Legislature(2007 - 2008)HOUSE FINANCE 519

04/06/2008 04:00 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 04:30 pm today --
+ HB 106 REPEAL FEES FOR STUDDED TIRES TELECONFERENCED
Moved CSHB 106(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 422 CHILDREN'S TRUST GRANT FOR ENDOWMENT TELECONFERENCED
<Bill Hearing Canceled>
+= HB 314 G.O. BONDS FOR TRANSPORTATION PROJECTS TELECONFERENCED
Moved CSHB 314(FIN) Out of Committee
+= SB 254 AK REGIONAL ECONOMIC ASSISTANCE PROGRAM TELECONFERENCED
Moved HCS SB 254(FIN) Out of Committee
SENATE BILL NO. 254                                                                                                           
                                                                                                                                
     "An Act extending the termination date of the Alaska                                                                       
     regional economic assistance program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
Vice-Chair Stoltze  MOVED to ADOPT  HCS SB 254(FIN),  labeled                                                                   
25-LS1367\E, as the  work draft before the Committee.   There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Representative Nelson  informed the Committee that  there was                                                                   
a change in the bill to include hair crab fisheries.                                                                            
                                                                                                                                
FRANK   HOMAN,  COMMISSIONER,   COMMERCIAL  FISHERIES   ENTRY                                                                   
COMMISSION, offered  to provide additional  information about                                                                   
the bill.                                                                                                                       
                                                                                                                                
Representative Nelson reported  that the addition to the bill                                                                   
would extend  the life of the  hair crab fisheries  along the                                                                   
west coast of Alaska.   Mr. Homan said that was  correct.  In                                                                   
addition,  it  extends  the  scallop   fisheries.    The  two                                                                   
fisheries are  unique in that  they are vessel  based license                                                                   
systems.                                                                                                                        
                                                                                                                                
Representative  Nelson said her  understanding is  that those                                                                   
two fisheries alone have 4 out  of 18 permit holders that are                                                                   
owned  by Community  Development  Quota  (CDQ)  groups.   Mr.                                                                   
Homen thought that was correct.                                                                                                 
                                                                                                                                
Representative  Nelson  asked how  many  permit holders  from                                                                   
Alaska are in the limited entry  system.  Mr. Homen responded                                                                   
that  there are  about 15,000  limited entry  permits and  78                                                                   
percent  are from  Alaska.   Representative  Nelson asked  if                                                                   
there were about 10,000.  Mr.  Homan thought it was more like                                                                   
11,000.                                                                                                                         
                                                                                                                                
Representative Nelson estimated  that from the two CDQ's that                                                                   
are  owners in  the  hair crab  and scallops  fisheries,  the                                                                   
Coastal Village Region  Fund has about 20 villages  and about                                                                   
9,000 people, and  Norton Sound has fewer villages  but about                                                                   
8,500 people.  Just in those 4  permit holders, the owners of                                                                   
the  permits total  about 17,000  residents of  Alaska.   She                                                                   
stated that the  CDQ's are not Native programs.   She saw the                                                                   
CDQ's  with  their community  shareholders  as  positive  for                                                                   
communities.                                                                                                                    
                                                                                                                                
4:47:21 PM                                                                                                                    
                                                                                                                                
Representative  Thomas   asked  how  corporations   can  hold                                                                   
permits when  it is prohibited  throughout the  whole limited                                                                   
entry permit  system.  Mr.  Homan clarified that  the vessel-                                                                   
based program is  unique.  In 2002, the legislature  passed a                                                                   
bill allowing  the two fisheries  to have different  systems.                                                                   
The  limited entry  system  was  designed around  the  salmon                                                                   
fisheries  with an  individual owner.   Vessel-based  limited                                                                   
entry  fisheries are  managed  differently.   They are  large                                                                   
boats  with multiple  crews and  skippers.   The  traditional                                                                   
method could  not be used.   Sometimes the vessels  are owned                                                                   
by corporations made  up by two or three individuals,  due to                                                                   
the  expense  of getting  into  these  two fisheries.    They                                                                   
require  a  different  financial  structure.    There  is  no                                                                   
intention  of moving  the vessel-based  system  to any  other                                                                   
fishery.                                                                                                                        
                                                                                                                                
Representative Thomas thought  the doors would be opened when                                                                   
the rules change.   He voiced concern about the  process.  He                                                                   
related that he  fought the limited entry program  so that no                                                                   
corporation would  ever own the  permits.  Mr.  Homan related                                                                   
that  the legislature  in  2002 made  that  allowance and  it                                                                   
would  require  legislation  to change  it.    Representative                                                                   
Thomas reiterated  his concerns.  He suggested  consolidating                                                                   
or  releasing more  permits.    He said  the  usual route  is                                                                   
through the Board of Fish.                                                                                                      
                                                                                                                                
