Legislature(1995 - 1996)
04/19/1995 05:02 PM House FSH
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON FISHERIES
April 19, 1995
5:02 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Chairman
Representative Carl Moses, Vice Chair
Representative Scott Ogan
Representative Gary Davis
Representative Kim Elton
MEMBERS ABSENT
None
COMMITTEE CALENDAR
*HJR 43: Relating to commercial fishing and subsistence use in
Glacier Bay National Park.
PASSED OUT OF COMMITTEE
*HB 284: "An Act relating to the Alaska Commercial Fishing and
Agriculture Bank."
PASSED OUT OF COMMITTEE
(* First public hearing)
WITNESS REGISTER
RON SOMERVILLE
P.O. Box 22394
Juneau, AK 99802
Telephone: 780-4812
POSITION STATEMENT: Provided background on HJR 43
BRUCE WEYHRAUCH, Attorney
Allied Fishermen of Southeast Alaska
302 Gold Street
Juneau, AK 99801
Telephone: 586-2210
POSITION STATEMENT: Provided background on HJR 43
CHERYL SUTTON, Administrative Assistant
Representative Carl Moses
Alaska State Legislature
Capitol Building, Room 204
Juneau, AK 99801
Telephone: 465-6848
POSITION STATEMENT: Provided information on HB 284
ED CRANE, President
Commercial Fishing and Agricultural Bank
2550 Denali Street
Anchorage, AK 99503
Telephone: 276-2007
POSITION STATEMENT: Provided information on HB 284
DICK ELIASON, Director
Commercial Fishing and Agricultural Bank
P.O. Box 92070
Anchorage, AK 99509
Telephone: 276-2007
POSITION STATEMENT: Supported HB 284
PREVIOUS ACTION
BILL: HJR 43
SHORT TITLE: FISHING AND SUBSISTENCE IN GLACIER BAY
SPONSOR(S): SPECIAL COMMITTEE ON FISHERIES
JRN-DATE JRN-PG ACTION
04/07/95 1173 (H) READ THE FIRST TIME - REFERRAL(S)
04/07/95 1173 (H) FISHERIES
04/19/95 (H) FSH AT 05:00 PM CAPITOL 124
BILL: HB 284
SHORT TITLE: AK COMMERCIAL FISHING & AGRICULTURE BANK
SPONSOR(S): SPECIAL COMMITTEE ON FISHERIES
JRN-DATE JRN-PG ACTION
03/27/95 933 (H) READ THE FIRST TIME - REFERRAL(S)
03/27/95 933 (H) FSH, LABOR & COMMERCE, FINANCE
04/05/95 (H) FSH AT 05:00 PM CAPITOL 124
04/19/95 (H) FSH AT 05:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 95-24, SIDE A
Number 000
CHAIRMAN ALAN AUSTERMAN called the meeting to order at 6:02 p.m.
and noted for the record Representatives Davis and Ogan were in
attendance and that a quorum was present.
HJR 43 - FISHING AND SUBSISTENCE IN GLACIER BAY
Number 010
CHAIRMAN AUSTERMAN read the sponsor statement aloud, "This
Resolution has been introduced by the House Special Committee on
Fisheries in response to concerns expressed by Southeast commercial
fishermen and subsistence users. Glacier Bay has been a National
Monument since 1925. Congress created the Glacier Bay National
Park as part of ANILCA (Alaska National Interest Lands Conservation
Act) in 1980. In 1990, environmental groups sued the National Park
Service for, among other things, allowing commercial and
subsistence fishing within Glacier Bay National Park. In 1991, the
National Park Service promulgated draft regulations that would
phase out commercial fishing in and around Glacier Bay within seven
years, and completely prohibit subsistence fishing. Last year, a
federal judge ruled that ANILCA did not prohibit commercial fishing
in Glacier Bay National Park, but that ruling has since been
appealed to the Ninth Circuit Court of Appeals. Elimination of the
commercial and subsistence fisheries in the vast area contained in
the Glacier Bay National Park would significantly harm the coastal
communities of northern Southeast. Both fisheries have utilized
this area long before park designation. Also, if the area were
closed to commercial fishing, other fisheries in Southeast would be
harmed from increased pressure by those fishermen displaced by a
closure of Glacier Bay waters."
