Legislature(1995 - 1996)
03/22/1995 03:25 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HJR 23 - COMMUNITY DEVELOPMENT FISHING QUOTAS Number 184 CHAIRMAN KOTT said the next matter before the committee was HJR 23, sponsored by Representative Alan Austerman. Number 191 REPRESENTATIVE ALAN AUSTERMAN, PRIME SPONSOR OF HJR 23, stated the committee had before them a copy of the CS and he would like to read the following statement for the record: "HJR 23 asks the North Pacific Fishery Management Council to reauthorize the inshore/offshore allocations and the Community Development Quota (CDQ) program before they expire at the end of this year. "The inshore/offshore allocation stipulates that 35 percent of the pollock in the Bering Sea and 100 percent of the pollock in the Gulf of Alaska be brought ashore to processing facilities. The CDQ program developed a partnership between Western Alaska communities and the multimillion-dollar Bering Sea groundfish industry. The economic successes of these programs are crucial to the small communities throughout Western and Southwest Alaska. "Extending the inshore/offshore allocation, and the pollock CDQ program, will preserve stability in the groundfish industry during the period required for the Council to develop a comprehensive rationalization plan. The inshore/offshore allocation and pollock CDQS were initially passed to serve as a bridge to comprehensive rationalization. It has taken the Council longer than anticipated to accomplish their goal of the comprehensive rationalization plan." REPRESENTATIVE AUSTERMAN said the inshore/offshore issue was very vital to the coastal communities in the Gulf of Alaska and in the Bering Sea. He said 90 percent of the Pacific cod catch was being brought ashore in addition to 100 percent of pollock to be processed in the Gulf of Alaska. He explained this was the reason for the CDQ program, to create jobs for Alaskans. He commented that he wasn't familiar with the total history of how the CDQ program was eventually tied in with the inshore/offshore issue but acknowledged it was an intricate part of that issue. He pointed out that if this program goes by the wayside, processing will again return offshore and many jobs will be lost, not only in the coastal communities but also in places like Anchorage that have a large influx of seafood processing jobs. He stated a representative from the Department of Community & Regional Affairs, who administers the program, and a representative from the Department of Fish & Game would answer any questions the committee might have. CHAIRMAN KOTT stated for the record that Representatives Rokeberg and Porter had joined the meeting at 3:35 p.m. Number 249 REPRESENTATIVE KUBINA commented that the $1.4 billion paid to the fish harvesters was a huge amount. REPRESENTATIVE AUSTERMAN noted these were groundfish off the coast of Alaska. He said close to 80 percent of the poundage landed off the coast of Alaska, including salmon, are groundfish. This is in comparison to the overall catch of seafood products. Number 262 REPRESENTATIVE KUBINA asked if line 13 on page 1, which states the CDQ program sets aside 7.5 percent of the quota for the communities, was correct. REPRESENTATIVE AUSTERMAN answered it was. REPRESENTATIVE KUBINA asked if there was a way to increase this percentage. Number 268 REPRESENTATIVE AUSTERMAN responded there had been discussion on this and he would defer any technical questions to the department. He added there was also an effort to include other products in the CDQ program, but at this time, the resolution addresses only the pollock issue. He explained the system is set up so that, in the Bering Sea, the 7.5 percent comes off the top of the total allowable catch. The remaining allowable catch is divided by the 35 percent that comes onshore in addition to the 7.5 percent. He said that 65 percent of the remaining fish is processed offshore by the large processors. Number 282 CHAIRMAN KOTT asked if the three departments involved in monitoring the CDQ program are the Department of Fish & Game, the Department of Commerce, and the Department of Community & Regional Affairs. REPRESENTATIVE AUSTERMAN replied this was correct, and there would be someone from C&RA joining them at the table. CHAIRMAN KOTT pointed out that backup materials indicate the United Fisherman of Alaska (UFA) do not support expansion of the CDQ program to fisheries in the Gulf Alaska. He asked if the CDQ program was currently in the Gulf, and if they are talking about expanding the program. REPRESENTATIVE AUSTERMAN responded there aren't any CDQ programs in the Gulf of Alaska, and based upon the dynamics of the Gulf, he doubts there ever would be. He explained if there were a CDQ program in the Gulf, it could include some communities on the California coast. He said they never expect a CDQ program in the Gulf of Alaska, and this is what they are talking about when referring to expansion. They don't want it expanded. He added that 100 percent of the pollock in the Gulf of Alaska is allocated to shoreside plants. CHAIRMAN KOTT, referring to a letter from UFA, asked Representative Austerman to clarify the last paragraph which states, "Therefore, UFA endorses reauthorization of the existing CDQ program in the Bering Sea pollock sea fishery in existing inshore/offshore programs for both the Bering Sea and the Gulf of Alaska." Number 295 REPRESENTATIVE AUSTERMAN explained that in the Gulf of Alaska there is no CDQ program. However, 100 percent of the pollock catch is allocated to shoreside processing. If catcher processors come up from the Lower 48, they must bring their catch onshore to be processed. He reiterated that 90 percent of the Pacific cod in the Gulf is processed onshore. He said in the Bering Sea, there is an allocation of inshore/offshore in the CDQ program. He said because of the lack of infrastructure, Western Alaska coastal communities don't have the ability to go out and catch this product; it is all being caught off their shores, but there is no way for them to capitalize on it. He said this allows