Legislature(2001 - 2002)
02/11/2002 03:40 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
HB 286-OWNERSHIP OF MORE THAN ONE FISHERY PERMIT CO-CHAIR STEVENS announced that next order of business would be HOUSE BILL NO. 286, "An Act allowing a person to hold more than one commercial fishing entry permit for a fishery; relating to the power of the Board of Fisheries to establish fishing periods and areas for subgroups of commercial fishing permits and commercial fishing permit holders and to establish limits on the amount of fishing gear that may be used by certain commercial fishing permit holders; and providing for an effective date." Number 2420 [Although there was a motion to adopt HB 286, Version O, it was already before the committee. Representative Scalzi spoke to the proposed committee substitute (CS) for HB 286, Version B. REPRESENTATIVE SCALZI, sponsor of HB 286, characterized the bill as another avenue for consolidation of commercial fisheries permits. He said there are many permits throughout the state that are currently dormant. In the last three decades, the efficiencies of the fleets have grown greatly due to factors such as bigger and faster boats, stronger nets, and more knowledgeable people with "higher-tech" equipment. He said there is an oversupply of harvesters in many areas. He said the bill would allow individuals to hold two permits per area. This would allow more fishing time, by attrition. REPRESENTATIVE SCALZI said the bill was initially a Bristol Bay bill that would allow multiple permit holders to benefit with more fishing time or the use of more gear in the water. He said that the UFA did not support the stacking measures. Number 2220 REPRESENTATIVE SCALZI made a motion to adopt the CS for HB 286, 22-LS1099\B, Utermohle, 2/7/02. There being no objection, Version B was adopted as the work draft before the committee. REPRESENTATIVE SCALZI said Version B was different from the original bill in that it is a "consolidation bill more than a stacking bill." He said the two new provisions in the bill are that salmon fisheries can form associations and collect revenue up to 5 percent, and that it allows people to hold up to two permits per area. Number 2193 BILL CRUMP, Salmon Purse Seiner, testified via teleconference. Mr. Crump said he was just listening in as an interested permit holder. He said he was glad to see the legislature trying to inject some "synergies of efficiency" into the salmon fishery. Mr. Crump said there are approximately 270 seine permits in Prince William Sound. He added that he did not believe the fishery would ever support that number of permits again, perhaps not even half that number. Number 2055 BRENNAN EAGLE, Southeast Alaska Commercial Fisherman, testified via teleconference. Mr. Eagle said he has been a commercial fisherman for 25 years, and that he is currently involved in four fisheries. He expressed support for the concept of the bill, but said there are important issues to be fixed in it. He said he would like to see the other fisheries included. He has lobbied the Commercial Fisheries Entry Commission to allow a similar process in the shrimp fishery. He said fishermen would like to solve the problem of oversaturation of permits on their own, as an industry. MR. EAGLE said there needs to be an economic incentive to buy multiple permits. As written, the bill offers no return on the extra money spent on multiple permits. He gave the example of those in the pot shrimp fishery who bought extra permits when it instituted a limited entry program. The fishermen put their extra permits in the names of their spouses or children and did not fish them, thinking it would be a good way to remove permits from the fishery. He said there was nothing that could be done by holding the extra permits. When those permits went up in value, they sold them because there was no economic incentive to hold them. Mr. Eagle said it is important to consider an incremental gear increase, or a fishing-time increase so that there would be some kind of return on the investment. MR. EAGLE said that he did not think it prudent for the new associations to tax themselves to raise money for new permit loans. He said there are already two good places to get money. He said it would result in another small bureaucracy. He gave his support for the concept of the bill and urged them to consider the additions he'd suggested. Number 1872 DAVID BEDFORD, Executive Director, Southeast Alaska Seiners Association (SEAS), testified before the committee. He said that in his view and the view of the board of the UFA [of which SEAS is a member[, this is an important piece of legislation. Mr. Bedford said that these are hard times for the salmon industry. Bristol Bay permits are selling for ten cents on the dollar compared to what they commanded ten years ago. MR. BEDFORD spoke of the hard situation for people who made investments in that fishery ten years ago. He addressed the dire situation for Southeast purse seiners and their lack of markets. The prices for salmon are declining statewide. He characterized salmon fishing as the lifeblood of coastal Alaska economies. Mr. Bedford said that many fishermen are involved in a number of different fisheries, "but there are darn few of them who are not, at a minimum, salmon fishermen." He told the committee that HB 286 is