03/23/2004 01:35 PM Senate L&C
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= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 23, 2004
1:35 p.m.
TAPE(S) 04-25
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ralph Seekins, Vice Chair
Senator Gary Stevens
Senator Bettye Davis
Senator Hollis French
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 340(JUD) am
"An Act relating to damages in an action for a defect in the
design, construction, and remodeling of certain dwellings; and
providing for an effective date."
MOVED CSHB 340(JUD) am OUT OF COMMITTEE
SENATE BILL NO. 357
"An Act relating to the regulation of insurance, insurance
licenses, qualifications of insurance producers, surplus lines,
fraud investigations, electronic transactions, and compliance
with federal law and national standards; and providing for an
effective date."
MOVED CSSB 357(L&C) OUT OF COMMITTEE
CS FOR HOUSE JOINT RESOLUTION NO. 34(FSH)
Requesting the United States Department of Agriculture and the
United States Department of Labor to extend Trade Adjustment
Assistance benefits to Alaska salmon fishermen; requesting the
United States Congress and the United States Department of
Agriculture to extend additional disaster and price support
benefits to Alaska salmon fishermen; and requesting the United
States Department of Commerce to establish a Trade Adjustment
Assistance program specific to commercial fishermen.
MOVED CSHJR 34(FSH) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 409(FSH)
"An Act relating to the maximum length of salmon seine vessels;
and providing for an effective date."
HEARD AND HELD
SENATE BILL NO. 358
"An Act relating to the performance of railroad track
construction work for the Department of Transportation and
Public Facilities by the Alaska Railroad Corporation."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 340
SHORT TITLE: DAMAGES IN CONSTRUCTION CLAIMS
SPONSOR(s): REPRESENTATIVE(s) MEYER
01/12/04 (H) PREFILE RELEASED 1/2/04
01/12/04 (H) READ THE FIRST TIME - REFERRALS
01/12/04 (H) L&C, JUD
01/23/04 (H) L&C AT 3:15 PM CAPITOL 17
01/23/04 (H) Moved CSHB 340(L&C) Out of Committee
01/23/04 (H) MINUTE(L&C)
01/26/04 (H) L&C RPT CS(L&C) 1DP 4NR
01/26/04 (H) DP: ANDERSON; NR: CRAWFORD, LYNN,
01/26/04 (H) GATTO, GUTTENBERG
02/04/04 (H) JUD AT 1:00 PM CAPITOL 120
02/04/04 (H) -- Meeting Canceled --
02/09/04 (H) JUD AT 1:00 PM CAPITOL 120
02/09/04 (H) Moved CSHB 340(JUD) Out of Committee
02/09/04 (H) MINUTE(JUD)
02/12/04 (H) JUD RPT CS(JUD) 5DP 1NR
02/12/04 (H) DP: OGG, SAMUELS, HOLM, ANDERSON,
02/12/04 (H) MCGUIRE; NR: GARA
02/23/04 (H) TRANSMITTED TO (S)
02/23/04 (H) VERSION: CSHB 340(JUD) AM
02/25/04 (S) READ THE FIRST TIME - REFERRALS
02/25/04 (S) L&C, JUD
03/04/04 (S) L&C AT 1:30 PM BELTZ 211
03/04/04 (S) Heard & Held
03/04/04 (S) MINUTE(L&C)
03/09/04 (S) L&C AT 1:30 PM BELTZ 211
03/09/04 (S) Scheduled But Not Heard
03/23/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 357
SHORT TITLE: INSURANCE
SPONSOR(s): LABOR & COMMERCE
03/01/04 (S) READ THE FIRST TIME - REFERRALS
03/01/04 (S) L&C, FIN
03/09/04 (S) L&C AT 1:30 PM BELTZ 211
03/09/04 (S) Heard & Held
03/09/04 (S) MINUTE(L&C)
03/23/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: HJR 34
SHORT TITLE: FED TRAINING AND ASSISTANCE FOR FISHERMEN
SPONSOR(s): REPRESENTATIVE(s) OGG BY REQUEST OF SALMON INDUSTRY
TASK FORCE
01/28/04 (H) READ THE FIRST TIME - REFERRALS
01/28/04 (H) FSH, L&C
02/09/04 (H) FSH AT 9:00 AM CAPITOL 124
02/09/04 (H) Moved CSHJR 34(FSH) Out of Committee
02/09/04 (H) MINUTE(FSH)
02/12/04 (H) FSH RPT CS(FSH) NT 5DP
