Legislature(2019 - 2020)BUTROVICH 205

04/22/2019 03:30 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 90 COOK INLET: NEW ADMIN AREA;PERMIT BUYBACK TELECONFERENCED
Heard & Held
+= SB 91 NUYAKUK RIVER: HYDROELECTRIC SITE TELECONFERENCED
Moved SB 91 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 22, 2019                                                                                         
                           3:31 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Chris Birch, Chair                                                                                                      
Senator John Coghill, Vice Chair                                                                                                
Senator Cathy Giessel                                                                                                           
Senator Lora Reinbold                                                                                                           
Senator Click Bishop                                                                                                            
Senator Scott Kawasaki                                                                                                          
Senator Jesse Kiehl                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 91                                                                                                              
"An  Act  relating   to  the  development  and   operation  of  a                                                               
hydroelectric site at the Nuyakuk  River Falls; providing for the                                                               
amendment  of  the management  plan  for  the Wood-Tikchik  State                                                               
Park; and providing for an effective date."                                                                                     
                                                                                                                                
     - MOVED SB 91 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 90                                                                                                              
"An  Act  relating  to  the   powers  of  the  Alaska  Commercial                                                               
Fisheries Entry Commission; relating  to administrative areas for                                                               
regulation  of   certain  commercial   set  net   entry  permits;                                                               
establishing  a  buyback  program   for  certain  set  net  entry                                                               
permits; providing  for the  termination of  state set  net tract                                                               
leases  under  the  buyback program;  closing  certain  water  to                                                               
commercial fishing; and providing for an effective date."                                                                       
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 91                                                                                                                   
SHORT TITLE: NUYAKUK RIVER: HYDROELECTRIC SITE                                                                                  
SPONSOR(s): SENATOR(s) HOFFMAN                                                                                                  
                                                                                                                                
03/15/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/15/19       (S)       RES, FIN                                                                                               
04/05/19       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/05/19       (S)       <Bill Hearing Canceled>                                                                                
04/15/19       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/15/19       (S)       Heard & Held                                                                                           
04/15/19       (S)       MINUTE(RES)                                                                                            
04/22/19       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 90                                                                                                                   
SHORT TITLE: COOK INLET: NEW ADMIN AREA; PERMIT BUYBACK                                                                         
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
03/13/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/19       (S)       RES, FIN                                                                                               
03/29/19       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/29/19       (S)       Heard & Held                                                                                           
03/29/19       (S)       MINUTE(RES)                                                                                            
04/22/19       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RICKY GEASE, Division Director                                                                                                  
Division of Parks and Outdoor Recreation                                                                                        
Alaska Department of Natural Resources                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 91.                                                                            
                                                                                                                                
KONRAD JACKSON, Staff                                                                                                           
Senator Micciche                                                                                                                
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Explained the changes from version G to                                                                   
version R committee substitute for SB 90.                                                                                       
                                                                                                                                
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 90.                                                                                         
                                                                                                                                
FATE PUTMAN, Chair/Commissioner                                                                                                 
Alaska Commercial Fisheries Entry Commission                                                                                    
Alaska Department of Fish and Game                                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions regarding SB 90.                                                                       
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
3:31:33 PM                                                                                                                    
CHAIR CHRIS BIRCH called the  Senate Resources Standing Committee                                                             
meeting to order  at 3:31 p.m. Present at the  call to order were                                                               
Senators Coghill, Reinbold, Kiehl, and Chair Birch.                                                                             
                                                                                                                                
            SB 91-NUYAKUK RIVER: HYDROELECTRIC SITE                                                                         
                                                                                                                                
3:31:58 PM                                                                                                                    
CHAIR BIRCH  announced the  consideration of  Senate Bill  91 (SB                                                               
91). He noted  that public testimony was heard  and closed during                                                               
the  previous hearing.  He  asked if  committee  members had  any                                                               
final questions or comments.                                                                                                    
                                                                                                                                
SENATOR REINBOLD  asked if Mr.  Gease from the Division  of Parks                                                               
and Outdoor Recreation had any concerns regarding SB 91.                                                                        
                                                                                                                                
3:33:24 PM                                                                                                                    
RICKY  GEASE, Division  Director, Division  of Parks  and Outdoor                                                               
Recreation,  Alaska Department  of Natural  Resources, Anchorage,                                                               
Alaska, answered  that the division supports  the project running                                                               
through the Federal Energy  Regulatory Commission (FERC) process.                                                               
He noted  that two other  lakes were studied previously  and were                                                               
shown to  be unfeasible.  He said  passing SB  91 will  allow the                                                               
FERC process to  go through and the studies to  take place. After                                                               
the  studies are  complete, the  appropriate next  steps will  be                                                               
considered. He summarized that the  proposed changes in SB 91 are                                                               
necessary for the FERC process to occur.                                                                                        
                                                                                                                                
SENATOR REINBOLD voiced support for SB 91.                                                                                      
                                                                                                                                
3:33:54 PM                                                                                                                    
SENATOR KAWASAKI joined the committee meeting.                                                                                  
                                                                                                                                
SENATOR KIEHL  referenced the discussion in  the previous hearing                                                               
that if the  project were to be feasible and  go ahead, the power                                                               
would run out of the park  on straight, short lines. He asked Mr.                                                               
Gease if he was comfortable that  the language in the bill covers                                                               
the necessary power lines to move the power from the project.                                                                   
                                                                                                                                
MR.  GEASE  answered  yes; the  division  is  comfortable  moving                                                               
forward with the existing language.                                                                                             
                                                                                                                                
3:35:02 PM                                                                                                                    
SENATOR COGHILL moved to report  SB 91, version 31-LS0520\A, from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note.                                                                                                                           
                                                                                                                                
