Legislature(2017 - 2018)BUTROVICH 205
04/18/2018 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB315 | |
| SB135 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 135 | TELECONFERENCED | |
| + | HB 315 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 135-COOK INLET: NEW ADMIN AREA;PERMIT BUYBACK
3:48:03 PM
CHAIR GIESSEL announced consideration of SB 135.
3:48:31 PM
SENATOR COGHILL moved to adopt CSSB 135( ), version 30-LS1047\D,
as the working document.
CHAIR GIESSEL said she would not object, because she wanted the
sponsor to be able to work from this committee substitute as his
first presentation. Finding no other objections, she said the CS
was before the committee.
3:49:04 PM
SENATOR PETER MICCICHE, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 135, quipped that long before he got into
the legislature he heard that some folks disagree on some
fishing issues and that wading into a bill like this seemed like
the furthest thing from something that he would want to do. He
stated that two sides that normally don't hang out together came
up with an idea that could work. The set netters routed the
interest to their membership in the form of two questions:
1. Do you support the concept of voluntary fleet
reduction program for the Cook Inlet set net fishery
that would cost nothing to those who do not
participate and remain fishing? 79.6 percent of the
respondents answered yes; 20.3 percent said no.
2. Do you oppose any form of fleet reduction at this
time? 17.7 percent said yes, and 82.3 percent said no.
SENATOR MICCICHE said those poll responses sent a strong message
to him that it was okay to start this conversation.
3:51:11 PM
He said you know about the competition for fish in Cook Inlet
and about the issues between in-river fishermen and set netters
when it comes to king salmon catches along the east side.
SENATOR MICCICHE explained the goal of this legislation is a
voluntary buy-back that reduces the amount of people that are
fishing on the east side to the pre-1980s migration east when
people from all over Cook Inlet moved into the east side because
the fishery was more lucrative there. It seemed more manageable
then and it was more profitable for the commercial set netters
who were fishing at the time and in the view of many, there was
less negative interaction between the two groups.
The plan in SB 135 would reduce the number of fishermen by about
40 percent. For interested parties, there would be three years
of a lottery; each year the number in the lottery would be 65
with a target of around 200. If a fisherman decided to sell his
operation, it would come with the piece of water where he fishes
- from a DNR shore lease, a buoy-tag system, or another
identifying system - it would take that piece of water and that
permit out of fishing the east side. It would separate these
districts from the rest of Cook Inlet set netters and no new
fishermen could come into the area that was bought.
A whole operation has been valued at $260,000 realizing that it
would be the ending of a business that in some cases has been
there for many generations. The payments would be received over
three years for tax considerations. The result would be that
that site would be removed from active fishing along with the
permit.
SENATOR MICCICHE said they believe that coming back to that 60
percent range would eliminate a significant amount of negative
interaction between the two groups and it would make remaining
set net operations more efficient and, therefore, survivable. It
would increase the amount of in-river opportunities for both the
Kasilof and the Kenai Rivers.
CHAIR GIESSEL asked for a sectional analysis Of SB 135.
3:55:17 PM
KONRAD JACKSON, staff to Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, provided a sectional analysis of SB
135.
Section 1: Establishes the short title of this legislation as
the East Side of Cook Inlet Set Net Fleet Reduction Act.
Section 2: Adds a findings section to the uncodified law of the
state establishing that it is in the public interest to reduce
the number of commercial set net fishers on the east side of
Cook Inlet to allow more fish for in-river users and create a
more economically viable and sustainable se net fishery.
Section 3: Amends AS 16.43.200(b) granting Alaska Commercial
Fisheries Entry Commission (CFEC) the authority to divide an
existing administrative area.
Section 4: Amends AS 16.43.200 by adding 2 new subsections:
(c)Establishes the new Eastern Set Net Subdistrict
(ESNS)as distinct administrative area separate from
the Cook Inlet Central District. This rea is made up
of the statistical areas currently identified as 244-
21, 244-22, 244-31, 244-32, 244-41, and 244-42.
(d)Restricts those who have not previously fished in
the newly established ESNS from beginning to fish in
that area.
