Joint Legislative Salmon Industry Task Force

Production Subcommittee

Representative Bill Williams, Chair

Meeting Minutes

Friday, October 10th, 2003

 

 

In Attendance (by teleconference):  Representative Bill Williams (BW), Don Giles (DG), Chris Moss (CM), Frank Homan (FH) & Kurt Schelle (KS) (CFEC), Tom Gemmell (TG), Mark Vinsel (MV)(UFA), Cheryl Sutton (CS) (Task Force Staff), Tim Barry (TB) (Staff to Representative Williams)

 

BW called the meeting to order at 10:35 am, and asked FH to discuss his thoughts on the proposed fractionalization/permit reduction bill (included in FH’s memo). 

 

 

CS explained the draft legislation on Permit Reduction.  CS said it was drafted by Legislative Legal last winter, but was brought up late in the Task Force’s discussions on bills, and, because of this and the fact that it was a big, complicated issue, the Task Force did not forward it for introduction last session.  CS explained that the bill:

 

  1. Establishes a permit reduction program without a buy-back.
  2. Requires an optimum number study
  3. Program must be approved by 2/3 of the permit holders in the fishery.
  4. After establishment of program, all original permits in the fishery expire and cannot be renewed.
  5. Allows a 5-year temporary “joint entry permit” for two or more fishermen after initial issuance of permit shares.  Provides sufficient adjustment and decision-making time on whether to continue in the fishery.
  6. Has a two and five year proviso.  They both start at the same time and end at the same time.

 

CS said the bill provides a formula for calculation of Permit Shares:

 

  1. After optimum number study, a formula determines the number of permit shares to be issued. The optimum number of permits (determined by the optimum number study) is divided by the number of permits that must be removed to determine the initial number of permit shares issued to each permit holder.
  2. Another formula then determines the number of permit “shares” needed to acquire a new entry permit. To calculate the number of permit shares a person must hold in order to qualify for and receive a new entry permit, the total number of outstanding permits in the fishery is divided by the number of permits that must be removed from the fishery as determined by the optimum number study.

 

(There are two special situations that are excepted on the requirement that permit shares for a fishery are issued only to persons who hold entry permits in the fishery.  1) Permit shares may pass to the heirs of a shareholder; 2) Also provides for lending programs [CFAB and Division of Investments] that foreclose on permits that have been replaced by permit shares to purchase permit shares, convert them into a new entry permit, and sell to recoup the amount of the loan.)

 

CS said she thinks it is a creative way to consolidate fisheries without establishing a buy-back program.

FH of the CFEC reminded everyone that the Commission has used different approaches to determine Optimum Numbers.  Several Court decisions govern this process.

CS and the CFEC folks answered some questions from Subcommittee members:  Shares have the same rights as permits; shares are available only by purchase; the number of share/permit holders can not be raised after it has been lowered.

FH suggested that Line 31, Page 3, be changed to read, “The commission may sell…”  There was general agreement to this suggestion.

There was discussion about establishing a process for how the CFEC would sell shares that revert to it.

There was discussion about the requirement for approval from 2/3 of permit holders.  There may be some fisheries in which 2/3 of permits are not being fished.  FH pointed out that the CFEC website includes data on how many permits are being fished in each fishery.

 

BW asked the members to think more about this draft bill, and direct questions to CS or TB; the conversation will continue next week.  He asked CS to move on to the next bill.

 

CS spoke about the draft bill relating to a buy-back surcharge.  This program also would have to be approved by 2/3 of permit holders in a fishery.  Once that happened, the CFEC could impose a buy-back surcharge on renewal of permits.  The bill would also require that a buy-back program be terminated when the state has collected enough money to offset the cost of the program.

There was some discussion about what kind of a fee would be reasonable, and how large a charge would be excessive, especially for lower-income permit holders.

There was also discussion about how the CFEC would go about buying back permits, and how to determine their value.  DG said the Magnuson/Stevens Act has provisions for making these determinations under Federal law.  Perhaps the state could use this as a model.

 

BW directed CS to ask Doug Mecum, Director of Commercial Fisheries, ADF&G and Art Nelson, Board of Fisheries member, to participate in the next meeting.

 

BW directed CS to request a draft bill addressing the 58’ limit seiners for consideration at the next meeting.

 

BW directed CS to obtain information form Legislative Legal on allowing owners of multiple salmon permits in different administrative areas to fish more than one in the same year.  Two specific questions are: 1) Impact if individual were allowed to fish more than one permit; 2) Impact if allowed to use same vessel.  These questions will also be directed to Doug Mecum and Art Nelson in the next meeting.

 

BW noted that the teleconference time was up and asked members to gather their thoughts on all the bills discussed and forward questions to CS or TB.  He said the subcommittee would continue this discussion, and discussion of additional draft bills, next week.

 

Schedule:

 

Friday, October 10th, 10:30 am:  Teleconference Meeting.

Friday, October 17th, Noon:  Face-to-Face Meeting, Juneau (House Finance Committee Room)

Friday, November 21st, 1:00 pm:  Face-to-Face Meeting, Seattle

 

 

Minutes taken by Tim Barry