3:35:15 PM                                                                                                                    
CHAIR BIRCH  announced that without  objection, SB 91  moves from                                                               
the Senate Resources Standing Committee.                                                                                        
                                                                                                                                
3:35:23 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
        SB 90-COOK INLET: NEW ADMIN AREA; PERMIT BUYBACK                                                                    
                                                                                                                                
3:38:26 PM                                                                                                                    
CHAIR BIRCH  announced the  consideration of  Senate Bill  90 (SB                                                               
90). He  said public  testimony was heard  and closed  during the                                                               
previous bill hearing.                                                                                                          
                                                                                                                                
3:38:52 PM                                                                                                                    
SENATOR COGHILL moved to adopt  the committee substitute (CS) for                                                               
SB 90, version 31-LS0230\R, as the working document.                                                                            
                                                                                                                                
SENATOR REINBOLD objected for discussion purposes.                                                                              
                                                                                                                                
3:39:15 PM                                                                                                                    
SENATOR BISHOP joined the committee meeting.                                                                                    
                                                                                                                                
CHAIR BIRCH  asked Mr. Jackson to  explain the changes in  the CS                                                               
for SB 90.                                                                                                                      
                                                                                                                                
3:39:58 PM                                                                                                                    
KONRAD   JACKSON,   Staff,   Senator   Micciche,   Alaska   State                                                               
Legislature,  Juneau,   Alaska,  reviewed  the   changes  between                                                               
version  G and  version  R of  SB 90  speaking  to the  following                                                               
prepared document:                                                                                                              
                                                                                                                                
     Sections 1, 2 and 3 are not changed                                                                                        
                                                                                                                                
     Section 4;                                                                                                                 
       Page 2, line 17 and 18; Delete "Eastern Set Net".                                                                        
     Insert "Upper".                                                                                                            
                                                                                                                                
SENATOR  KAWASAKI referenced  the  maps in  the  bill packet  and                                                               
asked if set nets are used on the western side of Cook Inlet.                                                                   
                                                                                                                                
3:40:59 PM                                                                                                                    
SENATOR  PETER   MICCICHE,  Alaska  State   Legislature,  Juneau,                                                               
Alaska, sponsor  of SB 90, explained  that there are set  nets on                                                               
the eastern and  western sides and Kalgin Island, as  well as the                                                               
northern district in Cook Inlet.                                                                                                
                                                                                                                                
3:41:17 PM                                                                                                                    
SENATOR GIESSEL joined the committee meeting.                                                                                   
                                                                                                                                
MR. JACKSON continued to explain the following differences                                                                      
between version G and version R of SB 90:                                                                                       
                                                                                                                                
     [Section 4 continued]                                                                                                      
     Page 2,  line 19; Following (d),  delete "An individual                                                                    
     who holds  an entry  permit that entitles  the". Insert                                                                    
     "An entry permit that entitled a".                                                                                         
                                                                                                                                
     Page2,  line  21;  Following "Inlet",  delete  "Central                                                                    
     District  may not".  Insert  "administrative area  does                                                                    
     not entitle that person to".                                                                                               
                                                                                                                                
     Page2,   line  22;   Insert   "unless  the   commission                                                                    
     reassigns the permit to that administrative area."                                                                         
                                                                                                                                
     New  Section  5;  Page 2;  Following  line  22,  Insert                                                                    
     former section 7. This new  section was revised to more                                                                    
     clearly  define  the  process  by  which  a  permit  is                                                                    
     reassigned   and    therefore   valid   in    the   new                                                                    
     administrative    area.   Terminology    is   clarified                                                                    
     regarding  the  districts   and  subdistricts  of  Cook                                                                    
     Inlet, using the same language  changes as noted above.                                                                    
     The use  of buoy tags  is added  as a means  of proving                                                                    
     prior participation in the east side set net fishery.                                                                      
                                                                                                                                
     New  Section  6  is  added which  defines  the  appeals                                                                    
     process in  the event an  applicant is denied  a permit                                                                    
     for the new administrative area.                                                                                           
                                                                                                                                
     Section 7  was formerly  section 8. Language  was added                                                                    
     providing the  manner in which  permit holders  who are                                                                    
     in the appeals process may participate in the election                                                                     
                                                                                                                                
     Section 8 was  former section 5. New  language has been                                                                    
     added  which requires  application  to  the program  be                                                                    
     made  within   30  days  of  new   section  8  becoming                                                                    
     effective.                                                                                                                 
     Adds  a  new  paragraph specifying  how  a  provisional                                                                    
     permit holder may participate in the election.                                                                             
        (c) If an  applicant whose name  is selected  in the                                                                    
        lottery under this  section has a  provisional entry                                                                    
        permit provided  under sec.  6(b) of  this Act,  the                                                                    
        commission shall set aside the funds to buy back the                                                                    
        permit but may not buy back the permit until a court                                                                    
        finds, in a  final judicial determination,  that the                                                                    
        permit must be reassigned  by the commission  to the                                                                    
        administrative      area      established      under                                                                    
        AS16.43.200(c), enacted by  sec. 4  of this  Act. If                                                                    
        the court finds, in a final  determination, that the                                                                    
        commission's  determination   not  to   reassign  an                                                                    
        applicant's  permit   to  the   administrative  area                                                                    
        established  by  AS16.43.200(c)  was   correct,  the                                                                    
        applicant is  not qualified  to  participate in  the                                                                    
        buy-back program established by this section.                                                                           
                                                                                                                                
     The  following  paragraphs  of this  section  are  then                                                                    
     renumbered.                                                                                                                
                                                                                                                                
     Section  9; Changes  reference to  the  section of  the                                                                    
     bill which establishes the buy-back program.                                                                               
                                                                                                                                
     Section  10; Removes  the specific  date  by which  the                                                                    
     chair of  the commission  must notify the  Lt. Governor                                                                    
     and  the revisor  of  statutes of  the  outcome of  the                                                                    
     election.                                                                                                                  
                                                                                                                                
