Legislature(1993 - 1994)
02/19/1993 08:00 AM FSH
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 research 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 depleted 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 $500K 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, Sitton,Mackie,Davies,Davidson,Brown 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, FINANCE 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 overview. JERRY McCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA (UFA), and REPRESENTATIVE OF THE CORDOVA DISTRICT FISHERMEN UNITED, 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. ARNI THOMSON, EXECUTIVE DIRECTOR, ALASKA CRAB COALITION, 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 JUDE HENSLER, FISHERIES DEVELOPMENT SPECIALIST, BERING SEA 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. BRUCE SCHACTLER, MEMBER, AREA K SEINERS ASSOCIATION, advised 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 CHRIS MOSS, REPRESENTATIVE, NORTH PACIFIC FISHERIES 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. DALE KELLEY, EXECUTIVE DIRECTOR, ALASKA TROLLERS 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 believed. 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. GREG WINEGAR, LOAN MANAGER, DEPARTMENT OF COMMERCE AND 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. RICK LAUBER, LOBBYIST, PACIFIC SEAFOOD PROCESSORS 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 JAY GINTER, BIOLOGIST, NATIONAL MARINE FISHERIES SERVICE, 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 level. 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. MARTIN RICHARD, DIRECTOR, DIVISION OF INVESTMENTS, DCED, had 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. LINDA BEHNKEN, EXECUTIVE DIRECTOR, ALASKA LONGLINE 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. ADJOURNMENT VICE CHAIRMAN OLBERG asked members and the public if there were further comments. Hearing none, he adjourned the meeting at 9:55 a.m.