Legislature(2019 - 2020)BUTROVICH 205

03/29/2019 03:30 PM Senate RESOURCES

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03:30:32 PM Start
03:30:59 PM SB90
04:59:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        SB 90-COOK INLET: NEW ADMIN AREA;PERMIT BUYBACK                                                                     
3:30:59 PM                                                                                                                    
CHAIR BIRCH  announced the  consideration of  Senate Bill  90 (SB
3:31:18 PM                                                                                                                    
SENATOR  PETER   MICCICHE,  Alaska  State   Legislature,  Juneau,                                                               
Alaska, sponsor  of SB  90, explained the  challenge of  the Cook                                                               
Inlet  fisheries is  different user  groups working  together. He                                                               
said the  issue that SB  90 addresses is  an example of  one case                                                               
where Cook Inlet user groups have come together.                                                                                
He disclosed  that his office  has been working the  past several                                                               
years  with  Cook  Inlet's  sport  and  commercial  groups  on  a                                                               
solution that  he thinks  is a  good start.  He said  SB 90  is a                                                               
result  of sport  and commercial  fishermen  working together  in                                                               
Cook Inlet  towards a  viable solution. SB  90 supports  all user                                                               
groups: commercial, sport, personal  use, and subsistence stress-                                                               
relief  by reducing  the number  of east  side setnet  fishers in                                                               
Cook Inlet by nearly half.                                                                                                      
He opined  that by  reducing the number  of setnet  operations on                                                               
the east  side of  Cook Inlet,  the area will  see a  more viable                                                               
commercial fishery  for those remaining, adequate  production for                                                               
the  processing industry,  and more  fish available  for in-river                                                               
users. SB  90 offers setnet  fishermen, some of whom  have fished                                                               
in the area for generations, a  way to fairly exit the fishery or                                                               
to reinvest in remaining operations  once the 200 permit and site                                                               
reduction plan takes place.                                                                                                     
SENATOR MICCICHE  explained that  in the 1980s  there was  a huge                                                               
migration of  setnet fishermen  to the east  side of  Cook Inlet,                                                               
returns to those river systems  were very large, fishing the area                                                               
was lucrative, and access to  processors easy, therefore the area                                                               
held great  appeal to commercial  fishermen. As pressure  on fish                                                               
stocks increased  and commercial  fishing profitability  began to                                                               
wane,  several  processors  left  the  area.  Over  time,  setnet                                                               
fishermen  saw fewer  and  fewer opportunities  to  fish, and  in                                                               
recent  years  there  have  been very  few  openings  during  the                                                               
fishing season.                                                                                                                 
He disclosed that  he is a Cook Inlet commercial  fishman that is                                                               
not involved  in the specified  fishery, a fishery that  does not                                                               
impact his  income; however, he said  he has seen the  impacts on                                                               
his setnetting neighbors through the years.                                                                                     
He specified that  SB 90 is a voluntary program,  a point that he                                                               
cannot  stress   enough.  The   legislation  would   only  become                                                               
effective after  an affirmative election held  amongst the permit                                                               
holders; a  covenant that provides  the fishermen with  the "last                                                               
He disclosed that  recent polling data showed over  75 percent of                                                               
setnet respondents  were interested  in SB 90's  program concept.                                                               
Once the program  is established, permit holders  would apply for                                                               
the  program  where 200  permits  would  be  drawn in  a  lottery                                                               
fashion  to determine  the  order of  permit  retirement. When  a                                                               
permit is  retired the waters  where the permit was  fished would                                                               
be closed to future commercial fishing.                                                                                         
He summarized  that increased  returns for  in-river users  and a                                                               
more viable setnet  fishing industry will make SB  90's concept a                                                               
win-win for all user groups.                                                                                                    
3:35:38 PM                                                                                                                    
At ease.                                                                                                                        
3:36:11 PM                                                                                                                    
CHAIR BIRCH called the committee back to order.                                                                                 
3:36:19 PM                                                                                                                    
KEN  COLEMAN,   President,  Eastside   Consolidation  Association                                                               
(ECA), Kenai, Alaska,  explained that ECA was formed  a few years                                                               
ago to explore permit or gear  reduction on the east side of Cook                                                               
Inlet. The goal is to  remain or become more economically viable,                                                               
which is the  central premise of limited entry.  The buyback plan                                                               
also makes  sure that the  river escapements are  sustainable for                                                               
optimal use of all user groups.                                                                                                 
MR. COLEMAN  said the setnetting  fishery in Cook Inlet  has been                                                               
around for  a long  time. Eighty-four percent  of the  fishery is                                                               
composed  of  Alaskans  and  over   eighty  percent  are  central                                                               
peninsula residents.  Many commercial fishermen live  right where                                                               
they fish. He proclaimed that  Alaska's commercial fishery "feeds                                                               
the world and the nation."  The Cook Inlet's east side setnetters                                                               
have  been around  about  150 years  and is  part  of a  vibrant,                                                               
diversified economy.                                                                                                            
He specified that the entire Cook  Inlet setnet area has over 735                                                               
permits, spanning  from Goose Bay  up towards Anchorage,  all the                                                               
way to  Homer and across  the way  from Homer. Cook  Inlet's east                                                               
side, which  is the  upper subdistrict  of the  central district,                                                               
has approximately 440 registered setnet fishermen.                                                                              
3:39:03 PM                                                                                                                    
He  explained  that  limited entry  was  promulgated  and  passed                                                               
constitutionally in the  1970s. Limited entry is  the crown jewel                                                               
in terms  of salmon fishing  and other fishing. In  the mid-1980s                                                               
there was  a large influx on  Cook Inlet's east side  for several                                                               
reasons  including   large  biomasses,  record  prices,   and  an                                                               
increased area to put setnets.                                                                                                  
He explained that the intent of  the Cook Inlet permit buyback is                                                               
to reduce  the permit  numbers by  approximately 45  percent from                                                               
440 permits to  240 permits. The primary reason  for reducing the                                                               
