Legislature(1997 - 1998)
02/16/1998 05:05 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HJR 48 - SUPPORT AMERICAN FISHERIES ACT Number 0035 CHAIRMAN AUSTERMAN announced the committee would first hear HJR 48, Supporting passage of S. 1221, the "American Fisheries Act," by the United States Congress. He asked the sponsor, Representative Grussendorf to present the resolution. Number 0070 REPRESENTATIVE BEN GRUSSENDORF stated that in 1976 the Fisheries Conservation and Management Act was created with the intent to Americanize the fisheries within the 200-mile limit. The 200 miles of the continental shelf area, would be managed by Americans with the goal that eventually all American interests in that area would be doing the harvesting. He explained that the resolution would send the Legislature's support of Senator Ted Stevens' S. 1221, which sets standards for vessels fishing within the 200-mile-limit. He stated that it addresses the anti-reflagging issue and sets the stage for a future moratorium in those fisheries, in order to make sure the fishing effort of a stock is managed on a sustained yield basis. He asserted that without this management, fisheries could be destroyed, as with the Atlantic Ocean fisheries because of trawlers. Number 0277 REPRESENTATIVE GRUSSENDORF declared that his main concern is tied in with the Individual Fish Quota, (IFQ). He stated that when the fisheries are being harvested by foreign entities, basically by the Norwegians and the Japanese, a problem is created in regards to the IFQ's. The purpose of creating the American Fisheries Act is to ensure the people onshore would have the economic benefits of handling their product, those fishing for the resource would be Americans; American captains and crew members. Number 0333 REPRESENTATIVE GRUSSENDORF referred to the issue of anti-reflagging and stated that there is some concern because the coast guard, in interpreting how to apply the law has left some major loop-holes in the fisheries. He stated that any U.S. ship, that is commercially operated, out of the U.S. and flagged with the American flag will have to have at least 75 percent American ownership. He stated that currently, in this area it is 51 percent and with foreign ownership the situation is present of "paper" American captains, with the true captain being from another nation. He pointed out that under international law there are exclusive fisheries, that do not allow Americans into those fisheries. Number 0456 REPRESENTATIVE GRUSSENDORF explained that a person could buy a U.S. made hull, take it to a foreign ship building yard, rebuild the ship and still have it considered an American vessel. Senator Stevens is trying to address these issues with S. 1221. He declared that it would be in the best interest for the state of Alaska to bring the product onshore and make sure that the money generated is going into Alaska's economy. He added that an American-flagged vessel qualifies for U.S. loans, therefore, foreign owners are able to receive American loans and the privileges that go along with them. He stated that the bill raises American ownership to 75 percent. The idea is to make sure that American fisheries are fished to the maximum extent by Americans. Number 0681 REPRESENTATIVE GRUSSENDORF stated that Senator Stevens is not trying to ban the foreign trawlers rather slowly phase some of them out, as there is a grandfather clause that gives the vessels 18 months to arrange the 75 percent American ownership. He stated that there have been 18 vessels newly participating in Alaska's fisheries that are larger and self-contained creating a concern. He stated that the bottom line is the question regarding who controls the IFQ's. Should the foreign companies have the American IFQ privilege. Number 0835 DON MITCHELL, Representative, Norton Sound Economic Development Corporation, stated that the corporation is one of the Community Development Quota program, (CDQ) participants. Through the CDQ program the North Pacific Fisheries Management Council has given 7.5 percent of the total overall catch of pollock to participants in the program. He explained that of that 7.5 percent the Norton Sound group has been allocated 22 percent. The corporation has entered into a contractual arrangement with Glacier Fish Company to participate in harvesting their share of pollock quota. This has worked out very well, as a result, the corporation has purchased a 50 percent equity interest in Glacier Fish Company. Number 0918 MR. MITCHELL stated that the Glacier Fish Company has two mid-water trawlers that are participating in harvesting the CDQ's for Norton Sound and in the open access fishery. He stated that one trawler is 210 feet and the other is 276 feet in length. Both trawlers are over the limit that is allowed in Senator Stevens' bill but they would be grandfathered in. Number 0977 MR. MITCHELL referred to page 2 line 19 of HJR 48, that states "the