Legislature(2015 - 2016)GRUENBERG 120
03/17/2016 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| HB241 | |
| HB366 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 241 | TELECONFERENCED | |
| *+ | HB 366 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 366-COMM. FISH. ENTRY PERMIT LOANS & BANKS
10:15:07
CHAIR STUTES announced that the final order of business would be
HOUSE BILL NO. 366 "An Act relating to commercial fishing entry
permits; establishing regional community permit banks and
regions for certain commercial fishing permits; relating to
commercial fishing entry permits and regions leased and
controlled by a regional community permit bank; relating to the
duties of the Commercial Fisheries Entry Commission and the
Department of Commerce, Community, and Economic Development; and
providing for an effective date."
10:15:52 AM
REPRESENTATIVE KREISS-TOMKINS, prime sponsor, presented HB 366,
providing a brief overview and history of the abundant,
renewable, natural resource that is the Alaskan commercial
fishing industry and introduced the invited witnesses speaking
to the issues being addressed in the bill. Since the inception
of limited entry, many of the traditional, Native, fishing
villages that were the pioneers of the commercial industry, have
suffered and lost their ability to participate due to the out
migration of the required permits. In 2014, an effort was begun
to encourage and support young fishermen entering the industry,
as well as to address the loss of permits from communities and
the state. The proposed bill provides a stepping stone for
young fisherman to enter the industry through the formation of
regional structures, with community governance, over permit
banks. He acquainted the arrangement as similar to renting a
house while gaining credit history, experience, and deciding
whether or not to invest in a house. Under HB 366, the
availability of permits to young fisherman would be assured,
while allowing them the possibility to gain experience and
confidence prior to deciding to invest in a permit. The
legislation creates regional structuring of Commercial Fisheries
Entry Commission (CFEC) administrative areas, roughly mirroring
what is already established under the Alaska Native Claims
Settlement Act (ANCSA). The community governance structure
would be similar to existing community development quota (CDQ)
groups. The permits would be acquired on the open market
through a consolidation cap and made available via the permit
bank to first time, as well as young, unestablished fishermen.
He said financing would not be made available, as the bill
doesn't provide money, but rather creates the vessel and a
mechanism for regions to adopt a support framework for assisting
start-up fishermen to bootstrap their way into the industry.
10:24:15 AM
REPRESENTATIVE HERRON stated support for the legislation and
asked about the sponsor's motivation for carrying the bill.
REPRESENTATIVE KREISS-TOMKINS described the 17 months of work
involved in formulating the bill, which incorporates comments
gathered from fisherman across the state. He reported that
critical feedback was received from every region. A major
concern is that the status quo works for a number of fisherman,
who may resist change; however, the necessity to alter the trend
lines for economic development in rural Alaska is widely
supported.
10:26:58 AM
REPRESENTATIVE MILLETT acknowledged that the financial barriers
for young fishermen entering the industry are substantial, save
for generational fisherman who may receive a family perpetuated
permit. She emphasized her support for the bill as a good means
for addressing the problem, and asked whether there is
opposition to the permit banking approach.
REPRESENTATIVE KREISS-TOMKINS responded that two primary
questions are thematic. One revolves around legitimate legal
and constitutional issues, which the attorneys are addressing.
The other concern regards changing the status quo and the effect
it would have on established fishermen and the overall system.
He also noted that the Division of Investments and the
Commercial Fishing and Agriculture Bank (CFAB) has questions
regarding the approach. He said the biggest concern may be the
legislature itself, as fishing legislation typically presents as
a high profile topic and elicits a multitude of opinions from
members and their constituents.
10:32:15 AM
REPRESENTATIVE MILLETT asked whether there's been more push-back
or acceptance from communities.
REPRESENTATIVE KREISS-TOMKINS answered that many of the
communities have been supportive and see the benefits,
particularly in the areas of Bristol Bay, Kodiak, and Southeast
Alaska. These three areas may share a common thread regarding
the outflow of permits and the effects the loss has dealt to the
associated villages and communities. In some locales, such as
Cook Inlet, the resident fleet in Homer not been effected and
the bill represents a non-issue. Regional partner entities,
such as Native associations and the Alaska Regional Development
Organizations (ARDORs), have shown a strong interest in the
legislation and the opportunity to participate in establishing
permit banks.
REPRESENTATIVE MILLETT asked for a chart what would illustrate
the locations and movement of the permits; where they are held
in-state, as well as out-of-state.
REPRESENTATIVE KREISS-TOMKINS agreed to produce a chart.