permits is that  the area's commercial fishermen  know the number                                                               
of  permit holders  cannot be  supported, that  the area  is over                                                               
capitalized. There  has been an  exponential growth over  time in                                                               
user  groups. The  Kenai and  Kasilof  rivers no  longer have  an                                                               
enhancement  process.  Escapements  in   the  area  are  at  more                                                               
traditional  levels,  and  user   groups  are  asking  for  their                                                               
appropriate piece of  the Cook Inlet biomass. SB 90  is a plan to                                                               
find  a way  for everyone  to live  together. He  reiterated that                                                               
there have been fruitful discussions  with the area's user groups                                                               
and  there  is  hope  that   the  user  groups  can  find  common                                                               
3:41:18 PM                                                                                                                    
He explained that  SB 90 says that if a  setnet permit is retired                                                               
through  the  voluntary buyback  program,  the  waters where  the                                                               
permit was fished  would be closed to  future commercial fishing.                                                               
This will increase  returns to the rivers  and increase available                                                               
fish for all user groups.                                                                                                       
MR.  COLEMAN  noted  that  ECA surveyed  permit  holders  and  80                                                               
percent responded  positively to making changes,  a response that                                                               
indicates people want and need change.                                                                                          
He detailed that a value is  affixed to a setnet permit that will                                                               
be paid.  The methodology to determine  the value is based  on 10                                                               
years of what a permit makes  in Cook Inlet, which is $20,000 per                                                               
year, and an additional $60,000 for tax implications.                                                                           
3:43:43 PM                                                                                                                    
SENATOR BISHOP  asked if the $20,000  per year is a  gross or net                                                               
MR. COLEMAN answered that the amount is gross.                                                                                  
He  said ECA  is looking  to  find a  way for  permit holders  to                                                               
financially  stay  in  business,  to  live  with  other  end-user                                                               
neighbors,   and  to   continue  to   have  healthy   limits  and                                                               
sustainable escapements.                                                                                                        
He  disclosed  that ECA  has  been  working collaboratively  with                                                               
other groups  and noted  the increased  cooperation to  solve the                                                               
fishing issues in Cook Inlet. He  said the fish wars between user                                                               
groups have torn communities apart.                                                                                             
He referenced a  document in his overview, "A Letter  to Erin," a                                                               
letter  in  prose that  was  very  poignantly  done by  a  multi-                                                               
generation fisherman.                                                                                                           
3:45:53 PM                                                                                                                    
He summarized that  Senator Micciche has done a lot  of work with                                                               
ECA over  the past five years  on the legislation proposed  in SB
90. He  opined that SB  90 is a fair  and equitable bill  that is                                                               
voluntary for permit  holders. An affixed number  for the payback                                                               
has been assigned to those who  will be leaving and closing their                                                               
business  forever. There  will be  a  vote by  permit holders  to                                                               
proceed.  He opined  that the  proposed legislation  is the  best                                                               
vehicle for fairness that he has seen for some time.                                                                            
SENATOR KAWASAKI  asked how many  people will participate  in the                                                               
proposed program.                                                                                                               
MR. COLEMAN replied  that he anticipates in excess  of 200 people                                                               
will apply for the program.                                                                                                     
SENATOR KAWASAKI inquired if there  are permits currently held by                                                               
fishermen who are not utilizing the fishery.                                                                                    
MR. COLEMAN replied that he does  not have data to answer Senator                                                               
Kawasaki's   question.  He   said  ascertaining   information  is                                                               
difficult for  setnet fishermen; for  example, he noted  that his                                                               
family owns multiple permits but sells fish on only one permit.                                                                 
3:48:42 PM                                                                                                                    
SENATOR KAWASAKI  asked if his  family owns multiple  permits for                                                               
different sites but only utilizes one of the permits.                                                                           
MR. COLEMAN answered  that all of his family's  permits are being                                                               
used, but as a convenience only  one permit is being used to sell                                                               
product. That way  four people with four different  names on four                                                               
permit cards do not have to go  to the processing plant or a fish                                                               
SENATOR KAWASAKI asked  if there is a deadline in  which to apply                                                               
for the expected 200 possible permits.                                                                                          
3:49:53 PM                                                                                                                    
KONRAD   JACKSON,   Staff,   Senator   Micciche,   Alaska   State                                                               
Legislature, Juneau, Alaska, explained that  the goal of SB 90 is                                                               
to retire  200 permits,  but there is  no expectation  that there                                                               
will  be 200  applications for  retirement  on day  one. He  said                                                               
there  is  no deadline  to  apply,  but  he assumes  that  permit                                                               
holders  interested  in  the  program   will  apply  as  soon  as                                                               
SENATOR KAWASAKI  said he equates  the permits to  liquor license                                                               
transfers.  For example,  there are  a limited  number of  liquor                                                               
licenses in Fairbanks where a  licensee holds on to their license                                                               
because the value  keeps appreciating due to a  limited number of                                                               
licenses.  He asked  if there  is  concern that  a permit  holder                                                               
might want to wait for other  people to jump in first because the                                                               
permits that are remaining would probably appreciate.                                                                           
MR. COLEMAN answered  that he suspects that the  number of people                                                               
who speculate will be rather small.                                                                                             
SENATOR  KIEHL  said  he  appreciates  the  element  to  close  a                                                               
particular site.  He asked  if somebody who  does not  sell their                                                               
permit could fish  close to the area that was  closed through the                                                               
3:52:16 PM                                                                                                                    
MR.  COLEMAN  answered  no;  the  intent is  to  close  the  area                                                               
associated with the buyback.                                                                                                    
SENATOR KIEHL inquired  if a permit holder could  come within 600                                                               
feet of an area that is closed.                                                                                                 
MR. COLEMAN  answered no.  He explained that  there is  a spatial                                                               
