UNITED STATES OF AMERICA

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DEPARTMENT OF COMMERCE

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NATIONAL OCEANIC AND ATMOSPHERIC

ADMINISTRATION

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MARINE FISHERIES ADVISORY COMMITTEE

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Friday,

November 14, 2008

The Marine Fisheries Advisory Committee met in the Bienville Room in the
Hotel Chateau LeMoyne, 301 Rue Dauphine, New Orleans, Louisiana, at 8:30
a.m., Tom Billy, presiding.

[PRESENT]{.underline}:

SAM RAUCH (For VICE-CHAIR BALSIGER)

TOM BILLY

MARK HOLLIDAY, Director, Office of Policy

RANDY CATES

BILL DEWEY

PATTY DOERR

CHRIS DORSETT

ERIKA FELLER

MARTIN FISHER

RANDY FISHER, PSMFC

ROB FLETCHER

CATHERINE FOY

JIM GILMORE

STEVE JONER

DOROTHY LOWMAN

HEATHER McCARTY

VINCE O\'SHEA, ASMFC

TOM RAFTICAN

ERIC SCHWAAB

LARRY SIMPSON, GSMFC

DAVE WALLACE

[ALSO PRESENT]{.underline}:

RITA CURTIS

RALPH CANTRAL

TOPHER HOLMES

PETER JONES

HARLON PEARCE

SAM RAUCH

GARY REISNER

ALAN RISENHOOVER

MICHAEL RUBINO

PHIL STEELE

[TABLE OF CONTENTS]{.underline}

[PAGE]{.underline}

Discussion of Committee Membership on

Fishery Management Councils 4

Impact of 2005 Hurricanes on Gulf of

Mexico Marine Resources:

Phil Steele 9

Larry Simpson 29

Harlon Pearce 59

Community Sustainability, Rita Curtis 89

Conclusions and Recommendations Re:

Fisheries Infrastructure 123

Discussion of Future Meeting Dates 172

Sustainable Fishing Communities 189

Presentation of Ralph Cantral 189

Industry Assistance, Gary Reisner 215

Presentation by Alan Risenhoover 242

[P R O C E E D I N G S]{.underline}

(8:32 a.m.)

MR. BILLY: Okay. One of the things we\'d like to start out with before
we get into the specific agenda is Mark looked at the committee
membership as it relates to the various fishery management councils, as
well as people that live in and around Washington, D.C., for purposes of
following up as we discussed with the 2020 document, and so I\'d like to
call on Mark to share with you both how it looks and then we\'re going
to ask for you to talk among yourselves and decide which one or several
of you will take the responsibility for the different councils.

So Mark.

DR. HOLLIDAY: Thank you, Tom.

It\'s interesting. There\'s a \-- well, not interesting \-- but it\'s
comforting to know that we have a good regional representation across
our regional councils since that\'s one of our intents in our selection
of members, and so the distribution looks pretty good that we can
probably cover all of the regional council areas with one of our
members.

And so I\'d like you to during a break or at lunchtime today look at the
other members that are within the regional council areas, and so as an
example, for the three East Coast councils, New England, Mid-Atlantic,
and South Atlantic among Tony, who unfortunately just had to leave,
Eric, Dave Wallace, and John Graves, they should agree on a division of
labor as to who would be willing and able to brief the council on the
2020 paper.

And so as we go through the different councils, I\'d like to have you
self-select who you think would be available and capable of and
interested in doing that on behalf of MAFAC.

The Fisheries Service would write a letter on your behalf to the Council
Executive Directors explaining the purpose and serving as the
introduction to invite ourselves to get on their agenda, and it may be a
couple of meetings before they actually have the time and ability to
squeeze us in since they\'re usually pretty full agendas planned well in
advance. Nonetheless, we\'ll help to facilitate getting you to those
meetings.

The other criteria that we\'re looking at is to try to minimize the cost
to MAFAC, and so if you\'re local and we look at the council meetings
that are online, you can look at the Websites and see if it\'s going to
be particularly close to you. That might be a factor in deciding who
among your little peer group would be best to serve there.

We\'re also fortunate thatfor the briefings that might be done on a
short notice in the D.C. area for transition, recall Jim\'s comment
yesterday about being flexible. We have a number of people, including
Tom, Jim Gilmore, John Connelly, Patty and Eric that, again, are within
car striking distance of D.C. to help represent the committee as you
select who among that group would be ready and available to help with
those transition team briefings and new administration briefings.

So the charge to the committee for the morning is to check among the
different groups from your region about who might be able to best cover
these council briefings on 2020 and get that information back to me, and
if you need some help, I\'m here to provide you information about
council meeting dates or any other of the mechanics about how to do
that.

But by the time we leave today, I\'d like to have at least a first order
representation and we can get started on getting the invite letters and
request letters prepared.

Any questions? Is that okay? Sound reasonable?

MR. BILLY: I think we would include the Commission folks as well. So
we\'re not limiting it at all. Okay? All right.

DR. HOLLIDAY: So over beignets at the first break (if you haven\'t had
one, you can go for a hike down since I bought some beignets for
everybody to make sure you had a taste of the true Cafe du Monde New
Orleans experience) and make your decisions about where to go next for
those council members.

Thank you, Tom.

MR. BILLY: Okay. Thank you very much.

Today is sort of dedicated to an examination of the policies influencing
U.S. fisheries\' infrastructure, and we\'re going to look at it from
several perspectives, and in particular, we\'re taking advantage again
of being present here in the Gulf, but we urge the Committee to not
limit your thinking just to the Gulf.

Obviously there have been some very significant events here, and we can
learn a lot from that, but events occur all around the United States,
and the broader question we\'re looking at is are the existing policies
that relate to infrastructure, support, emergency response or disaster
assistance, are those policies adequate? Are there gaps? Are there other
things that should be done or a change of emphasis with a view that then
the Committee would make some recommendations to the Secretary in that
regard?

So I think it\'s a good opportunity and timely to look at that area,
particularly as we\'re moving into a new administration.

So to start off this morning Phil Steele, who you met yesterday, is
going to share with us from the regional perspective the experience and
response to the hurricane events that have occurred here.

Phil.

MR. STEELE: Thank you, Mr. Chairman.

Good morning, everyone. I trust everyone had a good night in New Orleans
and were in bed by nine. I know I was.

(Laughter.)

MR. STEELE: My report this morning, presentation, is going to deal with
the impact of the horrific 2005 hurricane season on marine resources in
the Gulf of Mexico. This is one of two congressionally mandated reports
that we developed, one looking at the impact of marine resources. The
other one was on habitat. I won\'t deal too much with habitat today, but
strictly on marine resources.

Both of these reports are available online if you care to get them.

To take a minute just to thank some of the people in this room who were
helpful, responsible for getting this report together, we had about six
months to do it.

Larry Simpson\'s staff, Larry.

The state directors, certainly our NOAA Fisheries folks.

I was basically the herder of cats on this report. So it was a very
good, cooperative effort and turned out to be a pretty good product.

Some of this information in this report is a little dated because it
came out in 2007, but I\'m sure Larry and Harlon will bring us up on
some more recent information and certainly some impacts of the more
recent storms.

I think all of us in fisheries management will acknowledge the fact that
we try to use the best available science in managing our fisheries and
developing our fisheries management plans. However, I think Mother
Nature sometimes has its own fisheries management plan in mind, and this
is one of them right here.

Let me read from my notes here for a minute so I can remember all of
this stuff.

This is Hurricane Katrina. It first damaged southern Florida when it
moved across the Florida Keys as a Category 1 hurricane on the
Saffir-Simpson scale. After strengthening to a Cat. 5, which is pretty
tremendous, over the central Gulf, Katrina weakened slightly to a Cat. 4
and then a Cat. 3 before making landfall on August 29th near Buras,
Louisiana and again on the Louisiana-Mississippi coast.

This was the most severe of the 2005 hurricanes and probably one of the
worst natural disasters to ever hit the United States in living memory.

Right behind her came her sister, Rita. This is the hurricane tidal
damage done. You can see where this story came up. That\'s Buras and
this storm came up, and the storm surge came up over 20 feet pushing
into New Orleans, but most of the flooding came from all the way up the
Mississippi.

I got ahead of myself here.

We had the opportunity \-- this is a motley crew right here, but right
after the storm, this is people from the regional office, from IRA, Dr.
Crabtree. We had the opportunity to fly with the hurricane hunters, to
go up and assess some of this damage.

I\'ve flown a lot of military aircraft in my life, but I\'ll tell you
these hurricane hunters are something to see. I think they\'re all
frustrated fighter jocks. You can always tell when Dr. Crabtree flew up
in the flight engineer seat and wanted to go see something because they
would put the \-- we\'re at 500 feet in this big, old P-3 \-- put that
airplane on its wing like this and just whew. It\'s really something to
see, but we\'ve all seen these pictures on TV of the damage caused by
these hurricanes, but to see this from the air at very, very low
altitude was really something to see. Indescribable.

Next came Rita about a month after Katrina. Landfall on the northern
Gulf coast; came ashore near Sabine Pass, Texas, also as a Cat. 3 storm;
inflicted major flooding and fisheries infrastructure damage on coastal
communities in Texas and Louisiana. It just compounded the damage that
was done by Katrina.

And last but not least, here came Wilma across the southern coast of
Florida. Enough of that reading.

Now, after these storms, the fisheries made determination, which Larry
will talk a little bit more about later on. Secretary Carlos Gutierrez
made two formal fisheries failure determinations, and these
determinations, of course, authorized Congress to allocate some money to
support fisheries disaster relief funds.

Since then the National Marine Fisheries Service and our partners across
the Gulf states have attempted to assess the damage, look at debris, and
try to rebuild and restore some of these infrastructures that were
damaged during the storm.

Impacts. This is derived from the report to Congress. In some of the
stuff I\'m going to tell you about today, you need to be a little
cautious in making some informal inferences about hurricane damage and
what happened to fisheries. Basically the impacts on marine resource in
the Gulf of Mexico were minimal, with the exception of oysters. Cause
and effects are a little different.

The report as mandated has four areas. We look at trends in fishery
status, types of debris which were horrific in the Gulf, how the funds
Congress provided to the emergency bill were utilized, and then some new
recommendations that NMFS developed on how to address additional
resource needs.

Data sources. We did not go and mine any new data. We didn\'t create any
new studies. We tried, because of the short amount of time that we had,
we tried to use, we had to use the available data that was there.
Remember all of the Gulf states have follow-up assessments on the
impacts of their marine resources that I used, also Southeast Fisheries
Science Center data.

There was also a very nice assessment done by Impact Assessments, which
is also available if you folks would like to take a look at it.

The overview. Like I said earlier, with the exception of oysters, the
available information we had, the impact of these three hurricanes on
marine resources, our fin fish, our shrimp, our vertebrates, crabs and
lobsters and stuff, was minimal.

However, as you can see, commercial landings, recreational fisheries
landings and all of these declined naturally because the infrastructure
was gone. I mean basically gone. There was nothing left out there. It
seemed gone, flowing across this area. We flew up the coast and went
across the Mississippi. It looked like someone had just taken a giant
backhoe and cleared everything for a half a mile. All you could see was
just slab after slab after slab. So all of the icehouses, the bait
houses, the marinas, the docks, gone.

So you can imagine what impact this would have on fisheries landings,
not the resources themselves, but the ability to land and processes.

It caused extensive damage to the fisheries\' infrastructure in all of
the Gulf states, particularly Alabama and Louisiana. In some areas the
destruction is still there. Although rebuilding is certainly underway,
you can still go to some of these areas, and they have not recovered.
You can see areas like this in Louisiana. Some of these areas may never
recover.

I think this is Sulphur City. Does that look right? This is some of the
pictures we took from the P-3. It\'s just unbelievable. You can see
houses and the oil spills, and the oil in the water was just
unbelievable. You see houses with oil up to their eaves, on the roofs,
these giant 100 foot slab shrimp boats up on the docks. It was just an
amazing thing to witness the power of these hurricanes.

Here\'s some of these big slab boats up there. Some of them are still
there. It costs thousands and thousands of dollars to remove these craft
and put them back in the water. Some people will never be able to do it.

I like this picture. What\'s wrong with this picture?

(Laughter.)

MR. STEELE: This is not a put-on. This is one I took on purpose. I was
going to send this picture to FEMA and say, \"What\'s that out there?\"
That\'s a good picture.

As I said, most of the infrastructure, especially to the east of this
red line is just gone, just absolutely gone. We took some surveys right
after when we were doing some of this work shortly after these things,
and it still gives me chills to think about it.

Here\'s a little bit more of a quantitative look at facilities counts,
offloading facilities before and after. You can see offloading
processing. Ice plants are one of the biggest things. It\'s hard to
process seafood without ice or gasoline.

As I say, with the exception of the oysters, most of the resources were
not impacted that much. Our surveys from our science centers at our
Pascagoula labs indicated basically shrimp, fin fish was basically the
same, maybe slightly high to pre-Katrina levels, but there were some
declines as you would expect in the esturarine shellfish species. It
detected some of that in recent studies.