02/12/04 (H) DP: OGG, WILSON, SAMUELS, GUTTENBERG,
02/12/04 (H) SEATON
02/16/04 (H) L&C AT 3:15 PM CAPITOL 17
02/16/04 (H) Moved CSHJR 34(FSH) Out of Committee
02/16/04 (H) MINUTE(L&C)
02/18/04 (H) L&C RPT CS(FSH) NT 4DP 1NR
02/18/04 (H) DP: LYNN, GATTO, GUTTENBERG, ANDERSON;
02/18/04 (H) NR: DAHLSTROM
02/26/04 (H) TRANSMITTED TO (S)
02/26/04 (H) VERSION: CSHJR 34(FSH)
02/27/04 (S) READ THE FIRST TIME - REFERRALS
02/27/04 (S) L&C, RES
03/23/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: HB 409
SHORT TITLE: SEINE VESSEL LENGTH
SPONSOR(s): REPRESENTATIVE(s) WILLIAMS BY REQUEST OF SALMON
INDUSTRY TASK FORCE
01/28/04 (H) READ THE FIRST TIME - REFERRALS
01/28/04 (H) FSH, RES
02/09/04 (H) FSH AT 9:00 AM CAPITOL 124
02/09/04 (H) Heard & Held
02/09/04 (H) MINUTE(FSH)
02/16/04 (H) FSH AT 9:00 AM CAPITOL 124
02/16/04 (H) Moved CSHB 409(FSH) Out of Committee
02/16/04 (H) MINUTE(FSH)
02/18/04 (H) FSH RPT CS(FSH) 3DP 4NR
02/18/04 (H) DP: WILSON, HEINZE, GUTTENBERG;
02/18/04 (H) NR: GARA, OGG, SAMUELS, SEATON
02/18/04 (H) RES AT 1:00 PM CAPITOL 124
02/18/04 (H) Moved CSHB 409(FSH) Out of Committee
02/18/04 (H) MINUTE(RES)
02/19/04 (H) RES RPT CS(FSH) 5DP 1DNP 2NR
02/19/04 (H) DP: STEPOVICH, HEINZE, KERTTULA,
02/19/04 (H) GUTTENBERG, MASEK; DNP: WOLF;
02/19/04 (H) NR: LYNN, GATTO
02/26/04 (H) TRANSMITTED TO (S)
02/26/04 (H) VERSION: CSHB 409(FSH)
02/27/04 (S) READ THE FIRST TIME - REFERRALS
02/27/04 (S) L&C, RES
03/11/04 (S) L&C AT 1:30 PM BELTZ 211
03/11/04 (S) <Above Bill Hearing Postponed>
03/23/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 358
SHORT TITLE: ALASKA RAILROAD TRACK WORK
SPONSOR(s): TRANSPORTATION
03/03/04 (S) READ THE FIRST TIME - REFERRALS
03/03/04 (S) TRA, L&C
03/04/04 (H) TRA AT 1:30 PM CAPITOL 17
03/04/04 (H) -- Meeting Canceled --
03/05/04 (S) TRA RPT 3DP 2NR
03/05/04 (S) DP: WAGONER, COWDERY,THERRIAULT
03/05/04 (S) NR: LINCOLN, OLSON
03/23/04 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
Representative Kevin Meyer
Alaska State Capitol
Juneau AK 99801-1182
POSITION STATEMENT: Sponsor of HB 340.
Ms. Linda Hall, Director
Division of Insurance
Department of Community & Economic Development
PO Box 110800
Juneau AK 99811-0800
POSITION STATEMENT: Supports SB 357.
Ms. Melissa Dover
Staff to Representative Dan Ogg
Alaska State Capitol
Juneau AK 99801-1182
POSITION STATEMENT: Sponsor of HJR 34.
Mr. Mark Vinsel, Executive Director
United Fishermen of Alaska
211 4th Street, Suite 110
Juneau AK 99801-1172
POSITION STATEMENT: Supports HJR 34.
Mr. Tim Barry
Staff to Representative Bill Williams
Alaska State Capitol
Juneau AK 99801-1182
POSITION STATEMENT: Commented on HB 409 for the sponsor.
Mr. Jerry McCune, Executive Director
United Fishermen of Alaska (UFA)
211 4th Street, Suite 110
Juneau AK 99801-1172
POSITION STATEMENT: Supports HB 409.
Mr. Mac Meiners
Purse Seiner
No address provided
POSITION STATEMENT: Supports HB 409.
Mr. Melvin Larson
Sand Point AK
POSITION STATEMENT: Opposes HB 409.
Mr. Richard Schmitz
Staff to Senator John Cowdery
Alaska State Capitol
Juneau AK 99801-1182
POSITION STATEMENT: Commented on SB 358 for sponsor.
Ms. Wendy Lindskoog, Director
External Affairs
Alaska Railroad Corporation (ARRC)
PO Box 107500
Anchorage AK 99510
POSITION STATEMENT: Supports SB 358.
Ms. Nona Wilson, Legislative Liaison
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau AK 99801-7898
POSITION STATEMENT: Supports SB 358.
Mr. J.R. Wood, Owner
Railway Support Services
Anchorage AK
POSITION STATEMENT: Opposes SB 358.
Mr. Mark Condon, President
Condon Railroad Construction
Anchorage AK
POSITION STATEMENT: Opposes SB 358.