an important part of Alaskan fishermen's efforts to try to help themselves. He said that it would help the salmon industry become viable again by reducing the fleet. Number 1682 Mr. BEDFORD said there were a number of concerns expressed by fishermen and fishing communities about doing things that would modify their fisheries. He said it is important for fishermen to be able to "shoulder the responsibility for this." He said it is important that the program be voluntary and regional, and that the associations be accountable. MR. BEDFORD gave an overview of the bill. It allows an individual to hold two permits in a fishery for purposes of consolidation. It allows fishermen to set up a nonprofit association to help with the consolidation program, in their fishery, in their region. He said that it allows fishermen to vote on taxing themselves. Mr. Bedford also pointed out how the bill contains a great number of administrative procedures to protect the process from takeover by powerful individuals and groups, and to assure transparency. Number 1575 MR. BEDFORD said that if fishermen "choose this route," they would have to pay the setup costs. He said that two-thirds of participants in a fishery would have to agree on a buyback. He said fishermen would tax themselves, set up the association, and administer the program. Mr. Bedford said that the two-thirds provision will help to ensure that whatever program is put forward will be acceptable to the majority. He said that there are provisions within the bill that repeal the tax. A 25- percent petition and an ensuing vote would accomplish this. Number 1482 MR. BEDFORD said only permit holders of a given geartype, in a given region would vote on an association in their fishery. He said that the associations would have to set up an annual business plan in conjunction with the Alaska Department of Fish & Game. There is an annual reporting responsibility to both the fishermen in the region, and the state. He said there is also the ultimate responsibility: "If the fishermen don't like it, they get together and vote it out of existence, and it's gone." He said, "These are hard times in the salmon industry." He urged support of the bill. Number 1385 CO-CHAIR STEVENS asked whether there was any economic incentive to buy the extra permits. MR. BEDFORD said that it would be up to regional fisheries to come up with "great ideas." He gave an example that had a fisherywide tax; holders of more than one permit would be paid not to fish them. Mr. Bedford also raised the possibility of loaning money to purchase permits and hold them. He said there are probably a great many ideas out there. Number 1268 CO-CHAIR WILSON asked who would own the permits. MR. BEDFORD said an association might want to help people to buy a second permit. He said that in the current legislation, ownership is restricted to individuals. It might be possible for a fishery to assess a fisherman, collect an amount of revenue, and then go out and contract with people who own one or two permits to not fish one or both of them. It could be that someone might devise a plan to assist people in buying a second permit. Whatever plan is devised must stand up to the vote of at least two-thirds of the members of any given fishery. Number 1163 REPRESENTATIVE SCALZI brought up the question of why this was only for salmon fisheries. He asked Mr. Bedford to comment on that issue. MR. BEDFORD said that many people in other fisheries wanted to be included in this bill, but the UFA felt it had a high level of expertise in the salmon fisheries all around the state. He said that the UFA did not feel as comfortable with the shrimp fishery because it is of a more regional nature; there are no shrimp fisheries in Cook Inlet or Kodiak, for example. He suggested that non-salmon fishermen interested in this type of program should support this bill and then ask that the legislature amend the legislation for their fishery. Number 1040 REPRESENTATIVE SCALZI surmised that there was no opposition from the UFA to including other fisheries, but that they just felt they could not endorse the other fisheries when the bill was being drafted. MR. BEDFORD confirmed Representative Scalzi's interpretation. Number 1020 CO-CHAIR WILSON asked how someone could pay for a permit that was not being fished. She asked whether, if someone wanted to sell a permit, the sale would be carried out on a regional basis. MR. BEDFORD said that the bill would not make any changes to the way permits are transferred. He also said the bill would be blessed with the "infinite flexibility of contract." He said that contracts between people could take myriad different forms to accomplish something. He said that the bill would "leave it up to people within the regions to sort of invent whatever they can come up with," but added that those arrangements must fall within the requirements of statutes that are in place. He gave the example that a holder of more than one permit could be paid to keep a permit dormant. He said that market forces could bring permits out of dormancy if the fishery were to rebound and raise the value of the permit to a level that would make it more valuable being fished than remaining dormant. REPRESENTATIVE COGHILL raised the issue of overlapping areas. He said that there would be a problem of what area would get the