Oysters, very typically the animal that\'s most impacted by this kind of
storm as you can imagine. There are huge amounts of water and silt that
are brought across these. It has a severe impact on our oyster beds.

Alabama was just coming back from Iran when Katrina struck, and it
damaged almost 80 percent of their Alabama oyster resources when it made
its landfall. Katrina came back in and did the rest of it. So pretty
severe damage to the Alabama oyster fisheries as they were in all of the
other Gulf states.

I\'ll concentrate on oysters a little bit because it\'s basically the
only impact on marine resources we had, and you can see Louisiana\'s
commercial oyster landings were down in 2000-2004, and they looked like
they were coming back a little bit until Katrina hit. Again, it had its
severe impact on it.

It looks like it was resounding a little bit, and again, the storms that
have come through in the last year or two probably has some more impact.
I\'m sure Harlon and Eric can speak to that a little bit more.

Florida, didn\'t have a lot in Florida that I can see, and also I think
some of their trips and landings were down a little bit, and when I
talked to some of these guys though, because of some of the impacts on
the other areas in the Gulf Coast, they got a little bit better price
and a little bit better production because of the impacts on the
Mississippi and in Texas and so forth.

As you can see, and I won\'t belabor the point, all of the Gulf states
had severe impacts on their oyster.

Shrimp.

MR. DEWEY: Phil, on the oysters, my understanding was that the hurricane
also stimulated a terrific spawn.

MR. STEELE: Larry, is that true?

MR. SIMPSON: I\'m sorry. I was answering a question.

MR. STEELE: The impact on oysters, increased spawning.

MR. SIMPSON: No.

MR. DEWEY: I thought I had understood that it had triggered increased
spawning.

MR. SIMPSON: It may have. I don\'t know.

MR. STEELE: Well, to see that you get the true value of the impacts on
oysters, the next time you guys went down there and order a dozen
you\'ll see they\'re about eight or nine dollars.

The shrimp, not too much. You can take a look at some of the trend
analysis. This is just the prawn shrimp. As you can see, it probably is
a pretty good line. Actually it has kind of increased a little bit.

We\'ll see the same kind of trends in our fin fish. Not a lot going on
there.

A little survey coming back on here, another trend analysis of fin fish
biomass basically, you know, kind of going back up, not a lot of impact
there.

And crabs, lobsters, can\'t really do too much to blue crabs. You can\'t
hurt them.

So but here\'s where the real impacts came. This is on our
infrastructures. You can see that right after Katrina, the commercial
lands in 2005 right after Katrina was the lowest during the 30-year
period from \'77 to 2006. Dockside revenues, of course, correspondingly,
were down also. A little trend analysis on that to give you an idea of
millions of pounds, dollars on this.

You can just skip that and kind of do it yourself and get an idea that
Katrina had some severe because there was no processing houses out there
to be able to process the product that\'s coming on board the docks.

Recreational undoubtedly really took it in the shorts, too. We looked at
this, declines in the five-year averages, some 57 percent, although the
number of trips taken really weren\'t that much, but the number of trips
in shore and offshore decreased while the number of trips near shore,
which makes sense, kind of increased.

The recreational landings, that little dip for 2005, as you see a lot of
people were out fishing. There\'s a lot of debris in the water. People
had a hard time getting gasoline. A lot of the boats were up in somebody
else\'s backyard. So it\'s hard to go fishing without a boat.

Recreational trips are kind of flat, as you can see. A little dip there
in 2005, abut you know, to see a lot of these vessels, Larry was just
showing me some pictures a few minutes ago. Looking at the charter boat
loss, they really, really took a beating on this thing.

This is one that Bobby Walker put together, one of our council members,
charter fleet loss of almost \$125 million. Almost 500 vessels were
impacted during the storms. Not a lot of places to hide.

Here is probably one of the bigger impacts here, was marine debris.
Larry has got some great pictures of this. It was just unbelievable:
bridges, barges, shrimp boats, docks, houses. All of the stuff wound up
in the water, millions of millions of tons of this. There\'s a picture
of some of it right there.

Right after the storm our Office of Coast Surveys came in and we started
partnering with the other Gulf states and local fishermen to collect
some of the largest near shore and coastal base serving efforts ever
implemented by NOAA. We did a lot of marine mapping, and we\'ve also
spent a lot of money implementing or giving force to this to clean up
some of this.

This is the idea of the marine debris densities along the Gulf coast. As
you can see from Bay St. Louis on over, the darker it gets the worse it
was. A lot of stuff out there.

And our marine debris removal, which is still ongoing by the way.

Okay. This is another segment of the report that we looked at, the
impacts of the force emergency supplemental. Larry can probably give a
little bit more updated information on this.

In June the President signed the Emergency Supplemental Appropriations
Act, the appropriations bill, the natural hurricane, since all
authorities in 2005. Through the act, Congress \-- I think it\'s 188
million; is that correct, Larry? I\'ll ask you on that \-- to assist the
Gulf states in the ongoing recoveries, rehabilitation of oyster beds,
mapping the debris, and building and rebuilding our Pascagoula
laboratory, Southeast Fisheries Science Center, which was totally
destroyed during the storm. I hear it is up and running again.

And the recovery plan, this is something that we worked with the state
directors. Four primary objectives, you can read them yourselves:
providing short-term relief; building more sustainable, profitable
commercial and recreational fisheries, improving the quality of nursery
areas, rebuilding the central fisheries related facilities throughout
the Gulf of Mexico.

The recovery plan focused on four major areas, providing short-term
financial assistance; restoring infrastructure which I said is still
going on; developing funding capacity reduction. I think that hurricane
probably took care of a lot of that by itself. And the number four in
red, like I said, it\'s recovering the essential fish habitats. I\'m not
going to go into too much of that. They have their own little separate
report.

And we start again. I think this is Hurricane Ike. So the saga begins
again, and that\'s it.

Questions?

MR. BILLY: Peter.

MR. JONER: On the oil rigs, was there any damage to the resources?

MR. STEELE: Oh, absolutely. There were a number of rigs that broke
loose, sank. Like I said earlier, flying over Louisiana, there was a
tremendous amount of leakage from storage tanks, and you could just fly
over some of these bayous and they were just black with oil.

MR. JONER: Storage tanks on shore?

MR. STEELE: On shore.

MR. JONER: But I\'m worried about what about the rigs?

MR. STEELE: There were a number of rigs that broke loose and sank. There
were a number of old capped oil rigs, pipelines that blow that the
capping came off and you could see the oil was bubbling up out of the
ground. So it was pretty horrific.

MR. JONER: So what was the impact of that?

MR. STEELE: We\'re still feeling it.

MR. JONER: So it was a major component.

MR. STEELE: Absolutely.

MR. SIMPSON: Let\'s see. One hundred percent of the 1.5 million barrels
per day was down from Katrina.

MR. STEELE: Wow.

MR. SIMPSON: Ninety-four percent of the gas, that\'s ten billion cubic
feet per second, was down. Ninety percent of the manned platforms were
impacted. Eight-five percent of the rigs \-- excuse me \-- 85 percent of
the rigs were evacuated; 90 percent of the manned platforms were
evacuated. Probably at a minimum, two, three weeks; in actuality, some
several months.

The price of gasoline in Atlanta, Georgia jumped two dollars a gallon.
It was temporary. All total loss, I don\'t know the actual number,
Steve. Probably half a dozen rigs out of hundreds.

MR. JONER: So was that typical?

MR. SIMPSON: The time frame of getting those guys off, coming back and
redoing.

MR. JONER: I\'m curious about how well they withstood the Category 5.

MR. SIMPSON: Like I say, three, four, five six, half a dozen, Harlon,
would you guess? Something like that.

MR. PEARCE: They got some of them.

MR. SIMPSON: Yes.

MR. JONER: Four or five out of how many?

MR. SIMPSON: Hundreds.

MR. PEARCE: A couple hundred, yes.

MR. JONER: Okay. So they\'re built to survive that. Some of them just
got hit a little too hard; is that it?

MR. PEARCE: They survived it. The real loss is just the loss of effort
and work.

MR. JONER: Right.

MR. PEARCE: When the storm comes, the oil rigs have to be very ahead of
it. They\'ve got to get back and cap it after the storm.

MR. SIMPSON: I mean, I can\'t remember. I\'ve dealt with my senses here
over time, but the 40, 50 foot wave. They had these buoys offshore.
That\'s unreal, I mean, and that\'s not just one wave. On and on and on.

Okay. Thank you. Phil\'s \-- I\'m going to put a little clothes on the
body that Phil kind of laid out, and we\'re glad to have Phil and
appreciate having Phil as one of our Assistant Regional Directors.

Of course, now he got his training back in the States. So that\'s why
he\'s so good. He\'s a Florida employee.

I\'m going to have to push this back and forth.

All right. Fisheries are important. Okay. Now, what Phil was talking
about is true. You can get these three storms. In 2005 it was not a fun
year, but you\'ve got to remember one thing about a hurricane. From 12
o\'clock to three o\'clock is the killing zone. That\'s the northeast
quadrant. So whenever you see something hit shore, these folks take the
brunt.

Now, the only thing that wasn\'t said by Phil, it went right up the
Mississippi-Louisiana line. Okay? So it got half of the State of
Louisiana. Rita that came about a month or so later got the other half
of the State of Louisiana, and then Wilma came across down there, and
they had some pot loss and some trap loss and disruptions and so forth.

One other point is this storm was like 300 miles wide. That\'s unheard
of. I\'ve been through these storms since I was a kid, with Betsy in
\'64 to Camille to all of them, and usually they\'re very compact. What
kills me is when the Weather Channel says, \"Now, don\'t worry about
exactly where this thing is going to hit land.\"

I laugh at that. If you lived down here, and Harlon and I do, 40 miles
makes a big difference, makes a big difference. Now, you\'ve got to make
plans to get out and everything, but this one was so wide it was
unbelievable. Camille in my aunt\'s house came right up to the floor. It
didn\'t get inside on River Road and Moss Point. My trunk, when I was in
college, floated and I lost a few things on the back porch.

In Katrina, the same house \-- that\'s 1969, Camille \-- 2005, Katrina,
there was a glass and the water was this high. That\'s just one house.

MR. FLETCHER: You said the killing zone is 12 to three.

MR. SIMPSON: Northeast quadrant.

MR. FLETCHER: Is that the surge? Is that the wind? Is that the rain?

MR. SIMPSON: Wind.

MR. FLETCHER: Everything?

MR. SIMPSON: The \"baddest\" part of the deal because once it gets on
shore, now, it\'s bad. Everything is relative. I\'m just saying that\'s
the bad zone.

MR. FLETCHER: Is that where a lot of rain falls and it gets you \--

MR. SIMPSON: Man, it rains everywhere, but I mean, it\'s the worst zone.

MR. O\'SHEA: Bob, what happens, the hurricane is moving forward. So in
that corner, if you look at the circular thing, the forward velocity of
the hurricane gets added to the wind of the hurricane. So it\'s 15 or 20
miles an hour higher wind.

MR. SIMPSON: It\'s bad. You want to be out of the northeast quadrant.

MR. JONER: Bob, I\'ll translate to a Californian: Dude, surf\'s up.

(Laughter.)

MR. SIMPSON: Okay. So we have these different time things here. You
know, in September 2005, disaster; September the 29th we did some
testing. Steve Murawski and the National Marine Fisheries Service paired
with some inside charters and outside charters and all that hydrocarbon
was a big worry, and we found that overall there was no elevated levels
of contamination in seafood.

In October, Rita came in. Some more testing after that. E. coli, which
is a human sewage and so forth, no higher levels of contamination. No
negative impacts on seafood quality in January 2006. Congress in June
approves an emergency disaster program, 128 million. In June of \'07,
EDRP II, 85 million, and the latest one, September 30th, \'08, we just
got a new disaster for Ike and Gustav, 75 million. That\'s yet to be
determined about how that\'s going to be distributed.

Bring the people back. Help out the fishermen. They\'ve lost their jobs.
Keep them. The biggest thing that I\'m concerned about and some of the
guys were concerned about is you lose these fishermen and you can\'t
just put anybody back in there and say, \"This is how you do it.\" It\'s
an art. Much of it is an art, and if you lose that art, you just can\'t
replace it. So we were real concerned and want to get them back.

A little wrinkle. It doesn\'t mean a whole lot, but 38 million of the
first EDRP I must be spent on oysters. The reason was that the first
appropriation was done under agriculture. My good friend Senator Cochran
is the chairman of the Agriculture Committee. He wanted that money to
get over there, but Agriculture and Commerce deal with natural disasters
entirely different. They didn\'t have rules and regulations to fit
oysters, and without getting technical, there\'s about 50 percent in
public grounds and 50 percent in private grounds in Louisiana, and they
were going to give you a certain amount of money to do private grounds
for each individual lease, you know, and then they were going to give
the entire public grounds in Louisiana the same amount as one single
lease.

