Legislature(1997 - 1998)

03/18/1998 05:06 PM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HB 423 - ACCESS FISHERY TRUST/LIC. PERMIT SURCHARGE                            
                                                                               
Number 0516                                                                    
                                                                               
CHAIRMAN AUSTERMAN stated that the next order of business is HB
423, "An Act relating to the Alaska access fishery trust, purchase             
of commercial fisheries permits, vessels, gear, equipment, and                 
leases by the Department of Fish and Game, sport fishing license               
surcharge, and the entry permit surcharge; and providing for an                
effective date."  He called on Bruce Twomley.                                  
                                                                               
Number 0533                                                                    
                                                                               
BRUCE TWOMLEY, Chairman/Commissioner, Commercial Fisheries Entry               
Commission (CFEC), Department of Fish and Game stated that he has              
talked to Representative Mulder, sponsor of HB 423, about the                  
problems of the legislation and has recommended a work group to                
convene between sessions to work through some of the problems.  He             
stated that Representative Mulder concurred with that                          
recommendation and his recommendation would be that the work group             
preceded passage of the bill because there are enough problems that            
need to addressed.  He stated that it would be important for all               
parties to know how the requirements for a buy-back program and how            
it will be implemented.  He stated that it is also important to                
understand the Johns v. Commercial Fisheries Entry COmmission  case            
as it affects the subject of buy-backs.  The supreme court has                 
basically said that a limited fishery can become too exclusive and             
if it does become too exclusive then the limited entry commission              
can put more permits back into the water.  He stated that                      
therefore, there are implications for whoever foots the bill for a             
buy-back program.  He stated that the Johns case itself invalidates            
the language of Section 8, lines 26 and 27.  He stated that he has             
already faced a lawsuit under the Johns ruling to eliminate the                
entire limited entry program for the Bristol Bay Drift Gilnet                  
Fishery and it was only in the last 4 years.  He stated that the               
supreme court has identified a tool to defend against the Johns                
claim and to support the buy-back program.  It is the optimum                  
number study, although it is not perfect and is time consuming and             
expensive.  He stated that the result is a single number for all               
time in regards to the fishery.  He stated that it is critical that            
the study is conducted as an independent and professional study.               
                                                                               
Number 1106                                                                    
                                                                               
CHAIRMAN AUSTERMAN asked if he has ever done a study on the optimum            
number.                                                                        
                                                                               
MR. TWOMLEY replied that they have completed a study for the                   
Southeast herring purse seine fishery, under a court order and                 
public pressure to put more permits back into that fishery.  The               
result was that the optimum number study defended the status quo.              
                                                                               
Number 1146                                                                    
                                                                               
CHAIRMAN AUSTERMAN asked if they had ever done an optimum number               
study on salmon.                                                               
                                                                               
Number 1147                                                                    
                                                                               
MR. TWOMLEY replied that it would need to be done and the bill does            
call for it as it is the triggering mechanism that would have to go            
forward with the buy-back.  The standard in the bill is that the               
buy-back would have to provide a direct and immediate benefit to               
sport fishermen.  It is not known exactly what that would mean                 
until the specifics are known.  He stated that if that translated              
into reallocating the catch, it would be a factor that would have              
to be taken into account in a optimum number study.  He stated that            
the most important aspect in doing the optimum number study is                 
applying the statute as written which provides some standards but              
they are somewhat ambiguous and contradictory.  An optimum number              
study is an exercise in statutory interpretation which means that              
a court could substitute its own judgement of what an optimum                  
number ought to be.   He stated that it would be helpful to have a             
decision from the court that the study was a sound methodology but             
that could take up to three years.                                             
                                                                               
Number 1328                                                                    
                                                                               
MR. TWOMLEY stated that there are also some practical                          
considerations.  He referred to the 1995 setnet fishery which had              
625 permits that recorded catch and 120 permits that did not record            
any catch and 63 permits that recorded .3 percent of the catch.                
183 permits were not making demands on the resource at the cost of             
$24,800 a piece. The cost of retiring those permits would be more              
than $4.5  million.  He stated that the 5 percent surcharge on the             
permits that the CFEC administers would only raise $200,000 a year.            
He stated that in order to evaluate the risks and the benefits a               
buy-back program it is necessary to look closely at it on a fishery            
by fishery basis.  This bill does not provide the methodology about            
how to go forward.  He encouraged that those considerations be                 
discussed before proceeding.                                                   
                                                                               
