Legislature(2001 - 2002)
04/29/2002 02:13 PM Senate JUD
Audio | Topic |
---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 206-LIMITED ENTRY FOR COMM. FISHERIES MS. MARY MCDOWELL, Commissioner at the Commercial Fisheries Entry Commission (CFEC), gave the following description of the origins of HB 206. In 1996 the Legislature enacted a moratorium on the entry of new vessels into the Korean hair crab fishery and in 1997 to the scallop fishery. As part of the Korean hair crab moratorium bill, the Legislature included a provision directing CFEC to work with the Department of Law to draft legislation that would create a vessel-based limited entry program. In response to that legislative mandate, HB 206 was drafted and introduced last year by the House Resources Committee at CFEC's request. MS. MCDOWELL said in its directive, the Legislature asked that statutory language be developed to create a vessel-based program that could be used in fisheries in which limitation to the current, existing program would not effectively meet the purposes of the Limited Entry Act: conservation of the resource and protection of the economic viability of the fishery. In doing that, the Legislature recognized that certain fisheries do need limitation, but that the characteristics of those fisheries make them ill-suited to CFEC's existing program and recognized that the state needs a tool to handle those fisheries. HB 206 was initially introduced as generic legislation as the Legislature directed. It contained a new framework of a program better suited to certain fisheries that CFEC could apply. However, the House passed version of the bill was narrowed down so that it now restricts the use of this program to only the scallop and hair crab fisheries, the two fisheries placed under moratorium. Members of the public expressed concern in the House committees about giving generic authority to limit fisheries under this new method, which diverges considerably from traditional limited entry. HB 206 was amended to create the new program and authorize its use in the two fisheries only. She explained that the program does not limit those fisheries; it would be an alternative available for CFEC's use if it does limit those fisheries. MS. MCDOWELL pointed out the current limited entry program has been in place for nearly 30 years and has been used to limit nearly 65 fisheries. Its design is based on an owner-operator model, which is characteristic of most fisheries. Those fisheries are relatively small and tend to have single owners who invest in their boats and equipment and operate them. Limited entry permits are issued only to individuals, not to the vessels or partnerships. However, in recent years, CFEC has been faced with the need to handle fisheries that have evolved in a different way, the hair crab and scallop fisheries being two of them. They have different ownership and participation patterns and are difficult to limit under CFEC's existing program. HB 206 contains a modified approach that can be used in fisheries that are characterized by larger, more expensive vessels, which are rarely owned by one person. Skippers are often hired to run them and they fish further offshore. If that fishery was limited using the current limited entry program, there is a possibility that the number of participants would increase because of the number of skippers per boat. If the only two choices were open access to the fishery or limitation, it's possible there would be enough risk to the resource that managers would opt to close the fishery rather than endanger the resource, resulting in a loss of jobs and taxes. CFEC also sees this as a fairness issue. In the existing limited entry program, the person who has invested in the fishing operation is the one who is likely to be "grandfathered" in. In the scallop and hair crab fisheries, investors have purchased and maintained vessels and hired skippers. The Legislature must decide who should get the fishing privileges that go with that vessel in the future. The Legislature recognized these problems when it enacted the two moratoria because both fisheries are vessel based. The hair crab moratorium ends in 2003 and the scallop moratorium ends in 2004. CFEC needs to have a tool to limit the hair crab fishery next year so passage of HB 206 this session is important. 2:19 p.m. CHAIRMAN TAYLOR noted that Senator Therriault joined the committee. MS. MCDOWELL said that passage of HB 206 will not effect the existing limited entry program, which will continue to be CFEC's primary method of limiting fisheries in the future. And, even if HB 206 had passed as generic legislation, it contains a default provision to CFEC's regular program unless CFEC could determine that limitation would not be effective. The House-passed version simply creates a tool that would be available to CFEC in just two fisheries. She noted CFEC strongly supports maintaining the traditional person or gear operator based limited entry system as its primary program and recognizes that this legislation does authorize an exception to the fundamental premise of that existing program. HB 206 is a departure from CFEC's existing program and it presents a policy call for the Legislature to make. She stated CFEC believes this legislation is responsive to the Legislature's directive and presents a pragmatic approach to dealing with the evolving nature of Alaska's fisheries and that CFEC is faced with having to limit a few fisheries that do not fit the model that works well in other fisheries. CFEC supports this legislation. SENATOR THERRIAULT asked Ms. McDowell to explain why the two fisheries do not