Legislature(1999 - 2000)
03/17/2000 01:45 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 429 - MORATORIA: HAIR CRAB & SCALLOP FISHERIES Number 0069 CO-CHAIR HUDSON announced that the first order of business would be HOUSE BILL NO. 429, "An Act extending the termination date for the vessel permit moratoria for the Bering Sea Korean hair crab fishery and the weathervane scallop fishery; and providing for an effective date." LIZ CABRERA, Staff to Representative Bill Hudson, Alaska State Legislature, speaking as committee aide for the House Resources Standing Committee [which had sponsored the bill], read the following sponsor statement: HB 429 extends the current vessel moratoria on the Korean hair crab (AS 16.43.901) and weathervane scallop (AS 16.43.906) fisheries. These moratoria were enacted by the legislature in 1996 and 1997, respectively. These extensions are necessary because the legislature has not yet created a viable limited entry or moratorium program for the Commercial Fisheries Entry Commission [CFEC] to use after these vessel moratoria expire. Without some type of program in place, these fisheries will likely have to be reopened to a potential influx of new participants or be closed entirely. In addition, the state risks federal preemption of state management of these fisheries. When the legislature enacted these moratoria, it recognized that these fisheries might not lend themselves to limited entry under existing state statute. With that in mind, the legislature implemented the moratoria and directed CFEC to submit legislation for a vessel-based limited entry program the following year. Legislation authorizing a vessel permit limitation system was introduced in the House and Senate, but neither bill has moved out of its first committee of referral. It appears that legislation will not be passed in time to implement vessel limitation programs in these two fisheries prior to the expiration of the moratoria. The weathervane scallop and Korean hair crab fisheries occur in both state waters and in adjacent federal waters of the Exclusive Economic Zone (EEZ), but the state has assumed management of both fisheries. Number 0354 REPRESENTATIVE BARNES stated that she does not support HB 429 because in both 1996 and in 1997, when the legislature was being asked to enact this moratorium, they were told that there were no uncertain terms: the first time, it was for one year, and the second time, it was for two years, she indicated. Representative Barnes further indicated her belief that entry is being limited through moratoria. CO-CHAIR HUDSON pointed out that last year there was the issue of transferability, which Representative Barnes opposed, and that is the reason that this year there is a simple extension of the moratoria authorization. He indicated that he does not view HB 429 as institutionalizing limited entry. Rather, the goal is to have CFEC come back to the legislature with something other than just continuing this. He said he understands Representative Barnes's point of view, but he thought they had taken care of her principal concern, the issue of transferability. REPRESENTATIVE BARNES stressed that it was a big concern. CO-CHAIR HUDSON indicated that they did try to address it. REPRESENTATIVE COWDERY wondered how big the hair crab fishery is and why it is mixed with scallops. Number 0653 MARY McDOWELL, Commissioner, Commercial Fisheries Entry Commission, stated that the CFEC supports HB 429 because it provides a stop-gap measure needed to avoid some possible chaos in these two fisheries. She indicated that there is some confusion about the various measures that have been before the legislature. The bill last year, HB 104, was a separate measure that would authorize the CFEC to implement moratoria in fisheries when necessary; one provision in that bill would have allowed the CFEC, through regulation, to extend an existing moratorium. She pointed out that HB 104 is in the Senate and has not moved. The other bill that is related to this measure is SB 143, which the legislature had directed CFEC to draft and bring back to the legislature. MS. McDOWELL pointed out that the state's current limited entry program is an individual-based permit program, based upon the owner-operator model that is typical in salmon fisheries. The legislature passed the Limited Entry Act 27 years ago; since that time, the number and scope of Alaska's fisheries have grown. The characteristics of some of the new and evolving fisheries are quite different from that owner-operator model, which characterized the fisheries that were the norm at the time the permit program was created. This is especially true of the larger vessel fisheries in the EEZ, so it is important that Alaska's laws and programs be updated, as needed, to keep pace with the changing needs and realities of the resource uses. MS. McDOWELL indicated the legislature had recognized that; in passing the two moratoria - hair crab and scallops - it gave those temporary permits o the owners of the vessels. In those fisheries, the investments in the vessels are made by people, in most cases, who do not operate