Legislature(2023 - 2024)BUTROVICH 205
04/21/2023 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SB84 | |
| SB128 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 84 | TELECONFERENCED | |
| *+ | SB 128 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
April 21, 2023
1:30 p.m.
MEMBERS PRESENT
Senator Matt Claman, Chair
Senator Jesse Kiehl, Vice Chair
Senator Cathy Giessel
Senator Löki Tobin
MEMBERS ABSENT
Senator James Kaufman
OTHER LEGISLATORS PRESENT
Senator Click Bishop
COMMITTEE CALENDAR
SENATE BILL NO. 84
"An Act relating to the business of money transmission; relating
to money transmission licenses, licensure requirements, and
registration through the Nationwide Multistate Licensing System
and Registry; relating to the use of virtual currency for money
transmission; relating to authorized delegates of a licensee;
relating to acquisition of control of a license; relating to
record retention and reporting requirements; authorizing the
Department of Commerce, Community, and Economic Development to
cooperate with other states in the regulation of money
transmission; relating to permissible investments; relating to
violations and enforcement of money transmission laws; relating
to money transmission license exemptions; relating to payroll
processing services; repealing currency exchange licenses; and
providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 128
"An Act temporarily closing the commercial salmon fishery in a
portion of the Alaska Peninsula and Aleutian Islands; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 84
SHORT TITLE: MONEY TRANSMISSION; VIRTUAL CURRENCY
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/24/23 (S) READ THE FIRST TIME - REFERRALS
02/24/23 (S) L&C, JUD, FIN
03/06/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/06/23 (S) Heard & Held
03/06/23 (S) MINUTE(L&C)
03/27/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/27/23 (S) Heard & Held
03/27/23 (S) MINUTE(L&C)
03/31/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/31/23 (S) Moved SB 84 Out of Committee
03/31/23 (S) MINUTE(L&C)
04/03/23 (S) L&C RPT 4DP 1NR
04/03/23 (S) DP: BJORKMAN, DUNBAR, BISHOP, GRAY-
JACKSON
04/03/23 (S) NR: MERRICK
04/21/23 (S) JUD AT 1:30 PM BUTROVICH 205
BILL: SB 128
SHORT TITLE: COMMERCIAL SALMON FISHERY CLOSURE
SPONSOR(s): SENATOR(s) OLSON
04/12/23 (S) READ THE FIRST TIME - REFERRALS
04/12/23 (S) JUD, RES
04/21/23 (S) JUD AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
ROBERT SCHMIDT, Director
Division of Banking and Securities
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Presented SB 84 on behalf of the
administration.
DEAN FLEER, Financial Examiner III
Division of Banking and Securities
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 84.
SENATOR DONNY OLSON, District T
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 128.
ALMERIA ALCANTRA, Staff
Senator Donny Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sponsor statement for SB 128.
DOUG VINCENT-LANG, Commissioner
Department of Fish and Game
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony in support of SB
128.
KAREN GILLIS, Program Director
Bearing Sea Fishermen's Association
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in support of SB
128.
VIRGIL UMPHENOUR, Member
Fairbanks Fish and Game Advisory Committee
Fairbanks, Alaska
POSITION STATEMENT: Provided invited testimony in support of SB
128.
BRIAN RIDLEY, Chief, Chair, and President
Tanana Chiefs Conference
Tanana, Alaska
POSITION STATEMENT: Provided invited testimony in support of SB
128.
ERNIE WEISS, Natural Resources Director
Aleutian East Borough
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
ABBY FREDERICK, Director of Communications & Investor Relations
Silver Bay Seafoods
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
ALISSA NADINE ROGERS, Director of Natural Resources
Orutsararmiut Native Council
Bethel, Alaska
POSITION STATEMENT: Testified in support of SB 128.
CARLIN HOBLET, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
CHARLOTTE LEVY, Natural Resources Assistant Director
Aleutians East Borough
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
DALE PEDERSEN, representing self
Aleutians East Borough
Sand Point, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
DAVID POLUSHKIN, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
CONNOR MURPHY, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
CHELSAE RADELL, Assistant Director
Alaska Groundfish Data Bank
Kodiak, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
BLAIR HICKSON, representative
Anvik River Lodge
Anvik, Alaska
POSITION STATEMENT: Testified in support of SB 128.
VIVIAN KORTHUIS, Chief Executive Officer
Association of Village Council Presidents
Bethel, Alaska
POSITION STATEMENT: Testified in support of SB 128.
ADOLPH LUPIE, representing self
Tuntutuliak, Alaska
POSITION STATEMENT: Testified in support of SB 128.
STACY ARBELOVSKY, representing self
Kasilof, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
RICHARD DAVIS, Member
Board of Directors
Seafood Producers Cooperative
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
DENNIS ZADRA, representing self
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
PHYLLIS SHIRRON, representing self
Cordova, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
CHARLES LEAN, Chair
Northern Norton Sound Fish and Game Advisory Committee
Nome, Alaska
POSITION STATEMENT: Testified in support of SB 128.
PETER HAMRE, representing self
Homer, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
SCOTT ADAMS, representing self
Homer, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
DANNY CUMBERLODGE, representing self
Sandpoint, Alaska
POSITION STATEMENT: Testified in opposition to SB 128.
ACTION NARRATIVE
1:30:09 PM
CHAIR MATT CLAMAN called the Senate Judiciary Standing Committee
meeting to order at 1:30 p.m. Present at the call to order were
Senators Tobin, Giessel, and Chair Claman. Senator Kiehl arrived
soon thereafter.
SB 84-MONEY TRANSMISSION; VIRTUAL CURRENCY
1:30:46 PM
CHAIR CLAMAN announced the consideration of SENATE BILL NO. 84
"An Act relating to the business of money transmission; relating
to money transmission licenses, licensure requirements, and
registration through the Nationwide Multistate Licensing System
and Registry; relating to the use of virtual currency for money
transmission; relating to authorized delegates of a licensee;
relating to acquisition of control of a license; relating to
record retention and reporting requirements; authorizing the
Department of Commerce, Community, and Economic Development to
cooperate with other states in the regulation of money
transmission; relating to permissible investments; relating to
violations and enforcement of money transmission laws; relating
to money transmission license exemptions; relating to payroll
processing services; repealing currency exchange licenses; and
providing for an effective date."
1:31:19 PM
ROBERT SCHMIDT, Director, Division of Banking and Securities
(DBS), Department of Commerce, Community and Economic
Development (DCCED), Anchorage, Alaska, delivered the
presentation, "ALASKA UNIFORM MONEY TRANSMISSION MODERNIZATION
ACT SB 84."
He displayed slide 2.
What does this bill do?
• Reduces regulatory burden by streamlining initial
licensing and license renewal.
• Protects Alaska consumers by conducting criminal
background checks through the Nationwide
Multistate Licensing System (NMLS).
• Ensures regulatory costs of supervision keep pace
with growth.
• Broadens the definition of money transmission and
defines virtual currency activities.
• Requires licensees to comply with federal laws,
including suspicious activity reporting
• Updates enforcement provisions by allowing a
broader spectrum of orders to be issued.
• Ensures DBS can coordinate with other states in
all areas of regulation, licensing, and
supervision to reduce regulatory burden on the
industry and more effectively utilize regulator
resources.
MR. SCHMIDT stated that SB 84 impacts an industry that Alaskans
use thousands of times an hour, involving billions of dollars
per year. He relayed that about half of the bill is dedicated to
standardizing and streamlining the process of obtaining a
license; examinations of licensee safety and soundness; and
standardizing procedures for licensee mergers. SB 84 introduces
cryptocurrency standards including disclosures, permissible
investments, net worth requirements, and consumer protection
provisions. It clarifies relationships where a local delegate
transmits money on behalf of a licensee. He noted that these
historically have been some of the most problematic areas of
money transmission in Alaska. Significantly, the bill allows
multistate cooperation in licensing, allowing states to leverage
other states' resources in protecting their residents.
1:32:37 PM
MR. SCHMIDT spoke to slide 3.
Why do we need this law updated?
