Legislature(2017 - 2018)BUTROVICH 205
03/12/2018 03:30 PM RESOURCES
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SSSB 211-TEMP. TRANSFER OF COMM. FISHING PERMITS 3:30:56 PM CHAIR GIESSEL announced consideration of SB 211 [SSSB 211 was before the committee]. This is the first hearing. TIM LAMKIN, staff to Senator Stevens, Alaska State Legislature, Juneau, Alaska, said SSSB 211 attempts to address the graying of Alaska's fishing fleet. It establishes a temporary permit transfer process to connect the more experienced master fishermen with younger journeymen to train them over a period of time to take over the reins. The intent is to help younger fishermen with some upward mobility into the industry and provide them with some advanced training. The stakeholders, fishermen, and Commercial Fisheries Entry Commission (CFEC), all support this idea. The bill uses terms that convey the purpose of allowing the means for a master fisherman to phase himself out as younger fishermen are trained to phase themselves in. 3:33:07 PM MR. LAMKIN said that Section 25 is the substantive component of this bill and he would start with that in his sectional analysis. Every other section is conforming amendments to existing statute. Section 25 adds a new subsection establishing the Alaska Master Fisher Retirement Transfer Program (AMFRT). In trying to be gender neutral he realizes "fisher" needs to be changed back to "fisherman" with the intent of still being gender neutral. The following is the sectional analysis of the rest of SSSB 211, version 30-LS1369\D: (a) Would require that the transfer not be initiated during an open fishing season, so it's not an impromptu decision. (b) The transfer process is limited to a period of no more than three consecutive years, so it can't be in perpetuity. This bill was carefully crafted to honor the Limited Entry Program and avoids looking like a leasing program. (c) The transfer process must include written binding contract between both parties filed with CFEC. (d) Provides that the primary permit holder be present during 50 percent of the fishing season. (e) The journeyman must use the master's vessel for the fishing season. (f) Provides that both names of master and journeyman are on the permit. (g) The journeyman qualifies to participate in the AMFRT program if the journeyman: 1. applies to the CFEC on a form approved by the ADF&G. 2. Demonstrates having been employed by and be a crewmember for the master for a minimum of one year prior to initiating the transfer process. 3. Meets marine and navigational safety standards appropriate for the fishery and sophistication of the vessel being operated, including demonstrated knowledge of the fishery and of protecting the state's fisheries and marine environment and 4. Paid a required fee. The CFEC is charged with adopting regulations specifying the forms, dates of application, and procedures to be followed in applying for and renewing a temporary permit transfer under the AMFRT program. These regulations will also include reporting requirements for both master and journeyman. 3:38:15 PM SENATOR MEYER joined the meeting. 3:39:06 PM MR. LAMKIN provided the rest of the analysis as follows: Section 1 Conforms with the naming of the program as "the Alaska Master Fisher Retirement Transfer Program (AMFRT." Section 2 Allows the Board of Fisheries to require a fisherman participating in the AMFRT program to be physically present at the fishing site. Section 3 Requires a fisherman participating in the AMFRT program to hold a commercial fishing license during their portion of the transfer process when they are actually fishing under the permit, as well as requiring a crew member license when an AMFRT participant is on the vessel, but not directly fishing under the permit. Section 4 Exempts resident participants of the AMFRT program from having to pay a fee for an annual crew member fishing license. Section 5 Exempts nonresident participants of the AMFRT program from having to pay a fee for their annual crewmember fishing license. Section 6 Exempts participants of the AMFRT program from being eligible for a seven-day crewmember fishing license. 3:41:08 PM Section 7 Incldues in the definition of "commercial fishing license" the entry perjimnit being temporarily transferred through the AMFRT program. Section 8 Allows participants in the AMFRT to deliver or land fish provided they meet the permitting requirements consistent with existing commercial fishing laws and regulations. Section 9 Provides for participants in the AMFRT program to be able to employ crew for purposes of commercial fishing activities, and to transport and sell fish caught commercially. Section 10 Includes criminal penalties for participants of the AMFRT program if they are convicted for failure to be present, on board during commercial fishing activity under their permit. Section 11 Includes the provision that a fish processor or commercial buyer may only purchase fish from permit