Section 5: Amends AS 38.05.082 by adding a new subsection:
(g)Not withstanding (a)-(d) of this section, restricts
the DNR director of the Division of Mining, Land, and
Water from entering into a new lease for shore
fisheries in the statistical area established under AS
16.43.200(c), enacted by sec. 4 of this Act, of an
exiting shore fishery lease. Does allow for accepting
assignment or sublease, extension, or renewal of
existing leases.
Section 6: Adds new transition sections to the uncodified law of
the State:
(a) Directs CFEC to issue new permits for the Cook
Inlet Central District set net fishery.
(b) If an individual shows satisfactory proof of
fishing in the new administrative area established
under AS 16.43.200(c) within the two years prior to
12/31/18, they will be granted a permit for that new
administrative area.
3:58:13 PM
Section 7: Adds a new section to the uncodified law of the State
which requires an election be held on March 1, 2019, to approve
or disapprove the fleet reduction program. Establishes the
criteria for the election process. The ballot will determine if
the program will be implemented; it will indicate region
boundaries, details of buy-back program, effective date if the
program is approved, and the date by which the ballots must be
returned.
3:59:08 PM
Section 8: Adds a new section to the uncodified law of the State
which defines the east side setnet fleet reduction program:
-Defines the qualifications for participation in the
program;
-Establishes that the program is voluntary;
-Establishes that the commission shall hold a lottery
each year for three years;
-Sets permit value at $260,000;
-Establishes a payment plan for the purchase of the
permits;
-Program shall terminate when permit count has been
reduced by 40 percent of the permits fished in 2017;
Permits purchased under this program shall be
cancelled and not reissued in place of the cancelled
permit;
-A three-year installment payment option shall be
provided;
-DNR shall, without penalty, terminate the shore lease
and prohibit future leases of the property;
-Acquisition of permits is not subject to the State
Procurement Act;
-Establishes that "commission" means Alaska Commercial
Fisheries Entry Commission.
4:00:58 PM
Section 9: Adds a new section to the uncodified law of the State
which directs the chair of the commission provide written
notification to the Lt. Governor of the results of the election.
Sections 10, 11, and 12: Effective Date Clauses.
SENATOR WIELECHOWSKI asked if a set net entry permit gives one
the right to have one set net in the water or is it an area.
SENATOR MICCICHE replied that one permit typically allows three
nets wherever you are permitted to fish, unless there is another
restriction.
SENATOR WIELECHOWSKI said he knows people own multiple permits
and have maybe six or nine nets in the water and asked if they
could sell just one permit and keep the other two.
SENATOR MICCICHE replied selling a permit means selling the
ability to fish those three nets and that piece of water would
have to go with it. They would not have to sell the other
permits. The important thing is that in the 40 percent removal
they will know who is registered and whether they are qualified
by the criteria, so the number of permits and sites in that area
is known. The goal is to reduce number by 40 percent. No new
permits would be issued to backfill.
SENATOR GIESSEL recognized Representative Rauscher and
Representative Knopp in attendance.
4:03:14 PM
SENATOR VON IMHOF said section 8 is part of the mechanics of the
bill and says, "establishes that this program is voluntary," and
asked what if no one wants to sell his permit.
SENATOR MICCICHE replied if no permits are sold, people would
continue fishing as they have, but that probability is non-
existent. Some are worried about "voluntary" being removed, and
this bill really is about all the users in Cook Inlet and his
intention is to protect the rights of everyone involved
including those set net fishermen who have brought this forward.
SENATOR VON IMHOF said if a whole lot of people want to sell
their permits, who is paying this $260,000 per permit and how
much is going to be paid per year.
SENATOR MICCICHE replied that this bill has no funding, the
total price tag for the full 40 percent reduction would be
around $50 million, and he is working with the congressional
delegation on getting federal conservation funds.
SENATOR STEDMAN said it is late in the session and asked why he
introduced this buyback bill now, because it takes time to work
through. The last one, which he thought was on the verge of
being "crooked," was the Southeast seine buyback, and when he
sees a buyback bill, it brings those bad memories back. He
wanted to hear why there is interest in the buyback; maybe data
showing pressure on the fishery - lack of fish or too many
permits. He also wanted to know how they arrived at the $260,000
valuation and what those permits trade for over the last few
years for background, and how many trades per year. He cautioned
that the Resources Committee should proceed with caution and do
a thorough job. He also cautioned the committee on the title
being too broad.