• Money transmission is the fastest growing
financial industry the Division of Banking and
Securities regulates. Changes in the industry
have made the law sorely in need of
modernization.
• This growth has mostly been driven by mobile
payment technologies such as PayPal, Venmo, and
Cash App. Cryptocurrency has been a secondary
driver of money transmission growth. These
technologies did not meaningfully exist when the
current law was adopted.
• This bill will modernize Alaska's money
transmission laws to have common standards for
licensing, operations, and consumer protection.
• As of April 10th, this model law has been
introduced in 25 states. Ten states have passed
bills with all or some sections of the Model Law.
MR. SCHMIDT discussed different aspects of money transmissions
in Alaska based on the data reflected in the charts on slides 4-
7. He stated that the industry grew from $1.6 billion
transmitted to, from, and within Alaska in 2019 to more than $7
billion in 2021. This declined to $5.8 million in 2022, much of
which was driven by volatility in virtual currency, also known
as cryptocurrency.
The graph on slide 5 shows the growth in the number of times
that Alaskans used money transmission, regardless of the size of
the transaction. In three years, the number of transactions
tripled, from $10 million to more than $31 million. In 2022,
Alaskans used money transmission an average of 3,540 times an
hour, 24 hours a day, 365 days a year. The growth was driven
largely by mobile phones and payment applications. Using money
transmission services like PayPal or Cash App is common. He
noted that a money transmission service is embedded in all
smartphones
1:34:58 PM
The graph on slide 6 shows the increase of money transmission
licensees from 2018 through 2022. As of December 31, 2022,
Alaska had 168 money transmitter licensees, which was a 51
percent increase since 2018. He noted that the top nine
licensees perform over $100 million of business to, from, and
within Alaska each year; the top two each handle volumes in
excess of $1 billion each year. He characterized these as some
of the most complicated applications that the division handles.
1:35:52 PM
At ease to address technical difficulties.
1:36:01 PM
CHAIR CLAMAN reconvened the meeting.
1:36:02 PM
MR. SCHMIDT advanced to slide 7, "What types of transmissions
happen in Alaska?" He spoke to the pie chart that shows the
following breakdown in 2022 of money transmitted based on dollar
value.
Money Transmission 64 percent
Stored Value 22 percent
Virtual Currency 11 percent
Payment Instruments 3 percent
Fiat Currency Exchange < 1 percent
1:37:17 PM
MR. SCHMIDT advanced to slide 8 and spoke to the following.
Why regulate money transmission at all?
• States have licensed and regulated transmitters
of money for over 100 years.
• 55 states and U.S. territories regulate money
transmission currently.
• Industry wants this bill adopted.
• No industry stakeholder or state regulator wants
federal pre-emption.
• DBS is uniquely qualified to protect Alaskans.
• States have the expertise and examination
infrastructure that the feds completely lack.
States are able to pivot and react more quickly
as events transpire.
1:38:50 PM
DEAN FLEER, Financial Examiner III, Division of Banking and
Securities (DBS), Department of Commerce, Community and Economic
Development (DCCED), Anchorage, Alaska, presented the sectional
analysis for SB 84. It read as follows.
The proposed bill is not a simple repeal and
reenactment of AS 06.55. Instead, it is a line-by-line
overhaul of the Act carefully considering the Model
Law and selectively adopting and revising the
statutes. The bill repeals the currency exchange
license and includes that activity in the definition
of money transmission so only one license type will be
required in AS 06.55 going forward.
Section 1. Adds a section of uncodified law explaining
the purpose of the bill.
Section 2. Amends AS 06.05.101(a) requires a license
to engage in the business of money transmission (MT).
The amendment inserts a citation to the exemption
statute, AS 06.55.802, and clarifies that an
authorized delegate may not engage in MT if the
actions taken are outside the scope of the exemption.
Section 3. Repeals and reenacts AS 06.55.102 to
conform with the Model Law providing application
requirements for a MT license and allows the
Department of Commerce, Community, and Economic
Development (DCCED or the department) to change or
update the forms be consistent with licensing
requirements in NMLS.
Section 4. Repeals and reenacts AS 06.55.105 to
conform with the Model Law and provides that if the
applicant is subject to a multistate licensing
process, the department may accept investigation
results of the lead investigation state.
Section 5. Repeals and reenacts AS 06.55.106 to
conform with the Model Law changing license renewal,
renewal reporting and renewal terminology. Fees
collected at the time of renewal will change with
details to be prescribed by the department through
regulation.
1:42:34 PM
MR. FLEER continued.
Section 6. Amends AS 06.55 to add new sections AS
06.55.108, AS 06.55.109, and AS 06.55.110 to Article 1
to conform with the Model Law.
AS 06.55.108 states that licensees must continue
to meet the qualifications that apply to new
applicants and states that the department may
suspend or revoke a license if a licensee fails
to do so.
AS 06.55.109 contains submission requirements for
individuals in control of applicants or
licensees, and key individuals defined by the
bill. Criminal background check report
requirements are also included for individuals
who have resided outside of the United States
(US) in the last ten years.
AS 06.55.110 grants the department discretion to:
1. Implement licensing provisions consistent with
other states that have adopted a multistate
licensing process;
2. establish relationships or contracts to
collect and maintain records, coordinate
licensing, process fees, and communicate with
licensees, and
3. utilize the NMLS for all aspects of licensing.
Section 7. Amends AS 06.55 to add new sections to
Article 1A concerning virtual currency derived from
the Model Law. Virtual Currency (VC) Business Activity
replaces Currency Exchange Licenses as the heading for
Article 1A.
AS 06.55.150 06.55.170 provide the details of
what is considered and what is not considered
licensed activity for companies engaging in VC
business activity. The bill will allow regulation
and supervision of persons that issue VC or that
provide services that allow others to transfer
VC, provide exchange services to the public, or
offer to take custody of VC for other persons. AS
06.55.150 provides that VC business activity is
MT and unless exempt, the activity requires a MT
license.
AS 06.55.155 concerns required disclosures
granting the department discretion to require
additional disclosures and to regulate the time
and form required for disclosure.
AS 06.55.160 requires VC business with control
over VC to maintain an amount of each type of VC
sufficient to satisfy the aggregate entitlements
of the persons to each type of VC ensuring
consumer protection and reducing regulatory
burden on the licensee without increasing net
worth requirements.
AS 06.55.165 allows a licensee engaged in VC
business activity to include VC in its tangible
net worth calculation and details record keeping
requirements specific to VC businesses.
AS 06.55.170 contains a list of exempted
activities and provides an exemption for business
activity of $5,000 or less.
Section 8. Repeals and reenacts AS 06.55.301
creating a requirement that a licensee adopt
policies and procedures consistent with applicable
state and federal law prior to using an authorized
delegate and provides details stating that a
licensee must enter into a contract with an
authorized delegate with a list of provisions.
Section 9. Amends AS 06.55.302 concerning
unauthorized activities and liability provisions
that apply to persons engaging in MT on behalf of an
unlicensed person.
Section 10. Amends AS 06.55.401 relating to
supervision and the department's powers with respect
to examination. It allows the department to accept
examination reports from other states, the federal
government, or an independent accounting firm. This
section requires licensees to pay all costs
associated with examinations, references
confidentiality requirements, and eliminates the
existing requirement to notify a licensee 45 days
prior to an examination.
Sections 11 - 14. Repeals and reenacts or amends
subsections of AS 06.55.403 for consistency with the
Model Law. It requires quarterly reports of condition
for a licensee's activities and their authorized
delegates. It maintains existing requirements for
immediate reporting knowledge of filing a bankruptcy
petition, a proceeding to revoke or suspend a license
in another state or country, bond cancellation and
criminal charges. Allows the department to utilize the
NMLS for reporting required by AS 06.55.403. Executive
officer is replaced and repealed utilizing key
individual, a term introduced by the Model Law which
means "any individual ultimately responsible for
establishing or directing policies and procedures of
the licensee, including an executive officer, manager,
or trustee."
