Legislature(1993 - 1994)
02/16/1994 08:30 AM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON FISHERIES
February 16, 1994
8:30 a.m.
MEMBERS PRESENT
Representative Carl E. Moses, Chair
Representative Harley Olberg, Vice Chair
Representative Gail Phillips
Representative Cliff Davidson
MEMBERS ABSENT
Representative Irene Nicholia
COMMITTEE CALENDAR
Overview: National Marine Fisheries Service Implementation
of Halibut and Sablefish IFQ Program
WITNESS REGISTER
PHILIP SMITH, Chief
Restricted Access Management
National Marine Fisheries Service
United States Department of Commerce
P.O. Box 21668
Juneau, Alaska 99802
Phone: 586-7334
POSITION STATEMENT: Provided overview of the halibut
and sablefish IFQ program
CHERYL SUTTON, Legislative Aide
Representative Carl Moses
State Capitol Building, Room 204
Juneau, Alaska 99801-1182
Phone: 465-6848
POSITION STATEMENT: Inquired about the workshop schedule
for the division
ACTION NARRATIVE
TAPE 94-8, SIDE A
Number 000
CHAIRMAN CARL MOSES called the meeting to order at 8:35 a.m.
He noted the members in attendance and asked that MR. PHILIP
SMITH to begin the overview.
Number 020
MR. PHILIP SMITH, CHIEF, RESTRICTED ACCESS MANAGEMENT,
NATIONAL MARINE FISHERIES SERVICE, UNITED STATES DEPARTMENT
OF COMMERCE, advised members that he was hired to develop a
new division within the Alaska Region to implement the IFQ
program for Pacific halibut and sablefish. As other forms
of restricted access or limited entry emerge, implementation
of those programs will fall under this division, also.
There are about 7000 people in Alaska who will be eligible
to receive an initial issuance of quota share; of that
figure, about 80 percent are Alaskans. There is an
application period which began on January 17, 1994, and will
conclude on July 15, 1994, for information and application
forms.
MR. SMITH continued by noting that approximately 8,000 pre-
application materials have been sent to potentially eligible
people. From the Department of Fish & Game fish ticket
data, State Limited Entry Commission data, and from the
National Marine Fisheries Service (NMFS) vessel file and
permit file data, quota share can be approximated for each
eligible fisherman.
Number 103
MR. SMITH said that about 3,000 of the requests for
applications have been returned. Within two weeks, the
formal applications should be issued for the halibut and
sablefish fisheries. Beginning in March, the division will
start a series of workshops in major ports around the state.
There is a toll free phone line, 1-800-304-4846, that people
can call with questions about applying. The appeals
regulations are not yet finalized.
MR. SMITH advised members that in three to five years, there
may be combines, or groups of fishermen working with
processors, transportation and marketing firms. The goal of
the program is to put fresh product on the market for six to
nine months of the year. There is more opportunity to
maximize the economic returns from the harvest under this
scenario, and the intent is to supply the market with a
constant supply of fresh seafood. There has been a lot of
criticism of the program, and currently there is a court
case pending with the "Alliance against IFQ's". The
controversy is understandable, as the program is a rather
significant change in fisheries management. The program,
however, has the potential to provide steady employment for
20-30 people in the cold storage business for seven to eight
months, somewhat steady employment for the skippers and
their crews, and to see the value of the product double or
triple.
Number 253
MR. SMITH advised members that the division is sensitive to
the economies of coastal Alaska. Outreach is very
important, to ensure that people who may be eligible get
their applications, and have their questions answered.
Number 265
CHAIRMAN MOSES asked if there were questions.
REPRESENTATIVE GAIL PHILLIPS asked about a letter from Mr.
Smith, to Representative Hudson, dated January 27, 1994,
regarding program amendments. She then asked if anyone was
considering significant changes to the program.
MR. SMITH said that the statement in the letter is
clarifying a point brought up by Representative Hudson,
whereby an inquiry was made as to whether or not the
legislature could alter the program through legislation. In
fact, the program is conducted under federal authority, and
under the terms of the Magnuson Act and the Halibut Act, any
program changes are initiated through the North Pacific
Fisheries Management Council (NPFMC), not the Alaska
Legislature. He added that no one is considering major
changes at this time. Some fine tuning may be needed, but
no proposals are available. The issue of block restrictions
are not yet finalized, for instance.
Number 312
REPRESENTATIVE PHILLIPS then asked about the lawsuit
potentially delaying the March 1995 start up date. She then
asked about the marketing issue with cooperatives,
specifically, who would be handling the marketing for the
program.
MR. SMITH replied that he couldn't respond on the merits of
the lawsuit, yet the lawsuit should not affect the
operations of the office. As a correction, there are two
lawsuits pending, one with the Alliance Against IFQ's, the
other with the Klawock Cooperative Association. He added
that the division was not handling the marketing; the amount
of product desired from the program should be market driven.