fit the existing model. MS. MCDOWELL explained that the ownership and participation arrangements in the two fisheries differ from the traditional fisheries, which tend to be owner-operator fisheries. In the traditional fisheries, one person or a family owns the vessel and runs it. In the larger boat fisheries, the vessels are large and expensive and tend to be owned by partnerships or corporations and several skippers are hired to run them on a rotating basis. SENATOR COWDERY asked Ms. McDowell to elaborate on the eligibility period. MS. MCDOWELL said that would be determined through the regulatory process when CFEC puts forth a proposal on how it will limit a given fishery. Usually, CFEC looks at four years immediately preceding a limitation. Because these fisheries have been closed for several years, the issue is more complicated. SENATOR THERRIAULT asked if the sale of permits would be similar to limited entry permits. MS. MCDOWELL said it would be very similar to the limited entry permits. The permits would be a use privilege that would be under the control of the state. Transfers would have be requested of the Commission and authorized and they would trade on the open market so when the owner sells the vessel, the fishing privileges would be sold with it. SENATOR THERRIAULT asked if the initial permits would be issued or sold. MS. MCDOWELL said they would issue a permit and grandfathered in. SENATOR THERRIAULT asked if the permits will have a tremendous value. MS. MCDOWELL said they would take on the open market value. CHAIRMAN TAYLOR announced that he would take teleconference testimony. Due to the number of participants, he asked that testimony be limited to two minutes. MS. TERESSA KANDIANUS informed members that she and her husband own a scallop vessel named the Provider. She has reviewed some of the correspondence sent to the committee regarding the number of skippers. The Provider has had five different skippers on it since 1996. She noted there are a lot of on-board processing issues with DEC. DEC processing and wastewater permits are required regardless of whether or not the fish are frozen on- board and vessels must have 100 percent observer coverage. Those requirements are not economically feasible for smaller vessels to comply with. In one respect, it is a large boat, offshore fishery that requires a boat that can handle rough weather, and it requires a lot of permitting not required of a smaller "mom and pop" operation. MR. JASON TANDLER, testifying from Kodiak, said he has been a year-round fisherman for 26 years. He is a former scallop permit holder and vessel owner captain who is now denied access to the scallop fishery. He is adamantly opposed to HB 206 as this bill will not only enable but will guide CFEC to make unconstitutional and unfair laws, specifically giving rights to harvest scallops to a very few select out-of-state boat owners. Traditionally, that privilege has gone to the permitholder operator, for instance in the salmon fishery. HB 206 will set the stage for other fisheries to follow this precedent. By giving vessels the exclusive rights to the fishery, the need to pay an experienced local crew fair wages is eliminated. By either returning the scallop fishery to open access or giving the permitholder operator the rights to fish instead of the boat owner, the state can eliminate the monopoly and economic hardship that has been created by the present and proposed continuation of having the boat owner possessing exclusive rights to a public resource. He stated: His boat will by no means lose its actual value, and if he's willing to offer a competitive opportunity to utilize his already rigged and proven vessel in the scallop fishery, undoubtedly his boat is selected by a permitholder to continue to fish. Should the owner be unwilling to be economically competitive, then he can buy a permit in another fishery the same as you or I. At least a fair situation is created where the economics dictate that the proverbial pie is split up a little more evenly. As a veteran, long time year round fisherman, I maintain that the scallop resource is dramatically underutilized. Some of the areas already being harvested, such as Prince William Sound and Kodiak, could withstand a significant increase and effort. Many areas now permanently closed, for instance most of the bays and near shores of the Alaska Peninsula mainland and the Shelikof Island areas, should be open. At a time when both the state and fishing industry are in financial trouble, we need to approach this very valuable resource on a level where Alaska and its local residents realize some of the profits available. This upcoming season, the state scallop fishery will be a one-boat fishery, this boat being a large out-of-state factory boat delivering its catch to foreign [indisc.] or going back to Washington with its catch. Let's put our state waters back into our state's residents' hands. Thank you. MR. PAUL SEATON, a commercial fisherman from Homer, said HB 206 raises the philosophical debate for corporate ownership of limited entry permits. He noted he is not referring to the offshore scallop fleet that already has federal limited entry permits, he is referring to state licenses only. He stated that Ms. McDowell testified that HB 206 will apply to only a few non- owner operated fisheries, however the tanner crab fisheries, the state water sea cod fisheries and others also fit the description of non-owner operated. The only addition that would be needed to add these fisheries to the list, once this philosophical debate is over, would be a simple statutory change. If HB 206 is