Legislature(2001 - 2002)
03/20/2002 03:35 PM Senate RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE RESOURCES COMMITTEE
March 20, 2002
3:35 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Gary Wilken, Vice Chair
Senator Ben Stevens
Senator Kim Elton
MEMBERS ABSENT
Senator Rick Halford
Senator Robin Taylor
Senator Georgianna Lincoln
COMMITTEE CALENDAR
SENATE BILL NO. 329
"An Act authorizing community development quota groups to hold
commercial fishing permits."
HEARD AND HELD
CS FOR HOUSE BILL NO. 206(RLS)
"An Act relating to a vessel-based commercial fisheries limited
entry system for the Bering Sea Korean hair crab fishery and for
weathervane scallop fisheries, to management of offshore
fisheries, and to the definition of 'person' for purposes of the
commercial fisheries entry program; and providing for an
effective date."
HEARD AND HELD
CS FOR HOUSE BILL NO. 298(L&C)
"An Act relating to authorizing the Alaska Railroad Corporation
to lease land for a period of up to 55 years."
HEARD AND HELD
HOUSE BILL NO. 131
"An Act relating to standards for forest resources and practices;
and providing for an effective date."
HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 329 - See Resources minutes dated 3/6/02.
HB 206 - No previous action to record.
HB 298 - No previous action to record.
HB 131 - No previous action to record.
WITNESS REGISTER
Ms. Kelly Huber
Staff to Senator Halford
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented SB 329 for the sponsor.
Mr. Bruce Twomley, Chairman
Commercial Fisheries Entry Commission
8800 Glacier Hwy, Ste 109
Juneau AK 99801
POSITION STATEMENT: Opposed SB 329.
Mr. Steve White, Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on SB 329.
Mr. Jerry McCune
United Fishermen of Alaska
211 4th Street, #110
Juneau AK 99801
POSITION STATEMENT: Opposed SB 329.
Mr. Robert Heyano
Bristol Bay Economic Development Council
PO Box 1409
Dillingham AK 99576
POSITION STATEMENT: Commented on SB 329.
Mr. Oliver Holm
333 Tona Lane
Kodiak AK 99615
POSITION STATEMENT: Opposed SB 329 and HB 206.
Mr. Alan Parks
PO Box 3339
Homer AK 99603
POSITION STATEMENT: Opposed SB 329 and HB 206.
Mr. Malcolm Milne
PO Box 1846
Homer AK 99603
POSITION STATEMENT: Opposed SB 329 and HB 206.
Mr. Mako Haggerty
PO Box 2001
Homer AK 99603
POSITION STATEMENT: Opposed SB 329 and HB 206.
Mr. Yakov Reutov
PO Box 2956
Homer AK 99603
POSITION STATEMENT: Opposed SB 329 and HB 206.
Representative Drew Scalzi
Alaska State Capitol
Juneau AK 99801-1182
POSITION STATEMENT: Sponsor of HB 206.
Ms. Mary McDowell, Commissioner
Commercial Fisheries Entry Commission
8800 Glacier Hwy, Ste 109
Juneau AK 99801
POSITION STATEMENT: Commented on HB 206.
Mr. John Winther
Petersburg AK
POSITION STATEMENT: Supported HB 206.
Mr. Jim Stone
Scallop Vessel Ocean Runner
Kodiak AK
POSITION STATEMENT: Supported HB 206.
Mr. Chris Berns
PO Box 26
Kodiak AK 99615
POSITION STATEMENT: Opposed HB 206.
Mr. Jim Kubitz
Vice President, Real Estate
Alaska Railroad Corporation
PO Box 107500
Anchorage AK 99510
POSITION STATEMENT: Commented on HB 298.
Ms. Carol Carroll, Director
Division of Support Services
Department of Natural Resources
400 Willoughby Ave. 5th Floor
Juneau AK 99801
POSITION STATEMENT: Supported HB 131.
Ms. Marty Freeman, Manager
Forest Resources Program
Division of Forestry
Department of Natural Resources
550 W 7th Ave. Ste 1450
Anchorage AK 99501
POSITION STATEMENT: Supported HB 131.
Mr. Bob Zachel
Interior Timber Industry
PO Box 83244
Fairbanks AK 99708
POSITION STATEMENT: Supported HB 131.
Mr. James Durst
Division of Habitat and Restoration
Department of Fish and Game
333 Raspberry Rd.
Anchorage AK 99518
POSITION STATEMENT: Supported HB 131.
Ms. Beth Caissie
Northern Alaska Environmental Center
830 College Rd.
Fairbanks AK 99709
POSITION STATEMENT: Supported HB 131.