Section 15. Repeals and reenacts AS 06.55.404
regarding acquisition of control of a MT licensee
containing procedural and reporting requirements for
the acquisition or transfer of control of licensees.
It allows exceptions for acquisition of control and
contains discretionary provisions for the department
for ease and flexibility of administration and the
utilization of the NMLS. It adds details for
aggregation of interest of ownership for family
members for consistency with the Model Law.
Sections 16 and 17. Amends AS 06.55.405(a) and (d) for
consistency with the Model Law. It details record
keeping obligations of licensees, increasing the time
period from 3 years to 5 years, and makes conforming
language changes.
Section 18. Amends AS 06.55.406(a) concerning money
laundering reports retitling the heading to Bank
Secrecy Act reports for consistency with the Model
Law. Remove the requirement that certain money
laundering, record keeping, and suspicious transaction
reporting requirements be filed with the Attorney
General.
Sections 19 - 22. Amends AS 06.55.407 for consistency
with the Model Law.
AS 06.55.407(d) was retained and slightly amended
because it contains guidance that is helpful regarding
when a licensee or authorized delegate may disclose
financial information provided to the licensee or
authorized delegate by a customer.
Section 23. Adds a new subsection (f) to AS 06.55.407
stating when department records may be made public and
what information is confidential.
Section 24. Amends AS 06.55 to add new sections to
article 4 from the Model Law.
AS 06.55.408 requires licensees to submit an
annual audited financial statement to the
department within 90 days after the end of the
licensee's fiscal year.
AS 06.55.409(a) grants the department discretion
to enter into agreements with other state and
federal agencies to improve efficiencies and
reduce regulatory burden. AS 06.55.409(b) grants
the department broad discretion to administer,
interpret, and enforce the chapter, to adopt
rules and regulations, and to recover its costs
through imposition and collection of fees.
AS 06.55.410 expands the department's ability to
participate in multistate supervisory processes
such as joint investigations.
AS 06.55.411 provides that in the event of an
inconsistency between state and federal law, the
federal law governs to the extent of the
inconsistency.
AS 06.55.412 contains the requirements and
procedures applicable when a licensee adds or
replaces a key individual allowing the department
to disapprove a change of key individual due to
certain criteria.
Sections 25 - 30. Revises article 5 of AS 06.55 to
rename and broaden its scope from Permissible
Investments to Prudential Standards. Two existing
sections (AS 06.55.104 and 06.55.107) are repealed and
reenacted, as revised, to fit in the new article. The
level of permissible investments required by a
licensee are detailed in AS 06.55.502.
Section 25. Amends AS 06.55.501 to allow the
department to limit specific investments held by
licensees due to risk concerns, with the exception of
permissible investments listed in AS 06.55.102. AS
06.55.501(c) adds language to protect beneficiaries of
statutory trusts from actions by creditors of
licensees.
Section 26. Amends AS 06.55.501 to add a new
subsection (d) regarding the establishment and
termination of statutory trusts and related department
obligations. Subsection (e) was added, and it allows
the department to allow additional permissible
investments and to participate with other state
regulators to identify permissible investments.
Section 27 and 28. Amends subsections (a) and (b) of
AS 06.55.502 concerning permissible investments for
consistency with the Model Law.
Subsection (a) does the following:
1. Incorporates ACH items in transit to licensees
and payees, cash in transit via armored car,
cash in smart safes, etc. ACH funds are in the
banking system and the Model Law defines cash
in transit via ACH as a permissible
investment;
2. allows letters of credit as a permissible
investment; and
3. allows excess bonding as a permissible
investment type.
Subsection (b) is repealed and reenacted to
include a list of investments that are
permissible up to a certain aggregate value for
each investment category as a component of a
licensee's total investment portfolio.
1:45:13 PM
MR. FLEER continued.
Section 29. Amends AS 06.55 to add a new section to
article 5.
AS 06.55.503 contains the requirements for
letters of credit to align with the Model Law.
Amends AS 06.55 to add new sections to article 5.
AS 06.55.505 proposes applicable forms of
security (AS 06.55.104) and is a hybrid of the
Model Law and the existing Act. It requires a
licensee to hold a security bond or with the
department's approval, a deposit, with a maximum
amount of $1,000,000 and be maintained for no
less than 5 years with the details to be
determined by the department in regulation or
order.
AS 06.55.506 provides a significant expansion of
net worth requirements from $25,000 to a new net
worth based on a tiered level of total assets
held, requiring a licensee to demonstrate net
worth at application. It also allows the
department to exempt applicants or licensees from
net worth requirements.
Section 30. Amends AS 06.55.601 for consistency with
the Model Law regarding the suspension and revocation
of a license by deleting unnecessary language and
inserting new terms such as key individual and the
replacement of transmission for services.
Section 31. Amends AS 06.55.601 by adding a new
subsection (c) that allows a licensee to apply for
relief from a suspension or revocation of a license.
Section 32. Amends AS 06.55.602 for consistency with
the Model Law, replacing money services with money
transmission.
Section 33. Amends AS 06.55.602 by adding a new
subsection (c) for consistency with the Model Law
allowing an authorized delegate to apply for relief
from a suspension or revocation of a license.
Sections 34 - 36. Amends AS 06.55.603 for consistency
with the Model Law conforming language such as
deleting money services and inserting money
transmission.
Section 37. Amends AS 06.55.605 regarding civil
penalties allowing the department to assess its costs
and expenses for investigation.
1:45:38 PM
MR. FLEER continued.
Section 38. Amends AS 06.55.606(b) for consistency
with the Model Law conforming language such as
deleting money services and inserting money
transmission.
Section 39. Amends AS 06.55.606(c) for consistency
with the Model Law conforming language such as
deleting money services and inserting money
transmission.
Sections 40 and 41. Amends subsections of AS 06.55.607
to remove citations to AS 06.55.201, which is
repealed. The existing AS 06.55.201 contains the
currency exchange license requirements and this
license is being eliminated in the bill in favor of
one license type including currency exchange as a
money transmission activity.
Section 42. Amends AS 06.55.702(a) concerning hearings
for consistency with the Model Law deleting money
services and a citation to AS 06.55.702(b) which is
repealed in the bill.
Section 43. Amends AS 06.55.802 for consistency with
the Model Law revising licensing exclusions and
renames the section to exemptions. It adds new
exemption types and would allow the department to add
additional exemptions if it is in the public interest
creating consistency from state-to-state. It also adds
the term federally insurance depository financial
institution for consistency with other statutes the
division regulates under AS 06.60.990(9).
Section 44. Amends AS 06.55 by adding a new section AS
06.55.803 allowing the department to require a person
who claims an exemption to provide information and
documentation demonstrating the claimed exemption.
Section 45. Amends AS 06.55.810 regarding notices
requiring licensees and authorized delegates to
provide customers with notices of how to file a
complaint and allows the department to establish the
format and content required in the notices.
Section 46. Amends AS 06.55.810 by adding a new
subsection (d) that requires licensees and authorized
delegates include on a receipt or through disclosure
on the licensee's website or mobile application, the
name and phone number of the department and a
statement on how customers can contact the department
with questions or complaints.
Section 47. Amends AS 06.55 by adding a new section AS
06.55.815 concerning in-state determination of the
location of a person requesting a transaction.
Section 48. Repeals and reenacts AS 06.55.830
regarding receipts for consistency with the Model Law.
Subsections (a) (b) include content and format
requirements for transaction receipts and define
receipt. Receipts are required to be in English and
any other language principally used by the licensee or
authorized delegate to negotiate a transaction.
Subsection (c) describes exceptions to the receipt
requirement including stored value. Subsection (d)
provides a definition of receipt.
Section 49. Amends AS 06.55 to add a new section, AS
06.55.835 concerning timely transmission requiring
licensees to forward money received for transmission
in accordance with the agreement between the licensee
and sender unless the licensee determines there may be
fraud involved or another crime. The licensee is
required to respond to inquiries from the sender with
the reason for the failure to forward money unless
doing so violates a state or federal law.
Section 50. Repeals and reenacts AS 06.55.840
concerning refunds for consistency with the Model Law.