REPRESENTATIVE PHILLIPS then asked if ASMI was doing any
marketing for the program.
Number 360
MR. SMITH advised members that his office has not been doing
any marketing, and to his knowledge, has not been meeting
with the Alaska Seafood Marketing Institute (ASMI)
officials. He noted that the intent was not to have ASMI
develop a market, but instead visit Safeway and similar
stores, and negotiate a daily supply channel and price.
REPRESENTATIVE CLIFF DAVIDSON inquired about the possible
concentration of ownership of the Individual Fishing Quota
shares.
Number 399
MR. SMITH replied that the current configuration of the
fishing fleet was not working, and the intent to privatize
the access to a public resource is meant to distribute those
benefits. Now, there is terrible overcapitalization in the
race to fish such short openings; unfortunately, this method
is terribly inefficient. Goals of the program were
developed to help eliminate the concentration of ownership.
First, there was a cap of no more than one-half of one
percent on the amount of quota that each person can hold for
halibut and sablefish for the Gulf and Bering Sea. The cap
is no more than one percent in the waters of Southeast
Alaska.
Number 439
MR. SMITH noted that another restriction is the allocation
of quota share by vessel class. Quota shares that are
initially allocated to one vessel class are not transferable
to another vessel class. In addition, under the program,
with the exception of Southeast, only people who receive
their initial issuance of quota may hire skippers to fish
that quota. That quota share can then only be transferred
to an individual, not a corporation or company. Second
generation quota share must only be fished by the people who
hold it. In Southeast, the restrictions are a bit more
stringent. Finally, there are block restrictions to ensure
that quota share is not consolidated into a few number of
holders. He then noted that the division will carefully
monitor any transfers.
REPRESENTATIVE DAVIDSON asked where the division gets its
funding to do the labor intensive `careful monitoring' of
enforcement.
MR. SMITH replied that this division is currently funded at
$1.2 million for the current federal fiscal year, and is
anticipated at the same level for the next year. The
enforcement division has a request in for funding for a
sufficient amount, plus the use of computers allows a few
number of staff to monitor several thousand permits. The
incentive under the program, for fishermen to act as
whistleblowers on other operations that are not following
the rules, is very high.
REPRESENTATIVE DAVIDSON noted the success of the Canadian
quota system, yet asked if there was a method built in to
abort the program if, after years down the road, the program
does not seem to work. He then asked if the privatization
of the access wasn't more like privatizing the common
property resource.
Number 564
MR. SMITH replied that there was a lot of time put into
developing the program. At anytime, the North Pacific
Fisheries Management Council can abort the program, the NMFS
can request that the secretary abort the program, or
Alaska's congressional delegation can delete the program's
funding. There are many routes to abolishing the program if
it does not work. To clarify the privatization, he added
that actually, people with quota shares own the right, or
privilege to harvest that amount of resource.
Number 606
CHAIRMAN MOSES asked if there was a minimum of the initial
quota.
MR. SMITH replied that the quota share is based on the
number of pounds of resource harvested between 1984 and 1990
for halibut, and 1985 and 1990 for sablefish, less the two
least productive years. That share is designated by
management area and by vessel class. The total allowable
catch will rise and fall from year to year, depending upon
biological considerations.
TAPE 94-8, SIDE B
Number 000
CHERYL SUTTON, LEGISLATIVE AIDE FOR REPRESENTATIVE MOSES,
asked if the division had a list of the locations and times
for the workshops, and inquired why there were no stops
scheduled for the Aleutian Chain. She then asked how the
issue of fishermen who fished the 1984-1990 time span in a
small vessel, yet now have a larger vessel will receive
their quota share, since the vessel size has changed.
MR. SMITH said the list would be available by the end of the
week, and will be distributed to the areas of the meetings,
as well as the fisheries committee. The meeting schedule
was first designed to visit communities where at least 100
or more potentially eligible IFQ holders resided. Although
there are no workshops scheduled for the Aleutian Chain, the
division will entertain adding a few stops for those
fishermen, as well as teleconferencing the workshops. The
quota share will be issued in the vessel class that was last
used in a groundfish fishery by the fisherman, prior to
September 25, 1991. If a person now has a larger vessel
class, there may not be a match between the IFQ and the
vessel.
MR. SMITH noted, in addition some exotic steps being taken
by the program to limit the black market, or the high seas
selling of fish. The idea of primary ports, and hailing to
the NMFS six hours before delivery, and a credit card system
that will keep a running balance of the resource, as well as
random boardings will all help to discourage inefficiencies
in the program. The last problem is high-grading, or
throwing out less valuable small fish and only keeping the
larger fish. Economically, this is not sensible, and
processors will notice if all fish in a catch are large.
Lastly, there is no current plan for lapsing and reissuance
of quota share.
Number 280
ADJOURNMENT
CHAIRMAN MOSES asked members and the public if there were
further comments. Hearing none, he adjourned the meeting at
9:42 a.m.
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