Legislature(1999 - 2000)
04/14/1999 01:09 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 104 - ENTRY MORATORIA ON PARTICIPANTS/VESSELS Number 0101 CO-CHAIR OGAN announced that the first item of business would be House Bill No. 104, "An Act revising the procedures and authority of the Alaska Commercial Fisheries Entry Commission, the Board of Fisheries, and the Department of Fish and Game to establish a moratorium on participants or vessels, or both, participating in certain fisheries; and providing for an effective date." Before the committee was CSHB 104(FSH). Number 0154 REPRESENTATIVE BILL HUDSON, Alaska State Legislature, sponsor, noted that Mary McDowell of the Commercial Fisheries Entry Commission (CFEC) could answer technical questions. He explained that HB 104 amends existing moratorium law to provide for a streamlined and more effective process, in order to better manage Alaska's fisheries resources. The current moratorium statute, which Ms. McDowell could address, has proven cumbersome and unworkable. That, in turn, prevents quick response - not only by the CFEC, but also by other agencies - to fisheries that are growing too rapidly to ensure effective management. As a result, both the resource and the economic livelihoods of the participants could be jeopardized. REPRESENTATIVE HUDSON pointed out that a new element is allowing petitioners to request a moratorium directly from the CFEC. The moratorium would be established if the CFEC found that it was necessary to promote the conservation and sustained yield management of the resource, and the economic health and stability of commercial fishing in the state. The bill also authorizes the CFEC to implement a moratorium on entry of new vessels, as well as participants, providing an additional management tool when a number of different skippers are used on one vessel, as occurs in some offshore fisheries. REPRESENTATIVE HUDSON informed members that HB 104 allows the state to extend its moratorium authority to offshore fisheries adjacent to state waters, when it is consistent with federal law. The state's fisheries go out three miles, and the territorial sea goes out twelve miles. However, there are fisheries that move in and out of both state and federal waters. Wherever there is a consistency, the CFEC would be able to apply this moratorium, to take care of the health of the fisheries there. REPRESENTATIVE HUDSON advised the committee that the bill also authorizes the CFEC to extend the current moratorium on the Bering Sea Korean hair crab and the weathervane scallop fisheries for an additional two years. "We gave, by law, a few years back, the authority or the ability for them to create a four-year moratorium," he noted, "and this would give them an additional two years." He indicated that Ms. McDowell could explain why that is needed, then reminded members that a similar bill had passed the House during the Twentieth Alaska State Legislature, with overwhelming support. Number 0490 REPRESENTATIVE BARNES brought attention to two letters from Ray Campbell, which discussed the belief that amendments made to HB 204 the previous year had greatly improved the bill, but were not included in the present legislation. She asked why Representative Hudson had chosen not to introduce the final version from the previous legislature. REPRESENTATIVE HUDSON answered that it was primarily at the recommendation of the CFEC. He deferred to Ms. McDowell. Number 0632 MARY McDOWELL, Commissioner, Commercial Fisheries Entry Commission (CFEC), Alaska Department of Fish and Game (ADF&G), explained that this bill incorporates everything adopted by the House last year, but is missing one amendment made in the Senate Resources Committee; that amendment had jumped into the next phase, saying that any fishery that came under a moratorium under these provisions could not later go under a limited entry program with a transferable permit. Other changes have been made to address concerns expressed as the previous bill went through. In particular, Co-Chairman Ogan had expressed concern about making sure that the Board of Fisheries continued to have involvement in the process; that has been incorporated in several places in the bill. Number 0734 REPRESENTATIVE BARNES asked why the Senate Resources Committee amendment was not incorporated. She also requested that Ms. McDowell address the fact that once a limited entry permit exists, it becomes a thing of value that can be sold or transferred. MS. McDOWELL noted that transferability is controversial, in that it creates value for permits when they are transferred for money. However, that feature has kept the limited entry program as Alaskan as it is today. It is a constitutional way for permits to change hands, from a parent to a child, for example, and still not be considered a closed class under the federal constitution and interstate commerce. Without transferability, if the permits came back to the state, to be handed back out, the list of those who would receive them would have to include nonresidents and everyone else. A parent could no longer transfer a permit to his or her child, to keep it in the family. Number 0836 REPRESENTATIVE BARNES said she doesn't believe that is a good argument. She asked whether it is not a fact that permit owners sell their permits outside of their families, "for big bucks." MS. McDOWELL agreed they can be sold, although many permits change hands as a gift, inheritance or survivorship to the spouse at the death of the permit holder. Restating that transferability has always been controversial, she reported that 77 percent of all permits are in the hands of Alaskans, and the system has been upheld as constitutional. The legislature, in adopting limited entry, had felt that transferability was a feature of the program that would help make that happen, she added, which seems to have proven true over the years. Number 0943 REPRESENTATIVE