Alaska State Legislature supports S. 1221". He pointed out that it may be too early in the process for the Legislature to decide how it feels about S. 1221 as introduced. He stated that the corporation has several areas of concern. He asserted that the corporation shares the commitment to Americanize the ownership of the Bering Sea Fishery and supports the 75 percent ownership requirement. He also agreed that it is important to eliminate the loopholes that have allowed U.S. ownership requirements to be avoided. However, he stated that two items have gotten confused. Mandating additional ownership requirements and whether or not there are vessels that are participating in fleet because they have snuck in under certain interpretations of the Reflagging Act. He stated that they are two separate issues and it is unclear to him as to where Senator Stevens is with respect to his primary policy objective. He declared that if his primary objective is to eliminate the vessels that Senator Stevens thinks should not be in the fishery to begin with, then he does not have to get into the U.S. ownership issue. He explained that if the issue is the U.S. ownership issue then whether the vessels stay or go is a separate issue. Number 1148 MR. MITCHELL announced that the Senate Commerce Committee is going to have a hearing on the bill and he is hoping that will bring forth the sponsor's policy objectives on S. 1221. He stated that the corporation supports the 75 percent ownership mandate in the bill. He stated that they presently have no position in respect to the reflagging issue other then to say that Senator Stevens is putting all of the other vessels, that are not part of the reflagging exercise, at a political risk by having the vessel length and horsepower requirements in the bill and by making the findings of S. 1221 be about the environmental consequences of the participation of those vessels in the Bering Sea. He explained that there is a big difference between mid-water trawl vessels and their effect on the environment verses other types of trawlers that may cause a greater concern. He stated that by lumping them all together under vessel length is not dealing with a very complicated issue with the precision that it needs. He reiterated that it may be too early to make a decision of support. Number 1254 REPRESENTATIVE GENE KUBINA asked if there is specific language or wording that would address his concerns. Number 1269 MR. MITCHELL responded that his personal view would be to divide the policy issues that are in S. 1221 and then the Legislature could make a statement about how it feels on those policy issues. He asked if the Legislature really agrees that all vessels, fishing in the Bering Sea, even mid-water trawl vessels that are over 165 feet, are creating the kind of environmental problems that the bill states. He asserted that the Norton Sound Economic Development corporation does not believe that it is factually accurate. Number 1363 HEATHER McCARTY, Representative, At-Sea Processors Association, (APA) stated that the association is made up of a group of seven catcher-processor companies, including the Glacier Fish Corporation. She stated that it took a long time to reach a consensus on S. 1221 because each of the companies has a different ownership scenario with different aspects to the company. She stated that it is a complex piece of legislation and perhaps just parts of it would be acceptable to the Legislature and other parts may not be upon further examination. Number 1438 MS. McCARTY stated that she would go through the APA's position on S. 1221. The APA is opposed to the provision that would phase out fishing vessels over 165 feet. In the bill, vessel length is correlated with environmental disruption but it is not factual to assert that longer vessels are more damaging to the environment. She stated that there are plenty of catcher vessels that are just under the 165 length limit and are capable of catching as many fish as vessels that are over 165 feet and processes their catch. She stated that the main reason the vessels both catch and process the fish are so big is not necessarily to catch more fish but because they have to carry their factories on their backs. Number 1465 MS. McCARTY stated that even if there were a correlation between environmental disruption and vessel length, Congress depends on the North Pacific Fisheries Management Council and the National Marine Fisheries Service (NMFS) to regulate and monitor the fishery. They have found that mid-water pollock trawling is one of the cleaner fisheries. REPRESENTATIVE KUBINA asked if any of the trawlers are bottom draggers or are they are all mid-water trawlers. Number 1542 MS. McCARTY replied that she could not say that none of them fish on the bottom, but 95 percent of the fish caught by the APA members are caught in mid-water trawl gear. She agreed that it depends on what species they are fishing