ACTION NARRATIVE
TAPE 02-12, SIDE A
Number 001
SB 329-ALLOW CDQ GROUPS TO HOLD ENTRY PERMITS
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee
meeting to order at 3:35 p.m. Senators Wilken, Stevens, Elton and
Chairman Torgerson were present. Chairman Torgerson said the
committee would have a quorum until 4:00 so it wouldn't be able
to move any bills today. He announced SB 329 to be up for
consideration.
MS. KELLY HUBER, staff to Senator Halford, sponsor of SB 329,
explained:
SB 329 provides an additional tool to the community
development quota groups by allowing them to hold
limited entry permits. Broadening the limited entry
permitting process creates a mechanism that will allow
the CDQ groups to protect their own region and get
permits into smaller communities within their
geographic bounds. It's an effort to bring new jobs and
wages that will strengthen the economic well-being in
communities of Western Alaska. Should this bill become
law, limited entry permits would be held by
individuals, CDQ groups, CFAB and other state loan
programs. The sponsor recognizes that this is the first
step in the process and welcomes public comment that
will be before you today and encourages changes that
will strengthen the bill and at the same time prevent
unintended consequences.
MR. BRUCE TWOMLEY, Chairman, Commercial Fisheries Entry
Commission (CFEC), stated support for getting permits into the
hands of the local rural residents, but was against the bill in
its current form. He stated, "I want to say that there's the
means to meet those goals under state law right now."
He explained that under the existing state commercial loan
program, a special loan program was created some years ago by
Nels Anderson for rural residents. It allows CDQ groups to
partner in the process to help get more permits into the hands of
local people. CDQ groups can actually promote local people for
the loans and partner with the Division of Investments. He noted:
The reason we feel compelled to speak against the bill
basically comes down to two points. First, I think
there are some serious legal issues raised by the bill.
The bill would authorize CDQ organizations to hold
limited entry permits. Well, CDQs are entities that are
confined to certain limited geographic areas in rural
Alaska. They're also composed entirely of Alaska Native
villages certified by the Secretary of Interior. This
is a very limited category of holders of limited entry
permits. It's very restrictive. I think you can
contrast it with the category that formerly governed
the subsistence preference in Alaska. Under our state
constitution, a rural preference for subsistence was
struck down. Now, that's a very broad largely open
category. The category being put forward in this bill
is much more restrictive in terms of area and in terms
of the composition of the groups that can hold limited
entry permits. The basic question I would want to raise
is how would you defend this new category under the
state constitution? I'm not sure that can be done.
The second question I want to raise is: why open the
holding of limited entry permits to entities at all?
The major step this bill takes would be to authorize an
entity, a corporation, to hold limited entry permits.
Going back to the time limited entry was created, one
of the fundamental purposes of the Act was to make sure
that limited fishing privileges could be held only by
real live individual fishermen. The notion was that
there was some history of exploitation of Alaskan
fishermen by corporations and other entities. The idea
was to help insulate Alaskan fishermen from that by
giving them total control of their fishing privileges
so that they could conduct their own affairs, conduct
their own businesses, have some bargaining power in the
process. I would submit that in the future as we face
various dislocations for the industry trying to adjust
to a changing world market that preserving that
individual place for Alaskans in the fishery remains
important; even though there may be any number of
creative ideas where people could get together with
CDQs. CDQs could help open up new markets. I think that
the individual fishermen need to remain in control of
their fishing rights so that they have some bargaining
power in the process so they can preserve a place in
the process and not simply become an employee of a
corporation. I think that issue remains important
today…
CHAIRMAN TORGERSON asked if other loans are available to people.
MR. TWOMLEY reviewed his list. The State Commercial Fishing Loan
Program has money available in the Division of Investments, which
has a special category to loan money to rural residents for
limited entry permits. He stated:
There has been an upper limit on the amount of money
that was available for those loans and today, with
depressed permit prices, permits for the first time are
within reach of this loan program. It's called the Type
B Loan Program. Now, that's coupled with an opportunity
for CDQ organizations to literally be a partner with
the Division of Investments. All CDQ organizations need
to do is deposit some money into an account where it
can sit and collect interest and have that money
available as loan guarantees. From there they can work
together with the Division of Investments where
Division of Investments does all the administrative
work, handles the money, all of the detail work and the
opportunity for the local CDQ organization is to pick
good candidates for the loans - people they know can
succeed as fishermen. It's a much better prospect than
having someone in Juneau pick an applicant for a
loan…They can also pick people to stand in line to step
in and assume the loan in the event that there's a
failure of the original loan. It's an opportunity; it's
there right now and it doesn't require changing the
law.
CHAIRMAN TORGERSON asked if his technical concerns are small in
nature.