Mr. John Landerfelt
Laborers Local 341
Anchorage AK
POSITION STATEMENT: Opposes SB 358.
ACTION NARRATIVE
TAPE 04-25, SIDE A
HB 340-DAMAGES IN CONSTRUCTION CLAIMS
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 1:35 p.m. All members were
present. The first order of business to come before the
committee was CSHB 340(JUD)am.
REPRESENTATIVE KEVIN MEYERS, sponsor, said that there had
already been a lot of testimony on this bill and offered to
answer any questions.
CHAIR BUNDE said the committee had already had one hearing on
this bill and there was no additional testimony.
SENATOR RALPH SEEKINS moved to pass CSHB 340(JUD)am from
committee with individual recommendations and attached fiscal
note.
CHAIR BUNDE asked for a roll call vote. Senators Gary Stevens,
Bettye Davis, Hollis French, Ralph Seekins and Chair Con Bunde
voted yea; and CSHB 340(JUD)am moved from committee.
SB 357-INSURANCE
CHAIR CON BUNDE announced SB 357 to be up for consideration.
SENATOR GARY STEVENS moved to adopt CSSB 357(L&C), version H.
There were no objections and it was so ordered.
MS. LINDA HALL, Director, Division of Insurance, Department of
Community & Economic Development (DCED), said the CS has two
changes.
We have had two areas of concern expressed to us....
One of those is represented in sections 47 and 48,
which are the changes in the bill. The original bill
requires reinsurance agreements to be filed and
approved by the director of the Division of Insurance.
The feedback we got from, not only industry, but the
Reinsurance Association, was that this was overly
burdensome and could sometimes be impossible due to
negotiations between insurers for their treating
reinsurance agreements. The new language in the CS
requires only that the signed agreements be filed
within 30 days and it's my understanding that these
changes meet the concerns of industry and they also
meet our needs. Our needs were that we need to be sure
that we are able to get copies of the signed
reinsurance agreements and that had been a problem in
the past. So, the only changes in the CS are to,
instead of the division having to approve the
reinsurance agreements, they would merely have to file
a signed copy of the reinsurance agreements.
The other area of concern that I would like to
address...is in section 12 of the bill and I believe
this was also part of a letter that was received by
members of the committee.
CHAIR BUNDE asked her if she was referencing the Timber
Insurance Exchange letter.
MS. HALL replied yes. She explained:
The second half of that letter is addressed in 47 and
48 addressed in the CS. Section 12 has received some
concern. The language in section 12 is taken directly
from the NAIC [National Association of Insurance
Commissioners] model regulations on reinsurance. What
we've tried to do here is to provide assurances that
the state of domicile is aware that the insurer
writing the reinsurance is a life insurance company
who is writing what is typically a property casualty
line of workers' compensation. The financial
statements that are filed by the two types of
companies are very different and the NAIC has
recognized a need for more extensive financial
information and has provided a supplement to the
annual financial statements that a life insurer would
file if they choose to write workers' compensation. We
want to be sure that the state of domicile, the
primary regulator, has that information, has the
ability to look at and approve that company writing
those lines of business. We're not asking that they
have a certificate of authority, but merely that they
be given approval, which can be done as simply as a
letter acknowledging that they have approval to write
that line of business. That's really a financial
oversight area.
CHAIR BUNDE added that the letter expressed concern that section
12 would prevent Alaskan property and casualty insurers from
using life insurance as a reinsurance.
MS. HALL clarified that it wouldn't prevent them from using life
insurers for reinsurance as long as the state where the
reinsurer is primarily regulated, their state of domicile, knows
they're doing it and has approved them doing it. They don't have
to be licensed, so section 12 would not prevent them from being
able to do it.
CHAIR BUNDE asked her why it could be perceived as preventing
them from doing it.
MS. HALL replied that she didn't know.
CHAIR BUNDE asked if she had any further comments on the bill.
MS. HALL replied that she had spent quite a bit of time going
through the bill at its first hearing and would answer
questions.
CHAIR BUNDE indicated there were no further questions.
SENATOR RALPH SEEKINS moved to pass CSSB 357(L&C) from committee
with individual recommendations and attached zero fiscal note.
CHAIR BUNDE asked for a roll call vote. Senators Ralph Seekins,
Hollis French, Bettye Davis, Gary Stevens and Chair Con Bunde
voted yea; and CSSB 357(L&C) moved from committee.
HJR 34-FED TRAINING AND ASSISTANCE FOR FISHERMEN
CHAIR CON BUNDE announced CSHJR 34(FSH) to be up for
consideration.
MS. MELISSA DOVER, staff to Representative Dan Ogg, sponsor,
said the HJR 34 asks Congress to make trade adjustment
assistance a better fit for commercial fishermen. Last year
commercial fishermen became eligible to receive trade adjustment
assistance through two programs. One of them is a Department of
Labor program that expends retraining benefits and the other is
a U.S. Department of Agriculture (USDA) program that gives cash
benefits up to $10,000.