for as well. She stated that all of vessels that are CDQ partners are over 165 feet. Number 1567 MS. McCARTY stated that the second issue is the increased Americanization. The APA supports increased Americanization and also supports the elimination of the grandfather provision on ownership, which allows vessels to be 100 percent foreign owned. She stated that there is a tremendous amount of foreign ownership of onshore processing plants that should be examined by Congress. Number 1602 MS. McCARTY stated that the APA is opposed to the rebuilt vessel provision, particularly the retroactive elimination of up to 15 or 16 vessels that are now in the fishery. She stated that most of those vessels have been in the fishery for 10 years and have come in legally as well as employ hundreds of Alaskans. She asserted it would be damaging to the community and to the economy to eliminate these vessels. Number 1647 REPRESENTATIVE SCOTT OGAN asked what the capital investment in the 16 vessels are. MS. McCARTY replied that she did know. REPRESENTATIVE OGAN asked what an average vessel cost. MS. McCARTY replied that they could run up to $15 million for a new vessel and they can sell for as little as 3 million, depending on the market. Number 1693 RON DALBY, Employee, American Seafoods Company, stated that it is a very complicated issue. He stated that they do not know exactly what losses are going to occur from S. 1221 due to its complicated nature. He asked why Americanize only one side of the fishery and not the other side because it is foreign owned as well. He stated that the United Nations Fisheries Report calls the Bering Sea's mid-water pollock fishery one of the cleanest fisheries in the world. Their bycatch is less then 2 percent and discards are a moot point. He stated that there is a zero discard rule. Number 1786 CHAIRMAN AUSTERMAN asked how is it determined to be the cleanest mid-water trawl fishery. Number 1783 MR. DALBY stated that all vessels 165 feet and larger have one or more NMFS' observer on board for 24-hour coverage. He stated that all American Seafoods Company's vessels sail with two, each working a 12-hour shift, therefore, there is always a NMFS' observer there to set aside and weigh the amount of bycatch that comes on board. He stated that bycatch is anything other than the target species. Number 1846 MR. DALBY stated that all boats fishing for Bering Sea pollock are trawlers, as it is the only way to catch pollock. He asserted that eliminating a few factory vessels will not affect the catch rate. He stated that the at-sea trawlers average 50 to 75 tons of pollock at a time. The biggest loads of 125 tons or more go to the smaller catcher boats. He stated that there are 650 Alaskans at sea right now, 27 vessels are fishing for pollock and everyone of these jobs are endangered depending on what the final interpretation of S. 1221 is. Number 1872 REPRESENTATIVE KUBINA asked what the total amount of people is that are working on the trawlers. MR. DALBY replied that there is somewhere between 3,500 and 4,000 people. He stated that in 1990 there were basically no Alaskans working. American Seafoods has opened a full-time employment office in Anchorage and his job is to find people to work on the vessels. Number 1900 MR. DALBY stated that the 56 communities served by the CDQ program are partnered with a factory trawler company for their CDQ revenue, the reason being that they have gotten a better deal, more money for the villages. He asserted that it is too early to take a position on the bill. It is a complicated issue and has not had its first hearing in Washington and the final form of the bill is unknown. He recommended that it be tabled until after the federal hearings in March and April when there is a better idea of the final form of the bill. He declared that S. 1221 is nothing more than reallocation, if the factory ships are eliminated those fish will given to somebody else. Number 1963 REPRESENTATIVE KUBINA asked if the North Pacific Fisheries Management Council voted to give a higher percentage to the shore- based processors. Number 1973 MR. DALBY replied that the proposals in front of the council have been flying hot and heavy. The council has tabled all action on this, pending a rather extensive study of all of Western Alaska to see who benefits from pollock. Number 2006 REPRESENTATIVE OGAN asked if a the Legislature does not pass the resolution will it make a difference. Number 2026 MR. DALBY stated that he is not sure if the resolution will have a whole lot of impact in Washington D.C., but it will not hurt. He stated that all the data is not in yet in order to decide whether support should be given. Number 2057 HENRY MITCHELL, Representative, Tyson Seafoods, stated that Tyson Seafoods strongly supports HJR 48. He stated that the policy of the country is to go to from a foreign fishery to a joint venture phase to an American harvester position. He stated