MR. TWOMLEY replied a couple of them are small. Language on page
1, line 6 to 10, would authorize CDQ organizations to hold
interim use permits and he assumed those were in open fisheries
as opposed to limited entry fisheries. That language doesn't make
sense since CDQ organizations can participate in open-to-entry
fisheries now. They simply have to employ a captain and a captain
can buy an interim use permit to participate in those fisheries.
He remarked:
The only way this would make sense is if CDQs under the
bill would be in a position to compete with individual
fishermen for limited entry permits if the fishery goes
to limited. That may be the purpose of the bill because
at a later point in the bill, page 7, lines 11 -13, the
wording suggests that the CDQ itself could qualify for
a limited entry permit on initial issuance by the state
just as individual fishermen can now. That was an issue
that concerned me…
One has to contemplate that limited entry only survives
under the state constitution if it satisfies the two
specified constitutional purposes, one of them being
conservation of the fishery, the other one preventing
economic distress among fishermen. If you can't satisfy
those two provisions, the limited entry system will be
struck down and I can't see from the bill that it meets
either of those standards.
3:47 p.m.
SENATOR STEVENS asked why the sponsor statement says that CFAB
and state loan programs would become eligible under this bill.
MS. HUBER responded, "The sponsor is just letting you know that
the CDQ groups would be among the list that could hold, if the
bill passed, limited entry permits."
SENATOR STEVENS said that CFAB cannot hold a limited entry permit
right now.
MR. TWOMLEY added that is true, but it has a security interest.
SENATOR STEVENS asked if he was saying that nothing right now
prevents a CDQ group from having secured interest on a loan.
MR. TWOMLEY replied they have the opportunity to piggyback on top
of the State Division of Investments Program now. They can do it
with CFAB, too.
SENATOR STEVENS said, in that case, the CDQ group is the
guarantor of the individual.
MR. TWOMLEY said that is correct. That helps make the money go
further and, in this case, it's in a program where no down
payment is required. Basically, the loan program does all the
grunt work.
SENATOR STEVENS asked what the security would be for the CDQ
group.
MR. TWOMLEY answered that the permit, itself, will be security.
The Division of Investments and CFAB are authorized to actually
foreclose on a permit. He stated, "Under the scheme, they
wouldn't necessarily have to do that because there could be
another local person standing in line ready to assume the loan
under this program. They wouldn't necessarily lose the permit
from the local area.
SENATOR STEVENS asked how many limited entry permits exist for
the salmon fishery now.
MR. TWOMLEY replied that altogether there's about 14,000 permits.
Alaskans hold about 78% (11,000) of the permits overall. Rural
residents hold more than half of the permits held by Alaskans.
SENATOR STEVENS asked if he had a breakdown by region.
MR. TWOMLEY replied that it varies from fishery to fishery. In
the lower Yukon, Norton Sound, and lower Kuskokwim, the
percentage of Alaskans holding permits varies between 98 - 99%.
Most of them are held by local people. In Bristol Bay, 72% of the
setnet permits are held by Alaskans and more than half of those
are held by local Alaskans. In the driftnet fishery a little more
than 49% are Alaskans, which is roughly the historic percentage
of Alaskan/not Alaskan participation in the fishery. More than
half of the permits held by Alaskans are held by local Alaskans.
It's in excess of 450 drift permits.
He said they tried to encourage people to establish a local
permit brokerage to help them get limited entry permits. They
have been working with the CDQ and their representative, Robin
Samuelson, has told him that they are exploring the kind of
program he has suggested could be productive in the Bay.
3:53 p.m.
MR. STEVE WHITE, Assistant Attorney General, agreed with Mr.
Twomley's comments, especially regarding the constitutional
issues. He explained:
We have a constitutional problem because CDQ groups
have to be certified and one of the criteria is that
they have to be certified as a Native village under
ANCSA. The federal government is permitted under its
constitutional scheme to give preference based upon
Native issues, but the state constitution does not
allow us to do that unless we meet really strict
standards under our equal protection and our uniform
application clauses. Essentially, our courts would say,
'What is the purpose for this type of scheme and if the
purpose is to return permits [indisc.], is there
another way to do that without establishing essentially
a racial classification or preference?' Mr. Twomley has
already said there are other ways to accomplish that.
So, I think this would be very vulnerable under our
state constitution.
Also, I think it could be challenged under the federal
constitution, because it would be giving not only a
preference to racial classification, but to Alaska
residents versus nonresidents who also commercial fish.
Then we get back to the whole privileges and immunities
clause problem that we're dealing with in the Carlson
case. We are actually vulnerable there, because not
only do the CDQ groups have to be Native village
certified, they have to be local residents - that is
Alaskans. So Alaskans would be given preference in this
scheme versus nonresidents. And even though I like that
idea, the federal constitution has problems with it.