Number 1548                                                                    
                                                                               
MR. TWOMLEY stated that he believed the bill is a good vehicle for             
discussing this and there are present inducements given the                    
situation in the salmon fisheries.  He stated that the CFEC would              
like to be involved in developing a working program.  He stated                
that the gear groups that have looked closely at buy-backs in their            
fisheries have tended to turn away from sweeping buy-back programs             
and have looked toward incremental ways to reduce fishing efforts              
in the given fishery.  He stated that the question has been raised             
for fishermen to get together privately, pool their funds to buy-              
out and retire permits.  The CFEC has found a way for that to be               
done under existing law.  He stated that the advantage is that a               
private buy-back program would be less visible to attract a John's             
type challenge.                                                                
                                                                               
Number 1713                                                                    
                                                                               
CHAIRMAN AUSTERMAN asked if the optimum number study would be                  
needed with a private buy-back program.                                        
                                                                               
MR. TWOMLEY replied no, a private buy-back program could go forward            
if people chose to commit their money and assume that risk, it                 
could happen right now.                                                        
                                                                               
Number 1736                                                                    
                                                                               
REPRESENTATIVE ELDON MULDER stated that Sections 7, 8, 9 deal with             
the areas of concern.  He stated that he did not want them to be               
included in the bill because it clouds the issue.  He stated that              
he agreed with Mr. Twomley, it is not possible to construct a buy-             
back program that passes all the tests.  He stated that the only               
way to do so is to have the affected user groups come together to              
develop something that works for everybody.  He stated that he                 
would not mind having those sections deleted from the bill.  As the            
optimum number study is extremely expensive and time consuming and             
will not be the best way to get where we want to go.  He stated                
that if that requires a constitutional amendment then so be it.  He            
stated that this bill is a way to get to the solutions.                        
                                                                               
Number 2007                                                                    
                                                                               
REPRESENTATIVE HODGINS asked if a group decides they want to retire            
their permits what will happen to those permits.                               
                                                                               
Number 2014                                                                    
                                                                               
MR. TWOMLEY replied that there, currently, is a yearly renewal fee             
and if a permit is not renewed for two years it is canceled.  He               
stated that with a private buy-back program it would be possible               
for an individual holding a permit to contract anyone to not seek              
reinstatement.                                                                 
                                                                               
REPRESENTATIVE HODGINS asked if that permit could be reissued again            
even with an optimum study.                                                    
                                                                               
Number 2126                                                                    
                                                                               
MR. TWOMLEY replied no, because that is where the constitution                 
intervenes, if there were to be an optimum number study that                   
indicated more permits where required to make the fishery                      
constitutional or if there was a court decision then more permits              
would have to be added back in.                                                
                                                                               
Number 2157                                                                    
                                                                               
REPRESENTATIVE HODGINS stated that the fallacy is that there could             
be a way to get the permits reinstated.                                        
                                                                               
MR. TWOMLEY replied that is correct.                                           
                                                                               
Number 2231                                                                    
                                                                               
CHAIRMAN AUSTERMAN asked if the constitution was changed to omit               
the optimum number, wouldn't that problem be eliminated.                       
                                                                               
Number 2236                                                                    
                                                                               
MR. TWOMLEY replied that there would be a lot to change and the                
reason the issue comes up is because there is a clause that                    
authorizes limited entry but then there is a clause that states                
fisheries are open to everybody.  He stated the only way to                    
resolved that tension is to do an optimum number study.  He stated             
that if a mechanism could be found under law other than an optimum             
number study, that would satisfy the court, that would be a way                
around it.                                                                     
                                                                               
Number 2405                                                                    
                                                                               
REPRESENTATIVE HODGINS asked if it was true that on the setnet                 
sites, buying a permit does not mean you are buying the site.                  
                                                                               
MR. TWOMLEY stated that was his understanding.                                 
                                                                               
KEVIN DELANEY, Director, Division of Sport Fish, Department of Fish            
and Game, stated that one could envision a corporate effort with               
the Board of Fisheries, where time and area where changed in                   
addition to permits being bought.                                              
                                                                               
