Legislature(2001 - 2002)

03/20/2002 03:35 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         CSHB 206(RLS)-LIMITED ENTRY FOR COMM. FISHERIES                                                                    
                                                                                                                                
CHAIRMAN TORGERSON announced HB 206 to be up for consideration.                                                                 
                                                                                                                                
REPRESENTATIVE  DREW SCALZI, sponsor  of HB 206,  said in  1996 or                                                              
1997 a  moratorium was  placed on  the hair  crab and  weathervane                                                              
scallop  fisheries   and  reauthorized  a  few   years  later.  He                                                              
explained:                                                                                                                      
                                                                                                                                
     Under the  direction of the legislature,  the Commercial                                                                   
     Fisheries Entry  Commission was asked to come  up with a                                                                   
     limited  entry plan  for these two  fisheries. The  CFEC                                                                   
     needed a different tool than  was in the toolbox to come                                                                   
     up  with a plan.  Currently, our  limited entry  permits                                                                   
     must go to an entity, a person.  Under this scenario, it                                                                   
     was not  acceptable to create  a limited entry  plan for                                                                   
     these  two  fisheries  that  would  not  exacerbate  the                                                                   
     problem.  If  the  limited entry  system  that  we  have                                                                   
     currently was used, the permits  would have had to go to                                                                   
     more than  one vessel,  because all  vessels have  up to                                                                   
     five different permit holders on them.                                                                                     
                                                                                                                                
     These  are Bering  Sea fisheries  and the  owner is  not                                                                   
     usually  on board  and under  that  scenario, you  would                                                                   
     need multiple permits. That  would have allowed too many                                                                   
     entrants into the fishery. So,  the CFEC felt that if we                                                                   
     would modify the  system with HB 206 and  allow a vessel                                                                   
     based  permit  to  take place,  the  vessels  that  were                                                                   
     involved in the  fisheries for the last few  years would                                                                   
     be  the  potential  recipients   of  the  limited  entry                                                                   
     permits  that would  be made available.  HB 206  changes                                                                   
     essentially  the  manner  in  which  the  limited  entry                                                                   
     system can take place by attaching it to the vessel.                                                                       
                                                                                                                                
He  said  the  bill  had  been  modified  several  times,  because                                                              
initially  CFEC wanted  a tool that  could be  utilized for  other                                                              
fisheries. Because the  bill allows an entity to be  an owner of a                                                              
permit, they thought it best to limit it to these two fisheries.                                                                
                                                                                                                                
REPRESENTATIVE  SCALZI said  that initially,  after the permit  is                                                              
issued to the  vessel, the next generation of  ownership should go                                                              
back  to an  entity. Because  of the  dynamics of  the Bering  Sea                                                              
fisheries,  they  realized  that  the  owners  can't  operate  the                                                              
business while being onboard and often are not there.                                                                           
                                                                                                                                
SENATOR STEVENS  asked him to explain  the concept of  the Limited                                                              
Liability Partnership  (LLP) versus a  state permit and  the issue                                                              
of why the state should let LLP participants in.                                                                                
                                                                                                                                
REPRESENTATIVE SCALZI answered after  an incident when one scallop                                                              
vessel  took  the quota  a  few years  ago,  there  was a  drastic                                                              
measure  to put  a moratorium  on  new entrants  into the  scallop                                                              
fishery. The LLP  and the federal fisheries are  separate, in that                                                              
[the LLP] applies to federal fisheries.  This is for state managed                                                              
fisheries.                                                                                                                      
                                                                                                                                
CHAIRMAN TORGERSON  referred to Section 3, which  deletes "scallop                                                              
fisheries" and inserts  "fisheries." He asked what  else this bill                                                              
would include besides the scallop fishery.                                                                                      
                                                                                                                                
REPRESENTATIVE SCALZI  said this bill just applies  to the scallop                                                              
and hair  crab fisheries and that  language change was made  to be                                                              
consistent with another part of the bill.                                                                                       
                                                                                                                                
TAPE 02-12, SIDE B                                                                                                            
                                                                                                                              
MS. MARY MCDOWELL, Commercial Fisheries Entry Commission, said:                                                                 
                                                                                                                                
     As the sponsor  of the bill said, as far  as the origins                                                                   
     of  the  bill,  this is  something  the  Commission  was                                                                   
     directed  to do by  the legislature specifically.  There                                                                   
     was language in the hair crab  moratorium bill asking us                                                                   
     to  come back  to  the  legislature with  language  that                                                                   
     would  be  generic.  Originally   that's  what  we  were                                                                   
     requested  to do -  to come  up with  a bill that  would                                                                   
     create  this alternative  program that  would be  vessel                                                                   
     based,  that could  be used  in fisheries  that did  not                                                                   
     lend  themselves  to  effective   limitation  under  our                                                                   
     current program.                                                                                                           
                                                                                                                                