holders, including participants of the AMFRT program. Section 12 Provides that participants of the AMFRT program must possess and present their permit identification when selling commercial fish caught under their permit. Section 13 Includes AMFRT program participants n common property fisheries and terminal harvest area takings. Section 14 Includes in the duties of the Alaska Commercial Fisheries entry Commission (CFEC) the authority to approve temporary permit transfers for qualifying participants of the AMFRT program, and to adopt regulations to manage the program. Section 15 Specifies that a person may not operate gear in the commercial taking of fishery resources unless that person is an AMFRT program participant. Section 16 Specifies that a crewmember may assist with operation of gear for the commercial taking of fishery resources, provided an AMFRT program participant is physically present and also engaged in the operation of that gear. 3:43:08 PM Section 17 Provides for AMFRT program participants to operate gear within a specified fishery. Section 18 Requires AMFRT program participants to be in possession of their permit at all times when operating the gear for which the permit was issued. Section 19 Prevents the permit activated under the AMRFT program from being used as an instrument of equity or financially encumbered in any way, or to be transferred to repossessed in any way beyond what is allowed within the program, as set forth by the program and related regulations. Section 20 Adds a new subsection establishing that a temporary permit holder under the AMRFT program has the same use privilege and rights in a fishery as is available to an individual holding a regular entry permit. Section 21 Provides CFEC authority to establish annual fees for the issuance and renewal of entry permits, including temporary permits issued under the AMFRT program. Section 22 Establishes that temporary permits issued under the AMFRT program may only be transferred through the CFEC as provided by law and by regulations established by the CFEC. Section 23 Disallows the transfer of temporary permits issued under the AMFRT program except as specifically provided by law or regulation. Section 24 Provides exceptions, established by regulation, for the transfer of temporary permits issued under the AMFRT program, to include emergency transfer of the permit in the event of such things as medical illness, death, military or governmental duties, or other extenuating circumstances resulting in an unavoidable hardship and preclusion from being able to participate in the fishery. Section 25 (Covered at the beginning of the analysis) Section 26 As regards the existing point system for frequent violators of the Entry Permit salmon fishery laws, this section includes the AMFRT program permitee in that point system of respective violations. Section 27 Extends the requirement of the CFEC to provide notice of violations and point-docking for AMFRT permit holders committing violations to salmon fisheries laws, consistent with existing notice requirements for standard permit holder making same violations. Section 28 Extends the assessment of points against a standard permit holder to also include a permit holder under the AMFRT program that such assessment shall be in addition to and not a substitution for other penalties that may be imposed by a court. 3:46:03 PM Section 29 Adds a new subsection to clarify the master shall be given notice of any points assessed against a journeyman participating under an AMFRT transfer agreement. Section 30 Specifies that if a master's or journeyman's salmon fishery permit is suspended for any reason, the CFEC shall not issue another permit for either of them in that fishery during the suspension period, nor may they engage in any manner of commercial salmon fishing activity during that suspension time period. Section 31 Extends CFEC authority to revoke the AMFRT permit in the event that false or misleading information was used to obtain it. Section 32 Establishes an effective date of January 1, 2019. SENATOR VON IMHOF asked what happens now when a retiring fisherman wants to leave his permit to a younger fisherman, in the absence of this program. MR. LAMKIN said first that this bill is missing an owner financing mechanism for these permits, and that is currently being worked on with the Department of Commerce, Community and Economic Development (DCCED). Currently, when a retiring fisherman wants out, he sells his permit out-right to an interested buyer. There isn't a shortage of sellers or buyers right now, but permits can cost over several hundreds of thousands of dollars and that may keep a younger fisherman from entering the industry. Rather than them being left out, this provides an opportunity for them to participate. 