Section 51. Amends AS 06.55.850(b) for consistency
with the Model Law. The amendments are significant and
allow the department greater flexibility in the
assessment of fees.
Section 52. Amends AS 06.55.850(c) concerning
conducting a review annually of each fee level to
determine if fees are sufficient to cover the cost of
the administration of this chapter.
Section 53. Amends AS 06.55.850 by adding a new
subsection (f) that states an annual renewal fee must
be based on a licensee's total volume of money
transmission in the state with the annual renewal fee
to be determined by the department by regulation or
order.
Sections 54 - 61. Amends definitions found in AS
06.55.990 for consistency with the Model Law. Changes
include the incorporation of the words in this state
to ensure AS 06.55 protects Alaska consumers and
insuring revisions are made to align the language of
the Act with the model law. It also includes an
exception for a loyalty reward card, amends the
definition of control to at least 25% of ownership and
amends the definition of stored value.
Section 62. Amends AS 06.55.990 to renumber and add
definitions for terms introduced by the Model Law
including the following terms:
1. Accredited state
2. Acting in concert
3. Average daily money transmission liability
4. Bank Secrecy Act
5. Closed loop stored value
6. Control of virtual currency
7. Dollar equivalent
8. Eligible rating
9. Eligible rating service
10. Federally insured depository financial
institution
11. In this state 12. Individual 13. Key
individual 14. Passive investor 15. Payroll
processing services 16. Registry 17. Tangible
net worth 18. Virtual currency
Section 63. Amends AS 06.55.995 to refer to the Act or
Chapter as the Alaska Uniform Money Transmission
Modernization Act instead of the Alaska Uniform Money
Services Act.
Section 64. Amends AS 12.62.400(b) to read that an
applicant under AS 06.55 may submit fingerprints to the
registry.
Section 65. Repeals several sections in AS 06.55. AS
06.55.104 and AS 06.55.107 are repealed and reenacted in
Article 5 concerning prudential standards. All statutes in
Article 2 regarding currency exchange licenses are repealed
as the activity was added to the definition of money
transmission. AS 06.55.890 and AS 06.55.990 contains
definitions that are no longer necessary.
1:47:14 PM
MR. FLEER continued.
Section 66 68 are transitional provisions amending
uncodified law to avoid interference with existing
contracts, to allow a transitional period for holders of
existing money services licenses and for payroll
processors, to allow adoption of transitional regulations
by DCCED, and to instruct the revisor of statutes to amend
certain headings.
Section 69. Provides for an immediate effective date for
sec. 68, which would allow DCCED to begin the regulation
promulgation process.
Section 70. Provides for an effective date of January 1,
2024.
1:47:33 PM
MR. SCHMIDT offered some last thoughts, stating that SB 84 will:
protect consumers; reduce regulatory burden; adopt a model law
the industry drafted with state regulators; prevent federal
preemption by creating uniform statutes nationwide; and allow
the division to update fees to keep up with technology and
innovation in an ever-changing financial industry.
1:48:32 PM
SENATOR KIEHL referenced the provision in subsection (p) of
Section 15 relating to a person considered to have a controlling
influence over a licensee and is thus subject to background
checks. The bill establishes 25 percent as a controlling stake.
He asked if 25 percent was the right threshold.
MR. SCHMIDT acknowledged that 10 percent would be consistent
with the mortgage industry and other industries that the
division regulates.
SENATOR KIEHL referenced the exemption on page 45, line 17,
subsection (c)(2) relating to money received for transmission
that is not primarily for personal, family, or household
purposes. He asked whether Alaskans who receive their paychecks
in cryptocurrency would get a receipt because it was for
personal purposes or if that would be considered business
purposes.
MR. SCHMIDT deferred the question to Mr. Fleer or Ms. Reno.
1:51:30 PM
MR. FLEER offered his understanding that there would be receipt
requirements for a crypto transaction.
SENATOR KIEHL said he didn't believe a paycheck was a family or
household purpose.
MR. FLEER agreed it wasn't.
SENATOR KIEHL stated that it would not be considered a personal
purpose.
1:52:04 PM
SENATOR KIEHL asked about the exemption, also on page 45, in
subsection (c)(1) relating to money received for transmissions
subject to [12 C.F.R. Part 1005, Subpart B;] that is in the
federal consumer financial protection bureau. He asked what that
covers.
MR. FLEER said the information he sent to Senator Kiehl's office
should answer the question.
CHAIR CLAMAN asked him to send the information to all members of
the committee.
MR FLEER agreed.
1:53:27 PM
CHAIR CLAMAN held SB 84 in committee for further consideration.
SB 128-COMMERCIAL SALMON FISHERY CLOSURE
1:53:34 PM
CHAIR CLAMAN announced the consideration of SENATE BILL NO. 128
"An Act temporarily closing the commercial salmon fishery in a
portion of the Alaska Peninsula and Aleutian Islands; and
providing for an effective date."
He acknowledged the considerable interest in the bill and
clarified the following: The legislation will not move out of
committee today; public testimony on the bill will remain open
until all who wish to testify are given an opportunity to
testify; constitutional issues raised by this legislation will
not be reviewed in detail today; the bill probably won't be
heard again before the legislature adjourns in mid-May; and
written testimony may be submitted online to
[email protected]. He predicted that 20-30 people would
be able to testify today.
1:55:36 PM
SENATOR DONNY OLSON, District T, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 128, thanked the committee for
hearing the bill that addresses an issue that is of great
concern for many of his constituents.
1:56:22 PM
ALMERIA ALCANTRA, Staff, Senator Donny Olson, Alaska State
Legislature, Juneau, Alaska, presented the sponsor statement for
SB 128 on behalf of the sponsor.
Over the last three years, Western and Interior Alaska
have faced detrimental collapses in salmon runs along
the Yukon River and Kuskokwim River. This collapse has
led to fishery closures along the rivers and their
tributaries for all fishing types, which has had a
severe impact to the subsistence and personal use
harvests that residents rely on for their cultural,
financial, and physical wellbeing.
In 2021, there was a return decrease for Yukon Chinook
and summer Chum of nearly 90%, which left residents
along the Yukon and Kuskokwim struggling to make ends
meet and put food on the table for their families. At
the same time, however, commercial fisheries in the
Alaska Peninsula and Aleutian Islands have had record
high harvests with 1,168,601 Chum bycatch.
Historically, much of this bycatch happens in Area M,
a mixed stock intercept fishery in the Alaska
Peninsula, Aleutian Islands, and Atka-Amlia Islands.
In February, the Board of Fisheries had the
opportunity to address this issue and protect the
people and salmon of the Arctic-Yukon-Kuskokwim (AYK)
region, they failed to do so by not passing
Proposition 140. Proposed by the Fairbanks Advisory
Fisheries Sub-Committee, Proposition 140 called to
reduce the commercial salmon fishing time in Area M.
Due to the failure of the Board to act in accordance
with their constitutional obligation under the
"sustained yield principle" and statutory obligation
to provide reasonable subsistence fishing
opportunities under AS 16.05.258(b)(4)(A) I am
introducing this legislation.
Senate Bill 128, TEMPORARY CLOSURE OF ALASKA PENINSULA
MAMANGEMENT AREA M TO COMMERCIAL SALMON FISHING;
directs a temporary closure for commercial fishing in
Area M from June 10th, 2023 through June 30th, 2023.
This closure allows those fish bound for their natal
streams in Western and Interior Alaska to have a
fighting chance to reach their spawning grounds.
Furthermore, while Senate Bill 128 addresses concerns
about the State and Board of Fisheries constitutional,
statutory, and treaty obligations; it also opens the
conversation of how the State of Alaska can better
manage our fisheries with current science, data,
policy, and traditional ecological knowledge from
Indigenous communities across the State. As a
testifier from Kwethluk said at the Board of Fisheries
meeting this last February, "I am asking on behalf of
my village and the residents of the Kuskokwim and
Yukon rivers, that you make decisions that will
benefit all Alaskans- no matter how small it seems to
be. We are asking to give a chance for some salmon to
return to our rivers. We are asking because we want to
see some salmon in our smokehouses and freezers. We
are asking not for money? it's just that we want to
eat our food."