the big vessels but hire skippers to do so. The legislature had directed the CFEC, during that time, to bring legislation back that would create an alternative program that could be used to permanently limit fisheries like that; they did that, and it was introduced as SB 143, which has not moved. MS. McDOWELL said her point is that these fisheries that are under moratoria are about to go back to open access, because the legislatively enacted moratoria will expire. She said that [CFEC] does not have a tool to limit them, which is the dilemma. Number 1018 CO-CHAIR HUDSON asked Ms. McDowell to respond to Representative Cowdery's question regarding how large the hair crab fishery is and why the two fisheries are mixed together. He also asked what the dollar value is and what the significance is to the communities where the product is actually landed. MS. McDOWELL clarified that the legislature had enacted two separate moratoria - two separate bills - a year apart. One was for hair crab, and one was for scallops. One expires this year, and one expires next year. The only reason they are mixed together is that both will need an extension; therefore, rather than introducing two separate bills extending the moratoria separately, this bill [HB 429] changes the expiration date of both moratoria in one bill. REPRESENTATIVE COWDERY wondered if the fisherman affected by the bill all fish for hair crab and scallops. Number 1116 KURT SCHELLE, Researcher, Commercial Fisheries Entry Commission, answered that they are two separate fleets. In the Bering Sea Korean hair crab fishery, 25 vessels are eligible for permits; under the moratoria, the participation of vessels has ranged from 19 down to 8. There has been a decline in the guideline harvest in the [hair crab] fishery in recent years, with the stocks going down. He indicated the scallop fishery is a completely different fishery, with a different moratorium. In both the state and federal moratoria, there are 18 vessels total; under the state moratoria in state waters, there are 10 vessels total. REPRESENTATIVE COWDERY asked how they catch the hair crab. MR. SCHELLE replied that it is a pot fishery. REPRESENTATIVE BARNES indicated it appears that most of the vessels are registered out-of-state. MR. SCHELLE said that is correct. In the Bering Sea Korean hair crab fishery, the majority of the vessel permits are going to owners that have nonresident addresses. He pointed out that for the vessel permit, there is no residency declaration, so they are basing it on the entity that owns the vessel. Of those who renewed permits over the 1996-to-1998 time period and who are eligible to renew them this year, 76 percent are nonresidents. REPRESENTATIVE BARNES asked if one can presume, then, that except for what the crews are being paid, most of the money for the fishery is going out-of-state. MR. SCHELLE responded that there is a lot of activity associated with the vessel; there is the landing of the product and the shipping of the product. CO-CHAIR HUDSON pointed out that often there are taxes that go to the communities when the product is landed. He wondered approximately how much money goes to the communities. MR. SCHELLE said he has not calculated that. CO-CHAIR HUDSON wondered if there is a percentage. MS. McDOWELL indicated that the fisheries business tax goes to the general fund. REPRESENTATIVE BARNES said it goes through the general fund and back to the communities. CO-CHAIR HUDSON indicated that could be looked into further. He asked whether it is known where the crew is from, because the hair crab fishery is lucrative, being valued at a million dollars. He wondered what the value is on the scallop fishery. MR. SCHELLE responded that the scallop fishery in 1999 was estimated to have a value of $2.7 million. He said that in the past it has been valued higher, up to the $7 million range. CO-CHAIR HUDSON asked how many of the vessels involved in the scallop fishery are also coming from the Lower 48. MR. SCHELLE replied that it is a mix. Over the moratoria years, state scallop permits have been about 67 percent nonresident and 33 percent resident. Number 1602 REPRESENTATIVE JOULE wondered why there are so few resident permits. MS. McDOWELL indicated it is hard to know. She pointed out that these fisheries are large-vessel fisheries that operate out in the federal waters and cross into state waters. They are not typical Alaskan fisheries; the [CFEC] program is designed for the typical Alaskan fishery, which consists of smaller vessels and owner-operator type situations. She explained that the dilemma is to make it manageable and to maintain management of the resource. She said [the state's] only other option would be to open access and not limit the numbers, but they have no reason to believe that the [hair crab] fishery would become more Alaskan by opening it up further; rather, there would probably be more "outside" vessels. REPRESENTATIVE JOULE referred to a comment by Mr. Schelle, with regard to the hair crab fishery, about the vessel participation declining from 19 to 8. He wondered if it has to do with the availability