Number 2544                                                                    
                                                                               
REPRESENTATIVE HODGINS asked how the mechanism of setnet sites and             
permits interact, where if a permit was bought what would happen to            
the site.                                                                      
                                                                               
Number 2603                                                                    
                                                                               
JERRY McCUNE, United Fishermen of Alaska, responded that setnet                
sites are different from area to area, some are leased federal                 
sites and they are leased every year.  He stated that in Cook Inlet            
some people own their sites and they would be looking to sell the              
sites with the permits.                                                        
                                                                               
Number 2705                                                                    
                                                                               
REPRESENTATIVE HODGINS asked if the Cook Inlet sites could be moved            
around.                                                                        
                                                                               
MR. McCUNE responded that was correct.                                         
                                                                               
Number 2830                                                                    
                                                                               
BRENT JOHNSON, President, Kenai Peninsula Fishermen's Association,             
testified via teleconference from Kenai that he is opposed to HB
423.  He stated that the bill states that it would buy-back boats              
and gear and asked what will the state do with them; if they don't             
burn them they will then be on the market at a decreased value and             
devalue the fishermen who choose not to sell.  He asked the                    
committee to keep in mind that the commercial fisheries are an                 
important part of the economy.  He asked that with the cut back in             
jobs related to Alaska's other natural resources jobs if it was                
wise to affect the commercial fishing industry.  He stated that he             
would rather have two people making $30,000 in the setnet fishery              
than one person making 60,000.  He stated that the salmon stocks               
are healthy and as last year "121 million salmon" were harvested               
across the state of Alaska, before 1983 that state had only                    
exceeded this harvest one time.  He stated that those kind of                  
numbers do not support a buy-back.  He stated that in the Pacific              
Northwest, Canada and Washington have had buy-backs generated                  
because they did not have any fish.  He stated that fishing season             
has always fluctuated and care needs to be taken when talking about            
buying something back that will permanently change the fishery when            
things may turn around.  He stated that page 2, line 5, states                 
"that would result in a direct and immediate benefit to sport                  
fishermen."  He asserted that the fisheries could be decreased                 
without a handful of fish going to the sport fishermen.  He stated             
that this is feeding the sport fishermen a line that they would                
benefit from a buy-back program.  He stated that the technology is             
there for the existing fleet to continue to harvest the same number            
of fish.  He stated that there are benefits to a slow fishery                  
season in that young people are able to buy into the fisheries.                
                                                                               
Number 3544                                                                    
                                                                               
DALE BONDURANT testified via teleconference from Kenai that he                 
could not figure out how it would work and that a lot of problems              
would result.  He questions how it would benefit the sport fish                
fleet.  He stated that we do not owe the permit holders any money.             
He said "They did not pay anything for them so why does the public             
have to start paying them back."  He stated that this is not the               
problem of the sport fishing industry.                                         
                                                                               
Number 3846                                                                    
                                                                               
GRACE KENDALL, testified via teleconference from Kenai that HB 423             
takes away from an already established commercial fishery and gives            
to a new commercial fishery called sport fish guiding.  She stated             
that the reason for HB 423 is not to benefit the salmon runs or to             
enhance the habitat but to benefit the sport guides and enhance                
their pocket book at the expense of the commercial Cook Inlet                  
fishery.  She referred to page 2, line 5 of HB 423 and stated that             
the wording should be changed from a direct benefit to sport                   
fishermen to sport guides because all the local sport fishermen                
have been shoved out of the way for the sake of the sport guides               
and their non-local paying customers.   She asked if she understood            
it correctly that the local commercial drifters and set netters are            
supposed to help pay to put themselves out of business, so they can            
help the sport fishermen.  She stated that the commercial fishermen            
were limited in 1974 for the sake of conservation of salmon runs               
and it has worked but it will not do anything if an unlimited                  
amount of guides are allowed in the river drawing an exponential               
amount of tourists to damage and pollute the rivers.   She pointed             
out the Cook Inlet commercial fishermen do not fish in the rivers,             
the drifters only take 8 percent of the silvers and the setnetters             
only catch 14 percent of the silvers, therefore, that only leaves              
the in-river fisheries to to account for the rest of the catch                 
rate.  It is time that the state starts recognizing the devastating            
effect they are having on the resources and stop blaming others.               
She stated that if the loss of fish in the rivers is due to the                
overuse and abuse by the in-river fisheries then it should be                  
addressed at that level and not by destroying the local economy.               
                                                                               
