Scallop bill shucks regional development

JUNEAU — The Alaska Regional Development Organization celebrated the “silver jubilee” of its 25th anniversary in its annual report this year, and the Alaska Legislature marked the occasion by letting the program die after the bill to extend its sunset date for five years fell victim to an obscure fish war involving Korean hair crab and weathervane scallops.

The failure to pass House Bill 71 before the legislative session ended April 14 means the Alaska Regional Development Organization program expires on July 1 and the 12 ARDORs will each lose $62,000 in state funding.

Established on a regional basis that covers the entire state, the ARDORs range in size from the Anchorage Economic Development Corp., with $20,000 “Diamond Level” investors including the three major oil companies, to the Copper Valley Development Association, one of the smallest.

(Morris Alaska, owner of the Journal, is an AEDC Diamond Level investor.)

“I’ve already had to let one person go today and there may be other cuts,” said Copper Valley Development Association Executive Director Jason Hoke on April 15.

Hoke said what had been a staff of five, will likely be reduced to himself and an administrative assistant, eliminating or reducing work on projects ranging from collaboration with the Alaska Energy Authority on business conversions to biomass and other alternative energy sources to “lemonade day” at regional schools. (That project helped budding elementary school entrepreneurs through cost/benefit analyses and unit pricing decisions on lemonade stands.)

The financial loss to the ARDORs wasn’t limited to the $859,000 in direct funding, including state administrative costs, because the state contribution provides better than a four-to-one match in federal funds.

The $1.03 million the ARDORs received for 2012 produced $4.49 million in matching funds, according to the annual report.

Hoke said there was no question who was to blame for the ARDORs’ demise.

“Sen. (Donny) Olson killed it,” Hoke said of the Golovin Democrat.

“I’m sorry, senator, but I can’t keep this in,” Hoke added.

Calls that turned to pleas as it became clear the future of the ARDORs was at risk reached Olson’s office from across the state, including Kawerak Inc., the Nome-based ARDOR for the region including Olson’s Senate district.

“I called on Sunday (April 14) asking to help push the bill through regardless of whether the fisheries were involved,” said Bryant Hammond, Kawerak’s ARDOR director, with reference to HB 71.

Kawerak will probably lose one full-time position, Hammond said on April 16.

Olson had no involvement with HB 71 until his own bill, Senate Bill 54, got stalled in the House Fisheries Committee. SB 54 extended for five years the sunset date for the Korean hair crab and statewide weathervane scallop fisheries from this Dec. 30 until 2018.

Those limited entry fisheries are unique in the state as the only ones in which the Commercial Fisheries Entry Commission, or CFEC, licenses vessels. In all salmon and other state waters fisheries, only human beings may be licensed and the license holder must be aboard the boat when harvesting is occurring under their license.

SB 54 passed the Senate on an 18-1 vote on March 18, and, as widely expected, became stalled in the Fisheries Committee chaired by Rep. Paul Seaton, a Homer Republican and consistent opponent of vessel-based permitting since it was first authorized in 2003.

When it became clear Seaton was not willing to let SB 54 out of the Fisheries Committee, Olson attached it to HB 71, the ARDOR sunset extension, when it reached the Senate Finance Committee.

The amended bill passed the Senate 20-0 on April 12 with the expectation that Seaton’s objection to concurrence with the Senate change would be ignored.

Exactly the same ploy worked in 2008 when, coincidentally, Seaton was also chairman of the Fisheries Committee.

Why it did not work again is not completely clear, although one of Seaton’s major concerns had been proven true. The hair crab/scallop limited entry program allows corporate ownership of state fishing permits, and Seaton warned a decade ago that corporate ownership could lead to consolidated control of the fisheries, which recent CFEC reports have confirmed.

Of nine original permits intended to be issued for the state waters limited entry program, at least six are now owned or effectively controlled by the Alaska Scallop Association through direct ownership or through ownership of parallel federal waters licenses once associated with active state permits.

The members of the Lakewood, Wash.-based Alaska Scallop Association have acquired five federal licenses through various corporate entities, three purchased in 2008 that were associated with relinquished or currently suspended state permits.