BARNES responded that although limited entry was approved by a constitutional amendment, that doesn't make it right. She said the resources belong to all the people of this state, adding, "I don't believe that 77 percent of the permits are still held by Alaskan residents, because people from Washington, Oregon, North Carolina and all over own those permits and come up here and fish every year, when Alaskan people can't fish." Number 1021 CO-CHAIR OGAN asked Ms. McDowell to specifically address Section 1, as well as the remainder of the bill. MS. McDOWELL explained that the bill essentially fine-tunes and updates this one aspect of the limited entry law. The intent is to meet the needs of the evolving Alaska fisheries. Although current law has a moratorium provision for the CFEC, it is not a useful tool because it requires a long, cumbersome process. Fishermen who recognize the need for some kind of cap on their fishery would have to petition the commissioner of the ADF&G, who would then go to the Board of Fisheries; the board would schedule it on their agenda, then decide whether to give the commissioner of the ADF&G permission to then petition the CFEC. This process could take months or years. MS. McDOWELL pointed out that the lengthy process could actually worsen the situation by causing a rush into that fishery by speculators. "As soon as you notify people that we're considering having a lid put on this fishery, and then give them a year or two to rush in, participate and get grandfathered in, you actually aggravate the problem," she explained, adding that no one has ever petitioned for a moratorium under the current statute, because it is so cumbersome and counterproductive. MS. McDOWELL noted that the situation that gives rise to the need for a more effective moratorium process didn't exist when the Limited Entry Act was passed in 1973, when people could primarily make a living in one fishery. Now fisheries are diversifying, she said. New fisheries are springing up, for under-utilized species and gear types, for example. This is good economic development and diversification for the state, and it creates job opportunities. However, these new fisheries tend to come into existence and expand very rapidly, and they can quickly create a resource conservation or overcapitalization problem. That is why a more efficient moratorium process is more important than ever now. Ms. McDowell advised members: Currently, ... the only tool we have for getting a quick handle on an expanding fishery is limited entry. So, this bill could actually avoid the need to go straight to a limited entry permit program in a fishery. If a fishery is mushrooming, a moratorium would give us a tool for putting a temporary lid on that fishery, and give us four years to assess the resource, look over the fishery, go the Board of [Fisheries] and see if they have an alternative way of getting a handle on that fishery - gear restrictions or whatever. So, it's possible that this moratorium tool would actually prevent the need to go into limited entry in some of these fisheries, because it buys you some time to get a lid on something that's getting out of control and figure out what the next step should be. During that four years, we could assess the situation, determine whether we need to propose limited entry and, if so, how to best structure it to conserve the resource and take care of the orderly development of that fishery, and to look for alternatives to limited entry for that fishery. So, we believe that the ability to administratively enact a moratorium like this is a very important management tool, ... and helps keep our options open for the future. And the whole bill is structured to make this process so that the fishermen could petition the entry commission. There'd be an open public process, then, for public comment and so on, ... while that moratorium is in place, and just avoids this need to go through this convoluted process of going to the commissioner, who goes to the board, who goes back to the commissioner, who comes to the commission. And we believe this process is a sound one. Number 1304 MS. McDOWELL advised members that Representative Hudson had asked her to address the issue of extending moratoriums. She reported that the moratoriums enacted by the legislature in the last two years - on dive fisheries, scallops and hair crab - have all been for four years. This bill allows for those moratoriums, or any enacted in the future under this statute, if necessary, to be extended for up to two more years. She stated: We would hope to not have to use that tool in any fishery, because people need some certainty, and there should, ... in most cases, be time to resolve the question in four years. If there is an instance where you can't resolve it in four years, we believe the ability to extend is an important thing to have. For example, if the Board of [Fisheries] is planning to take action and get a lid on things some other way, this would buy time for doing that. In the case of the scallop fishery and the Korean hair crab fishery, the legislature put those under a moratorium based on the vessels, not on the individuals. We don't have a vessel limited entry program. Right now, we don't really have a tool in place to limit those fisheries before those moratoriums expire. We've drafted legislation to do that, but until that's passed, we don't really have a tool for limiting those fisheries. If we didn't have the ability to extend this, and the moratorium would expire on those fisheries, it gets thrown wide-open to open access again, and probably would create a rush of nonresidents into the fisheries. So, that provision for extending the moratorium is one we would hope to not have to use, but believe is an important tool to have in place, in case it ever is needed. Number 1409 CO-CHAIR OGAN referred to Ms. McDowell's comments about creating a rush into a fishery. He