     Section  11;  Remove  all  material  and  replace  with                                                                    
     language repealing sections  1, 2, 8 and 9  on June 30,                                                                    
     2026.                                                                                                                      
                                                                                                                                
     Section  12; Delete  reference to  sections 5,6  and 11                                                                    
     and  inserts section  8 to  this conditional  effective                                                                    
     date clause.                                                                                                               
                                                                                                                                
     [Section 13; Effective date unchanged.]                                                                                    
                                                                                                                                
     Section  14; Delete  reference to  sections 5,6  and 11                                                                    
     and inserts section 8 to this effective date clause.                                                                       
                                                                                                                                
     Section 15 is not changed.                                                                                                 
                                                                                                                                
3:46:02 PM                                                                                                                    
SENATOR KAWASAKI referenced section 5 of the original bill that                                                                 
says the area to which the permit applies would not be usable                                                                   
for a future permit that is issued  to the area. He asked if that                                                               
same provision was in version R.                                                                                                
                                                                                                                                
SENATOR MICCICHE  answered yes;  to participate [in  the buyback]                                                               
both the  permit and the piece  of land that is  attached to that                                                               
permit has to go into the drawing.                                                                                              
                                                                                                                                
SENATOR KAWASAKI  noted that the  language is clear  and specific                                                               
in the previous version where it says:                                                                                          
                                                                                                                                
     (c)  The  commission  shall   cancel  an  entry  permit                                                                    
     purchased under  this section.  The commission  may not                                                                    
     reissue a permit  or issue another permit  in the place                                                                    
     of a cancelled permit.                                                                                                     
                                                                                                                                
He said he did not read that same language in the new section 5.                                                                
                                                                                                                                
MR. JACKSON specified  that section 5 is a  renumbered section 7.                                                               
The new section  5 is merely the reassignment of  the permits for                                                               
the new administrative area and the  rest of Cook Inlet. He noted                                                               
that nothing will  be done with the permits  other than assigning                                                               
new  permits  for the  new  area.  Participation in  the  buyback                                                               
program is where permits are  cancelled and not reissued. Section                                                               
5 is  the actual assignment  of the permits  and that is  why the                                                               
section will not show permits being canceled.                                                                                   
                                                                                                                                
3:48:20 PM                                                                                                                    
SENATOR REINBOLD asked Senator Micciche  to describe the ultimate                                                               
goal of SB 90.                                                                                                                  
                                                                                                                                
SENATOR  MICCICHE  replied that  the  goal  is to  eliminate  200                                                               
permits and  the associated fishing  operations from  the eastern                                                               
side of Cook  Inlet. That will hopefully lead  to greater returns                                                               
to the rivers, particularly King  Salmon, and leave a more viable                                                               
fishery for  the remaining operations.  He explained  that setnet                                                               
fishing on the east side of  Cook Inlet became very profitable in                                                               
the 1980s  and that caused  people to  migrate to that  area. The                                                               
increased  participation  has  led   to  conflict.  The  proposed                                                               
removal of  200 permits and  associated operations from  the east                                                               
side will bring  the number of permits fishing that  area in line                                                               
with what it was before the influx in the 1980s.                                                                                
                                                                                                                                
SENATOR REINBOLD  asked him to  address the fiscal impact  of the                                                               
bill and the buyout amount of each permit.                                                                                      
                                                                                                                                
SENATOR MICCICHE answered that the  buyout amount for each permit                                                               
is $260,000.  He explained that the  amount is based on  10 years                                                               
of  average income  plus tax  protection. He  said SB  90 has  no                                                               
fiscal  note because  the funding  will come  from sources  other                                                               
than the  state. Some private endowments  have mentioned interest                                                               
for  conservation  groups and  the  federal  delegation has  been                                                               
approached  for  possible  funding from  federal  programs  which                                                               
participate in  conservation efforts. He summarized  that payment                                                               
will  come  from   as  yet  unidentified  sources;   SB  90  just                                                               
establishes the system that allows the buybacks to occur.                                                                       
                                                                                                                                
3:51:35 PM                                                                                                                    
SENATOR REINBOLD said she was  struggling with the idea of paying                                                               
200 fishermen  $260,000 in the  buyout and  basically eliminating                                                               
the competition  for the remaining  fishermen. She noted  that it                                                               
was unclear  where the funding  for the program would  come from.                                                               
She  recalled the  considerable opposition  voiced during  public                                                               
testimony  and opined  that all  opposition should  be addressed.                                                               
She  asked  what  is  being  done  to  address  the  considerable                                                               
opposition to the bill.                                                                                                         
                                                                                                                                
SENATOR MICCICHE answered that the  legislation goes to a vote by                                                               
the  impacted permit  holders to  ultimately decide  if they  are                                                               
interested or not.  SB 90 has support in the  80-percent range. A                                                               
number  of options  were considered  and  this is  what the  user                                                               
groups settled on. He emphasized  that pleasing everyone is never                                                               
going to happen.                                                                                                                
                                                                                                                                
SENATOR  REINBOLD removed  her objection  but  noted her  concern                                                               
about the  unidentified funding.  She said  she would  not impede                                                               
the progress  of the  but requested the  finance members  on this                                                               
committee to look carefully at the funding sources.                                                                             
                                                                                                                                
3:54:29 PM                                                                                                                    
SENATOR  KAWASAKI remarked  that the  buyback has  a large  price                                                               
tag,  close to  $50  million.  He asked  Senator  Micciche if  he                                                               
anticipated that  the commercial  permit buyback would  result in                                                               
more  fish  moving up  stream  or  if  there  would still  be  an                                                               
allocation issue dependent on the Board of Fisheries.                                                                           
                                                                                                                                
