Legislature(2011 - 2012)CAPITOL 120

02/17/2011 05:00 PM House FISHERIES


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05:06:06 PM Start
05:06:18 PM Overview(s): North Pacific Fisheries Management Council (npfmc)
05:57:36 PM HB141
06:37:25 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: North Pacific Fisheries Management TELECONFERENCED
Council
+ - Presentations by Chris Oliver, Executive TELECONFERENCED
Director & Stefanie Moreland, ADF&G Federal
Fisheries Coordinator
*+ HB 141 LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                       February 17, 2011                                                                                        
                           5:06 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Steve Thompson, Chair                                                                                            
Representative Craig Johnson, Vice Chair                                                                                        
Representative Alan Austerman                                                                                                   
Representative Bob Herron                                                                                                       
Representative Lance Pruitt                                                                                                     
Representative Scott Kawasaki                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bob Miller                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S):  NORTH PACIFIC FISHERIES MANAGEMENT COUNCIL (NPFMC)                                                                
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 141                                                                                                              
"An Act relating to loans for the purchase of fishing quota                                                                     
shares by certain community quota entities; and providing for an                                                                
effective date."                                                                                                                
                                                                                                                                
     - MOVED OUT OF COMMITTEE                                                                                                   
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 141                                                                                                                  
SHORT TITLE: LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS                                                                          
SPONSOR(s): REPRESENTATIVE(s) AUSTERMAN                                                                                         
                                                                                                                                
02/04/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/11       (H)       FSH, FIN                                                                                               
02/17/11       (H)       FSH AT 5:00 PM CAPITOL 120                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRIS OLIVER, Executive Director                                                                                                
North Pacific Fishery Management Council (NPFMC)                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented an overview of the North Pacific                                                               
Fisheries Management Council (NPFMC).                                                                                           
                                                                                                                                
STEFANIE MORELAND, Federal Fisheries Coordinator                                                                                
Office of the Commissioner                                                                                                      
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Responded to questions during the                                                                        
presentation from the North Pacific Fisheries Management Council                                                                
(NPFMC).                                                                                                                        
                                                                                                                                
DUNCAN FIELDS, Vice President                                                                                                   
Fisheries and Economic Development                                                                                              
Old Harbor Native Corporation                                                                                                   
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 141, and                                                                      
responded to questions.                                                                                                         
                                                                                                                                
OLE OLSEN, Board Member                                                                                                         
Gulf of Alaska Coastal Communities Coalition (GOAC3)                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 141.                                                                  
                                                                                                                                
TIM GREENE, Representative                                                                                                      
Nanwalek IRA (Indian Reorganization Act) Village Council,                                                                       
Nanwalek, Alaska                                                                                                                
POSITION STATEMENT:  Testified during the hearing on HB 141.                                                                  
                                                                                                                                
BILL LUCEY                                                                                                                      
Coastal Planner                                                                                                                 
City and Borough of Yakutat                                                                                                     
Yakutat, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
GALE VICK                                                                                                                       
Executive Director                                                                                                              
Gulf of Alaska Coastal Communities Coalition (GOAC3)                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
PATRICIA BROWN SCHWALENBERG, Executive Director                                                                                 
Chugach Regional Resources Commission (CRRC)                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
BOB HENRICKS, Board Member                                                                                                      
Chugach Regional Resources Commission (CRRC)                                                                                    
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
TONY GREGORIO, Fisherman                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
FREDDIE CHRISTIANSEN, Fisherman                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
5:06:06 PM                                                                                                                    
                                                                                                                                
CHAIR  STEVE  THOMPSON  called  the  House  Special  Committee  on                                                            
Fisheries meeting  to order at 5:06  p.m.  Present at  the call to                                                              
order  were  Representatives  Thompson,   Herron,  and  Austerman.                                                              
Representatives  Johnson, Kawasaki, and  Herron arrived  while the                                                              
meeting was in progress.                                                                                                        
                                                                                                                                
5:06:18 PM                                                                                                                    
                                                                                                                                
^OVERVIEW(S):     North  Pacific   Fisheries  Management   Council                                                              
(NPFMC)                                                                                                                         
 OVERVIEW(S):  North Pacific Fisheries Management Council (NPFMC)                                                           
                                                                                                                                
