Legislature(2001 - 2002)

04/02/2001 06:13 PM House FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                         April 2, 2001                                                                                          
                           6:13 p.m.                                                                                            
                                                                                                                              
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Gary Stevens, Co-Chair                                                                                           
Representative Peggy Wilson, Co-Chair                                                                                           
Representative Drew Scalzi                                                                                                      
Representative Fred Dyson                                                                                                       
Representative John Coghill                                                                                                     
Representative Beth Kerttula                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mary Kapsner                                                                                                     
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 206                                                                                                              
"An Act  relating to a vessel-based  commercial fisheries limited                                                               
entry system,  to management  of offshore  fisheries, and  to the                                                               
definition of  'person' for purposes of  the commercial fisheries                                                               
entry program; and providing for an effective date."                                                                            
                                                                                                                                
     - MOVED HB 206 OUT OF COMMITTEE                                                                                            
                                                                                                                              
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 206                                                                                                                  
SHORT TITLE:VESSEL LIMITED ENTRY FOR COMM. FISHERIES                                                                            
SPONSOR(S): RESOURCES                                                                                                           
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/22/01     0691       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/22/01     0691       (H)        FSH, RES                                                                                     
04/02/01                (H)        FSH AT 5:00 PM CAPITOL 124                                                                   
                                                                                                                              
WITNESS REGISTER                                                                                                              
                                                                                                                                
MARY McDOWELL, Commissioner                                                                                                     
Commercial Fisheries Entry Commission                                                                                           
Alaska Department of Fish & Game                                                                                                
8800 Glacier Highway, Suite 109                                                                                                 
Juneau, Alaska 99801-8079                                                                                                       
POSITION STATEMENT:  Testified on behalf of  Commercial Fisheries                                                               
Entry Commission in support of HB 206.                                                                                          
                                                                                                                                
JOHN WINTHER                                                                                                                    
(No address provided.)                                                                                                          
Alaska                                                                                                                          
POSITION STATEMENT: Testified in support of HB 206.                                                                             
                                                                                                                                
ALAN PARKS                                                                                                                      
PO Box 3334                                                                                                                     
Homer, Alaska 99603                                                                                                             
POSITION STATEMENT: Testified  on HB 206; he noted  that the bill                                                               
might have good intentions, but he does not support it as-is.                                                                   
                                                                                                                                
PAUL K. SEATON                                                                                                                  
58395 Bruce Street                                                                                                              
Homer, Alaska 99603                                                                                                             
POSITION STATEMENT: Testified against HB 206.                                                                                   
                                                                                                                                
MAKO HAGGERTY                                                                                                                   
PO Box 2001                                                                                                                     
Homer, Alaska 99603                                                                                                             
POSITION STATEMENT: Testified against HB 206.                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-16, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
                                                                                                                                
CO-CHAIR GARY  STEVENS reconvened the House  Special Committee on                                                               
Fisheries meeting to order at  6:13 p.m.  Representatives Scalzi,                                                               
Dyson,  Coghill,  Kerttula,  Stevens, and  Wilson  were  present.                                                               
[For minutes of the Presentation  on the AK Seafood International                                                               
(ASI)  by  Bob Poe,  Executive  Director,  AIDEA and  Jeff  Bush,                                                               
Deputy   Commissioner,  Department   of   Community  &   Economic                                                               
Development, see the 5:07 p.m. minutes for the same date.]                                                                      
                                                                                                                                
HB 206-VESSEL LIMITED ENTRY FOR COMM. FISHERIES                                                                               
                                                                                                                                
CO-CHAIR STEVENS  announced the next  order of business  would be                                                               
HOUSE  BILL  NO.   206,  "An  Act  relating   to  a  vessel-based                                                               
commercial  fisheries  limited  entry system,  to  management  of                                                               
offshore  fisheries,  and  to  the  definition  of  'person'  for                                                               
purposes  of   the  commercial   fisheries  entry   program;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 0048                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SCALZI,   speaking  as  co-chair  of   the  House                                                               
Resources Standing  Committee, sponsor of HB  206, explained that                                                               
there  are two  types of  limited  entry systems  in Alaska,  the                                                               
[current] limited  entry system and the  Individual Fishery Quota                                                               
[IFQ], a federally   managed fishery.  This bill  addresses a new                                                               
fishery that  exists for which  the current limited  entry system                                                               
does  not work.   The  current  limited entry  system requires  a                                                               
permit to be issued to the vessel operator.                                                                                     
                                                                                                                                
REPRESENTATIVE  SCALZI noted  that HB  206 is  by request  of the                                                               
Commercial  Fisheries  Entry  Commission  [CFEC],  and  has  been                                                               
brought to the legislature to see  if CFEC can receive support in                                                               
obtaining this new "tool" regarding  management of fisheries.  He                                                               
stated   that   Mary   McDOWELL,   Commercial   Fisheries   Entry                                                               
Commission,  is here  to speak  on the  "fine necessities  of the                                                               
situations"  that  have  risen  in  the  hair  crab  and  scallop                                                               
fisheries  and why  the existing  limited entry  system does  not                                                               
work.                                                                                                                           
                                                                                                                                