SENATOR MICCICHE  answered that  the east side  set net  area has                                                               
440 permits and  the buyback will remove 40 percent  of the total                                                               
in  that  area.  Some  of  the  remaining  fishermen  will  catch                                                               
additional fish, but a lot more fish will get into the rivers.                                                                  
                                                                                                                                
CHAIR BIRCH asked if there were any other objections.                                                                           
                                                                                                                                
SENATOR GIESSEL objected for purposes of amending the bill.                                                                     
                                                                                                                                
3:57:49 PM                                                                                                                    
CHAIR BIRCH found no further objection to the CS and announced                                                                  
that version R is adopted.                                                                                                      
                                                                                                                                
3:58:33 PM                                                                                                                    
SENATOR GIESSEL moved Amendment 1.                                                                                              
                                                                                                                                
                                                   31-LS0230\R.1                                                                
                                                        Bullard                                                                 
                                                        4/20/19                                                                 
                                                                                                                                
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
  OFFERED IN THE SENATE                     BY SENATOR GIESSEL                                                                  
     TO:  CSSB 90(   ), Draft Version "R"                                                                                       
                                                                                                                                
   Page 6, lines 4 - 8:                                                                                                         
     Delete all material and insert:                                                                                            
               "(2)  provide proof satisfactory to the                                                                          
     commission that the individual or an immediate family                                                                      
     member of the individual                                                                                                   
                    (A)  has held the entry permit that was                                                                     
          reassigned from the Cook Inlet to the administrative                                                                  
          area   established   under   AS 16.43.200(c)    since                                                                 
          January 1, 2009; and                                                                                                  
                    (B)  actively participated in the fishery                                                                   
          identified by the  Department of Fish and Game as  of                                                                 
          January 1, 2019,  as statistical  areas 244-21,  244-                                                                 
          22, 244-31, 244-32,  244-41, and 244-42 of the  Upper                                                                 
          Subdistrict of  the Cook Inlet  Central District  for                                                                 
          at least five of the 10 years preceding  December 31,                                                                 
          2019; and"                                                                                                            
                                                                                                                                
  Page 8, lines 18 - 20:                                                                                                        
     Delete all material.                                                                                                       
                                                                                                                                
   Page 8, lines 21 - 22:                                                                                                       
     Delete all material and insert:                                                                                            
          "(l)  In this section,                                                                                                
               (1)  "commission" means the Alaska Commercial                                                                    
     Fisheries    Entry     Commission    established     under                                                                 
     AS 16.43.020;                                                                                                              
              (2) "immediate family member" means                                                                               
                    (A) the spouse of an individual;                                                                            
                    (B)  another individual cohabiting with                                                                     
          an individual in a conjugal relationship that is                                                                      
          not a legal marriage;                                                                                                 
                    (C)  a child, including a stepchild and                                                                     
          an adopted child, of an individual;                                                                                   
                    (D)  a parent, sibling, grandparent,                                                                        
          aunt, or uncle of an individual; and                                                                                  
                    (E)   a   parent   or    sibling   of   an                                                                  
          individual's spouse;                                                                                                  
               (3)  "proof satisfactory" includes a shore                                                                       
     fisheries lease, an area registration, a buoy tag, or                                                                      
    previous submission of fishing statistics for the area."                                                                    
                                                                                                                                
3:58:41 PM                                                                                                                    
SENATOR KAWASAKI objected for discussion purposes.                                                                              
                                                                                                                                
SENATOR GIESSEL explained  that the purpose of Amendment  1 is to                                                               
prevent the process  from being scammed. She noted  that in 2005-                                                               
2006  there  was a  similar  buyback  in Southeast  Alaska  where                                                               
people  who  had  not  been fishing  were  offering  permits  for                                                               
buyback.                                                                                                                        
                                                                                                                                
She  specified that  Amendment 1  will require  an individual  to                                                               
have owned their permit for at  least 10 years and have fished it                                                               
for at least 5 of those  years. She opined that this will prevent                                                               
savvy individuals from speculating on potential future buybacks.                                                                
                                                                                                                                
CHAIR  BIRCH asked  Senator Micciche  if he  was amenable  to the                                                               
amendment.                                                                                                                      
                                                                                                                                
4:00:50 PM                                                                                                                    
SENATOR MICCICHE  replied that he  did not support  the amendment                                                               
because having  to own  a permit  for 10  years would  preclude a                                                               
huge portion  of people that own  east side set net  permits from                                                               
participating in the buyback. He  emphasized that which east side                                                               
set net permits  sell is not the  issue. The goal of  the bill is                                                               
to take  200 permits  out of  the water  and the  amendment would                                                               
prevent a huge portion of  the permit holders from participating,                                                               
which would make  it less likely that the goal  will be attained.                                                               
Furthermore,  the  opportunity  to speculate  was  foreclosed  by                                                               
eliminating the opportunity to buy a  new permit for this area as                                                               
of December 31, 2018.                                                                                                           
                                                                                                                                
SENATOR   MICCICHE  emphasized   that  there   is  literally   no                                                               
comparison  between  the  proposed   buyback  and  the  one  that                                                               
occurred in Southeast Alaska. The  buyback in Southeast was based                                                               
on  different values  whereas the  price  for east  side set  net                                                               
permits is set  based on 10 years of the  average catch, plus tax                                                               
protection. The  flat, $260,000 number was  specifically selected                                                               
to  keep  people  from  gaming  the  system,  he  said.  He  also                                                               
clarified  that  an individual  can  own  just  one permit  in  a                                                               
fishery.                                                                                                                        
                                                                                                                                
SENATOR REINBOLD asked Fate Putman  if it was possible to compare                                                               
the Cook Inlet and Southeast buybacks.                                                                                          
                                                                                                                                