requirement  in Cook  Inlet to  keep  nets from  being too  close                                                               
together. There  is a 600-foot buffer  between any part of  a net                                                               
and another net.                                                                                                                
SENATOR  MICCICHE explained  that the  bill does  not change  the                                                               
fishery for  those remaining in  Cook Inlet other than  the water                                                               
that is closed will be closed  and the water that is open remains                                                               
open. The 600-foot buffer does not change.                                                                                      
He  said   regarding  the  speculation  issue,   because  of  the                                                               
participation deadline,  if people  are going to  speculate, they                                                               
are going to speculate. SB 90  sets the baseline for some time at                                                               
$260,000 and the  natural market value of the  permits will occur                                                               
after that.  He said  he expects  that the  buyback will  be more                                                               
attractive to lower  value sites and it's not  enough to purchase                                                               
the higher value  sites, so there will be some  "blending" of the                                                               
permits'  values  for  some time  before  the  remaining  permits                                                               
returns to the natural market tension.                                                                                          
3:55:20 PM                                                                                                                    
SENATOR KIEHL  asked what the  vote threshold will be  for permit                                                               
holders  voting on  the buyback.  He asked  if consideration  was                                                               
given to  set the "vote  threshold" higher  than 50-percent-plus-                                                               
MR. COLEMAN  answered that  there was  no direct  conversation on                                                               
vote  threshold with  respect  to  the bill.  He  noted that  the                                                               
National Oceanic and Atmospheric  Administration (NOAA) had a 50-                                                               
percent-plus-one threshold for  their capacity reduction program,                                                               
a model that will probably be used for the buyback program.                                                                     
SENATOR KAWASAKI  asked if  a permit  holder who  participates in                                                               
the  buyback  could receive  a  permit  to  fish in  a  different                                                               
SENATOR MICCICHE said  he prefers to answer questions  on what is                                                               
in  the  bill.   He  explained  that  if  the   bill  passes  the                                                               
legislature,   the  legislation   goes  before   the  east   side                                                               
setnetters for a final vote after  the area has been divided into                                                               
two  administrative areas.  The first  200 permitholders  who are                                                               
selected  by  lottery  will participate  in  the  buyback.  Their                                                               
permits within the east side setnet  area will be retired and the                                                               
waters where the permit is fished will be closed.                                                                               
He noted  that the fiscal  note is indeterminant  because outside                                                               
funding is being sought; no money will come from the state.                                                                     
3:58:06 PM                                                                                                                    
SENATOR KAWASAKI said he was  trying to ascertain whether all the                                                               
real estate  along the east  side is fully encumbered  by setnets                                                               
or if an  individual could get a permit right  now for a physical                                                               
location that is not currently being fished.                                                                                    
SENATOR MICCICHE answered  that the bill will  reduce the permits                                                               
by 45  percent. New  permits could  not come  into the  area, but                                                               
east side  setnet permitholders could move  around into available                                                               
areas that are not currently  being fished. People could not move                                                               
into areas  that have been closed  by a sale. He  said the number                                                               
of permits in the east side area would be reduced by 200.                                                                       
SENATOR KAWASAKI  asked for  confirmation that  there will  be no                                                               
other permits or  no other availability to fish in  the east side                                                               
fishery portion.                                                                                                                
SENATOR MICCICHE answered that is correct.                                                                                      
CHAIR  BIRCH asked  that  the  sectional analysis  for  SB 90  be                                                               
4:00:02 PM                                                                                                                    
MR.  JACKSON  referenced the  sectional  analysis  for SB  90  as                                                               
     Section 1:                                                                                                             
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding  a  new  section  which  establishes  that  this                                                                    
     legislation  may be  known  as the  East  Side of  Cook                                                                    
     Inlet Setnet Fleet Reduction Act.                                                                                          
     Section 2:                                                                                                             
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding new Legislative findings  and intent relating to                                                                    
     the bill.                                                                                                                  
     Section 3:                                                                                                             
     Amends  AS 16.43.200(b),  giving the  Alaska Commercial                                                                    
     Fisheries   Entry   Commission  (commission)   specific                                                                    
     authority  to  divide  an existing  commercial  fishing                                                                    
     administrative area into two or more separate areas.                                                                       
     Section 4:                                                                                                             
     Amends AS  16.43.200 by adding  2 new  subsections: (c)                                                                    
     Establishes  the   Eastern  Setnet  Subdistrict   as  a                                                                    
     distinct  administrative area  separate  from the  Cook                                                                    
     Inlet Central  District on January  1, 2020.  This area                                                                    
     is  made  up of  the  statistical  areas identified  on                                                                    
     January  1, 2019  as  244-21,  244-22, 244-31,  244-32,                                                                    
     244-41 and 244-42. (d) Provides  that an individual who                                                                    
     has  a  setnet  permit   for  the  Cook  Inlet  Central                                                                    
     District  on  December  31, 2019  is  not  entitled  to                                                                    
     setnet  in the  administrative area  created under  the                                                                    
     section as of January 1, 2020.                                                                                             
     Section 5:                                                                                                             
     Amends AS  16.43 by adding  a new section to  Article 4                                                                    
     which  establishes  the  setnet  entry  permit  buyback                                                                    
     program   for    certain   permits   fished    in   the                                                                    
     administrative area  established under  AS 16.43.200(c)                                                                    
     (added by sec.  4 of the bill). This  section will only                                                                    
     take effect if  approved at a vote (see sec.  8) by the                                                                    
     setnet entry permit holders  in the administrative area                                                                    
     established under  AS 16.43.200(c). If it  is approved,                                                                    
