Legislature(1997 - 1998)
01/24/1998 10:08 AM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
January 24, 1998
10:08 a.m.
Dillingham, Alaska
COMMITTEE CALENDAR
WESTERN ALASKA ECONOMIC DISASTER BRIEFING AND TESTIMONY
TAPE(S)
98-5, SIDE(S) A & B
98-6, SIDE(S) A & B
98-7, SIDE(S) A & B
CALL TO ORDER
Representative Ivan, Chairman, convened the House Community and
Regional Affairs Standing Committee meeting at 10:08 a.m. in
Dillingham.
PRESENT
Committee members present at the call to order were Representatives
Ivan, Dyson, Joule, Ryan and Sanders; Representative Ogan was
present at the call to order via teleconference. Representative
Kookesh was absent. Also attending via teleconference were
Representative Phillips, Speaker of the House, and Representative
Moses.
SUMMARY OF INFORMATION
TAPE 98-5, SIDE A
Number 001
CHAIRMAN IVAN IVAN gave opening remarks.
Number 115
DEBORAH TENNYSON, Department of Community and Regional Affairs
(DCRA), Dillingham 99576, (907) 842-2238, Coordinator of Bristol
Bay Coordinated Response Partnership (CRP) team, discussed the
Bristol Bay CRP process and the adopted plan that was presented to
the Department of Commerce.
Number 273
REPRESENTATIVE JERRY SANDERS asked Ms. Tennyson what the
government's process is and how they were doing things. He also
explained that when farmers would have a bad harvest in the
Midwest, it seemed as if all the money that the government provided
would go directly to the farmers in the form of loans, some of
which were long-term. The loans had low interest and did not have
to be paid until they had a good harvest. Representative Sanders
said it seemed like the same situation here, except most of the
money is going to go into local government entities. Mr. Sanders
asked Ms. Tennyson if this is a change in philosophy by the federal
government or just a way we do things here. He asked: Why isn't
more of the money going to the individuals that are affected?
Number 286
MS. TENNYSON responded that there are not the kind of programs for
fishermen that there are for farmers.
Number 309
REPRESENTATIVE SANDERS commented on the federal government's slow
response.
Number 312
MS. TENNYSON responded that the Commerce people were not going to
allow Magnuson-Stevens Act funds to go directly to fishermen. The
only thing they felt comfortable with was a loan program, and there
really was not very much money in the program for that.
Number 323
REPRESENTATIVE FRED DYSON referred to letters from the Bristol Bay
Borough and the Lake and Peninsula Borough, which mentioned that
the Governor had stated he would propose emergency tax relief
through the municipality. Representative Dyson then asked Ms.
Tennyson what tax they are talking about relieving and whether the
Administration had anything working on that.
Number 330
MS. TENNYSON responded that the original plan that was submitted to
Commerce asked for municipal tax replacement, that is, the taxes
that the municipalities ordinarily collect on either raw fish tax
or on a shared fishery business tax. That was denied by Commerce.
She stated that the Governor's office is now looking at, at the
least, providing to those same municipalities, including the
boroughs that ordinarily get the fish tax. The other part of the
shared fishery business tax that ordinarily the state keeps, as she
understands it, is in addition to the supplemental being asked for
as a match for this Magnuson-Stevens money. In other words, if
Bristol Bay Borough (indisc.--muffled) the state collects its 3-to-
6 percent in the business tax on the fisheries, they provide about
50 percent of that back to the borough. What the Governor is
proposing is that instead of 50 percent being provided back, that
all of it be provided back.
Number 346
REPRESENTATIVE JOE RYAN mentioned testimony from fishing villages
that folks don't have enough money to gear up to go fishing next
year, and the money that is going to be provided here will come
after this fishing season, so it is not going to help. He asked
Ms. Tennyson if she had an average on how much it would take to get
a fisherman ready for the fishing season.
Number 357
MS. TENNYSON responded that it would be about $15,000; it might
vary up or down. She stated that one of the major canneries in
Dillingham said that last year, a fisherman's debt to them was
about $14,000 for driftnetters and $10,000 for setnetters. Not
only do they have gear-up costs, but also they are looking at debts
that have not been retired at this point from last year. It is not
clear how canneries and processors are going to handle credit to
extend to the fishermen coming into this next year.
REPRESENTATIVE RYAN asked what they could do, if possible, for
these people to go out and try to fish.
MS. TENNYSON responded that there has been that hope that a Small
Business Administration (SBA) loan program would help and that also
unemployment insurance to fishermen and crew would be of
assistance; that is hovering on the horizon. She said the state
knows that these jobs programs are coming too late. She expressed
hope that some of them can go into the villages before the fishing
season. But the way things have dragged on, it does not look that
way.
Number 397
REPRESENTATIVE REGGIE JOULE commented that the committee had heard
from some communities that they were sore because they were left
out of the process. He asked Ms. Tennyson whether she has run into
any of that and whether all the communities are covered that should
have been covered under the declaration.
Number 399
MS. TENNYSON responded that in Bristol Bay, all the villages are
included.
Number 419
CHAIRMAN IVAN acknowledged Representative Carl Moses and his own
staff member, Pat Walker, on teleconference.
DAVE McCLURE, Dillingham 99576, (907) 842-5956, representing
Bristol Bay Housing Authority (BBHA), commented that last summer
when this first occurred, the BBHA came up with a program to help
reduce homeowner payments. He commented on community problems due
to low income. Mr. McClure stated that the BBHA is in support of
the proposed program, and he thinks that it is important for them
collectively, as a group, to react on the federal level and get
some amendments to the Magnuson-Stevens Act.
REPRESENTATIVE DYSON asked Mr. McClure, "Because you are getting
requests about utilities to be shut off, have the local utilities
and local government, in the past, made some provision where they
can continue to keep the service going and get paid out of next
year's fish ticket receipts or permanent fund dividends?"
MR. McCLURE said yes.