4:05:21 PM                                                                                                                    
FATE  PUTMAN,  Chair/Commissioner,   Commercial  Fisheries  Entry                                                               
Commission (CFEC),  Alaska Department  of Fish and  Game, Juneau,                                                               
Alaska,  replied that  the two  buyback  programs are  distinctly                                                               
different. The Southeast  buyback is federally funded  via a loan                                                               
that fishermen pay  back through a percentage  of their earnings.                                                               
He  also pointed  out that  permits  in Southeast  are valued  at                                                               
$250,000 while  the Cook  Inlet permits  are currently  valued at                                                               
$17,000 to $20,000.                                                                                                             
                                                                                                                                
SENATOR REINBOLD  asked if  the buyback  system in  Southeast has                                                               
been scammed and how that might have happened.                                                                                  
                                                                                                                                
MR.  PUTMAN answered  that the  National Oceanic  and Atmospheric                                                               
Administration  (NOAA)  is  doing  a good  job  of  managing  the                                                               
Southeast purse  seine fishery  and the buyback  and he  does not                                                               
believe the program has been scammed.                                                                                           
                                                                                                                                
SENATOR REINBOLD  opined that the amendment  from Senator Giessel                                                               
sounds reasonable where  a person needs to hold  their permit for                                                               
a certain  amount of time  as well as defining  "immediate family                                                               
member". She asked Mr. Putman if he could support the amendment.                                                                
                                                                                                                                
MR. PUTMAN answered  that passing the amendment is  a policy call                                                               
for the legislature and he will stay neutral.                                                                                   
                                                                                                                                
4:08:25 PM                                                                                                                    
SENATOR KAWASAKI  asked if  there is  an annual  cost to  renew a                                                               
permit regardless of whether the permit is fished.                                                                              
                                                                                                                                
MR. PUTMAN  answered yes; CFEC  sets fees  based on the  value of                                                               
the permit and  adjustments are made annually. The  annual fee is                                                               
$75  for the  permits that  are currently  valued at  $20,000. In                                                               
2018 the value was $18,000.                                                                                                     
                                                                                                                                
SENATOR  KAWASAKI  opined  that   the  amendment  sounds  like  a                                                               
practical way  to make sure  people are not speculating  on these                                                               
permits. He  suggested that the  hard date might make  more sense                                                               
if 10-year  tracking was available.  This would help  ensure that                                                               
people are using the fishing permits, not speculating.                                                                          
                                                                                                                                
4:10:49 PM                                                                                                                    
MR. PUTMAN said CFEC tracks  exactly how much fish each fisherman                                                               
is  catching.  They know  there  are  440  permits in  the  upper                                                               
subdistrict that's referred to within  Cook Inlet's four regions.                                                               
CFEC knows  that 375 of  the 440  permits made landings  in 2018;                                                               
however, some  landings are made  by families with more  than one                                                               
permit but just one member  sells the fish. As currently drafted,                                                               
the  legislation requires  either a  history of  landing fish  or                                                               
have  the  DNR permit  to  fish.  Those  are the  things  Senator                                                               
Micciche is trying to get out of the fishery.                                                                                   
                                                                                                                                
He noted  that 20 years  ago the average fisherman  made $100,000                                                               
in  the  fishery  but  the current  average  is  $11,000.  CFEC's                                                               
responsibility as a commission is  to make sure that fishermen in                                                               
a  fishery make  enough  money  to support  their  family and  an                                                               
$11,000 annual income from a permit is not sustainable.                                                                         
                                                                                                                                
SENATOR KIEHL asked if CFEC has volume data on the fishery.                                                                     
                                                                                                                                
MR. PUTMAN answered yes.                                                                                                        
                                                                                                                                
SENATOR KIEHL asked how many permits sell each year.                                                                            
                                                                                                                                
MR. PUTMAN said he would follow up with the information.                                                                        
                                                                                                                                
4:12:36 PM                                                                                                                    
SENATOR GIESSEL explained that to  participate in the buyback the                                                               
amendment says  the individual must provide,  "proof satisfactory                                                               
to the commission that the  individual or immediate family of the                                                               
individual"  owns the  permit.  That proof  includes  one of  the                                                               
following: shore  fisheries lease,  an area registration,  a buoy                                                               
tag,  or a  previous  submission of  fishing  statistics for  the                                                               
area. Those  requirements would exclusively prohibit  someone who                                                               
was fishing the permit with other people, she said.                                                                             
                                                                                                                                
MR. PUTMAN concurred  that one of the four items  would qualify a                                                               
fisherman to vote  in the buyback, to authorize  the buyback, and                                                               
then to submit their permit for purchase.                                                                                       
                                                                                                                                
SENATOR  GIESSEL  noted that  the  four  items  are part  of  the                                                               
amendment as  well. The  amendment does  not prohibit  people who                                                               
are fishing their permit with  other people where someone else is                                                               
sent to sell the fish.                                                                                                          
                                                                                                                                
MR. PUTMAN concurred.                                                                                                           
                                                                                                                                
SENATOR GIESSEL  commented that the requirement  in the amendment                                                               
for  a   10-year  ownership  and   at  least  5   years  actively                                                               
participating seems doable.                                                                                                     
                                                                                                                                
MR. PUTMAN  reiterated that  the amendment is  a policy  call and                                                               
CFEC  will implement  whatever the  legislature determines  to be                                                               
the best course of action.                                                                                                      
                                                                                                                                
SENATOR  GIESSEL  asked if  he  owns  a  set  net permit  on  the                                                               
eastside of Cook Inlet.                                                                                                         
                                                                                                                                
MR.  PUTMAN  answered no.  He  specified  that  to serve  on  the                                                               
commission  an  individual  cannot   have  any  involvement  with                                                               
commercial fishing or commercial processing of fish.                                                                            
                                                                                                                                
4:15:01 PM                                                                                                                    
SENATOR REINBOLD  commented that  a lot of  the people  she knows                                                               
fish but do  not make their living from fishing;  it is not their                                                               
fulltime permanent job.                                                                                                         
                                                                                                                                