For a variety of reasons the programs have not fit very well for
commercial fishermen - mostly because they were designed for
agricultural workers. Things like receiving Exxon-Valdez
payments made fishermen ineligible for the programs. HJR 34 asks
for four specific things - the first is that USDA give price
adjustment benefits to Alaska salmon fishermen who fished five
out of six years from 1997 to 2002 and subsequent qualifying
years if they can prove lost income or market share in any one
of those five years due to imports. It also asks that the U.S.
Department of Labor extend retraining benefits to Alaskan salmon
fishermen who fished in the same years even if they did not fish
in the preceding year due to impacts from price fluctuations or
loss of market. Some people were not able to fish, especially
last year, simply because they lost their market.
Third, HJR 34 asks Congress and the USDA to make Alaska salmon a
covered commodity, which would make Alaska salmon fishermen
eligible for other disaster and price support benefits. This is
something that Senator Murkowski hopes to get passed this year.
Lastly, it asks Congress to pursue a program that is designed
specifically for commercial fishermen so that they don't have
the same problems in the future.
CHAIR BUNDE asked how fishermen prove they have lost price due
to imported fish.
MS. DOVER replied that currently the USDA is not disputing the
fact that prices have plummeted due to imports.
MR. MARK VINSEL, Executive Director, United Fishermen of Alaska
(UFA), added that UFA filed the petition that successfully
qualified all five species of Alaska salmon for the USDA trade
adjustment assistance. The Foreign Agricultural Service has
determined that increased imports were a significant factor in
the price decline according to guidelines in the program for all
five salmon species.
CHAIR BUNDE asked if the retraining program is designed to make
fishermen better fishermen or to get them to move out of the
fishing industry.
MR. VINSEL replied that part of the program includes technical
assistance training to show fishermen ways to be more efficient
and other ways to get more income by diversifying their fishing
business. The cash price adjustment helps fishermen to adjust
financially to the impact imports have already had on their
business.
CHAIR BUNDE noted that he's often thought of commercial fishing
as a way of life rather than a career choice.
As I've told Senator Stevens from time to time, I
believe in separation of church and state, so we ought
not to be putting money into fishing that's a
religion.
SENATOR RALPH SEEKINS asked Mr. Vinsel to define an Alaskan
salmon fisherman.
MR. VINSEL replied that the petition included all permit-holding
Alaska salmon fishermen throughout the state, all crew members
if they could should show a crew license, which doesn't say
which kind of fishery or species, and a letter from a captain
stating that they did have a share in a catch of salmon.
Fishermen of both crew and fishermen categories of the
Metlakatla Indian Association are included.
SENATOR SEEKINS asked, of the qualified fishermen, how many are
Alaska residents.
MR. VINSEL replied that he didn't have statistics for crew
members, but of the permit holders, about 70 to 75 percent are
residents.
CHAIR BUNDE asked if it was possible for the State of California
to have a program like this and that fishermen could possibly
double dip and apply in both states?
MR. VINSEL replied:
This is a federal USDA program and the commodity that
UFA qualified through our petition is all Alaska
salmon. The Farm Service Agency of the different
states is cast with following through with helping
with the application process so basically the
qualification of Alaska salmon is by the permit holder
fishing fishermen from other states as well. They are
included in the program. In addition, Washington State
salmon, other than their pinks and chums were
qualified.... California salmon - I don't think that
they applied. Oregon salmon applied and were not
approved. Alaska salmon - all five species were
approved and it's a commodity-based program, so it's
really based on the fish and that's where there's a
little bit of misconception and the price adjustment
is based on the poundage of fish during the year under
the petition.
SENATOR SEEKINS said the reason he asked is because language on
pages 2 and 15 talks about Alaska salmon and that led him to
think about Alaska residents who fish for the Alaska salmon. He
thought language on line 15, "whereas alternative job
opportunities are uncommon in many of the rural areas where
Alaska salmon fishermen live", is a little misleading and was
concerned about temporary people who come to Alaska from the
Lower 48 to fish for a season and then want to get benefits
because they are "Alaska salmon fishermen."
SENATOR SEEKINS wanted to know how many members of the United
Fishermen of Alaska actually live in Alaska and don't just fish
here. He is not sympathetic to transients who come up here to
take advantage of Alaska's disaster.
CHAIR BUNDE said he would get an update of those numbers for
him.
SENATOR GARY STEVENS commented that Senator Seekins' concern has
troubled all people in the fishing industry. Often permits are
held by people who are not Alaska residents, but he hesitated to
call them transients, because many had been fishing in Alaska
for 20, 30 or 40 years. Charging non-residents more for their
permits was found to be unconstitutional. Much of the industry
has been created by people from outside Alaska and it's an issue
that he didn't want to tackle. He asked Mr. Vinsel if there was
any element of the retraining that would take fishermen out of
the fishing industry.
