a separate issue from the licensing requirements.                                                                   
                                                                                                                                
Mr. Harlamert  stated that  the bill has  two major components:  one                                                            
being  the  requirements  for  licensure  and the  other  being  the                                                            
bonding component.                                                                                                              
                                                                                                                                
10:43:58 AM                                                                                                                   
                                                                                                                                
Senator Stedman stated  that, upon reviewing the accompanying fiscal                                                            
notes,  it  appears  that  this  bill  might   generate  revenue  by                                                            
furthering  the collection of the  Seafood Marketing Assessment.  In                                                            
addition, he wondered if  the State's imposition of a cash bond on a                                                            
processor who  got in trouble for lack of payment,  might jeopardize                                                            
that  processor  ability to  operate.  It could  be  assumed that  a                                                            
processor who had not paid  their obligations might be having a cash                                                            
flow problem.                                                                                                                   
                                                                                                                                
10:44:58 AM                                                                                                                   
                                                                                                                                
Mr. Harlamert  communicated that the  State would have "better  luck                                                            
collecting the  Seafood Marketing Assessment", as  presently keeping                                                            
current on  that is not a requirement;  however, only a "relatively                                                             
few" do not currently pay that tax.                                                                                             
                                                                                                                                
Mr.  Harlamert  stated  that  the  elements   that  would  affect  a                                                            
processor's  bond would be  whether one's  employees, fishermen,  or                                                            
unemployment  security contributions  had been  paid. Currently  the                                                            
bond  level  would be  unaffected  were  a processor  to  satisfy  a                                                            
judgment with  another asset such  as cash. This bill would  "change                                                            
that in that the  mere existence of a judgment in  excess of $10,000                                                            
would trigger"  increasing the bond  level from $10,000 to  $50,000.                                                            
                                                                                                                                
10:47:09 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green asked  whether the  Committee's  questions thus  far                                                            
could be more  appropriately answered  by the Department  of Revenue                                                            
or the Department of Labor and Workforce Development.                                                                           
                                                                                                                                
PATRICK SHIER, Acting Deputy  Director, Employment Security Tax, and                                                            
Chief,  Division of  Employment Security,  Department  of Labor  and                                                            
Workforce  Development, stated  that Mr. Harlamert  has handled  the                                                            
questions quite  well. This legislation  would allow the  Department                                                            
of Labor  and  Workforce Development  to  move against  a bond  more                                                            
quickly than  it could currently;  the quicker the Department  could                                                            
act, the quicker  that problems could be resolved  before either the                                                            
fish, cash, or processor left the State.                                                                                        
                                                                                                                                
Co-Chair Green appreciated that information.                                                                                    
                                                                                                                                
Mr.  Harlamert stated  that  under current  law,  any processor  who                                                            
could demonstrate  a  piece of real  property located  in the  State                                                            
equal to  the required  bond level  would be excused  from the  bond                                                            
requirement.  This would  be acceptable  were no  trouble to  arise;                                                            
however, the  process of foreclosing  against that real property  to                                                            
satisfy a judgment  could be problematic.  This bill would  restrict                                                            
the use of  real property in a case  where a processor had  a record                                                            
of failure to pay, and a cash bond would be required.                                                                           
                                                                                                                                
Mr.  Harlamert stated  that  the changes  in the  bond requirements                                                             
would make the process more responsive and easy to access.                                                                      
                                                                                                                                
Senator Stedman  ascertained that  the real concern being  addressed                                                            
by the  proposed  bond changes  would be  a floating  processor  who                                                            
might be in the State today  but gone tomorrow as opposed to a fixed                                                            
shore-side  processor who  might get  into a liquidity  bind  due to                                                            
market conditions or mismanagement.                                                                                             
                                                                                                                                
10:49:59 AM                                                                                                                   
                                                                                                                                
Mr. Harlamert  stated that established  longtime corporate  citizens                                                            
of Alaska  tend to have real  property and  they are allowed  to use                                                            
that property in lieu of  the bond. Floating or itinerant processors                                                            
did not have similar  connections to the State and  therefore a cash                                                            
bond was  required  from them to  protect fishermen  and  employees.                                                            
There has  been no change  in the basic bond  level or the  right to                                                            
use real  property in  lieu of  cash requirements.  The only  change                                                            
would be in the case of  a processor who displayed a history of non-                                                            
payment.  The  consequences   would  be  more  immediate  and  "more                                                            
realistic".                                                                                                                     
                                                                                                                                
Co-Chair  Wilken   understood  therefore   that  were  he   a  small                                                            
processor,  he would be required  to get a  bond. To that point,  he                                                            
asked whether  his house could be  recognized as collateral  in lieu                                                            
of cash provided he had no prior judgment history.                                                                              
                                                                                                                                
Mr. Harlamert  responded that Co-Chair  Wilken would be required  to                                                            
purchase a bond were he  to buy fish in the State unless he had real                                                            
property he could use in lieu of the cash bond.                                                                                 
                                                                                                                                
Co-Chair  Wilken understood  therefore that  a portion of his  house                                                            
could be used unless a judgment had been levied against him.                                                                    
                                                                                                                                
10:52:33 AM                                                                                                                   
                                                                                                                                
Mr. Harlamert  affirmed.  He communicated  that  the judgment  issue                                                            
could be revisited after a few years.                                                                                           
                                                                                                                                
Mr.  Shier  stated  that  the  Department  of  Labor  and  Workforce                                                            
Development  supports this  bill because it  would require  that all                                                            
taxes, assessments,  and judgment  must be  current. Thus,  it would                                                            
allow "the slate to be  clean" going into the coming year. It should                                                            
be  noted that  processors  are provided  "ample  opportunities"  to                                                            
address  the situation  through  options  such as  deferred  payment                                                            
contracts  and negotiated  settlements. The  Department "recognizes                                                             
the fact the employers  provide jobs. That is very important" and no                                                            
effort is made "to hobble  the folks that want to do the right thing                                                            
or …. might fall on hard times in a particular year."                                                                           
                                                                                                                                
Mr. Shier stated  that the bill would also provide  an incentive for                                                            
a processor to contact  the Department and rectify a situation. Sec.                                                            
3 would specify the length  of time that would be available in which                                                            
to secure a bond.  The bond is important, as sometimes  "that is the                                                            
only thing  that is left  after the fish is  gone, the cash  is gone                                                            
and the employer is gone".  Many things could contribute to the need                                                            
for a higher  bond amount. The Department  supports the language  to                                                            
that point.                                                                                                                     
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objection,  CS  SB  124(L&C)   was  REPORTED  from                                                            
Committee  with zero  fiscal note  #2, dated February  4, 2005  from                                                            
Department  of Commerce,  Community and  Economic Development;  zero                                                            
fiscal note #3, dated December  16, 2004 from Department of Fish and                                                            
Game;  zero  fiscal  note  #4, dated  February  24,  2005  from  the                                                            
Employment  Security  Division, Department  of  Labor and  Workforce                                                            
Development; zero  fiscal note #5, dated February  24, 2005 from the                                                            
Division  of Labor  Standards and  Safety, Department  of Labor  and                                                            
Workforce  Development,  and new zero  fiscal note,  dated April  1,                                                            
2005 from the Department of Revenue.                                                                                            
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Green adjourned the meeting at 10:56 AM.                                                                               

Document Name Date/Time Subjects