SENATOR ELTON said his memory of the limited entry debate in the
early '70s is that the privilege of limited entry was to be
accorded to real people and not to corporations. That was based
on the state's previous experience and the concerns many people
in the state had about processors accumulating permits.
MR. WHITE said he wasn't sure of the constitutional history of
the amendment that allowed limited entry, but he knew a lot of
the impetus behind it was to get the fishing industry away from
being owned by the processors, particularly the ones in Seattle
who had accumulated a lot of power through owning the
opportunities to fish and sharecropping them out to the
fishermen.
SENATOR ELTON said he asked because this legislation is so
narrowly drafted only one kind of an entity would be allowed to
accumulate the permits from a very discreet region of the state.
He asked if that would be a problem.
MR. WHITE replied that he thought the language was general enough
to pass that particular constitutional test. He thought the other
constitutional problems were a lot more severe.
MR. JEFF BUSH, Deputy Commissioner, Department of Community and
Economic Development (DCED), said he is also a member of the
state's CDQ team. He stated:
In contrast to Bruce Twomley's position, our agency at
least is supportive of the philosophy behind this
particular piece of legislation, but we share some of
the same concerns in terms of the legal issues and
truly believe that those need to be addressed…
Excluding the legal concerns or assuming they could be
dealt with, our department at least is supportive of
the concept of assisting CDQ groups, at least in terms
of if the overriding philosophy or purpose of this
legislation as we understand it is to essentially
assist western Alaskan communities in retaining permits
in the regions and allowing fishermen in those
particular communities to have more opportunity than
they would otherwise to utilize those permits, maybe
we're only arguing here or disagreeing on how you
accomplish that.
MR. BUSH said he recognized the legal concerns and would oppose
anything that would open up the limited entry program to larger
entities or other entities like fish processors.
SENATOR ELTON said that CDQ groups are processors in a sense.
MR. BUSH responded that CDQ groups are in all cases nonprofit
corporations. Their members are the communities that they
represent specifically, they have to actually select their board
from the communities and as part of their businesses they do
processing.
CHAIRMAN TORGERSON questioned how much of a problem this is if
99% of the permits are already owned by local rural residents. He
asked if that was his experience in dealing with CDQ groups.
MR. BUSH replied that in some of the regions that is true, but in
the Bristol Bay area it's not true; it's more like 50/50. That is
where the loss of permits from Alaska is occurring.
SENATOR STEVENS asked if this bill passes, whether each CDQ group
could own a permit in each limited entry fishery.
MR. TWOMLEY said he thought that was a correct reading of the
bill.
SENATOR STEVENS noted that he thought there were about 26 limited
entry fisheries.
MR. TWOMLEY said he thought it was intended that the CDQ group
could hold more permits than one.
SENATOR STEVENS asked if the CDQ entity could only hold one
permit, would he still oppose the bill.
MR. TWOMLEY said he was concerned about that as well as the broad
opportunities for an entity to hold limited entry permits. He
explained:
There are some limited exceptions now for cost recovery
permits and educational permits in the Act, but there
is this basic bias in the Act from the beginning for, I
think, sound reasons that fishing privileges ought to
be restricted to real live individual fishermen and not
go to entities. I'm kind of worried about opening the
door and the additional pressures that might create for
more entities to move in and hold limited entry
permits. Even if it's confined to CDQ holding limited
entry permits, even though CDQs are one of the best
things that has ever happened to Western Alaska, if
CDQs can hold limited entry permits. It does interpose
a corporation between a fisherman and the fisherman's
rights. That fisherman becomes an employee of the
corporation as opposed to somebody who can make his or
her own decisions about prosecuting a fishery. I would
be concerned about that.
CHAIRMAN TORGERSON asked if there was any cap they could put in
this bill to make him feel more comfortable, like saying a CDQ
couldn't own more than 10% of the permits available in the area,
if the legal issues were resolved.
MR. TWOMLEY replied that he was concerned about the principle.
SENATOR STEVENS theorized that a CDQ group is given special
recognition in federal law and has benefits of certain state
laws, but it's not recognized in the limited entry commission. He
asked Mr. Bush if CDQ groups can only invest in entities that
harvest fish.
MR. BUSH said that is correct right now, but that provision is
under review by the North Pacific Fisheries Management Council,
which might possibly allow a small percentage of in-region
general economic development investments instead of just
fisheries.
MR. JERRY MCCUNE, United Fishermen of Alaska (UFA), said that UFA
doesn't want to see any entity hold a permit, whether it's a CDQ
group or anything else. He said other processors in the state
would love to own permits. He said when the limited entry law was
drafted, it was pretty smart to keep permits in individual's
names so those permits would stay in Alaska. The biggest
opportunity that Bristol Bay has now is to start buying those
permits back, like Mr. Twomley said.