MR. VINSEL answered that the technical training part of it is
specific to fishing and helping people be better fishermen, but
the Department of Labor program, which a fisherman automatically
qualifies for if he qualifies for the USDA program, previously
required that a fisherman had to be part of an employee worker
group. Employees of processors qualified for that, but not
fishermen. That program is a retraining program to offer
alternative work and new career paths. It includes other jobs
that could go hand in hand with seasonal fishing.
SENATOR GARY STEVENS stated that the salmon industry is in a
crisis because of farming and hopefully it will come back, but
it would take a while. Fishermen can train for fishing in
undersubscribed fisheries - specifically the pollock jig
fishery.
CHAIR BUNDE asked if a person who lives in Seattle and fished in
Kodiak for the last 20 years could take advantage of this
program. That person could retrain and go from an oversubscribed
to an undersubscribed fishery and thereby compete with an Alaska
resident. "There could be a downside to this as well. Is that
not possible?"
SENATOR GARY STEVENS responded, "I would think that in a jig
fishery, which is a year-round fishery...that person would
probably become an Alaska resident, I would think...."
SENATOR SEEKINS asked why those particular dates were selected.
MR. VINSEL answered that 2001/2002 is the specific year of price
decline for which UFA applied and a full year of data was needed
for the application; 2003 was still in progress at the time. The
concept should be carried forward into the 2003/2004 petition
cycle, for which the salmon species will still probably be
qualified.
SENATOR HOLLIS FRENCH said language on page 2 was confusing,
because it first states that fishermen experience reduced
earnings due to a decline in price, but went on to say they
couldn't show that.
MR. VINSEL replied that is the crux of the problem with the
specific net fishing income decline requirement for benefits.
Salmon prices went down over the whole five-year
period. It was a slam-dunk in getting the salmon
qualified based on the numbers. And if somebody had $1
less fishing income in 2001, then they made $1 more
than that in 2002, even though it's pretty much
understood that both years were pretty poor, they
wouldn't qualify for this program. So, the net fishing
income decline is really the crux of the resolution,
in my opinion. It's the main reason why many salmon
fishermen weren't able to qualify for the benefits in
the program. It's what we expect to have some
possibility to work on with the USDA in fine-tuning
the program.
SENATOR FRENCH asked if the net decline was different than the
annual decline.
MR. VINSEL answered:
The requirement for benefits in the program is a net
decline in all fishing income. In my opinion, more or
less rightly so, taking into effect that if you were a
farmer or a fisherman and were already diversified and
you made up on other species from the poor fishing in
salmon - or say you grew another crop, because you
knew the price would be low on your corn and so you
grew potatoes or something like that.... Things like
Melissa mentioned, like the Exxon Valdez payments and
any other things that are ultimately in your tax
returns in the fishing income category - that kept
other people from qualifying. We believe these are not
necessarily in the statutes; they were interpreted by
the USDA as this was the first year of this program.
Partly in their haste in the challenge of processing
the potential large number of fishermen that may
apply, which is a little beyond what the program was
designed to do when it was started with farmers in
mind. When they added fishermen, it made some
procedural challenges - especially in Alaska where we
didn't have a large infrastructure of Farm Service
Agency offices....
SENATOR FRENCH said he heard him saying that net decline in
fishing earnings is just a different measure than simply fishing
earnings by themselves.
MR. VINSEL sought to clarify further that the net fishing income
on tax returns includes Exxon Valdez payments and other work a
fisherman does with his boat. The original program started out
with net farming income, which might not be as complicated as
fishing income.
SENATOR SEEKINS moved to pass CSHJR 34(FSH) from committee with
individual recommendations.
CHAIR BUNDE asked for a roll call vote. Senators Hollis French,
Bettye Davis, Gary Stevens, Ralph Seekins and Chair Bunde voted
yea: and CSHJR 34(FSH) moved from committee.
HB 409-SEINE VESSEL LENGTH
CHAIR CON BUNDE announced HB 409 to be up for consideration.
MR. TIM BARRY, staff to Representative Bill Williams, sponsor,
said that HB 409 was requested by the Joint Legislative Salmon
Industry Task Force.
It could give the Alaska Board of Fisheries and
Alaska's fishermen an additional tool to allow them to
diversify and increase the value of their fish. First
of all, Mr. Chairman, I want to make it clear that
this does not eliminate the 58 ft. length limit on
salmon seiners. It only puts these boats in the same
regulatory regime as all other fishing boat size
limits. The 58 ft. limit is one of only two commercial
fishing boat length limits that are enshrined in
statute.