1:59:34 PM
SENATOR OLSON spoke about the crisis situation facing
subsistence fishermen today. He talked about the history of
fishing starting in 1741 with Vitus Bering, to the decline of
the Sea Otter in 1780, to 1868 when fish plants started on
Kodiak Island, to the use of fish traps, to the successful
ballot measure in 1948 to do away with fish traps - which
Congress ignored, to 1960 when Governor Egan closed the
fisheries in Bristol Bay and Cook Inlet for most of that decade.
He said he patterned SB 128 on Proposition 140 that was narrowly
voted down by the Board of Fisheries in February. The point is
to address the issue of once vibrant fish camps and full
smokehouses that now are silent and just not there. He opined
that if the state doesn't take drastic action like Governor Egan
took, some fisheries will become extinct.
CHAIR CLAMAN recognized Senator Bishop in the audience.
2:05:33 PM
SENATOR KIEHL asked whether the Board of Fisheries took any
action during the meeting when Proposition 140 was voted down.
SENATOR OLSON answered that the board offered no other solution
and that's why he put the bill forward.
MS. ALCANTRA clarified that Proposition 140 originally called
for a 60 percent reduction in fishing time in Area M, but what
passed was just a 12 percent reduction in fishing time.
SENATOR OLSON commented that the people on the rivers want
solutions, not more studies.
CHAIR CLAMAN turned to invited testimony.
2:09:44 PM
DOUG VINCENT-LANG, Commissioner, Department of Fish and Game,
Juneau, Alaska, provided invited testimony in support of SB 128.
He read the following prepared testimony.
Thank you for the opportunity to speak with you today
regarding South Alaska Peninsula salmon fisheries. For
the record, my name is Doug Vincent-Lang, and I am the
Commissioner of the Alaska Department of Fish and
Game.
Let me begin by saying the Department is deeply
concerned about the poor returns of chinook, summer
chum, fall chum and coho salmon to coastal western
Alaska systems. The poor returns have resulted in
fishery restrictions and closures that impact food
security and subsistence and cultural activities.
I have visited the region numerous times and listened
to testimony about the impact this is having. The
words spoken are real and the impact understood. Let
me be clear, we understand and are sympathetic to the
hardship that the restrictions and closures are
creating for people living in western Alaska.
As fishing is restricted or closed in rivers, people
are asking what is being done in fisheries that
intercept fish destined for these rivers. They are
asking for some of these mixed stock fisheries to be
restricted, or in the case of the legislation being
discussed today, closed.
It is important to note that nearly all salmon
fisheries are mixed stock fisheries. They all harvest
to varying degrees stocks of mixed origins. For
example, the salmon fisheries that occur in the lower
Yukon River are mixed stock fisheries in that they
harvest a range of discrete stocks that occur upriver
of the fishery, including some of Canadian origin. It
is not until a fishery is prosecuted on the spawning
beds that it is not a mixed stock fishery.
In the case of coastal western Alaska chum salmon,
these fish are harvested in various mixed stock marine
fisheries, including as bycatch in marine trawl
fisheries targeting pollock and cod as well various
directed salmon fisheries, including the South Alaska
Peninsula seine and gillnet fisheries.
However, it is important to note that they are also
harvested in other fisheries, such as the Bristol Bay
sockeye salmon fishery, as they move through that
fishery on their way to the Kuskokwim and Yukon
Rivers.
So, the question is: What is the acceptable level of
harvest or intercept in these fisheries when
subsistence is restricted or closed? Should all
fisheries be closed if they harvest even a single chum
salmon that is destined to coastal western Alaska when
these fisheries are closed or restricted?
2:11:48 PM
To get a handle on this question, it is important to
understand the stock compositions of the salmon
harvested in these mixed stock fisheries that
intercept coastal western Alaska chum salmon. I will
not talk about bycatch in this presentation as it is
being addressed by the North Pacific Fishery
Management Council. Instead, I will focus on the
fisheries that occur along the South Alaska Peninsula,
as this is one of the fisheries that is affected by
the legislation being considered today.
In response to the poor returns of summer chum salmon
to coastal western Alaska, the Department initiated an
evaluation of the genetic compositions of chum salmon
harvested in the South Peninsula area mixed stock
salmon fisheries last year. This is one of several
marine mixed stock fisheries that are known to
intercept fish of Bering Sea coastal origin. Our study
was designed to assess whether stock compositions in
this fishery changed from when we previously evaluated
as part of the Western Alaska Salmon Stock
Identification Program (WASSIP) study conducted over a
decade ago.
So, what did we learn? From fish ticket information,
we know that 817,279 chum salmon were harvested in the
South Peninsula fisheries in all of 2022. This is 78%
of the recent 10-year average. Of these, 544,137 were
harvested during June, which from previous studies is
the time period when summer chum of coastal western
Alaska origin are harvested in this fishery.
2:13:07 PM
For the June fishery, about 58% of the chum salmon
harvested were of Asian origin and about 18% were of
coastal Alaska origin. That is to say about 6 out of
every 10 chum salmon harvested were of Asian origin.
In contrast, less than 2 out of 10 were of coastal
western Alaska origin. Coastal western Alaska
represents a grouping of Bristol Bay, Kuskokwim River,
Yukon River summer, and Norton Sound summer chum
salmon. Unfortunately, we cannot differentiate stocks
within this grouping with current genetic technology.
Bottom line, our study showed that about 96,000 summer
chum of coastal western Alaska origin were harvested
in the South Peninsula fisheries last year during
June. Based on preliminary run reconstruction data,
this represents about a 6% harvest rate on these
stocks as a group. Again, this number represents the
total number of summer chum stocks of coastal western
Alaska origin that were harvested. That is, these are
not all of Yukon and Kuskokwim River origin. They are
also of Bristol Bay and Norton Sound origin.
This is information that we presented to the Board of
Fisheries at their recent meeting to inform their
discussions.
The two primary questions the Board faced at their
meeting were: What was an acceptable level of
intercept harvest, and how could harvest of coastal
western Alaska chum salmon be reduced?
2:14:29 PM
Proposal 140, which was submitted by the Fairbanks
Advisory Committee and supported by Tanana Chiefs
Conference (TCC) and others, called for adoption of a
previous management approach that restricted time
fished. They postulated that chum salmon harvest could
be reduced solely on reduction of time alone. However,
when this management plan was utilized in the early
2000s, it did not significantly reduce the harvest of
chum salmon, and given the improved fishing power of
the modern Purse Seine fleet, the Department could not
guarantee that chum salmon harvest would be reduced
based solely on time restrictions. Based on this and
other information, the Board chose to not pass
proposal 140. It failed on a 3-4 vote.
Instead, they adopted a hybrid approach, specifically
designed to reduce the harvest of chum salmon in June,
that:
• Closed a known area of high chum harvests (Sanak
Island sections) to commercial fishing for salmon
during June.
• Reduced commercial salmon fishing time with purse
seine gear in June by a minimum of 13%.
• Increased the length of closure windows to allow
chum salmon passage through the fishery.
• Created chum salmon harvest limit triggers that
restrict and potentially close the commercial
purse seine fishery in June, if they are met or
exceeded. A trigger of 300,000 chum was set that
if exceeded after the second opening would reduce
fishing time by 44 hours for the third period. A
second trigger of 450,000 was set that if
exceeded after the third period would close the
fourth period, a reduction of 88 hours.
• Expressed an expectation, and received commitment
from the fishing industry, that the industry
coordinate efforts to reduce chum salmon harvest
based on a signed agreement that reduced harvest
last year. This included waiving confidentiality
and forming voluntary cooperatives. The
cooperatives were formed last year and were
successful in reducing chum harvests from 1.1
million chum in 2021 to 544,000 chum last year.
This proposal passed by a vote of 4-3.
2:16:47 PM
I want to note that many people were involved in this
outcome, which occurred over a 7-day period during
which public comment was taken, a committee of the
whole discussion occurred and numerous after hour
discussions occurred.