that was the goal set by Congress and the North Pacific Fisheries Management Council. He stated that he has served for three terms on the council. At first a mere 50,000 tons were harvested by domestic operations, by the mid-80s with the joint venture phase, the fishery was rapidly moving towards being fully capitalized. He explained that there are loopholes that could put Americans at a disadvantage for the 100 percent Americanization goal. He stated that the Senators tried through the Anti-Reflagging Act to correct the situation. Misinterpretations by the Coast Guard and the courts allowed the situation of rebuilt hulls and foreign ownership. He stated that the goal always was to turn the fisheries into a 100 percent American harvesting position. The rebuilt vessels have an enormous capacity and overcapitalization of the fishery. He stated that the intent is to correct the law to what it was intended to do. Number 2182 MR. MITCHELL asserted that the Legislature should support the bill by passing the resolution. He stated that there may be provisions in the bill that are not quite right, but they are not the main element of the legislation and negotiations will iron those out. Number 2295 REPRESENTATIVE OGAN referred to Senator Stevens written statement citing that foreign vessels throw overboard 483 million pounds of groundfish wasted and unused. He asked how would this act clean that up. Number 2332 MR. MITCHELL stated that there have been improvements since then, as with pollock there is 100 percent retention. The North Pacific Fisheries Management Council is moving forward in conjunction with mandates under the Magnuson-Stevens Act to basically find a resolution on the bycatch issues. He stated that bycatch presently is far less then what it was two years ago. Number 2368 REPRESENTATIVE OGAN stated that the statement was dated September 25, 1997 and it does refer to 1995. He asked if that was because those were the only statistics available. MR. MITCHELL replied that yes, those were the statistics that were available, and the new provision on pollock retention has just taken effect. REPRESENTATIVE OGAN asked how would the bill address the bycatch issue. Number 2389 MR. MITCHELL replied that if 30 percent of the harvesting capacity was taken out of the fleet, the remaining harvesters could conduct the fishery on the quota for that year at a less hectic pace. They could search for the better schools of fish, rather than race to achieve their quota. Number 2422 REPRESENTATIVE OGAN asked if the better result would occur from banning bottom trawling. MR. MITCHELL replied that there are problems with certain types of bottom trawling but it is dependent on the ability of the captain to stay out of certain grounds. TAPE 98-5, SIDE B Number 0002 MR. MITCHELL stated that a vessel that had a bad bycatch record would have an escalating fee system, which would rise with the bycatch amount. It would be an economic disincentive to help individuals who did not care clean up their act. Number 0019 REPRESENTATIVE OGAN asked what is the percentage of bycatch of Tyson Seafoods. MR. MITCHELL stated that he could not say exactly. He stated that they only have one bottom trawler in operation. Number 0057 REPRESENTATIVE KUBINA stated that a large biomass of pollock has come into Prince William Sound in the last few years and it is virtually 99.9 percent pollock that is being taken. He stated that the mid-trawlers are a very efficient and clean way to collect fish. Number 0102 BART EATON, Part-Owner, Trident Seafoods, stated that Trident was founded in 1973 and is a 100 percent American owned company with shore-based processors in Akutan and Sand Point for pollock and white fish. He stated that they also have processors in St. Paul, Ketchikan and Bristol Bay. He stated that Trident Seafoods is one of the first facilities to Americanize the harvesting process of pollock. He gave a history of the fisheries and the Magnuson- Stevens Act and the Anti-Reflagging Act. He stated that he hoped this legislation would finally achieve the intent of the Magnuson- Stevens Act to Americanize the fisheries resources. He stated that Trident Seafoods supports the intent of HJR 48. Number 0302 DICK TREMAINE, Representative, Central Bering Sea Fishermen's Association, testified via teleconference from Anchorage. He stated the association has been involved with the pollock fishery since 1992. He stated that the association strongly supports the U.S. ownership of all harvesters and processors. He stated that the Americanization of the fisheries would be a good move for Alaska. He stated that however, some CDQ vessels would be eliminated by the bill. He stated that he would agree with the environmental groups in that the bill has many aspects to it that are allocative rather than conservation oriented. He made a suggestion that HJR 48 should state "The Alaska State Legislature supports the Americanization