Legislature(2001 - 2002)

05/03/2002 01:44 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
         HB 286-FISHING PERMITS/ASSOCIATIONS/ASSESSMENTS                                                                    
                                                                                                                                
REPRESENTATIVE  SCALZI, sponsor  of HB  286, said  the bill  would                                                              
offer the  salmon industry a tool  for consolidation.  He  said it                                                              
would allow  individuals to hold  two salmon permits in  any given                                                              
area.  He said there was often a  lot of inactivity of permits and                                                              
believed  there  were  more  permits issued  in  some  areas  than                                                              
necessary;  more  permits were  activated  when  a fishery  became                                                              
healthy through  an increase  in prices  or salmon  runs.   HB 286                                                              
would offer  individuals in the  salmon fisheries  the opportunity                                                              
to buy and hold  some of the permits.  The permits  would carry no                                                              
privileges,  such   as  extra  fishing  gear  or   time.  He  said                                                              
consolidating  the effort  would keep fishermen  from other  areas                                                              
from coming in and exacerbating the problem of overcrowding.                                                                    
                                                                                                                                
He said  HB 286  was the  highest priority  bill supported  by the                                                              
United Fishermen of  Alaska (UFA) because it would  offer the most                                                              
benefit to the commercial fishing industry.                                                                                     
                                                                                                                                
CHAIRMAN TAYLOR asked Ms. Sue Aspelund to provide testimony.                                                                    
                                                                                                                                
MS. SUE ASPELUND,  Executive Director, Cordova  District Fishermen                                                              
United (CDFU),  said CDFU represents  the fishing families  of the                                                              
Copper  River/Prince   William  Sound  area.  CDFU   believes  the                                                              
industry needs  a variety  of tools  to pursue structural  changes                                                              
necessary to compete in the new global  marketplace.  HB 286 would                                                              
provide  fishermen with  one of  the simplest  and most  immediate                                                              
tools  to  get  fishing  gear  out  of  the  water  in  distressed                                                              
fisheries.                                                                                                                      
                                                                                                                                
CHAIRMAN  TAYLOR  asked  if  there  were  any  questions  for  Ms.                                                              
Aspelund.  There were none.                                                                                                     
                                                                                                                                
MR. VICTOR  SMITH said UFA and  processors are saying that  HB 286                                                              
is part  of a  plan to  revitalize Alaskan  salmon fisheries.   He                                                              
said the main authors of HB 286 were  Mr. David Bedford, Executive                                                              
Director of the  Southeast Alaska Seiners Association  (SASA), and                                                              
Mr. Bob Thorstenson,  president of UFA and stockholder  of "Alaska                                                              
Seafoods."  He said fishermen themselves  had very little input on                                                              
the bill.  The SASA board did not  authorize or direct Mr. Bedford                                                              
to proceed on  its behalf regarding permit stacking.   He said the                                                              
board  authorized  a  committee   to  explore  options  for  fleet                                                              
reduction  but while  that committee  was  exploring options,  Mr.                                                              
Bedford  was also  working on  a plan  of his  own.   He said  Mr.                                                              
Bedford  denied saying  there  was a  deal  that processors  would                                                              
support  permit stacking  in exchange  for UFA's  support to  keep                                                              
global seafoods out.   He said Mr. Bedford now claims  he said UFA                                                              
wouldn't  oppose  the  processors'  new  management  plan  if  the                                                              
processors would support permit stacking.                                                                                       
                                                                                                                                
MR. VICTOR  SMITH said one  of the touted  features of HB  286 was                                                              
that it  could be used in  different ways in different  fisheries.                                                              
He wondered why that would be necessary  because all Alaska salmon                                                              
fisheries were  subject to the  same laws.   He said UFA  and SASA                                                              
also used the  selling point that  HB 286 would be in  the control                                                              
of  fishermen.   He  said  they   had  possibly  been   guilty  of                                                              
involvement  or  trade   on  their  global  decision.     He  said                                                              
nonresidents couldn't  use their permits and were  forced to sell.                                                              
He said the salmon  industry needs to follow the  law.  Key people                                                              
involved in HB 286 had conflicts  of interest and had broken rules                                                              
of accountability.  He said these  same people would probably have                                                              
control over permit  stacking and how it would work.   He believed                                                              
HB 286 would  be as bad for many  Alaskans as it had  been for the                                                              
first round of nonresidents ousted from Alaska fisheries.                                                                       
                                                                                                                                
CHAIRMAN TAYLOR asked  if there were any questions  for Mr. Victor                                                              
Smith.  There  were none.  He  asked Mr. David Bedford  to provide                                                              
testimony.                                                                                                                      
                                                                                                                                
MR. DAVID  BEDFORD, Executive Director,  SASA, said he sat  on the                                                              
board of UFA for SASA and was licensed  to practice law in Alaska.                                                              
He said HB  286 is the highest  priority piece of  legislation for                                                              
UFA   and  has   a  strong   majority  of   support  within   that                                                              
organization.                                                                                                                   
                                                                                                                                
He said  UFA brought HB 286  forward because the  salmon fisheries                                                              
are in  dire straits and  some things need  to be done  to address                                                              
the  economic difficulties  the fisheries  are  experiencing.   He                                                              
said HB 286 would  give them the opportunity to  reduce the number                                                              
of people competing  for a share of a shrinking pie  so they could                                                              
have  a viable  fishing business  to support  the coastal  regions                                                              
that depend on the salmon fisheries.                                                                                            
                                                                                                                                
MR.  BEDFORD  maintained  that  HB   286  was  drafted  to  be  as                                                              
transparent as possible to make sure  that control would be in the                                                              
hands of  the permit  holders.   It was  drafted that way  because                                                              
they were  concerned somebody  might be  able to  use the  bill to                                                              
force something  on fishermen that they  didn't want.  He  said HB
286 would require  a two-thirds vote of all permit  holders before                                                              
any kind of assessment  could be levied.  He  said anybody wanting                                                              
to initiate  the program  would be  required to  go to the  permit                                                              
holders with an outline of the plan  so they had a very clear idea                                                              
of what would  be done and what  their money would be  paying for.                                                              
The program  would be regional so  nobody from another  area would                                                              
have anything to say about a distant fishery.                                                                                   
                                                                                                                                
MR. BEDFORD said  UFA and SASA are asking the  Legislature to give                                                              
them the tools to address their problems.                                                                                       
                                                                                                                                
1:55 p.m.                                                                                                                       
                                                                                                                                
SENATOR THERRIAULT asked who would buy and hold the permits.                                                                    
                                                                                                                                
MR.  BEDFORD  said  the  limited entry  law  specifies  that  only                                                              
individuals  can hold  permits.   He  said  the association  would                                                              
decide it was going  to set up a program and figure  out how to do                                                              
it. They could contract with a permit  holder to send their permit                                                              
back  to   the  Commercial  Fisheries   Entry  Commission   to  be                                                              
extinguished,  or the  association  could contract  with a  permit                                                              
holder to hold  a second permit until sometime in  the future when                                                              
the fishery  was so  lucrative that  there should  be more  people                                                              
fishing.  Individuals would hold the permits at all times.                                                                      
                                                                                                                                
SENATOR THERRIAULT asked if HB 286  might create a situation where                                                              
people would buy low and hope to sell high.                                                                                     
                                                                                                                                
MR.  BEDFORD  said  that  is possible  with  any  kind  of  effort                                                              
reduction  program.  He  said the  Magnuson-Stevens  Act  provided                                                              
effort reduction  programs for federal  fisheries. A  person could                                                              
buy a permit and  try to speculate on it but he  didn't think that                                                              
would be a very  good investment. He said people  currently in the                                                              
fishery would  probably buy a second  permit to hold  because they                                                              
would  receive an  annual payment  from the  association and  they                                                              
would have to compete with one less  boat. He said the association                                                              
should be able to contract for less  money with a person who would                                                              
be gaining the additional benefits of less competition.                                                                         
                                                                                                                                
CHAIRMAN TAYLOR asked if there were  any further questions for Mr.                                                              
Bedford.  There were none.                                                                                                      
                                                                                                                                
MR.  JERRY  MCCUNE, UFA,  said  HB  286  wouldn't work  for  every                                                              
fishery; it would be an option that  some fisheries could use.  He                                                              
said  people probably  wouldn't buy  another permit  in a  fishery                                                              
where  permits  cost $60,000  to  $70,000.   However,  they  would                                                              
probably  buy  another  permit  if  the  permit  cost  $10,000  to                                                              
$18,000.  He said that might be a  good investment for a fisherman                                                              
planning to stay in the fishery.                                                                                                
                                                                                                                                
MR. MCCUNE  said the  associations  would be difficult  to  set up                                                              
because the  permit holders need to  support the idea to  start an                                                              
association.  He  said many safeguards are contained  in HB 286: a                                                              
timeline  on assessments  is required;  a two-thirds  vote of  all                                                              
permit holders would be required  to extend an assessment; and 25%                                                              
of the permit holders  could petition to have a vote  to change or                                                              
remove an assessment.                                                                                                           
                                                                                                                                
CHAIRMAN TAYLOR asked if there were  any questions for Mr. McCune.                                                              
There were none.                                                                                                                
                                                                                                                                
SENATOR  COWDERY moved  CSHB  286(RES) am  out  of committee  with                                                              
attached zero fiscal note and individual recommendations.                                                                       
                                                                                                                                
There being no objection, CSHB 286(RES)  am moved out of committee                                                              
with attached zero fiscal note and individual recommendations.                                                                  

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