[Congressional Record Volume 147, Number 18 (Thursday, February 8, 2001)]
[Extensions of Remarks]
[Pages E146-E147]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ALASKA COMMUNITY DEVELOPMENT QUOTA PROGRAM

                                 ______
                                 

                             HON. DON YOUNG

                               of alaska

                    in the house of representatives

                       Thursday, February 8, 2001

  Mr. YOUNG of Alaska. Mr. Speaker, in 1992 the North Pacific Fisheries 
Management Council established, and the Secretary of Commerce by 
regulation began implementing, the western Alaska community development 
quota (CDQ) program. Over the past nine years, the CDQ program has made 
a valuable contribution to improving economic and social conditions in 
the small Alaska Native villages on the coast of the Bering Sea that 
participate in the program.
  In 1994 a question was raised whether the Magnuson-Stevens Fishery 
Conservation and Management Act (Magnuson-Stevens Act) authorized the 
Council to establish and the Secretary to implement the CDQ program. In 
response, in 1996 I sponsored a provision that the 104th Congress 
enacted as section 111 of the Sustainable Fisheries Act that amended 
the Magnuson-Stevens Act to explicitly authorize the CDQ program.
  The provision--section 305(i)(1) of the Magnuson-Stevens Act--settled 
the authorization question; however, it does not provide guidance to 
the Secretary for implementing the CDQ program, nor does it authorize 
the state of Alaska to assist the Secretary to implement the program or 
establish the terms and conditions for the state's participation.
  In addition, over the past nine years the business activities of the 
six groups that the eligible communities have organized to participate 
in the CDQ program have become increasingly sophisticated. Initially, 
each CDQ group simply contracted with an existing fishing company to 
harvest the share of the total allowable catch of Bering Sea pollock 
that the group was allocated. In exchange, the group received a royalty 
payment from the company, as well as employment opportunities for 
village residents and other local economic development benefits. 
However, today the CDQ groups are participating in all Bering Sea 
directed fisheries through substantial equity interests in established 
fishing companies. In addition, in 1998 when it enacted the American 
Fisheries Act the 105th Congress created a loan program--contained in 
section 211(e) of the American Fisheries Act--that encourages CDQ 
groups to make additional investments.
  It is important that the implementation of the CDQ program reflect 
these new realities. For that reason, Congress needs to provide the 
Secretary, the CDQ groups, the fishing companies in which the CDQ 
groups own equity interests, and the state of Alaska clear guidance 
regarding how the CDQ program should be implemented.
  Last October I introduced H.R. 5565 whose enactment would have 
amended section 305(i)(1) of the Magnuson-Stevens Act to provide that 
guidance. Unfortunately, there was not enough time for the U.S. House 
of Representatives to consider H.R. 5565 prior to the adjournment of 
the 106th Congress. For that reason, I today am reintroducing the 
legislation in the 107th Congress.
  Mr. Speaker, this bill identifies that the objectives of the CDQ 
program are to provide eligible western Alaska communities the fair and 
equitable opportunity to participate in Bering Sea fisheries that 
Magnuson-Stevens Act National Standard 4 requires, and to assist 
eligible communities to achieve sustainable long-term diversified local 
economic development. The bill requires the Secretary to allocate to 
the CDQ program the same percentages of the total allowable catches and 
guideline harvest levels of Bering Sea directed fisheries that Congress 
through section 206 of the American Fisheries Act and the Secretary by 
regulation already have allocated to the program.
  In 1998 Congress directed the National Academy of Sciences to study, 
and then to report to Congress regarding, the CDQ program. In 1999 the 
National Research Council delivered that report and, in part, 
recommended that the process through which the state of Alaska assists 
the Secretary in implementing the CDQ program should be clarified.
  Pursuant to that recommendation, this legislation establishes a 
process for implementing the CDQ program. The bill I am introducing 
today establishes the terms and conditions for the state of Alaska's 
assistance to the Secretary in implementing the program. The bill also 
affords the CDQ groups an opportunity to decide among themselves the 
percentages of each Bering Sea directed fishing allowance that each 
group will harvest during a fishing year. If the CDQ groups cannot 
agree, the bill affords the groups an opportunity to jointly develop 
the criteria that the Secretary shall apply to allocate fishing 
opportunities among the groups (as well as for the state of Alaska to 
apply in developing its recommendations to the Secretary regarding the 
allocation of fishing opportunities).
  On October 4, 2000 the General Counsel of the National Oceanic and 
Atmospheric Administration issued a legal opinion that concluded that 
the text of the definition of the term ``CDQ project'' in 50 CFR 679.2 
is ambiguous regarding whether programs and activities of fishing 
companies in which CDQ groups

[[Page E147]]

own equity interests are ``CDQ projects''. For that reason, this bill 
defines the term ``CDQ project'' to clarify that a program or activity 
that is administered or initiated by a subsidiary, joint venture, 
partnership, or other entity in which a CDQ group owns an equity 
interest is not a ``CDQ project'' over which the Secretary may assert 
oversight authority if the program or activity is funded by the assets 
of the subsidiary, joint venture, partnership, or other entity, rather 
than by the assets of the CDQ group. The definition also clarifies that 
a program or activity that is administered or initiated by a CDQ group 
is not a ``CDQ project'' over which the Secretary may assert oversight 
authority if the program or activity is not funded by revenue that, 
during the duration of a community development plan, the group derives 
or accrues from harvesting the share of the percentage of the total 
allowable catch or guideline harvest level of a directed Bering Sea 
fishery that the Secretary authorized the group to harvest when he 
approved the group's plan.
  Finally, Mr. Speaker, in response to my introduction of H.R. 5565, at 
its December 2000 meeting in Anchorage the North Pacific Fishery 
Management Council voted to organize a committee to review the 
Secretary and the state of Alaska's administration of the CDQ program 
and to identify needed changes. I am pleased that the Council did so, 
and I look forward to considering the committee's suggestions. However, 
the committee's work is not a substitute for action by Congress.

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