10:34:59 AM
SAM COMMISSIONER, Commissioner, Alaska Department of Fish & Game
(ADF&G), stated support for HB 366, and recalled that
improvement of fishing access and opportunities for Alaskan's
was one of the five priorities listed by the governor's
fisheries transition team. Specifically identified was the need
to create a means for increasing Alaskan ownership of commercial
fishing licenses, permits, and quotas, while increasing fishery
participation among the coastal residents via a policy tying
fishing rights to communities. Legislation was recommended that
would include the establishment of fisheries trusts, or permit
banks, to recapture and retain commercial fishing quotas and
licenses for the benefit of coastal Alaskans. Barriers were
identified involving state constitutional questions, as well as
federal level concerns from the North Pacific Fishery Management
Council (NPFMC). The outmigration of fishing permits,
particularly Commercial Fisheries Entry Commission (CFEC)
permits, has been well documented. He referred to the committee
packet to indicate the supporting documents contained therein,
and stressed the importance for the committee to pursue due
diligence in reviewing the correspondence offering support, as
well as the statements of opposition. The opposition, he
observed, tends to focus on the constitutional aspects. The
legislation being proposed will need to meet the requirements of
the state constitution, he acknowledged, and opined that the
equal rights provided for in Article 8, Section 15 and Article
1, can be satisfied. The department does not support a person
being allowed to lease a permit, without physical participation
in the fishery, but facilitating a permit bank is supportable.
The bill provides great potential, and the department offers
official support for HB 366, he finished.
10:39:59 AM
PAULA CULLENBERG, Director, Alaska Sea Grant Corporation,
University of Alaska Fairbanks (UAF), stated support for HB 366,
and said the greying of the fleet and the loss of permits from
the coastal communities, has been a long standing concern of the
corporation due to the economic ramifications. The growth in
the number of non-Alaskans owning fishing permits and gaining
access to the fisheries has grown, she stressed. The coastal
residents are economically impacted, as are the variety of
infrastructure investments that a community chooses whether or
not to support. She recalled the 2012 resolution passed by the
House Special Committee on Fisheries encouraging the state to
address the greying of the fleet issue. The Alaska Sea Grant
Corporation has contributed in a number of ways to bolster the
fishing industry, such as: hosting the Young Fisherman's
Summit; co-sponsoring the greying of the fleet research project;
and hosting a steering committee workshop in January, 2016,
titled, "Fisheries Access for Alaskans; Chartering the Future."
The workshop participation level indicated a statewide concern
for this multi-faceted issue, which may require a variety of
approaches to solve. Effective solutions will take into
consideration specific requirements including: does it create
an inter-generational path to assist young fishermen entering
the industry while allowing retirees to sell without financial
penalties; is it linked to communities and regions to provide
local support; and does it contain opportunities for mentorship.
Consensus from the workshop was for coastal Alaska to have a
thriving, stable, inter-generation participation in local
fisheries so that communities can support fishing businesses
with infrastructure and amenities to retain residents and create
a diverse local economy. The bill appears to provide many of
these tools that will help to reverse the downward trend, she
opined, and underscored support her for HB 366.
10:46:09 AM
LINDA BEHNKEN, Executive Director, Alaska Longline Fisheries
Association, stated support for HB 366, paraphrasing from a
prepared statement, which read [original punctuation provided]:
The Alaska Longline Fishermen's Association (ALFA)
SUPPORTS HB 366: An Act establishing community permit
banks.
ALFA is a Sitka-based organization of independent
fishermen committed to sustainable fisheries and
thriving fishing communities. Our members support
science-based fisheries management through
collaborative research, advocacy and innovation. We
work to safeguard ocean health and improve the
economic viability of small boat fishing. Commercial
fishing is the economic driver of Alaska's
communities; commercial fishing also provides
residents of rural communities with access to
important subsistence resources, supporting household
economics and community culture.
The dependence of communities on commercial fishing
increases in the remote and isolated coastal areas
stretching along the Gulf of Alaska and Bering Sea
coasts. Fishing permits and quota are leaving Alaska,
especially leaving Alaska's rural coastal communities.
Between 1975 and 2014, Alaska's rural communities
experienced a net loss of over 2,300 limited entry
permits. Federal quota has also become concentrated
into fewer hands and migrated from rural communities.
Because few alternative employment opportunities exist
in these communities, losing access means losing
livelihood and ultimately losing community.
Six billion dollars' worth of fisheries resources are
harvested off Alaska's coast each year. Non-residents
have an important role in that harvest, but Alaska
community residents depend on access to that valuable
resource-and that access is increasingly out of reach.
The cost of access to some of Alaska's fisheries has
doubled, quadrupled, and then doubled again since
limited access programs were implemented. Young
fishermen, especially fishermen from rural areas, lack
the necessary capital and collateral to obtain loans.
Even when funding is available, the risk new fishermen
face is staggering.