She  explained  that CSHB  206(RLS)  is generic  legislation  that                                                              
creates this  program with  specific criteria.  The default  is to                                                              
the  original program  unless the  purposes of  the Limited  Entry                                                              
Act, conservation and avoiding economic  distress among fishermen,                                                              
could not  be met under  the current  program. In that  case, CFEC                                                              
could consider  using this alternative  program, vessel  based, to                                                              
limit that  fishery. During  considerable  testimony in the  House                                                              
Resources Committee, concerns were  expressed about moving towards                                                              
the  possibility  of  a  limited entry  program  based  on  vessel                                                              
ownership and ownership  by entities rather than  by human beings.                                                              
She commented:                                                                                                                  
                                                                                                                                
     The  Commission  feels  very  strongly  that  we  should                                                                   
     always  use the  person-based program  when we  possibly                                                                   
     can. That is  something that has been very  important to                                                                   
     the  way Alaska  manages  its fisheries  and  empowering                                                                   
     fishermen and so on and we are  very supportive of doing                                                                   
     that whenever possible.                                                                                                    
                                                                                                                                
She said CFEC recognizes that the  state is faced with managing or                                                              
limiting a  few fisheries that just  may not lend  themselves well                                                              
to limitation under their current  program, two examples being the                                                              
weathervane scallop and hair crab fisheries. She noted:                                                                         
                                                                                                                                
     These are  very much unlike  the kinds of  fisheries the                                                                   
     state  has had  to limit  before. These  are Bering  Sea                                                                   
     fisheries, large  boat, currently corporately  owned and                                                                   
     for the most  part the owners are not on  board. Most of                                                                   
     them are used  by corporations and partnerships  and use                                                                   
     hired skippers  and relief skippers. There  are a number                                                                   
     of different people running  the boat over the course of                                                                   
     a season.                                                                                                                  
                                                                                                                                
MS. MCDOWELL  said that the  House Resources Committee  recognized                                                              
the need  to have an alternative  program in these  two instances,                                                              
but it  was not  willing to create  a generic  tool that  could be                                                              
used in  any of  the fisheries.  Language in  CSHB 206(RLS)  still                                                              
largely  reflects   the  original  generic  bill,   but  has  been                                                              
restricted to use in those two fisheries only. She stated:                                                                      
                                                                                                                                
     The  question that  arose a  few minutes  ago on page  9                                                                   
     about   "scallop  fisheries"   being  broadened  to   "a                                                                   
     fishery"  was in the  original generic  bill, but  still                                                                   
     makes sense  to include  here. This is  just to  make it                                                                   
     clear in statute that when the  state has an opportunity                                                                   
     to  manage  a  fishery  that the  feds  are  willing  to                                                                   
     delegate management  to the state  to run, that  we have                                                                   
     clear  statutory authority  to accept  that. I think  it                                                                   
     has  always been  the state's  position  that we  should                                                                   
     manage whatever fisheries we  can and in some instances,                                                                   
     the  North Pacific  Council and  the federal  government                                                                   
     are willing to turn over management  of a fishery to the                                                                   
     state. So,  this is to  make sure that generic  language                                                                   
     is in there for the state to accept that.                                                                                  
                                                                                                                                
She said  that phrase really  doesn't have  much to do  with CFEC,                                                              
but rather with state management of a fishery through ADF&G.                                                                    
                                                                                                                                
SENATOR STEVENS  asked how many weathervane scallop  permits would                                                              
be issued with this legislation.                                                                                                
                                                                                                                                
MS. MCDOWELL answered:                                                                                                          
                                                                                                                                
     I  guess it's  important to  start  by recognizing  that                                                                   
     this bill  doesn't limit either  of those fisheries.  It                                                                   
     will only give us the ability  if and when we were going                                                                   
     to  limit  those, to  use  this alternative  program  if                                                                   
     necessary. So  we haven't done the research  to know how                                                                   
     we would  limit these two  fisheries. I think  under the                                                                   
     moratorium there are 21 boats  for scallops and only one                                                                   
     for hair crab.                                                                                                             
                                                                                                                                
SENATOR  STEVENS  asked if  this  framework meets  the  moratorium                                                              
requirement and when it sunsets.                                                                                                
                                                                                                                                
MS.  MCDOWELL replied  that the  hair crab  moratorium sunsets  in                                                              
2003 and the scallop moratorium in 2004.                                                                                        
                                                                                                                                
SENATOR STEVENS asked if they would  have to implement the plan by                                                              
'03 and '04.                                                                                                                    
                                                                                                                                
MS. MCDOWELL said this would be the enabling legislation and:                                                                   
                                                                                                                                