authority and who would be included in the association. He said that there would be one more tier of groups to get consent from. Representative Coghill said there would be a plethora of new commission issues as well. REPRESENTATIVE KERTTULA asked why the Board of Fisheries is not involved in the legislation. Number 0730 MR. BEDFORD said the UFA feels that the "Board of Fisheries is a very risky process." He said that members of the UFA get "kind of nervous" when the board becomes involved in an issue. He gave the example of the Chignik Co-op. He said there is a concern that there is a lack of expertise on the board to deal with the "fine-tuning" that would be involved with the stacking program that the original form of the bill would have implemented. REPRESENTATIVE COGHILL asked if the UFA had considered the overlap in fisheries. MR. BEDFORD said that it is set up so that regions of the state are defined as administrative areas, and within that they are broken up into particular gear types. He gave the example of Southeast Alaska. He said Southeast Alaska begins at Cape Suckling and runs south from there. Within Southeast Alaska there is a purse seine fishery, a gillnet fishery, a troll fishery, and a set-net fishery near Yakutat. He said that the fisheries do not overlap geographically or administratively with adjacent fisheries of the same gear type. Number 0571 GORDY WILLIAMS, Legislative Liaison, Office of the Commissioner, Alaska Department of Fish & Game, testified before the committee. He said the department supports "the providing of tools to the industry." The department also appreciates flexibility in the approaches to problems. He said the department supports the basic intent of the bill, but it has not had an opportunity to review it. There is concern over the role of the department and whether the department would be the appropriate entity for the administration of such a program. MR. WILLIAMS said that the bill is based upon some Southeast Alaska dive fisheries where the department had a similar role, but he said that the monies raised in that case were predominantly for management of the fisheries. He said that in the case of Version B, the department is responsible for administering elections and establishing associations. He said that the department is not given the same connection with management as for the dive fisheries. He said the department has not had time to look within the administration and find which department is most appropriate to deal with the functions it has been given in the bill. Mr. Williams said the department also needs to look at how the administrative costs would be handled in the case of several regions wanting to form associations. Number 0280 REPRESENTATIVE SCALZI said that the management of the fishery is still under the Alaska Department of Fish & Game with the bill, and he said that he did not think it necessary to indicate that in the bill. He asked Mr. Williams if any of the fisheries bills would be supported by the administration. MR. WILLIAMS said he was supporting the bill, but added that the department only first saw it recently. He said that in the instance of the dive fisheries, there was no management money available. He said the funds raised will stay with the department, and they will be used for things other than the management of the salmon fisheries. Mr. Williams said that the department already manages the salmon fisheries. Number 0128 REPRESENTATIVE SCALZI said that because the department is responsible for fishery management, it should not require more money to carry that management out. MR. WILLIAMS said that he was not lobbying for the department to keep any money, apart from some administrative costs. He said that he was not sure that the department is the appropriate agency to certify ballots, bylaws, and registration and voting procedures. He said the department supports the concept, but it wants to take time to talk to sister agencies and see if one of the others might be able to carry out the functions in a more efficient manner. REPRESENTATIVE SCALZI agreed that Mr. William's was a fair assessment. Number 0045 REPRESENTATIVE KAPSNER asked if the two-thirds vote would be attainable considering low voter turnout and the high number of out-of-state fishermen in fisheries such as Bristol Bay. TAPE 02-3, SIDE A Number 0001 MR. WILLIAMS said it would be a big educational burden to try to inculcate the diverse groups of fishermen as to the intricacies of the voting process. Number 0109 BRUCE SCHACTLER, Fisherman, testified before the committee. He said he supported the bill and called it a step forward. He suggested the administration be involved as little as possible, and added that the program probably would cost little to administer anyway. He said that if the fishermen vote for an assessment, "it will be our money." He said this has little to do with management, and that it would make management easier by having fewer permits. MR. SCHACTLER said that getting 66 percent to vote would be quite easily done in the fisheries he is involved in. He said this is the case because at least that percentage will not be involved in the fishery after this year. He said those leaving the fishery would be happy to tax someone else to buy their permits from them. He said a lot of the "new thinking" is a result of the