The 58 ft. limit predates statehood. In the 1950s,
Alaska's commercial fisheries were not nearly as well
developed as they are now. Territorial and early state
lawmakers wanted to protect Alaska's fishing fleet
from the dominant fleet of large boats that fished out
of, primarily, Puget Sound. This perceived threat was
serious enough that legislators enshrined this length
limit in statute rather than allowing the Board of
Fisheries to have the same discretion it has regarding
lengths in other gear restrictions. Those concerns
that drove the law 50 or so years ago are no longer
present. There really is no longer the same threat
from outside vessels or fleets today. In fact,
Alaska's fishing fleet is far stronger and healthier
now than certainly the Puget Sound fishing fleet.
In addition, if HB 409 becomes law, the length limit,
as I said earlier, remains in place. If the Board of
Fisheries decides to consider changing it, the board
will have to consider the concerns about Alaska's
seiners and their economic future, as well as dozens
of other concerns before rendering a decision. The
Board of Fisheries has the authority to change or
impose length limits, gear limits, and all sorts of
other regulations on commercial fishing boats in the
State of Alaska.
If this bill is made law, the board will have to go
through its normal public process, which involves
hearings, public comment, generally speaking, at least
a three-year cycle between the proposal of a change
and an actual change being made before this length
limit would be changed. The bill before you is
supported by the UFA and by a number of individual
fishermen around the state. Unfortunately, a number of
seiners who wanted to testify in favor of this bill
are out fishing. In conversations in other committees,
seiners have said they could diversify their
operations if they had longer boats. They could do a
little more processing; they could add value to their
product, which is something we're all hoping we can
help Alaska's fishermen do. There is a zero fiscal
note from the Department of Fish and Game....
CHAIR BUNDE asked if the other length that is set in statute is
for Bristol Bay boats.
MR. BARRY replied that Bristol Bay boat length is not enshrined
in statute, but is determined by the board. The other boat
length was set in statute six years ago and has to do with the
hair crab fishery out west.
CHAIR BUNDE asked if he thought seiners would begin to pressure
the board to change their length limitation if this bill passes.
MR. BARRY replied that he wouldn't bet against that happening.
SENATOR GARY STEVENS asked if the 58 ft. length were eliminated,
would that devalue the vessels that are in the fleet now.
MR. BARRY answered that fishermen have commented a lot on this
issue. One of their comments is that not all seiners are 58 ft.
long - some are 48 ft. or 52 ft. and a good living could be made
from them if other boats were larger. Testimony is that some
fishermen want to diversify their business with the change being
very gradual.
SENATOR STEVENS pointed out that the 58 ft. boat length is not
being removed, but the option is simply being given to the board
to do that.
SENATOR SEEKINS asked if he had a 62 ft. seiner that has been in
the state's waters since before 1962, could he still be fishing
it.
MR. BARRY replied that he understands that using an Alaska seine
permit limits a boat size to 58 ft.
2:17 p.m.
SENATOR SEEKINS remarked that it says, "except vessels that have
fished for salmon with seines in waters of the state before
January 1, 1962...." and asked what that means.
MR. BARRY replied that some boats were fishing when the law was
put in place in 1962, but the boat would still have to be under
the same ownership and permit to be fished.
SENATOR FRENCH asked how much longer he anticipated boats
getting to be.
MR. BARRY replied that testimony has indicated that other
considerations would come into play in the board's process of
determining length. For instance, federal regulations for boats
longer than 60 ft. and practical considerations in terms of what
people can do on a boat once it gets to be that much longer like
where it can fish. People are not looking for an optimum number.
He added that trollers currently do not have a length limit and
a few are 70 ft., but most are shorter than 60 ft.
MR. JERRY MCCUNE, United Fishermen of Alaska (UFA), supported
the sponsor's statement for HB 409. People could petition the
board according to area and it would have to decide based on its
deliberations.
TAPE 04-25, SIDE B
MR. MCCUNE continued saying that probably some fishermen would
want to extend their boats 5 - 10 ft. and be able to harvest
more fish - perhaps by putting in a Sunday hold so they could
put RSW (refrigerated salt water) sockeye in it and high grade
fish in another.
So, even if you change the limit in Southeast, it's
not going to happen overnight. Guys are going to have
to make the decision based on their economics and
based on whether they want to market some of their own
fish and things like that. Way back when, there were
100 ft. tuna seiners coming up here to do the herring
and stuff, so they put that 58 ft. to keep all that
big boat fleet out of here.... Well, that fleet is no
longer in existence. So, a lot of this is changing now
to be able to do your own fish and market and have
enough room to handle it.
He described how one fisherman needs more room to put his seine
[net] and another fish hold while still being able to have a
covered area to clean fish, a DEC requirement. In other areas,
some guys have two boats, a 58 ft. and a 70 ft. They could get
rid of one boat and consolidate their operations and save money
by just using the one boat if the board decided that was the
limit.
SENATOR SEEKINS asked again what the process is for the Board of
Fisheries to consider changing the length regulation.
MR. MCCUNE explained that he would write a proposal to the board
if he fished in Southeast, asking to change the 58 ft. limit to
65 ft.
I'd have to write that proposal, submit it in the
three-year cycle that the board has Southeast in.