REPRESENTATIVE CARL MOSES joined the committee at 5:05 p.m.
Number 050
RON SOMERVILLE testified, "As a member of the Alaska Department of
Fish and Game previously, I dealt with this specific issue for
about four years." He said, "When ANILCA passed in 1980, the
extensions to Glacier Bay National Park were limited to mean high
tide, although the only portions that really extended were in the
northern portions. The whole issue here really revolves around
whether or not the state of Alaska still retains authority to
regulate and authorize subsistence fishing and commercial fishing
within what the Park Service claims is the boundary of the park.
We, of course, have claimed for a long time that in fact their
authority really doesn't extend into territorial waters. We came
close to a resolution of this issue two years ago, and right at the
dying moments of Congress, we were unable to finalize a bill and
thus we went back to kind of a status quo. Since then, the Park
Service has been proceeding with the concept, that's why you see it
in Resolution here, of adopting regulations to authorize some
subsistence taking and commercial taking within the Park."
MR. SOMERVILLE continued, "We've always contended that these are
not park resources. The bulk of them that are taken in the waters
adjacent to Glacier Bay National Park because most of them are in
essence passing through those waters and we claim that they really
don't have any jurisdiction over them as being park resources. We
tried to work with the Park Service to develop a process whereby
the Parks and the state could work together to maintain some kind
of cooperative effort, if you will, but we still maintained that we
had the authority to regulate taking for subsistence or commercial
purposes. If the Park Service goes forward with their regulations,
which they now have found out that they can allow the taking of
commercial purposes within the park, just to give you kind of a
glimpse of what we've seen in those regulations: One is they would
like to phase out fishing within the Glacier Bay proper, within the
Park which would then affect some of the subsistence fisheries
within the Park."
REPRESENTATIVE KIM ELTON joined the committee at 5:10 p.m.
Number 168
REPRESENTATIVE GARY DAVIS voiced concern about page 2, line 11 of
HJR 43 where it says, "WHEREAS the State of Alaska has a claim to
ownership of the submerged lands and navigable waters of the Park."
MR. SOMERVILLE replied, "Glacier Bay was included in the general
encompassing litigation called the Babbitt case, which the Governor
dropped. That included jurisdictional aspects related to all of
the waters of the state," and clarified, "The position of the state
has been, I think it still is, that lands underlying the waters,
adjacent to Glacier Bay out to three miles are submerged lands
belonging to the state of Alaska. We just have never filed in
court to claim those titles."
Number 205
BRUCE WEYHRAUCH, Attorney, Allied Fishermen of Southeast Alaska,
described the geographic area encompassed in the Glacier Bay
National Park and testified, "What happened is, when Congress
passed ANILCA they created this park and that's when they created
the marine water area of the park. Fishing has continued in that
area for centuries and these communities have sprung up because of
that. In 1990, the Alaska Wildlife Alliance and American Wildlands
sued the National Park Service, the Secretary of the Interior, and
said, in part that `You're violating the Marine Mammal Protection
Act because there's whales affected. The vessel management plan
for the park that allows vessels going in there is implicated. The
concessionaires are implicated because of the vessels you're
allowing in there. But they also said that ANILCA prohibits
commercial fishing and that issue was addressed by federal district
Court Judge Holland who said that ANILCA does not prohibit
commercial fishing in the non-wilderness waters of Glacier Bay
National Park. The environmental groups have now appealed that to
the Ninth Circuit and it has not been briefed yet, but it's
probably going to be briefed this year."
MR. WEYHRAUCH then suggested some amendments: Inserting ",
environmental," after "economic" on page 1, line 12.
On page 1, line 13, delete "northern". On page 2, line 23, insert
"if it promulgate regulations" and delete "proceed expeditiously to
amend its regulations in order to". On page 2, line 25, insert
"authorize continued" and delete "allow". On page 2, line 26,
delete "non-wilderness areas of the park" and insert "marine waters
of Glacier Bay National Park". He also suggested that language be
added to the Resolution to amend ANILCA to authorize subsistence
and commercial fishing.