industry's being down so far. He gave the example of the purse seine fishery in Kodiak where he lives. He has not fished there since 1995. He said over 50 percent of the permits there are no longer being fished. He said he has had many conversations with the limited entry commission over the last decade on the issues of stacking and consolidation. He said he is glad to see it finally come to the forefront, and that it is a "very doable thing." Number 0399 MR. WILLIAMS said there were a lot of financial considerations given to the people who would make the investments in consolidating permits with their own money. He said that it was cautious thinking that took the incentives out of the bill because it is a "pilot project." He said the bill is conservative so that it is not exposed to a great deal of risk. From that conservative baseline, incremental changes and improvements can be made. He said the bill gives everyone a voluntary chance to participate with a low risk factor. He urged the committee to give the bill the consideration it needs. CO-CHAIR STEVENS asked Representative Scalzi if the two-thirds vote would be two-thirds of eligible permit holders or two- thirds of those who vote. REPRESENTATIVE SCALZI said that the two-thirds applies to the absolute number of permit holders, adding that it "is a very high bar." He brought up the "Chignik issue," saying that it is important to have support from all permit holders. REPRESENTATIVE KAPSNER asked if the two-thirds applied to two- thirds of all members of a fishery voting "yes." REPRESENTATIVE SCALZI replied that Representative Kapsner was correct: two-thirds of all permit holders must vote yes. Number 0614 JERRY McCUNE, United Fishermen of Alaska, testified before the committee. He said the UFA did not want to create two classes of fishermen. He said that they did not want to see groups with the means to buy multiple permits "ramming through" stipulations that would force economic hardships on those who could not afford more permits. He said that fisheries need to get themselves in order. After that, ideas can be worked through. He made it clear that all of these changes must be voluntary. He said that there will have to be cooperation within the fisheries to implement these programs. Mr. McCune warned that next year will see some fisheries in worse shape than they are this year. He said that this will force more cooperation. MR. McCUNE said it never occurred to him to talk to those in other fisheries when he began working on the legislation. He said if all shrimpers came in, UFA would probably work to get them included in the legislation; however there are myriad fisheries in the state. MR. McCUNE addressed the earlier question about who would own the permits and who would be in charge of selling them. He said that individuals would make the decision to sell or not sell. He told the committee that the association would be a vehicle for getting money, and the Alaska Department of Fish & Game would be an advisory group for that money's disbursal. He said the UFA felt the department would be the most appropriate agency for that oversight. MR. McCUNE said that not everyone will be in agreement. He is "dragging 10,000 people along, and some of them don't want to come along." He said the UFA is doing its best to do what is best for the salmon fisheries of the state by consolidating them. He said it will be painful for some of the fisheries. He said the UFA is trying to keep the tax bases up in salmon- dependent communities. Number 1043 REPRESENTATIVE SCALZI said his initial intent in having the department involved was because it makes the determination of whether the number of permits is appropriate for the harvest capacity. He said that the dialogue on this bill should be carried on in the next committee, along with HB 284. Number 1135 REPRESENTATIVE KAPSNER asked Representative Scalzi if it mattered to him whether or not there would be permit stacking by out-of-state permit holders. She said that Bristol Bay had the concern of more consolidation coming from out-of-state fishermen. REPRESENTATIVE SCALZI said the commerce clause would not allow restriction of out-of-state permit holders from consolidating. He said Alaskan residents are the ones promoting the bill. Number 1204 CO-CHAIR WILSON expressed her pride in the fishing industry as a whole for "thinking outside the box" and using a lot of caution. She said the selfless caution was commendable, as was the "66 percent" clause. Number 1277 CO-CHAIR WILSON moved that CSHB 286 [version 22-LS1099\B, Utermohle, 2/7/02] be moved out of the House Special Committee on Fisheries with individual recommendations and zero fiscal notes. Number 1301 REPRESENTATIVE KERTTULA raised a question of how this would help economically. She expressed concern about the broadness of the bill. She said that she could see how taking permits out of the fishery might work, but she emphasized that she wants to understand the economics of the bill. She said it is "a pretty amorphous thing," and that there must be a lot of work before it goes to the floor. Number 1385 CO-CHAIR STEVENS asked if there were objections to moving the bill out of committee. There being no objection, CSHB 286(FSH) was moved out of the House Special Committee on Fisheries.
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