REPRESENTATIVE DYSON asked if the housing that is being financed
through various government programs here is technologically
appropriate for this climate.
MR. McCLURE said yes.
JOE McGILL, Dillingham 99576, (907) 842-2452, former member of the
House of Representatives and now a commercial fisherman, stated
that he does not want to see the local governments handle the
money; he would like to see the money go to the fishermen.
Number 531
REPRESENTATIVE GAIL PHILLIPS, Speaker of the House, spoke via
teleconference, thanking the committee for going to the Kuskokwim
and Bristol Bay areas to talk to the people about the disaster.
She also expressed that Representative Ivan has kept her office and
the caucus informed of the issues and the plans. She stated, "We
in the House are waiting for the recommendations from
Representative Ivan and his committee, following their visit to the
Bethel and Dillingham regions. We are very concerned about the
long-term economic effect this region will face due to the
diminished returns of 1997. The economic disaster also greatly
affects the urban centers as well. The fishermen in my area, in
the Kenai Peninsula and Homer, are affected by what happened in
Bristol Bay. It is important that the plans that we put into place
be used to jump-start the economies in the Kuskokwim and Bristol
Bay communities. We are giving consideration now in introducing
appropriation legislation in order to provide quicker assistance,
but we will wait till the report from the committee before we
proceed. I have every confidence in Representative Ivan and the
committee that they will take your concerns and bring them to us in
Juneau."
REPRESENTATIVE SCOTT OGAN (via teleconference) asked Mr. McGill
what he would think of using the money to buy back out-of-state
fishing permits. Representative Ogan stated, "According to my
calculation, I think if we use the money that was allocated to
Bristol Bay, which I believe to be about $4.5 million, I understand
that permits are going for around a hundred thousand to a hundred
and ten thousand apiece. I could probably buy 40 to 45 permits
back from out-of-state people and reduce the out-of-state
competition. Would that be something the community might get
behind?"
Number 571
MR. McGILL said yes, but it does not help the fishermen now.
REPRESENTATIVE OGAN said he thinks we all realize that the long-
term outlook for fishing is not too good with the increased
competition of farmed fish. He mentioned the possibility of
reducing the number of people, especially out-of-state people, that
are fishing.
MR. McGILL responded that he would also like to see some of the
permits bought back, but in the past they have been through talking
about buying back permits. He said the cheapest ones to buy are
from these people that are desperate at the present time, who live
here. Most of those from out of state have other businesses.
REPRESENTATIVE OGAN responded that maybe this money could be
directed in a loan program so that more Alaskans could buy some of
these permits from people from the Lower 48. He stated that he did
not know if they could legally structure it that way, but it would
be worth looking at.
MR. McGILL agreed it would be worth looking into.
TAPE 98-5, SIDE B
REPRESENTATIVE DYSON asked Mr. McGill whether he knew of any local
processors in the bay who are close to bankruptcy or who might not
make it through this disaster.
Number 593
MR. MCGILL responded that from what he had heard from some, they
are in trouble. He also heard of new ones wanting to come in.
REPRESENTATIVE DYSON continued to say that he knew that some of the
suppliers he bought from said that only about 20 percent of the
fishermen were paying for the electronics, nets, and so forth that
they bought in the Naknek-King Salmon area. Representative Dyson
asked Mr. McGill whether it is similar in Dillingham.
MR. McGILL responded that he understands it is similar.
Number 646
REPRESENTATIVE RYAN commented that the committee had heard some
criticism of the Alaska Department of Fish and Game (ADF&G) and had
also heard people asking them to give them more money to do a
better job in managing fish. Representative Ryan asked Mr. McGill
what his overall assessment was on how the ADF&G programs worked.
Number 653
MR. McGILL responded that there is a need for more money for smolt
programs and that the ADF&G should have more people out in the
field.
Number 698
REPRESENTATIVE JOULE commented that buying back permits with the
disaster funds would help in the short term; however, there are
individuals that really need these dollars.
MR. McGILL stated again that he thought the money should go to the
individual fishermen.
CHAIRMAN IVAN commented that there will be testimony on
recommendations to address the current emergency needs. He said
there would also be recommendations to address the long-term
effects. Chairman Ivan stated that buying back permits is worth
looking at for the long-term package.
Number 755
MOSES KRITZ, Mayor, City of Togiak, P.O. Box 99, Togiak, stated
that he supports the loan program because it is a fast fix for some
of the people in Togiak.
Number 790
VAL ANGASAN, Box 1389, Dillingham 99576, (907) 842-3339, testified
that he is a fisherman for Dillingham, born and raised in Naknek.
Mr. Angasan stated that the people of the Naknek and Kvichak areas
are hurting pretty bad financially. He also commented on making
Bristol Bay more independent because what is happening is too slow.
Mr. Angasan requested getting the SBA to do something; he also
requested closer coordination between the Governor's staff and the
legislature. He stated that this is a natural disaster: They have
no fish.
Number 958
TERRY HOEFFERLE, Executive Director, Bristol Bay Native Association
(BBNA), P.O. Box 310, Dillingham 99576, (907) 842-5257, expressed
that the response to this disaster has been too little, too late.
Mr. Hoefferle thought that people in federal agencies and fish
biologists are still trying to figure out what happened. He stated
that many people believe that this past summer is not the last they
are going to see of poor fishing. When this situation first
happened, people saw that there were some immediate needs like
fuel, electricity and food. That was in August. In terms of the
long-term approach, it was immediately apparent that what the
fishermen needed was not simply the ability to borrow money because
they went in the hole this year. What was needed was long-term,
low-interest loans to help people recapitalize their fishing
businesses. Mr. Hoefferle expressed his gratitude to the Governor
for pursuing an appeal to the FEMA declaration.
REPRESENTATIVE DYSON asked Mr. Hoefferle whether many of the
affected fishermen have equity in a home to where they can borrow
on it, and whether the banks have been responsive to people taking
that approach.