Well, that don\'t work. So we had to transfer the 38 million into the
Department of Commerce which deals with fisheries and blah, blah, blah.

So the first 38 million, and it must be documented, which came through
Agriculture, must be spent on oysters. Don\'t worry about it. We\'ll
spend 60, 80 million. We have probably already satisfied that.

MR. SCHWAAB: What was the major impact? Was it sedimentation?

MR. SIMPSON: Oh, yes. They get silted over.

MR. SCHWAAB: Was removal of that sediment or \--

MR. SIMPSON: You just get mudded over. They suffocate.

MR. SCHWAAB: Right. So the money was spent to?

MR. SIMPSON: Oh, I can show you. Don\'t worry.

MR. SCHWAAB: You\'re going to get to that?

MR. SIMPSON: Yes, I\'ll get to that.

MR. SCHWAAB: All right. Thank you.

MR. SIMPSON: This is how the EDRP I, emergency disaster recovery
program, EDRP I, was split up. Texas, about two and a half percent,
three million; Louisiana, 53 million; Mississippi, 37 million; Alabama,
29 million; Florida, four million, and some administrative money.

We intentionally kept this low, 128 million. I\'m telling you if I had
known what it has involved in handling this program, it\'s amazing at
how much reporting they wanted. As a matter of fact, Lautenbacher was
interested and so forth, and he wanted these specific reports, and the
reports that he required in this cooperative agreement are illegal
they\'re so fast. The process cannot even accept the reports.

We volunteered to do it because you all said we needed to.

Anyway, about 50 million who wished to reap out of that 127 about
shellfish, fin fish. Debris removal, about 50 million. Cooperative
research, which has to do with shrimp or larval eggs and basic species,
about 30 million out of that 128 million. That\'s how it was supposed to
go.

Here we go. EDRP II, not less than two percent, turtle excluded device,
bycatch reduction device compliant. In other words, if you had an
enforcement action against you and you\'re a shrimper, you don\'t get
that money. But if you\'re a clean shrimper and you did good things,
then you got some money. All right. That was right off the top.

Ballots were provided to assist fishermen, business, industry, marketing
and so forth, oyster relays, et cetera, et cetera.

Okay. Here\'s how EDRP broke out. You know, 1.2 detects is 41. This is
all in addition to the other numbers. Louisiana, 41 million;
Mississippi, 25; Alabama, 50; and Florida and administration.

Here\'s how we were going to initially lay out all the work: about two
million for this, assistance to fishermen, business and industry,
domestic marketing, testing, and so forth.

Okay. This is the latest one for the 2009, the one that the President
just signed, and it\'s in process about how to split it up. Disaster
money from this one is nationwide. It\'s not specific just to the Gulf.
So they\'ve got some issues on the East Coast and they\'ve got some
issues on the West Coast, and we\'ve got Ike and Gustav down in the
Gulf. So Gary and them are going to make all of those wonderful
decisions, and then they\'ll tell us how it\'s going to come about.

It came out under Interjurisdictional Fisheries Act. When I first came
to work, most all of the disasters were under an old program called
88-309 and Interjurisdictional Fisheries Act superseded that, changed
that. John Breaux wanted to change it, and so it comes under
Interjurisdictional Fisheries Act and the Magnuson Act. Both of these
laws have disaster provisions in them.

That\'s just September the 1st was Gustav. September the 13 was Ike, and
now I\'m going to just try to put a little clothes on it, give you a
story. Okay? That\'s all the other stuff.

This is Cocodrie, Louisiana. It\'s a sport fishing area in South
Louisiana, which I went and took these pictures immediately after the
storm, and see, I was very much surprised that it wasn\'t as bad as I
thought. It was just Gustav now, but most of them made it, but there was
some damage, and so forth.

This is Ike, and this is over in Texas. Now, watch this spot right here.
This is pre-storm.

Now, before you say, \"Oh, that guy\'s lucky,\" I mean, that whole house
is ruined. It\'s undermined and everything just from the air.

Okay. Here\'s some accomplishments, things that we\'ve done now. We\'ve
had a bunch of these limestone pyramids, sports fishing enhancements,
culvert materials, vessels. You know, we\'re about a third completed,
low profile reefs, thousands of cubic yards of concrete trying to
recycle things. Limestone reef, 60 percent done here in shore. Used some
of these old culverts and so forth.

These things are great. I went out and these prefab limestone and
concrete that put in a specific spot. Artificial reefs, they don\'t
move, enhancing the resource again.

Trip reports, and that EDRP II and others that we\'re trying to get the
fishermen. You know, we pay them and they give us information, so to
speak. Okay? We\'ve got about 20,000 in shrimp, about 5,000 in fin fish,
and charter boat reports, about 10,000, about 6,000 in oysters. We\'ve
got about 50,000 of these reports of where, when, et cetera. So you get
a good catch for effort and so forth. We\'ll be able to use them.

Here\'s the form that they filled out. We paid them to do that.

Removal, 500 square miles of debris, crab traps, a bunch of crap traps
everywhere in the world. We spent about that much.

All right. Here\'s a crab trap removal. This is a crab trap fisherman.
These are lightweight things, and they get strewn everywhere, and we
recycled them. The states when I say \"we\" were cooperative.

Then we get into debris. That\'s an automobile and this is a beach, I
think, in Biloxi. It looks like a war zone. It looks like somebody set
off a bomb. Just try go looking at it, cars coming out of the water,
trash. You can\'t see this with these lights very well.

Oyster ground restoration. The issue is you have probably 100 percent,
90 percent mortality in Mississippi on oysters. Okay. That was probably
the worst thing. Now, there\'s infrastructure damage and so forth. So
the key part is not the spawning. The key part is to give them culch,
give them something to set on, and so that\'s what you do, is you put
down culch material.

I don\'t know what it is. Ten to one? You put a dollar in and you get
ten dollars back? It\'s a historical thing. So we know what we\'re doing
about this. We\'ve done this before. Those many acres, seed oysters, you
know, \$20 million.

What they do is they get this mined oyster shell or limestone or crushed
concrete of the specific size. I mean it\'s down to an art, and they
blow it back over into an area so that this clean culch will accept that
spat, and it\'s a big operation and costs a lot of money.

Now, they don\'t just throw it out there. This is an oyster area that\'s
GPS, and you can see. If these lights were down, you could see the
little lines that he follows, and he stays in a certain pattern.

And then you take these seed oysters and you dredge them up out of
unapproved areas, and this is a dredge, oyster dredge, and they put them
over the top of all of that to help, you know, jump start it.

Then you\'ve got this. It\'s called a tonger. It\'s like a big, huge
steel rake at the bottom. It\'s a historical thing. Have you ever seen a
guy that\'s an oyster tonger? He ain\'t got no net. Don\'t mess with him
in a bar.

(Laughter.)

MS. FOY: Larry, why are they doing this?

MR. SIMPSON: By hand. They get the oysters and bring them up.

MS. FOY: Oh, they\'re bringing them up.

MR. SIMPSON: Yes. I mean, that\'s sacks of oysters.

Okay. Date is important and they work it all, keep track of it, and so
forth.

Cost recovery, this is three years after Katrina. This is Gulf Coast
Research Laboratory. One of the facilities at Tom McIlwain\'s aquarium
and so forth. That\'s a symbol for the University of Southern
Mississippi.

And this was an office in GCRL. Now here it is. This was a bridge
between Ocean Springs and Biloxi. We got on it, still working on it,
still working on it, and that\'s what it is today. It\'s back.

I\'ve walked that bridge. This thing they added to it, this walking
track, do you see these people? That\'s a nice walk.

PARTICIPANT: That bridge needed to be replaced.

MR. SIMPSON: Big. Let me tell you. When Camille hit, that bridge was
brand new when Camille hit, in 1969, and it\'s a long story, but anyway,
they had some bad materials, and that thing plates. They didn\'t tear it
down, but the plates were like this. So they had to put it back. You
could go across that bridge after it was brand new until this and it
went like this, bo-boom, bo-boom, bo-boom.

Anyway, historical sites, this is Beauvoir. They\'ve come back. Marinas,
this guy went around, you know. You had to have one of these GPSes or
you couldn\'t figure out where you were. You lost all of your landmarks.

Anyway, this was a marina, a big marina. This was a yacht club. There\'s
a swimming pool. That was all that was left of the yacht club. Now the
yacht club is back. That\'s the swimming pool.

This was a little bait place and a fishing place down in South
Louisiana. I forget just where. It doesn\'t look like much, but that guy
is selling bait to recreational fishermen so they could go do their
thing. You know, the infrastructure is just horrible.

Bay St. Louis, Long Beach. This was a little processing plant. Now he\'s
back, that processing plant.

This is part of the National Marine Fisheries Service Lab in Pascagoula.
There\'s where it\'s coming back to now.

Trainer Marine, boats all up in there everywhere. These are menhaden,
dead fish who had suffocation with oxygen and so forth, birds, et
cetera. This is what we really want. We want these people out here
fishing. We want that shrimper and so forth going out and doing his
thing. We want these kids to enjoy themselves.

This one I couldn\'t resist. This is a school of red fish feeding on
some sari and mullet right off the Texas coast. That\'s what we want
right there, and I want to be right there.

(Laughter.)

MR. SIMPSON: Menhaden plant. Back during Katrina water inundated and so
forth. Remember this little alleyway right here. That\'s us touring the
facility after he\'s got this thing back. Spent millions. That\'s his
net shed. That\'s what it\'s supposed to look like, when he takes his
nets and he dips them and so forth to protect them.

The Iberville over in Biloxi, cold storage. You can\'t do business like
that. He\'s back. This one was so bad and messed up he just had to
rebuild. Gollott, he\'s one of my Commissioners, Senator Gollott, his
family. Put some money back in these places.

There\'s an interface. I keep trying to tell people by necessity the
seafood industry has to have that land-water interface. So you\'re
always going to have these problems. You\'ve got shrimpers with land.
You\'ve got oil and gas shipyards, you know. You can\'t bring these
things in 20 miles in shore and work on them. You\'ve got to work on
them right there.

So this land-water interface is where all of the activity and the
problems occur, and we want to get back to commerce and selling the
product and so forth, not only shrimp, but there are some other issues
that you have to deal with.

This is the kind of thing that you come back to sometimes and you don\'t
think about it. Now, how in the world are you going to figure out where
this thing belongs? I don\'t know how they did it, but they did it, you
know. This is in Biloxi and they came back. They found a home and got
them all back, but there are still a few. There are still a few.

There was three after Camille, and they named them Hope, Charity, Faith,
Hope and Charity, and they never did figure out who they were.

You know, this kind of stuff right here, this is what we want, you know.
When the storms come, they run and hide in the intercoastal, you know,
and these boats go back there in hurricane holes and try to save
themselves.

After it\'s all over, both recreational and commercial, you\'ve got this
kind of thing even though this was over with, you know.

There\'s a little old place down in Breton Sound. This is east of the
river in Louisiana. Came back and he\'s going to launch his boats and
selling stuff, and he\'s back.

This lady right here, this is Ocean Springs, Mississippi. I wish you
could really see this. It\'s a beautiful house up here, and that was
hurt. It was high up on the hill, but look at all of the mess she had in
her front yard.

Now, this woman got really incensed when they came in and got all of
that stuff, and they had to get it out of her front yard, but they tore
that woman\'s yard up, and she was so mad because she didn\'t have any
of the damage, but the boats were all \-- and they tore up all of this
beautiful landscaping. She was all mad.

All right. Here\'s some more habitat stuff. I think it\'s kind of
interesting to see. this is some of the things you have to deal with
after storms. See the difference. See the difference.

Now, I don\'t know what idiot took this.

MR. JONER: Well, Larry, will those come back eventually?

MR. SIMPSON: Not all of them, but they will regenerate to some degree,
but you can\'t have that much loss.

A quick story. They tell me that for every mile of marsh it makes a
difference in one foot of storm surge, something like that, for every
mile of marsh. So you\'re losing marsh. Your storm surge, think about my
aunt\'s house, you know, and the storm surge is what gets you.

I don\'t know what idiot took this in the middle of the storm. This is
Philip Horn\'s place in Pascagoula. Somebody was standing up on this
highrise bridge in Pascagoula with his Red Snapper and other places.
That\'s his business. Took the picture, and that\'s what happened
afterwards. It floated back and Philip said if they could have just got
through off of this thing, when that post stuck a hole right through the
middle.

That\'s his office.

A little personal story. This person came back to her house right there.
She works for me. this is Madeline Travis\' house. She works for me, and
this is what she came back to after Camille. There\'s nothing there. Her
house used to sit right there, and she had to live in one of these
things, which is better than a little FEMA trailer. She got this from a
church and so forth. She had to live there while she was getting this
done.

Now I\'m happy to say that everything is fine, but after two years and a
half year she took off a day to move in, and she called the office, and
she was ecstatic. She said, Larry, since two years I have finally washed
clothes in my own house.

Now, you think about that. She had to go down to the washateria for two
years to wash her clothes. Little things. In the middle of the storm,
afterwards; she\'s back in business.