SENATOR STEDMAN also recalled that for the last buyback there
was a lot of interest in the funding coming out of Washington,
D.C.
4:09:31 PM
SENATOR MICCICHE replied that he didn't know if he heard a
question, but he would take a stab at an answer. He lives with
these people every day; this isn't a game. No one is proceeding
more carefully on this issue than the him. He assured Senator
Stedman this will go forward slowly, which is why it has taken
four years to get this point from the initial contact. This has
to be done right. These are people's lives.
There is nothing dishonorable about this approach he said. This
is the result of the second version of the bill. The first one
was drafted earlier and pre-filed. The folks from home and the
CFEC sent lots of comments and they heard from people all over
the state. All of the comments that made sense that seemed to be
remotely related to this bill are included in the second
version.
4:11:22 PM
SENATOR STEDMAN clarified that his comment referred to
legislative games at the end of session not the district games.
He assured Senator Micciche that the Southeast buyback program
smelled; it smelled so bad that it drew the attention of the
Attorney General's office and he didn't want to see that happen
again.
CHAIR GIESSEL said that is the purpose of this hearing and
people are online to respond to those concerns and questions.
SENATOR BISHOP said section 6 directs CFEC to issue new permits
for the Cook Inlet central district net fishery and asked if he
was looking for a third party to buy the permits from the people
who want to voluntarily sell them. Could he, as someone from the
Interior, purchase one of these permits?
SENATOR MICCICHE replied that Senator Bishop could purchase a
site any time; they are open to the public. But the reason it
goes through CFEC is because they are trying to stay within
acceptable practices. The reason they have to reissue the
central district permits is because today all permits are Cook
Inlet set net permits.
SENATOR BISHOP asked if he bought one of these permits, could he
fish it on the east side, because that is where they are trying
take permits out. Could he fish in the central district?
SENATOR MICCICHE replied today he can fish wherever he'd like.
Today, a set net permit in Cook Inlet can move anywhere it wants
to as long as the site is a legal site in which to fish. This
measure would separate the east side district from the rest of
Cook Inlet. So, they would have to reissue the other Cook Inlet
permits. Senator Bishop could purchase an east side set net
permit, but it would cost more. He could likely purchase another
Cook Inlet set net permit outside of that area - Calgon Island
and the Northern District - for a lower price.
SENATOR BISHOP asked how the value of $260,000 for three pieces
of gear was calculated.
SENATOR MICCICHE replied that some of the sites are worth far
more than that and some are worth less. Keeping in mind that
when a site is being retired, it is a small business in Alaska
that will be retired forever, that value was brought to him by
the groups that put this together. The sites that are worth more
will not be interested in this, and the stakeholders want the
productive efficient sites to stay in place.
This bill does not allow a target; a person has to win a
lottery. They hope the productive sites that are worth far more
stay in production. If someone wants to keep fishing, they could
invest in a more productive site and keep those active and would
be able to do that after the election.
SENATOR COGHILL asked if reducing the fleet would make a vacuum
somewhere else and incent people to rush in. And if someone has
an exclusive area, does that become a right?
4:19:24 PM
SENATOR MICCICHE replied at this point the bill uses a
constitutional approach that doesn't have those challenges. He
is a "drifter" and once the fish hit the beach, they are gone
for drifters; they are heading for the river. If and when a site
is removed, a certain proportion of fish will be caught by the
sites upstream/downstream from them and a higher proportion will
escape and make it into the river. For every site that is
removed, some of those fish will be caught by others, which
increases the efficiency of the remaining sites, but more fish
will inevitably end up within the river. The sites will not be
patchwork but will represent a general reduction in gear. He
said Anchorage is two hours and twenty minutes away and the two
(three, if one includes personal use) user groups have really
struggled with this issue for the last 40 years and believe this
is a way to take the pressure off while still giving someone an
honorable way to go "do something else, perhaps."