As with all compromise solutions, people on both sides
of the issue were not happy with the outcome. Inriver
users felt the Board let them down by not adopting
their preferred solution. South Peninsula fishermen
felt they unnecessarily lost traditional sockeye
salmon harvest opportunity.
This season will tell the tale of the outcome. If the
fishery is prosecuted, we will closely monitor it
inseason. We will also, assuming a fishery is
prosecuted, conduct a second year of genetic sampling.
If the fishery is cancelled, we will not be able to
conduct this study. We have also spoken with public
safety to beef up enforcement to address the perceived
issue of chum chucking. Finally, we will monitor the
cooperatives to ensure they are operating as agreed to
and envisioned.
2:17:50 PM
In closing, as with many Board of Fisheries decisions,
and also the legislative process, not everyone is
always happy with the outcomes. But in both cases,
it's not for a lack of thoughtful deliberation and
consideration.
2:18:17 PM
KAREN GILLIS, Program Director, Bearing Sea Fishermen's
Association (BSFA), Anchorage, Alaska, stated that BSFA works to
support small boat fishermen in the Arctic, Yukon, Kuskokwim,
and Bristol Bay regions. She said SB 128 will solve a problem
that the Board of Fisheries failed to address effectively. That
problem is that for more than a decade Area M management has
prioritized commercial fishing over escapement and subsistence,
in violation of state law and the policies that guide Board of
Fisheries decisions. ADF&G has documented the severe decline in
chum salmon in Western Alaska. In 2021 and 2021, escapement
goals were not met throughout the Yukon and Kuskokwim river
system, and subsistence harvests were severely limited or
completely closed throughout the season. Meanwhile, ADF&G
documented that the Area M fishery harvested over 210,000 chum
salmon the last two years. These fish were bound for the Western
Alaska Rivers that are failing to meet escapement goals.
She referenced a 2012 ADF&G Special Publication that identifies
the stock competition of chum salmon harvested in fisheries of
the Western Alaska Salmon Stock Identification Program. It says
that Area M is composed primarily of migratory salmon pathways
where discrete salmon stocks need protection from overharvest to
prevent poor escapement. Chum and Chinook transiting Area M are
weak and need protection. The law and the Alaska constitution
are clear that ensuring chum salmon meet escapement goals and
subsistence needs in the AYK region is a priority of ADF&G and
the Board of Fisheries. If a stock cannot provide reasonable
opportunity for subsistence, all other uses must be eliminated.
For all fisheries in Alaska with the exception of Area M,
ADF&G's policy and practice is to manage to meet salmon
escapement goals and to close commercial fishing on a stock when
escapement needs or reasonable opportunities for subsistence are
not being met. This is not being applied to the Area M
commercial salmon intercept fishery.
In February 2023, the Board of Fisheries voted to allow the Area
M fisheries to continue to harvest Western Alaska chums without
any meaningful windows for chum passage. For decades AYK
residents have voiced concerns about changes in salmon stocks
that have sustained the people for millennia. There is a
multispecies salmon decline in Western Alaska and there is no
provision for escapement and subsistence priority or in-river
commercial fishing in the foreseeable future. The continued
interception of migrating chum salmon in Area M threatens the
sustainability and future of coastal Western Alaska chum salmon
and the fisheries they once supported. Stakeholders have
exhausted their administrative remedies with the Board of
Fisheries. She asked the legislature to take action and provide
lawful restrictions on the commercial fishery in Area M as a
remedy to the Board of Fisheries inability to follow the law.
CHAIR CLAMAN asked her to submit her remarks in writing.
2:23:16 PM
VIRGIL UMPHENOUR, Member, Fairbanks Fish and Game Advisory
Committee, Fairbanks, Alaska, provided invited testimony in
support of SB 128. He shared that he served three terms on the
Board of Fisheries and tried very hard to get a responsible
fishery in Area 140. That measure passed 7:0 in 2001, but it was
subsequently changed from 3 16-hour openings per week to 88
hours of fishing with 32 hours off in June. He pointed out that
the Area M fishery is the only fishery in the state that is not
managed on escapement goals. He noted that the Yukon River is
managed on escapement goals in Alaska and Canada. He highlighted
that during the last meeting, the Board of Fisheries not only
did not pass Proposition 140, but also ignored the Sustainable
Salmon Policy that is in regulation. He read an excerpt to
support the point. Furthermore, the board violated the
allocation criteria set out in AS 16.05.251. He specifically
cited subsections (e)(3) and (4) about providing residents the
opportunity to obtain fish for personal and family consumption
and the availability of alternative fisheries resources. That is
nonexistent in the AYK while Area M had 225 other commercial
fishing permits in use in 2021 in addition to the salmon
permits.
2:27:21 PM
BRIAN RIDLEY, Chief, Chair, and President, Tanana Chiefs
Conference (TCC), Tanana, Alaska, provided invited testimony in
support of SB 128. He is from the village of Eagle on the
Canadian border. He stated support for the bill and the idea of
sustainable salmon management, which is lacking largely due to
decisions made by the Board of Fisheries and ADF&G. He charged
that following three days of public testimony and expert advice
from renowned fishery scientists, the Board of Fisheries ignored
that testimony and failed to prioritize sustainability and
subsistence in favor of commercial salmon interests. This was a
clear violation of regulatory and statutory requirements. In
closing comments, he said two of the four members who voted in
favor of the current proposal said they voted for the money.
He stated that TCC understands that the interception of salmon
in Area M and salmon bycatch in the Bering Sea Pollack are not
alone to blame for the collapse of chum and Chinook runs, but
the situation in the Yukon River is so dire that each and every
chum and Chinook salmon counts. The more than 18,000 people TCC
serves have already sacrificed for years by not fishing for
salmon and practicing their way of life. Salmon is more than
sustenance; it is essential to members' physical, economic,
cultural, and physical wellbeing. He called on everyone who
makes up the Area M commercial fleet to join in the conservation
efforts to rebuild the area salmon populations before they go
extinct.
MR. RIDLEY concluded by saying that SB 128 can change the
trajectory of salmon management in Area M and allow salmon to
return to the Yukon and Kuskokwim rivers. He urged the
legislature to support SB 128.
2:31:14 PM
CHAIR CLAMAN opened public testimony on SB 128.
2:31:38 PM
ERNIE WEISS, Natural Resources Director, Aleutian East Borough,
Anchorage, Alaska, testified in opposition to SB 128. He relayed
that he had attended all the Board of Fisheries meetings this
year, including the Alaska Peninsula, Aleutian Islands, Chignik
finfish meeting, and the Arctic, Yukon/Kuskokwim finfish
meeting. He stated that the action the Board of Fisheries took
during the Alaska Peninsula meeting in February was based on
science and the public process was robust. The meaningful
restrictions imposed on the South Alaska Peninsula June fishery
are meant to move more chum salmon through the area. He opined
that the restrictions coupled with the action plan this fleet
enacted will significantly reduce chum harvest. He pointed out
that the action plan this fleet enacted in 2022 resulted in the
lowest chum to sockeye ratio since limited entry was enacted. He
highlighted that the science presented during the February
meeting showed that climate change was the cause of the
struggling salmon stocks, not the Alaska Peninsula fishery.
Furthermore, genetic testing shows that 80 percent of the chum
salmon caught in this mixed stock fishery are bound for Asia.
Closing the Area M June salmon fishery will not fix the AYK
salmon issues, but it will hurt borough fishermen and
communities. He concluded by saying that overriding the Board of
Fisheries by passing SB 128 would set a poor precedent.
2:33:36 PM
ABBY FREDERICK, Director of Communications & Investor Relations,
Silver Bay Seafoods (SBS), Juneau, Alaska, stated that SBS
opposes SB 128 but shares the concern about Western Alaska
salmon stocks. They support efforts to better understand the
cause of the declines and find meaningful solutions that
strengthen healthy sustainable ecosystems. She said climate
change is warming Alaska twice as fast as the rest of the US and
it is disheartening to hear about the impacts that climate and
changes in the ocean are having on Alaska's salmon stocks.