noted that interstate commerce laws prohibit discrimination against nonresidents. MS. McDOWELL explained that in the case of the fisheries under moratorium now, if the moratorium expired and there were no limitation in place, it would go back to open access and anyone could get back in. In the case of a couple of the fisheries in the Exclusive Economic Zone (EEZ), the concern is that several other fisheries have been closed; license limitation has been put in place in federal waters, and "there are boats looking for things to do, many of those nonresident vessels that could move into the fisheries." If there were a lag time between when a moratorium was proposed and its implementation, there potentially would be a rush of speculators who weren't already active participants, who may jump in to see whether they can be grandfathered in. Number 1499 CO-CHAIR OGAN asked whether, if this moratorium legislation isn't passed, the ADF&G, through the board, could limit seasons or take a total poundage limit, for example. MS. McDOWELL affirmed that, noting that those are tools the board has all of the time. The moratorium wouldn't even be proposed in a fishery if tools were already in place to keep a lid on that fishery, she explained. A moratorium could get a handle on a fishery that is mushrooming and hold it at its present level while the Board of Fisheries has time to act. If the board had tools and met in the meantime, and if it found a way to get a handle on that fishery, then the need to limit it, at the end of the moratorium, would go away. Number 1544 REPRESENTATIVE BARNES recalled that the last moratorium, for the dive fishery, was for four years. Noting the request to provide authorization to extend that two years, she asked, "In four years, you mean to tell me, the board of fish and game has not addressed the problem in that dive fishery?" MS. McDOWELL answered that the moratorium is in place now, in the dive fishery, and they hope it will be resolved by the end of the four years; a number of species are under that one moratorium. This bill would not extend that moratorium, but it would provide the ability to do that. Ms. McDowell pointed out that there are several proposals floating around, about combined fisheries or endorsements, for example, where one permit would be handed out for all the dive fisheries, but there would be endorsements for individual species. She stated: We don't have the ability to do that now. But if the legislature decided that you were interested in providing that tool, there might be a reason to hold off on finalizing the action on limitation until we knew whether that tool was going to be provided. ... We would always try to finish making a decision in four years, because people need certainty, they need to get on their lives. And if it's going to be opened up, it needs to be opened up; if it's going to be limited, it needs to be limited. So, our goal would always be [to] resolve it in four years. We're primarily concerned about hair crab and scallops right now, where it's a vessel moratorium. We don't have a vessel limitation program. We don't have a way to limit those right now, ... unless given the tools to do a vessel limitation. Number 1675 CO-CHAIR OGAN noted that he had provided members with copies of the section of Title 16 that is repealed by Section 1 of the bill. Number 1705 AMY DAUGHERTY, Lobbyist for Pacific Associates and Alliance Fisheries, came forward, clarifying that she was speaking on behalf of hair crabbers and scallop vessel owners. She read her written testimony into the record, with comments, as follows: I'm here to speak in support of this legislation. In my four-year tenure with the Fisheries Committee, I assisted in putting through two statutory moratoriums, for the hair crab and scallop fisheries. In both cases, the harvesting effort was beginning to exceed what those small fisheries could endure, so we contained them legislatively. We were fortunate that these situations were dealt with so expediently in a political setting, but that was before most of the legislature's attention was on budget concerns and subsistence. Of particular importance in this bill are Sections 2 and 8, which would allow CFEC to extend the current moratoriums up to two years. The hair crabbers and scallopers, who I now represent, are in support of extending their current moratoriums, especially if a more long-term solution cannot be attained. It is critical that we not let these fisheries open up again. In both cases, open access would open a floodgate of effort, to the extent where these small fisheries ... would be difficult or impossible to manage .... Particularly in the hair crab fisheries, now that AFA [American Fisheries Act] has passed and pollock is essentially co-oped, there's a lot of flexibility, so that they can assign their pollock quota. And this, I believe, is the only fishery that's open in the EEZ, which is just a red flag for people to rush into. ... I hope the legislature will enable the state with this management tool. Both of these fisheries reside primarily offshore in federal waters yet have been delegated to the state for management. Both have a higher percentage of Alaskan involvement than most offshore fisheries. If the state effectively "drops the ball" or neglects to show interest, it increases the likelihood that these fisheries will return to federal management. It's in Alaska's best interest to have its fishery management tools in place. My partner, Joe Kyle, is an Alaskan designate on the North Pacific Fishery Management Council, and he couldn't be with us today. But he stated on numerous occasions that Alaska needs to show its capability in fisheries management, in order to retain control of these fisheries, and also to keep our state's best interest prevailing in the offshore fisheries. He has indicated that restoring a license limitation program under a federal regime would