MR.  PUTMAN  explained  that  he   brought  up  the  commission's                                                               
responsibility to  make sure fishermen  make enough money  in the                                                               
fishery because  the state  constitution was  amended in  1972 to                                                               
clarify that while there shall  be no exclusive right of fishery,                                                               
the state can limit a  fishery to prevent economic distress among                                                               
fishermen and  those dependent upon  them for a  livelihood. When                                                               
CFEC sees  a situation where  there are  too many fishermen  in a                                                               
fishery and  none of them are  making a living, then  CFEC is not                                                               
protecting  the economics  of  the fishermen  who  depend on  the                                                               
fishery for their livelihood.                                                                                                   
                                                                                                                                
SENATOR REINBOLD said she'd like to focus on the amendment.                                                                     
                                                                                                                                
CHAIR BIRCH  asked if he has  a sense of how  many permit holders                                                               
would not  qualify to vote  or participate, should  the amendment                                                               
pass.                                                                                                                           
                                                                                                                                
MR.  PUTMAN   answered  that   he  would   follow  up   with  the                                                               
information.  He  reiterated  that  375  of  the  permit  holders                                                               
delivered  fish   and  440  of   them  have  registered   in  the                                                               
subdistrict. Approximately 50 percent  of the permit holders have                                                               
a DNR land lease.                                                                                                               
                                                                                                                                
4:17:29 PM                                                                                                                    
CHAIR BIRCH asked  him to confirm that the permits  are tied to a                                                               
specific piece of real estate, whether leased or not.                                                                           
                                                                                                                                
MR. PUTMAN answered yes.                                                                                                        
                                                                                                                                
SENATOR KAWASAKI asked if there is  a way to get more information                                                               
on the  75 leases  that did not  have to report  to find  out how                                                               
many are completely latent and if  a person is just holding on to                                                               
the permit for the $75 fee.                                                                                                     
                                                                                                                                
MR.  PUTMAN answered  that the  information  is confidential  but                                                               
CFEC knows exactly how much fish an individual fisherman caught.                                                                
                                                                                                                                
SENATOR KAWASAKI asked  him provide the numbers  to the committee                                                               
so  that he  can  understand  whether the  75  permits are  being                                                               
utilized in some way or held.                                                                                                   
                                                                                                                                
SENATOR KIEHL explained that he  asked about the volume of permit                                                               
sales because there  will be very different  incentives among the                                                               
voters  if   a  significant  number   of  permit   holders  can't                                                               
participate in  the buyback. That  potentially dooms  the program                                                               
to failure, he said.                                                                                                            
                                                                                                                                
4:19:36 PM                                                                                                                    
SENATOR BISHOP  opined that the  bill could pass with  or without                                                               
the amendment, but  there is no guarantee there is  ever going to                                                               
be any money  to see if the legislation is  going to be effective                                                               
or not.                                                                                                                         
                                                                                                                                
MR.  PUTMAN  agreed   that  the  funding  source   has  not  been                                                               
established  for the  buyback.  He  said CFEC  has  never done  a                                                               
buyback in the  43 years of the commission, but  Cook Inlet is an                                                               
area in need of a buyback and  CFEC is prepared to do the buyback                                                               
if the money is secured.                                                                                                        
                                                                                                                                
SENATOR COGHILL offered  his understanding that the  intent is to                                                               
figure out  how to get  more nets out of  the water so  that more                                                               
fish  get  to the  mouth  of  the  rivers.  He asked  what  other                                                               
fisheries will intercept fish before  they reach the mouth of the                                                               
rivers in this area.                                                                                                            
                                                                                                                                
MR. PUTMAN  replied that there  is a  purse seine fishery  in the                                                               
lower part of the Cook Inlet  and a drift gillnet fishery farther                                                               
up the  Inlet, but most  drift area fishermen  at the top  of the                                                               
water column.  SB 90 is targeted  to save King Salmon,  a species                                                               
that swims at  the bottom of the water column.  Set nets are more                                                               
likely to  catch King  Salmon near  shore than  out in  the water                                                               
column. There has  been a surplus of sockeye in  the fishery over                                                               
the course  of years, but  it's the  King Salmon that  are really                                                               
the problem.                                                                                                                    
                                                                                                                                
4:21:38 PM                                                                                                                    
SENATOR COGHILL  asked if  limiting net depth  is another  way to                                                               
limit catching King Salmon.                                                                                                     
                                                                                                                                
MR. PUTMAN replied  that is an issue for the  Board of Fisheries.                                                               
The board decides  on mesh size and the amount  of net. The board                                                               
also  authorizes permit  stacking in  Cook Inlet  where fishermen                                                               
can own two  permits and fish both  at the same time  on a single                                                               
site.  He noted  that most  stacking provisions  sunset, but  the                                                               
board  determined that  the stacking  provision  is permanent  in                                                               
Cook Inlet.                                                                                                                     
                                                                                                                                
SENATOR BISHOP asked if any of the 440 permits are stacked.                                                                     
                                                                                                                                
MR. PUTMAN answered yes.                                                                                                        
                                                                                                                                
SENATOR BISHOP asked  if the buyback would split the  stack or if                                                               
both permits would be purchased.                                                                                                
                                                                                                                                
MR.  PUTMAN  offered  his  understanding  then  deferred  to  the                                                               
sponsor.                                                                                                                        
                                                                                                                                
4:23:33 PM                                                                                                                    
SENATOR MICCICHE specified  that a fisherman can put  one or both                                                               
permits in  for the buyback,  individually, but a  stacked permit                                                               
would not be available for purchase as a package.                                                                               
                                                                                                                                
SENATOR BISHOP asked if a fisherman  who has a stacked permit can                                                               
sell one permit and still fish their permit on the eastside.                                                                    
                                                                                                                                