Number 0226                                                                                                                     
                                                                                                                                
MARY   McDOWELL,   Commissioner,   Commercial   Fisheries   Entry                                                               
Commission (CFEC),  Alaska Department  of Fish &  Game, explained                                                               
that the  origin of  this bill  stems from  the legislature.   In                                                               
1996, the  legislature placed  a moratorium on  the entry  of new                                                               
vessels into  the Korean hair crab  fishery, and did the  same to                                                               
the weather  vane scallop fishery in  1997.  In passing  the bill                                                               
that implemented  the moratorium  on the  hair crab  fishery, the                                                               
legislature directed the CFEC and  Department of Law to draft and                                                               
bring forward legislation to create  a vessel-based limited entry                                                               
program.   This alternative program  could serve where  there are                                                               
problematic  programs  such  as  in the  hair  crab  and  scallop                                                               
fisheries.                                                                                                                      
                                                                                                                                
MS.   McDOWELL  stated   that  the   legislature  gave   specific                                                               
instructions  to develop  a vessel  based  limited entry  program                                                               
that could be used in  fisheries in which limitations of Alaska's                                                               
current  program  hindered the  achievement  of  the purposes  of                                                               
Limited Entry  Act.  She  said these purposes  were "conservation                                                               
[of]  a resource  and protecting  the economic  viability of  the                                                               
fishery  and  those who  depend  on  it."    In doing  this,  the                                                               
legislature recognized  that these fisheries are  not well suited                                                               
to limitation in the current program.   So, a new tool was needed                                                               
for specific use in these fisheries.                                                                                            
                                                                                                                                
Number 0374                                                                                                                     
                                                                                                                                
MS.  McDOWELL specified  that the  current limited  entry program                                                               
was enacted in  1973, with very few changes since  then.  Over 60                                                               
fisheries have been limited under  the current program.  She said                                                               
it has served Alaska and its  fisheries very well.  She explained                                                               
that the current limited entry program was based on the owner-                                                                  
operator model, that has characterized  the salmon fishery, which                                                               
happens to  be the first  fishery that  was limited.   The owner-                                                               
operator  model  still characterizes  the  vast  majority of  the                                                               
state-managed  fisheries.    Relatively small  boats  and  single                                                               
owners characterize these fisheries.   These owners invest in the                                                               
boats and equipment  and serve as the skippers  of the operations                                                               
by operating the vessel, hiring crew,  and so on.  She reiterated                                                               
that  fishing privileges  go  to the  vessel  operator under  the                                                               
current limited entry  program.  These privileges can  only go to                                                               
a human being, not to  companies, partnerships, or any other kind                                                               
of  entity.    So,  operators of  these  fishing  operations  are                                                               
"grandfathered" into a fishery under CFEC's program.                                                                            
                                                                                                                                
MS. McDOWELL said  in recent years, CFEC has been  faced with the                                                               
need to get a handle on  several fisheries that differ in the way                                                               
they have  evolved.  This has  resulted in a modified  version of                                                               
the  limited  entry   program.    These  fisheries   tend  to  be                                                               
characterized  by  larger  and more  expensive  vessels,  fishing                                                               
farther offshore, and  ownership through companies, partnerships,                                                               
or corporations, even  if those involved one  or two individuals.                                                               
In these  fisheries, owners  use hired  skippers more  often than                                                               
not.  These  skippers are not invested in the  fishery, and might                                                               
be working on a rotating basis throughout the year.                                                                             
                                                                                                                                
MS. McDOWELL indicated that if  these fisheries were limited such                                                               
that the  permits had to be  issued to the actual  fishermen, the                                                               
number of  participants in a  fishery could increase  rather than                                                               
decrease.  For  example, if one boat has four  skippers, and four                                                               
permits are  issued, the  operation could  be "cloned"  into four                                                               
[fisheries].                                                                                                                    
                                                                                                                                
Number 0601                                                                                                                     
                                                                                                                                
MS. McDOWELL remarked  that there is also a fairness  issue as to                                                               
whether, under  the current  program, ongoing  fishing privileges                                                               
were  being issued  to employees  rather than  to those  who have                                                               
invested  in  developing  that  fishery.    So,  the  legislature                                                               
recognized  that these  fisheries had  different traits  when the                                                               
moratoriums   were  implemented.      She   mentioned  that   the                                                               
moratoriums for hair crab and  scallop fisheries were supposed to                                                               
expire in  2000-2001, but  since the legislature  did not  have a                                                               
way of permanently dealing with  these fisheries, the legislature                                                               
extended them  to 2003-2004.   House Bill  206 provides  the tool                                                               
needed  to  deal  with  the  hair  crab  and  scallop  fisheries.                                                               
However,  as the  legislature directed,  this is  a generic  bill                                                               
that could serve as a useful tool in other fisheries.                                                                           
                                                                                                                                