What I like about this one is it blew through and there\'s all of that
damage, but look at them boats up at the top. Usually the top ones are
the cheaper ones. You know, the expensive ones are down here, but
anyway, these poor guys, they made it all right. Now it\'s back.

This was a casino barge, and it used to be a hotel under it. It was
pushed over and squashed that hotel. Now they took the barge off, built
hotels and stuff back.

This kind of stuff you\'ve got to deal with. It just kind of takes time.
This is what you want. This is bad.

This is good. We\'re seeing these guys, shrimpers, brushmen come in and
they offload their stuff, and then we put it on a barge and then seed
those oyster beds.

This kind of house, you know, it was a beautiful yard, nice, residential
area, and then he\'s got to live in this for two or three years, and
that\'s a good one. That\'s called a Katrina cottage. That\'s not a FEMA
trailer.

Your life changes, and I can\'t explain to you how bad it really is.
This is what it looks like, you know, a few days later. This is what we
want. To get from here to here is a lot of work.

Here, now, trees. Had two million trees in the State of Mississippi
alone upended. Now, we\'re talking about Tupelo, Memphis. You know,
we\'ve got a lot of timber industry, and two million trees in one little
old state, and these things took a beating.

So I thought this was great. People came along on the beach and they
carved these beautiful things, you know. They\'re gorgeous. You know,
you might as well use them, but I love this shot. Here\'s when you think
you\'re down and nothing is going to happen. This tree started growing
again.

So that\'s the little story. I hope that that helps you understand it a
little bit and provides you a little clothing.

MR. JONER: I have a question about the house that your co-worker built
there.

MR. SIMPSON: Yeah.

MR. JONER: Will that survive the next one? Is that up high enough?

MR. SIMPSON: Yeah, it will survive a storm surge like came in before.
Now, whether it will survive the wind, that\'s something else. The
elevation codes were \-- make them raise them higher, and they do
everything they can to \--

MR. JONER: So what is the code?

MR. SIMPSON: One of the most beautiful places down there.

MR. JONER: What is the code for how high?

MR. SIMPSON: It depends on the area, Steve, but generally, you know, it
may be it went from like 15 to 20. It\'s amazing how high you can get.

MR. BILLY: Heather.

MS. McCARTY: Larry, I don\'t know whether Tim is going to talk about
this in a minute, but the cost of doing, say, individual homes,
completely rebuilding them, did the government help pay for that or was
it private insurance?

What happened with private insurance with all of these different
categories?

MR. SIMPSON: Private insurance. The government doesn\'t have anything to
do with that.

MS. McCARTY: So it\'s all private insurance.

MR. SIMPSON: It\'s either private insurance, and you\'ve got flood
insurance and you\'ve got wind and hail and upland, but if you\'re on
that coastal zone right there, that band, you\'re put into what\'s
called a wind pool. They charge you whatever they want to charge you.

Now, the difference in economics of living on the coast has changed
completely, completely. Now, that\'s not to say that the big, beautiful
homes \-- and I didn\'t show you all of those mansions because those
people have resources. They\'re being built back just as fast as they
can build them back, but that\'s coming right out of that person\'s back
pocket, and he\'s not even insuring it. That\'s him.

But, no, that\'s private insurance, and in most cases what happened, you
saw a lot of the lawsuits and everything. The big one was State Farm,
and I\'m not taking sides, but State Farm came in and said it\'s all
flood, just unilaterally it\'s all flood.

You know and I know all of it wasn\'t flood. Some of it was torn down
before the flood ever hit. So that has worked its way out and so forth.

But insurance and cost of living on the coast is different.

MR. CATES: Larry, a couple of questions. You know, I\'ve been through a
couple of hurricanes in Hawaii, and actually I was in one in Florida.
The last one in Hawaii was, I think, a Category 4. It hit Kauai, and I
remember running ice with my fish boat 90 miles away, four trips in a
day. It was the most brutal.

Is the money that you guys receive in your opinion well spent? That
would be the first question.

And did the fishermen and the seafood industry take preparative action
or was it kind of lackadaisical?

MR. SIMPSON: Yeah, they have to take action. This isn\'t the first calf
roping that these guys have ever been to. So, you know, you saw the
hurricane holes and so forth. You lash them down, but I mean, you have
to be on the land water interface. Okay? They were pouring, you know, a
big part of \-- you know, the guy took the picture in front of that big
thing. It was his ice plant. Okay?

Well, when it was all over, he had a refrigerated truck and there was no
electricity, and so the county morgue rented his trucks and he had a
refrigerated truck sitting there with about 19 or 20 bodies in it for I
don\'t know how long.

Is the money well spent? Absolutely. The resource will ultimately be
back. The shrimp resource will ultimately \-- I mean the oyster resource
\-- will ultimately be back better than it was before unless we have
another one. I think it has been well spent.

If you can\'t keep these guys \-- and Harlon will talk about the
fishermen and the heritage and the history \-- if you can\'t keep these
guys back in it, because they\'ll go and every carpenter and they\'ll go
offshore and everything, and they won\'t come back.

MR. CATES: So are they coming back?

MR. SIMPSON: I\'ll let Harlon talk to that. Mostly. The ones that just
got it in here and they can\'t get it out of them, they\'ll come back.

MR. BILLY: Okay. I think we\'ll move on. The next presenter, Harlon
Pearce, the commercial fisherman, member of the Gulf Council, and the
Louisiana Seafood Marketing and Promotion Board.

Harlon.

MR. PEARCE: Yeah. My name is Harlon Pearce. I know some of you. I don\'t
know all of you.

I am Chairman of the Louisiana Seafood Promotion Marketing Board. I am
on the Gulf Council. I co-chaired the Louisiana Fishing Community
Recovery Coalition which developed after Katrina and Rita. If you put
all of that and put it in a big paper bag and shake it, I\'m just a
coon-ass fish peddler. That\'s about all I am.

(Laughter.)

MR. PEARCE: But I think I\'ve got a little bit of all of us in this
room, a little of that in this room.

What amazes me today is that I guess I take for granted what happened in
these storms, that everybody knew about it, that you guys knew a lot
about it, but I can see that you really don\'t know as much about what
happened in that storm as I think you should or did, and I guess we
lived through it and we go through it, and the things I\'m going to talk
about today are sort of what happened, but things I think have to happen
for the future because it will happen again.

The Barrier Islands you saw there that aren\'t there, that\'s the
problem. Larry talked about one foot of marsh and the difference it
makes in the surge is important, and the last two storms we had
thoroughly proved that.

So I really think we need to be proactive and not reactive in all of our
thought processes, definitely not reactive. We need to \-- and I know
you\'re going to laugh at this one \-- but we need to be able to work at
the speed of business, not of government, not at the speed of
government. When you work at the speed of government, we really don\'t
get our industries back the way they need to be, and we don\'t get them
back in the right form.

When you have a problem like these storms, you want to grow from it. You
want to have a fishery that comes back in a better way. You want a more
professional fishery. You want to develop your processing facilities out
of harm\'s way. You want safe harbors. You want these things.

But when the money comes as slow as it does come, and I\'ll give you an
idea of how slow it comes. It comes. You don\'t have the time to do
that. You\'re chasing your tail getting your businesses back up. You
can\'t develop or redevelop in the ways I think that are important for
the future of our fisheries in the State of Louisiana and in this
country.

I don\'t need to talk about Katrina or Rita and the time, August 29th.
It happened. September 15th we developed the Louisiana Fishing Community
Recovery Coalition, which is about 20 different groups within the state,
with Sea Grant, LSU, Department of Economic Development, Wildlife and
Fisheries, and all of the fisheries we had within the state to try to
develop a quick master plan on what we needed to do to go to Washington
with, to find out what infrastructure damage we had, what damage we had
financially to the fishermen and what we needed to do.

That group did a lot of work, and we had a comprehensive report within a
month or two that we went to Washington with to try to get money. It
really didn\'t work. We got busted out of that one. We got some monies.
I\'d like to talk about this first supplemental and second supplemental
because that\'s how our monies came down.

Our first supplemental was like 50-something million dollars, I believe,
but most of that was already guaranteed to us through an agriculture
supplemental, agriculture bill for oysters that was \$38 million anyway.
So we really didn\'t get much out of that. So the first one came down,
and the bad part of it was that it was dedicated to oyster and shrimp
ground rehabilitation. So we couldn\'t give any direct monies to the
fishermen, period.

How these supplementals come down and how we write into how we can use
it is very important. If it can\'t get written into it that it\'s going
to be directly going to the fishermen, it doesn\'t happen, and all of
you guys who are involved with government, you know all the checks and
balances you have to have. So you\'ve got to make sure that it gets to
the right people and that it gets to the right agencies to spend it.

Wildlife and Fisheries in Louisiana was the agency that did it. Now,
this is a resource agency that\'s given the job of spending money or
giving money out. They did a yeoman\'s job doing it, but that\'s not
really what they\'re there for. They\'re there to do resource
management, not to give money to fishermen. And they took a lot of
beatings because of what happened. Even though they did their job the
right way, there\'s ways to solve a lot of their problems.

You saw the picture. You saw everything. Some of the crises within the
crisis was what I call the toxic soup syndrome. The seafood industry in
the Gulf went through, of course, the sensationalism of the media. They
have to have a story to tell and it\'s always a negative story, and so
we fought the toxic soup battles where they thought everything coming
out of the Gulf was bad product.

We have restaurants in Washington, D.C. that were advertising that they
weren\'t going to sell Louisiana product. They didn\'t sell it because
of that. You know, we really took beatings. We were on conference calls
with every initial agency in the world to try to make sure we were
updated on what the quality levels in our water was and what was going
on, and some of the water, the alcohol coming out of the water was
actually drinking water quality. It wasn\'t as bad as it was made out to
be.

By September 29th, I think, as Larry said, we got a clear bill of health
on the oysters to go ahead and do it \-- not the oysters, but the
fishery. Fin fish, crab, shrimp, these guys get out of the way. You
don\'t have a problem ever with those guys. There\'s no tissue damage.
There\'s nothing in the tissue.

Oysters are filter feeders on the bottom. So you have to close your
oyster beds to get them cleaned out, to get them going, but that\'s a
regular thing in the oyster industry, not just because of these storms.
We do it all the time. You get a heavy rain. Certain areas are shut down
and certain areas are closed and then opened again.

What we did in Louisiana prior to any major federal help is we went out
to industry and to different industry to get things done. We got a
travel lift from Alaska, from the Affirm group in Alaska. It helped us
get some of these boats you see back in the water or get where they need
to be fixed.

Shell Oil came up with \$600,000 for three ice machines that we put into
place right away, and the thing I\'ve got to impress on you is that we
got the money for the ice machines and in two months they were in place,
not two years, not three years, not six months. They were working, these
fishermen.

One of the most emotional times I had during the storm was when we put
that ice machine in Cameron Parish, and when these people were just so
ecstatic about having ice to go fishing again, I mean, it was just an
experience that gives me chills every time I think about it right now,
and the kids and everybody thanking you on what you could do, something
as simple as ice we take for granted, but when these storms come around,
we can\'t.

Shell Oil also gave me \-- well, we had a small loan and grant program
from the Louisiana Recovery Authority in Louisiana that was developed.
It had like a \$100 million program that was for all of the industries
in the state, but we did. We energized our industry, and it had a lot of
outreach through Sea Grant, with help from the Promotion Board, with the
help of a lot of the fisheries. We got 15 million out of the 60 million
they gave out, which was 30 percent of it, for the fishermen by our
outreach work and the stuff that we did.

We also got a quarter million from Shell Oil Company, again, to grease
the wheels of that program so that we got our application together for
the fishermen, trying to help them get ready to go so when that small
loan or grant came down, we were ready to go. We gave out that quarter
million in \$5,000 increments to needy fishermen at the time.

Again, when we got to a quarter million, within two months it was gone.
That\'s not the case when it comes to government money. It doesn\'t ever
get out that quick.

Let me go to that one while I\'m thinking about it. The storm \-- let\'s
see. Where\'s my notes here?

Katrina was in August \'05 basically. When I called the first
supplemental was okayed in Congress by June of \'06. It was okayed in
Louisiana to spend in October of \'06. The monies were spent in August
of \'07. So two years later; two years later before even the monies that
the oyster guys needed to spend, and this was money that was already
guaranteed from the Agriculture that ended up being bulked back into
this supplemental.

The second supplemental I call it was where we got \$41 million for
direct aid to fishermen. It was in August \'07. Louisiana okayed it in
December of \'07. It was spent in June of \'08, a lot quicker. Six,
seven months we got that one out because we had our systems pretty much
in place to get it done.

But another part of the problem when it comes to this, and I know Larry
got right in the middle of this particular situation, is politics can
get in the way of what needs to be done correctly, and we need to figure
out how to change the way we allocate these funds to the states that
need it the most.

You all saw Katrina pictures. You all know where it hit in Louisiana.
Well, the 41 million that went to the fishermen because of that storm,
and I will use values and volumes of the fishery in that state. All
right?