Let's use, for example, 2006 is the next Southeast
cycle - submit that proposal, they accept the
proposal, put it in the book and then they publish it
to the public - all the proposals - so everybody gets
to see what's going to be coming up in 2006.
SENATOR SEEKINS said the application is not by petition, but
rather by a proposal that anyone could write.
MR. MCCUNE replied that is correct.
SENATOR SEEKINS asked if he was right in assuming that the board
didn't have to consider just any proposal at any time, but
within the board cycle.
MR. MCCUNE replied that is right.
SENATOR GARY STEVENS asked if he thought there would be any
devaluation of the existing fleet and would existing vessels
still be competitive.
MR. MCCUNE replied that he really didn't think existing boats
would be devalued. There is a good 58 ft. limit market in Kodiak
right now. He said that a lot of people would just extend their
existing boats that might already be paid for.
SENATOR GARY STEVENS said he knew of several fishermen in Kodiak
who were attempting to do value-added processing on their
vessels and they often have to do that in very cramped spaces.
"This would allow them to be a little more competitive on the
market, I would guess."
MR. MCCUNE agreed. "You have to have another fish hold if you're
going to clean fish and ice them. You can't have it in the
refrigerated salt water. That's against DEC rules, because of
bacteria and stuff...."
MR. MAC MEINERS, Alaska purse seiner, supported HB 409. He has a
little purse seiner.
If they would open up and get bigger seiners, that
would give me an opportunity to buy a little bit
bigger boat.... What we've got to remember is that the
gear catches the fish and the gear is also restricted.
So, no matter how big the boat is, you'll always have
the same piece of gear.
MR. MELVIN LARSON said he is a limit seiner out of Sand Point
and carries 160,000 lbs. under the deck; he didn't agree with
most of the previous testimony. He said there are many different
ways to process and make a boat capable of doing more work.
Under the federal LLP regulation, with the limit
seiner that I have now, I'd only be able to add on two
feet. Under federal regulations you can only go to 60
ft. and then it goes from 60 to 125 ft. I'd be
penalized and I'd be able to go only two feet under
federal regulations.
MR. LARSON said the same goes for fishing halibut IFQs. You
could only go to 60 ft. otherwise you would have to get another
boat or you wouldn't be able to fish your IFQs on the same
vessel.
Under federal regulations, also, if you are not currently
qualified for processing, you are only capable of processing a
small amount of rockfish on a vessel. Getting rid of the 58 ft.
limit wouldn't help in terms of adding processing capacity.
Regarding the value of a 58 ft. seiner, Mr. Larson said he paid
over $1 million for his "wide-bodied Delta," and right now it is
valued at about half of that. If the 58 ft. limit went away, he
didn't know what he would be able to sell it for. Not much.
I also believe the salmon fishery is already
overcapitalized. It doesn't need anything to change
it. Passing this bill would stop in the wrong
direction, putting the burden on small struggling
communities that are already having a hard time. I
don't believe many people in these smaller communities
could afford to spend $400,000 to $500,000 to lengthen
their boats....
MR. LARSON said he has been a member of the UFA for a long time
and wasn't contacted about this. "I don't agree with UFA. I
think it's just personal opinions there that's being presented
to you."
CHAIR BUNDE said he would pass that information on to Mr. McCune
and that he would hold the bill for further thought.
SB 358-ALASKA RAILROAD TRACK WORK
CHAIR CON BUNDE announced SB 358 to be up for consideration and
that it is a work in progress and he didn't plan to move it
today.
MR. RICHARD SCHMITZ, staff to Senator John Cowdery, explained
that until recently the Department of Transportation (DOTPF)
would treat the railroad the same way it would treat a utility
or power company when crossing a highway by putting the work out
to bid.
Over the last few years, there have not been bids put
on some of this work and the railroad itself has come
in and done it because they have the equipment to do
it. So, the purpose of the bill is to basically go
back and allow DOT to have the choice of either
putting the work out to competitive bid or just
allowing the railroad to do the work under a utility
type agreement....
MS. WENDY LINDSKOOG, Director, External Affairs, said that
Eileen Riley, Vice President of Projects, Engineering Signals
and Technology, ARRC, would help her answer questions. She
supported Mr. Schmitz' statements elaborating that SB 358
retains the DOTPF's ability to work with the private sector
under the competitive bid process for the DOT projects that
include track construction, like a crossing over a road.
In addition, SB 358 amends the state procurement code
so that DOT can also work directly with the ARRC on
track work through a reimbursable service agreement
similar to other utilities. Prior to 1996, the Alaska
Railroad could conduct work with DOT projects under
the utility agreement arrangement. The railroad work
was treated just as a utility relocation with cost
reimbursed in the same manner as the relocation of any
other utilities similar to a power line or a water
line. The utility agreements include cost estimates
that are reviewed and approved by DOT in advance of
the work. After 1996, due to private sector interest
in the track work part of these projects, the state
procurement code was amended requiring DOT to contract
track work under the competitive bid process.