     Once  it  is in  place,  the  Commission would  have  to                                                                   
     research both fisheries, determine  which program - this                                                                   
     doesn't automatically  say we shall limit it  under this                                                                   
     program.  At  that point,  we  would have  to  determine                                                                   
     whether  there   was  any  possible  way  to   limit  it                                                                   
     effectively under our current  program and then we would                                                                   
     have to  make a finding that  we would have to  use this                                                                   
     program  to limit  that fishery,  put  out a  regulatory                                                                   
     proposal proposing  a limitation  and go through  all of                                                                   
     that,  and then adoption  of the  program and have  that                                                                   
     eligibility  criteria and have  it adopted and  in place                                                                   
     before  the  moratorium  expired  - in  order  to  avoid                                                                   
     having an open access fishery happen in the meantime.                                                                      
                                                                                                                                
SENATOR STEVENS asked  if both of these biomasses  in the GHLs are                                                              
managed by the Alaska Department  of Fish and Game (ADF&G) under a                                                              
fisheries management plan from the federal government.                                                                          
                                                                                                                                
MS. MCDOWELL said she thought that was true.                                                                                    
                                                                                                                                
SENATOR STEVENS  said the  reason he brought  it up is  because of                                                              
the recent  news that the  entire shellfish management  plan might                                                              
be reverting  back to the federal  government anyway. He  asked if                                                              
she had talked to ADF&G about that potential.                                                                                   
                                                                                                                                
MS.  MCDOWELL replied  that she  understands that  there had  been                                                              
some conversation  about  what to  do with the  management  of the                                                              
fisheries that have been delegated  to the state under the current                                                              
budget situation,  but CFEC  needs to have  the tools in  place in                                                              
case they are faced with this management dilemma.                                                                               
                                                                                                                                
SENATOR STEVENS agreed they need to be prepared.                                                                                
                                                                                                                                
MS. MCDOWELL  said she thought the  discussion he referred  to had                                                              
to do with where the state had been  delegated authority to manage                                                              
in federal waters and, in this case,  they are talking about state                                                              
waters.  She stated,  "The  feds  are already  managing  scallops;                                                              
they've done the LLP. The state is  managing the licensing for the                                                              
scallops."                                                                                                                      
                                                                                                                                
SENATOR STEVENS said  the point he was trying to  make is if ADF&G                                                              
is cut from shellfish management, all of this is for naught.                                                                    
                                                                                                                                
MS. MCDOWELL responded that she didn't  know if this would be part                                                              
of that or not, since this is in state waters.                                                                                  
                                                                                                                                
CHAIRMAN TORGERSON  asked what would happen without  this bill. He                                                              
asked  if   they  could  issue   limited  entry  permits   to  the                                                              
individuals under current law and not vessels.                                                                                  
                                                                                                                                
MS. MCDOWELL  replied that  the dilemma they  would be  faced with                                                              
would be to decide they couldn't  effectively manage and let it go                                                              
back to  open access,  which could result  in ADF&G's  closing the                                                              
fishery if they felt that was too risky. She said:                                                                              
                                                                                                                                
     The  other  option would  be  to explore  whether  there                                                                   
     would be  a way to limit  it using the existing  program                                                                   
     to get the numbers down to something  that was sensible.                                                                   
     A  policy  call  for the  legislature  is  the  fairness                                                                   
     question  of  issuing permanent  fishing  privileges  to                                                                   
     those who  have been hired  skippers rather  than invest                                                                   
     in the boat.                                                                                                               
                                                                                                                                
SENATOR STEVENS asked how many permits that would amount to.                                                                    
                                                                                                                                
MS.  MCDOWELL  replied that  they  hadn't  done the  research  and                                                              
didn't know the exact numbers.                                                                                                  
                                                                                                                                
MR.  JOHN  WINTHER,  Petersburg  fisherman,  said he  had  been  a                                                              
commercial  fisherman since  1964 in Southeast  and expanded  into                                                              
the Bering Sea with a crab vessel  in 1973. He said the Bering Sea                                                              
is unique because the majority of  vessels are not owner-operated.                                                              
All of  the crab fisheries  are under  a ration program  under the                                                              
North Pacific Fisheries Management  Council (NPFMC) except for the                                                              
Korean hair crab fishery, which was  delegated to state management                                                              
quite a while ago. That is why they  are asking for legislation to                                                              
create a vessel license through the  state with authorization from                                                              
the legislature.  They see no other  way under the  current system                                                              
that  uses  personal  license  permits  to reduce  the  number  of                                                              
permits to where  it can be a rational fishery. He  said, "In fact                                                              
you would be expanding the effort because of multiple skippers."                                                                
                                                                                                                                
MR. WINTHER said another issue is  with the large cost of entering                                                              
the Bering Sea fisheries:                                                                                                       
                                                                                                                                