MR. WEYHRAUCH added, "The National Park Service is maybe searching
for some hook if it's going to prohibit commercial fishing to do
that. It's not easy (for them) because (1) commercial fishing does
not harm park values, it has been going on there for more than a
century; (2) there's been no environmental harm. This is not an
environmental issue; and (3) the fisheries that are caught are not
resident fish species of the park, they're migratory. The salmon
and halibut move in and out. There are some resident crab
populations perhaps." He also said, "So it's not clear that they
will promulgate regulations. I think that it's important that they
get the idea if they're going to do it, that this is a
longstanding, environmentally safe, economically sound and well-
managed fishery by the state of Alaska that should go on. This is
not a problem. And if it is prohibited, it's going to wreck
serious economic and environmental harm in this state and on the
fishermen that work in that area."
Number 412
REPRESENTATIVE ELTON asked if the first resolve was necessary.
MR. WEYHRAUCH indicated that there are ongoing research projects
which the state would like to stay apprised of.
Number 434
REPRESENTATIVE OGAN moved that the suggested amendments be adopted.
There were no objections.
REPRESENTATIVE OGAN moved to pass CSHJR 43(FSH) out of committee.
There were no objections.
HB 284 - AK COMMERCIAL FISHING & AGRICULTURE BANK
Number 452
CHERYL SUTTON, Administrative Assistant to Representative Carl
Moses, testified saying, "HB 284 seeks to modify and refit the
Commercial Fishing & Agriculture Bank's (CFAB's) enabling statute
to reflect evolving commercial law and present day fishing
economies needs. CFAB was created in 1978 and much has changed in
both commercial law and fishing economies since that time. There
are two significant changes which would be enacted with the passage
of HB 284. The first is permanent ownership by the state through
retirement of all but $1 million of the state's initial investment
of $32 million. Second, broadening of the purposes and
circumstances for which a fisherman may use his limited entry
permit as collateral. Some of these include loans for lease or
purchase of quota shares, IFQs, other licenses, and the purchase,
construction, maintenance, repair or improvement of commercial
fishing boats, sites, gear and improvement."
ED CRANE, President, CFAB, said, "We're really not creating
something new here. We're simply redoing and revising, and
mechanically this is the easiest way to handle what was intended."
He testified, "When CFAB was established by a 1978 act which was
implemented in 1980, the state of Alaska invested $32 million as
seed capital in the form of stock in CFAB. And the statute
provided for CFAB to retire, that it return all the money, to
retire that stock within 20 years, by the year 2000. The theory
was as that money was returned by the state, it would be replaced
by money invested by members, users, borrowers of CFAB. That
process has taken place. Actually seven years ago, the state wrote
off the entire $32 million that has been carried for the last few
years as zero on the books of the state. Nevertheless, we have
been retiring that stock. We have now retired $21,750,000 to be
specific. And also we have accumulated roughly sixteen and a half
million dollars of replacement equity that represents investments
of fishermen or borrowers or fisherman and farmers. Unfortunately,
there was a catch, as near as I know, an inadvertent catch-22 in
the existing statute. On the one hand it says that if CFAB does
not retire, fails to retire all of the $32 million in stock by the
year 2000, the Commissioner of Commerce can take steps to dissolve
the bank, to liquidate the bank. Then, in another part of the
statute, it says that when CFAB has retired all of the $32 million,
the statute lapses. Well, if the statute lapses, there is no CFAB,
it's gone. So we had that particular concern that this bill
addresses. But in addition to that is the fact that CFAB, as we
discussed some time ago, CFAB is the only private entity,
nongovernmental entity which has the statutory authority to accept
a lien on a limited entry permit and allow fishermen to use permits
as devices through which they can finance their operations." He
then indicated that in order to justify CFAB's unique status with
the state, it is necessary for CFAB to retain $1 million in CFAB as
a "perpetual investment." He pointed out there is considerable
responsibility and accountability to the state.
Number 578
REPRESENTATIVE ELTON asked if Mr. Crane was comfortable with the
three year terms of board members appointed by the Governor.
MR. CRANE said yes.
REPRESENTATIVE ELTON pointed out that one of the board members is
required to be a "resident farmer."
MR. CRANE indicated that the original statute was even more
restricting. He said, "The original statute required that it be a
farmer with ten years of experience farming in Alaska. Also in the
original statute, directors were required to be active members,
that is current borrowers, of CFAB." He said CFAB has made very
few loans to farmers historically, due to the state's agricultural
loan program.