Louisiana, which got hit the hardest, got 14 cents on the dollar as far
as value goes. Mississippi got 59 cents on the dollar. Alabama got 39
cents on the dollar. Politics.

As far as volume, Louisiana got four cents on the dollar for that money,
for the volumes that we put up in our state. We\'re one-third of the
fisheries in the United States comes out of Louisiana.

A dollar, thirteen of the volume went to Mississippi as related to the
dollar volume, and 60 cents went to Alabama. And I don\'t blame Larry\'s
group for that. That\'s how it came out. The politics were stronger in
other states, but we need to set a system in place that says, hey, LSU
Sea Grant, Florida Sea Grant, Texas Sea Grant, give us your assessments,
your economic assessment of damage and your infrastructure assessment.
Let\'s use those as guidelines to dish the money out to the states
accordingly that are needing it.

Right now Texas is going to need it hard. We want to make sure that they
get the money, but what happens is that when we get through this
political quagmire that we have to go through to get this stuff done,
and it is a quagmire, it doesn\'t get to the right place all the time.
Most of the time it doesn\'t, and that\'s sad.

And we have to make sure that, again, by being proactive and not
reactive. We need to be prepared for this for the future because it\'s
going to happen.

Ike hit Texas. All of Louisiana flooded. No Barrier Islands; we\'re
going to flood again. With a tropical storm we\'re going to flood. New
Orleans had six foot tide surges in the city. You know, we\'ve got to be
ready to do things in a different way than we\'ve done them in the past,
and we cannot worry about the mistakes we\'ve made or what we did or
didn\'t do. Let\'s think about what we need to do to create something
better for the future because the future is what we have to worry about
now. What\'s done is done.

We wanted to create safe harbors. We wanted to create clustering of
industries with generation of power, water and fuel. We couldn\'t do it.
Time wouldn\'t permit. So we need to think now about how do we do that
now. How do we have monies in place to begin to start that process
before we have our problems?

So if we have a safe harbor where these boats you see are piled up or
moved out quick and go to safe harbors, sure, you\'re going to have your
interface damage. As Larry, we\'ve got to have the interface with the
water, but that\'s not the same. We can fix that. We can handle that.

Let\'s find places to put our boats. Let\'s find places so that the day
after the storm comes we\'re processing shrimp. We\'re doing what we\'ve
got to do to get that industry back up and running.

Ike showed us a really different problem this last one with the floods.
We lost one month out of our economic life during Ike. Business in
southern Louisiana came to a standstill for a month, and it\'s hard for
me to even believe. It didn\'t do that in Katrina and Rita. It did it in
Ike, and so one month out of everybody\'s life economically, you know
what that means, you guys in business. That\'s a killer. It means nobody
in this state is going to make money this year.

So we have to prepare differently for that storm, for that type of
storm. Things as simple as we\'ve got our shrimpers ready to go, we\'ve
got no damage to that area, but they can\'t make ice because they don\'t
have potable water or they can\'t do this because they don\'t
generators. They can\'t do that. Simple things that can be talked about
and thought about on a Gulf-wide program to bring something together so
that when these storms come we have portable ice machines on wheels. We
have generation of power, generators. We have potable water. We have
fuel that goes directly to where we need that problem solved, and then
in two days you\'re up; you\'re running, and your industry is back
going.

The votes were there after Ike, but we couldn\'t get anything done.
Everything shut down. When I tell you it was a month, it was a month,
much, much, much different than Katrina and Rita. A different storm,
different effects, but it clearly showed what no Barrier Islands will
do. The storm surge is here and it\'s coming every time we have a storm.
No doubt. When a Texas storm floods the entire State of Louisiana, and I
mean floods it not just a little bit; floods it, a place that has never
been flooded before even during Katrina, you know, it\'s important that
we think that way and we think in a different way.

It\'s important that we find ways to make sure the money is allocated
correctly because, like I say, it\'s going to happen again, and it\'s
important that we get this money out quicker or by being proactive,
we\'ve already done our job in a lot of respects so that when that storm
comes we can react quickly to what we\'ve got to do.

How do we act at the speed of business and not the speed of government?
Exactly what I just said. Have portable ice machines ready to go. Have
generation power ready to go. Have these things set up or in place and
spend the money ahead, not after to get it done.

Develop crop insurance for our industry that the farmers have had for
years and years. The oyster industry in Louisiana is close to doing that
now, but thanks to like in Louisiana we have trip tickets, and in a lot
of the other states if you have trip tickets where a commercial
fisherman comes in, commercial harvester, we know what that guy caught
last year. We know what he did our didn\'t do, and there\'s a way to
insure that for him for the future. We need to look to that. We need to
look to the ways to take the models of agriculture and mold them and
shape them a little different so that after a storm if you\'ve got that
in place, that fisherman has got money to get back going again.

You don\'t have to worry about federal help all of a sudden. You\'ve got
that insurance that steps up to the plate, and if we\'re proactive
without thinking, you know, getting the ice machine and everything else
ready to go, then we\'ve got lots of things in motion right away and we
don\'t have to go fight for money in Washington. We don\'t have to fight
for allocation of the funds. We don\'t have to worry about how we spend
it.

Our wallets in fisheries took a hit on the way they gave money out
because they were fair in the way that they did it, but anybody that had
a commercial license and a harvesting license got money. That doesn\'t
mean they were really a harvester or a fisherman.

One of the things we have to do with our industry is to begin to
professionalize. I mean, we all had discussions on buy-backs yesterday.
I\'m not a buy-back fan at all. I\'m a professionalization fan. I think
that we have to grow a stronger, better industry from the ground up and
allow access to that fishery to anybody that wants to get in it, but
he\'s got to go to school, got to learn about the law. He\'s got to
learn about food safety. He\'s got to learn about everything.

You know, you can jump in a 50 foot boat in Louisiana and drive off
without anything. You can\'t sell flowers unless you went to college
first. There\'s something wrong with that picture, but not only what
that does. I\'m not a fan of somebody in the oil industry that\'s out of
work jumping in a flat boat and getting in the seafood industry. It\'s
not good for anybody. It\'s not good for him or us.

I want that guy that\'s in our business serious so you solve a lot of
problem, and then the guys that are serious are getting the funds that
they need and not people that don\'t deserve the funding is getting the
funding.

We had 16,000 fishermen in the State of Louisiana before the storm.
We\'re down to ten or 12,000 now. It shows you the loss we\'ve had. Good
and bad. Good in that the fishermen that are out there are catching and
making a living, and a lot of that was peripheral edge fishermen that we
didn\'t need anyway. So we\'ve got to protect the ones we have now and
we have to begin to grow the ones coming up.

The charter boat industry and the recreational sector, it\'s time that
they stood up for their fishery, that they became responsible for their
fishery. They need to look at trip tickets and electronic log books. If
the charter boat industry had had the same things that we had in the
harvesting sector, their funding would have been a lot stronger than it
is now. They would have been able to show what they did then and didn\'t
do now.

So I know that the Gulf Council is working very hard to get that done,
and in Louisiana we\'re going to work very hard to make sure the charter
boat sector begins to step up to the plate and give us the data that we
need to manage our fisheries as well as the data we need to help them
when a storm comes, not if; when it comes.

We need to look at everything we\'re doing in a very different way for
the future and try to learn from what happened in the past. We can\'t
change what happened in the past, and get that done.

Gustav and Ike really showed me a lot more than I wanted to see. We\'ve
got a cluster. We\'ve got safe harbors. We\'ve got to do all of these
things, and we\'ve got to understand that we\'ve got to work at the
speed of business and not the speed of government, and to do that,
we\'ve got to get ahead of it, not behind it.

And if we do that, we will have solved a lot of the problems that we
faced after Katrina and Rita and Ike and Gustav now. You know, I could
give you story after story after story about the storm but you\'ve seen
some already. You don\'t need to know that.

What we need to focus on is to be proactive, not reactive and working a
lot faster and getting in place the tools of the trade and the fishermen
that they need right away. And I\'m not just talking they have to have
it in Louisiana. Find some place where we can move to any state in that
Gulf that has that problem and get it moving and get it going. And then
we will have done something. Then we will have spent our money wiser
than we spent it this time.

I\'m not saying we didn\'t spend it wisely. I\'m just saying that that
would be the way to get people back up and running. Our fishermen in
Louisiana did not receive a penny other than the monies that we got from
Shell Oil and some monies we got from Department of Economic Development
until two months ago. Two months ago from Katrina, something is wrong
with that picture.

And it\'s all the bureaucratic stumbling blocks that we have to go
through in order to get that money out and to do our job right. So we
have to change that thought process and do something differently and
figure out ways that we get it to our industry a lot quicker and ways to
grow our industry as we do it and change it from what it\'s evolving
into the future and evolve it into the global economy that we all have
to be involved in now and take us out of the small minded businesses
that we have today and do something in a different way.

I think that\'s all I\'ve got to say. I hope I\'ve enlightened you a
little.

Yes, sir.

MR. FLETCHER: You talked about the importance of safe harbors. Is there
a blueprint for what that is? And do the fishermen know where to go to
get into that place?

MR. PEARCE: We don\'t have them yet. That\'s what I\'m trying to say. In
my meetings in the beginning we talked about getting that done, but the
funding sources dripped and drabbed in, and we couldn\'t get it done. We
couldn\'t get the financing to get the right spots. We had people that
were going to donate land for this, that were safe harbors where we
could put the boats in, put the processing facilities. Unless you got
all of that pot of money in one spot to get it done, you\'re not going
to do it.

We had \$19 million that we secured for our fishermen right after the
storm that hadn\'t been spent yet for infrastructure, for harbors in New
Orleans, harbors in other states, oyster plants, oyster processing
facilities. It hadn\'t been spent yet because of this, you know.

So we have to think now about how to find those safe harbors and where
to put them. We have to think now about where we might want to cluster
our industries.

When I say cluster, I don\'t just mean our seafood industry, but things
that we\'re late to see value added. When I say value added, we now find
that oysters cure cancer, some of them. We know that. So let\'s have the
facility that has met that oyster processing plant doing whatever it has
got to do to get that drug ready, or we know that we can get collagen
from fish waste. Let\'s have that pharmaceutical company right there
where we can process the product, where they can do it. Let\'s do more
than just see-through cluster. Let\'s cluster industries around that can
help our seafood industry grow and do things in a different way.

It\'s not done now. We wanted it to be done after Katrina, but there was
no way to get it done after Katrina, but now let\'s look to the future.
Let\'s think about across the whole Gulf. How do we do these things?

Yes, sir.

MR. O\'SHEA: Harlon, listening to what you\'re saying suggests a
two-part problem to me. One is immediate disbursement of aid, but the
other thing you\'re really talking about is the need to have an in place
infrastructure plan. Make an assumption the whole place is going to get
wiped out.

What I hear you saying is there should be a plan in place if that
happens. If only half of it gets wiped out, then use half the plan. But
it\'s not going to be a FEMA or the state emergency action guys to do
the long-term infrastructure thing.

And the flip side is you need a special organization to quickly put the
money on the ground short term. So my question is who do you think is
the appropriate group to be doing this long-term planning. The Coastal
Zone Management Act people within the states?

I work for the state. So I would say it\'s not really the function of
the federal government to do that.

MR. PEARCE: I can tell you right off the bat we\'re doing it through
Wildlife right now. We\'re already developing some \-- taking some of
the monies from Katrina-Rita and we\'re rechanneling it into that type
of thought process. We\'re going to try to take the three ice machines
that we have that we got from Shell Oil and make them mobile as a
beginning thought process.

In the state we\'re working on generators for everybody. So we\'re going
to try to do that already through what the state can have done right
now, and I don\'t know which guy should do it. I just know where we got
the money that we\'re going to grab and try to run with right now to
create the beginnings of that process.

MR. O\'SHEA: But if you have a plan in place, you\'re going to deploy
that money a lot more effectively and a lot quicker than if you have to
start from scratch.

MR. PEARCE: Right.

MR. O\'SHEA: And I think that\'s your point.

MR. PEARCE: Right. That is. We have to have that. We have to have it
ready. We have to have these things somewhere stored ready to go when
this happens because it\'s going to happen. So let\'s plan on that,
especially ice water, fuel, power, stuff like that, simple necessities
that we can get into an area and get it done.

To me that\'s the easiest thing for us to do. The safe harbors, the
clustering, that\'s the toughest thing to do. That\'s going to take a
lot long term plan, long term thought process.

But the other thing is we\'ve got to get some barrier islands. Some kind
of way we\'ve got to get some protection from the storm surge in the
Gulf. If we don\'t, it\'s going to get worse and worse, no doubt about
it.

MR. O\'SHEA: Thanks.

MR. PEARCE: And, Heather, to answer your question about housing,
Heather.

MS. McCARTY: Yeah.

MR. PEARCE: To answer your question about housing, in Louisiana we have
the Louisiana Recovery Authority with a home program that supplemented
insurance payments for people to help try to get them back up to 150,000
for their houses. Some cases it works; some cases it didn\'t work. If
they don\'t want their house, we bought it back in the state and we\'ll
sell it to other people, or clean the lots off and make some green
space, whatever.