MR. ROBERT HEYANO, Bristol Bay Economic Development Council,
supported the concept of SB 329 and shared Commissioner Twomley's
concerns, but the Council feels the content of the bill is worth
pursuing.
MR. OLIVER HOLM, Kodiak, opposed SB 329. He thought there were
other methods to get permits into local ownership in Bristol Bay.
He was concerned about the legal issues and keeping permits in
the hands of individuals.
MR. ALAN PARKS, Homer fisherman, shared a lot of the concerns
expressed about SB 329, including consolidation into entities
that would ultimately control communities and independent
fishermen. He commented, "The protection of independent fishing
families is very important to the social structure and fabric of
our communities and our lives as fishermen…"
MR. MALCOLM MILNE, Homer fisherman, opposed SB 329 for all
reasons already stated, especially those by Mr. Twomley.
MR. MAKO HAGGERTY, retired fisherman, said he would like to fish
again sometime, but bills like this make fishing for him in the
future look pretty dim. He surmised, "It seems to me like the
first step in turning fishing into an agribusiness and that, of
course, eliminates the individual fisherman, which is what I am,
was, and will be."
MR. YAKOV REUTOV, Homer fisherman, opposed SB 329 for all the
reasons stated.
CHAIRMAN TORGERSON said they would set the bill aside for further
work.
CSHB 206(RLS)-LIMITED ENTRY FOR COMM. FISHERIES
CHAIRMAN TORGERSON announced HB 206 to be up for consideration.
REPRESENTATIVE DREW SCALZI, sponsor of HB 206, said in 1996 or
1997 a moratorium was placed on the hair crab and weathervane
scallop fisheries and reauthorized a few years later. He
explained:
Under the direction of the legislature, the Commercial
Fisheries Entry Commission was asked to come up with a
limited entry plan for these two fisheries. The CFEC
needed a different tool than was in the toolbox to come
up with a plan. Currently, our limited entry permits
must go to an entity, a person. Under this scenario, it
was not acceptable to create a limited entry plan for
these two fisheries that would not exacerbate the
problem. If the limited entry system that we have
currently was used, the permits would have had to go to
more than one vessel, because all vessels have up to
five different permit holders on them.
These are Bering Sea fisheries and the owner is not
usually on board and under that scenario, you would
need multiple permits. That would have allowed too many
entrants into the fishery. So, the CFEC felt that if we
would modify the system with HB 206 and allow a vessel
based permit to take place, the vessels that were
involved in the fisheries for the last few years would
be the potential recipients of the limited entry
permits that would be made available. HB 206 changes
essentially the manner in which the limited entry
system can take place by attaching it to the vessel.
He said the bill had been modified several times, because
initially CFEC wanted a tool that could be utilized for other
fisheries. Because the bill allows an entity to be an owner of a
permit, they thought it best to limit it to these two fisheries.
REPRESENTATIVE SCALZI said that initially, after the permit is
issued to the vessel, the next generation of ownership should go
back to an entity. Because of the dynamics of the Bering Sea
fisheries, they realized that the owners can't operate the
business while being onboard and often are not there.
SENATOR STEVENS asked him to explain the concept of the Limited
Liability Partnership (LLP) versus a state permit and the issue
of why the state should let LLP participants in.
REPRESENTATIVE SCALZI answered after an incident when one scallop
vessel took the quota a few years ago, there was a drastic
measure to put a moratorium on new entrants into the scallop
fishery. The LLP and the federal fisheries are separate, in that
[the LLP] applies to federal fisheries. This is for state managed
fisheries.
CHAIRMAN TORGERSON referred to Section 3, which deletes "scallop
fisheries" and inserts "fisheries." He asked what else this bill
would include besides the scallop fishery.
REPRESENTATIVE SCALZI said this bill just applies to the scallop
and hair crab fisheries and that language change was made to be
consistent with another part of the bill.
TAPE 02-12, SIDE B
MS. MARY MCDOWELL, Commercial Fisheries Entry Commission, said:
As the sponsor of the bill said, as far as the origins
of the bill, this is something the Commission was
directed to do by the legislature specifically. There
was language in the hair crab moratorium bill asking us
to come back to the legislature with language that
would be generic. Originally that's what we were
requested to do - to come up with a bill that would
create this alternative program that would be vessel
based, that could be used in fisheries that did not
lend themselves to effective limitation under our
current program.
She explained that CSHB 206(RLS) is generic legislation that
creates this program with specific criteria. The default is to
the original program unless the purposes of the Limited Entry
Act, conservation and avoiding economic distress among fishermen,
could not be met under the current program. In that case, CFEC
could consider using this alternative program, vessel based, to
limit that fishery. During considerable testimony in the House
Resources Committee, concerns were expressed about moving towards
the possibility of a limited entry program based on vessel
ownership and ownership by entities rather than by human beings.
She commented:
The Commission feels very strongly that we should
always use the person-based program when we possibly
can. That is something that has been very important to
the way Alaska manages its fisheries and empowering
fishermen and so on and we are very supportive of doing
that whenever possible.
She said CFEC recognizes that the state is faced with managing or
limiting a few fisheries that just may not lend themselves well
to limitation under their current program, two examples being the
weathervane scallop and hair crab fisheries. She noted:
These are very much unlike the kinds of fisheries the
state has had to limit before. These are Bering Sea
fisheries, large boat, currently corporately owned and
for the most part the owners are not on board. Most of
them are used by corporations and partnerships and use
hired skippers and relief skippers. There are a number
of different people running the boat over the course of
a season.
MS. MCDOWELL said that the House Resources Committee recognized
the need to have an alternative program in these two instances,
but it was not willing to create a generic tool that could be
used in any of the fisheries. Language in CSHB 206(RLS) still
largely reflects the original generic bill, but has been
restricted to use in those two fisheries only. She stated:
The question that arose a few minutes ago on page 9
about "scallop fisheries" being broadened to "a
fishery" was in the original generic bill, but still
makes sense to include here. This is just to make it
clear in statute that when the state has an opportunity
to manage a fishery that the feds are willing to
delegate management to the state to run, that we have
clear statutory authority to accept that. I think it
has always been the state's position that we should
manage whatever fisheries we can and in some instances,
the North Pacific Council and the federal government
are willing to turn over management of a fishery to the
state. So, this is to make sure that generic language
is in there for the state to accept that.
She said that phrase really doesn't have much to do with CFEC,
but rather with state management of a fishery through ADF&G.
SENATOR STEVENS asked how many weathervane scallop permits would
be issued with this legislation.
MS. MCDOWELL answered:
I guess it's important to start by recognizing that
this bill doesn't limit either of those fisheries. It
will only give us the ability if and when we were going
to limit those, to use this alternative program if
necessary. So we haven't done the research to know how
we would limit these two fisheries. I think under the
moratorium there are 21 boats for scallops and only one
for hair crab.
SENATOR STEVENS asked if this framework meets the moratorium
requirement and when it sunsets.
MS. MCDOWELL replied that the hair crab moratorium sunsets in
2003 and the scallop moratorium in 2004.
SENATOR STEVENS asked if they would have to implement the plan by
'03 and '04.
MS. MCDOWELL said this would be the enabling legislation and:
Once it is in place, the Commission would have to
research both fisheries, determine which program - this
doesn't automatically say we shall limit it under this
program. At that point, we would have to determine
whether there was any possible way to limit it
effectively under our current program and then we would
have to make a finding that we would have to use this
program to limit that fishery, put out a regulatory
proposal proposing a limitation and go through all of
that, and then adoption of the program and have that
eligibility criteria and have it adopted and in place
before the moratorium expired - in order to avoid
having an open access fishery happen in the meantime.
SENATOR STEVENS asked if both of these biomasses in the GHLs are
managed by the Alaska Department of Fish and Game (ADF&G) under a
fisheries management plan from the federal government.
MS. MCDOWELL said she thought that was true.
SENATOR STEVENS said the reason he brought it up is because of
the recent news that the entire shellfish management plan might
be reverting back to the federal government anyway. He asked if
she had talked to ADF&G about that potential.
MS. MCDOWELL replied that she understands that there had been
some conversation about what to do with the management of the
fisheries that have been delegated to the state under the current
budget situation, but CFEC needs to have the tools in place in
case they are faced with this management dilemma.
SENATOR STEVENS agreed they need to be prepared.
MS. MCDOWELL said she thought the discussion he referred to had
to do with where the state had been delegated authority to manage
in federal waters and, in this case, they are talking about state
waters. She stated, "The feds are already managing scallops;
they've done the LLP. The state is managing the licensing for the
scallops."
SENATOR STEVENS said the point he was trying to make is if ADF&G
is cut from shellfish management, all of this is for naught.
MS. MCDOWELL responded that she didn't know if this would be part
of that or not, since this is in state waters.
CHAIRMAN TORGERSON asked what would happen without this bill. He
asked if they could issue limited entry permits to the
individuals under current law and not vessels.
MS. MCDOWELL replied that the dilemma they would be faced with
would be to decide they couldn't effectively manage and let it go
back to open access, which could result in ADF&G's closing the
fishery if they felt that was too risky. She said:
The other option would be to explore whether there
would be a way to limit it using the existing program
to get the numbers down to something that was sensible.