MR. HOEFFERLE responded that a third of the housing stock in the
region is public housing, and he did not think that people have
that capacity. He stated, "One of the things to securing outside
funding to help through this difficult time is the same problem we
experience when a limited entry permit comes on the market. Our
local people often don't have the collateral, they don't have a job
and income stream outside the fishery. It makes it difficult to
get into the capital market. Many folks owed the canneries money
before this bad season."
REPRESENTATIVE DYSON asked whether the local banks had been
cooperative if people did have equity in their home or other
property.
MR. HOEFFERLE said yes.
REPRESENTATIVE SANDERS commented that if you have equity, the banks
cooperate. He then asked Mr. Hoefferle, "When you look at the
long-term problem for the local fishermen, are there any
organizations out here that are just for local fishermen, that
protects, lobbies and works for just the local fishermen, and if
not, is there a possibility that you could pull one together to
protect yourselves from people coming from outside and taking a cut
out of your income?"
MR. HOEFFERLE responded that yes, there were probably 2,800
driftnet and setnet Bristol Bay permits that were issued by the
limited entry commission 15 to 17 years ago. Of those, 1,376 were
issued to Bristol Bay residents. Fifteen years later, there are
9,035 Bristol Bay salmon permits; about 30 percent of the permits
have left the region. Mr. Hoefferle commented that his fear is
that the people who are most likely to sell their permits are the
local people that don't have an outside job in order to support
their families.
REPRESENTATIVE SANDERS commented that there should be some way to
form some sort of co-op for protection, so that during good years,
the fishermen can put back 1 percent to buy permits or lease them
to local people.
MR. HOEFFERLE responded that there are fishermen's groups
throughout the bay, and they serve different purposes. He also
stated that if a group of people sat down and looked at things that
could be done to correct that problem, and with participation of
the legislature, it might be able to be done.
TAPE 98-6, SIDE A
Number 073
PETER CHRISTOPHER, Mayor, City of New Stuyahok, (907) 693-3171,
stated that the community did a survey of all the permit holders
and crew members from last summer. There are 34 permit holders and
77 crew members. The majority of the community relies on
commercial fishing. About 5 percent of the people have winter jobs
in the community. Mr. Christopher also stated that he had spoken
with the local corporation board and discussed the disaster. They
all came to the decision of pooling all the resources and whatever
grants they got; they would distribute and provide part-time jobs
to people with two weeks on, two weeks off. He stated that they
were able to do that with three different projects last fall. They
also had contacted the Alaska Village Electric Cooperative (AVEC),
which supplied power in the community. On the corporate side, the
board of directors approved two small dividends to the local
people. But there are still a lot of people who can't pay AVEC
because they have not made enough money. Mr. Christopher would
like to see a grant program as soon as possible; the people are in
desperate need of groceries and fuel.
REPRESENTATIVE DYSON asked Mr. Christopher if most of the newly
constructed homes in the village have no provision to heat
partially by wood.
MR. CHRISTOPHER responded that of the 13 newer homes, some are
heated by furnace only.
REPRESENTATIVE DYSON asked if the people that do have wood stoves
use them mostly to heat in tough times like this.
MR. CHRISTOPHER responded that they do use their wood stoves.
CHAIRMAN IVAN commended the community of New Stuyahok for their
reactions to the situation.
Number 257
WILLIAM GUNLICKPUK, New Stuyahok, (907) 693-3171, commented on the
effects of the economical disaster on New Stuyahok. The main
things he noted are lights and home payments. Next is oil and gas.
Without gas, they cannot get firewood or go hunting.
Number 340
TIMOTHY WINHOLLA, SR., New Stuyahok, commented on the disaster and
wanted to know when the money could be available.
Number 391
DENNIS ANDREW, Sr., New Stuyahok, (907) 693-5507, testified that
he is a commercial fisherman and also works for the Department of
Transportation in the airport. His main concern is the canneries
are not really doing anything for credit. He also stated that the
BBNA issued out $800 to the community, but some families got turned
down for that $800 and are hurting. He said that he is in favor of
a grant program instead of a loan.
Number 424
TERRY WASSILIE, Box 14, Newhalen 99606, (907) 571-1410, commented
that he also supported the grant program instead of a loan program.
He also spoke about the high cost of living in the communities. He
would like to see the funds go to the fishermen.
Number 471
ROBERT LiPUMA, P.O. Box 310, Dillingham 99576, (907) 842-2262,
representing BBNA as the work force development director, commented
on state services provided in Bristol Bay. He believed that they
need to get equitable service so that they are prepared for a
disaster like this in the future. He did not think that the state
had the most basic services available to the people in Bristol Bay
this summer. The BBNA general assistance program received 150 new
applications in one month, compared to six new applications in the
previous year, which is a good indication of the needs. Child
care, employment and training have also been affected. Mr. LiPuma
also stated that the BBNA, on their own, without state assistance,
opened a one-stop shop so that the residents in Bristol Bay can
call. They will try to coordinate whatever services they need,
such as general assistance, employment/training and child care,
whether they need it from the Native association or the state. It
is essential for the future that they get at least minimal local
services available to the people of Bristol Bay.
Number 527
TERRY WASSILIE commented on there not being any jobs or income to
get fuel for hunting or wood.
Number 540
JOANN WASSILIE, Newhalen, (907) 571-1410, stated that she agrees
that the money should go to the fishermen, but if that is not the
case and it goes into a community grant, then they should get a
hold of the community first before they decide where the grants
would go.
MS. TENNYSON (DCRA) commented that community itself has the
complete option as to who they want to run the program, and the
applications will be sent out to the community. She also stated
that they are asking for a joint resolution from the tribal council
and the city council on determining which of those two entities
they want to run the program. The real idea is to get the money
down to the villages and let the local government run the program.
REPRESENTATIVE JOULE asked Ms. Tennyson whether the grant
applications are noncompetitive.