Of 13 hair crab permits, eight are owned by Washington interests, one by an Oregon resident and four by Alaskans. Unlike scallops, the hair crab fishery has not been open for years and there is no indication the stock status will allow fishing any time in the near future.

Two of the Alaskan permits are owned by the Coastal Villages Region Fund, the Community Development Quota group for the Kuskokwim delta that is partners with Norton Sound Economic Development Corp., the CDQ for Olson’s district.

Olson said he was under orders to get his bill passed at all costs.

“Some of the permit holders in my area said get it through there any way you can,” he said April 16.

A conference committee to resolve the dispute was scheduled for 10 a.m. April 14 but no deal was reached. Running negotiations occurred throughout the day.

Rep. Shelley Hughes, the Palmer Republican and sponsor of HB 71, at first left Seaton and Olson to their own talks but later became a shuttle-negotiator to salvage her bill.

“It’s kind of between the two people who are invested in it,” she said of Seaton and Olson shortly after 6 p.m. April 14.

After it failed to pass, Hughes said April 16 that, “I was not happy about it. I did everything in my power and worked every angle.”

Even a relatively large scallop lobby was unable to break the impasse.

Frank Homan, a retired CFEC commissioner, was hired by the scallop association specifically to lobby for the passage of SB 54 along with Gerry McCune, a long-time lobbyist for the United Fishermen of Alaska. They and Ben Brown, a CFEC commissioner, spent much of the session’s final day at the capitol, but had no apparent impact on the final outcome.

The conference committee finally met at 8 p.m. April 14 but only long enough for a 3-3 vote rejecting adoption of the Senate version of HB 71, with the vessel-permitting language attached and a 3-3 vote rejecting the original version of the bill.

The meeting lasted barely two minutes and events quickly began to spin out of control.

“We’re done,” said Rep. Craig Johnson, R-Anchorage, a House member of the conference committee, shortly after the meeting ended.

Seaton would agree only to a CFEC extension to March 2014 to give Olson enough time to draft a bill that would preserve the dormant hair crab permits. Olson wanted an extension to 2016 for both hair crab and scallops, according to Hughes.

Letters were drafted asking the legislative leadership to grant the conference committee broader powers to negotiate a compromise but the course of other events also began working against a resolution.

Plans were discussed to appoint six lawmakers to a new conference committee, but it quickly became apparent that wouldn’t work either.

Sen. John Coghill, R-Fairbanks, the Senate majority leader, said shortly after the failed conference committee meeting that its time had run out. The conference committee had been advised to complete its work by late afternoon and there was no longer enough time for its co-chairs to formally request the expanded powers during each body’s floor session or to name new committee members.

In a fallback bid, the committee was going to approve a new deal that was beyond its negotiating authority and get retroactive power to approve that agreement. Its members gathered again at about 8:45 p.m., but never formally convened after Hughes said Olson and Seaton had not come to terms.

Hughes and aid Ginger Blaisdell spent much of the next hour in shuttle diplomacy.

The House had announced a 10:30 p.m. news conference to trumpet the success of the session and while it did not adjourn for the year until about 11:15 p.m., work on its floor and in the Senate had largely completed. Lawmakers spent much of the last 40 minutes in congratulatory speeches.

Hughes had admitted that the ARDORs appeared be dead, but the pro-business Senate showed little interest in saving them if it had to compromise.

In a brief interview when he stepped off the House floor near 10:30 p.m., Seaton said he had agreed to a CFEC sunset extension only to March 30, 2014. That would give Olson enough time to draft a bill preserving hair crab vessel permitting, but the program for the scallop fishery was dead, Seaton said.

That arrangement also died, “because the senator that might have been interested in doing that was not interested in doing that. He wanted a three- to five-year extension or nothing,” Seaton said of Olson.

Seaton also said the ARDORs could easily have been preserved if the Senate would respect the legislature’s single-subject rule.

“The Senate well knows that they have the ability to sustain the ARDOR program but they would have to strip off their unconstitutional amendment,” Seaton said.

Olson did not attend the Senate majority news conference after the session ended April 14.

Bob Tkacz is a correspondent for the Journal based in Juneau. He can be reached at [email protected].

04/18/2013 - 11:29am