Number 4142                                                                    
                                                                               
DONNA SCHOWEILER, Commercial Fisherman, testified via                          
teleconference from Anchorage against HB 423 because in 1974 the               
commercial fishermen agreed to the limited entry system under the              
assumption that it would be protecting their heritage and their                
families.  She stated that in 1997 the amount of registered sport              
fishermen on the Kenai river was 472.  These boats take on the                 
average, two trips per day, six people each trip which equates to              
54 fish per person.  She said "Two trips a day with six people on              
board, the limit per person would be three, which equates 11,328               
people per day and 33,984 fish a day.  She asked that the committee            
think about this.                                                              
                                                                               
Number 4349                                                                    
                                                                               
MR. McCUNE stated that the United Fishermen of Alaska (UFA) opposes            
the bill as it is written, however, they do think it is an option              
to be looked at.  It would have be crafted very carefully and be               
from area to area.  He stated that it would  have to be a voluntary            
buy-back program.  UFA expressed that they would like have a                   
voluntary buy-back program where each group would have to vote on              
it, they would assess themselves the 5 percent and pay for the                 
permits in their areas.  He stated that the way the bill is                    
drafted, he would be paying for Bristol Bay permits whether he had             
a buy-back program or not.  He suggested that the allocation issue             
be taken out all together as it causes problems.  He asked why                 
would he want to buy out his permit unless he received a gain.                 
                                                                               
Number 4554                                                                    
                                                                               
CHAIRMAN AUSTERMAN asked what allocation issue in the bill is he               
referring to.                                                                  
                                                                               
MR. McCUNE responded page 2, line 5 "would result in a direct and              
immediate benefit to sport fishermen."  He stated that this would              
depend on the fishery and the area.  He stated, for example, in the            
Copper River if 70 permits were bought out it would not make a                 
difference as there are 70 permits that don't fish.                            
                                                                               
TAPE 98-12, SIDE A                                                             
Number 0001                                                                    
                                                                               
MR. McCUNE suggested putting the buy-backs on a neutral ground.  He            
stated that he had a concern on page 4, line 10.                               
                                                                               
REPRESENTATIVE MULDER stated that the drafters put that in and it              
is not important to him.                                                       
                                                                               
MR. McCUNE stated that it is a worthwhile discussion and some areas            
would like to look at it but UFA would like to get the program                 
under the constraints that he mentioned.                                       
                                                                               
Number 0153                                                                    
                                                                               
REPRESENTATIVE MULDER stated that page 2, line, 5 has a purpose in             
that federal requirements, in relation to sport fish licenses,                 
prohibit the use of fish and game funds for those purposes that do             
not have a "direct and immediate benefit to sport fishermen."                  
Without that language sport fishing licenses could not be used to              
help in the process.  He stated that it is a way to ease tensions              
and benefit both user groups.  He pointed out that in some                     
locations this could not be done.  He stated that there is a                   
benefit to having a regional breakdown.                                        
                                                                               
Number 0316                                                                    
                                                                               
MR. McCUNE stated that language on page 2, line 5 is what sets                 
people off.  He stated that one group or other should not be listed            
to gain from the buy-back because the gains are unknown.  He stated            
the number of participants in some fisheries could be cut in half              
but the remaining boats could still catch that same amount of fish.            
                                                                               
Number 0505                                                                    
                                                                               
REPRESENTATIVE MULDER stated that he could only reflect the area               
that he knew the best, which is Cook Inlet.  He stated that his                
point is well made, a mechanism needs to be developed to evaluate              
which permits would give the greatest benefit to sport fishermen               
and then have those permits bought out by sport fishermen.                     
                                                                               
Number 0545                                                                    
                                                                               
MR. McCUNE stated that he understood the intent but thought that it            
would have to be voluntary by the permit holders and those benefits            
would be weighed after the fishery was consolidated instead of                 
stating the direct benefit ahead of time.  He suggested that                   
allocation and this section be removed so the issue is how best                
could a buy-back program be implemented from area to area for those            
that desire to have one.                                                       
                                                                               