of the resource. MR. SCHELLE indicated that the Korean hair crab resource has been declining in the past two or three years. The ADF&G has reduced the guideline harvest, so there has been a falling off in participation. REPRESENTATIVE JOULE wondered if ADF&G is doing any checking on the availability of that species and what the trends are. MS. McDOWELL replied that ADF&G is responsible for that. Number 1802 GERON BRUCE, Legislative Liaison, Office of the Commissioner, Alaska Department of Fish & Game, explained that the survey of the hair crab is conducted by the National Marine Fisheries Service (NMFS), which also conducts the surveys on the opilio crab and other crab resources in the Bering Sea. He pointed out that [the fishery] is in federal waters and is managed by the state under a fisheries management plan adopted by the North Pacific Fishery Management Council (NPFMC), which delegates actual in-season management authority to the state. He indicated that the state receives federal funding, and the federal government contributes the survey. The survey information is then analyzed by scientists from both ADF&G and NMFS, and an annual quota is established. MR. BRUCE pointed out that the stock is declining, and it is characteristic of crab stocks, in general, in the Bering Sea. He indicated that the department believes that, to some extent, it is due to environmental factors and may also be due to fishing practices. He said people are examining that now and trying to come to some answers as to why the declines are occurring and what can be done to prevent further decline. He added that if the moratoria were to come off of these fisheries now, while the crab stocks are down - and considering that the federal government recently entered into a license limitation program for groundfish, including pollock, cod and flounder in offshore waters - there is the potential for large vessels to be excluded from those fisheries, and they will be looking for other opportunities. If the moratoria were to come off of the Korean hair crab fishery, in particular, many of those vessels could immediately switch to the [hair crab] fishery; given the small size of the resource to begin with, it would cause some real conservation concerns for the department. He explained that it would be harder to manage a small quota with an unlimited amount of effort than it would be to manage it with limited amount of effort. Number 1995 REPRESENTATIVE BARNES wondered if one of the problems that they have been having with the crab fishery and other bottom fisheries relates to dragging the bottom. MR. BRUCE indicated there is certainly a lot of concern about the impact on crab of on-bottom trawling, because crab is a bottom species. He said the department and NPFMC have tried to address those concerns, and there are areas that are important to crab that have been closed to trawling. It is not the only factor, but it is one factor. REPRESENTATIVE BARNES wondered if it is possible to regulate the fishery through quotas and seasons instead of through moratoria. MR. BRUCE indicated that [ADF&G] may use many tools to manage the fisheries, including having a quota, gear limitations, seasons and size limits. He pointed out that the reason it is also important to limit fishing power is that it plays a very big part in the equation, especially for vessels in the 100-to-160-foot range that can stay out in any kind of weather and fish effectively. He added that "effort" is a very important factor and a variable that needs to be considered in managing for conservation. REPRESENTATIVE BARNES referred to Mr. Bruce's comment with regard to fishing around the clock. MR. BRUCE clarified that [ADF&G] could take measures to restrict the efficiency, but there is a balancing act between restricting efficiency and the economics of the fishery; if they get too far out of line, then the fishery is no longer economically viable. Number 2180 CO-CHAIR HUDSON agreed that bottom dragging affects crab and other species in that area. He pointed out that it is difficult to know what is going on out there in those fisheries, as opposed to the salmon fishery, which is right here in Southeast Alaska where they can keep a watchful on eye on it. We wondered if there are any state observation vessels out there. MR. BRUCE answered that there are only a couple of state vessels that would be capable of operating out there. He pointed out how expensive it is to put a state observation vessel on patrol out there when the gross vessel value is a million dollars. There start to be diminishing returns, where the cost to the public of administering and enforcing the fishery start to be greater than the value of the fishery; then they have to question the purpose of the fishery. He added that those are the kinds of concerns that the state struggles with. It is expensive, and the hair crab fishery is a relatively small fishery. REPRESENTATIVE BARNES commented: Who's to say what is a small fishery, and who's to say ... who won't participate if it drops below, say, a million dollars? But the problems I have with these moratoriums is that the