     You  have a  vessel and  you have  a guy  that owns  the                                                                   
     permit who doesn't have any  interest in the vessel. The                                                                   
     vessel owner  is held  hostage to the  guy that  has the                                                                   
     license. If  he chooses not  to go on your  vessel, your                                                                   
     vessel sits at the dock. If  it's a vessel license, then                                                                   
     you can get  anybody to run the vessel. So,  we have all                                                                   
     the investment  and all the  risk and yet no  license to                                                                   
     fish under the current entry system.                                                                                       
                                                                                                                                
He said that  every boat that goes  up there is qualified  to fish                                                              
as a  catcher vessel. All  the product  is taken to  Alaskan shore                                                              
side plants, processed in state.  The state derives a fish tax off                                                              
of it and jobs are created. He maintained:                                                                                      
                                                                                                                                
     If the  moratorium expires and  there's nothing  to take                                                                   
     its place, this thing will shift  to an offshore fishery                                                                   
     where you  get the catcher  processors involved  and the                                                                   
     state sees little or nothing…                                                                                              
                                                                                                                                
He pointed  out that a  majority of the  Bering Sea  fisheries are                                                              
out-of-state owned,  but in this little fishery, about  24% of the                                                              
boats are owned  by Alaskans. Of the larger crab  fleet about 5 to                                                              
10% of the boats are owned by Alaskans. He stated:                                                                              
                                                                                                                                
     If  this  does  expire  and  it  goes  back  to  federal                                                                   
     management,  you don't want  it there.  By the time  you                                                                   
     get something implemented under  the federal system, new                                                                   
     entrants  come into  being  and they  won't  be able  to                                                                   
     manage the fisheries.                                                                                                      
                                                                                                                                
MR. JIM STONE said he is from the  scallop vessel Ocean Hunter and                                                              
has fished  off  the coast  of Alaska  for 15 years;  10 of  those                                                              
years in state waters. They were  excluded from state waters after                                                              
the moratorium.  They have a federal  license to fish  outside the                                                              
three-mile limit where 80% of the  scallop beds exist. He supports                                                              
HB 206, as the  LLP vessel license limitation has  done a bunch of                                                              
good things  for them.  The boats work  well together,  their crab                                                              
by-catch has gone  way down through voluntary  monitoring and they                                                              
are no longer  racing for fish or  going out in storms.  He noted,                                                              
"We'd like  to see the  state mirror  what the federal  government                                                              
has done in federal waters."                                                                                                    
                                                                                                                                
MR. OLIVER  HOLM said he is  concerned about the precedent  set in                                                              
HB 206  in licensing  vessels, because  an entity  is getting  the                                                              
right to harvest  fish. He thought the concentration  of ownership                                                              
would be very hard to track, especially  with a reduced budget. He                                                              
didn't think it was necessary to  have state limited entry at all.                                                              
The Korean  Hair Crab fishery  is fairly small  and insignificant.                                                              
He said  most of the money  would go out  of state if  the vessels                                                              
were licensed. If individuals were  licensed they would contribute                                                              
to the economy in Alaska more.                                                                                                  
                                                                                                                                
MR.CHRIS BERNS said  he opposes HB 206 because of  all the reasons                                                              
previously stated,  along with the  same concerns people  had with                                                              
SB 329. He believes,  "It's a drastic policy shift  that the state                                                              
has taken."                                                                                                                     
                                                                                                                                
MR. YAKOV REUTOV opposed HB 206 for the reasons already stated.                                                                 
                                                                                                                                
MR. ALAN  PARKS, Homer commercial  fisherman, said he  is speaking                                                              
on his own behalf and opposes HB  206 for a lot of reasons. He has                                                              
participated  in the  fisheries on  a variety  of different  sized                                                              
vessels.  He disagrees  somewhat with what  the sponsor  statement                                                              
(dated 3/21/01)  says,  "Further, it would  award ongoing  fishing                                                              
privileges to  many who have  worked professionally as  hired crew                                                              
and not those who have invested in the fishery."                                                                                
                                                                                                                                
By giving rights to the resource  to vessel owners, he, as a hired                                                              
crew, is  basically a  sharecropper and he  didn't think  that was                                                              
the intent of limited entry laws.                                                                                               
                                                                                                                                
MR.  MALCOLM MILNE,  Homer commercial  fisherman,  opposed HB  206                                                              
because, "It's important that fishing  rights go to the people who                                                              
are fishing  and not those who  are at the dock  out-of-state just                                                              
collecting the money."                                                                                                          
                                                                                                                                
MR.  MAKO  HAGGERTY also  opposed  HB  206  for the  same  reasons                                                              
already stated. He thought the economics  of the hair crab fishery                                                              
determines  the level  of participation  and he  wasn't sure  that                                                              
limited entry was a fair way of managing that fishery.                                                                          
                                                                                                                                
CHAIRMAN TORGERSON reiterated that  he had lost a quorum so he was                                                              
only taking testimony today. He thanked everyone who testified.                                                                 

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