SENATOR WIELECHOWSKI said he appreciated Senator Micciche
bringing this bill forward; and while it probably won't pass
this session, it is a good conversation starter. He thought the
pressure is for kings more than anything else and asked if he
had given any thought to changing the structure so as to offer
the ability to the state or conservation groups to go out and
buy [permits] instead of having a lottery. Conservation groups
could be willing to pay millions of dollars for that on a
conservation basis. However, he didn't know if this idea would
be constitutional.
4:23:44 PM
SENATOR MICCICHE responded that it's certainly constitutional;
anyone can buy the sites, but that's not how it works. The most
effective way to manage interception of kings is through
reduction of gear and experts agree with that.
He added that he brought this forward at this late date in the
session because he wanted to get it heard and get something real
on the table and take it back to the experts and stakeholders
and talk about it over the interim - and make sure it works.
4:26:44 PM
ANDY HALL, Executive Director, Kenai Peninsula Fisherman's
Association (KPFA), Chugiak, Alaska, said they are neutral on SB
135, mostly because they just got their first look at it. He
supported Senator Micciche's statistics and added that KPFA
represents all set netters in Cook Inlet but Senator Micciche
seems to primarily represent east side set netters, which is a
majority of their membership. There are 736 permits in the Cook
Inlet and 440 of them fish in what is defined as the east side,
but only 193 people responded to the KPFA survey, the one
Senator Micciche referred to. He didn't know if that was a good
representation of stakeholders, but it at least tells him there
is interest. Of those who responded, 80 percent support the
concept of a fleet reduction.
The bill seems to be a move in the right direction, but some
issues remain. If it's a placeholder and fishermen can work with
Senator Micciche and his staff to improve it, it could get to a
point where KPFA would support putting it in front of fishermen
and let them decide their own fate. It's remarkable that both
sides of this "interminable fish war" seem to be talking and he
would hate to miss this opportunity.
4:29:17 PM
KEN COLEMAN, Vice President, Kenai Peninsula Fisherman's
Association (KPFA), Kenai, Alaska, said he is currently
president of the East Side Consolidation Association which is a
qualified salmon association of interested parties who are
limited entry permit holders; it is also a 501(c)(5) non-profit.
He and his wife are commercial set netters and fish on the east
side beach near the mouth of the Kenai River. He has fished here
for 45 years and been involved in fish politics in almost every
way imaginable since the advent of the Upper Cook Inlet
Management Plan in 1977. He is currently president of the East
Side Consolidation Association.
He said the mission of the Commercial Fisheries Entry Commission
(CFEC) is to limit the number of participants in a particular
fishery to allow for sustainable and economic viability, and as
a further product, conservation of the resource for the common
property into the future.
East side set netters have been discussing gear reductions for
many years and in the last few years have been pursuing it
formally. The CFEC has a method for reduction called an
optimization study, which in part, considers numbers of permits,
their value, the economic value of the catch, and the history of
the fishery. Such a study is typically lengthy and whatever
reduction is proposed or not or limited must be applied to the
entire fishery and cannot be overlaid or applied to a particular
area. This method doesn't work in most set net fisheries. The
Cook Inlet set net fishery has 736 permits spread throughout
five different districts in Cook Inlet: the northern district,
Calgon Island district, the western district, the southern
district, and the eastern district where the fish wars occur
every year.
He said the CFEC method of optimization is suitable for other
fisheries that are more homogenous in nature such as the seine
fisheries or drift fishery that "scooch around" together whereas
set netters used fixed gear and in the case of Cook Inlet, are
spread over five districts that have little commonality. The one
thing they seem to all agree on is that a voluntary reduction
would result in increased viability.
He said the east district has a keen interest in moving forward
with the fleet reduction program and another poll sent out three
years ago came back with an 88 percent favorability rating on
gear reduction in Cook Inlet.