Nevertheless, SBS still cannot support the punitive actions put
forth in SB 128; they will devastate the Alaska Peninsula but
won't benefit the AYK salmon stocks. She described the Board of
Fisheries action during the February meeting as significant. She
highlighted that while the board restricted fishing a minimum of
13 percent, additional actions in the decision potentially could
reduce the commercial fishery further. She opined that the Board
of Fisheries' action coupled with the fleet's adaptive approach
is the best path forward.
2:35:45 PM
ALISSA NADINE ROGERS, Director of Natural Resources,
Orutsararmiut Native Council, Bethel, Alaska, testified in
support of SB 128. She stated that the Yupik people are strong
and resilient, but nothing but ashes is left of what was once
the largest unaltered King Salmon fishery in the world. She
stated that the tribe is heavily involved in this fishery
through science and traditional knowledge. Many tribal members
live in poverty and their economy is the subsistence harvest.
She described the importance of the Aleutians commercial salmon
fishery and the production of oil to the state's economy and
questioned the reason for selling Alaskan oil dirt cheap and
punishing the Alaskan people for the lack of economic
infrastructure. She pointed out that the Yupik people have
sustained themselves on their fishery for more than 10,000
years. She emphasized the importance of allowing for substance
harvest throughout the Arctic, Yukon, Kuskokwim, and Bristol Bay
rivers. She reiterated support for SB 128.
2:38:19 PM
CARLIN HOBLET, representing self, Anchorage, Alaska, stated that
he is an Area M seiner who was urging the legislature not to
undermine the established system for fisheries management in
Alaska. He maintained that hearing SB 128 disregarded appointed
officials who have dedicated their careers to fishery science
and management. He posited that passing the bill would set a
dangerous precedent throughout state government. He pointed out
that countless hours of research into the salmon crashes in the
Yukon and Kuskokwim Rivers had shown that the Area M fisheries
are not a significant contributing factor. Nevertheless, Area M
fishermen have implemented a self-management plan to maximize
the number of chum and Chinook transiting the area. Their
interest is for the greater good of fellow Alaskans, and their
mission is to rebuild endangered salmon stocks so Alaskans will
still being able to participate in the fishery that is the
foundation of the region. He posited that SB 128 will not return
salmon to the endangered rivers because climate is the leading
factor in the decline. He urged the committee to prevent SB 128
from advancing.
2:40:42 PM
CHARLOTTE LEVY, Natural Resources Assistant Director, Aleutians
East Borough, Anchorage, Alaska, testified in opposition to SB
128. She stated that for many years she has participated in
Board of Fisheries meetings and worked with Area M fishermen.
She pointed out that fisheries management is complex and the
state has developed a rigorous and comprehensive process for its
management. The Board of Fisheries relies on science and the
lived experience of stakeholders. Board processes exist for a
reason; they require extensive resources, time, and subject
matter expertise that is not available within the legislature.
She opined that passing SB 128 would set a precedent that
potentially would undermine all board processes in the state.
She concluded by reminding the committee that the fishermen in
Area M are predominantly Alaska residents who operate boats that
are under 60 feet. They are subsistence users and borough
residents who live and work in remote communities year around.
The borough is responsible for critical infrastructure in these
communities and the Area M fishery contributes upwards of 28
percent of the borough's fish tax revenue. She questioned
cherry-picking this one fishery because it would be the
harbinger of borough and community collapse.
2:42:33 PM
DALE PEDERSEN, representing self, Sand Point, Alaska, stated
that he is a 50-year Area M fisherman and setnetter who
wholeheartedly opposes SB 128. He said the Board of Fisheries
meeting in February was well attended and like all such
meetings, there were no winners. Like them or not, stakeholders
have always lived with Board of Fisheries' decisions. If the
legislature were to override the Board of Fisheries decision by
passing SB 128, it would upset this precedence. He also pointed
out that by the time the board made its decision, many boat
owners had already invested significant money in their fishing
operations, thinking there would be a June fishery. He urged the
committee to instead spend time looking at why salmon smolt were
having difficulty surviving and returning salmon were starving.
He opined that it was due to poor conditions in the ocean. He
urged the committee to hold SB 128 and allow the Board of
Fisheries and ADF&G do the jobs they do so well.
2:44:02 PM
DAVID POLUSHKIN, representing self, Wasilla, Alaska, stated that
he has fished in Area M for 36 years, and is a board member of
Concerned Area M Fishermen (CAMF). He advised that CAMF
represents more than 80 percent of the drift fleet in Area M. He
also represents 54 fishing vessels from the Russian communities
on the Kenai Peninsula and MatSu Borough. He stated opposition
to SB 128, which would deal a devastating blow to the Area M
fishery without any noticeable benefit to returns in Western
Alaska rivers. He reminded the committee that this was tried in
Area M in 2001-2003; it decimated the fishery but had no
noticeable benefit to the Western Alaska chum salmon stock. SB
128 would be even worse because it also proposes closing the
north side of the Area M fishery even though chums bound for
Western Alaska aren't caught there. He continued that the bill
overrides the Board of Fisheries decision that was based on
science and stakeholder experience. The legislature voted for
Board of Fisheries members and should let them do their job. He
urged the committee to oppose SB 128.
2:46:13 PM
CONNOR MURPHY, representing self, Kodiak, Alaska, stated that he
is a lifelong Alaskan, a subsistence user, and a commercial
fisherman. Most of his income comes from his setnet operation
which would be shut down completely for the month of June if SB
128 were to pass. North Alaska Peninsula districts would be shut
down as well. He explained that the North Alaska Peninsula is
managed based on escapement in specific rivers. He reported that
just 154 chums were caught in June last year on the North Alaska
Peninsula and there was no genetic evidence that any of the
chums would struggle in Western Alaska river systems. He
continued that there was no proposal or testimony before the
Board of Fisheries about closing the North Alaska Peninsula in
June for chums bound for these river systems. The Area M fishery
is complex and SB 128 fails to grasp that fact. He opined that
overriding the Board of Fisheries' process directly threatens
all fisheries in the state and all board processes. He urged the
committee to leave fisheries management to the Board of
Fisheries and ADF&G, as has been the case since statehood.
2:47:54 PM
CHELSAE RADELL, Assistant Director, Alaska Groundfish Data Bank
(AGBD), Kodiak, Alaska, stated that AGDB is a member-based
organization that represents shoreside processors and trawl
vessels that are mostly home-ported in Kodiak. She voiced
explicit opposition to SB 128 and stated support for Area M
fishermen. Instead of repeating the extensive scientific data
that was presented in February, she said she would focus on the
larger issue of the dangerous precedent that would be set for
fisheries management in Alaska if SB 128 were to pass. She
reminded the committee that the Board of Fisheries is comprised
of experts and stakeholders with the knowledge and experience to
delve into the complex issue of fisheries management. The
members are appointed based on their experience and the
legislature has control over who is confirmed to sit on the
Board of Fisheries. She disputed the notion that the Board of
Fisheries somehow failed to act during the February meeting.
They took action to significantly restrict the Area M fishery
while implementing adaptive measures to allow more chum salmon
to transit the area. She emphasized that any action to further
restrict the fishery outside the board process undermines the
authority of the Board of Fisheries on this and all future
fishery management issues in the state. She urged the committee
to hold SB 128.
2:50:07 PM
BLAIR HICKSON, representing Anvik River Lodge, Anvik, Alaska,
stated that he had been in the area for 28 years, which is the
primary spawning grounds for chum salmon in the Yukon River. He
reported the high and low chum salmon numbers in the river and
stated that there was no question the spawning rivers could
still house these fish. The water temperatures have remained
fairly stable. He stated support for SB 128 and emphasized that
every salmon that swims up these rivers and spawns counts.
2:51:31 PM
VIVIAN KORTHUIS, Chief Executive Officer, Association of Village
Council Presidents (AVCP), Bethel, Alaska, stated that AVCP
represents 56 tribes along the Yukon and Kuskokwim rivers and
the Bering Sea coast in Western Alaska. She urged the
legislature to protect Alaskans by passing SB 128, maintaining
that the Board of Fisheries was not doing its job and ignoring
state law. She described the current situation as the greatest
natural resource crises that had ever occurred in Alaska. This
is a generational and humanitarian crisis and a food famine.