There\'s some things working in that respect. It didn\'t work perfect,
but at least it was there as an effort.

MS. McCARTY: Can I ask a question?

MR. BILLY: Sure.

MS. McCARTY: I don\'t understand the insurance thing down here, but were
these businesses also like not insured for flood? Is that the same as a
house?

MR. PEARCE: I think everybody, businesses I\'m sure \-- well, you\'ve
got different zones down here for flood insurance. Some zones are out of
flood. You know, you don\'t have to worry about it supposedly, but those
still got hit. So maybe those people didn\'t get flood insurance.

But the ones that are in the heavy flood zones all had flood insurance,
but then what Larry was saying, some of it was denied. So that flood
insurance, some say it was wind damage. Some say it was flood damage. So
you have to fight with insurance companies from day one to get it done.

MR. SIMPSON: They redrew all of the maps.

MR. PEARCE: Right.

MR. SIMPSON: They redrew all of the maps. What was the mark in Camille
is a new mark now.

MR. PEARCE: My insurance and my business quadrupled the next year just
on the regular insurance.

MR. SIMPSON: And then when you apply that to private loan.

MS. McCARTY: And there\'s no regulatory system that curbs that sort of
abuse?

MR. PEARCE: There is, but it\'s not going to do any good right now. We
were scrambling just to find companies to insure us. The state actually
set up a program to insure the citizens in the state, but we didn\'t
have companies left in the state.

MR. CATES: We had the same problem in Hawaii.

MR. SIMPSON: You\'re in good hands until the crisis. As long as you\'re
paying in everything is fine.

MR. BILLY: We\'ve got time for a collective discussion. Let\'s get the
last speaker this morning. Rita, Rita Curtis from our Office of Science
and Technology.

DR. HOLLIDAY: Just as part of the further introduction, Rita is the
chief of the Economics and Social Science Division at Headquarters, and
it\'s in the Office of Science and Technology, and I asked her to speak
to us this morning about getting back to this national perspective on
research and data associated with identifying issues and policies and
problems with respect to sustainable fishing communities.

And so we\'ve taken these case studies that we\'ve heard about in the
Gulf with respect to hurricane events, and we\'re moving back towards
generalizing these issues and problems, and part of that is what do we
know about fishing communities across the nation, what kind of research
programs, big needs that are out there, and what our capacity is right
now to try to fulfill that.

And so I didn\'t mean to steal your thunder. I just wanted to help; a
little bit of a segue way. We\'re trying to move now towards our
afternoon session, and this is sort of this intermediate step.

MS. CURTIS: Thank you, Mark.

The outline for my talk is first I\'m going to discuss some concepts
that are relevant for community sustainability. These include sources of
risk to coastal communities, community sustainability, community
resiliency, and then look at what NMFS is currently doing with our
community profiles.

And actually, whenever I say NMFS, I should say this is often NMFS in
partnership with its state partners and the commissions, so giving
credit where credit is due, and then look at some of the work that\'s
being done on economic research on fishing communities and introducing
here some economic concepts of economies of scale and scope and
economies of agglomeration, and I\'ll get into that in my talk.

So risk to coastal communities. These are probably just a handful of the
risks to coastal communities, but climate change, that has a lot of
potential to effect coastal communities certainly in terms of increasing
the intensity or number of severe storms as you heard about this
morning.

And then changing the distribution, the spatial distribution and
abundance of marine species. So through ocean acidification, changes in
sea surface temperature, loss of sea ice, and then fuel price change.
For fishing communities obviously this has been a big factor, and it has
left a lot of boats tied up at the docks this past year, and changes in
energy policy, such as drilling, is often a concern in coastal areas.

And then a couple of things that I\'ll just put under globalization:
aquaculture, trade, seafood markets. All of these are factors that are
changing, that are putting a lot of pressure on coastal communities,
fishing communities in particular, and then population growth.

We know that coastal areas have seen rapid expansion in population and
housing development, and so that also puts pressure on coastal
communities.

So the Magnuson-Stevens definition of community sustainability is at
first blush somewhat narrow in that it\'s really looking at just the
regulatory effects of fishing communities, and it tells NMFS that we
should minimize to the extent practicable the economic and social
impacts on fishing communities and so to provide for the sustained
participation of these fishing communities in fishing.

Actually, I\'m sorry, I lost my train of thought for a moment.

The challenges here are that the data for looking at community
sustainability is quite limited, other than the port landings
information, permit data, and in some cases license data and the census
data, which comes out every ten years, which at this point is pretty
dated, there\'s very little data available at the community level. We
don\'t have a lot of information on the other industries and fishing
communities. We don\'t know about, to a large extent the dealers, the
processors, the marinas, the repair shops, all of the \-- ice factories,
all of these other industries, auxiliary industries that are necessary
to have a fishing industry.

And what also makes it challenging is sustainability is a long-term
concept, and a lot of our data that we\'ve begun to collect, well,
we\'ve just begun to collect it. So we really can\'t look at long-term
trends and say much about it.

And what we need to be looking at are really more of the fishery
dynamics, the seafood market dynamics, the human dynamics of what\'s
going on in these fishing communities so that we can say more about, you
know, what will be the impact of climate change, what will be the impact
of trade or fuel prices. All of these other issues will effect
communities\' sustainability.

So community resiliency, slightly different. It\'s a broader concept
than fishing or community sustainability, and it\'s really looking at a
community\'s ability to adapt to or prepare for changes, and the factors
effecting resiliency include lack of economic diversification,
geographic and social isolation, poverty, unemployment, educational
attainment levels, and then environmental risks, such as natural
disasters, hurricanes obviously, and human induced disaster, such as oil
spills and community apathy and lack of participation is another issue
we don\'t see that often in fisheries, I think.

And this is actually community resiliency, is a really important factor
in our fishing communities, and I\'ll give you an example from the
Alaska community profiles. Now, Alaska, you can imagine their fishing
communities, geographically, they\'re remote. Many are inaccessible by
boat, and they have high levels of poverty and unemployment. Almost 50
percent of the fishing communities have unemployment rates that are two
times the national average and poverty rates that are 30 percent higher
than the national average.

So these are real concerns, and these issues play out differentially
across fishing communities, and even within a state they play out very
differently. But these are the things that we need to be looking at.

So the NMFS community profiling, it has really been a three-step process
that we\'ve been engaged upon. The first step was identifying the
fishing communities. Deciding you know, and setting up criteria for what
is a fishing community and what is not.

We\'ve been through that phase, and then the next phase was, we call
them Tier 1 community profiles, and that was just gathering a lot of the
secondary data on fishing communities. So those would be the landings,
the licenses, the census demographics that tell us a lot about fishing
communities.

And we are wrapping that phase up this year. We\'ll have community
profiles completed in all of our states.

The Tier 2 are more detailed community profiles, and so they have more
information on the fishermen, the institutions, the fishing industry,
and the history. Now, for the Gulf, we\'ve actually \-- we completed the
Tier 2 community profiles in August of 2005 right before Katrina struck,
and what was quite \-- which was great because what we had was
inventories of all of the seafood processors, all of the dealers,
marinas, bait shops, all of the auxiliary industries. We had inventories
of how many were there prior to the storm and then after the storm, we
sent people back out \-- Larry is nodding \-- and they were able to show
what was the impact on these industries, and they were staggering.

I think in Louisiana and in Mississippi there were towns that lost 90
percent or more of their fishing related industries, just gone. And the
numbers remain quite high three months later, six months later in
eastern Louisiana and Mississippi.

So they\'re very useful not just for fishery management, but also for
these disaster assessments. And so I would say for the disaster
assessments, as well as for talking about community resiliency, our Tier
1, quite good; Tier 2, obviously better.

They don\'t tell us a lot about sustainability in fishing. We\'re using
our community profiles in our social impact assessments for fishery
management actions, but ideally we\'d be able to do more. I think we\'re
hitting kind of the lowest level of what we need to do, but we need to
do more.

And so I\'d say the biggest problem is that they\'re not predictive. We
weren\'t able to really say prior to the Bering Sea, Aleutian Island,
crab rationalization, how the fishing industry would be changed by this
rationalization.

And there were by all reports, and we don\'t have all of the information
to say this conclusively, but there were a lot of impacts on the fishing
related industries because of crab lack. So under this economies of
agglomeration, which is \-- economies of agglomeration is when you get
geographic concentrations of industries, different types of industries
in a particular area, and they locate there because it just makes sense.
They support one another. You know, it\'s the people that they do
business with.

And so what they found in an Alaska crew study was that the
rationalization had large but proportional effects on crew size, which
sounds good, proportional effects, but what happened was that in some
areas you no longer have a sufficient size to support some of these
other related industries, and so you heard about a lot of the fishing
communities, a lot of the industries in these fishing communities
literally just shutting down, and so that\'s something that we \-- is a
hole that we need to be addressing, and we\'re starting to address,
looking at what\'s happening in Alaska with these support industries and
how they might be effected by rationalization programs.

And then another thing that we don\'t really have a good handle on is
I\'ll say economies of scope, and here economies in scope is when the
fishing vessel produces multiple types of products, and so they could do
that on a single fishing trip or they may participate in multiple
fisheries at different times of year.

And so because they\'re mobile, they may not operate, and the fisheries
may be in different areas. They don\'t really \-- they\'re not tied to
one particular port, and this is important because your regulation may
effect one fishery and particular ports, but then you have to look at
what would be the spillover effects on other fishing communities and
other fisheries.

And so some research that we\'re doing on the West Coast is looking at
Cindy Thompson who \-- with Southwest Fisheries Science Center has put
together over 20 years of data, and she\'s looking at how the fleets \--
how the individual vessels in the fleet, how many fisheries do they
participate in and what is the geographic distribution of their fishing
effort.

Now, what this particular graphic shows is 22 of the 35 fisheries along
the West Coast, and it shows the interconnectedness of these different
groups. I\'m not sure if you guys can read it that well, but just
starting with shrimp trawl, so there\'s six, 26 \-- I don\'t want to go
too far on this \-- 26 vessels involved in \-- I guess there\'s a typo
there. It probably should be 28 \-- in shrimp trawling, but 28 are also
involved in the ground fish trawl. So it just shows the linkages across
all of these different \--

MR. DEWEY: So the numbers between the boxes are the number of vessels
that are involved in both of those fisheries?

MR. FISHER: There\'s black lines up there. We just can\'t see them.

MR. DEWEY: Oh, okay.

MS. CURTIS: Thank you.

And so this is just an average for 2002 to 2006, and so this is
important from a fishery management perspective because it can show you,
when you have a regulation, say, on the salmon trawl fishery, which
happened, what will be the spillover effects on other fisheries? Where
are they likely to move to?

And by doing it by fishing port, as well, you can also see what are
going to be the impacts on those fishing ports, those fishing
communities.

And so just to go a little bit further with this, so this shows the
distribution of boats within each region, and on average, 57 percent of
the boats fish out of one port for the whole year, which sounds, you
know \-- that\'s the majority, but that means 43 percent dumped, and so
you really need to be looking at those linkages across ports and across
fisheries. It\'s very important.

What this one also shows is that, by region or by state, Oregon has the
most boats fishing out of one port. In contrast, when we look at fishery
diversification, we see that Washington has the most vessels
participating in one fishery.

So just looking at these dynamics is going to be really quite fruitful.
At this point, we\'ve just mapped the trend. She\'s just mapped the
trend, but this would be a very fruitful area for modeling impacts on
communities and spatial distribution of fishing effort.

So continuing with that, economies of agglomeration, Eric Steinberg has
done this really neat study looking at industry concentrations in the
Northeast. That\'s New England and the Mid-Atlantic, and it tracks
fishing related industries over actually an 18-year period, and what\'s
neat about this study is that it shows differences in concentrations
across counties, not at the community level, because the data isn\'t
available that way, across counties, across states, by industry,
obviously, and it also demonstrates changing patterns of concentration
over time.

So the paper itself has a number of really kind of interesting
descriptions of, you know, what\'s going on in the seafood industry,
what\'s going on in the fishing industry. What they showed was that
there\'s been a lot of concentration in the harvester, in the fleets,
that the number of vessels landing in the Northeast has decreased from
3100 in the \'94 to \'97 period down to about 2400 in the 2000 to 2004
period.

So there\'s been a lot of concentration there. There\'s been
considerable concentration in the processing industry, as well, but not
in the dealer. So it\'s really quite interesting.

What I like about this paper even more, though, is that it brought from
economics literature these concepts of concentration of industries,
market power, and so it took concepts that were already existing and
applied them to the marine sector. It also used \-- their study\'s
limited to the Northeast, but the data is available for all regions.

So this is something that we could actually extend to all of the
regions, and come out with good indices for looking at industry
concentrations, and I think that that information would be very useful
for future modeling, as well as for describing what\'s going on in these
industries.