3:48:54 PM SENATOR VON IMHOF asked if this measure is being designed for buying the limited entry permit but not the boat and gear. MR. LAMKIN replied yes, and testimony will indicate that once you get the permit, the rest tends to fall in place much easier, although that may be arguable. SENATOR VON IMHOF asked how having the journeyman on the master's vessel interplays with the permit and is three years enough time for pay back. How does a bank loan play into that? MR. LAMKIN replied that those great questions would be ironed out eventually. They want to associate the permit and this training transfer process with not just the master fisherman and the name on the permit, but also the vessel and the gear and the equipment associated with that permit and fishery. Whether three years is realistic is a good question and more time may be needed. SENATOR MEYER, referring to sections 4 and 5, asked what the ratio is between residents and nonresidents having these permits. He wanted to incentivize Alaskans and not nonresidents. MR. LAMKIN replied that he didn't know but could look it up. MR. LAMKIN said section 4 has to do with being a crewmember not being the permit holder, adding that the whole point of Limited Entry is to keep our fleets and the holders of those permits at least substantially in the hands of Alaskans. 3:52:35 PM CHAIR GIESSEL opened invited testimony. BRUCE SCHACTLER, commercial fisherman/representing himself, Kodiak, Alaska, supported SB 211. He commented that resident participation depends on the area and the fishery. Kodiak fisheries are more than 75 percent residents. He explained that SB 211 is designed to be a training program. Although he has been fortunate to have the same crew for many years, many crewmen don't know if they want to be a captain or have what it takes to be one. Are they fish killers? Do they have what it takes to find fish and catch them? Do they know how to handle grumpy crewmembers? Can they deal with the responsibility of running a boat? He said this program was put together by captains with their crewmen. It's not intended for a crewman to amortize the cost of the permit over three years. The idea of three years was after doing this for three years the journeyman will have it figured out. Either he wants to buy a permit and a boat and get into it as a Limited Entry permit holder, or not. 3:57:26 PM Another possible way to transfer a permit is through the central lien registry that CFEC and the Division of Investments is working on. This concept would enable someone to do an owner transfer and if it didn't work out, be able to get the permit back. MR. SCHACTLER said SB 211 doesn't require a complicated rewrite of Limited Entry; it just amends one section that adds the program. The other amendments are conforming language. It will add no more gear to the fishery and it adds safety training for everyone. In all his conversations he hadn't found anyone not in favor of this. He added that another variable is on the table now: the fishing resource itself is "iffy," the loss of codfish in the Gulf of Alaska, for example. 4:00:17 PM FATE PUTMAN, Commissioner, Commercial Fisheries Entry Commission (CFEC), Alaska Department of Fish and Game (ADF&G), Juneau, Alaska, supported SB 211. It heads in the right direction in establishing a new temporary transfer for this type of permit. He had some concerns about language on page 11, lines 5-7, saying the commission is responsible for certifying that the journeyman has the safety training. That and the protection of property along with the state's fisheries and marine conservation are jobs better suited to other agencies like the Department of Environmental Conservation (DEC), and the Alaska Department of Fish and Game (ADF&G), or the Coast Guard for training. He hoped that could be changed. Secondly, this measure would require the CFEC to find a stopping point in order to effectuate the transfer, and some fisheries go throughout the year with no stopping point. SENATOR VON IMHOF said she understood the motivation behind the transfer process but she is not clear if money will change hands for a lease towards ownership for three years. She asked Mr. Putman if he cares if money is transferred prior to that. MR. PUTMAN replied the commission is concerned about leasing, but at the same time, catch profits are normally exchanged between the master and journeyman and that should continue. A provision requires CFEC to maintain and review the contracts between the master and journeyman. 4:03:45 PM CHAIR GIESSEL thanked him and opened public testimony on SB 211. 