Chum salmon numbers have crashed since 2020 resulting in a
failure to provide escapement and meet subsistence needs. There
are no more conservation actions that AYK subsistence fishermen
can take. She urged the committee to support SB 128.
2:54:03 PM
ADOLPH LUPIE, representing self, Tuntutuliak, Alaska, stated
that he is a subsistence hunter and fisherman who is
representing his village in support of SB 128. He made the
following points: 1) 2019 was the first year of the chum salmon
crash; 2) chum salmon crashed in 2021 in both the Yukon and
Kuskokwim rivers, 3) chum salmon numbers remained very low in
2022, 4) Area M interception in 2021 was over 210,000 chum
salmon and bycatch was 51,500 that were headed for Western
Alaska and the Tuntutuliak commercial fishery; 5) Board of
Fisheries management of Area M prioritizes commercial fishing in
violation of state law; 6) people in Tuntutuliak are hurting
from the lack of fish; and 7) chum salmon is needed during the
summer to meet food needs during the winter. He urged the
committee to act.
2:56:37 PM
STACY ARBELOVSKY, representing self, Kasilof, Alaska, stated
that he is a lifelong Alaskan who has commercial fished for 49
years. He owns and operates a drift gillnet boat and permit in
Area M and is a member of Concerned Area Fishermen. He opposes
SB 128. He stated that the Board of Fisheries took action this
winter against the June fishery to help chum salmon to transit
the area during times of abundance. This included loss of
fishing time, area closures and the adaptive fleet cooperative
to stand down and move fishing areas when implemented. He opined
that this was a good management plan for the fishery. He pointed
out that SB 128 would also shut down the North Peninsula fishery
for setnet and gillnet fishing, which was not part of
Proposition 140. He said that genetic studies and sampling have
shown that this fishery does not harvest any AYK chum salmon. He
emphasized that the June fishery on the North Peninsula is
extremely important to the set and drift gillnet fleets. He
spoke against having five sockeye rivers over-escaped from a
closure that is not science-based. He asked the committee to
consider the real motive of SB 128 and urged the committee to
support fisheries management that is based on science.
2:58:45 PM
RICHARD DAVIS, Member, Board of Directors, Seafood Producers
Cooperative, Juneau, Alaska, testified in opposition to SB 128.
He stated that the cooperative is the largest and longest
surviving trade association of commercial fishermen on the North
American Continent. The cooperative paid $0.5 million in raw
fish business tax to the State of Alaska this year. He stressed
that the legislative process should not be used to contravene
Board of Fisheries management decisions. The fishermen he
represents don't always like the Board of Fisheries' decisions,
but they live with them. Thus, the Seafood Producers Cooperative
opposes SB 128.
3:00:54 PM
DENNIS ZADRA, representing self, Cordova, Alaska, testified in
opposition to SB 128. He echoed the previous testimony that
science should govern decisions on fisheries. The board process
should be respected.
3:02:03 PM
PHYLLIS SHIRRON, representing self, Cordova, Alaska, testified
in opposition to SB 128. She posited that the bill wasn't
developed with a comprehensive understanding of the watersheds
or communities it would impact. It does not take into account
the biomass effects of all the river systems or far-reaching
negative economic effects to families and communities in Area M.
Furthermore, SB 128 blatantly undermines the power and value of
the public process and managerial plans that are in place.
Passing SB 28 would set a precedent for overriding existing
regulatory and managerial agencies through the legislature. She
urged the committee to oppose SB 128.
3:04:01 PM
CHARLES LEAN, Chair, Northern Norton Sound Fish and Game
Advisory Committee, Nome, Alaska, stated that he was speaking
from the heart in support of SB 128. He stated that a public
process is only as good as its rules. What is happening is the
Board of Fisheries is not following the rules that it
promulgated. He pointed out that the majority of AYK has not
fished for chum and Chinook salmon for three years and fishing
for coho salmon has been limited. At issue is the lack of
adequate escapement and the replenishment of the runs that
support an area the size of Texas with 130,000 Alaska residents.
He concluded by emphasizing that this crisis needs to be
addressed; the department and Board of Fisheries are not
following the rules and it is time to step in and take over.
3:06:21 PM
PETER HAMRE, representing self, Homer, Alaska, stated that he
owns and operates a fishing boat on the Alaska Peninsula, and
more than half his income comes from the Area M June fishery.
Thus, he is opposed to SB 128. Board of Fisheries members are
carefully vetted, whereas the legislature has neither the time
nor expertise to take on fisheries management. He urged the
committee not to go down this path.
3:06:56 PM
SCOTT ADAMS, representing self, Homer, Alaska, testified in
opposition to SB 128. He stated that he worked in Area M for 10
years and he feels the bill is going in the wrong direction. The
Board of Fisheries and the fishers in Area M are working to
restrict the chum catch. He opined that fisheries should not be
managed legislatively.
3:08:12 PM
DANNY CUMBERLODGE, representing self, Sandpoint, Alaska,
testified in opposition to SB 128. He sat through the 12 days of
Board of Fisheries meetings and listened to all the science that
was presented. He believes the board made the best decision it
could. All parties sacrificed. He opined that adopting the bill
would make the Board of Fisheries process irrelevant.
3:09:18 PM
SENATOR OLSON offered closing comments that disputed the notion
that the Board of Fisheries and ADF&G were doing a good job.
3:10:02 PM
CHAIR CLAMAN held SB 128 in committee with public testimony
open.
3:10:21 PM
There being no further business to come before the committee,
Chair Claman adjourned the Senate Judiciary Standing Committee
meeting at 3:10 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 84 version A 2.24.2023.PDF |
SJUD 4/21/2023 1:30:00 PM SJUD 5/1/2023 1:30:00 PM SJUD 5/5/2023 1:30:00 PM |
SB 84 |
| SB 84 Transmittal Letter 2.27.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/1/2023 1:30:00 PM SJUD 5/5/2023 1:30:00 PM |
SB 84 |
| SB 84 Sectional Analysis version A 2.24.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/1/2023 1:30:00 PM SJUD 5/5/2023 1:30:00 PM |
SB 84 |
| SB 84 Letters of Support - Received as of 3.23.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/1/2023 1:30:00 PM SJUD 5/5/2023 1:30:00 PM |
SB 84 |
| SB 84 PowerPoint Presentation 4.21.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/1/2023 1:30:00 PM SJUD 5/5/2023 1:30:00 PM |
SB 84 |
| SB 84 Fiscal Note DCCED-DBS 2.16.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/1/2023 1:30:00 PM SJUD 5/5/2023 1:30:00 PM |
SB 84 |
| SB 128 version A 4.12.2023.PDF |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |
| SB 128 Sponsor Statement version A 4.19.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |
| SB 128 Sectional Analysis version A 4.19.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |
| SB 128 Fiscal Note DFG-DCF 4.14.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |
| SB 128 Fiscal Note DOR-TAX 4.14.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |
| SB 128 Letters of Opposition - Received as of 4.21.2023 v.2.pdf |
SJUD 4/21/2023 1:30:00 PM |
SB 128 |
| SB 128 Letters of Support - Received as of 4.21.2023 v.2.pdf |
SJUD 4/21/2023 1:30:00 PM |
SB 128 |
| SB 128 Opposing Testimony - Received as of 4.24.2023 2_23 PM.pdf |
SJUD 4/21/2023 1:30:00 PM |
SB 128 |
| SB 128 Supporting Testimony - Received as of 4.24.2023 10_10 AM.pdf |
SJUD 4/21/2023 1:30:00 PM |
SB 128 |
| SB 128 Supporting Document - 2022 Kusko Situation Cover Letter & Report 2.17.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |
| SB 128 Supporting Document - Chum Decline Infographics 4.21.2023.pdf |
SJUD 4/21/2023 1:30:00 PM SJUD 5/12/2023 1:30:00 PM |
SB 128 |