I went fast. So some of the upcoming research that we have going on, we
have a number of economic surveys of fishing related businesses in the
Gulf and in Alaska, and we have some pilot studies that are going on in
Washington and Oregon. The work that we did in the Gulf, it created
inventories of fishing firms, but it didn\'t give us a lot of
information on the firms themselves, how many people they employed,
their revenues, and so you didn\'t really \-- you know number of plants
that were affected, but you don\'t really know the scale of the
operations. So you really can\'t say a lot about the industry overall.

But it didn\'t give us this great frame for identifying the firms, and
being able to contact these people.

In Alaska, their data collections are in two regions of Alaska, and then
we just have some pilot studies going on in Washington and Oregon of a
few communities.

The West Coast port study that I showed you, and the Northeast
agglomeration study are well positioned to be extended to other regions.
Cindy\'s port study, she worked to compile all of the data and track
these trends. Clearly, the other regions could be working with their
commissions and sign centers to compile comparable data and look at
these trends.

The Alaska Science Center has been doing a number of studies on the
effects of climate on ports and fisher location choice, and this is some
of our best modeling, I think, on looking at climate effects, on working
with the biologists to see how the stocks will shift over time, how
they\'re expected to shift, and then tracing that through the fleets and
then back to the community level.

So this will be some early research coming out, and then we have some
limited ethnographic studies in Alaska, Hawaii and the Northeast, and so
that\'s finding out more about the crews, where they\'re going, how
they\'re affected by various trends in the industry.

Hawaii and Alaska, you\'re looking at native populations, Pacific
Islanders. So just providing more industry on social networks and so
forth.

Research needs, we really need to expand our data collections on fishing
communities. We need to know a lot more about these shore side firms, a
lot more about crew, a lot more about the fishermen, and then we need to
establish better research program priorities.

I think you guys can see that we\'ve created a critical mass of
research. We\'ve completed this Tier 1 community profiles, and we\'re on
to our Tier 2, but we haven\'t laid out a research agenda beyond that.
So we\'re kind of at a good point. We\'ve got a few studies that we can
build from, a few really good studies that we can build from, and I
think now we\'re kind of positioned well to take this more to a national
level, and decide what\'s relevant in each region, and how to
appropriately expand outward.

I think developing community resiliency indicators, we\'re well
positioned. We\'ve compiled a lot of the data necessary for that, and
with the 2010 census not that far away, I think developing those now,
and then later after the 2010 census, would be really quite interesting
and useful to do.

And then developing this addenda for undertaking research to look at
climate change, population growth, real estate trends, housing market
trends, energy, trade, regulation, I think that\'s kind of where we\'re
positioned right now.

And that\'s all I have.

MR. BILLY: Thank you very much.

Are you going to be around after the coffee break?

MS. CURTIS: Yes, I am.

MR. BILLY: Okay. Any immediate questions? Yes.

MR. O\'SHEA: Some of the things that you mentioned towards the end here
seem to track with some presentations I\'ve seen by NOS to the CZM
community that are also looking at climate change, areas that are going
to be impacted by change in sea level, that type of stuff.

So my question is how much linkage is there between what you\'re doing
and what those folks might be doing over at NOS and CZM.

MS. CURTIS: Well, I think that a lot of the data will likely be that
we\'ll share data or be looking at, you know, the same data set. I\'m
not sure if \-- we\'re answering different questions. So I think the
research will actually tend to splinter. I think what they\'re looking
at for coastal resiliency is, and I guess we\'ll find out more about
this this afternoon, is looking more at storm related activities and
other types of activities.

I think we\'re trying to maintain that fisheries focus.

MR. BILLY: Okay. Heather.

MS. McCARTY: Do you find that the lack of understanding and information
about these coastal community aspects is because of a lack of data? Is
it the data collection that\'s sparse, or is it money to do the research
and modeling, or what is it that keeps that information from being
available?

MS. CURTIS: It\'s both. You know, the community profiles, we did the
long form, you know, the more detailed community profiles in the Gulf of
Mexico, very fortunately, because that positioned us well for looking at
Katrina, but we didn\'t have money to do long forms in all regions. So
we\'re doing, you know, kind of a more satisfying approach, is that Tier
1 of getting a lot of low level information quickly.

MR. BILLY: Okay. Randy.

MR. CATES: I noticed you had aquaculture as a risk, but have you guys
looked at how aquaculture can support coastal communities and support
the fisheries like keeping processing plants open year round?

MS. CURTIS: Right. No, that\'s a good point. That\'s a really good
point. So for some, aquaculture creates a change. It\'s a change, so
people have to adapt to that, and some groups will be positively
impacted, and others will be negatively impacted, and so that\'s
something we need to be looking at more carefully, and not just lump
something that\'s bad for one group as bad, and understanding how they
interact.

MR. CATES: Or as a follow-up, how we could change the fishing rules to
support the communities better. In other words, if you have a short
fishing season, it may not be the best thing for your community to keep
the businesses open.

MS. CURTIS: Right, and so that would just require more information on,
you know, what are those crew doing during the off season. We actually
got some really interesting data from the IRS that shows many household,
fishing households, income is drawn from multiple sources, but we don\'t
know what those other sources are.

It could be, as you suggest, from aquaculture, or it could be, you know,
maybe the spouse is a teacher, a banker. You know, we don\'t really
know.

MR. BILLY: Larry.

MR. SIMPSON: I just want to support the kind of work that Rita and them
are doing. It\'s non-sexy, you know. It\'s not save the world. It\'s the
long-term picture that\'s the baseline for all of the decisions that you
try to make. The very first thing that you\'re going to do after a storm
is try to quantify it in some fashion, to get it down to numbers. And if
you don\'t have this kind of information, I mean, you\'re going to be -
I don\'t want to use the old Southern term - but anyway, you\'re going
to be behind the eight ball.

(Laughter.)

MR. SIMPSON: And you\'ve got to have this kind of information. That\'s
the first thing that you want to know is how bad was it, and what\'s it
going to take, so forth and so on. Just a small, tangential thing about
some of the data that we need for fisheries. We don\'t have enough money
to do all that we need to do in biology, and we don\'t have enough money
to do the economics and so forth, but the new wave and the new era of
fisheries is how does it affect you and when.

You know, if you have this bag limit, how does that affect you? How does
it affect this community. I mean, it\'s just important.

MR. BILLY: Okay. Tom.

MR. RAFTICAN: Yeah. You do an awful lot of work on fishing communities.
How do you define a fishing community? Is this strictly geographic
terms?

MS. CURTIS: It\'s place based. It\'s place based, and that\'s one that
we struggled for for a bit, but they decided that\'s the appropriate
definition.

And then the criteria that was set is, you know, you\'re looking at a
host of factors in terms of engagement in fishing, where do people live,
where do they land fish, the other industries, looking at those as well.

So I know for the West Coast fisheries, we\'ve got fishing communities
over in Virginia that are impacted by \-- they\'re included in the West
Coast fishing community profiles because they\'re that impacted by what
goes on.

MR. RAFTICAN: I was thinking in terms of recreational fishing, too.

MS. CURTIS: Yeah, they\'re part of it.

MR. BILLY: Jim.

MR. GILMORE: I hope this doesn\'t seem frivolous after talking about
natural disasters, but thinking about all of these species from the
seafood cards that are being put out now, swordfish boycotts,
Greenpeace\'s press release about the pollock fishery collapsing, don\'t
eat pollock, I\'m kind of curious whether NMFS has \-- anecdotally, I\'d
have to say that I don\'t know, because there have been impacts on the
fishing community from all of these don\'t eat this species kind of
campaigns that are out there, I\'m just curious whether the agency has
looked at that at all.

MS. CURTIS: I would say we haven\'t looked at it at the community level.
I know that there has been some research done. Like on the \-- there was
one for swordfish some years ago, you know, save the swordfish, and the
impact of that was to bring down prices, and so the NGO\'s campaign was
highly successful in reducing demand for swordfish, but that was not
traced back to the community level.

So again, it\'s kind of going the extra step to look at how those
impacts are distributed that\'s important.

MR. BILLY: Dorothy.

MS. LOWMAN: Well, I started my career 30-some years ago as an associate,
and every year, you know, we always say we need more of this kind of
information, and it never hardly ever raises above that line to get some
funding. You know, I mean, it\'s good to see you doing some of these
community profiles, but a lot of that work also seems very snapshot in
nature, and I mean a lot of the allocation hypes are always couched in
terms of, well, I need this because I provide more benefit to the
community than you do.

And so, you know, it is nice to see you starting to look at how can we
do some more predictive modeling, and do things that are more dynamic in
nature, too, than sort of snapshots because it is a crying need, you
know, but it\'s been a crying need for 30 years, and it seems like we
haven\'t made too much progress in that area.

MR. BILLY: Bill.

MR. DEWEY: Thank you, Mr. Chairman.

I just wanted to follow on to that point, and say that, to complement
the fishing community data, I think there would be some real value in
NOAA, as you\'re trying to encourage the development of aquaculture, [to
go in and contrast some of the communities around the country that are
founded on aquaculture.]{.mark}

You certainly have that in Washington State, we\'ve got some counties
that shellfish aquaculture is the major employer in those counties, or
in Maine, with the salmon farming industry, or in Cedar Creek, Florida,
with the clam farming industry. Just to have those as a comparison, or
to complement the data from the fishing communities. You know, I think
what you\'ll see, and Randy alluded to that, you know, is more stability
in your infrastructure and so on when you have that to complement your
live fisheries.

MR. BILLY: Okay. Mark.

DR. HOLLIDAY: Rita, just following up with a comment, Heather and
Dorothy followed up on the same thread, two capacity issues. One is sort
of a leading question, but if commercial fisheries are worth \$4 billion
ex vessel, and a value added of \$30 billion to the economy, and the
NMFS budget is \$728 million, what investment are we currently making in
these economic research and data elements?

My last calculation was less than one cent of every dollar of the NMFS
budget goes towards collecting this kind of information. (This is a
rhetorical question.)

(Laughter.)

DR. HOLLIDAY: But the real question is - is given the importance of the
data that you provided after Katrina with respect to these community
profiles and demonstrating the importance of it, has there been any
significant increase in the investment, or the agency\'s response to
that, recognizing the value to this? Are we getting more money to do
these things, or is it still the same pot of money, even though it\'s
proved itself as being critical to policy making?

MS. CURTIS: At the time of Katrina, we were spending only about a
million dollars a year in our community profiling work, and most of that
was eaten up by staff. We have seven FTEs funded out of that, which
doesn\'t leave much for data collection.

And I\'d say they\'ve been very good at using students, and just
squeezing blood from a stone to get to where they got to. In 2007, we
received emergency funding, or disaster relief funding for the Gulf of
Mexico, and so we funded quite a bit of economic and social research,
hired an economist out of Gulf states to help us run all of these data
collection activities, and that increase was essentially made permanent.
We got a comparable increase, permanent increase in 2008.

And so that\'s where a lot of the new economic data collections on the
shore side firms, where that increase is going, is looking more broadly
at the fishing industry. That is soon going to be eaten up by FTEs,
getting more economists on board. So we\'ve got a bit more funding, but
you know, that needs to go for ecosystem research, the community
research, other economic issues, fishery management issues, LAPP issues.

So it gets spread really thin. We\'re not talking a lot more money for
data collection, probably a couple hundred K once you pay for those
FTEs.

MR. BILLY: Okay. Heather.

MS. McCARTY: No, I was just thinking we should have a coffee break.

(Laughter.)

MR. BILLY: Okay. One more. Patty.

MS. DOERR: Can you expand a little bit more on the recreational aspect
of the profiles, and, you know, what you\'re looking at there, and also,
if you go a little bit further into the local economy in terms of both
the commercial and recreational impact on local businesses in terms of
restaurants, and hotels, and gas stations and stuff like that, do you go
further?

MS. CURTIS: So the baseline studies that we do, the Tier 1, use whatever
recreational data that we have available. So if there\'s a license frame
in the state, we can track that obviously to the fishing communities.
Not all states have recreational licenses. So you can be stymied there.

We don\'t \-- the recreational fishing effort estimates that we do,
they\'re not available at the community level. We don\'t have sufficient
resolution to be able to do community level trip estimates. So we\'re
kind of limited there.

For the longer form, Tier 2 assessments, we definitely looked at the
recreational support industries, firms, as well.

MS. DOERR: So you take into account the bait and tackle shops, or turtle
landings, and all of that that might exist?

MS. CURTIS: Yes, in the longer forms that we did. You know, it was great
that we had \-- for the Gulf that we had the 2005 assessments just
completed in August of 2005, but Katrina kind of made everything
obsolete that we did. So we had to go back out after Katrina and redo
everything that we had just completed.

So it was great that we had it, but then suddenly, you know, you had to
feel like, well, now we don\'t have it, and we had to start from square
one. So that\'s kind of our frustration.

You know, I believe somebody said that, you know, they\'re kind of
snapshots in time, and I think that\'s our main shortcoming is that
we\'ve got snapshots, but we\'re not able to project outward, or look at
issues and be able to see the linkages across multiple industries.