     the buyback  program will  become law  on July  1, 2020                                                                    
     (see  secs.   12  and  14).  Sets   qualifications  for                                                                    
     participation  in  the  program, provides  the  buyback                                                                    
     price for permits, requires  that the purchased permits                                                                    
     be cancelled  and not re-issued, provides  that certain                                                                    
     waters that  were fished  with permits  purchased under                                                                    
     the  program  will  be   closed  to  future  commercial                                                                    
     fishing,  and specifies  other details  of the  buyback                                                                    
     Section 6:                                                                                                             
     Repeals the program on June 30, 2026.                                                                                      
     Section 7:                                                                                                             
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding a new section  which provides how the commission                                                                    
     will  determine  whether  an  individual  who  holds  a                                                                    
     setnet entry permit in the  Cook Inlet Central District                                                                    
     on January  1, 2020 is  reassigned an entry  permit for                                                                    
     the   administrative   area    established   under   AS                                                                    
     16.43.200(c)  (added by  sec.  4 of  the  bill) or  the                                                                    
     portion  of the  Cook Inlet  Central District  that was                                                                    
     not assigned  into the administrative  area established                                                                    
     under AS 16.43.200(c).                                                                                                     
     Section 8:                                                                                                             
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding a  new section  which requires  a March  1, 2020                                                                    
     election be  held by persons in  the new administrative                                                                    
     area  to  affirm support  or  opposition  to a  buyback                                                                    
     program.  Requires  the  commission to  provide  public                                                                    
     notice  of the  vote, hold  public meetings  concerning                                                                    
     the election,  and clarify the  details of  the buyback                                                                    
     Section 9:                                                                                                             
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding a  new section which requires  the commission to                                                                    
     provide  a written  report to  the  Legislature on  the                                                                    
     status of the program no later than January 15, 2026.                                                                      
     Section 10:                                                                                                            
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding a  new section which  requires the chair  of the                                                                    
     commission to  notify the  Lieutenant Governor  and the                                                                    
     Revisor  of Statutes  of the  outcome  of the  election                                                                    
     held under section 8.                                                                                                      
     Section 11:                                                                                                            
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding a  new section which provides  an instruction to                                                                    
     the  revisor to  change the  heading  of art.  4 of  AS                                                                    
     16.43 if the buyback program  is approved (see secs. 12                                                                    
     and 14).                                                                                                                   
     Section 12:                                                                                                            
     Amends the  uncodified law  of the  State of  Alaska by                                                                    
     adding a  new section which  provides that secs.  1, 2,                                                                    
     5, 6, 9 and 11 take  effect only if the buyback program                                                                    
     is approved  at the election  held under sec. 8  of the                                                                    
     Section 13:                                                                                                            
     Effective  Date Clause.  Section  4 of  the bill  takes                                                                    
     effect January 1, 2020.                                                                                                    
     Section 14:                                                                                                            
     Effective Date Clause. Provides that if sections 1, 2,                                                                     
     5, 6, 9, and 11 take effect, they take effect July 1,                                                                      
     Section 15:                                                                                                            
      Effective Date Clause. Except as provided in section                                                                      
     13 and 14, the bill takes effect July 1, 2019.                                                                             
4:06:32 PM                                                                                                                    
SENATOR  GIESSEL  asked  him  to explain  what  the  language  in                                                               
section  5   regarding  AS   16.43.200(b)  actually   means.  She                                                               
commented that it sounds like  somebody volunteers but then might                                                               
decide not to participate in the buyback if they are chosen.                                                                    
MR. JACKSON explained that the idea  is that  permit holders will                                                               
apply  and 200  of  the  applicants will  be  selected through  a                                                               
lottery  for  their  permit to  be  purchased.  Should  something                                                               
change in  a permit  holder's life after  they are  selected, the                                                               
intent is to afford the individual the ability to withdraw.                                                                     
SENATOR GIESSEL  asked if there  was a  provision to fill  a slot                                                               
that has been withdrawn.                                                                                                        
4:08:11 PM                                                                                                                    
MR. JACKSON  answered that lottery  choice 201 would  replace the                                                               
withdrawn lottery applicant.                                                                                                    
SENATOR GIESSEL asked  if the process would be  to select another                                                               
name from the bowl of applicants.                                                                                               
MR.  JACKSON replied  that he  would expect  that the  commission                                                               
will  draw 210  or 225  permits to  establish the  lottery order,                                                               
should someone step back from the program.                                                                                      
SENATOR MICCICHE  added that  some people  think about  buying or                                                               
selling a  business that  they have  had for 10  or 15  years and                                                               
think about the emotion tied to it.  In the case of the east side                                                               
buyback,  there  will  be  families that  have  fished  for  five                                                               
generations and it  is who they are. He said  it might sound like                                                               
a really good  idea at that time to retire  for $200,000 plus tax                                                               
protection for  a total of  $260,000, but  when it comes  down to                                                               
it, some will  say, "Move on down  the list, we think  we are not                                                               
ready."  He  opined  that  the decision  to  participate  in  the                                                               
lottery  is a  very  emotional, significant  opportunity that  is                                                               
tough. There will  not be 100 percent support.  The support level                                                               
for the buyback has been  increasing because the sheer numbers is                                                               
kind of a writing on the  wall situation. He said he assumes that                                                               