most probably decrease Alaska's involvement in these fisheries. It's just a matter of numbers out there. Why should you care? These fisheries add to Alaska's economy. They pay landing tax or business tax and fuel, and, I believe, $1,000 annual license fees. Some Alaskans participate in these fisheries. Some have direct employment, and some have indirect. They can't help but add to the Alaskan economy when they sell to processors onshore or the product is shipped through Anchorage after charter planes pick up the produce from the grounds. They buy fuel and groceries from Alaskans. They strengthen our state's infrastructure. This legislation will enable CFEC to more effectively do their job, limiting participation when fishing effort exceeds a level of sustainability - resource and economic sustainability. I urge your support for HB 104. Number 1989 RAYMOND CAMPBELL testified via teleconference from Ketchikan. A former commercial fisherman, he told members he was put out of business on a moratorium. It seems that public access is being described as a convoluted procedure, he said. "We're talking about very valuable resources here, and to have a small group of people go in and petition the CFEC, to put a moratorium on a fishery, and then have the CFEC just do it, it seems to be taking a lot of the public process out of it," he stated. MR. CAMPBELL said he understands that there have been more than ten requests to place other fisheries under a moratorium. If this bill goes through, the CFEC could shut down those fisheries through a moratorium, putting people out of work. Furthermore, he suggested, removal of transferability and getting rid of the money incentive may keep speculators from getting into the fisheries. If this bill goes through, he wants to see it amended as HB 204 was amended in the last session. "And I think the whole issue of limited entry won't be an issue anymore, if we take the transferability and the money incentive out of it," he concluded. Number 2115 CO-CHAIR OGAN asked Mr. Campbell about his letter dated March 11, 1999, which says in the fourth paragraph that there have been transfers of moratorium permits, which puts a value on them. He asked Mr. Campbell if he could cite specific examples of what the transfers have been. MR. CAMPBELL answered, "There have been transfers of the moratorium permits in the dive fisheries; there have been medical transfers. ... One of the things that the dive moratorium did was it gave permits to people who never participated in the urchin fishery, and maybe Miss [McDowell] can give us numbers on how many medical transfers there's been on moratorium permits in the dive fishery. And that is driven by money, too. ... On a medical transfer, there's money traded." Number 2261 GERON BRUCE, Legislative Liaison, Office of the Commissioner, Alaska Department of Fish and Game (ADF&G), came forward, specifying that the ADF&G supports this legislation. He said he would focus on biological issues relating to why a moratorium is helpful in maintaining the health of the resources. He told members: As both the sponsor and Ms. McDowell indicated, there's increased interest in Alaska in developing the new fisheries on species that are currently under-utilized or not utilized at all. ... In nearly all cases involving these species, the department knows very little about their life history, the distribution, how productive they are, how they will respond to commercial harvest. ... And so, we are very cautious in approaching new fisheries, and there have been cases where new fisheries have been started - abalone is probably the instance I'd like to use the best in Southeast Alaska, where an abalone fishery started off at a very low level at first, interest in it expanded, harvest rapidly expanded, beyond what the resource could support, the fishery collapsed, and we no longer have an abalone fishery. And while there are mechanisms that we can put on - using seasons, quotas or trip limits, other kinds of things - you don't always know which of those tools are appropriate. And you have to remember, always, that we're starting, with these new fisheries, with very, very limited information about the size of the resource, its productivity, and its ability to respond to intensive harvest. So, ... we often need some time to begin to develop some information, because in some cases, the fishery may actually be the only way we have of collecting information. We're not getting increased funding for supporting new fisheries, so there's very limited funds. We basically have to borrow from the staff that's dedicated to existing fisheries to try to begin to collect this information. And so, sometimes the fishery itself is a very important data collection tool. However, being a fishery, it ... doesn't operate the same way that a scientific survey would. And that's part of the reason why you need to be cautious, and why a moratorium like this would be very helpful. It helps the department be able to ensure that while we may not have exact data about the size of the resource and its productivity, we can do our best to hold the harvest at a conservative level, until we get enough information that we can then increase the harvest or allow the harvest to conform to what the resource ... can sustain. So, for those reasons, Mr. Chairman, we are in support of this legislation and urge you to pass it. Number 2437 REPRESENTATIVE MASEK asked whether the number of permits is a factor in establishing a quota. MR. BRUCE replied that it wouldn't be a factor in establishing the quota, which would be based on the size of the resource, its productivity, its distribution, and the harvest that it could maintain on a sustained basis. Number 2494 CO-CHAIR OGAN asked whether anyone else wished to testify, then announced that he wouldn't close public testimony at this time. [HB 104 was held over.]
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