Mr.  Homan  recalled   that  in  2002  the   legislature  did                                                                   
recognize  consolidation.   No  vessel owner  could own  more                                                                   
than two permits.                                                                                                               
                                                                                                                                
4:53:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze pointed  out that  the bill would  extend                                                                   
the  termination   date  of  the  Alaska   Regional  Economic                                                                   
Assistance Program.                                                                                                             
                                                                                                                                
Representative  Nelson  said  in addition  to  extending  the                                                                   
termination  date, there  are  18 hair  crab  permits and  19                                                                   
scallop  permits.   In the  18  crab permits,  there are  250                                                                   
quota holders.   She inquired if the fishery  were abolished,                                                                   
if all of  those quota holders  would be able to come  in and                                                                   
fish that resource.  Mr. Homan  confirmed that to be true for                                                                   
both   fisheries;  both   would   return   to  open   access.                                                                   
Representative Nelson  said that is of great  concern because                                                                   
of the potential  loss of revenue to Alaskan  permit holders.                                                                   
Representative  Nelson  commented that  the  fishery is  also                                                                   
needed to  prevent over  fishing.  Mr.  Homan added  that the                                                                   
resource is  fragile and  the fishery very  small.  If  it is                                                                   
opened  to unlimited harvest,  restrictions  will need  to be                                                                   
applied.                                                                                                                        
                                                                                                                                
Representative  Nelson asked if  the other 14  permit holders                                                                   
are from across  the state, in addition to the  4 CDQ's.  Mr.                                                                   
Homan  replied that  it is  a  mixture of  Alaskans and  non-                                                                   
residents.   Representative Nelson thought there  were permit                                                                   
holders from  Southeast Alaska as  well as from  the Interior                                                                   
and South Central Alaska.  Mr. Homan said that was correct.                                                                     
                                                                                                                                
4:57:05 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  for  an explanation  of the  hair                                                                   
crab and scallop fisheries.  Mr.  Homan explained the history                                                                   
of the two  fisheries.  The  Department of Fish and  Game put                                                                   
restrictions  on the fisheries,  requiring a vessel  license,                                                                   
in 2002.                                                                                                                        
                                                                                                                                
Representative  Gara asked  how  long the  extension is  for.                                                                   
Mr. Homan said  5 years.  Representative Gara  asked if, when                                                                   
it lapses,  it becomes  a permit  fishery again.   Mr.  Homan                                                                   
explained  that  the  sunset  allows  revisiting  the  issue.                                                                   
Representative Gara asked if the  bill would limit additional                                                                   
vessels.   Mr.  Homan  said that  is  correct.   He  recalled                                                                   
testimony by Fish  and Game that regulation  of the fisheries                                                                   
would be increased if the bill does not pass.                                                                                   
                                                                                                                                
5:01:11 PM                                                                                                                    
                                                                                                                                
Representative Thomas  recalled during the time  of statehood                                                                   
and the  intent to  abolish fish  traps owned by  non-Alaskan                                                                   
corporations  back then.   Limited entry  was developed  very                                                                   
carefully to  ensure that corporations  were not able  to own                                                                   
permits.                                                                                                                        
                                                                                                                                
Representative  Nelson thought  that  if there  was open  and                                                                   
unlimited  access   to  the  fisheries,  it   would  be  more                                                                   
expensive to manage  them.  She reported that  there was also                                                                   
a  possibility that  they  would be  managed  by the  federal                                                                   
government.  One  of the purposes of statehood  was to ensure                                                                   
state  management of  fish and  game resources.   Alaska  has                                                                   
already  lost  management  of   resources  on  federal  land.                                                                   
Losing  limited entry  will make  Alaska  vulnerable to  more                                                                   
federal management.                                                                                                             
                                                                                                                                
Mr. Homan  related that  the federal  government also  limits                                                                   
these fisheries  in the  federal fishery  zone; however,  the                                                                   
state manages both fisheries in  all waters.  If it goes back                                                                   
to  open  access  there  would  be  two  management  systems.                                                                   
Representative  Nelson noted  support for  the bill  from the                                                                   
Department  of Fish  and Game  and from  United Fishermen  of                                                                   
Alaska.  North Pacific Management  Council and the Commercial                                                                   
Fisheries   Entry  Commission   (CFEC)   also  support   this                                                                   
legislation.     Mr.  Homan  concurred  that   all  prominent                                                                   
fisheries support the bill.                                                                                                     
                                                                                                                                