MS. McDOWELL remarked that this  bill establishes a framework for                                                               
a  vessel-based  program that  is  very  similar to  the  current                                                               
program under current  statute.  This bill  was carefully drafted                                                               
to preserve  the use  of CFEC's  current person-based  program in                                                               
any fisheries where it can be  workable.  It was also designed to                                                               
adhere  to as  many  of the  goals and  purposes  of the  current                                                               
program as possible and still create a new one.                                                                                 
                                                                                                                                
Number 0723                                                                                                                     
                                                                                                                                
MS. McDOWELL referred to page 2,  lines 16-31, of HB 206 and said                                                               
it  contains  criteria  regarding  when the  CFEC  may  use  this                                                               
program  as opposed  to the  traditional  limited entry  program.                                                               
She  summarized  this  part  of  the  bill  as  saying  that  "we                                                               
essentially  always default  to traditional  person-based limited                                                               
entry."   It is  a well-designed program  that keeps  the fishing                                                               
privileges in the hands of the  actual participants.  She went on                                                               
to say  that [traditional limited entry  program] avoids absentee                                                               
ownership of  Alaska's fisheries  and consolidation  of ownership                                                               
and so on, and it works well  to protect the place of Alaskans in                                                               
their  fisheries  both  at  initial issuance  and  over  time  as                                                               
permits change hands, while  still passing constitutional muster,                                                               
which  it  needs  to  do  because it  is  regulating  a  commerce                                                               
activity.                                                                                                                       
                                                                                                                                
MS.  McDOWELL  remarked  that  the bill  ensures  that  this  new                                                               
program  would only  be used  in state-managed  fisheries if  the                                                               
fishery met  several criteria.   She  indicated that  the fishery                                                               
would  have to  meet limitations  that would  not work  under the                                                               
existing limited  entry system.   The new  program could  also be                                                               
used  for fisheries  that are  in the  [United States]  exclusive                                                               
economic  zone  if it  helped  the  state  gain or  retain  state                                                               
management of those fisheries.                                                                                                  
                                                                                                                                
MS. McDOWELL  pointed out the "second  generation" provision that                                                               
begins on page  6, line 8, of  HB 206.  She said  that under this                                                               
program,  permits  are  initially  issued when  a  fishery  comes                                                               
"under limitation  to the  owners of  the vessels  that qualify."                                                               
These  owners can  be  individuals,  partnerships, companies,  or                                                               
another sort of  entity.  However, when  permits are transferred,                                                               
sold,  or  given  away,  they  can  only  be  transferred  to  an                                                               
individual  human being,  which  is the  case  in CFEC's  current                                                               
[traditional limited entry] program.                                                                                            
                                                                                                                                
MS. McDOWELL  said this bill  mandates that the  person receiving                                                               
the permit must  hold an ownership interest in the  vessel and be                                                               
onboard whenever  that vessel is  fishing.  These  provisions are                                                               
also in the current [limited  entry] program.  Permit holders can                                                               
still have partnerships  in owning a boat and so  on, but fishing                                                               
privileges  can only  be under  one person.   She  said the  only                                                               
exception for  this is found on  page 6, line 24,  subsection (c)                                                               
which says an entity that  received an initial issuance permit in                                                               
that fishery  could have another  permit transferred to it  if it                                                               
was for use on the same boat.   For example, this could happen if                                                               
different criteria  such as species to  be caught or areas  to be                                                               
fished were attached  to the permits in a given  fishery.  So, if                                                               
one's initial permit  was for a particular species  or a specific                                                               
area, another permit could be issued  to the same boat to broaden                                                               
the  species or  area that  could be  fished.   This is  the only                                                               
exception.   Otherwise, at the  second generation and  from there                                                               
on, permits would  have to change hands only into  the hands of a                                                               
human being.                                                                                                                    
                                                                                                                                
MS.  McDOWELL  summarized  that  [CFEC]  believes  this  bill  is                                                               
responsive to  the directives  from the  legislature and  that it                                                               
departs from CFEC's  current program as little as  possible.  The                                                               
Commercial  Fisheries Entry  Commission encourages  quick passage                                                               
of the  bill since it  is faced  with the upcoming  expiration of                                                               
the  moratorium on  the hair  crab and  scallop fisheries,  where                                                               
this program  is needed.  She  said this bill is  only "enabling"                                                               
legislation.  After  its passage, limitations will  still need to                                                               
be proposed in  those fisheries.  The  Commercial Fisheries Entry                                                               
Commission  plans on  working closely  with the  people in  these                                                               
fisheries to ensure that a workable program is developed.                                                                       
                                                                                                                                
Number 1064                                                                                                                     
                                                                                                                                
CO-CHAIR  WILSON asked  for  clarification on  what  occurs if  a                                                               
transfer must be made to a person.                                                                                              
                                                                                                                                