a  percentage   of  the   200  will   change  their   mind  about                                                               
4:10:48 PM                                                                                                                    
SENATOR KIEHL asked  if the bill has sufficient  language for the                                                               
Department  of  Natural  Resources   (DNR)  to  extinguish  their                                                               
shoreside leases.                                                                                                               
MR. JACKSON answered yes.                                                                                                       
SENATOR KIEHL noted  that the bill does not speak  to the outside                                                               
funding  mechanism  for the  buyback.  He  asked how  the  actual                                                               
process of funding a repayment will work.                                                                                       
SENATOR  MICCICHE answered  that  there  have been  conversations                                                               
over  the  last several  years  with  federal programs  that  are                                                               
involved  with   conservation  buybacks.  The   discussions  have                                                               
resulted  in a  strong indication  that funding  is possible.  If                                                               
partial  funding is  possible and  the program  is approved,  the                                                               
Commercial Fisheries  Entry Commission  (CFEC) and the  DNR would                                                               
manage the  purchase of the permits  that can be purchased  up to                                                               
the partial amount  and wait for additional  funding. The partial                                                               
funding  scenario has  been discussed  with the  groups as  well.                                                               
There  is a  chance  that the  program does  not  secure the  $52                                                               
million  initially, but  partial funding  will begin  the partial                                                               
4:13:53 PM                                                                                                                    
SENATOR  KIEHL asked  if funding  for the  program is  from grant                                                               
SENATOR MICCICHE answered yes.                                                                                                  
SENATOR KAWASAKI asked him to  follow up regarding the Cook Inlet                                                               
setnet permits declining  over the past 6 years from  846 to 735,                                                               
and if a Cook Inlet setnet permit can currently be purchased.                                                                   
SENATOR MICCICHE  replied that he will  answer Senator Kawasaki's                                                               
question offline as requested.                                                                                                  
4:15:12 PM                                                                                                                    
CHAIR BIRCH opened public testimony for SB 90.                                                                                  
4:16:26 PM                                                                                                                    
DAVID MARTIN,  representing self,  Clam Gulch,  Alaska, testified                                                               
in opposition of  SB 90. He disclosed that he  has fished in Cook                                                               
Inlet  for 48  years. He  said SB  90 addresses  a very  divisive                                                               
issue  amongst the  fishermen and  industry members  and not  all                                                               
fishermen are  in favor  of SB  90. He  opined that  the proposed                                                               
buyback program came from a  handful of setnetters located at the                                                               
mouth  of  the Kenai  River  that  want  somebody to  fund  their                                                               
retirement. He  pointed out that  the department did not  ask for                                                               
the buyback program for management  purposes, they have "time and                                                               
area" in their  management plans under the  constitution. He said                                                               
the  mouth of  the  Kenai River  is the  largest  closed area  in                                                               
Alaska, almost two  miles of closed area;  in comparison, Bristol                                                               
Bay implements their  whole fishery within three  miles of shore.                                                               
He opined  that there are  no conservation concerns on  the Kenai                                                               
River.  SB 90  is  strictly an  allocation  that the  legislature                                                               
should not get into to start  dictating. The Kenai River area and                                                               
the  amount of  gear  is needed  for large  runs  to harvest  the                                                               
surplus, it's  been used in  the past  for surges of  fish coming                                                               
into  the river  and the  setnet fishing  is the  last effort  to                                                               
prevent over-escapement. He opined that  SB 90 is contrary to the                                                               
Magnuson Stevens Act  for maximum sustained yield,  the bill will                                                               
take away a fishing area  for future generations. The Kenai River                                                               
area is the  last area to harvest the surplus.  He opined that SB
90 does not  guarantee that a viable setnet fishery  or fish time                                                               
will  be available  and  there  will still  be  groups trying  to                                                               
eliminate the fisheries in Cook Inlet.                                                                                          
4:19:12 PM                                                                                                                    
CHAIR BIRCH asked  if he is a setnet fisherman  involved with the                                                               
east side setnet fishery.                                                                                                       
MR. MARTIN  answered no. He  said he is  a drifter involved  in a                                                               
lot of fishing  organizations that were implemented  in the 1970s                                                               
that represent all gear types.                                                                                                  
SENATOR KAWASAKI asked if he is  aware that the legislation is an                                                               
optional and  voluntary process as  written and does  that change                                                               
his opinion of the legislation.                                                                                                 
MR.  MARTIN answered  that he  is aware  and remains  opposed. He                                                               
said there are  a lot of other fisheries issues  that needs to be                                                               
dealt  with   besides  the  proposed  legislation   from  SB  90,                                                               
specifically  on invasive  species and  fisheries management.  He                                                               
opined  that  there  are  a  lot of  other  ways  to  manage  the                                                               
fisheries  for maximum  sustained  yield  rather than  allocative                                                               
movements  proposed  in  SB  90  that  will  provide  for  future                                                               
4:20:43 PM                                                                                                                    
PAUL   A.   SHADURA,   President,   Cook   Inlet   Revitalization                                                               
Association  (CIRA), Anchorage,  Alaska, testified  in opposition                                                               
of SB  90. He disclosed that  he has been setnetting  in the Cook                                                               
Inlet for  51 years and  represents a  multi-generational salmon-                                                               
fishing family.                                                                                                                 
He said CIRA is a  qualified salmon fishery association under the                                                               
current  buyback  provision.  CIRA has  submitted  20  "critical"                                                               
points for the committee's review,  a consensus document from the                                                               
association's  board  of  directors  that  is  based  on  several                                                               
outreach meetings with fishermen.  He specified CIRA concerns and                                                               
recommendations as follows:                                                                                                     
   • CIRA has reviewed SB 90 but has not had time to hold public                                                                
     meetings with  other Cook Inlet  setnet fishermen  since the                                                               
     bill was filed.                                                                                                            
   • CIRA supports the efforts  of  Senator Micciche;  however,                                                                 
     CIRA does not agree with SB 90.                                                                                            