SENATOR  MICCICHE answered  that the  permit would  have to  come                                                               
with a body of water, so one  permit and that area of water would                                                               
go away. The fisherman would  have the remaining permit without a                                                               
site.                                                                                                                           
                                                                                                                                
SENATOR  REINBOLD  asked  if  the  Kenai  sports  fishermen  have                                                               
weighed in regarding SB 90.                                                                                                     
                                                                                                                                
SENATOR  MICCICHE  answered that  the  buyback  proposal was  put                                                               
together and brought forward by  the East Side Setnetters and the                                                               
Kenai  Sportfishing  Association  as  a  solution  for  all  user                                                               
groups. When  the proposal  was brought  to him,  he asked  for a                                                               
survey of  the setnetters and  that 80-percent  support convinced                                                               
him to bring the legislation forward.                                                                                           
                                                                                                                                
CHAIR BIRCH  asked the  committee to  confine their  questions to                                                               
the  amendment. He  summarized that  the amendment  says that  an                                                               
individual  or  family  member  must  have  the  permit  for  the                                                               
preceding 10 years and have fished 5 of the 10 proceeding years.                                                                
                                                                                                                                
SENATOR  REINBOLD asked  if  the  Kenai Sportfishing  Association                                                               
would support the amendment.                                                                                                    
                                                                                                                                
4:26:09 PM                                                                                                                    
SENATOR  MICCICHE replied  that  he cannot  speak  for the  Kenai                                                               
Sportfishing  Association,  but  he is  receiving  numerous  text                                                               
messages from  the other organizers  that the amendment  does not                                                               
work. He said  he is not sure the questions  on the amendment are                                                               
being put into  context. He pointed out that  people speculate on                                                               
fishing permits  all the time,  but there has been  no noticeable                                                               
increase in speculation on east side permits.                                                                                   
                                                                                                                                
He said he  knows that Senator Giessel is  concerned about gaming                                                               
the system, but  the reality is that someone who  bought a permit                                                               
after December 31, 2018 cannot  participate in this program. What                                                               
the  amendment  does is  prevent  a  large percentage  of  permit                                                               
holders from participating in the  buyback, whether they've owned                                                               
their permit  for 2  years or  50 years.  It doesn't  matter. The                                                               
legislation organizers want  200 permits out of  the fishery. Not                                                               
having the buyback does not solve  the problem of not enough fish                                                               
in the rivers for the other user groups.                                                                                        
                                                                                                                                
4:29:33 PM                                                                                                                    
CHAIR BIRCH asked if the 440  permits have 440 discreet pieces of                                                               
beach and if  a stacked permit applies to two  discreet pieces of                                                               
beach.                                                                                                                          
                                                                                                                                
SENATOR MICCICHE explained that stacking  allows for more gear in                                                               
the same  piece of property.  Even if  a fisherman has  a stacked                                                               
permit, their other  permit would not be usable on  that site any                                                               
longer. The  buyback truly  does take that  piece of  real estate                                                               
and the set net out of the  water. He agreed with Mr. Putman that                                                               
a very high proportion of the 440 permits are being fished.                                                                     
                                                                                                                                
He  opined  that  the  east-side  fishery  is  86-percent  Alaska                                                               
residents, which is probably the  highest of all fisheries in the                                                               
state. He said he suspects that  the number is probably well over                                                               
375  The number  of active  permit holders  will be  found to  be                                                               
higher than  the 375 because of  other family members that  own a                                                               
neighboring  permit  and are  delivering  on  the other  person's                                                               
permit, which is legal.                                                                                                         
                                                                                                                                
SENATOR REINBOLD  opined that actually  using the permit 5  of 10                                                               
years for  fishing does  matter if  the ultimate  goal is  to get                                                               
more fish  into the  rivers. She emphasized  that the  people who                                                               
are actually fishing are the ones you want out.                                                                                 
                                                                                                                                
4:31:54 PM                                                                                                                    
SENATOR MICCICHE responded  that the "5 of 10 years"  part of the                                                               
amendment does  not work.  He pointed  out that  a person  who is                                                               
qualified  could  participate in  the  buyback  for $260,000  and                                                               
afterwards buy a permit from someone  who did not qualify for the                                                               
buyback. He  reiterated that the  goal is to take  200 operations                                                               
out of the water and  the amendment dramatically complicates that                                                               
if  it  were to  pass.  Whatever  portion cannot  qualify,  those                                                               
individuals will be a "no" vote.  If support is 70:30 now, adding                                                               
20-percent "no" votes means there will  not be a program and more                                                               
fish won't  get into  the rivers. He  emphasized that  whether or                                                               
not a fisherman purchased within  the past 10 years is immaterial                                                               
to the program.  You're still taking a permit  and the associated                                                               
piece of land and are closing  it to fishing. It truly takes that                                                               
gear out of the water, he said.                                                                                                 
                                                                                                                                
SENATOR   REINBOLD  noted   that   the   amendment  says   active                                                               
participation for  5 of  the last  10 years and  it does  not say                                                               
anything about buying a permit.                                                                                                 
                                                                                                                                
MR. PUTMAN  explained that  no one  can fish  commercially unless                                                               
they have  a permit from CFEC.  In the case of  drift fishers and                                                               
people  who have  boats, there  is a  vessel associated  with the                                                               
permit and they  are not allowed to fish unless  they have both a                                                               
vessel and a permit.                                                                                                            
                                                                                                                                
SENATOR  REINBOLD  said  the bottom  line  is  Senator  Giessel's                                                               
amendment  encourages  the  permit   holders  that  are  actively                                                               
fishing. She said  the amendment makes sense  because the permits                                                               
must be actively used.                                                                                                          
                                                                                                                                