time is going to come when we're going to see -- you know, we've got letters here from the Aleut people, and what you'll end up having is these people that are fishing these waters, out-of- staters, they'll be grandfathered in, and the people that rightly ought to be able to fish that [hair crab] fishery are not going to have that opportunity. I've sat here too many years not to know whereby I speak, so I would just ask that the committee members read these letters from the Aleut people and from other calls that I've had, and understand what my concerns are, that Alaskans should have some opportunity to participate and not be grandfathered out of a fishery, and that's what I see coming down the pipe. MR. BRUCE pointed out that under the current moratorium, there is an open access area of five miles around the Pribilof Islands for smaller vessels to participate. So far during the moratorium, only two vessels have taken advantage of that. REPRESENTATIVE BARNES pointed out that the Aleut people in their letters are saying that they are trying to acquire larger boats. She stressed that she hates to see the people that live in an area get ripped off by people living thousands of miles away. REPRESENTATIVE COWDERY wondered if there are processing ships out there to buy the product. MR. BRUCE indicated that he believes participants come to shore to sell the product. CO-CHAIR HUDSON pointed out that when the product is landed it is taxed, which goes to the state and the community. REPRESENTATIVE COWDERY wondered where the market is for hair crab. MR. BRUCE responded that he believes it goes to a live market in Asia. REPRESENTATIVE HUDSON stressed that by pulling the opportunity for the state managers to manage the [hair crab] fishery, [the legislature] could be capitulating to be managed by the federal government. Number 2550 MR. BRUCE indicated it is the state's goal to see that Alaskans benefit from these fisheries. He explained that the reason that the fishery looks the way it does now is that the Bering Sea crab fisheries were developed primarily by large fishing fleets based out of Seattle, Washington. He pointed out that now [the state] has a tool to move toward getting more Alaskans participating in those fisheries, which is the community development quota (CDQ) program. Some CDQ groups are moving into those fisheries, and certainly a management system that provides more control, definition and long-range sustainability could offer that opportunity to Alaskans to increase their participation. He said it is a long-term vision and something that the state could work towards. He added that maintaining the status quo in this fishery could help to develop some additional tools that could assist the state to move in that direction. JOE KYLE, Chief Operating Officer for a CDQ Company; fisheries consultant; and voting member, North Pacific Fishery Management Council, urged the committee to pass the bill and move it forward. He indicated that when looking at the bill for the moratorium, they tried to factor in a 58-foot exemption so that the coastal residents of Alaska could get into the [hair crab] fishery and it would not be totally locked up by out-of-state fisherman. He explained that they are talking about offshore deep-water fisheries where they do not have the typical management found in the near-shore coastal fisheries, which the Board of Fisheries usually manages. MR. KYLE told members that limited entry systems are being placed on all the fisheries in the Bering Sea by federal fish managers. It is kicking a lot of out-of-state folks out of those fisheries because they do not have enough participation to qualify. Therefore, those folks are looking to in-state-water fisheries that are not currently limited or to fisheries like the hair crab fishery, which would not have a limitation if the moratorium were to lapse. He noted that ironically there are two types of people that can enter the fishery: those who have never done it before and displaced fisherman from out-of-state. He stressed that the outside world is going to impinge on them, and it is going to "kill" the few Alaskans that are in this fishery if they do not use moratoria and limited entry in small fisheries that the state is managing. JOHN WINTHER, Participant in the Bering Sea Korean hair crab fishery, stated that he has been in the commercial fishing business for 36 years and has the only crab vessel that participates in most of the crab fisheries in the Bering Sea. He said he was a prime supporter of the current moratorium; he indicated that many of the same arguments that were given then are valid today. He pointed out that the hair crab fishery is the only fishery that does not have an offshore processor; currently every crab caught is delivered to shore in Alaska, which is the highest economic value that they can get for the crab. If the moratorium expires, that will change. He explained that the main facility is in Saint Paul, and they pay a sales tax, which is 2 percent of the sale value. He noted that the quotas vary every year and have been as high as 2 to 3 million. In the early 1980s