   • CIRA has always addressed the issue with a keep  it simple                                                                 
   • CIRA contends that current permits  should be  voluntarily                                                                 
     relinquished without legislation via a third-party entity.                                                                 
   • CIRA contends that SB 90  has Alaska  funding the  program                                                                 
     entirely  with undetermined  cost  associated with  multiple                                                               
   • CIRA does not support closed waters which would connotate a                                                                
     state-approved property right.                                                                                             
   • CIRA believes that closed waters for current setnet holders                                                                
     would be a possible violation of the Alaska Constitution.                                                                  
   • CIRA does not support the  exclusion of  all current  Cook                                                                 
     Inlet  permit  holders   from  a  vote  to   give  up  their                                                               
     individual  rights  to harvest  salmon  in  the entire  Cook                                                               
     Inlet region.                                                                                                              
   • CIRA considers excluding a particular area creates a "super                                                                
     exclusive" zone,  something that Commercial  Fisheries Entry                                                               
     Commission (CFEC) has  had to tackle both in  the courts and                                                               
     within regulation.                                                                                                         
   • CIRA is trying to go forward with a simplest  way possible                                                                 
     and the least amount of conflict.                                                                                          
   • CIRA does not know what the individual funding will be for                                                                 
     the program.                                                                                                               
   • CIRA has been working with the federal delegation for many                                                                 
     years,  there seems  to  be very  promising  funds for  this                                                               
     program, but the  programs have not been set  up through the                                                               
     National Marine Fisheries Service, or NOAA as we know it,                                                                  
4:24:02 PM                                                                                                                    
SENATOR KAWASAKI noted  that Mr. Shadura mentioned  that CIRA has                                                               
a 20-point statement, but the  committee has not received letters                                                               
of support  of opposition to  the bill.  He asked CIRA  to submit                                                               
their statement.                                                                                                                
MR. SHADURA  replied that he  submitted CIRA's  statement earlier                                                               
that day.                                                                                                                       
4:25:03 PM                                                                                                                    
LISA  GABRIEL, representing  self,  Kenai,  Alaska, testified  in                                                               
support of SB 90. She said  her family has owned and operated its                                                               
setnet site  on Kalifornsky Beach  since 1987. SB 90  was brought                                                               
forward  at the  request of  fishermen in  hopes of  revitalizing                                                               
family  fishing businesses.  SB 90  offers fair  compensation for                                                               
fishermen  who voluntarily  choose  to participate  in the  fleet                                                               
reduction and exit  the fishery, and offers  future viability and                                                               
stability  for  those  fishermen,  like herself,  who  choose  to                                                               
remain. In  the past  20 or so  years, the  fishing opportunities                                                               
for the east  side setnet fishery has  declined dramatically. She                                                               
said SB 90 is the correct  solution to the survival and longevity                                                               
of a financially viable setnet fishery.                                                                                         
4:27:37 PM                                                                                                                    
RON  CARMON,  representing  self,  Kenai,  Alaska,  testified  in                                                               
opposition of SB 90. He said  the buyback means more fish for the                                                               
guides  and  dipnetters.  The  dipnet  fishery  takes  about  3.5                                                               
million  fish  from  state  general  fund  and  commercial  sport                                                               
fishermen take $35 million from  the general fund, the state will                                                               
receive nothing. All commercial fishermen  will be cheated out of                                                               
revenue as well as the  state. Last year the commercial fishermen                                                               
gave $146 million to the general  fund and there could be another                                                               
$70  million to  the  general fund  if  the commercial  fishermen                                                               
caught the  13 million  fish that  has been  taken from  them. He                                                               
said the legislature is selling  commercial fishermen's fish, not                                                               
its sites. He  opined that the state needs revenue  and should be                                                               
concentrating on revenue, not spending money and giving income.                                                                 
4:30:09 PM                                                                                                                    
ROMAYNE HINDMAN,  representing self, Kenai, Alaska,  testified in                                                               
support of SB  90. He said he has fished  before limited entry in                                                               
the  northern  most end  of  Cook  Inlet's central  district.  He                                                               
opined that SB  90 would reduce the amount of  nets and bring the                                                               
number  of central  district  setnets  back to  pre-limited-entry                                                               
numbers. The fact that the buyback  is open to all permit holders                                                               
and will benefit all user groups makes the bill a good plan.                                                                    
4:30:58 PM                                                                                                                    
THOMAS HINDMAN, representing self,  Nikiski, Alaska, testified in                                                               
support  of  SB  90.  He  said he  believes  the  bill  will  put                                                               
viability back to the fishery.                                                                                                  
4:32:12 PM                                                                                                                    
TRAVIS  EVERY, representing  self,  Kenai,  Alaska, testified  in                                                               
support of  SB 90. He  said he is  a third generation  Cook Inlet                                                               
fisherman. He  opined that the bill  is a huge step  in the right                                                               
direction for  commercial industry  and all  user groups  in Cook                                                               
Inlet.  The   bill  covers  several  issues   regarding  a  fleet                                                               
reduction that  is paramount for  the plan to be  successful. The                                                               
fleet reduction is entirely on  a voluntary basis. No matter what                                                               
the permit's location is on  the east side setnet, everyone would                                                               
be eligible for  the same monetary value. Most  importantly, if a                                                               
permit is  selected for purchase,  the associated waters  will be                                                               
closed from future use; that  will prevent "back filling" of gear                                                               
in  certain  areas which  defeats  the  purpose of  a  commercial                                                               
MR. EVERY summarized  that SB 90 will  create financial viability                                                               
and stability  within the commercial  fishing industry  that will                                                               
hopefully lead  to a more conservative  and sustainable fisheries                                                               
outlook in the Upper Cook Inlet for all user groups.                                                                            
4:33:36 PM                                                                                                                    