MS.  McDOWELL  replied that  under  the  current [limited  entry]                                                               
program, only  a human being can  hold a permit.   When fisheries                                                               
are initially  limited, the "grandfather  rights" are  handed out                                                               
to  participants.   In this  case, the  permit would  go to  only                                                               
vessel  owners,  which may  be  a  "non-human  being" such  as  a                                                               
company.   If the entity [vessel  owner] goes to sell  the permit                                                               
or give  it away, the permit  can only be transferred  to a human                                                               
being,  not   another  corporate  entity.     Similar  to  CFEC's                                                               
traditional  limited  entry program,  "it's  the  idea of  having                                                               
participants have the ownership in  the fishery."  She said there                                                               
was  some fear  in initial  discussions, that  the fishery  would                                                               
move  toward "absentee  corporate ownership,  that our  fisheries                                                               
would be owned by California  banks or something, [and] fishermen                                                               
would all  be hired  hands."  The  current limited  entry program                                                               
was  designed  for this  not  to  happen.   She  said  this is  a                                                               
confusing part  of the bill,  but it's  meant to depart  from the                                                               
goals of the current program as little as possible.                                                                             
                                                                                                                                
Number 1196                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STEVENS wondered  if  she had  any concerns  with                                                               
corporate structures owning permits,  especially when they change                                                               
hands.                                                                                                                          
                                                                                                                                
MS. McDOWELL remarked that this is  not going to be an easy thing                                                               
to administer.   The Commercial Fisheries  Entry Commission hopes                                                               
it will not be  used that often.  Provisions in  the bill will be                                                               
established for  when ownership  has changed  enough that  it has                                                               
triggered  the need  to be  transferred to  a human  being.   For                                                               
example, she said:                                                                                                              
                                                                                                                                
     If  there's a  partnership, [where]  you've got  two or                                                                    
     three  partners and  they want  to add  a new  partner,                                                                    
     that would be  seen as a change of ownership.   At that                                                                    
     point, we  would say this  partnership has  changed and                                                                    
     the  next owner  of that  permit  needs to  be a  human                                                                    
     being.   [In  other  words,]  one of  you  needs to  be                                                                    
     onboard and the  name of one person needs to  be on the                                                                    
     ownership of the fishing privileges.                                                                                       
                                                                                                                                
Number 1292                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA  remarked that if there  were problems in                                                               
the fishery, the same problems  would exist when transferring the                                                               
permit.  She  asked if this would cause transference  of a permit                                                               
to become very difficult.                                                                                                       
                                                                                                                                
MS. McDOWELL  commented that this  is an  area that they  will be                                                               
hearing from  fishery participants  about.  But  the participants                                                               
[CFEC]  has spoken  to so  far  have not  seen it  as a  problem.                                                               
[This bill]  will limit the  available market, because  [a permit                                                               
holder]  will have  to find  someone who  wants to  be an  active                                                               
participant.  She  said   in most partnerships,  the person whose                                                               
name it  is in, after  the transfer, will need  to be at  least a                                                               
partial owner of  the vessel    and look for a  partner who wants                                                               
to  be an  active participant.    She went  on to  say that  this                                                               
proposal came from fishery    participants, due to the concern of                                                               
people  moving towards  absentee  ownership.   So "we're  hopeful                                                               
it's  workable."     If   not,  CFEC   will  hear   from  fishery                                                               
participants.                                                                                                                   
                                                                                                                                
Number 1349                                                                                                                     
                                                                                                                                
REPRESENTATIVE SCALZI commented that the  reason for this is that                                                               
if [the  permit] were  to go to  the individual  initially, there                                                               
would be too many.  So, the intent  is to start with a vessel and                                                               
then "migrate to putting it to the person, essentially."                                                                        
                                                                                                                                
MS.  McDOWELL  said there  still  may  be  multiple owners  of  a                                                               
vessel, but one owner  has to have the permit in  his or her name                                                               
and be an active participant onboard.                                                                                           
                                                                                                                                
REPRESENTATIVE KERTTULA  asked what  the case  would be  if there                                                               
were four people who wanted to be the owner [of the permit].                                                                    
                                                                                                                                
MS. McDOWELL replied  that initially, the permit  would be issued                                                               
to the  company or  partnership.   Most of  the vessels  in these                                                               
big-boat fisheries are  incorporated as a business.   When vessel                                                               
ownership changes,  the "market"  would be towards  those willing                                                               
to put the [permit] in their names.                                                                                             
                                                                                                                                
REPRESENTATIVE  KERTTULA asked  if partnerships  can individually                                                               
sell their shares.                                                                                                              
                                                                                                                                
MS. McDOWELL said they could sell  the ownership of the boat that                                                               
way.  But  the fishing privileges have  to be put in  the name of                                                               
one person.                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA  asked if the  transfer could be  to "one                                                               
person and to one partnership, or to two persons."                                                                              
                                                                                                                                
MS. McDOWELL stated that upon transfer,  it has to be in the name                                                               
of one person because one person holds the [fishing] privileges.                                                                
                                                                                                                                
Number 1494                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL  said  chances are  high  that  ownership                                                               
would change  within a fishery.   He asked if she  knew what this                                                               
scope might look like.                                                                                                          
                                                                                                                                