REPRESENTATIVE ELTON asked if that seat would be better designated
to a timber harvester or processor.
MR. CRANE indicated that the definition of commercial agriculture
can be found on page 17 of the bill and it includes forest
products.
REPRESENTATIVE ELTON contended that a timber harvester would not be
a resident farmer.
Number 639
MR. CRANE said probably not unless it was on their own land on a
sustained yield basis.
REPRESENTATIVE ELTON asked about changes in indemnity for officers
and employees of CFAB.
MR. CRANE said, "Our intention here is simply to say that CFAB's
directors and employees may have the same indemnification in
insurance provisions as any private corporation in the state, no
more and no less."
REPRESENTATIVE ELTON said he viewed page 8, paragraphs 14 and 15 as
granting questionably "broad authorization" to CFAB.
MR. CRANE replied, "I cannot imagine our board doing anything
spectacular, if you will, which would appear to be supportive of
one small segment of the total fishing community and not have a
significant reaction from other CFAB members. (Indisc.) CFAB
members over time, and it has taken us some time to get there, are
beginning to be more and more attuned to the fact that what CFAB
does directly affects their pocketbook."
TAPE 95-24, SIDE B
Number 000
MR. CRANE continued, "It was written broadly, mostly because we did
not have anything specific in mind."
REPRESENTATIVE ELTON indicated that he is somewhat more comfortable
with those sections and asked about page 11, section 20, paragraph
5. He said, "With that paragraph, if somebody runs up a huge bill
at Nordstroms, they can pledge their permit at your financial
institution to pay off a Nordstrom's debt that has absolutely
nothing at all to do with fisheries or timber or agriculture."
MR. CRANE replied, "We make loans for the purpose of commercial
fishing related purposes and for many fishermen, particularly those
that simply operate as sole proprietors as opposed to having their
fishing business incorporated. There's essentially no distinction
between their personal obligations and their fishing obligations.
We have, to my knowledge, we have never been asked to finance the
kind of debt which you mentioned." He added, "The other side of it
is we, it is not unusual for fishermen or a fisherperson to come to
us with kind of a panacea of obligations that often do include
credit card debt, miscellaneous, not necessarily Nordstrom's but
for the things that all of us use credit cards for and we will
include that in the financing, again, for working capital
purposes."
Number 160
MR. CRANE continued, "It is difficult for anybody who has perhaps
only one payday a year to live from one payday to the next and it
is not unusual for persons in those circumstances to wind up in the
tenth month of their year with fuel bills, that is home heating
fuel bills, payable and credit card debt payable and a bill at the
grocery store that they've got to have taken care of before they
can actually obtain financing for their upcoming fishing season."
REPRESENTATIVE MOSES said that he suggests to fishermen friends to
pay with credit cards so they don't lose receipts, as they might
with paying cash.
REPRESENTATIVE OGAN asked if the chairman's intent was to move the
bill out of committee today.
CHAIRMAN AUSTERMAN said yes.
Number 215
DICK ELIASON, CFAB Director, testified in support of CFAB, "I was
impressed with the operation of the bank. I remember not too many
years ago, we looked upon CFAB as maybe even a mistake because
things were going wrong and a lot of bad publicity in the
legislative bodies, and we were wondering if, in fact, it was going
to disappear. However, within the last ten years they've made an
astounding comeback." He stressed the importance of the bank to
the rural areas of the state where there are often few financing
alternatives. He added, "Certainly, I'd have no qualms in saying
it was a bad deal if it was a bad deal because I don't have a
vested interest, but, I'd just like to reassure you that it's
working and I would like to see it continue to work (indisc.) good
service for the state and for the industry at large in Alaska."
REPRESENTATIVE ELTON asked, "Are you comfortable with the expansion
of duties into the venture capital kind of realm?"
MR. ELIASON said yes, and added, "There was some speculation, that
maybe we shouldn't put this large a bill forward at this time
because we know how busy the legislature is, especially this time
of the year. But we thought that it has a lot of merit and there
is a lot of support out there."
Number 303
REPRESENTATIVE MOSES moved to pass the bill out of committee.
There were no objections.
CHAIRMAN AUSTERMAN adjourned the meeting at 6:04 p.m.
| Document Name | Date/Time | Subjects |
|---|