Introduction

Alaska's fishing industry needs active support from both the private and public sectors in order to achieve biological and economic stability. This industry has existed as long as commerce has been practiced in Alaska. Seafood harvest is such an integral part of Alaska people often assume it will always be healthy, despite swings in volume and price. Current conditions facing the industry are so critical, survival of the industry as we know it, cannot be taken for granted. World seafood markets are recasting, and change is inevitable.

Fishing has been our heritage and can be our future but solutions must be devised to counter expanding competition from farmed salmon, detrimental effects of natural forces, erratic seasons, and soft markets created by the glut of fish products.

Though commercial fishing is one of the largest industries in the state, it is overwhelmingly comprised of small business operations. The largest share of Alaskan fishing vessels represent individual small businesses whose annual gross earnings pay crew shares, food, fuel, gear and other supplies as well as debt overhead and insurance costs. Each year the seafood industry pumps in excess of $3 billion into the state's economy.

The importance of the seafood industry to the state of Alaska cannot be overstated. If Alaska were a nation, it would rank among the top ten worldwide seafood producers . . . ahead of Norway, Canada, Iceland and other countries renowned as fishing nations.

Just as the salmon industry's value to the state cannot be overstated, we must never forget the negative impact created by record low prices. Each 1 cent per pound decline in the average statewide salmon price represents a loss of approximately $7 million in ex-vessel payments to fishers. Each dime reduction in prices represents a loss of approximately $70 million, and a $4.5 million loss in tax revenues and assessments to the state and municipalities.

The Alaska State Legislature was foresighted when it took a bold step by adopting the Limited Entry Act in May of 1973. The Act created a resource agency "to promote the conservation and the sustained yield management of Alaska's fishery resource and the economic health and stability of commercial fishing in Alaska by regulating and controlling entry into the commercial fisheries..." AS 16.43.010(a).

The Commercial Fisheries Entry Commission (Commission) became the exempt, independent, quasi-judicial agency to carry out the mandate. Beyond its function as a regulatory agency, the Commission provides a pivotal resource development tool. Today, over 50 of Alaska's fisheries are under limitation and additional requests for limitation are pending. The Commission plays an important role in the development and economic growth of Alaska's fisheries, contributes to the State's general fund, and provides data and analysis on a variety of fishery issues. The Commission is an essential component of fisheries management and Alaska's three billion dollar industry.

When creating the limited entry system, if the legislature had been committed only to simplicity and economy, it could have conducted a lottery or simply authorized auctioning a limited number of property rights to its fisheries. But the legislature rejected these approaches because they lacked consistency with the State's most important objective of protecting the resource and those who rely on the harvest of the resource. The Limited Entry Act protects the interest of qualified, individual fishers who demonstrate tangible dependence on their fishery.

Extensive biological, economic, historic, and cultural data and analyses have been generated to aid the development, enactment and review of entry limitation in Alaska. Thousands of hours of hearings throughout the State helped form the choices made in shaping Alaska's limited entry system. Alaska's courts have carefully scrutinized the program and developed an extensive and unique body of law governing limited entry in Alaska.

This governing body of law has successfully upheld an intent of the legislation to keep the permits in the hands of those who most depend on their fisheries for their livelihood. The percentage of permits held by Alaska residents has remained relatively stable. Today, more than 77% (more than 10,000) of all limited entry permits are still held by Alaskans, and more than half of that number by rural Alaskans.

Absent limited entry, many of the state's high-valued fisheries would experience large increases in effort by new entrants from several states. Such increases in effort would raise management costs and likely threaten the resource and the livelihood of many Alaskans in coastal communities where commercial fishing is the cornerstone of the economy. Unchecked growth in commercial fishing would also threaten subsistence and other uses of the resource.

The Commission is concerned about the economic plight of commercial fisheries during these troubled times and particularly efforts by the Internal Revenue Service (IRS) to force the sale of entry permits from local fishers who most depend on their fisheries.

Together with the Division of Investments, the Commission helped create the Tax Obligation Loan Program as a means for fishers to settle federal tax obligations and protect their fishing privileges. The Commission has supported statewide efforts between the public and private sector to perform outreach to inform fishers of this unique program.

In addition to responding to these current and pressing issues, the Commission has continued to perform its primary functions to license fishers, adjudicate claims, and perform research critical to the industry, as detailed in the sections to follow.

Broad support from both the private and public sectors is absolutely necessary to enable the industry to rebound to a level of economic health and stability. As a food source important to our State and the world, Alaskans must set a course to ensure our fisheries are sustained through sound management and wise commercial development. Fortunately, Alaska stands at the threshold of a new century . . . older and more mature, but young enough to believe that our best days are ahead of us. We at the Commercial Fisheries Entry Commission renew our commitment to apply the tools we have been given toward that goal.

Organization by Agency Function

COMMISSION

Chairman
Commissioner Commissioner
Adjudications Licensing Research Data Processing
Application Processing & Classification Entry and Interim-Use Permit Renewal Fisheries Data Collection Licensing System
Administrative Hearings Vessel Licensing Economic Profiles Fisheries Data Base
Case Management Permit Transfers New Limitation Research Data Development to Adjudications and Research
Preparation of Official Record in Judicial Appeals Local Licensing (Bristol Bay) Priority Hardship ("point") System Development and Testing Personnel, Travel, Accounting, and Property/ Supply Management
Residency and Fraud Investigations Optimum Number Research

Major Decisions/Activities Affecting Agency Operations Fiscal Years 1996-1988

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