the fishery declined; it was closed for a number of years and then the stocks rebounded. TAPE 00-21, SIDE B MR. WINTHER added that two recent factors would affect the hair crab fisheries. First, there is the drastic decline of the opilio crab resource, as mentioned earlier. In the year 2001, it looks as if there will be no [opilio resource], which will result in bankruptcies and financial disasters that he predicts will be more severe than with the king crab fishery in 1981. He noted that 250 vessels participate in the opilio fishery; without a moratorium, these vessels will try to make every dollar possible in the hair crab fishery before [declaring] bankruptcy. Such action could bankrupt a vessel that has been marginally making it in the hair crab fishery. Therefore, the trickle-down effect could come into play if outside entrants were allowed in the hair crab fishery. MR. WINTHER continued. He reported that the second recent factor is the American Fisheries Act, which mandated that the pollock fishery, the largest fishery in the world, name the participants that can share in the resource and those that own the resource. He clarified that the American Fisheries Act divides the resource among shore-side catcher vessels, offshore factor trawlers, and one or two offshore processors with catcher vessels. Vessels that have their pollock resource can lease it to other vessels, which frees that vessel to do something else. He suggested that vessels capable of fishing in the crab fisheries would possibly move to the hair crab fishery, if allowed to. The residency issue has been an issue, he added. Mr. Winther surmised that Alaskans are a minority in almost every fishery there. MR. WINTHER answered, in response to Co-Chair Hudson, that he has been an Alaskan for 56 years, of which 36 years have been spent in the fishery business. Mr. Winther informed the committee that in the hair crab fishery the state has total management; it is the only such fishery in the Bering Sea. He said he did not want the federal government in this [the hair crab fishery] because the management would be out of control until the federal government gets a handle on it, which usually takes them years. Furthermore, the federal system usually involves the most recent participants; thus there would a period of time in which people would enter the fishery and it would be unmanageable. Therefore, this moratorium is important in order for the state to maintain control of the effort. MR. WINTHER addressed earlier comments regarding the need to see what goes on out there. He informed the committee that every vessel has to hire observers, who get paid $200-$300 per day. Without the observers, one cannot fish. He noted that there is no way to monitor the Bering Sea fishery with overflights or boats. Mr. Winther pointed out that the moratoria created the zone around the Pribilof islands, which is specifically for small vessels from the area (the King Cove and Sand Point areas). In conclusion, Mr. Winther urged the committee to keep the moratoria and allow for time to try to develop the system. MR. WINTHER, in response to Representative Barnes, agreed that each vessel is required to have an onboard observer. In response to Co-Chair Hudson, he explained that the onboard observer is hired through a contractor, and the information is obtained by the management authority; the vessel owner pays for the onboard observer, who does not have enforcement authority. Number 2648 CO-CHAIR HUDSON inquired as to what would happen if HB 429 were "killed." MR. WINTHER reiterated that without HB 429 there would not be a fishery. If the stocks rose to historical highs and there were 250 boats looking for something to do, it would be doubtful if there would be a fishery. He predicted that it would probably happen so quickly that the quota would be overshot substantially. Mr. Winther informed the committee that these boats were once not interested in the hair crab fishery because there were other fisheries such as the opilio crab fishery. Because the seasons have been condensed, [the operators of] these boats are looking for something to do. Number 2533 PAT PLETNIKOFF testified via teleconference from Anchorage. He said HB 429 alone is good, and the moratoria should be continued. However, there is a question regarding the dates. Furthermore, HB 429 does not include all the pieces of legislation for last year with regard to vessel size limits, the CDQ percentage and the 5 mile question. Mr. Pletnikoff expressed concern that HB 429 only refers to the years 1993-1995 in terms of qualifying [for this fishery]. The other troubling aspect of HB 429 are the rules and regulations that may be adopted by the commission. He hoped that some of these issues can be discussed and some of the aforementioned missing provisions could possibly be included in HB 429. He also expressed the need to further discuss and review the qualification years. MR. [PAT] PLETNIKOFF echoed earlier comments regarding the expense to get into this fishery. Many are building up to [purchasing the expensive gear]. He acknowledged that the hair crab fishery is