CHAIR THOMPSON  announced that the  first order of  business would                                                              
be  an  overview  from  the  North  Pacific  Fisheries  Management                                                              
Council (NPFMC).                                                                                                                
                                                                                                                                
5:07:56 PM                                                                                                                    
                                                                                                                                
CHRIS   OLIVER,   Executive  Director,   North   Pacific   Fishery                                                              
Management  Council (NPFMC),  presented an  overview of the  North                                                              
Pacific  Fisheries  Management  Council  (NPFMC)  summarizing  the                                                              
importance  of Alaskan  fisheries,  and  established:   if  Alaska                                                              
were  a  country,   it  would  rank  in  the   top  ten  producing                                                              
countries; it represents  50 percent of the total  U.S. catch; the                                                              
catch  is between  three  and five  billion  pounds of  groundfish                                                              
annually, for  the past 30 years;  the industry is the  number one                                                              
private  sector  employer in  Alaska;  the industry  ranks  second                                                              
only  to  oil in  revenues  to  the  state.   He  said  that  what                                                              
established the  regional council system was  the Magnuson-Stevens                                                              
Fishery Conservation  and Management  Act (MSA), adopted  in 1976,                                                              
which  established the  following:   a  3-200  nautical mile  (nm)                                                              
exclusive  economic zone,  commonly referred  to as  the 200  mile                                                              
limit;   national    standards   and   other    requirements   for                                                              
conservation  and  management  of  resources; a  system  of  eight                                                              
regional  councils, composed  of fishermen  and government  agency                                                              
representatives,  to  develop  fishery  regulations  for  specific                                                              
areas,  subject to  approval and  implementation  by the  National                                                              
Marine Fisheries  Service.  Mr. Oliver described  the structure of                                                              
the  council,   which  includes   the  heads   of  the   fisheries                                                              
departments  for  Alaska,  Washington, Oregon,  and  the  National                                                              
Marine  Fisheries  Service  (NMFS)  among  the  membership.    The                                                              
council  holds week  long meetings,  on  five different  occasions                                                              
throughout  the year.   An  industry  advisory panel,  as well  as                                                              
scientific  and statistical  committees,  provides  advice to  the                                                              
council,  and public  testimony is  taken at  each meeting  on all                                                              
issues.                                                                                                                         
                                                                                                                                
5:14:48 PM                                                                                                                    
                                                                                                                                
MR. OLIVER  provided pie charts,  indicating the catch  weight and                                                              
value   percentages,  from   the   groundfish,  herring,   salmon,                                                              
shellfish  and   halibut  2009   harvest  report,  which   totaled                                                              
2,178,700 metric  tons (mt) valued  at $1.15 billion dollars.   He                                                              
used pie  charts to indicate the  biomass of the  major groundfish                                                              
species  specific to  the Bering  Sea, which  produced 17  million                                                              
mt, and  the Gulf of  Alaska (GOA), which  produced 4  million mt.                                                              
The council  institutes a stock  abundance program  that maintains                                                              
a  formula for  sustainable fisheries  management.   Vessels  have                                                              
observers in  place, and conservative  catch limits are  the norm,                                                              
along  with  by-catch limits.    The  overall optimal  yield  (OY)                                                              
limit  for the  Bering  Sea and  Aleutian  Islands  (BSAI) is  two                                                              
million metric  tons, and  he reported  that, as  a result  of the                                                              
management  system, there  are  no overfished  groundfish  stocks;                                                              
plans are  in place to  rebuild the overfished  crab stocks.   All                                                              
catch,  including  discards  count   towards  each  species  catch                                                              
limit;  overseen  by onboard  observers  using  daily,  real-time,                                                              
electronic reporting.                                                                                                           
                                                                                                                                