Number 0636                                                                    
                                                                               
REPRESENTATIVE MULDER stated that if that section 2 were eliminated            
from the bill he would not participate and the bill would not be in            
front of the committee.                                                        
                                                                               
Number 0648                                                                    
                                                                               
CHAIRMAN AUSTERMAN stated that he understood where he was coming               
from and it is a discussion that the committee will continue to                
have.  He referred to the resolution by the Board of Fisheries and             
stated that because of Representative Mulder's interest in sport               
fish, he had incorporated further than what the Board of Fisheries             
has indicated.  He stated that the committee will have to come back            
to that issue.  He stated that the next issue is if sport fish is              
kept in the bill, the question is what is the Department of                    
Interior's view on using sport fish dollars.  He stated that a                 
determination by the department should be gotten.                              
                                                                               
Number 0811                                                                    
                                                                               
MR. DELANEY stated that the way he envisioned the program to work              
is to have the fish and game fund purpose in statute.  The state               
has to separately account for those things that are considered                 
licenses to sport fishermen within the state fish and game account             
and those monies can only be spent on projects where a linkage can             
be demonstrated to a sport fish benefit.  He stated that all other             
monies deposited in the fund can be used for any fish and wild life            
purposes.  He stated that the way it would need to work is a                   
separate ledger would need to be kept from the other monies.                   
                                                                               
Number 1036                                                                    
                                                                               
CHAIRMAN AUSTERMAN asked if the bill had been presented to the                 
Department of the Interior.                                                    
                                                                               
MR. DELANEY responded that he had asked the department if federal              
aid monies or license fees had been used to finance buy-back                   
programs.  He stated that the answer is that it is not an                      
appropriate use of federal aid funds but sport fish license fees               
had been used in some East Coast states to facilitate a buy-back               
program.  A direct linkage to the sport fish benefit would need to             
be proven.  He stated that the way he reads the bill, is that if               
nothing was ever implemented in the 10 year time-frame then all of             
those monies would be available to be appropriated to fish and                 
wildlife uses.                                                                 
                                                                               
Number 1201                                                                    
                                                                               
CHAIRMAN AUSTERMAN referred to a February 8, 1996 letter by George             
Utermohle that raised the question about the Department of the                 
Interior.  He asked if there should be further written                         
determination.                                                                 
                                                                               
Number 1243                                                                    
                                                                               
REPRESENTATIVE MULDER stated that it would be worth pursuing and he            
felt confident in what Mr. Delaney has stated.  There needs to be              
a carefully constructed plan.  He stated that for example, a permit            
that had a high intercept king salmon rate with the owner willing              
to sell it, could then be purchased from the access trust fund.                
                                                                               
Number 1337                                                                    
                                                                               
CHAIRMAN AUSTERMAN stated that there was reference in the Board of             
Fisheries resolution to the Magnuson-Stevens funding of buy-back               
programs on the East Coast and Washington state.  He asked if that             
had been considered.                                                           
                                                                               
Number 1347                                                                    
                                                                               
REPRESENTATIVE  MULDER stated that he has contacted Senator Stevens            
office and it is available.  He stated that it is a low interest               
loan program meant to be utilized for buy-back type programs.  It              
could be capitalized very quickly.  He stated that in the end,                 
there would be an assessment of the affected user groups to                    
implement a buy-back program and capitalized 100 percent by the                
fund from D.C. and paid back as a loan through the different                   
assessments to the affected groups.                                            
                                                                               
Number 1449                                                                    
                                                                               
REPRESENTATIVE HODGINS asked if he envisioned an incentive for                 
various group to buy-back permits within the group.  He asked if he            
was considering letting reduced fleets being able to fish longer.              
                                                                               
REPRESENTATIVE MULDER stated that he would expect the commercial               
fisheries to come to the table and develop a program that made                 
sense for them.  He stated that he would feel comfortable with                 
that.  He stated that in many of the regions there are multiple                
fishermen making close to nothing so with a reduced fleet is would             
be better to have one person making something.                                 
                                                                               
Number 1636                                                                    
                                                                               
CHAIRMAN AUSTERMAN stated that the HB 423 would be held over.                  
                                                                               

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