4:03:49 PM DAVID HASHAGEN, commercial fisherman/representing himself, Ketchikan, Alaska, supported SB 211. It is a step in the right direction in addressing "the graying of the fleet." However, he said a provision is needed allowing a person with a temporary permit to obtain his own vessel. He wants to keep his boat if he were to lease out his permit, because after 54 years, he has a boat that he can put his pickup on and travel up and down the coast from Patagonia to the Bering Sea. And if a person has two sons and turns the boat over to one and the permit over to the other, they would both have to come up with another permit or boat to make the business work. He suggested inserting "or by discretion of the commissioner" into section 25, lines 16-17, after "three consecutive years", as was done for Limited Entry. That language would allow the CFEC to make adjustments for the differences in each fishery. He said he has had the same crew for many years and if a temporary permit holder was added, he wouldn't have a place to sleep. He is in the gillnet fishery and there isn't a whole lot to learn; it's just a lot of hard work, and that's what the guys find out right away. In addition, a journeyman might want to gillnet in a different area than where he fishes his boat. The owner financing concept is an excellent idea. He would probably be the first one to participate in that if something was set up, because now when you turn your permit over to someone and if you haven't got your money, he can look you square in the eye and say: "good luck," and doesn't have to give the permit back. MR. HASHAGEN noted that the Limited Entry Program has been upheld by the Supreme Court three times: you can't discriminate against non-residents. However, he thought the owner financing provision would encourage a master to make a deal with someone he knows who lives in the state. And the three-year timeframe would provide the state with a financial track record for the fishery a person wants the state to finance the permit in. THERESA PETERSON, commercial fisherman/representing himself, Kodiak, Alaska, supported the intent of SB 211. However, the language needs to be tightened to make sure it meets the stated intent, because it changes significantly the integrity of the owner/operator limited entry system, which she thinks, works "really well." 4:13:12 PM Language in section 25, line 16, saying that the transfer cannot be initiated during an open fishing season needs more work. It would be important to determine that this agreement needs to be reached prior to when a fishery opens on a certain date but then it closes and opens throughout the course of the summer, at mid- season, or goes year-round. The "period of not more than three consecutive years on line 17 is not an adequate timeframe for someone to really understand if they want to pursue funding to purchase a permit, and this arrangement should be limited to one-time. The contract should include what the payments are while in the transitional phase (section 25 on page 10, line 20). That would be a good way to keep track of how much money is being extracted out of the fisheries. MAC MEINERS, representing himself/commercial fisherman, Juneau, Alaska, supported SB 211. 4:17:21 PM CHRIS BURNS, commercial fisherman/representing himself, Kodiak, Alaska, supported SB 211. He said the Limited Entry Program has been very successful. The CFEC has done plenty of studies on emergency transfer and fraud issues and hasn't found very much of that going on over the last three to five years. This is just fixing an oversight in the limited entry system. MR. BURNS said this is a way to break into management in the fisheries like the International Brotherhood of Electrical Workers (IBEW). Fishing is a little more complicated than the other trades: the owner needs to deal with insurance, crew, weather, big runs/low runs, and global market fluctuations. 4:21:26 PM JOHN MOLLER, commercial fisherman/representing himself, Juneau, Alaska, supported SB 211, agreeing with many testifiers. He owns three permits and his daughter owns one. They fish in three different fisheries out of Juneau. He said Alaska has some outstanding loan programs for financing permits and boats and this should not turn into a leasing program. The owner operator is an essential part of the overall CFEC program. 4:23:16 PM JIM PETERSON, commercial fisherman/representing himself, Kodiak, Alaska, supported SB 211. He wholeheartedly supports this bill, because like all the rest of them he isn't getting any younger. One of the biggest mountains a guy has to climb is getting that permit and making it easier for that individual is a good thing. 4:24:53 PM CHAIR GIESSEL said they could submit their specific recommendations in writing to her office. Finding no further testimony, she closed public testimony and set SB 211 aside. She invited the sponsor to comment. SENATOR STEVENS, sponsor of SB 211, Alaska State Legislature, Juneau, Alaska, said this issue was brought forward by Mr. Schactler who like a lot of older fishermen, realize they want to be able to pass their business on to somebody else. Passing it on to the son is the traditional way, but some people don't have a child to pass it on to. Getting young people into the industry is a big problem; a vessel and gear that used to cost $15,000 costs $300,000, now is more than most young people can accumulate. This is not a perfect solution, but he is looking forward to making it as good as possible. CHAIR GIESSEL held SB 211 in committee.