5:19:42 PM                                                                                                                    
                                                                                                                                
MR.  OLIVER said  that reducing  bycatch, discards,  and waste  is                                                              
being  accomplished  by  instituting   a  program  that  minimizes                                                              
discards and  eliminates waste.   A  series of slides  illustrated                                                              
the  progress made  in  this area  using  linear  and bar  graphs,                                                              
which  also listed  methods employed  including:   bycatch  limits                                                              
for crab,  salmon, halibut,  and herring;  gear restrictions  such                                                              
as pelagic trawls  only for BSAI Pollock, biodegradable  panels in                                                              
pots,  prohibition  on gillnets  and  other gear;  mandatory  full                                                              
retention  of  all  Pollock  and   cod,  and  some  GOA  flatfish;                                                              
voluntary  industry program  actions for  sharing of bycatch  data                                                              
to  avoid  hotspots.     Additionally,  habitat   conservation  is                                                              
practiced,  and requires  closures  of large  areas  that are  not                                                              
fished.   Over  60 percent  of the  management area  is closed  to                                                              
bottom  trawling,  or  other  methods,   for  habitat  or  species                                                              
conservation.     A  comprehensive   set  of  closures   has  been                                                              
maintained  to   minimize  interactions  between   the  groundfish                                                              
fisheries  and the  endangered Steller  sea lion  prey field.   He                                                              
reported that  the most  recent NMFS study,  2011, found  that the                                                              
pup  counts are  still  decreasing  and additional  measures  have                                                              
been imposed; a law suit, filed by the council, is pending.                                                                     
                                                                                                                                
5:23:28 PM                                                                                                                    
                                                                                                                                
MR. OLIVER said  that coastal community needs are  accommodated in                                                              
various  ways  to provide  community  protection,  which  include:                                                              
proposed  management  actions  with   assessments  of  social  and                                                              
community  impacts   based  on  development  and   maintenance  of                                                              
coastal community  profiles; sablefish/halibut  individual fishing                                                              
quota  (IFQ)   programs  designed  with  specific   safeguards  to                                                              
maintain coastal  community fleets;  sea lion protection  measures                                                              
modified to ease  the burden on small, local  vessels; regulations                                                              
to  recognize  halibut subsistence  fisheries;  regional  delivery                                                              
requirements  as  well  as individual  processing  quotas  (IPQs),                                                              
built into  the crab rationalization  program; and support  of the                                                              
community development  quota (CDQ) program.  He  elaborated on the                                                              
CDQ  program  to establish  the  following  points:   benefits  65                                                              
remote  coastal communities  in  BSAI since  1992;  sets aside  10                                                              
percent of  Pollock, ground  fish and  crab total allowable  catch                                                              
(TAC), and  halibut set  aside; since 1992,  over $100  million in                                                              
wages, education,  and training  benefits provided to  over 25,000                                                              
western  Alaska residents;  2002  total revenues  of  the six  CDQ                                                              
groups was  about $70 million combined.   Mr. Oliver said  the new                                                              
MSA reauthorization  was signed  by the  president on  January 12,                                                              
2007, and  significant new  provisions included  were:   a mandate                                                              
for  use  of  the annual  catch  limits  to  prevent  overfishing;                                                              
establishment   of  guidelines   for   limited  access   privilege                                                              
programs  (LAPPs); realigned  environmental  review process  under                                                              
NEPA  (National Environmental  Protection  Agency)  with the  MSA;                                                              
strengthened  the   role  of  science  in  decision   making,  and                                                              
improved the  data collection methods  for better management.   He                                                              
reported   that,  when   making  any   regulatory  amendments   or                                                              
allocation revisions,  the council is  compelled to comply  with a                                                              
number of presidential  Executive Orders (EOs), and  he listed the                                                              
most  important as:    the Endangered  Species  Act, requiring  an                                                              
assessment   of   impacts   on  listed   species;   the   National                                                              
Environmental   Policy   Act,  requiring   an   analysis  of   the                                                              
environmental   impacts  of   federal   actions;  the   Regulatory                                                              
Flexibility Act,  requiring an examination  of adverse  impacts on                                                              
small entities;  Executive Order  12866, requiring an  analysis of                                                              
the  costs  and  benefits of  regulations;  and  special  interest                                                              
legislation.                                                                                                                    
                                                                                                                                