Representative  Kelly asked if  the sunset date  was expected                                                                   
to be extended.   Mr. Homan said  it was, and he  related the                                                                   
history  of another  bill  that was  supposed  to extend  the                                                                   
termination date, but failed.   Representative Kelly asked if                                                                   
everyone in the  area supports the bill.  Mr.  Homan reported                                                                   
that it  is generally  supported.   A few  oppose it  because                                                                   
they  think it  is  going to  do something  else.   They  are                                                                   
uneasy with  consolidation.  Representative Kelly  asked what                                                                   
would happen to protect the resource  if it was not extended.                                                                   
Mr. Homan replied that Department  of Fish and Game said they                                                                   
would  initiate  more  restrictive policies  toward  the  two                                                                   
fisheries.   He  said the  Commission  would not  be able  to                                                                   
extend any limitation if the bill does not pass.                                                                                
                                                                                                                                
5:09:05 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  wondered if  a five-year sunset  was long                                                                   
enough  or  if a  sunset  was  even needed.    Representative                                                                   
Nelson thought  a sunset was not  needed.  She noted  that it                                                                   
has been  proven that  the resources  are rebounding  and the                                                                   
fisheries  are bringing  dollars  to Alaska's  coffers.   She                                                                   
worried that  a new  chairman of  fisheries might change  the                                                                   
termination date of the sunset in the future.                                                                                   
                                                                                                                                
Mr. Homan  related that  the original  intention of  the bill                                                                   
was to not have a sunset date.                                                                                                  
                                                                                                                                
Representative  Gara  thought  the  conservation  aspect  was                                                                   
working.                                                                                                                        
                                                                                                                                
Representative  Thomas said  he does  not like  the bill  but                                                                   
also did not think it needed a sunset.                                                                                          
                                                                                                                                
Vice-Chair  Stoltze   noted  the  title  restrictions.     He                                                                   
suggested a 10-year extension.                                                                                                  
                                                                                                                                
5:14:05 PM                                                                                                                    
                                                                                                                                
Representative Kelly said he was  uncomfortable with changing                                                                   
the sunset date, but liked the bill.                                                                                            
                                                                                                                                
Representative  Gara  thought there  was  not  a good  option                                                                   
surrounding the sunset issue.   He did not think that getting                                                                   
rid of the sunset was any worse a solution.                                                                                     
                                                                                                                                
Vice-Chair  Stoltze said  eliminating  the sunset  is not  an                                                                   
option in this  bill.  Representative Kelly  thought he could                                                                   
agree to the 10-year option.                                                                                                    
                                                                                                                                
5:16:40 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED to ADOPT Conceptual  Amendment 1 to                                                                   
extend the vessel permit portion of the bill to 2018.                                                                           
                                                                                                                                
Representative  Hawker  OBJECTED.    He  clarified  that  the                                                                   
amendment would apply to Section 2 of the bill.                                                                                 
                                                                                                                                
Representative Gara  requested that Representative  Nelson be                                                                   
added as  a sponsor of the  bill.  Representative  Nelson was                                                                   
added as a sponsor.                                                                                                             
                                                                                                                                
Representative  Hawker WITHDREW  his OBJECTION to  Conceptual                                                                   
Amendment 1.  There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
Co-Chair  Chenault reviewed  the fiscal  notes.   He noted  a                                                                   
need for  a new fiscal note  from the Department of  Fish and                                                                   
Game.                                                                                                                           
                                                                                                                                
Mr. Homan  said a  new zero fiscal  note from the  Commercial                                                                   
Fisheries Entry Commission would be forthcoming.                                                                                
                                                                                                                                
5:20:19 PM                                                                                                                    
                                                                                                                                
Representative  Foster MOVED  to REPORT  HCS SB 254(FIN),  as                                                                   
amended, out of Committee with  individual recommendations, a                                                                   
title change  resolution, and the accompanying  fiscal notes.                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HCS SB  254(FIN) was  REPORTED  out of Committee  with  a "do                                                                   
pass" recommendation,  a title change resolution,  a new zero                                                                   
fiscal note by the Department  of Fish and Game, and with two                                                                   
previously  published  fiscal  notes  by  the  Department  of                                                                   
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
AT-EASE:       5:21:41 PM                                                                                                     
                                                                                                                                
RECONVENED:    5:37:28 PM                                                                                                     
                                                                                                                                

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