MS. McDOWELL replied  that she did not know,  but perhaps fishery                                                               
participants who testified could answer that.                                                                                   
                                                                                                                                
Number 1525                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON asked  what the  required minimum  time was                                                               
that a  person could have  the permit in  his or her  name before                                                               
being able to transfer it.                                                                                                      
                                                                                                                                
MS. McDOWELL said there was no minimum amount of time.                                                                          
                                                                                                                                
REPRESENTATIVE  DYSON inquired  if the  permit had  to be  in the                                                               
hands of a person "every other time."                                                                                           
                                                                                                                                
MS. McDOWELL replied that a permit  could only go to an entity at                                                               
the initial  issuance.   After that,  the permit  must go  to one                                                               
person.                                                                                                                         
                                                                                                                                
REPRESENTATIVE DYSON asked how this  would work for a vessel that                                                               
worked year-round with a succession of crews and skippers.                                                                      
                                                                                                                                
MS. McDOWELL said  this is an inconvenience because  it means the                                                               
person  who owns  the  permit  must be  onboard  if  the boat  is                                                               
fishing.   As in  current [limited entry]  program, "we"  have to                                                               
find  someone who  is  willing  to be  on  the  boat whenever  it                                                               
fishes.   This  is how  the bill  is currently  crafted; however,                                                               
it's a policy call [for the legislature].                                                                                       
                                                                                                                                
Number 1625                                                                                                                     
                                                                                                                                
REPRESENTATIVE SCALZI commented  that this is similar  to the IFQ                                                               
fishery.   In first-generation IFQ  transfers, the  North Pacific                                                               
Fishery Management  Council realized that there  were many people                                                               
who  had  multiple boats  or  who  hired  skippers.   In  second-                                                               
generation IFQ  transfers, the owner  must be onboard  the vessel                                                               
when it is fishing.  He said the  intent of this was to keep it a                                                               
"small-boat  fishery" and  not have  absentee owners.   He  noted                                                               
that  Joe  Kyle,   who  served  on  the   North  Pacific  Fishery                                                               
Management  Council  during this  time,  would  be available  for                                                               
questions.                                                                                                                      
                                                                                                                                
Number 1625                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON remarked  that what this bill  does is "fix                                                               
something  that's  currently  a  problem"  but  she  wondered  if                                                               
someone, for example,  owned a corporation and sold  it after ten                                                               
years, if "we" would go back to the same problem.                                                                               
                                                                                                                                
MS.  McDOWELL said  no, because  the bill  proposes to  "push the                                                               
direction of  the evolution of  the fishery over time,"  by going                                                               
towards  participant  ownership  rather than  absentee  corporate                                                               
ownership.  These are expensive  vessels, and there will still be                                                               
companies  and  partnerships investing  in  them.   However,  the                                                               
fishing privileges  will be held  by actual participants  with an                                                               
ownership interest in the fishery.                                                                                              
                                                                                                                                
Number 1744                                                                                                                     
                                                                                                                                
JOHN  WINTHER  testified  via  teleconference.     [Much  of  Mr.                                                               
Winther's testimony was difficult to  transcribe due to bad sound                                                               
quality.]  He  stated that he was born and  raised in Alaska, and                                                               
has been involved in the fishing  business since 1964.  He bought                                                               
his first vessel  from an uncle who started fishing  in Juneau in                                                               
1915.  He  has fished crab in  the Bering Sea since  1973 as well                                                               
as hair crab.   He has also built his own vessel.   He has served                                                               
six years  on the North  Pacific Fishery Management  Council, ten                                                               
years on  the Governor's Panel of  U.S.-Canada Salmon Commission,                                                               
and is  currently on the  RJ (ph) Committee for  (indisc.), which                                                               
involves designing management options for the Bering Sea.                                                                       
                                                                                                                                
MR.  WINTHER   remarked  that  he  fully   supports  Commissioner                                                               
McDOWELL's testimony.                                                                                                           
                                                                                                                                
MR.  WINTHER described  hair crab  fisheries. [This  part of  the                                                               
testimony was indiscernible.]   He then went on to  say that this                                                               
bill  would replace  the  moratorium  that Commissioner  McDOWELL                                                               
discussed.                                                                                                                      
                                                                                                                                
MR. WINTHER commented on problems  with the current limited entry                                                               
system and how  this new system is modeled after  the federal IFQ                                                               
system.  [Details of this section were indiscernible.]                                                                          
                                                                                                                                
Number 2094                                                                                                                     
                                                                                                                                
ALAN  PARKS  testified  via  teleconference   that  he  has  been                                                               
involved with commercial fishing since  1975.  He spent ten years                                                               
fishing crab in  the Bering Sea, and has also  fished crab around                                                               
Kodiak, in the  South Peninsula, in Cook Inlet, and  on the outer                                                               
coast between  Homer and Seward.   He said he also  has 25 years'                                                               
experience longlining  from Washington  up to  Southeast [Alaska]                                                               
to Adak for primarily halibut, black  cod, and [Pacific] cod.  He                                                               
has also participated in salmon  fisheries in False Pass, Bristol                                                               
Bay, Kodiak, and Cook Inlet.   In addition, he has spent numerous                                                               
seasons fishing herring in Prince William Sound, Cook Inlet,                                                                    
Kodiak, and Togiak.  He went on to say:                                                                                         
                                                                                                                                