enacted, approximately 75 percent of the owner corporations in the hair crab fleet would be outside corporations. He said he is opposed to HB 206. He noted the constitutional amendment allowing for the Limited Entry Act would not have passed if corporations would be able to buy or be issued entry permits. MR. SEATON noted a second judicial issue is the Magnuson Stevens Act. Section 303 authorizes the terms under which the North Pacific Fisheries Management Council (NPFMC) can implement the fisheries management plans, and Section 304 restricts the Secretary from doing any management plans that include a limited access program. The state uses that same authority to extend its jurisdiction so he believes the state would be overstepping its bounds if it tried to put limited access of state origins into federal waters. MR. LEONARD HERZOG, part-owner of a crab boat in Homer, said the hair crab fishery takes place in deep waters in the Bering Sea, outside of state waters. About 20 boats are involved in the fishery. The fishery consists of large vessels that go through different ownership and skipper provisions. It would be problematic to issue a permit to a skipper. He and his partner bought their boat with the privilege of fishing hair crab. He stated: The idea that whatever we do here has to transfer to small boat fisheries in the Gulf I don't think is correct. At the last Board of Fish meeting, most of the tanner crab fisheries in the Gulf were made super exclusive and it was the intent of the Board to try to keep those boats small and owner-operated. However, in the Bering Sea the situation is different where most of the investments are over $1 million and the boats are owned, in our case, by a corporation with two Anchorage owners and one other case is by Yellow [indisc.]. So I think it is a tool the state recognizes is necessary, you know, for the hair crab fishery and I don't see any detriment to non-Alaskans or Alaskans. Thank you. CHAIRMAN TAYLOR took public testimony from those present. MR. JOHN WINTHER, a life long Petersburg resident who has been involved in the fisheries since 1964, said he is part owner of three vessels that participate in the cod fishery and the owner of another vessel that participates in the hair crab fishery. He said the hair crab fishery, when the moratorium is lifted in 2003, will be the only fishery that would not be limited. The NPFMC has put all ground fisheries, and is currently putting all crab fisheries, under a limited entry system. If this moratorium is allowed to expire, it will be the only open access fishery in the Bering Sea so that anyone not included in the current system under federal management will get involved in it. The hair crab fishery is very small, with quotas ranging from 1 to 3 or 4 million pounds. It is currently in a down cycle so very little fishing is going on. This fishery is the only crab fishery where every single crab is brought to shore and processed in Alaska. No catcher-processors are involved. Alaska receives its fish tax from every pound of this crab. The fishery provides about two months of employment in St. Paul, where most of the crab is delivered. He agreed with Mr. Herzog that this fishery occurs in the middle of the Bering Sea and requires large boats and major investments. He noted he has had three or four skippers run his boat during the hair crab fishery and, under the current system, four more licenses would be required. This fishery cannot take a multitude of licenses. While a member of the NPFMC from 1983- 1989, he learned a lot about fisheries management plans and believes HB 206 is "the way to go." MR. JOE KYLE told members he also speaks as an ex-member of the NPFMC and someone who has worked on the moratoria that were established for the Korean hair crab and scallop fishery. He said The Norton Sound CDQ group and the St. Paul CDQ group are invested in the Korean hair crab fishery and they have testified at previous hearings that they support HB 206. He said the Korean hair crab fishery is the only crab fishery in the state for which the NPFMC delegated limited entry authority to the state. The NPFMC delegated crab management to the state but it retained the exclusive right to limit those fisheries, except for the Korean hair crab fishery. He said he believes it is good to give CFEC a tool to use to limit this fishery if necessary. He emphasized that he has participated in numerous limited entry decisions on the NPFMC and every one would always get "a crawl stuck in our throat" over the equity issue. But, after the issue was debated, sometimes for years, having to limit the fishery was the only thing standing in the end. While the NPFMC did not like conveying equity interest, the fishery would be lost if it was not done because of conservation issues. MR. KYLE said he believes Representative Scalzi did an extraordinary job of carrying HB 206 on the House side. He tried to fix the bill many times to pacify the legitimate concerns of some but the goal post keeps moving. He said he personally believes that enough is enough and that CFEC needs this tool. He noted that Mr. Seaton expressed concern about the precedent that HB 206 will create because to apply it to other fisheries would only take a statutory fix. He believes that is an oxymoron because he has never seen a simple statutory fix to any fishery issue. There being no further testimony, SENATOR COWDERY moved CSHB 206(RLS) from committee with individual recommendations and its zero fiscal note. CHAIRMAN TAYLOR announced that without objection, CSHB 206(RLS) would move from committee.
Document Name | Date/Time | Subjects |
---|