JEFF BEAUDOIN,  representing self, Kasilof, Alaska,  testified in                                                               
opposition of  SB 90. He disclosed  that he has been  a setnetter                                                               
in  Cook Inlet  for  over  30 years,  his  business  is a  family                                                               
operation, and  he has been  involved in fishery  associations as                                                               
He remarked  that since the  bill's introduction,  fishermen have                                                               
never been given the opportunity to  address the bill in a public                                                               
forum regarding concerns and possible  mitigation. He opined that                                                               
the  legislature is  going to  create an  act before  there is  a                                                               
He suggested that the setnet  permits should be qualified through                                                               
Alaska  Department  of  Fish  and  Game  (ADF&G)  and  historical                                                               
records. He noted that permits  have been assigned to area waters                                                               
within the statistical areas along the east side of Cook Inlet.                                                                 
He summarized that his main  concern is unsustainability and that                                                               
ADF&G has not been involved in the plan.                                                                                        
4:37:03 PM                                                                                                                    
MARK  DUCKER, representing  self, Kasilof,  Alaska, testified  in                                                               
opposition of SB  90. He said the law change  is an irresponsible                                                               
and  reckless way  to  address the  fishery.  Limited entry  took                                                               
several years and  finally the federal government  had to approve                                                               
it before implementation. The Cook  Inlet resources are not state                                                               
resources, they are federal resources that belong to the nation.                                                                
He  opined that  the  bill is  a reallocation  of  a resource  to                                                               
create  a super  exclusive fishery.  Permits from  the west  side                                                               
were able to move back and  forth just like permits from the east                                                               
side.  The drift  fleet will  be allowed  to come  into the  east                                                               
side, a  drift net only must  stay 600 feet away  from a set-gill                                                               
4:39:34 PM                                                                                                                    
DEVIN  EVERY,  representing  self, Kenai,  Alaska,  testified  in                                                               
support of SB  90. He disclosed that he is  a high school student                                                               
who represents  the future  generations of  commercial fishermen.                                                               
He said  he believes  that everyone has  a choice  to voluntarily                                                               
get  out of  the  east side  fishery  and try  to  create a  more                                                               
economical, viable fishery for generations to come.                                                                             
MR. EVERY  summarized that  there is  a future  generation coming                                                               
that wants to fish.                                                                                                             
4:40:56 PM                                                                                                                    
GARY  HOLLIER, representing  self,  Kenai,  Alaska, testified  in                                                               
support of SB 90. He disclosed  that he is a 65-year-old lifelong                                                               
resident  of Kenai,  a fourth-generation  family  member who  has                                                               
been an east side setnetter for 48 years.                                                                                       
He opined  that SB 90  is progressive thinking that  could really                                                               
help all user groups. SB 90  is a voluntary gear reduction, a win                                                               
for all  user groups.  The bill  is good  for the  setnetters who                                                               
want  out as  well as  the setnetters  who want  to stay  fishing                                                               
because  the  bill  will  make   the  fishery  more  viable.  The                                                               
personal-use and sport fishery will  benefit as well. He said the                                                               
bill is  the first time that  he can recall where  there has been                                                               
some common ground  to help alleviate the "fish  wars." He opined                                                               
that  300-plus permit  holders  will apply  for  the buyback.  He                                                               
added that  without closed waters  the bill  is moot. He  said he                                                               
would  like to  see his  kids  and grandkids  participate in  the                                                               
4:44:12 PM                                                                                                                    
PAT  ZURFLUH,  representing  self, Kenai,  Alaska,  testified  in                                                               
support of  SB 90. He said  the bill will make  everything viable                                                               
and is a  good to start in  ending the fish wars.  He stated that                                                               
he would be glad to sell his permit and win the lottery.                                                                        
4:45:08 PM                                                                                                                    
MIKE  WOOD, representing  self, Talkeetna,  Alaska, testified  in                                                               
support  of SB  90. He  said  he and  his wife  own a  commercial                                                               
setnet  operation at  the mouth  of Susitna  River. He  disclosed                                                               
that he is the board president  of the Susitna River Coalition as                                                               
well as the chair of the Mat-Su Wildlife Commission.                                                                            
He  noted that  he  has spoken  to many  friends  that have  been                                                               
lifelong east  side setnetters  and considers  the bill  as being                                                               
better for the  river and the diverse user  groups to voluntarily                                                               
remove nets  from the  Cook Inlet's east  side waters.  He opined                                                               
that  the  buyback  program  will lead  to  a  more  predictable,                                                               
viable, and  sustainable fishery in  the future that  will return                                                               
the beach to  the more historical pre-1980s  fishery. The results                                                               
of reducing the number of permits  and leases will show some very                                                               
attainable and positive results for all user groups.                                                                            
MR. WOOD conceded  that some details still need to  be ironed out                                                               
but having two  user groups who have always been  at each other's                                                               
throats, the  sport and the commercial,  agree that SB 90  is the                                                               
right direction, then the plan should be "given a whirl."                                                                       
4:46:52 PM                                                                                                                    
RUSSELL  CLARK, representing  self, Kenai,  Alaska, testified  in                                                               
support of  SB 90.  He disclosed  that he  has been  fishing Cook                                                               
Inlet in the middle district  for approximately 20 years. He said                                                               
there are  400-plus permits  on the east  side district  from the                                                               
bottom line  at Ninilchik all to  the way to Boulder  Point where                                                               
there  are  nets upon  nets.  Closing  the east  side  district's                                                               
waters because  the next fisherman's  ability to catch  more fish                                                               
will increase.                                                                                                                  
He explained that the monetary value  of the buyout is based upon                                                               
$20,000 per  year, an amount  that is poor. Having  a sustainable                                                               
fishery  for  future  generations  must  be  more  than  $20,000.                                                               
Individuals need to  go out and make a living,  right now that is                                                               
not  possible. Making  a sustainable  fishery cannot  be done  by                                                               