them to have an allocation for fish they can resell to processors. This also generates revenue for the community. He acknowledged comments had been made that this resembled a social program, but without this program the product would, most likely, go to Seattle and would not benefit Alaska. Number 341 KIM METCALFE-HELMAR, SPECIAL ASSISTANT, DEPARTMENT OF COMMUNITY & REGIONAL AFFAIRS, reiterated that the Department of Community & Regional Affairs, the Department of Fish & Game, and the Department of Commerce are involved in regulating the CDQ program on a state level. The National Marine Fisheries Service is the regulator on the federal level. She gave the following brief history on the CDQ program: The CDQ program was approved by the North Pacific Fisheries Management Council in December 1992. The program allocated 7.5 percent of the total allowable catch of the Bering Sea pollock to 56 Alaska villages located within 50 miles of the Bering Sea Coast. The communities participating in the program range from the Seward Peninsula continuing to the Southwestern Aleutian community of Atka. There are also communities on the Pribilof Islands, St. Lawrence Island and Diomede Island. She said the CDQ program was a unique opportunity to bring jobs to regions traditionally having few employment opportunities. The program allowed access to the fishery that the residents of the regions would otherwise not have been able to afford. She stated the data gathered in the 1990 census showed that 25 percent of the people in the region were below the poverty level, and only 49 percent of the adults held jobs. MS. METCALFE-HELMAR continued that the CDQ program was fashioned to allow the CDQ communities to harvest their allocation on an annual basis. It allowed them to fish their quota whenever they chose. The groups contracted with private sector seafood companies to ensure that the pollock would be harvested and processed in an economically efficient manner. She said the partners offer the CDQ groups various training, employment and educational opportunities on vessels or at shoreside processing plants. She cited data from a draft report the Department of Community & Regional Affairs is currently working on: The CDQ group areas had an average of a 16 percent unemployment rate. Of the people employed, the largest number, at 26 percent, were employed by the school district. Only 2 percent of the population at the time, held fishery-related jobs. The per capita annual family income for CDQ communities averages $10,000 per year, and the average income per household according to the 1990 census was $36,479 per year. She said in 1993, the six CDQ groups reported wages totaling $2.5 million. In 1994, they reported wages of $5.2 million. The number of CDQ jobs in 1993 totaled 173; in 1994, the jobs totaled 387. Wages earned by CDQ employees averaged $14,500 in 1993, and $13,300 in 1994, although some 4th quarter earnings had not been reported at that time. She continued that the reauthorization of the inshore/offshore allocations in the CDQ program had the wholehearted support of the Knowles Administration. The Administration believes this is a great example of a program that encompasses the Administration's stated goals of public/private partnerships and job creations, and therefore, the Administration would ask the committee to support this resolution. Number 392 CHAIRMAN KOTT asked what the net result would be if the North Pacific Fishery Management Council was not reauthorized. MS. METCALFE-HELMAR responded there were many programs still in the beginning stages that were started in late 1992. The villages involved are just now starting on these projects. She said one of the villages is sending students to the Seward Vocational Center to learn how to build aluminum boats. Those students will go back with that skill, and the boats will go back to the community. Number 405 REPRESENTATIVE KUBINA asked if the outlook was good for the reauthorization. MS. METCALFE-HELMAR replied at this time the prognosis was good. REPRESENTATIVE AUSTERMAN commented that he was not sure how closely tied the inshore/offshore issue was with the CDQ program. He said the inshore/offshore issue of bringing the product to shore for processing was a hard fought battle that had gone all the way to Washington, D.C. a number of times. He said without that allocation, the bulk of the product would be going South. He said it was imperative for the coastal communities to not lose any allocation for the product coming ashore. CHAIRMAN KOTT asked Representative Ivan to join the members at the table. Number 427 REPRESENTATIVE IVAN IVAN, ALASKA STATE LEGISLATURE, stated he represents some of the communities in the Coastal Village Cooperative area for the group of CDQ villages in the Lower Yukon. He said the six groups involved in the program are given the opportunity to participate in the offshore pollock fishing operation that they partner with established industries. He said the proceeds are invested by each CDQ group, depending on the strengths and weaknesses of their economic situation. He commented that across the board contributions are made to scholarship programs and individual job training. He concluded by saying the program was a foot-hold, and an extension would provide an opportunity for ongoing, established fisheries in the Western communities. They also are trying to prevent ongoing limited entry permits. For example, in Bristol Bay these groups partner with local established communities and are part of the infrastructure. CHAIRMAN KOTT asked if there were any questions for Representative Ivan or anyone else wishing to testify. Hearing none, he closed public testimony. Number 460 REPRESENTATIVE BRIAN PORTER made a motion to move CSHJR 23(FSH) from committee with individual recommendations and attached fiscal notes. CHAIRMAN KOTT stated there was a motion to move CSHJR 23(FSH) out of committee with individual recommendations. He asked if there were objections. Hearing none, the motion passed.
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