4:34:24 PM                                                                                                                    
SENATOR MICCICHE emphasized that the  amendment does not do that.                                                               
He  reiterated that  if the  permits were  owned by  December 31,                                                               
2018,  that  operation could  potentially  be  taken out  of  the                                                               
water.                                                                                                                          
                                                                                                                                
SENATOR REINBOLD  responded that whether  or not the  permits are                                                               
used matters to her.                                                                                                            
                                                                                                                                
SENATOR GIESSEL  said she  understands the  scenario where  a 90-                                                               
year-old woman  has owned a  permit and different  family members                                                               
are fishing it and she wants  to sell. That is provided for under                                                               
the broad definition of "immediate  family member." She specified                                                               
that the  goal is  not to  exclude people  other than  those that                                                               
were speculating  by buying permits  at the last minute  with the                                                               
thought of cashing in.                                                                                                          
                                                                                                                                
4:36:42 PM                                                                                                                    
SENATOR BISHOP commented  that the goal is obviously  to take the                                                               
gear out  of the  water, but the  lease is gone  too. He  said he                                                               
would be  interested in knowing  how many  people out of  440 are                                                               
eligible if the amendment were to pass.                                                                                         
                                                                                                                                
MR.  PUTMAN replied  that he  could provide  that data  in a  few                                                               
days.                                                                                                                           
                                                                                                                                
SENATOR MICCICHE  reiterated that  his concern  is that  the time                                                               
restriction in  the amendment is  arbitrary and does not  do what                                                               
it  is designed  to  do. He  said  if 20  percent  of the  permit                                                               
holders  are not  allowed to  participate,  there will  not be  a                                                               
program because there won't be enough votes to pass.                                                                            
                                                                                                                                
4:38:21 PM                                                                                                                    
SENATOR COGHILL  opined that the numbers  the committee requested                                                               
will help members decide. He said  the buyback is probably a good                                                               
idea, but  he does  not understand  where the  money is  going to                                                               
come from.  He asked if  the committee  could hold action  on the                                                               
amendment until there is more information.                                                                                      
                                                                                                                                
CHAIR  BIRCH  replied that  he  does  not  have an  objection  to                                                               
Senator  Coghill's   request.  He  asked  how   that  would  work                                                               
procedurally.                                                                                                                   
                                                                                                                                
SENATOR COGHILL  suggested the committee  hold the the  bill with                                                               
the   amendment  pending   in  anticipation   of  receiving   the                                                               
additional information.                                                                                                         
                                                                                                                                
4:40:48 PM                                                                                                                    
CHAIR BIRCH said he didn't object to the suggestion.                                                                            
                                                                                                                                
SENATOR  REINBOLD  asked  why  the  commission  allowed  so  many                                                               
permits if it's a limited entry fishery.                                                                                        
                                                                                                                                
MR.  PUTMAN explained  that initially  the limited  entry fishery                                                               
gave  permits to  everybody with  a fishing  history in  the Cook                                                               
Inlet and Kalgin Island area.  Fishermen drifted over to the east                                                               
side because  space was  available, access  is easier,  and there                                                               
are  processing facilities.  Also, the  Kenai and  Kasilof rivers                                                               
have a high  amount of sockeye, which most set  net fishermen are                                                               
after.  The intent  of the  bill  is to  segregate the  east-side                                                               
fishery, limit the  number of fishermen, and  allow fishermen who                                                               
are in other parts of the fishery to continue to fish.                                                                          
                                                                                                                                
SENATOR MICCICHE  noted that the  fisheries in the  Kasilof River                                                               
were enhanced through some work by Ted Stevens a few years ago.                                                                 
                                                                                                                                
He explained  that fishing on the  western side of Cook  Inlet is                                                               
difficult because  processing is on  the east side. When  the big                                                               
returns come  back to  the Kenai  and Kasilof  rivers, delivering                                                               
and processing is easier on the east side.                                                                                      
                                                                                                                                
He noted that the concept for  the bill has been around for three                                                               
years. He  said he  understood the  committee's effort  and asked                                                               
that members  process the pending  information and think  about a                                                               
better number  that might do what  the maker of the  amendment is                                                               
looking for but does not kill the program.                                                                                      
                                                                                                                                
SENATOR  REINBOLD inquired  why permits  are permanent.  She said                                                               
people have  asked her why  permits are  not based on  supply and                                                               
demand. She asked if taxing fish might  be a way to get people to                                                               
pull out of the area. She opined  that if oil is taxed then other                                                               
resources should  be taxed  as well.  She said  she wants  to get                                                               
some  of  the  issues  addressed  during  the  committee  meeting                                                               
resolved before she votes on the final version of the bill.                                                                     
                                                                                                                                
4:45:25 PM                                                                                                                    
CHAIR BIRCH held SB 90 in  committee with Amendment 1 pending. He                                                               
specified  that the  committee has  asked  to receive  additional                                                               
information.                                                                                                                    
                                                                                                                                
4:46:08 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Birch adjourned  the Senate  Resources Standing  Committee                                                               
meeting at 4:46 p.m.                                                                                                            

Document Name Date/Time Subjects
SB90 Roni Carmon Testimony ii 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Roni Carmon Testimony 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 John Mills Email 4.5.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Pauline Mills Email 4.4.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Kathryn Laba Email 4.3.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Kenneth Tarbox Testimony 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 John Mills Email 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 CIRA-Paul Shadura Testimony 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Lisa Gabriel Testimony 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Thomas Hindman Testimony 3.29.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 CS Version R.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Summary of Changes (Version G to R).pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 CS Sectional Summary (Version R).pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Amendment R.1.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Dan Norman Email 4.9.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Gary Hollier Email 4.10.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 John Manley Letter 4.10.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90
SB90 Jeff Beaudoin Letter 4.20.19.pdf SRES 4/22/2019 3:30:00 PM
SB 90