Community permit banks are an essential part of
addressing these issues. Permit banks anchor access in
communities and provide an affordable entry level for
new fishermen. As proposed in HB 366, community
permit banks would obtain limited entry permits than
lease these permits to resident fishermen for a
limited amount of time. As a result, new fishermen
would initially face only the cost of buying a boat
and fishing gear, then tackle the cost of a permit
after building equity in their boat, gaining
experience, and weathering the first few fishing
seasons. During the startup time, permit banks can
mentor young fishermen in sound fishing and business
practices, further lowering the risks they face and
supporting their eventual success. In short, permit
banks anchor access in communities, lower entry costs
and reduce risks faced by new fishermen. From ALFA's
perspective, community permit banks are an essential
step toward reversing the loss of fishery access.
ALFA has been actively working since 2009 to address
the loss of fishery access through a risk sharing
arrangement that supports intergenerational transfer
of federal fisheries quota to residents of Alaska's
communities.
Although we are making some progress, we recognize the
erosion of access far outstrips our current capacity.
A sea change is needed, and our members recognize
community permit banks are an essential part of that
change. Important to ALFA is the concept behind this
bill that establishes permit banks as an entry level
opportunity designed to launch independent fishermen
into permit ownership, rather than permanent lease
arrangements. Our members would not be comfortable
without that provision. We recognize some changes and
improvements will be made to HB 366 as it moves
through the process, but highlight that provision as
important to our support.
In sum, ALFA members urge the Committee to recognize
the economic, social and cultural importance of HB 366
to Alaska in general and Alaska's rural communities in
particular. We urge you to support the Bill and to
work toward timely implementation.
10:51: 11 AM
JIM BRENNAN, Attorney, reported that the potential state and
federal constitutional issues include a general discrimination
against non-Alaskan residents, and the U.S. equal protection
clause. Under Article 8 Section 15, of the Alaska constitution,
the creation of exclusive right or special privilege of fishery
is prohibited. He said these are legitimate concerns, and
opined that the constitutionality of the proposed permit bank
system would be upheld. Regarding the exclusive right issue, he
said the Alaska constitution has a specific clause addressing
the limited entry system. He referred, Article 8 Section 15,
which read as follows:
SECTION 15. No Exclusive Right of Fishery. No
exclusive right or special privilege of fishery shall
be created or authorized in the natural waters of the
State. This section does not restrict the power of the
State to limit entry into any fishery for purposes of
resource conservation, to prevent economic distress
among fishermen and those dependent upon them for a
livelihood and to promote the efficient development of
aquaculture in the State.
MR. BRENNAN said the amendment was adopted in 1972, which added
all of the language following the first sentence. The clause is
specific and has been interpreted by the Alaska Supreme Court to
authorize limited entry statutes, despite the no exclusive right
language and other constitutional clauses pertaining to equal
protection and non-discrimination. He directed attention to the
committee packet letter from the Alaska Independent Fishermen's
Marketing Association (AIFMA), 3/16/16, from David Harsila,
President, challenging the constitutionality of the bill, and
said that Mr. Harsila cites this section, but not as amended.
Also the letter invokes a number of Alaska cases, but those
cases did not qualify as beneficiaries to the 1972 amendment.
The bill should prevail under any constitutional challenges, and
is a sound means for solving the problems for which it was
intended, he opined.
10:58:32 AM
TYLER EMERSON, Fisherman, stated support for HB 366, and said as
a third generation fisherman, he looks forward to being able to
continue in the industry. He pointed out that two primary
business assets, a permit and a boat, need to be acquired at the
same time, which is problematic. The Division of Investments,
Commercial Fishing and Agriculture Bank (CFAB), was the resource
he turned to for assistance and was successful. However, he
opined, a means to handle these significant investments
separately would be optimal. During the 2016 Young Fisherman's
Summit, perhaps 90 percent of the participants entering the
industry indicated that they were generational fishermen. He
said HB 366 would provide an improvement to what is now
available through CFAB.
11:03:28 AM
JOHN STURGEON, Representative, Ouzinkie Native Corporation,
stated support for HB 366, and said the village of Ouzinkie has
a tradition of fishing; however, today only two boats remain.
Because of the limited entry requirements, the permits have
filtered out, leaving Ouzinkie village with no economy. The
bill will help restore what has been lost, he opined, and assist
in rebuilding the fishing fleet.
11:07:11 AM
NICOLE BORROMEO, Representative, Alaska Federation of Natives,
stated support for HB 366, and echoed the previous statements of
support. The bill has a real potential for making a difference
in rural Alaska economies, she said.
CHAIR STUTES asked about problems that may result from the
ownership requirements, as proposed in HB 366.
11:09:06 AM
BENJAMIN BROWN, Commissioner, Commercial Fisheries Entry
Commission (CFEC), lauded the intent of HB 366 and said the
desired intent will certainly assist Alaskans to participate in
the fishing industry. However, he said, with a bill of this
magnitude, a devil's advocate perspective is important to hold
in order to avoid the pitfalls that could ensue and magnify.