MS. TENNYSON responded that they are noncompetitive, and what they
are looking at doing is looking at those numbers for permit holders
and crew, and allocating an available amount per community. She
said they are aware of the post office situation in Newhalen and
are going to address that in a different way. The application will
not be village-against-village or region-against-region. There
will be an allowable amount based on the total divided by the
number of permits and crew for each village, and this is the amount
that the community can apply for.
REPRESENTATIVE RYAN commented that in Bethel, they had
conversations as to various structures of the city, borough and so
forth. The bureaucracy wanted to deal with an organized and
recognized entity, versus a tribal council or something that is
newer in the form of a governmental entity. He said the committee
just wants to make sure they don't run into that problem and that
the department recognized that whoever is going to be there as a
entity is eligible to receive the money, and it did not have to
necessarily be an organized city or organized community.
MS. TENNYSON said that is the way the DCRA is approaching it. The
DCRA actually does the capital matching grants to tribal councils
and so forth, so the whole idea is that the local community decides
who should run it and they apply; it is their choice. It makes no
difference whether it is a municipality, tribal government or
borough; it is whatever the community wants.
TAPE 98-6, SIDE B
BILLY BRANDON, Ekwok, commented that the disaster has had a
rippling effect on all families. They are having problems with
bills: electricity, fuel, and so forth. He is concerned about how
they will get fuel for the power plant. He stated that his company
is very reluctant to pay off his last year's bills because he is in
the hole with them.
CHAIRMAN IVAN said he would have his staff, Tom Wright, contact Mr.
Brandon to work on the fuel situation.
Number 703
PAUL NICHOLAI, JR., Ekwok, said that what the committee can
consider is that the disaster funds given to Bristol Bay be
deposited or invested in a money-making opportunity and having
people that have lived and fished in Bristol Bay for ten years as
shareholders, so that it will help in years down the road instead
of just for one year. The money should be in an account where it
could be disbursed directly to the fishermen.
Number 730
MR. BRANDON asked where the fish taxes are utilized.
MS. TENNYSON responded that the shared fisheries business tax that
the state collects goes back into the general fund. It is not
necessarily committed for fisheries as far as she knew. She stated
that some of the communities have a separate raw fish tax, and that
goes back to them.
MR. BRANDON asked if the money that the state has collected in the
fish tax can be appropriated for this disaster.
CHAIRMAN IVAN referred to Mr. Nicholai's comment on looking at more
of a long-term solution about the funds that may not be used at
this time and put back to use for next year. He then asked Ms.
Tennyson if she had any comments on that.
MS. TENNYSON responded that there has been discussion about the
money that is paid back from the loan program to be put back into
a program that would address future disasters. It is not clarified
on how that is working out yet.
MR. NICHOLAI, JR., commented that it was not the loan program he
was considering. He gave a example: Local corporations give money
to qualified shareholders, and this would be pretty much the same
thing, but the money would be disbursed directly to the fishermen.
CHAIRMAN IVAN commented that Mr. Nicholai's proposal includes
shareholders consisting of fishermen, and that could certainly be
looked into. Chairman Ivan asked Ms. Tennyson to bring that back
as feedback.
Number 800
HENRY STRUB, Box 493, Dillingham 99576, (907) 842-5930, stated that
he is a 22-year Dillingham drift fisherman and is in favor of a
low-interest or no-interest loan with a reasonable payback time
frame. His problem right now is that he is $22,000 in debt from
last season, and within three months he is facing just about the
same amount. He commented that the amount of $15,000 per season in
expenses does not really indicate the debt service on buying a
boat, but it is a good amount to use for gearing up for the season.
He stated that Terry Johnson at Marine Advisory did a study on this
and came up with some numbers that where really good; he said he
would like the committee to look at them.
REPRESENTATIVE RYAN responded that he is interested in coming up
with a plan that would help people get back on their feet for next
year, and hopefully they can go back to work and make some money if
the fishing season improves. He said the reason he asked for
dollar figures was to get a figure that people can justify on what
their expense is going to be and not set a target figure that
everybody will go and borrow the maximum and not need it and have
extra money, then wind up that much deeper in debt. Representative
Ryan then asked Mr. Strub if he had any suggestions on a method
that they could use to have people justify what the gear-up costs
are going to be.
MR. STRUB suggested looking at past records. He also stated, "I
believe earlier you suggested that Fish and Game could have helped
out with better information; I believe that to be true. Most of
the fishermen could probably eliminate half or more of their debt
if they knew that there was going to be a bad fishing season; they
would not have brought crew in."
REPRESENTATIVE RYAN commented that the committee has heard
testimony from a lot of other places that people were complaining
that there was not good management out there as far as limits,
quotas and so forth. He asked Mr. Strub if he had any comments on
the fish being intercepted in Kuskokwim and being taken somewhere
else.
MR. STRUB responded, "Yes, I believe that to be true, and I am glad
to see them making as much progress as they have in eliminating
that interception."
REPRESENTATIVE DYSON commented that for the 25 years that he
fished, his expenses for the year would average about $10,000. He
stated, "What always varies is when you have major repairs, buy a
boat or upgrade, and there are guys that have bought boats out here
that are $300,000 boats; those are very expensive. The situations
are always individual. My guess is that everybody is going to
spend $2,000 for nets and gear, and another $3,000 for insurance,
and then groceries and fuel. Most of the processors would front us
the money for those things." Representative Dyson asked Mr. Strub
if he thought $10,000 is an average for expenses.
MR. STRUB responded that $10,000 was an average for setnetters, and
an average for a Bristol Bay driftnetter in this community was more
on the order of $17,000 or $18,000, including the repairs and
repowering and changes in the fishery. He said he would be
comfortable to say that it would be around $20,000 to $22,000 per
year. He then stated that he is not in favor of doing away with
the Davis-Bacon wages.