MR. COLEMAN said 440 fishers are spread over 50 miles of beach
in the eastern district and as the result of their inability to
affect an outcome through the CFEC optimization process, they
approached Senator Micciche a couple years ago and this draft
evolved. It has the elements of what could be a successful
program. He has some "tweaks" if they were able to move forward
with it; one is price. They arrived at the $260,000 figure by
taking the average earnings of a set net permit each year over
the prior ten years, and those averaged a little above $20,000
per year per permit and added a number which seemed at the time
to be the tax implications, so that if volunteer fishers are
included in a program that comes to fruition they would leave
with a $200,000 sale for small business that in many cases have
been around for generations.
Historically in 1980, the fishery was about half the size that
it is today and for many reasons including increased bio-mass,
limitations on area, aquaculture inclusions into the fishery,
and an historically high price. In many cases, set net permits
came into the area from other parts of Cook Inlet.
In summary, Mr. Coleman said the bones of a good program are in
this bill and he would stand by for questions.
4:37:07 PM
RICKEY GEASE, Executive Director, Kenai River Sport Fishing
Association (KRSFA), Soldotna, Alaska, supported SB 135. He said
this is the first time that set netters have had a common
purpose and appreciate the time working with Senator Micciche in
moving towards a voluntary buyback program.
KRSFA supports the concept of a voluntary fleet reduction
program he said and that back in the 1980s about half the number
of permits were fishing in the Kenai and Kasilof Rivers. Now
they are in a situation where the runs have returned, but to a
lower level, and there is a lot of gear in the water not
catching enough fish. In Cook Inlet that is reflective of the
average price for permits. In 2016 they were about $15,000 and
earnings are about $20,000. So, one of the improvements coming
from a gear reduction is that the remaining permits become more
valuable and will have a higher price point in their gross
earnings per year.
As an association of sport anglers, KRSFA would be interested in
decreasing the harvest of king salmon, a primary fishery for the
in-river sport fisheries and think that a reduction of 45
percent would reduce interceptions of king salmon. The regional
ADF&G biologist indicated that with about 55 percent of the gear
he still feels comfortable that the east side set net fleet,
itself, would still have the historical harvests of their money
fish, which is sockeye salmon.
4:39:54 PM
Typically, you can figure out how many permits are necessary to
catch 100,000 salmon by taking the average around the state,
which is around 3.2 salmon permits for every 100,000 fish. But
in Cook Inlet, it's close to 25 permits. A lot of gear is
concentrated in that water.
4:40:53 PM
CHAIR GIESSEL thanked him and finding no further comments,
closed public testimony.
4:42:09 PM
SENATOR BISHOP asked when limited entry started and what its
purpose was.
DALE KELLEY, Commissioner, Commercial Fisheries Entry Commission
(CFEC), Alaska Department of Fish and Game (ADF&G), Juneau,
Alaska, replied it was started in 1973 and its purpose was to
protect sustained yield of our salmon resources and protect
commercial fishermen from economic dislocation.
SENATOR BISHOP asked her to help him understand that after 1973
no new permits were issued.
MS. KELLEY said that wasn't correct. She explained that in 1973,
most of the fisheries were open to being limited except the
salmon hand troll fleet that wasn't limited until the early 80s.
Since that time, other non-salmon fisheries have been limited.
SENATOR BISHOP asked how the Cook Inlet east side fleet grew by
50 percent under a limited entry program.
MS. KELLEY answered because the east side doesn't have its own
permit; it's a Cook Inlet set net permit, and people are free to
M.Ovi around. So, if the north side wasn't as lucrative, maybe
people would migrate to another area in the Inlet.
SENATOR BISHOP said so those permits already existed, but they
just got word that the fishing was better on the east side.
MS. KELLEY answered yes.
SENATOR BISHOP asked if DNR leases these sites.
MS. KELLEY replied that she wasn't sure but suspected that DNR
leased some sites and others were privately owned.
4:45:01 PM
FATE PUTMAN, Commissioner, Commercial Fisheries Entry Commission
(CFEC), added that he wasn't familiar with DNR permits, but he
knows that most fishermen have an upland permit and they often
fish three nets and often stack them. So, they may go out up to
a mile offshore from the permit site. The upland sites are very
valuable; DNR handles the leases. He reported that they had seen
four east side set net permits turn over since last September
for an average cost of $14,500.
SENATOR BISHOP said he would direct his questions to DNR.