     I  wanted  to  just  comment a  little  bit  about  the                                                                    
     history of the fisheries just  to give you a little bit                                                                    
     of what my perspective is when  we became a state.  The                                                                    
     very first Act of the  state legislature was to do away                                                                    
     with  the fish  traps around  our salmon  rivers.   And                                                                    
     that was  done for a  very specific reason  because the                                                                    
     corporation  had  a hold  of  our  communities and  the                                                                    
     legislature felt  that they needed  to give  control of                                                                    
     the resource ...  to the people living in the state.                                                                       
                                                                                                                                
     And  to  reflect back  to  the  1973 implementation  of                                                                    
     limit  entry  for salmon,  ...  it  was issued  to  the                                                                    
     individual and  the owner.   And ...  it was  issued to                                                                    
     the  people who  made  the fish  landings,  based on  a                                                                    
     point system.   So I have some real  problems with this                                                                    
     bill on  ... the way  it's going.  I  particularly want                                                                    
     to  say  that I've  been  the  operator, I've  been  an                                                                    
     owner-operator,  [I've] mostly  been a  crew member,  I                                                                    
     should  say,  but  I   have  owned  and  operated-owned                                                                    
     limited entry  permits, owned boats, [and]  fished in a                                                                    
     variety  of  different  fisheries under  a  variety  of                                                                    
     different capacities.                                                                                                      
                                                                                                                                
     But  in  the  introduction letter  from  Representative                                                                    
     Scalzi  and commentary  by the  CFEC  staff person,  it                                                                    
     states that  it would award fishing  privileges to many                                                                    
     who  have  worked  essentially as  hired  crew  in  the                                                                    
     fishery  and ...  not those  who have  invested in  the                                                                    
     fishery.  And  under that pretense, ... I  think that I                                                                    
     have invested in the fisheries  over the past 25 years.                                                                    
     I have  spent time.   And  you can  look at  those hair                                                                    
     crab vessels out there, and  they wouldn't be out there                                                                    
     if it wasn't  for a crew.  So there's  actually a value                                                                    
     to the crew.   [There is a] value to  the boat, owners,                                                                    
     and   operators   to  have   professional   crewmembers                                                                    
     onboard.                                                                                                                   
                                                                                                                                
     And I know that the  IFQ system has been mentioned here                                                                    
     a couple  of times, and  I should  say that there  is a                                                                    
     National   Academy   of  Science   publication   called                                                                    
     "Sharing the  Fish" that  addresses the  value socially                                                                    
     and  economically  for  giving   a  broad  spectrum  of                                                                    
     issuance to  fishing rights.   So, ...  I think  ... we                                                                    
     need to go back and think  about other ways that we can                                                                    
     address  the hair  crab and  the scallop  fishery while                                                                    
     not producing something that's [going  to] have a whole                                                                    
     bunch of  sideboard issues that we  don't foresee right                                                                    
     now.   So,  I think  that there's  other ways  to limit                                                                    
     those guys  and reduce  the number of  issuances, based                                                                    
     on  a point  system perhaps.   But  there's other  ways                                                                    
     that could possibly help those guys out.                                                                                   
                                                                                                                                
Number 2370                                                                                                                     
                                                                                                                                
     Now, I know that you  have mentioned the IFQ situation,                                                                    
     and I  can tell you right  now that I worked  on a boat                                                                    
     out of Seattle  that was an initial  allocation, and it                                                                    
     was basically  a first generation.   So they  were able                                                                    
     to hire a  skipper to run that boat, and  now that boat                                                                    
     and  vessel have  [been sold]  to an  investor, and  he                                                                    
     only  has  to  own....   There  are  several  loopholes                                                                    
     involved  in the  IFQ  situation, so  I  won't go  into                                                                    
     that.  But basically what's  happened is that this boat                                                                    
     that was  once producing  income for five  families has                                                                    
     been sold along with  its fishing rights, and basically                                                                    
     the investor  wrote a  new letter  to the  crew stating                                                                    
     that the  wages calculations has been  changed and your                                                                    
     wages have been cut 60 percent....                                                                                         
                                                                                                                                
     To sum it  up, I think the intent of  this [bill] might                                                                    
     have  merit, but  the devil  is in  the details,  and I                                                                    
     think we need to look at  other ways we can address the                                                                    
     problem  in the  hair crab  and scallop  fishery rather                                                                    
     than giving  it to corporation.   I think that  we have                                                                    
     to go back  to our roots and exactly how  we  (indisc.)                                                                    
     fisheries in the past.   And IFQ fisheries, a federally                                                                    
     managed program, so then the  state didn't do that.  So                                                                    
     I  guess  I  would  say,  "Use  caution,  look  at  the                                                                    
     details,   and  listen   to   the   fishermen  in   the                                                                    
     communities."   And I think  that you'll gain a  lot of                                                                    
     knowledge....    Thank you  very  much  for letting  me                                                                    
     testify.                                                                                                                   
                                                                                                                                