REPRESENTATIVE DYSON stated, "The reason I am trying to get these
figures is we go back the legislature, and some have not been down
here and have not heard of what is going on. So, we have to inform
them, and we have got to sell them, and we don't want them to come
along and tell us that they have another giveaway program. ... In
some way, I would think, the most easy way to solve it is a loan
rather than a grant, but at the same time we are dealing with folks
in Bethel that have perhaps have a little more resources and a
little more sophistication than a lot of people in the more rural
villages. So I am trying to figure out how to craft something that
is going to cover everybody. Debbie will tell you this program
from the feds leaves a lot of people out. I think what we really
need is input of the people to give us a fair idea, so when we put
a bill together we can set some limits here and there."
MR. STRUB stated, "People have complained about not being able to
get money from their processors anymore. Well, their debts have
not really been growing; they have had a bad season and a lot them
are carrying money on the books. Maybe the amount that they have
usually borrowed from the cannery can be loaned to them at a low-
or no-interest rate for a period of time, as long as their debt
didn't increase; that sounds legitimate to me. Those of us that
live here in town could look at past production records or past
fishing expenses. I don't believe in a grant program or giveaway
unless there was some way you could give us the whole $70 or $80
million, and I am sure we would pass it out to the fishermen and
let nature take its course, but that is impossible."
REPRESENTATIVE JOULE commented in regards to management of the
resource. He said as they continue to look at fiscal
responsibility and the belief that they need to cut an additional
$50 million out of this year's budget, there is a need to recognize
that the decisions that are made have a rippling effect. He stated
that they talked about working with the local advisory councils and
they in turn working with regional advisory councils and working
with game management at those different levels. When cuts are made
to the budgets and to the ADF&G, it does have a rippling effect
down the line.
Number 997
ANDY GOLIA, Dillingham,(907) 842-5207, discussed his personal
finances. He was concerned that the 1998 fishing season will not
be any better, and the fishermen are in need of long-term, low-
interest loans. Mr. Golia urged the legislature to do four things:
one, provide the supplemental appropriation; two, stand behind
Governor Knowles' appeal on the FEMA decision; three, offer
unemployment compensation for fishermen; and four, under the
Magnuson-Stevens Act, whenever there is a fisheries failure, it
should be amended to provide provisions for the SBA to respond.
REPRESENTATIVE RYAN asked Mr. Golia what kind of low-interest loan
would be reasonable.
ANDY GOLIA suggested a low rate of 4 percent interest.
REPRESENTATIVE RYAN commented that 4 percent may be a little high.
ANDY GOLIA stated, "I think the CRP is recommending a no-interest
loan, but from my perspective, I think it will be a big help to
focus on the Kuskokwim and people who don't have huge investments.
My payments are $15,000 a year, and I am going to knock it down to
about $9,000 a year. That will help. But to ask for $1,000 with
no interest, that does not even cover a portion of your interest
that accumulates before you go fishing in the 1998 season. I have
always felt that getting SBA in here with the long-term loans would
be the way to go."
Number 097
ROBERT HEYANO, Box 1409, Dillingham 99576, (907) 842-1053, stated
that he has participated in the Bristol Bay fishery for 35 years.
He believes that $10 million is not enough to do much of anything
and he does not agree with the proposed spending plan. He said if
this money is going to be used to help the commercial fishermen,
then it needed to go as directly to them as soon as possible and
that it should be in the form of low- or no-interest loans. Mr.
Heyano also commented that running it through the other
organizations to provide jobs in communities is a second-step
approach that needs to be looked at. He stated that the FEMA
appeal is important. Looking into the future, he thought what
should be done is to make sure the commercial fishery department is
adequately funded. Mr. Heyano said that he is supportive of a buy-
back program.
CHAIRMAN IVAN commented that the CRP did what they could to address
(indisc.--muffled). They even considered helping commercial
fishermen, but they had to work with the Department of Commerce.
REPRESENTATIVE SANDERS asked that his lack of comment after each
testimony not be interpreted as any form of disagreement. He said
he agrees with most of what everybody said.
MR. HEYANO commented that as a commercial fisherman he thought
there had not been enough people on the panel who represented
commercial fishing interests directly, and that the people were
associated with other organizations or municipalities. Mr. Heyano
stated, "If you could give 20 percent of the money directly in
loans to the fishermen, why can't you give 80 percent of that money
directly to the commercial fishermen? In my opinion, if there had
been more commercial fishermen on that panel, those are the type of
proposals you would have before you."
THOMAS TILDEN, Box 786, Dillingham 99576, (907) 842-2259, testified
that he has commercially fished in the Bristol Bay area since 1965
and presently owns his own site. His children are his crew
members. He said that he did not run himself into a lot of debt
but did delay things that needed to be done to his boat. Mr.
Tilden said that he almost hesitated to make any comment to the
proposal because he is afraid that if he did, it might delay the
funds. He would like to see an increase in the amount in regards
to loans directly to fishermen. Mr. Tilden also recommended that
the legislature pass a subsistence law. He mentioned an increase
in funding for the rural energy assistance program. He commented
that the rural areas are the hardest hit when budget cuts happen.
TAPE 97-7, SIDE A
REPRESENTATIVE JOULE asked about the snowfall last year compared to
this year in terms of the river depth and temperature. He also
asked whether anyone had heard any of the elders talking about what
to expect this year as a result of the snow.
MR. TILDEN responded that the snow this year is a lot more than the
previous years, and that he was sure that it does have an impact on
the river. He stated, "One of Doctor Rogers' (ph) theories was
that the water was so warm that the fish actually died in the bay
area. One of the factors was probably the amount of snow we had.
As far as what the old-timers said, that they always pertain a lot
of snowfall to a lot of berries -- and we got a lot of snow this
year. We are all hoping that we see a good return of fish and
berries."