of U.S. fisheries, fishery harvesters and processors including those provisions currently contained in S. 1221." He stated that they have asked for a list of vessels that would be affected by the bill, but has not received it as of yet. He stated that the association is hesitant to support a bill when it is unclear as to what it exactly does but they do support Americanization of the fisheries. Number 0548 VINCE CURRY, Owner, Alaska Prime Resources Consultants, testified via teleconference from Anchorage that he has worked with both the onshore and offshore companies that participate in the pollock industry in the Bering Sea. He stated that one of the unfortunate outcomes of S. 1221 would be to eliminate some of the most efficient and cleanest vessels that are harvesting the pollock resources. He stated that it is wise to support a U.S. ownership requirement, the difficulty with the bill is to take out vessels that have lawfully entered the fishery. He stated that the coast guard interpretation of the Anti-Reflagging Act was litigated through the court system and determined to be correct. Number 0662 MR. CURRY stated that S. 1221 is allocative in its result and will destroy competition between pollock processors. He stated that it will destroy alternative processing markets for Alaskan fishermen. He stated that it would reduce the value of the CDQ's because the number of people that would be bidding for the quota would be reduced. He stated that the bill ignores the 100 percent foreign ownership of the majority of the Bering Sea onshore pollock processing plants. Number 0795 TAMMY FOWLER POUND testified via teleconference from Dutch Harbor that she is representing herself as a resident of Alaska. She stated that she is strongly opposed to HJR 48 and HJR 55. She stated that Dutch Harbor is in a unique position of having economic stability from both the onshore and offshore sectors of a healthy pollock industry. The resolutions would hurt many small businesses and families that have invested in the community. She stated that money is the motivating factor. She asked that the Legislature look at what is best for the communities and not for large companies that just want increase their profit. Both sectors of the industry are needed to keep economic stability. Number 0889 JUDY NELSON, Executive Director, Bristol Bay Economic Development Corporation, testified via teleconference from Dillingham that the corporation is in support of the Americanization of the fleet. Number 0935 REPRESENTATIVE GRUSSENDORF stated that IFQ's are the big issue. They are going to be allocated to the ships with American flags, which is why the reflagging issue is very important. He stated that the Norwegian government is so concerned in regards to the allocation that they are getting subsidies from the shipyards to rebuild the American vessels. He stated that in regards to the conservation question he has the NMFS' statistics that show a 4.3 percent trawler bycatch, which is three times the amount that the smaller vessels have. Number 1063 REPRESENTATIVE OGAN referred to Senator Stevens letter dated January 27, 1998 to Senator Mackie, stating that the reduction of the factory trawler fleet would only effect 5 to 10 vessels and the remaining 50 would be allowed to stay in the fisheries. He asked if that is a fair estimate. REPRESENTATIVE GRUSSENDORF replied that it is a fair estimate of the number of vessels that are out there. He stated that in regards to IFQ's the foreign vessels that would not qualify, would only qualify for the amount of harvest that the American-owned vessels didn't catch. It is the 43 percent of the vessels that are foreign vessels flying the American flag that are going to cause the problem. Number 1153 REPRESENTATIVE HODGINS made a motion to move HJR 48, with individual recommendations and attached fiscal note out of committee. Number 1170 REPRESENTATIVE OGAN objected for purposes of discussion. He stated that there is more that he does not know about the resolution than he does know. He stated that he would have to vote no but it is not against the intent of the bill it is just that he does not know enough about it to be able to vote for it. Number 1201 REPRESENTATIVE IVAN IVAN stated that he had earlier reservations regarding the resolution, but is in favor of the intent to Americanize the fishery. He stated that his only concern is the CDQ program and he would work through the process to address those concerns. He stated that he hoped that the sponsor would consider some of the comments made by the CDQ groups. Number 1275 CHAIRMAN AUSTERMAN asked for all in favor of the motion to say "I". He noted for the record that Representative Ogan opposed the motion. Representatives, Ivan, Austerman, Kubina and Hodgins were all in favor of the motion. He stated that HJR 48 passed out of the House Special Committee on Fisheries.
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