closures.  There are  too many  permits on  the east  side to  be                                                               
effective in making living for future generations.                                                                              
4:49:20 PM                                                                                                                    
EUDELL BROWN,  representing self, Arkansas, testified  in support                                                               
of SB 90. He said the bill is a win-win for everyone.                                                                           
4:49:56 PM                                                                                                                    
VICTORIA COLEMAN, representing self,  Kenai, Alaska, testified in                                                               
support  of  SB 90.  She  disclosed  that  she  is an  east  side                                                               
setnetter  that fishes  north of  the Kasilof  River. She  opined                                                               
that  the bill  is  fair  and entering  the  program is  entirely                                                               
voluntary. The monetary price is  the same for all, regardless of                                                               
where a  permit holder fishes  on the east  side. If a  permit is                                                               
offered for sale,  the associated water is closed  to further use                                                               
whether  it is  leased or  not,  which allows  for the  remaining                                                               
setnetters to  have an opportunity  for financial  viability. The                                                               
bill  won't allow  other setnetters  to "back  fill" which  would                                                               
defeat  the whole  purpose. Financial  viability was  one of  the                                                               
basic tenants of limited entry.                                                                                                 
She said the  setnetters will vote on the  bill's acceptance, all                                                               
setnetters will have  an equal chance to be drawn  from a lottery                                                               
with no preferential  treatment, and the bill may  help to defuse                                                               
the "fish wars."                                                                                                                
4:51:19 PM                                                                                                                    
CHRIS  EVERY,  representing  self, Kenai,  Alaska,  testified  in                                                               
support  of SB  90. He  said  he is  an east  side setnetter.  He                                                               
opined that  the bill  is about  a group  of people  doing what's                                                               
best for the Kenai and Kasilof rivers.                                                                                          
He said the permit consolidation effort  is a first step that the                                                               
east  side setnetters  can do  for  the health  of their  fishery                                                               
while benefitting all user groups. He  opined that it is time for                                                               
each group to  come to the table with a  plan for their allocated                                                               
portion of  the fishery. The governor  has said he would  like to                                                               
end  the "fish  wars" in  the  upper Cook  Inlet, something  that                                                               
could  be done  by  the  net setters  and  other  user groups  by                                                               
curtailing their desires  to acquire a larger piece  of the fully                                                               
allocated fishery and to start  concentrating on how to enjoy the                                                               
fish that  are available  at current  levels. He  said SB  90, if                                                               
implemented, could create an unobstructed  corridor for fish from                                                               
Ninilchik to the Kenai River.                                                                                                   
4:52:58 PM                                                                                                                    
JOEANN WICHERS,  representing self,  Kenai, Alaska,  testified in                                                               
support of SB  90. She said her family started  setnet fishing on                                                               
north  Kalifornsky  Beach  in  1986. She  noted  that  he  family                                                               
currently has five  permits north of Kalifornsky  Beach. She said                                                               
during  her  family's 34  years  of  commercial fishing  in  Cook                                                               
Inlet, they have seen the increase  in fish pressure by many user                                                               
groups  including  commercial  fishing,  subsistence  use,  sport                                                               
guides, and sport fishing.                                                                                                      
She  said her  family  supports SB  90 to  reduce  the amount  of                                                               
permits on the east side setnet  fishery and to close the waters.                                                               
The reduction will  relieve pressure on the salmon  stock of Cook                                                               
Inlet  and allow  more fish  to  get to  the river  for all  user                                                               
groups.  SB  90 will  create  a  more  viable fishery  for  those                                                               
setnetters  who  remain, but  the  bill  also  allows them  as  a                                                               
volunteer in  the program to  continue on to other  businesses of                                                               
their choice to help support their families.                                                                                    
She said  her family has found  it very difficult for  to make it                                                               
setnetting anymore. Setnetting  used to be amazing, but  a lot of                                                               
permits have  moved in and there  is a need to  reduce permits to                                                               
get the fishery  back to the way  is used to be so  there will be                                                               
more space for the fish to get through.                                                                                         
4:54:52 PM                                                                                                                    
KEITH PRESSLEY,  representing self, Ninilchik,  Alaska, testified                                                               
in support  of SB 90.  He disclosed  that he has  four setnetting                                                               
permits between  himself and his son.  He opined that SB  90 is a                                                               
win-win situation  where removing permits would  greatly increase                                                               
fish  for people  staying in  the fishery  as well  as show  good                                                               
faith to the  sports fishermen that the east  side setnetters are                                                               
helping them. He added that there  seems to be a problem with the                                                               
funds and suggested  that consideration be given to  look at what                                                               
the  crab  industry   did  when  they  reduced   their  fleet  by                                                               
increasing  their fish  tax for  borrowing money  to pay  for the                                                               
4:57:28 PM                                                                                                                    
MARILYN KEENER,  representing self,  Kenai, Alaska,  testified in                                                               
support  of  SB  90.  She  disclosed that  her  family  has  been                                                               
involved in the setnet fishery since  1978. She opined that SB 90                                                               
is a solution  and a healing element for the  resource as well as                                                               
the people who  have been effected greatly by  the problems which                                                               
have  arisen over  the  years. She  said SB  90  is an  equitable                                                               
solution that will care for the resource and the people.                                                                        
4:58:59 PM                                                                                                                    
CHAIR BIRCH closed public testimony.                                                                                            
4:59:08 PM                                                                                                                    
CHAIR BIRCH held SB 90 in committee.                                                                                            

Document Name Date/Time Subjects
SB90 Version G.PDF SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Sponsor Statement Version G.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Sectional Summary Version G.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Fiscal Note-DFG-CFEC-3-22-19.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Fiscal Note-DNR-MLW-3-22-19.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Fiscal Note-DFG-DCF-3-22-19.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Eastside Setnet Area Map.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 Setnet Sites With DNR leases.pdf SRES 3/29/2019 3:30:00 PM
SB 90
SB90 ECA Presentation 3.29.19.pdf SRES 3/29/2019 3:30:00 PM
SB 90