REPRESENTATIVE RYAN commented that they have heard some testimony
from the villages, and they did not think that the biologists paid
much attention to the elders, who would go up the rivers and creeks
and see things that they knew traditionally were good indications
of large amounts of fish spawning and so forth. The biologists
would disregard this traditional information because it did not fit
their scientific model. The elders thought that the biologists
should have paid more attention. Mr. Ryan then asked if Mr. Tilden
had any comments on that.
MR. TILDEN commented that that is true. A couple of years back,
the villages relied heavily on the high-technology sonars, which
failed them. They found out later on that the sonars were not set
right. The old-timers and people that did not move from villages
to the fish camps saw all the fish and wondered why they were
seeing all the fish and why the sonar wasn't.
TERRY CHRISTIANSON, Port Heiden,(907) 837-2279, drift permit
holder, stated that 95 percent of the residents depend on
commercial fishing for income, and like others, Port Heiden is in
need of assistance for basic things such as oil and gas. They
depend on fuel for heating because they do not have trees. He
thanked the City of Port Heiden and the Community and Cultural
Center for their joint-effort project, for providing some locals
with income through the winter. Mr. Christianson said that $10
million was not enough.
REPRESENTATIVE DYSON asked Mr. Christianson whether he fished
Bristol Bay or Area M.
MR. CHRISTIANSON responded that he is a Bristol Bay fisherman.
REPRESENTATIVE DYSON asked Mr. Christianson if he thought Area M
was an intercept fishery in catching fish bound for Bristol Bay
rivers.
MR. CHRISTIANSON responded, "Most certainly. We are just 40 miles
away; we can hear them on our radios. When we are shut down we are
regulated by hours, like a 12-hour opening to 14-hour opening, and
they go by weeks. Being that we are only 40 miles away, we go home
and watch these guys fish."
Number 242
CARL BACKFORD, Box 115, Dillingham 99576, (907) 842-2584,
commercial fisherman, said traditionally his start-up expenses,
without a boat payment or permit payment, have always been about
$10,000. He asked if Governor Knowles has the same authority as
President Clinton to declare action on the disaster.
REPRESENTATIVE DYSON commented that the only authority that
Governor Knowles would have in appropriating money would be if the
legislature previously had given him authority to put the money in
the pot that was available to use under certain circumstances. He
is not really aware of what authority the Governor may have.
MR. BACKFORD stated, "That as far as helping the fishermen, it
seems like that in the United States, our government treats people
in other countries better than us. I see where regularly our
country gives money away, not by the millions but by the billions,
and that money is given out with the understanding that it does not
have to be paid back and is forgiven. It seems like there should
be something like that right here. What I would like to see is
that there is some kind of loan guarantees for the fishermen here
in Bristol Bay, so that if those fishermen are not able to pay back
those loans, it can be forgiven, so they don't lose their boats,
permits, and so they don't lose their ability to support their
families." Mr. Backford said the canneries know the fishermen's
situation and their habits, so he thought that the funds somehow
can be given to the canneries and then they can deal with the
fishermen because they know the fishermen.
REPRESENTATIVE SANDERS commented in regards to Mr. Backford's
question about the Governor coming up with funds. He suggested
that if Representative Ogan was still on line, he might be able to
help with that question. He said when the Big Lake fire occurred
last year, the Administration came up with several million dollars
in a disaster fund and then came back to the legislature for a
supplemental later. He then asked Representative Ogan how the
Governor got the money to cover the Big Lake fire and if this could
apply in this case.
REPRESENTATIVE OGAN responded that the timing of the fire was such
that the legislature was in special session at the time; so they
made an appropriation during that special session to cover the
cost. But otherwise, it would probably be done in a supplemental
request.
TOM WRIGHT, Committee Aide to the House Community and Regional
Affairs Standing Committee and Legislative Assistant to
Representative Ivan Ivan, commented that the legislature
appropriates money for the disaster relief fund, which can be used
by the Administration in the event of a disaster when the
legislature is not in session. The money is appropriated through
the disaster relief fund and then the Administration can come back
for a supplemental request to refund that program.
REPRESENTATIVE DYSON asked Carl Backford what his sense is on what
happened to the consumption of alcohol since the low-pay days in
July in Dillingham.
MR. BACKFORD said he did not know.
Number 371
GREG MOXIE, New Stuyahok, talked about his 45 years in fishing and
that this disaster was the worst he has ever seen. He made
comments on general living costs.
Number 421
ROBIN SAMUELSON, Box 412, Dillingham 99576, (907) 842-5335,
testified on behalf of BBEDC [Bristol Bay Economic Development
Corporation] and as a Bristol Bay fisherman. He stated that the
perception of Bristol Bay is that in the last ten years their runs
had been increasing to an all-time high, and that they are a rich
community, when in fact, during the big oil years Dillingham did
not pull in their proportionate share of state dollars. They don't
have any white elephants to support in the communities. Fishing
has been a pretty good livelihood in the last 10 to 15 years
because of high runs. He continued to say that they are a fishery
for which 8.3 percent comes right off the top.
MR. SAMUELSON stated, "When we had this disaster this year, the
declaration by both the federal and state government, I just
attended a two-week Board of Fisheries Area M meeting in Anchorage.
I was pretty dismayed to sit there in the audience and hear Bob
Clasby, the Director [of the Division of Commercial Fisheries
Management and Development] for the Department of Fish and Game,
say that there are no conservation concerns in Bristol Bay. The
Kvichak River system is the largest sockeye-producing river system
in the world, and in the last four years, it has not met its
minimum escapement goal. Last year, it was 1.4 million salmon
short. I think you are seeing the ripple effect. Here in
Nushagak, in the Wood River, we had met our escapement, but because
of the influx of boats, which is normally around 230, it rose to
over 500 boats. The people over here were impacted. That is what
happens in Bristol Bay: When one river system collapses, it has a
drastic effect on the other river systems."
MR. SAMUELSON said he doesn't know where the ADF&G is coming from.