5:27:07 PM                                                                                                                    
                                                                                                                                
MR. OLIVER  addressed  a series  of six slides  to illustrate  how                                                              
the council  receives and  processes proposals, highlighting  that                                                              
input is  received from  the public and  stakeholders, as  well as                                                              
governmental  agencies.  A  flow chart  indicated that  changes to                                                              
fishery   regulations  require   a  number   of  steps   including                                                              
proposal,  development  of  alternatives,   analysis  and  review,                                                              
decision,  and  rulemaking.  There are  opportunities  for  public                                                              
input  into  the  process  at each  step.    When  the  regulatory                                                              
package  of council  action is completed  it  is submitted  to the                                                              
U.S.  Secretary of  Commerce, where  it  undergoes another  review                                                              
and approval process,  which also allows for public  comment.  The                                                              
vast  majority  of  proposals  are   approved,  published  with  a                                                              
summary  of comments  and  NMFS'  response, and  become  effective                                                              
within 30  days of the publication  date.  A proposal  for council                                                              
action  can  take  one  year to  three  years  from  inception  to                                                              
implementation.   Coordination  with  the state  of Alaska  occurs                                                              
through four  means, which  are:  the  ADF&G commissioner  holds a                                                              
voting  seat on  the council;  annual meetings  occur between  the                                                              
council and  the Board of Fish  (BOF); a joint  protocol committee                                                              
meets  as necessary,  comprised of  council and  BOF members;  and                                                              
there is ongoing council/NMFS/ADF&G staff coordination.                                                                         
                                                                                                                                
5:32:00 PM                                                                                                                    
                                                                                                                                
MR.  OLIVER reviewed  recent and  pending council  issues and  the                                                              
actions  being  taken.    The  salmon   bycatch,  in  the  Pollock                                                              
fisheries,  has   proven  to  be   significant,  and  a   cap  was                                                              
established,  along with  a  series of  cooperatives  to help  the                                                              
Pollack   fishermen  manage   the   catch  better.     The   high,                                                              
disproportionate,  bycatch  numbers seen  in  2006  and 2007  have                                                              
been reduced; however,  the Bering Sea chum salmon  bycatch is now                                                              
receiving specific  focus.   Additionally, Chinook salmon  bycatch                                                              
measures are  being taken  in the GOA,  on an expedited  timeframe                                                              
with enactment  to occur  sometime next year.   He reported  that,                                                              
this year,  a change  will be  made in  the halibut bycatch  caps.                                                              
Also,  annual  catch  limits  (ACLs)  for  groundfish,  crab,  and                                                              
scallops  are  being established  to  align  with the  recent  MSA                                                              
reauthorization,  which  requires   the  establishment  of  annual                                                              
catch  limits for  crab  and  scallop; management  guidelines  are                                                              
deferred  to  ADF&G.     Regarding  the  halibut   charter  sector                                                              
allocations,  he said  the  council has  developed  a catch  share                                                              
plan, which  is scheduled  to take  effect next  year.   The catch                                                              
share plan will  provide a solid allocation level  and cement what                                                              
was previously  in  place; a harvest  level guideline.   In  place                                                              
this year is  a moratorium on the licensing for  halibut charters,                                                              
which  has  proven  to  be  a  controversial  issue.    A  fishery                                                              
management  plan  (FMP)  was  recently  approved  for  the  Arctic                                                              
region,  which   established  a  moratorium  as   a  precautionary                                                              
procedure until  sustainable fishing limits can be  researched and                                                              
adopted.    To  a  question  from   the  committee,  he  said  the                                                              
moratorium was  a proactive measure  to allow time  for scientific                                                              
review of the potential for fisheries, as the ice recedes.                                                                      
                                                                                                                                
5:40:29 PM                                                                                                                    
                                                                                                                                
MR. OLIVER  said that,  although salmon  are not managed  directly                                                              
by  the council,  there  is  a salmon  fisheries  management  plan                                                              
(FMP)  in  place.    Recently  litigation   has  been  brought  to                                                              
scrutinize the  jurisdiction authorization, that the  FMP provides                                                              
the  state, regarding  salmon  in federal  waters.   Finally,  Mr.                                                              
Oliver  reported  that  the  2010 U.S.  Ocean  Policy  Task  Force                                                              
recommendation for  a National Ocean  Council (NOC)  was supported                                                              
by a  presidential EO, which  also envisions the  establishment of                                                              
several regional  planning teams,  including in Alaska,  to create                                                              
a comprehensive  marine spatial planning initiative.   The council                                                              
is  not opposed  to this  type of  concept, but  there is  concern                                                              
that  the  NOC  may be  means  for  circumventing  the  management                                                              
authority already  in place.   He pointed  out that  the committee                                                              
packet includes  information regarding the council's  attention to                                                              
the  Arctic,  a   booklet  titled,  "The  North   Pacific  Council                                                              
Process," as  well as  a brochure specific  to the current  issues                                                              
being dealt with by the council.                                                                                                
                                                                                                                                