a small fishery in comparison to others; thus he is concerned with the health of the stock and whether enough surveys are being performed. Typically, the hair crab fishery is a near-shore fishery. He encouraged the hair crab fishery to be established as a near-shore fishery for vessels 60 feet and under; local development is critical, he noted. Mr. Pletnikoff reiterated the need to include some of the aforementioned missing provisions in HB 429. He said a moratorium should be maintained because no more entrants can be supported by the [hair crab] fishery. CO-CHAIR HUDSON requested that Ms. McDowell speak to the questions and concerns mentioned by Mr. Pat Pletnikoff. MS. McDOWELL explained that all the provisions with regard to leaving the near-shore areas open to access - which were put in the original moratoria legislation - remain. This bill, HB 429, merely takes that statute and changes the ending date of the moratoria. Therefore, all the provisions included under the original moratoria remain unchanged. MR. [PAT] PLETNIKOFF indicated that he is glad to hear that the provisions with which he expressed concern, regarding local effort, are in regulation. Number 2297 GORDON BLUE testified via teleconference from Sitka. He informed the committee that he fishes in the Bering Sea and is the owner and manager of two vessels, both of which have partnerships with the Aleut People on Saint Paul Island. In fact, there is a double partnership with the local village corporation and the community village development corporations for Saint Paul Island. He stressed that he is an advocate of local participation in this [hair crab] fishery and in the other fisheries in the Bering Sea. Mr. Blue informed the committee that he has been a vessel owner and operator in the hair crab fishery since that fishery restarted. MR. BLUE informed the committee that the [hair crab] fishery was first developed in the early 1980s after the collapse of the red king crab fishery, when those fishermen looked for new fisheries to go into. The red king crab fleet entered the hair crab fishery; within two years there was no fishery. It took almost ten years to rebuild that fishery, at which time only two [vessels] returned to the fishery. He noted that those two operators, of which he was one, entered the hair crab fishery because they were operating locally out of Saint Paul Island. He informed the committee that of the first 12 vessels that entered the hair crab fishery after it reopened, six were Alaskan. Ground can only be lost if this fishery is reopened to open access, Mr. Blue emphasized. He echoed earlier comments regarding the collapse of the opilio stocks, which has left many looking for something to do [another fishery]. Number 2085 GEORGE PLETNIKOFF, Executive Director, United Aleut Nation, testified via teleconference from Anchorage. He told members he would like to see these moratoria continue; however, he expressed concern with the statement in the bill that speaks to the years from which people could qualify. He echoed earlier comments that the Aleut People, who own approximately half of these vessels fishing in the Bering Sea, have not had the opportunity to develop any of these fisheries. Mr. Pletnikoff said: We need to ensure that the CDQ program that was enacted ten years ago, that's enabling us to go from 28-foot boats to 32-foot boats to 42-foot boats - and now we're working on 58-foot boats, after 15 years - we need to ensure that these vessels have an opportunity to participate in all these fisheries. MR. [GEORGE] PLETNIKOFF urged the continuation of the moratoria; however, he stressed the need to take care when setting qualifying dates. He pointed out that if he wanted to fish for hair crab this year, he would not be able to, even though he is a Aleut. He stressed the need to [enter the hair crab fishery] after the CDQ halibut is over. Therefore, he urged the committee to include some language in HB 429 to protect the future investment [of the locals] in the fishery. CO-CHAIR HUDSON related his understanding that the smaller boats do not have to qualify for the near-shore fishery, and that CFEC and ADF&G are trying to keep the door open for the smaller boats in the near-shore fishery. MS. McDOWELL noted that HB 538 is the bill that enacted these moratoria; the language in HB 538 would carry over, and HB 429 would merely extend the expiration date. She pointed out that in HB 538, AS 16.05.835(b) says, "A vessel engaged in the Bering Sea Korean hair crab fishery within five miles of the shore may not be longer than 58 feet overall length." MR. GEORGE PLETNIKOFF commented that from historical bottom dragging around the Pribilof plateau, it is known that much of that area is becoming a desert. He indicated the five-mile limit, although another restriction, is a good thing. Perhaps there should be a limit on the vessel sizes versus having a mileage restriction, he concluded. Number 1739 REPRESENTATIVE COWDERY made a motion to move HB 429 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, it was so ordered and HB 429 was moved from the House Resources Standing Committee.