He stated, "I asked what constitutes a conservation problem; they
said chronic failure of a river for five years in a row. You're
looking at a 16-year rebuilding program under the department's
analogy." Mr. Samuelson said he would like to see a sustainable
fisheries law pass. He continued to say that what he sees
happening in the state is that they are concentrating more on the
urban areas and forgetting rural areas. He said he would like to
see more studies done on smolt out-migration projects in the river
systems and limnology studies in the lakes. He urged a legislative
audit on ADF&G policies and urged that the money get disbursed
immediately.
REPRESENTATIVE RYAN asked Mr. Samuelson if he thought the Alaska
Seafood Marketing Institute (ASMI) was doing anything as far as the
individual fishermen to help them develop their business and make
the fish more sellable.
MR. SAMUELSON commented that he has never supported the 1 percent
tax because he thought it was not enough in the right direction.
The processors were involved, and the processors are all Japanese-
controlled, and they are not going to want competition. He stated,
"I think I could support ASMI if the processors themselves did not
have their finger in the pie."
REPRESENTATIVE RYAN asked Mr. Samuelson if he had any suggestions
on what they could do to break out of the stranglehold on our
fishing industry from Japan.
MR. SAMUELSON responded that if an investigation is done on the
fish processing companies, especially those that are basically 100
percent Japanese-controlled, we will find out that they use a
technique called "price transferring". They transfer all their
profits to Japan, and they take a loss in their plants here. Mr.
Samuelson said, "I think the taxes that they pay, besides real and
personal, are property and city taxes. I don't think they pay the
state government any tax; they pay raw fish tax. But I don't think
there has ever been an audit of a fish company in the history of
the state of Alaska to see if the raw fish taxes are the exact --
the state takes it at its face value and says good enough.' I
think the IRS [Internal Revenue Service] should get involved and
look at this price transferring."
REPRESENTATIVE DYSON asked Mr. Samuelson how he believes the
Japanese-dominated processors are keeping the small independents
out of the bay.
MR. SAMUELSON responded, "Not necessarily out of the bay. I had a
friend a few years ago that got into the processing here in the bay
and he had no problem buying his fish, but he had a problem
distributing his fish throughout the marketplace because of the
distributors, and it damn near ruined him because the distributors
would say if you are going to deal with him - and he is only
dealing 3 million pounds a year - then we are going to pull our
product away. They are charging us 5 cents a pound to distribute
our product; you'd better charge him 9 cents a pound, which was
cost-prohibiting."
REPRESENTATIVE DYSON asked Mr. Samuelson if that was for a domestic
market.
MR. SAMUELSON responded, "That was both domestic and foreign."
REPRESENTATIVE DYSON responded that he could see how they could
work with the distribution system in Japan to keep him out.
Representative Dyson then asked if they were putting pressure on
the American or Canadian distribution system to keep him out.
MR. SAMUELSON replied, "No, it was primarily the Japanese."
REPRESENTATIVE DYSON asked Mr. Samuelson if he thought that the
board process is generally the way Alaska should be managing our
fisheries, and if so, how can the legislature make it better or
less contaminated.
MR. SAMUELSON commented on the Board of Fisheries and Board of
Game.
REPRESENTATIVE DYSON replied, "So, the answer to my question on how
to make the board process better is to get strong, independent,
knowledgeable people who will make good public interest decisions."
MR. SAMUELSON responded, "Yes".
REPRESENTATIVE DYSON asked Mr. Samuelson whether it is his
perception that processor-backed representatives on the various
fish boards are disproportionate to those representing regular
fishermen.
MR. SAMUELSON replied yes, on some boards, but not on the fish
board. The balance on the fish board is a good balance. He is
pleased with the decisions made by the board.
REPRESENTATIVE DYSON asked Mr. Samuelson if he thought the Board of
Fisheries is or will be heading in the right direction on Area M/
False Pass interception of fish bound for river systems.
MR. SAMUELSON replied, "I could say yes, but that could change on
the next string of appointments. That is the way the Board of
Fish[eries] process works."
TAPE 98-7, SIDE B
MR. SAMUELSON commented that in order for fishermen in Bristol Bay
to expand, the processors need to want to expand with them into the
markets instead of taking all the fish and putting it on an
airplane right out of here and shipping it to Japan.
CHAIRMAN IVAN thanked all the people for their testimony. He
commented that the committee will deliberate on a course of action.
He explained that it is sometimes hard, as an individual
legislator, to push such important legislation through the process.
He invited the committee to sponsor legislation for appropriation
requests or ideas at this time. He then invited the committee to
comment.
REPRESENTATIVE SANDERS commented that from the testimonies of all
the villages they have heard from, the committee needed to go back
and try to find some way to readjust the percentages on this thing.
He believed that from the people that the committee has spoken to,
there is not enough going into the pockets of the individual
fishermen. If they give such a large percentage to the
governments, the state will not know where it is going. When they
get ready to build things here next summer, the fishermen will be
out fishing. That will not help anything in the long run. If we
could be sure that they will do things about roads, boat harbors,
et cetera, instead of things that are not important at the moment,
Representative Sanders said, he would have more sympathy. He said
a much larger percentage of money should go to the fishermen and
that there should have been more money. He also said the committee
should go back to work on what they could do to extend this
coverage to some of the tenders, employers and the cannery workers
and to see whether or not there could be some more emergency funds
that come directly from the state.