The Section 24 causes concern by removing the proscription of
who can't own a permit and who is not a person for the purposes
of permit ownership. The section requires tightening up, he
said, and directed attention to page 7, lines 15-20, which read
as follows:
* Sec. 24. AS 16.43.990(7) is amended to read:
(7) "person" means a natural person or a
regional community permit bank established under AS
16.44.010 [; "PERSON" DOES NOT INCLUDE A CORPORATION,
COMPANY, PARTNERSHIP, FIRM, ASSOCIATION, ORGANIZATION,
JOINT VENTURE, TRUST, SOCIETY, OR OTHER LEGAL ENTITY
OTHER THAN A NATURAL PERSON];
COMMISSIONER BROWN opined that, in order to later include a
regional community permit bank as a second type of person,
retaining language that stipulates what a person is not, may
prove unhelpful, and may will also effect the ability for
leasing permits.
REPRESENTATIVE KREISS-TOMKINS acknowledged the concern and
agreed that Sec. 24 requires amending.
11:12:24 AM
REPRESENTATIVE JOHNSON asked about the requirements that govern
the scallop and hair crab fisheries, which did not require the
permit holder to be on board the fishing vessel.
COMMISSIONER BROWN answered that two fisheries allowed for
vessel based permits, thus, ownership by a corporation versus a
person. He detailed the case and recalled that, upon the bills
sunset date, no harm came to pass. He opined that it may not
provide the best example for the potential opposition that may
be directed to HB 366.
REPRESENTATIVE JOHNSON questioned whether any precedent was
created by the scallop and hair crab fisheries and whether a
nexus exists, although there doesn't appear to be a great deal
of similarity.
COMMISSIONER BROWN agreed that legislative records could be
reviewed to glean some knowledge, but there isn't a great deal
of similarity shared by the two bills.
11:15:30 AM
REPRESENTATIVE HERRON referred to the committee packet and the
letter from the United Southeast Alaska Gillnetters, dated
3/15/16, addressing the members, and asked Mr. Brown to please
review the contents and provide an opinion.
COMMISSIONER BROWN agreed to provide the requested opinion.
11:16:59 AM
REPRESENTATIVE ORTIZ asked about how the passage of HB 366 would
impact the current market value of permits.
COMMISSIONER BROWN responded that the effect is not known, but
conjectured it would depend on the level of the permit exchange
participation.
REPRESENTATIVE ORTIZ asked whether the competitiveness for
obtaining permits could cause a downward turn of permit values.
COMMISSIONER BROWN conjectured on fluctuations of value, and
added that what might cause the most impact would be if, due to
the consolidation and banking of permits, a fleet reduction
measure in a fishery occurred, which in turn could lead to a
potential situation of excessive exclusivity.
REPRESENTATIVE KREISS-TOMKINS offered that the permit cost
question has been discussed, and reported that HB 366 is
tailored and intended to reduce market impacts by imposing a
four percent ownership cap and limiting access for holding
permits. It is expected that these measures will minimize any
price distortion on the free market, due to permit bank
operations.
11:23:47 AM
REPRESENTATIVE HERRON asked whether the model is being
implemented elsewhere.
COMMISSIONER BROWN said no.
REPRESENTATIVE KREISS-TOMKINS interjected that there is an
analogous system in the Gulf of Alaska, pertaining to the
halibut fishery, which is under federal management.
11:24:45 AM
REPRESENTATIVE JOHNSON questioned the primary goal of the policy
being considered: maintaining the fiscal value of fishing
permits, or to enable people to fish. He opined that the bill
may not be an effective vehicle for ensuring the fiscal value of
fishing permits; however, it does appear to propose a workable
means to assist people who are entering the fishing industry.
The fishermen may want both, he conjectured, but that would be
the perfect outcome.
[HB 366 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB241 Sponsor Statement.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB241 Sectional Analysis.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB241 Version A.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB241 Fiscal Note DFG.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB241 Support Legal Memo Bullard.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB241 Support ADFG Residency Requirements.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB241 Support PFD Eligibility.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB 366 Sponsor Statement.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Sectional Analysis Ver S.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Ver S.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Fiscal Note DCCED.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Fiscal Note DFG.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Support City of Ouzinkie Resolution 2016-03.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Support City of Port Lions Resolution 16-03.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Support Native Village of Ouzinkie Resolution 2016-3.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Support Native Village of Port Lions Resolution No 2016-07R.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Support Sun'aq Tribe of Kodiak - Resolution #2016-05.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Support Young Fishermen Letter.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Oppose AIFMA.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Oppose USAG.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB 366 Fiscal Note CFEC.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |
| HB241 Fiscal Note CFEC.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 241 |
| HB 366 Support Fisheries Access for Alaskans.pdf |
HFSH 3/17/2016 10:00:00 AM |
HB 366 |