SENATOR VON IMHOF asked if he was saying one permit site would
be sold for $14,500 and how that figures.
MR. PUTMAN replied that is the price of the permit not the site.
Buying a set net permit in the Cook Inlet area would cost
$14,500 and then you would also have to buy the upland DNR
lease. In this case, that is what is valuable.
SENATOR VON IMHOF asked what the price is now.
MR. PUTMAN said he wasn't an expert in DNR's leases, but rather
knows the value of the permits.
CHAIR GIESSEL said they would submit that question to DNR.
4:46:57 PM
SENATOR STEDMAN said the leases are transferred not bought, and
he asked to get the lease terms and rates from DNR. They need
this information, and he would really like to see a full
presentation on the Cook Inlet fishery including the history to
get a better feel for what they are dealing with.
CHAIR GIESSEL noted that about four years ago the committee had
a Cook Inlet fishery week and had all the different gear types
come in and an update would be good. She invited Senator
Micciche back to the table for additional questions and closing
remarks.
SENATOR BISHOP said this seemed like trying to help alleviate an
overfishing issue.
SENATOR MICCICHE responded that the returns to Cook Inlet can
vary dramatically from 1.5 million fish to 6 or 7 million fish.
On those heavy years - hence the draw of the east side - when
the Kenai and Kasilof produced phenomenal amounts of fish and
people on the west side starved to death, they moved east. Once
you move east and find the fishing is pretty good, it's hard to
move back to where the fishing is not nearly as good. Those
folks can move back if they choose to, but that does not seem to
be working.
He explained that the east side is also easier to fish because
it has better access to delivery facilities and facilities for
processing, and fishermen get a higher price per pound because
they don't have to worry about transportation and ice and things
like that, and typically, it's more lucrative.
Regarding overfishing, he said ADF&G decides on what is an
adequate return to the river and has been very successful at it.
They don't know what the problems are with king returns, but now
that they are challenged, they have become more important. Hence
the struggle has gotten worse not better. The thought is to
reduce that pressure. It is fascinating to have both sides at
the table, because normally they don't spend a lot of time
socializing together.
SENATOR BISHOP said he thought this was a fascinating subject,
but he thought ADF&G should be helping with this discussion.
SENATOR MICCICHE said the department decided to stay out of the
fray, but thinks it is a worthy discussion. He noted that about
half the permits have a DNR lease. People can fish where they
want to, but they just have to register the area. Some of them
are more lucrative sites and do have a DNR lease but focusing on
the permit value is not point in this discussion. There is a
dramatic spectrum of income and value. Some permits are worth
$15,000 and some sites are worth half to three-quarters of a
million dollars, and there are sites with a $15,000 permit that
are probably worth $25,000. His goal is to have a more efficient
fishery and folks living together in peace, at least for a time.
He thanked the chair for hearing the bill.
4:55:01 PM
CHAIR GIESSEL said during her time in the Senate, this was one
of the districts she represented, and she applauded him for
being able to bring the stakeholders all together.
Finding no further questions, she held SB 135 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Senate Resources Hearing Agenda - 4 - 18 - 2018.pdf |
SRES 4/18/2018 3:30:00 PM |
|
| HB315 - Version D.PDF |
SRES 4/18/2018 3:30:00 PM |
HB 315 |
| HB315 Explanation of Changes ver A to D.pdf |
SRES 4/18/2018 3:30:00 PM |
HB 315 |
| HB315 - Fiscal Note - DEC - 1 - 25 - 18.PDF |
SRES 4/18/2018 3:30:00 PM |
HB 315 |
| SB135 - Version D.pdf |
SRES 4/18/2018 3:30:00 PM |
SB 135 |
| SB135 - Sectional Summary - Version D.pdf |
SRES 4/18/2018 3:30:00 PM |
SB 135 |
| SB135 - Supporting document - Eastside Setnet Area Map - 4 - 18 - 18.pdf |
SRES 4/18/2018 3:30:00 PM |
SB 135 |
| SB135 Summary of changes ver A to ver D.PDF |
SRES 4/18/2018 3:30:00 PM |
SB 135 |