REPRESENTATIVE RYAN commented that he shared some of the concerns
expressed by Representative Sanders. He said he could see that
with studies, plans and engineering, the money would evaporate into
things that are not important at the moment. He stated, "When you
finally get down to the actual project to put people to work, there
is going to be very little of the money left because it will
disappear in the process in trying to design the project. I think
we need to go back and talk to our colleagues, especially in the
caucus, and explain the seriousness of the situation and look at
taking some money from the state for emergency relief for the
individuals in the various communities for electricity and fuel to
heat their homes. We are going to have to get some money together
to handle that problem on the short term, and I think we need to
look at a very low- or no-interest loan program and make sure that
we get enough for people to go back to work next year for fishing,
because if we don't give them enough to get back to work, it will
not solve the problem. This federal program, the way it is
structured, will leave too many people out. We heard tenders,
cannery workers, et cetera, that are not going to be getting
anything, so I think that we are going to have to supplement this
thing, whether it be an emergency appropriation to start with for
basic necessities, and then a program to allow these people to get
back to work."
REPRESENTATIVE JOULE commented that some of the short-term
solutions that they come up with will have potential positive long-
term effects. The committee has heard how much people are hurting,
and if we don't take any action, the state as a whole may hurt the
most, because some of these people's only other recourse is to get
rid of their permits, which may go to people outside of the state.
REPRESENTATIVE DYSON stated, "I am going to work on two things.
One, I am going to see if there is any procedure where by the folks
that live in the area that has been declared a disaster area could
get their PFDs [permanent fund dividends] six months early. It
seems to me that $1,000 in February for fuel bills and electric
bills would be a huge asset and a much bigger help than getting
$1,200 -- another thing I intend to find out is if the Air Guard is
now capable of flying fuel. Particularly I am thinking of the
towns that don't have enough fuel to keep their powerhouse going
and where they don't have trees needed for domestic heating, and if
the state has a supply of fuel somewhere." Mr. Dyson said that
some of the people the committee visited contributed to the
situation by poor decisions, and he expressed concern on the pounds
of booze that goes through the airport in Bethel. He stated that
he wanted to help the people that need the help but does not know
how to deal with the people that spend money foolishly instead of
on necessities. He said he is sure that people will misunderstand
his comment.
CHAIRMAN IVAN commented on the alcohol that goes through Bethel.
He said that the information on the amount of alcohol may be from
six to nine months ago, and it could have come before the disaster.
Chairman Ivan said, "Some of the appropriations regardless are
sometimes heavy and hard to get through the process, 40 on the
House side and 20 more on the Senate. I would propose that we
develop a committee appropriation proposal that would gear toward
trying to get the fishermen ready for the next season. In order to
accept what the Administration is proposing through the CRP
process, the $7 million from the U.S. Department of Commerce and
$1.9 million appropriation requirement from this side, looking at
that and try to arrive at that whole plan will take some time when
we deal with the process. I stated earlier: The supplemental
budget has not, I believe, ... hit our budget process down in
Juneau at this time. I would propose, as a committee, we propose
to Commerce that we fund part of that plan now, get it going
instead of waiting several months. I would propose that for the
committee's consideration at this time, and we reporting that back
to the Speaker and the Finance Committee. With respect, I
understand the Administration's efforts and I commend that."
MR. WRIGHT commented that one of things that the committee is going
to have to do, in line with Chairman Ivan's suggestion, is to find
out how the committee wants to gear state funds. Is the committee
going to gear state funds to specific portions of the plan or gear
state funds as applied to the overall plan? He stated, "I need to
have some sort of direction if that is a concept that the committee
is going to decide to propose. How we gear those funds, what
latitudes do we have within the plan - I don't know if we have any
latitude or not. From what I am hearing from the committee, is
that you want to see it go to the fishermen, if I understand things
correctly; in the old proposal maybe that was submitted or adopted
by the Commerce. I just need a little more direction as to how we
proceed with this."
REPRESENTATIVE SANDERS said, "To make this proposal, Mr. Chairman,
that the Governor come forward with the Department of Commerce, our
requirement is the 1.9 million. Am I correct, Deborah? Otherwise,
it won't work?"
MS. TENNYSON replied, "Yes, they want to look at the total lump;
they don't want to look at pieces of it."
REPRESENTATIVE DYSON recommended that the committee forward to the
Finance Committee that we fund $1.9 million so that the program
could go ahead, and they look at emergency appropriation of $600 to
$800 to help out these people who can't pay their basic bills.
Then the committee can try to figure out what dollar figure is
going to be needed get the fishermen back, and put together a
budget request for a low-interest loan package with a total dollar
figure. What the committee estimates is they will take the
individual people and add them together so that they can make
applications for these loans and get the gear necessary to go to
work this coming spring; that would be the minimum they can do.
MR. WRIGHT commented that last year he believed there was a surplus
in the loan program after the Division of Investments provided to
fishermen; maybe given the direction of the committee he could
explore that to see what that surplus was. It could be a
possibility to look at a low-interest package for starting costs.
They already have criteria. If he was given that instruction, he
said, he would proceed in that direction.
CHAIRMAN IVAN said he would certainly like an immediate solution,
if possible, but the plan itself should be considered.
REPRESENTATIVE DYSON commented that if there was an in-place
mechanism for the short term - in essence, an economic loan - maybe
the paperwork that people have to do for the loan from the federal
government could be used as the application or could be added to
for this one, just try to streamline that as much as possible.
MR. WRIGHT commented that the Division of Investments has been very
involved with the CRP process and has gone out of its way to help
out the fishermen. He stated that he will discuss it with the
division.
CHAIRMAN IVAN thanked the committee members for their comments and
said that as soon as they return to Juneau they would try to
address this, on the following Wednesday. He then asked the
audience to please understand how the system works in Juneau, and
that they would do what they can to get the process moving as best
as they could. Chairman Ivan thanked everyone for their patience.
CHAIRMAN IVAN adjourned the meeting at 2:50 p.m.
COMMITTEE ACTION
The committee took no action.
NOTE:
The meeting was recorded and handwritten log notes were taken. A
copy of the tape(s) and log notes may be obtained by contacting the
House Records Office at 130 Seward Street, Suite 211, Juneau,
Alaska 99801-1182, (907) 465-2214, and after adjournment of the
second session of the Twentieth Alaska State Legislature, in the
Legislative Reference Library.
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