Number 2479                                                                                                                     
                                                                                                                                
MAKO HAGGERRTY, commercial fisherman, testified via                                                                             
teleconference:                                                                                                                 
                                                                                                                                
     I  have a  lot of  problems with  this bill.   I  don't                                                                    
     really know where to start.   What I have heard is that                                                                    
     the concern is that one  boat that has four skippers is                                                                    
     going to  translate to four  permits, which  will clone                                                                    
     the fishery into four boats.                                                                                               
                                                                                                                                
     Well, first of all that doesn't  make a lot of sense to                                                                    
     me  because  that one  boat  had  four skippers  for  a                                                                    
     reason.   It had  four skippers  because that  one boat                                                                    
     had to be fishing all the  time.  So it just seems like                                                                    
     we're  trying  to  fabricate  a  problem  that  doesn't                                                                    
     really exist.   I think  it's a  bad idea to  be giving                                                                    
     the fishing  rights to  the vessel owners.   ...   I've                                                                    
     heard a  lot of  talk about that  one boat  and several                                                                    
     skippers.   But what  I haven't  heard talked  about is                                                                    
     one owner  and several boats.   And it  basically winds                                                                    
     up  into the  same thing,  ... concentration  of wealth                                                                    
     and one person  controlling a fishery.   And that takes                                                                    
     us back to  what Alan [Parks] was  talking about, which                                                                    
     is the  way the  fish wheels worked  and the  fact that                                                                    
     all the fish  was owned by one entity, and  we all were                                                                    
     lucky to be  able to have an opportunity to  just get a                                                                    
     little bit of that money.  ...                                                                                             
                                                                                                                                
     So  I guess  what I'm  really concerned  about is  that                                                                    
     this  particular  bill  kind   of  violates  what  that                                                                    
     initial sharing of  the resource was all  about, and it                                                                    
     re-concentrates a  resource back into the  hands of [a]                                                                    
     few.   And  this bill  does  exactly that.   You  might                                                                    
     think  that  this  just addresses  hair  crab  and  ...                                                                    
     scallop fishery.   It can be translated  into the state                                                                    
     cod  fisheries  and a  number  of  other fisheries  [as                                                                    
     well].    And I  think  that  it  would have  [a]  very                                                                    
     detrimental  effect  to the  coastal  economy.   And  I                                                                    
     would really urge you to  make the necessary changes or                                                                    
     even just throw  this bill out.  Alan  [Parks] had some                                                                    
     good points  about eligibility by  a point  system, but                                                                    
     giving  the fishery  to the  vessel owner  is really  a                                                                    
     (indisc.) to regulate managed fishers.                                                                                     
                                                                                                                                
Number 2631                                                                                                                     
                                                                                                                                
PAUL  SEATON testified  via teleconference  and  referred to  Ms.                                                               
McDOWELL's comments regarding  owner-operated salmon fisheries in                                                               
1973.   He  said anyone  who has  been involved  with the  salmon                                                               
industry,  including  him,  knows  that  these  were  not  owner-                                                               
operated  fisheries.   They were  predominantly vessels  owned by                                                               
canneries, and operators  were from the "outside"  or anywhere in                                                               
Alaska, and they fished "whether it  [was] in Bristol Bay or Cook                                                               
Inlet."  He noted that trolling  in the Southeast might have been                                                               
different.  But this is how the gillnet fisheries were.  He said                                                                
the state "saw in its wisdom" to grant permits to fishermen.  He                                                                
went on to say:                                                                                                                 
                                                                                                                                
     If  you  went  back  and looked  at  the  ownership  of                                                                    
     vessels in Cook  Inlet and the ownership  of vessels in                                                                    
     Bristol  Bay  at the  time  this  happened, you'd  find                                                                    
     exactly the  same situation that  you'd find  now, [one                                                                    
     in which]  somebody else [such as]  a corporation owned                                                                    
     a vessel,  and not  the majority of  fishermen.   And I                                                                    
     think  when the  state  decided  to empower  fishermen,                                                                    
     that's why they  did this.  And I don't  think the boat                                                                    
     would have come out the same  way if the ... system was                                                                    
     designed  to  give  the   ownership  to  vessel  owners                                                                    
     instead of the fishermen.                                                                                                  
                                                                                                                                