Over the years, contractors have bid and won the track
construction work from DOT. Today, however, some of
the specific railroad work does require highly
specialized equipment that is not cost effective for
the private sector to support or maintain in Alaska.
This has affected the level of interest on certain DOT
projects and it also has contributed to some recent
work that was not completed to railroad industry
standards. For an example, in the past year, the
railroad has had to redo some projects including a
mainline crossing at C Street in Anchorage and in
Talkeetna along the spur road. These factors led to
support for SB 358 from the Alaska Railroad, DOT and
the Associated General Contractors.
The goal of the bill is to ensure that DOT projects
involving rail construction can move forward by giving
DOT the flexibility to use either the competitive bid
process or to work directly with the railroad. And
more specifically, SB 358 would allow basic track
construction work to be done by the private sector
and, I say basic track construction work, but it would
also allow the highly specialized work like a mainline
crossing to be constructed by the railroad at the
discretion of DOT. Either way, Alaska laborers are
constructing the project.
Finally, we believe that there are advantages to
working with the railroad directly on certain projects
and the advantages for DOT would include some lower
costs and savings of time. There are a couple of
reasons for some cost savings. For starters, the
railroad does buy railroad materials in quantity and
we're able to pass those savings along. We own the
specialized equipment; it's very expensive and we also
have the skilled labor force who know how to work the
equipment and work around track issues. So, therefore,
cost savings are realized because the railroad does
not have to mobilize the specialized equipment out of
state. We already have it here in Alaska. Excessive
contractor premiums will be avoided for the small
specialty market and the railroad provides federally
required inspection and coordination for road
projects. DOT must pay the railroad for these services
even under the competitive bid process. An example
would be flagging, so that everybody who is working
around the track is protected from moving trains.
The advantage of this bill for the Alaska Railroad, in
our opinion, would be enhanced quality and assurance
that our industry standards are being met. The
Railroad, the DOTPF and Associated General Contractors
do support SB 358.
CHAIR BUNDE noted that there were concerns from the private
sector and asked if those had been addressed.
MS. LINDSKOOG replied that they had not heard any opposition
after a couple of hearings, but last week received word from
some companies that were concerned. Local 341 Laborers were
being used for this work. Other facts have come forward, but
their concern over quality issues hasn't changed on certain
parts of the rail projects that are highly specialized. One of
the companies may even be new to the scene. The bill has been
drafted in a manner as to allow DOT the flexibility to use
either method to get the work done.
CHAIR BUNDE asked her to work with DOT and the contractors to
see if there is some middle ground.
SENATOR HOLLIS FRENCH asked if this bill just applies to
railroads where they cross roads.
MS. LINDSKOOG answered that the bill amends the state
procurement code. When DOT has a road project, sometimes it
might be over a rail crossing or maybe straightening out the
highway like along Turnagain Arm where the railroad track has to
be moved. DOT is funding and managing the work, so it can mean
more than a crossing.
MS. NONA WILSON, Legislative Liaison, Department of
Transportation and Public Facilities (DOTPF), said Mark O'Brien,
Chief Contracting Officer, is out of town and had been working
closely with Ms. Lindskoog who has already hit all the major
points. She offered to answer questions.
CHAIR BUNDE said he would delay action on the bill until Mr.
O'Brien could testify.
MR. J.R. WOOD, owner, Railway Support Services, said he is
concerned that the bill would limit the procurement of the
Alaska Railroad from the DOT to just railroad crossing per se.
For instance, the job he just bid on in Wasilla is approximately
4,000 ft. adjacent to the highway.
Our major concern here is that we feel there are
quality contractors here available that can do the
work. In fact, I have worked with one of them that I
bid against this year. We do work in the transit
industry where the standards are much higher than they
are in the freight industry and we manage to maintain
those standards, which are nationwide....
MR. WOOD said that he has hired and trained more than 80
personnel including personnel with the local laborers union who
are exceptional workers and could compete with any railroad
laborer in the country.
Some of the specifications we follow up here are not
nearly as tight as they are in the states. I feel that
probably our abilities to perform the work and our
efficiency because we do work as 'hungry contractors,'
would be much greater.
MR. MARK CONDON, President, Condon Railroad Construction, said
he had been working on projects in Alaska for the last four
years and planned on continuing bidding on projects, but said,
"If they go through with this, it would pretty much put us out
of business."
MR. JOHN LANDERFELT, Laborers Local 341, opposed SB 358 as it
has potential to work harm against contractors who are now
engaged in this kind of rail work and, therefore, his
membership. He felt that the problems could easily be resolved
through the bidding process. He suggested holding the bill until
all the parties concerned could come to the table and work
things out.
CHAIR BUNDE said that was his recommendation as well - to see if
they could come to some compromise and bring that back to the
committee. There being no further business to come before the
committee, he adjourned the meeting at 2:52 p.m.
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