5:45:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  asked if a council seat  should be reserved                                                              
specifically for a subsistence member.                                                                                          
                                                                                                                                
MR. OLIVER  responded that  council membership  is dictated  under                                                              
the MSA.                                                                                                                        
                                                                                                                                
REPRESENTATIVE HERRON said:                                                                                                     
                                                                                                                                
       You mean a person that's truly just a subsistence                                                                        
     user, ... they can't get on the council.                                                                                   
                                                                                                                                
MR.  OLIVER   said  the   governor  could   make  an   appointment                                                              
recommendation  to the  U.S. Secretary  of Commerce,  for a  three                                                              
year term; three names are submitted.                                                                                           
                                                                                                                                
REPRESENTATIVE  HERRON queried  whether a  subsistence person  has                                                              
ever served on the council.                                                                                                     
                                                                                                                                
MR. OLIVER answered not to his knowledge.                                                                                       
                                                                                                                                
REPRESENTATIVE  HERRON described  the makeup  of his district  and                                                              
the  conflicts  that continue  to  occur,  particularly  regarding                                                              
bycatch.                                                                                                                        
                                                                                                                                
MR. OLIVER indicated  that relief should become  apparent based on                                                              
the measures  that have been  taken to  reduce the bycatch  in the                                                              
area.                                                                                                                           
                                                                                                                                
5:50:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN  noted that  the halibut bycatch  caps in                                                              
the GOA are based  upon the biomass, and asked whether  the cap is                                                              
a set poundage level or if it fluctuates with the biomass.                                                                      
                                                                                                                                
MR. OLIVER responded that it is set poundage.                                                                                   
                                                                                                                                
REPRESENTATIVE AUSTERMAN  inquired if  a fluctuating cap  is under                                                              
discussion.                                                                                                                     
                                                                                                                                
MR. OLIVER said not at the council level.                                                                                       
                                                                                                                                
5:52:20 PM                                                                                                                    
                                                                                                                                
STEFANIE MORELAND,  Federal Fisheries  Coordinator, Office  of the                                                              
Commissioner,  Alaska Department  of  Fish &  Game (ADF&G),  added                                                              
that the  council is  interested in learning  how the  bycatch and                                                              
the cap interact  with the halibut stock assessment  received from                                                              
the  halibut commission.    One  step taken  has  been to  request                                                              
further information from the halibut commission.                                                                                
                                                                                                                                
5:52:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN  noted the  reduction  in discards,  and                                                              
asked if  the percentage  has been reduced  because more  catch is                                                              
retained.                                                                                                                       
                                                                                                                                
MR. OLIVER  said it  primarily reflects  the groundfish  retention                                                              
program.   A  requirement was  implemented  that retention  versus                                                              
discard  be  instituted,  which   is  reflected  in  the  reported                                                              
percentage.                                                                                                                     
                                                                                                                                
5:54:37 PM                                                                                                                    
                                                                                                                                
MS. MORELAND  explained the structure  of the ADF&G staff  that is                                                              
organized to  work specifically with  the council and  interact on                                                              
the previously mentioned issues and coordination points.                                                                        
                                                                                                                                
        HB 141-LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS                                                                    
                                                                                                                                
The committee took an at-ease from 5:56 p.m. to 5:57 p.m.                                                                       
                                                                                                                                
5:57:36 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON  announced that the  final order of  business would                                                              
be  HOUSE  BILL  NO.  141,  "An Act  relating  to  loans  for  the                                                              
purchase  of  fishing  quota shares  by  certain  community  quota                                                              
entities; and providing for an effective date."                                                                                 
                                                                                                                                
5:57:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN, introduced  HB  141, paraphrasing  from                                                              
the   sponsor  statement,   which   read   as  follows   [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     The Community  Quota Entity (CQE) program  was developed                                                                   
     in   2004  by   the   federal  North   Pacific   Fishery                                                                   
     Management  Council  to help  communities  maintain  and                                                                   
     build  involvement   in  the   halibut  and  black   cod                                                                   
     longline  fisheries.    The  CQE  program  provided  the                                                                   
     legal  opportunity for  communities  to form  non-profit                                                                   
     organizations  to  purchase   individual  fishing  quota                                                                   
     (IFQ),   anchoring   fishery  participation   in   these                                                                   
     coastal   communities.       In   response,   the   23rd                                                                   
     Legislature  modified the  Commercial Fishing  Revolving                                                                   
     Loan Fund  to provide  authorization to finance  fishing                                                                   
     quota for CQEs.                                                                                                            
                                                                                                                                
     Despite  the  Alaska Legislature's  initial  efforts  to                                                                   
     provide  financing to  the communities,  only two of  42                                                                   
     eligible  communities  have   procured  quota  share  to                                                                   
     date.   In fact, small  coastal communities  continue to                                                                   
     see a significant  out-migration of fisherman  and quota                                                                   
     shares,  leaving  them  with  limited or  no  access  to                                                                   
     fisheries occurring just off their shores.                                                                                 
                                                                                                                                
     House  Bill 141  will modify  the financial  instruments                                                                   
     the   state   has   previously   provided,   to   assist                                                                   
     communities  to participate in  the program and  bolster                                                                   
     their  economies.     By  establishing   an  independent                                                                   
     revolving   loan   fund  modeled   upon   the   existing                                                                   
     Commercial  Fishing  Revolving Loan  Fund,  HB 141  will                                                                   
     enable  the   state  to  structure  a   successful  loan                                                                   
     program  that supports rural  community development  and                                                                   
     strengthens Alaska's coastal regions.                                                                                      
                                                                                                                                
     An   active  commercial   fishing  fleet   in  a   rural                                                                   
     community  employs  residents,  provides  tax  revenues,                                                                   
     and  spends  income  locally, which  has  a  substantial                                                                   
     multiplier effect  in small communities.  This  piece of                                                                   
     legislation  is  an  important  tool  to  support  rural                                                                   
     coastal  communities and  develop sustainable  economies                                                                   
     throughout the state.                                                                                                      
                                                                                                                                
6:02:23 PM                                                                                                                    
                                                                                                                                
DUNCAN   FIELDS,   Vice   President,    Fisheries   and   Economic                                                              
Development,  Old Harbor  Native  Corporation, introduced  himself                                                              
as a fisheries advocate and active fisheries consultant.                                                                        
                                                                                                                                
6:03:08 PM                                                                                                                    
                                                                                                                                
OLE  OLSEN,  Board  Member, Gulf  of  Alaska  Coastal  Communities                                                              
Coalition (GOAC3),  stated that, being born into  a Kodiak fishing                                                              
family,  he has  a lifelong  history with  Alaskan fisheries,  and                                                              
has  been involved  with the  Gulf of  Alaska Coastal  Communities                                                              
Coalition (GOAC3) since it was formed.                                                                                          
                                                                                                                                
6:03:44 PM                                                                                                                    
                                                                                                                                
MR. FIELDS  stated support  for HB 141,  and pointed out  that the                                                              
committee packet  includes [five]  pages of written  testimony and                                                              
supplemental material,  which he  submitted.  He  underscored that                                                              
HB 141 is a culmination of six years of work; not a new concept.                                                                
                                                                                                                                
6:04:49 PM                                                                                                                    
                                                                                                                                
MR.  OLSEN directed  attention to  the  committee packet  handouts                                                              
titled  "Community  Quota  Entities   (CQEs),"  dated  2/17-18/09,                                                              
prepared  by the Restricted  Access Management  (RAM) division  of                                                              
the National  Oceanic &  Atmospheric Administration  (NOAA), which                                                              
contain   a   history   of   CQEs   and   supporting   statistical                                                              
information.  He  described the development of  individual fishing                                                              
quotas (IFQs), beginning  with the inception of  limited entry and                                                              
the effect  it has  had on the  coastal community fishing  fleets,                                                              
as  a continual  erosion of  fishery access  to these  areas.   In                                                              
1998  CQE's  were  created  under   federal  law  to  address  the                                                              
situation  and assist  coastal communities  to  rebuild the  local                                                              
industry.                                                                                                                       
                                                                                                                                
6:07:46 PM                                                                                                                    
                                                                                                                                
MR. OLSEN provided  an example of what occurred in  Old Harbor and                                                              
the  effect  that the  IFQ  has  had through  the  rationalization                                                              
program.   The  fleet has  been significantly  reduced, and  every                                                              
coastal community has  felt similar effects.  The CQE  was seen as                                                              
a means to  level the playing field and  regenerate opportunities.                                                              
Forty-five   coastal    communities,   with   less    than   1,500                                                              
inhabitants,   and  not   connected  to   the  road  system   were                                                              
identified  as  eligible  to  organize into  CQE's.    He  further                                                              
explained  how  the CQEs  were  formed  using  a point  system  to                                                              
distribute an equitable quota, and allow community governance.                                                                  
                                                                                                                                
MR. FIELDS interjected that the issue has been funding.                                                                         
                                                                                                                                
6:12:17 PM                                                                                                                    
                                                                                                                                
MR. OLSEN stated  that, in 2004, the opportunity  to purchase CQEs                                                              
was  extended, but  immediately  met with  the lack  of a  funding                                                              
mechanism.     Lending  institutions  could  not   be  approached,                                                              
federal  sources  were not  a  fit,  and  the state  loan  package                                                              
requirements  were prohibitive.    In the  case of  Old Harbor,  a                                                              
fisherman was  able to provide backing,  and of the 20  CQE's that                                                              
have formed,  it is  the only  one operating,  due to the  funding                                                              
issue.                                                                                                                          
                                                                                                                                
6:15:03 PM                                                                                                                    
                                                                                                                                
MR. FIELDS  reviewed the  provisions of the  bill, stating  that a                                                              
long  term loan  is important  for  a CQE,  as it  is about  quota                                                              
share,  in the  community, in  perpetuity.   The second  provision                                                              
requires  a  down  payment  of   five  percent,  which  should  be                                                              
possible; a higher  rate would be a barrier.   The third provision                                                              
is  the  interest  rate  of  prime  plus  two  percent,  which  is                                                              
standard;  however, he suggested,  an incentive  would be  created                                                              
if it were  lowered to prime plus  one percent.  Finally,  he said                                                              
an essential  provision  is the  ability, as  stated in the  bill,                                                              
for a  CQE to ask  for postponement or  deferment of  the interest                                                              
on  the principle,  for  up to  ten years.    The deferment  would                                                              
eventually be  paid back, but  allowing this  on the front  end of                                                              
the loan,  is critical  to enable  the CQE  to build up  reserves;                                                              
necessary in a fluctuating fishery industry.                                                                                    
                                                                                                                                
6:17:26 PM                                                                                                                    
                                                                                                                                
TIM GREENE,  Representative, Nanwalek  IRA (Indian  Reorganization                                                              
Act) Village  Council, stated  support for HB  141, and  said that                                                              
the  CQE  has been  a  total  failure,  noting  that only  one  is                                                              
operational.    He  reported  that  the  North  Pacific  Fisheries                                                              
Management  Council (NPFMC) has  been unwilling  to meet  with the                                                              
village council  claiming  exemption from  EO 13175, which  states                                                              
that  all   federal  agencies   are  to   provide  government   to                                                              
government consultation to tribal entities.  Finally, he said:                                                                  
                                                                                                                                
     I  support HB  141.   It gives  a  chance for  a CQE  to                                                                   
     possibly  make a purchase.  ... But  there's nothing  to                                                                   
     purchase.   So that can  be the next  thing that  can be                                                                   
     resolved.                                                                                                                  
                                                                                                                                
6:21:14 PM                                                                                                                    
                                                                                                                                
BILL LUCEY, Coastal  Planner, City and Borough  of Yakutat, stated                                                              
support  for HB  141, and said  there  has been an  active CQE  in                                                              
Yakutat  for  about   four  years.    Periodically   the  cost  is                                                              
evaluated and  the numbers do not  pencil out.  He  predicted that                                                              
HB 141  could help with the  financial situation, and  the program                                                              
could  be  a huge  benefit  to  the area,  generating  upwards  of                                                              
$600,000  through  the  CQE  non-profit.    The  infusion  of  the                                                              
revenues  would  provide  the  community  with  a  great  deal  of                                                              
infrastructure security.                                                                                                        
                                                                                                                                
6:23:45 PM                                                                                                                    
                                                                                                                                
GALE   VICK,   Executive   Director,  Gulf   of   Alaska   Coastal                                                              
Communities  Coalition (GOAC3),  stated  support for  HB 141,  and                                                              
said the CQE  would be a viable, sustainable  program, if provided                                                              
with a  financial mechanism.   The  bill will  provide a  positive                                                              
economic stimulus.                                                                                                              
                                                                                                                                
6:26:04 PM                                                                                                                    
                                                                                                                                
PATRICIA   BROWN   SCHWALENBERG,   Executive   Director,   Chugach                                                              
Regional Resources  Commission (CRRC), stated support  for HB 141,                                                              
and  indicated  that  the  commission has  been  involved  in  the                                                              
evolution of the  CQE program.  Two years ago a  workshop was held                                                              
on forming CQE's,  but obtaining financing has  not been possible.                                                              
Funding  options  are  essential   to  get  this  program  up  and                                                              
running.                                                                                                                        
                                                                                                                                
6:28:28 PM                                                                                                                    
                                                                                                                                
BOB   HENRICKS,   Board   Member,   Chugach   Regional   Resources                                                              
Commission (CRRC),  stated support for HB 141, and  said this loan                                                              
program  is desperately  needed  to  get the  CQE  groups off  the                                                              
ground.  He said:                                                                                                               
                                                                                                                                
     We're  almost back to  the days  before statehood,  when                                                                   
     all  of the  fishermen,  and  all the  processors,  were                                                                   
     from   the  south   forty-eight,   and  controlled   our                                                                   
     resources.                                                                                                                 
                                                                                                                                
6:29:29 PM                                                                                                                    
                                                                                                                                
TONY  GREGORIO, Fisherman,  stated support  for HB  141, and  said                                                              
that it  will help  the villagers to  help themselves,  and create                                                              
an economic base.                                                                                                               
                                                                                                                                
6:31:22 PM                                                                                                                    
                                                                                                                                
FREDDIE CHRISTIANSEN,  Fisherman, stated  support for HB  141, and                                                              
said  this  would make  CQE's  plausible,  and stressed  that  the                                                              
program is needed in coastal communities.                                                                                       
                                                                                                                                
CHAIR THOMPSON closed public testimony.                                                                                         
                                                                                                                                
6:35:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  stated support for HB 141, and  said it is                                                              
the  type of  legislation that  provides  people a  means to  help                                                              
themselves.                                                                                                                     
                                                                                                                                
REPRESENTATIVE PRUITT concurred and stated support for HB 141.                                                                  
                                                                                                                                
6:36:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON moved  to report  HB 141 27-LS0158\I,  out                                                              
of   committee,   with   individual    recommendations   and   the                                                              
accompanying fiscal  notes.  There being no objection,  HB 141 was                                                              
moved from the House Special Committee on Fisheries.                                                                            
6:37:25 PM                                                                                                                    
                                                                                                                                
CHAIR THOMPSON announced the agenda for the next meeting.                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 6:37                                                                    
p.m.                                                                                                                            

Document Name Date/Time Subjects
North Pacific Fishery Management Council Overview 2011.pdf HFSH 2/17/2011 5:00:00 PM
HB 141 - Sponsor Statement.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Version I.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Yakutat Ltr - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Sectional Analysis.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Duncan Ltr - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Duncan Ltr - Supporting Data - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - IFQ Community Holdings - 1995-2009 - NOAA.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Community Quota Entity - Program Summary - 2009.PDF HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Ivanof Bay Tribe Resolution - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - Bay View Incorporated Resolution - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141-Fiscal Note - DCCED.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - GOAC3 Testimony - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - CQE Program Review - Feb 2010.PDF HFSH 2/17/2011 5:00:00 PM
HB 141
HB 141 - SWAMC Ltr - Support.pdf HFSH 2/17/2011 5:00:00 PM
HB 141