Legislature(2005 - 2006)HOUSE FINANCE 519
04/10/2006 09:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB484 | |
| HB360 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 93 | TELECONFERENCED | |
| + | HB 360 | TELECONFERENCED | |
| + | HB 390 | TELECONFERENCED | |
| + | HB 484 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 484
"An Act allowing for revenue received from issuance of
additional entry permits to be appropriated for
reimbursement to salmon fishery associations."
REPRESENTATIVE PEGGY WILSON, sponsor, introduced her staff.
LINDA MILLER, STAFF, REPRESENTATIVE PEGGY WILSON, related
the history of HB 484. In 2002, the Alaska Legislature
created salmon fishery associations under AS 16.40.250 to
encourage fleet reduction in the Alaska salmon fisheries.
Salmon fishery associations may be formed in salmon
fisheries throughout the state to facilitate a permit buy
back program. This means that a group of fishermen may form
an association and vote to assess themselves for purposes of
Buying Back Salmon Permits in their fishery.
Ms. Miller explained that the Southeast Seiners have formed
an association to develop a buy back program for Southeast
seine permits. One of the questions raised by fishermen was
"What would happen if we assess ourselves to buy back these
permits then at some point in the future the Commercial
Fisheries Entry Commission sells permits back into the
fishery?" Their dilemma was that they wanted a guarantee
that they would get their money back if that actually
happened. HB 484 answers that question.
Ms. Miller reported that the CS for HB 484 that is before
the committee is a housekeeping measure to clarify what may
happen to the revenue if the Commercial Fisheries Entry
Commission should find it necessary to sell or re-issue
permits that have been relinquished under the buy back
program authorized under AS 16.40.250. This bill makes it
clear that in the unlikely event CFEC sells more permits
than were previously purchased by an association, the
legislature may appropriate money back to that association.
The change from the original version to the current CS is to
make it clear that the fishery association that actually did
the buy back is the fishery association that may receive the
payback. Under this bill the legislature may appropriate
revenue from the permit sale to the association that paid
money or incurred debt to remove the permit from the market
in the first place. The state or CFEC has the
responsibility to monitor each limited entry fishery. In
the event that CFEC determines more permits are needed in a
salmon fishery through an optimum number determination or
court action, the provisions of HB 484 would apply.
Ms. Miller stated that the Commercial Fisheries Entry
Commission, who worked with the Southeast Seiners in
developing their association, supports this bill. Peter
Froehlich, Commissioner of CFEC, and Jerry McCune from the
United Fishermen of Alaska were available to answer any
questions. Ms. Miller requested support for the CS for HB
484 - Fishery Association Reimbursement.
9:17:07 AM
Representative Stoltz asked about self-funded buy backs. He
saw no clear separation for that.
PETER FROEHLICH, COMMERCIAL FISHERIES ENTRY COMMISSION,
related that there is no limit in the bill as to the source
of the funds. Association funds used for the buy back could
be reimbursed under this bill.
Representative Stoltze noted that most buy back mechanisms
use federal funds. He said it appears that there is nothing
that would limit those federal funds from being paid back to
individual fishers. Mr. Froehlich replied that the
association could use federal funding, or self-assessment,
or a combination of the two. The legislature could later
reimburse the association, not the individual fishers.
Representative Wilson added that in this instance, they are
assessing themselves and borrowing the money to do it. She
stated no problem with clarifying the idea. Representative
Stoltze reported on a likely mechanism for funding. He
wanted to ensure that it is the intent of the bill to refund
the amount that the association has assessed.
Mr. Froehlich said that is the intent of the bill. It was
crafted with UFA and the Southeast Seiners, who are working
with Congress and Senator Stevens' office. Representative
Wilson added that when the association borrows money they
want to be sure they are reimbursed. Representative Stoltze
summarized that there are two parts in need of
reimbursement, self-assessment and federal funds.
9:24:18 AM
Representative Kerttula suggested that the money could be
used for other things to enhance the fishery if it is going
into the buy back. She did not see a concern because the
bill solves the problem and the money would go back to the
fishery. Representative Wilson agreed.
Mr. Froehlich added that the version of the language in
Congress considers it a federal loan where financing is
required. Representative Kerttula said that is even more of
a reason for the bill.
9:26:40 AM
Co-Chair Chenault asked what gives the impression that if
the association goes through a buy back provision, the state
would go back in and resell more permits. Representative
Wilson responded that has never been the case. The
association is nervous about taking this big step because of
the large amount of money. It is a "what if" statement.
Co-Chair Chenault voiced concern about it being a long time
into the future before any state department would want to
increase permits.
9:28:47 AM
Representative Weyhrauch asked what percent of the funds go
to permits.
JERRY MCCUNE, UNITED FISHERMAN'S ASSOCIATION, related that
the bill allows the association to create a committee, voted
on by the permit holders, to accept money or assess
themselves. He explained that if there was a buy back, they
could set a price for the permit. The only reason that they
would have to put permits back, would be like the case in
Sitka where they went to court and asked for more permits.
The judge ruled that a fishery could be made too exclusive.
If the association used their own money they would have the
opportunity to ask the legislature at a later date if they
could get any money back.
Mr. Froehlich related two possibilities for having to issue
more permits: setting an optimum number that is higher than
the number of permits reduced by the buy back, and a court
order. He addressed Representative Weyhrauch's concern.
All of the funding would go to permitees in the buy back.
9:32:18 AM
Representative Weyhrauch said it seems like it is a risk for
the state. If there is a challenge, then the fishers might
be in a position of having sold their permits and obtained
money. If permits have to be put back, there may be a legal
risk to the state. Mr. McCune thought a lawsuit would be
unlikely because the state can defend an optimum number.
There is also a provision to own two permits. He said he
could not guarantee there would be no lawsuit.
Representative Weyhrauch summarized it would have to be
equal to, or greater than, the optimum number set by the
commission. Mr. McCune agreed.
9:34:32 AM
Representative Stoltze asked if the salmon fisheries
association is made up of those that have limited entry
permits. Mr. Froehlich replied yes, commercial harvesters.
Representative Stoltze asked about concerns related to
conservation and sport fishing. Mr. Froehlich said he is
not aware of any mechanism that would allow others to
participate in a buy back. Representative Stoltze thought
there might be others interested in participating in a buy
back. He wondered if that would be a policy concern. Mr.
Froehlich said it is a policy question beyond the scope of
the bill.
Mr. McCune responded that only permit holders could
participate in the buy back. Representative Stoltze
commented that the association does not want anyone else to
participate. Mr. McCune responded that the permit holders
are the ones that are going to be assessed. Representative
Stoltze noted a reluctance to provide a mechanism. He asked
about buy backs and conservation.
Representative Kerttula noted that there needs to be an
optimum number of permits. She said a theoretical risk is
always there. She noted that sport fishing does not fit
into the commercial fisheries entry. Representative Stoltze
maintained that it is hard to separate them.
9:40:11 AM
Representative Weyhrauch suggested a three-part process for
sport fishers to participate. Mr. Froehlich said that is
accurate since the bill refers to associations qualified
under AS 216.42.50.
Representative Stoltze shared some discomfort but said it is
not his intent to bog down the bill.
Representative Weyhrauch spoke about conflicts between user
groups with a limited resource. He suggested involving all
regions by having a broad policy such as this one.
9:43:20 AM
Representative Kelly voiced a concern about a person with
the intent to shut down the fisheries in order to limit the
market. Mr. McClune reported that only permit holders can
form an association, so that is not a danger. No one has to
sell a permit. The association is trying to reduce permits
for those who want to get out of the fishery.
9:45:32 AM
Representative Kelly asked if there is a danger of a cartel.
Mr. McCune explained market limitations. Representative
Weyhrauch noted that last year the commercial fisheries
entry commission tried to amend provisions of those statutes
that dealt with a moratorium. This bill is a vehicle for
fixing an unworkable statute.
Co-Chair Chenault stated that it is a voluntary buy back
program.
9:48:51 AM
Co-Chair Meyer noted a new zero fiscal note from the
Department of Fish and Game.
SUZANNE CUNNINGHAM, STAFF, REPRESENTATIVE MEYER, explained
that the House Special Committee on Fisheries drafted fiscal
note #1. She has requested a new zero note by Department of
Fish and Game.
9:50:49 AM
Representative Foster MOVED to report CSHB 484 (FSH) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 484 (FSH) was REPORTED out of Committee with a "no
recommendation" and with a new zero fiscal note by the
Department of Fish and Game.
9:51:29 AM
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