A policy call for the legislature is the fairness
question of issuing permanent fishing privileges to
those who have been hired skippers rather than invest
in the boat.
SENATOR STEVENS asked how many permits that would amount to.
MS. MCDOWELL replied that they hadn't done the research and
didn't know the exact numbers.
MR. JOHN WINTHER, Petersburg fisherman, said he had been a
commercial fisherman since 1964 in Southeast and expanded into
the Bering Sea with a crab vessel in 1973. He said the Bering Sea
is unique because the majority of vessels are not owner-operated.
All of the crab fisheries are under a ration program under the
North Pacific Fisheries Management Council (NPFMC) except for the
Korean hair crab fishery, which was delegated to state management
quite a while ago. That is why they are asking for legislation to
create a vessel license through the state with authorization from
the legislature. They see no other way under the current system
that uses personal license permits to reduce the number of
permits to where it can be a rational fishery. He said, "In fact
you would be expanding the effort because of multiple skippers."
MR. WINTHER said another issue is with the large cost of entering
the Bering Sea fisheries:
You have a vessel and you have a guy that owns the
permit who doesn't have any interest in the vessel. The
vessel owner is held hostage to the guy that has the
license. If he chooses not to go on your vessel, your
vessel sits at the dock. If it's a vessel license, then
you can get anybody to run the vessel. So, we have all
the investment and all the risk and yet no license to
fish under the current entry system.
He said that every boat that goes up there is qualified to fish
as a catcher vessel. All the product is taken to Alaskan shore
side plants, processed in state. The state derives a fish tax off
of it and jobs are created. He maintained:
If the moratorium expires and there's nothing to take
its place, this thing will shift to an offshore fishery
where you get the catcher processors involved and the
state sees little or nothing…
He pointed out that a majority of the Bering Sea fisheries are
out-of-state owned, but in this little fishery, about 24% of the
boats are owned by Alaskans. Of the larger crab fleet about 5 to
10% of the boats are owned by Alaskans. He stated:
If this does expire and it goes back to federal
management, you don't want it there. By the time you
get something implemented under the federal system, new
entrants come into being and they won't be able to
manage the fisheries.
MR. JIM STONE said he is from the scallop vessel Ocean Hunter and
has fished off the coast of Alaska for 15 years; 10 of those
years in state waters. They were excluded from state waters after
the moratorium. They have a federal license to fish outside the
three-mile limit where 80% of the scallop beds exist. He supports
HB 206, as the LLP vessel license limitation has done a bunch of
good things for them. The boats work well together, their crab
by-catch has gone way down through voluntary monitoring and they
are no longer racing for fish or going out in storms. He noted,
"We'd like to see the state mirror what the federal government
has done in federal waters."
MR. OLIVER HOLM said he is concerned about the precedent set in
HB 206 in licensing vessels, because an entity is getting the
right to harvest fish. He thought the concentration of ownership
would be very hard to track, especially with a reduced budget. He
didn't think it was necessary to have state limited entry at all.
The Korean Hair Crab fishery is fairly small and insignificant.
He said most of the money would go out of state if the vessels
were licensed. If individuals were licensed they would contribute
to the economy in Alaska more.
MR.CHRIS BERNS said he opposes HB 206 because of all the reasons
previously stated, along with the same concerns people had with
SB 329. He believes, "It's a drastic policy shift that the state
has taken."
MR. YAKOV REUTOV opposed HB 206 for the reasons already stated.
MR. ALAN PARKS, Homer commercial fisherman, said he is speaking
on his own behalf and opposes HB 206 for a lot of reasons. He has
participated in the fisheries on a variety of different sized
vessels. He disagrees somewhat with what the sponsor statement
(dated 3/21/01) says, "Further, it would award ongoing fishing
privileges to many who have worked professionally as hired crew
and not those who have invested in the fishery."
By giving rights to the resource to vessel owners, he, as a hired
crew, is basically a sharecropper and he didn't think that was
the intent of limited entry laws.
MR. MALCOLM MILNE, Homer commercial fisherman, opposed HB 206
because, "It's important that fishing rights go to the people who
are fishing and not those who are at the dock out-of-state just
collecting the money."
MR. MAKO HAGGERTY also opposed HB 206 for the same reasons
already stated. He thought the economics of the hair crab fishery
determines the level of participation and he wasn't sure that
limited entry was a fair way of managing that fishery.
CHAIRMAN TORGERSON reiterated that he had lost a quorum so he was
only taking testimony today. He thanked everyone who testified.
CSHB 298(L&C)-LEGISLATIVE APPROVAL OF RAILROAD LEASES
CHAIRMAN TORGERSON announced CSHB 298(L&C) to be up for
consideration.