     Basically,  this  is  a difference  between  the  state                                                                    
     system that  empowers fishermen and the  federal system                                                                    
     that gives  everything to vessel  owners.   And there's                                                                    
     been huge  amounts of  problems within  the communities                                                                    
     that [have] been created by  the federal system, and in                                                                    
     fact  that's  why  we  have  a  state  water  sablefish                                                                    
     fishery.  That's why the  state Board of Fisheries went                                                                    
     through  and formed  the  state  water's [Pacific]  cod                                                                    
     fishery  and  other  devices trying  to  alleviate  the                                                                    
     economic ...  hardships that have been  created by this                                                                    
     federal  vessel owner  system.   Between the  time this                                                                    
     first came up  and now, the federal  government and the                                                                    
     council  has created  the (indisc.)  implementation (or                                                                    
     LLP program)  to solve these problems  in these federal                                                                    
     fisheries, these both scallop and  hair crab can go and                                                                    
     get a species endorsement  without having to go through                                                                    
     and  change the  whole  basic  philosophy of  fisheries                                                                    
     management in the state of Alaska.                                                                                         
                                                                                                                                
     These  fisheries, to  solve those  problems, could  get                                                                    
     endorsements  on  LLP's  for those  two  fisheries  and                                                                    
     ....  go  back to the people that it  operated in those                                                                    
     fisheries.     And  the  state  could   still  maintain                                                                    
     management.  So, I am firmly against this.                                                                                 
                                                                                                                                
     We can  take a  look at the  state water  [Pacific] cod                                                                    
     (ph.) fishery, which has been  a lifesaver to fishermen                                                                    
     from Sand  Point and Chignik,  and Kodiak and  here and                                                                    
     Prince  William Sound,  to all  over.   We've got  five                                                                    
     different  management areas  and  they  have this  open                                                                    
     access  fishery   that's  regulated  in  a   number  of                                                                    
     (indisc.) to  a slow fishery.   And that's specifically                                                                    
     to provide a long-term  economic input.  The usefulness                                                                    
     of a limited  entry system here has not  occurred.  And                                                                    
     if  people haven't  applied for  limited entry  like at                                                                    
     Sand Point, which they would  immediately apply under a                                                                    
     vessel  license  program,  because  the  vessel  owners                                                                    
     aren't the guides that are out there fishing.                                                                              
                                                                                                                                
     It's the same way here in Cook Inlet.   I own  ...  two                                                                    
     vessels at [Pacific]  cod (ph.) fish[ery].   ....  Most                                                                    
     of the  larger vessels here are  not owner-operator and                                                                    
     I'm sure  there would  be a move  to apply  for limited                                                                    
     entry  right away  if the  owners of  the vessels  were                                                                    
     given  the permit.    Right now,  that's  not going  to                                                                    
     happen because  the vessel owners aren't  operating the                                                                    
     vessels.  And so they are  not out pushing for an entry                                                                    
     permit  system that  would give  those  permits to  the                                                                    
     operators.                                                                                                                 
                                                                                                                                
Number 2845                                                                                                                     
                                                                                                                                
MR. SEATON said there were a lot  of problems with this bill.  He                                                               
referred to page 5, line 3 of  HB 206, and remarked that he could                                                               
not believe  that "only if  lost" would  "make it into  the final                                                               
writing."                                                                                                                       
                                                                                                                                
MR. SEATON alluded to transfers  of vessel entry permits found on                                                               
page 6 of HB  206.  He referred to earlier  testimony and said if                                                               
"You  have  corporation   A  and  that's  bought   by  a  holding                                                               
corporation,  corporation A  still owns  the permit  but you  now                                                               
have  new   owners  of  that   permit  and  vessel."     He  said                                                               
corporations have many ways around this.                                                                                        
                                                                                                                                
MR. SEATON  pointed out another problem  on page 7, lines  3-6 of                                                               
HB  206.   He indicated  his hope  that substitution  [of another                                                               
vessel  for  the  vessel  identified  on  the  permit]  would  be                                                               
eliminated from the  bill, and that two fisheries  [hair crab and                                                               
scallop] would go  back to LLP endorsements  rather than changing                                                               
the state's philosophy on fisheries.                                                                                            
                                                                                                                                
Number 2920                                                                                                                     
                                                                                                                                
REPRESENTATIVE SCALZI  requested that  Mr. Seaton  submit written                                                               
testimony detailing his concerns.                                                                                               
                                                                                                                                
01-16 SIDE B                                                                                                                    
Number 2944                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KERTTULA remarked  that she  would not  object to                                                               
this  bill being  moved out  of committee  because she  has heard                                                               
enough testimony  to see  that the  bill needs  to be  looked at.                                                               
However,  she still  has concerns  about transferring  permits to                                                               
corporations since she is not  clear on what happens with second-                                                               
generation transfers.  She mentioned  that she sees how there can                                                               
be exemptions and "multiple ownership"  [with permits].  But, her                                                               
concerns  can be  addressed before  this bill  goes to  the House                                                               
Resources Standing Committee, she said.                                                                                         
                                                                                                                                
REPRESENTATIVE  SCALZI  made  a  motion   to  move  HB  206  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
notes.   There being no  objection, HB  206 moved from  the House                                                               
Special Committee on Fisheries.                                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 2898                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee  on Fisheries  Committee meeting  was adjourned                                                               
at 7:03 p.m.                                                                                                                    
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects