Legislature(1993 - 1994)

02/19/1993 08:00 AM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              HOUSE SPECIAL COMMITTEE ON FISHERIES                             
                        February 19, 1993                                      
                            8:00 a.m.                                          
  MEMBERS PRESENT                                                              
  Representative Harley Olberg, Vice Chairman                                  
  Representative Gail Phillips                                                 
  Representative Cliff Davidson                                                
  MEMBERS ABSENT                                                               
  Representative Carl E. Moses, Chairman                                       
  Representative Irene Nicholia                                                
  OTHER MEMBERS PRESENT                                                        
  Representative Ben Grussendorf                                               
  Representative Fran Ulmer                                                    
  COMMITTEE CALENDAR                                                           
  Overview:  United Fishermen's Association                                    
  *HB 123   "An Act relating to loans for the purchase of                      
            individual fishery quota shares."                                  
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
  (* first public hearing)                                                     
  WITNESS REGISTER                                                             
  Jerry McCune, President                                                      
  United Fishermen of Alaska                                                   
  Representative, Cordova District Fishermen United                            
  P.O. Box 939                                                                 
  Cordova, AK  99574-0939                                                      
  Phone:  424-3447                                                             
  Position Statement: Commented on the Fish & Game Budget and                  
                      the stock assessment of Herring                          
  Arni Thomson, Executive Director                                             
  Alaska Crab Coalition                                                        
  Member, United Fishermen of Alaska                                           
  3901 Leary Way NW, Suite 6                                                   
  Seattle, WA 98107                                                            
  Phone:  206-547-7560                                                         
  Position Statement: Commented on the seriously depleted King                 
                      Crab market and suggested areas of                       
  Jude Hensler, Fisheries Development Specialist                               
  Bering Sea Fishermen's Association                                           
  725 Christiansen Drive                                                       
  Anchorage, AK  99501                                                         
  Phone:  279-6519                                                             
  Position Statement: Commented that long term research was                    
                      needed in several areas of fisheries                     
  Bruce Schactler                                                              
  Member, United Fishermen of Alaska                                           
  Member, Area K Seiners Association                                           
  P.O. Box 2399                                                                
  Kodiak, AK  99615-2399                                                       
  Phone:  486-4686                                                             
  Position Statement: Commented that fin-fish research was                     
                      badly needed and that the King Crab                      
                      industry in Alaska was seriously                         
  Chris Moss, Representative                                                   
  North Pacific Fisheries Association                                          
  P.O. Box 1115                                                                
  Homer, AK  99603-1115                                                        
  Phone:  235-8053                                                             
  Position Statement: Commented on the interests of the United                 
                      Fisheries Association toward HB 123                      
  Dale Kelley, Executive Director                                              
  Alaska Trollers Association                                                  
  Member, United Fishermen of Alaska                                           
  130 Seward Street, Suite 505                                                 
  Juneau, AK  99801                                                            
  Phone:  586-9400                                                             
  Position Statement: Commented on the inconsistent tag-                       
                      recovery program in the state due to the                 
                      lack of funds                                            
  Representative Ben Grussendorf                                               
  State Capitol, Room 415                                                      
  Juneau, Alaska  99811-1182                                                   
  Phone:  465-3824                                                             
  Position Statement: Commented that he had asked the ADF&G                    
                      for a priority list of projects if given                 
  Representative Fran Ulmer                                                    
  State Capitol                                                                
  Court Building, Room 601                                                     
  Juneau, AK  99811-1182                                                       
  Phone:  465-4947                                                             
  Position Statement: Gave an overview of HB 123                               
  Greg Winegar, Loan Manager                                                   
  Juneau Lending Branch                                                        
  Alaska Department of Commerce and Economic Development                       
  P.O. Box 34159                                                               
  Juneau, AK  99803-4159                                                       
  Phone:  790-2693                                                             
  Position Statement: Supported HB 123                                         
  Richard B. Lauber, Lobbyist                                                  
  Pacific Seafood Processors Association                                       
  321 Highland                                                                 
  Juneau, AK  99801                                                            
  Phone:  586-6366                                                             
  Position Statement: Supported HB 123                                         
  Jay Ginter, Management Biologist                                             
  National Marine Fisheries Service                                            
  Member, United Fishermen of Alaska                                           
  9109 Mendenhall Mall Rd., Suite 6                                            
  Juneau, AK  99801                                                            
  Phone:  586-7228                                                             
  Position Statement: Explained Individual Fishing Quotas                      
  Geron Bruce, Special Assistant                                               
  Alaska Department of Fish & Game                                             
  P.O. Box 25526                                                               
  Juneau, AK  99802-5526                                                       
  Phone:  465-4100                                                             
  Position Statement: Supported HB 123                                         
  Martin Richard, Director                                                     
  Division of Investments                                                      
  Alaska Department of Commerce and Economic Development                       
  P.O. Box 34159                                                               
  Juneau, AK  99803-4159                                                       
  Phone:  790-2693                                                             
  Position Statement: Gave details of the interest rates on                    
                      fishing loans                                            
  Linda Behnken, Executive Director                                            
  Alaska Longline Fishermen's Association                                      
  Member, United Fishermen of Alaska                                           
  P.O. Box 1229                                                                
  Sitka, AK  99835-1229                                                        
  Phone:  747-3400                                                             
  Position Statement: Supported HB 123                                         
  PREVIOUS ACTION                                                              
  BILL:  HB 123                                                                
  SHORT TITLE:  LOANS FOR IFQ'S                                                
  BILL VERSION:                                                                
  SPONSOR(S):  REPRESENTATIVE(S) ULMER,Grussendorf,Navarre,                    
  TITLE: "An Act relating to loans for the purchase of                         
  individual fishery quota shares."                                            
  JRN-DATE     JRN-PG               ACTION                                     
  02/03/93       215    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/03/93       215    (H)   FISHERIES, RESOURCES, L&C,                       
  02/05/93       241    (H)   COSPONSOR(S): BROWN                              
  02/19/93              (H)   FSH AT 08:00 AM CAPITOL 17                       
  ACTION NARRATIVE                                                             
  TAPE 93-6, SIDE A                                                            
  Number 000                                                                   
  VICE CHAIRMAN HARLEY OLBERG called the meeting to order at                   
  8:21 a.m.  He noted only himself in attendance and asked                     
  members of the United Fishermen's Association to begin their                 
  advised that the Alaska Department of Fish & Game's                          
  (ADF&G's) budget had remained the same over the last few                     
  years, but had actually fallen with inflation factored in.                   
  He further advised that the UFA placed a tremendous amount                   
  of money in Alaska and that Alaska's stock assessment of                     
  herring was seriously depleted.                                              
  commented that the king crab fisheries around the state had                  
  collapsed around 1983, and have never returned to the same                   
  levels of production.  The king crab fisheries in Adak and                   
  Bristol Bay were still in operation, but had extremely small                 
  yields, he noted, and suggested the reproductive cycle of                    
  king crabs be studied in order to harvest larger quantities                  
  of more mature crabs in the future.  He also suggested that                  
  with more investment, Alaska's shellfish industry could be                   
  as large as the salmon industry.                                             
  Number 160                                                                   
  FISHERMEN'S ASSOCIATION, questioned the legislature's desire                 
  to cut the budget when Alaskan fisheries output was falling.                 
  The consensus among fishermen was that production was down,                  
  yet the data showed production was up, or at least at the                    
  level of years past, he claimed.                                             
  that this might be the last season of business in the gulf.                  
  The Kodiak area had not had a king crab fishery in ten years                 
  and fin-fish research in Alaska was needed terribly, he                      
  said, and felt the Exxon settlement money needed to be put                   
  to work upgrading fisheries and marketing fish across the                    
  United States.                                                               
  Number 315                                                                   
  ASSOCIATION, stated the Dungeness fishery in Kachemak Bay                    
  had been open for 12 years and harvested over one million                    
  pounds.  During those years, that fishery was over-                          
  harvested, and was closed for three years.  The lower Cook                   
  Inlet fishery was in dire financial trouble and had been for                 
  three years, he added.                                                       
  ASSOCIATION, noted the southeast fish industry was second in                 
  revenue only to oil.  There were many fisheries in the state                 
  that were not utilized and, the tag-recovery program was                     
  very poor due to the lack of funding and the inability to                    
  hire enough staff, she said.                                                 
  VICE CHAIRMAN OLBERG asked each member of the UFA how they                   
  would spend $5M of the Exxon settlement.  The members of the                 
  UFA agreed research, a stock identification program,                         
  enforcement, management of groundfish, a tag-recovery                        
  program, Prince William Sound tagging and long-term                          
  research, were areas that could be funded.                                   
  REPRESENTATIVE BEN GRUSSENDORF said he and Representative                    
  Moses had asked the ADF&G what they would do with $500K, and                 
  had not yet gotten a response, perhaps because the ADF&G did                 
  not want to upset the Office of Management and Budget with                   
  the bottom line dollar figure, he surmised.                                  
  MS. KELLEY advised of the need for the state to invest in                    
  public education across the U.S.  She suggested a public                     
  television documentary showing the difference between                        
  offshore versus coastal driftnets.  Many people in the south                 
  boycotted seafood because they were misinformed and thought                  
  that all driftnets caught dolphins and were harmful, she                     
  MR. McCUNE suggested putting enforcement officers back under                 
  the ADF&G, and not under the Department of Public Safety.                    
  He informed the group that officers oftentimes did not know                  
  their way around the rivers, or even how to run a boat.                      
  TAPE 93-6,  SIDE B                                                           
  Number 000                                                                   
  REPRESENTATIVE FRAN ULMER commented that the "Common Sense"                  
  booklets that had been distributed around the building                       
  during the week did not explain the details of the fishing                   
  industry in Alaska as it should.  When comparing state                       
  expenditures,  there needed to be a note that showed                         
  Alaska's fishing industry alone was larger than most states'                 
  entire industry total.                                                       
  Number 120                                                                   
  REPRESENTATIVE CLIFF DAVIDSON asked how the reception to the                 
  UFA had been in the majority offices.                                        
  Mr. McCUNE advised that most offices had been receptive to                   
  their ideas, but the Anchorage people especially needed more                 
  education on fishery issues.                                                 
  HB 123:  LOANS FOR IFQ'S                                                     
  Number 163                                                                   
  REPRESENTATIVE ULMER spoke briefly about HB 123, which                       
  related to loans for individual fishing quotas (IFQs).  She                  
  advised that it allowed Alaskan fishermen to have the                        
  financial backing to purchase quota shares by extending the                  
  existing limited entry permit loan program to quota shares.                  
  Currently, there was money in the revolving loan fund which                  
  allowed capitalization of this program without having to                     
  find new money, she said, and added the federal government                   
  had advised that it would be late this year before the                       
  regulations were in place and they did the adjudications                     
  necessary to determine who got the quota shares and how much                 
  they would be.  "If we put HB 123 in place this session, it                  
  will be ready when the federal government finishes the                       
  regulations," she said.                                                      
  ECONOMIC DEVELOPMENT (DCED), advised that HB 123 amended the                 
  loan program and made it more available to more people.                      
  Currently the interest rate was eight percent he said, and                   
  finished by saying that the department supported HB 123.                     
  ASSOCIATION, testified in support of HB 123.  He said the                    
  worth of the quota share was unknown, but he thought                         
  borrowers should be able to pay it off in about five years.                  
  Number 420                                                                   
  defined IFQs and advised that the concept would be expensive                 
  to implement.  He thought the cost versus benefit ratio was                  
  about ten to one.                                                            
  REPRESENTATIVE ULMER asked if the federal government was                     
  planning to implement a loan program similar to the program                  
  in HB 123.                                                                   
  MR. GINTER was not aware of such a program on the federal                    
  REPRESENTATIVE DAVIDSON asked if the federal government was                  
  more concerned with preserving businesses of the small                       
  fishermen or just with the efficiency of harvests.                           
  MR. GINTER advised that the federal government looked to                     
  support smaller fishermen by providing a one percent cap on                  
  the harvests and a .5% cap on crab harvests.                                 
  MR. THOMSON interjected that the UFA had not been involved                   
  in developing the IFQ program, yet they liked the concept of                 
  HB 123.  He further said that HB 123 needed restraint                        
  language to not make loans to people who already had loans.                  
  Loans should be made to really small fishermen and crew                      
  members who wished to be self-supporting, he believed.                       
  MR. SCHACTLER suggested the loan program was a great idea,                   
  but needed refinancing options consistent with programs in                   
  other states.                                                                
  Number 576                                                                   
  GERON BRUCE, SPECIAL ASSISTANT, ADF&G, advised that the                      
  ADF&G supported HB 123.                                                      
  Number 590                                                                   
  REPRESENTATIVE ULMER asked whether or not loans could be                     
  linked to landing the product in Alaska and if that was                      
  feasible.  She also asked about changing the loan rates.                     
  no comment on the first question and asked how, from a                       
  lending standpoint would he enforce how or where fishermen                   
  landed their fish.  In response to the second question, he                   
  said that fishing loans were currently refinanced at 10.5%,                  
  as required by statute.  He then stated the DCED had always                  
  charged the maximum rate which was a fixed, floating rate                    
  based on the Wall Street prime.  He noted one problem with                   
  refinancing many loans at a time was that it was labor-                      
  intensive to modify each loan.                                               
  FISHERMEN'S ASSOCIATION, said British Columbia went to a                     
  quota share program.  She added that Alaska needed to                        
  develop and market more value-added products.  Further, she                  
  would like to see more consistent fishing throughout the                     
  year instead of the one-day, 30K pound catches.                              
  TAPE 93-7, SIDE A                                                            
  Number 000                                                                   
  MS. BEHNKEN said longline fishermen supported HB 123.                        
  VICE CHAIRMAN OLBERG asked members and the public if there                   
  were further comments.  Hearing none, he adjourned the                       
  meeting at 9:55 a.m.                                                         

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