MS. ROBIN PHILLIPS, staff to Representative Lisa Murkowski,
sponsor of HB 298, gave the following synopsis of the bill.
The Alaska Railroad Corporation (ARRC) requested this
bill, which extends the length of time they can lease
lands from the current 35 years to 55 years.
This change in statute will help cultivate economic
development in communities along the Railbelt by making
commercial and residential development on Alaska
Railroad lands more viable. The current 35-year leases
are an obstacle in leasing lands to large commercial
and residential developers who need to secure long-term
financing for their investments. Financial lenders are
reluctant to invest in large scale projects requiring
substantial equity participation when there's no
guarantee the land will be available for 35 years. HB
298 will also make the ARRC's leasing practices more
consistent with other state agencies. Both the
University of Alaska and the Department of Natural
Resources can lease land for up to 55 years.
The proposed extension of the allowable lease term is
supported by the following businesses, individuals and
organizations: Anchorage Historic Properties, Anchorage
Neighborhood Housing Services, Mel Tipton (Ship Creek
tenant and commercial developer), Seward Ship's
Drydock, Inc., Dowl Engineers, Northrim Bank, AIDEA,
Yukon Fuel, Kantishna Holdings, Inc., A&A Construction
and Development, Inc., the Anchorage Chamber of
Commerce, City of Seward, Anchorage Assembly and
Fairbanks Chamber of Commerce.
MR. JIM KUBITZ, Vice President, Real Estate Division, ARRC, said
there really hadn't been much controversy about this. It came
from a demand from their tenants and leaseholders who really are
looking for longer terms to lease lands.
CHAIRMAN TORGERSON said he didn't know of any opposition either.
HB 131-FOREST RESOURCES & PRACTICES STANDARDS
CHAIRMAN TORGERSON announced HB 131 to be up for consideration
and said it was introduced by the House Rules Committee at the
request of the Governor.
MS. CAROL CARROLL, Director, Support Services, Department of
Natural Resources (DNR), said:
What the bill does, it identifies the riparian
standards for Region 3. The Board of Forestry requested
the science and technical subgroup to get together and
identify all of the best science. They got together
with an implementation group and with all of the
affected parties to make sure what we were looking at
in the scientific and technical group really would work
on the ground. After that process was completed, we
brought the bill back to the Board of Forestry for
their review and that bill is what you see before you
today.
MS. CARROLL said the committee has a "consensus bill" before it.
CHAIRMAN TORGERSON asked what the difference was between this and
Areas 1 and 2.
MS. CARROLL replied that Area 1 is coastal Alaska, Area 3 is
Interior Alaska and Area 2 is next.
MS. MARTY FREEMAN, Division of Forestry, DNR, said she was co-
chair of the Science and Technical Committee in the group of
stakeholders. She said that the difference between this and
Region 1 is that they have a different stream classification
system in the Interior that is tailored to the different stream
types there. In Region 1 there are four different stream types
including anadromous streams and tributaries. In the Interior the
streams are both anadromous and high value resident fish streams
and those are subdivided between non-glacial and glacial waters.
MR. BOB ZACHEL said he was the Interior timber industry
representative on the Science and Technical Committee when they
worked on this. He said, "I wanted to make it clear that what I
thought I was getting from this agreement was that Fish and Game
must present clear scientific data to justify any objections to
sales beyond the 100 ft. setback."
CHAIRMAN TORGERSON asked if he wanted to see something in statute
rather than just have a promise from ADF&G.
MR. ZACHEL said he did.
MR. JAMES DURST, Division of Habitat and Restoration, DNR,
supported HB 131. He commented, "I think it's been a pretty
impressive, consensus based development and nobody got absolutely
everything we wanted, but I think we all got enough of what we
needed to get…"
He said it was a good balanced bill and clarified that it wasn't
their intention to deal with issues beyond 100 ft. The existing
statute calls for a 100 ft. special management area along high
value resident and [indisc.]. The bill maintains that idea and
narrows it down to 66 ft. on private land.
CHAIRMAN TORGERSON said he hoped Mr. Durst could get together
with Mr. Zachel to work the differences out.
MR. DURST said they had been talking about it.
CHAIRMAN TORGERSON said the industry needed to be on board and if
it wasn't, he wasn't either.
MS. BETH CAISSIE, Northern Alaska Environmental Center, supported
HB 131. She stated, "We support this bill because not only would
it provide a higher level of protection for riparian habitats and
the fish that depend on it here in the Interior, but also because
we support the process by which this bill is drafted…"
CHAIRMAN TORGERSON said that concluded the committee's agenda for
the day and adjourned the meeting at 5:07 p.m.
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