MR. BILLY: Okay, Gary. You have the last word.

MR. REISNER: Well, I just wanted to say, in our economic and social
science programs, we\'ve had an increase on the order of \$6 million
that we\'ve been asking for for, gosh, going on four or five years now
that we haven\'t gotten.

Again, if you look at the \'09 President\'s request, if you look at the
House and Senate, that increase is there, but again, it\'s not enacted
yet. So that won\'t necessarily specifically address the community based
information, but it will be a big shot of money, increase in our
economic activities.

MS. CURTIS: Yeah, and with that kind of increase, for sure, we would do
a lot more for the fishing community.

MR. BILLY: Okay. We\'re going to take about a 15 minute break. I remind
everyone about checkout, working out arrangements there, and we\'ll get
back here in about 15 minutes, about a quarter to 11:00.

(Whereupon, the above-entitled matter went off the record at 10:32 a.m.
and resumed at 10:51 a.m.)

MR. BILLY: Okay. We\'re going to modify the agenda just a little. There
are several people that will be leaving over the course of the afternoon
to make various flights. So the last half hour of this morning we\'re
going to shift and focus on scheduling the next meeting, and see if we
can work that out, and that way, we can get that done when the vast
majority of you are here.

So if that\'s okay, we\'ll do that. Okay? Good.

All right. Well let\'s get back to a broader discussion now. We\'ve
heard some of the experiences here in the Gulf, and others have shared
similar experiences in other parts of the country, and the idea was to
see if, based on what we\'ve heard, there are some conclusions,
recommendations that we should consider with regard to this important
area of addressing the fisheries infrastructure, and particularly in
times of adverse events.

So let me open the floor. And Larry?

MR. SIMPSON: We had a conference call to all of the state directors and
federal partners, and so forth, and it was unusual. We had a Senate
appropriations staffer when we were getting this stuff done, and we
begged her to make it more flexible so that we could deal with
infrastructure rather than just resource stuff.

And that happened in II, but it\'s in I, as you can see, and you heard
Harlon speak to that. He\'s a fisherman, and he wants some things to
happen immediately. He doesn\'t realize accountability and accounting,
and so forth and so on.

And anything you can do to make this kind of declaration, this kind of
process, program allowable, more flexible, is better. Now with that
comes risk, and you know and I know that with that comes risk, but some
of what Harlon says is real good, and we need to take to heart. Some of
it is fishermen - and I don\'t mean this in a bad way - fishermen, if
you had a pile of fish, again, in the wharf, they\'d gripe because you
didn\'t have a front end loader for them to put it into the truck, you
know.

So anything you can do more flexible is good. That\'s my general
comment, and speed and the data to make your case, and tried and true
partners, it\'s not something you want to go and get some entity other
than the state or a commission to play with.

In other words, do not ever go in and take some association and say,
okay, you\'re in charge all the time. You\'d better stick with the
players that have been around and done this before.

That\'s my general comment.

MR. BILLY: I noted that Harlon mentioned the crop insurance program as
an example of one of the programs in the Department of Agriculture. Has
anyone looked at the other emergency assistance programs that are
available to farmers, as one example, or perhaps other sectors?

MR. SIMPSON: Mr. Chairman, it just doesn\'t work. I mean, it\'s
Christmas trees and fence posts, and we tried to get them to do rules
just in case Agriculture was ever pulled in this thing again, and they
don\'t have a clue as to how to make this thing work. It\'s got to be
Department of Commerce.

MR. BILLY: Well, let me be clear. It\'s not doing it there. It\'s using
some of their programs as a model that could be designed specifically
for fisheries.

MR. SIMPSON: Well, they need to write rules and \--

MR. BILLY: You know, that would be done at Commerce.

MR. SIMPSON: That could be done.

MR. BILLY: I\'m thinking Commerce.

MR. SIMPSON: And they still haven\'t done it. I kept encouraging them,
trying to work through this issue to write them down, but it\'s still
not done, to my knowledge.

MR. BILLY: Others? Randy.

MR. CATES: One thing that struck me this morning was how the data is
collected. I know fishermen are not the most honest people reporting
data, particularly in my region, because usually it meant something was
going to get taken away from you later on if you reported it accurately.

But the lesson learned was the people that reported data or had
violations didn\'t receive assistance, and that message should get out
to our fishermen nationwide that the more accurate you report the data,
and the more of a good player you are, in a time of emergency, you\'re
going to get the assistance, and those that aren\'t aren\'t going to get
the assistance, and that will benefit our fishers. So somehow we\'ve got
to get that message out before the disaster occurs.

The Gulf Coast fishermen now realize that, but we need to get that out
to the rest of the nation.

MR. BILLY: Okay. Sam?

MR. RAUCH: So one of the problems is that there\'s a single pool of
mixed resources that deals with both these hurricane and natural
disasters, which are sudden, and can they deal with these other fishery
kind of disasters that we\'ll talk about this afternoon.

One of the problems to getting prepared, you can\'t be flexible if
you\'re starting from zero when the hurricane hits. So the best way to
be flexible is to have plans in place ahead of time, to theoretically
have a pool of money in place ahead of time, but if it is subject, in my
opinion, if it is subject to being siphoned off for these other kind of
disasters we\'ll talk about this afternoon, there won\'t be any money
left when the disaster happens, and so if you\'re going to make a
recommendation about \-- you know, there is no standing. There\'s the
\$75 million, at least for the moment, but other than that, there\'s no
standing pool of money for which we can say, we will use this money in
these ways as a contingency fund.

So it\'s probably going to be gone very soon. When it\'s gone, there\'s
very little incentive for us to come out and say how we\'re going to
spend money that we don\'t have, that Congress hasn\'t given us.

And my perspective of the problem is [is that there needs to be two
separate plans, one to deal with hurricanes, which everybody agrees is a
big problem, and the other, though, to deal with these other kinds of
things, and then we would group them together. The hurricane one is
going to get siphoned off, and won\'t be there when we need it.]{.mark}

MR. BILLY: Okay. Randy? Mark?

MR. FISHER: Yes, thank you, Mr. Chairman.

In the State of Florida, the people of Florida just passed a
constitutional amendment to create a tax shelter for \-- or a deferred
tax on, or reduced \-- excuse me \-- a reduced military compared to
other properties around the working waterfront, and any supporting
marine infrastructure.

And I know this doesn\'t relate to the emergency aspect, but it might be
nice if the federal government could somehow support that effort. And
teeing off of what Randy was saying, the whole thing comes down to data,
and in the Gulf region, we\'re really deficient in data relating to
fishermen and the resource itself.

And if we could support the budgeting to create more data stream, that
would be excellent.

MR. BILLY: Okay.

MR. SIMPSON: I wanted to bring in that working waterfront issue, but
there were too many other things going on, and Martin\'s right. I mean,
competition for a marina or a place to do business, unless you own it
like Martin does, and the Bells and other folks \--

MR. FISHER: No, I don\'t, but thank you.

MR. SIMPSON: Well, I mean it\'s people like that that have a history and
have it, they\'re the ones that are going to be able to handle it, but
competing between fisheries and condos, and fisheries and casinos, and
fisheries and big time marinas, you\'re going to lose, and it\'s just
going to keep contracting, and contracting, and contracting.

So Martin\'s state in Florida has a working waterfront kind of issue. In
Mississippi, they\'re trying to come away from the front beach and go
into the Back Bay of Biloxi and buy up that land, you know, while they
get a chance, and dedicate that to commercial and recreational marinas.

I mean, in Orange Beach, you\'ve got tourism and so forth, and I\'m
talking about some huge marinas that you cannot pass the money up that
they offer these guys that own this land, and you\'re spaced for your
boats. I mean, commercial as well as cargo. I mean, you\'re in bad
shape, and it\'s the same way all over the country, and if we don\'t do
something as a policy to keep that, we\'re going to be in big trouble,
because there\'s only so much of this land, and it requires that
interface, and everybody and their brother wants to get here. That\'s a
real issue, working waterfront, land access, and it\'s both commercial
and recreational.

MR. BILLY: Martin.

MR. FISHER: Well, just to further that idea, infrastructure is the
backbone of both the commercial and the recreational fishery. Without
the infrastructure, you don\'t have it. We saw that in testimony today,
and I believe that Mr. Simpson\'s right. [Maybe Larry\'s right that this
Committee could get some support from NOAA to work on the working
waterfront.]{.mark}

Isn\'t there something currently happening on that level?

DR. HOLLIDAY: Yes. We\'re going to hear a little bit about working
waterfronts from our NOS, National Ocean Service representative on this
afternoon\'s agenda.

MR. BILLY: We can maybe hold that until we hear that discussion.

Dave?

MR. WALLACE: You know, this is a true quandary, and as Larry said, it\'s
happening everywhere, and many states \-- I know more about the East
Coast than I do about anything else, but if you go up in Maine, there
were a whole series of oystermen who had these little houses on the
water, and had a little pier, and made lobster traps. And somebody from
New York came along and offered him \$2 million for his house, and you
know, he paid 20,000 for it, he just couldn\'t say no.

But he immediately then complains that he doesn\'t have any place to
conduct his fishery out of, which is, you know, it\'s the other side of
that coin. So you see, in Maine, you know, initiatives to set up areas
that the state would buy, et cetera, and I guess I\'m going to say
clearly, you know, individual fishermen can\'t have it both ways.

But all that said, there are two obvious things that need to be done.
First of all, fishermen need to be profitable enough to be able to
afford expensive property, because they have to compete with everybody
else who wants to do it.

And second, fishermen have to work together to form cooperatives in some
way so that they, if they are small scale fishermen, so that they can
justify the expense of expensive property.

One of the companies that I represent operates very large vessels, a
large fleet of large vessels. They have two unloading docks right in the
middle of Atlantic City, which are very, very valuable, but then the
other side of the coin is, if you allow consolidation under IFQs or
IPQs, or other forms of LAPPS, where then companies can become big
enough so they can compete for that land to operate their businesses out
of, that is the other way to do it.

The menhaden industry can spend the money necessary to own the land that
they need to build the plants on. The clam industry can do that. [So if
you get economies of scale from an independent company, an individual
company, where economies of scale are very cooperative or collective,
those are the kinds of things that NMFS and NOS must support and
advocate to give these folks the ability to compete with
developers.]{.mark}

Now the developers are beat down right at the moment, but they\'ll be
back. They\'ll be back soon.

MR. BILLY: Okay. Heather.

MS. McCARTY: Interesting. Thank you, Mr. Chairman.

To get back to the Gulf, the other issues here, what I heard from
industry, and Harlon in particular, were a couple of things. One of them
was the barrier islands. You know, that seems like such a huge issue,
I\'m not sure how anyone can deal with that. Can you rebuild barrier
islands?

Harlon said it, and Larry said it. That\'s one thing.

The second is this preparation before the disaster, and I think you
addressed that a little bit. I think that\'s obviously something that we
should draw from this.

And the third thing that I heard him say was that you need a different
way of both allocating and distributing whatever money does come down
the pike for disaster relief, and he referred to politicization of that
process, and I\'m sure that\'s a pretty sensitive subject, but it seems
to me that those were the three messages that he had.

MR. RAUCH: Can I address the barrier island issue?

NMFS, in working with the Corps and the States of Louisiana and
Mississippi, and undoubtedly other partners, does have a very aggressive
program to build barrier islands just south of here in the Bay. They
cost about 20 to 30 to \$40 million a piece, but we take dredge sand out
of the Gulf and put it down there, and they do all of the material
designs, and they\'re designed to wash away within 20 years, because
that\'s what barrier islands do, but the idea is they\'ll provide
sediments, and build it up, and so we\'re actively engaged in a massive
program to try to recreate these barrier islands.

It\'s difficult to do, but you can build barrier islands, and we do that
with the Corps. I\'ve been on them. It\'s phenomenal.

MR. BILLY: Larry?

MR. SIMPSON: I can\'t remember what I was going to speak to.

MR. BILLY: Okay. Randy?

MR. FISHER: We have quite a bit of experience with disaster relief over
the last couple of years. When the Klamath disaster happened, we handed
out 60 million, and now we\'re handing out 170 million. We\'ve handed
out 68 million since October 1st.

The interesting thing is, to me, is the attitude by the fishermen,
number one, and that is they now think this is going to happen every
year, and they won\'t be able to figure it out when it doesn\'t happen
why it isn\'t happening.

We\'ve heard every excuse known to mankind, and really what it comes
down to, when we designed the program, we ended up with the last one
going to the governors, and I told everyone when we were involved with
this that we needed to have somebody to blame, because it always comes
down to that.

And NMFS actually wasn\'t involved in really the design of the program
at all, which was good. The commissions, I believe, in my mind are set
up really well to distribute money, because we can do it fast.

I think the only advantage in the disaster relief is that it at least
keeps some people going for a year or two. I don\'t think it\'s a
particularly good thing. I think they should have a pot set up
somewhere, and then not have a lot of \-- have a lot of flexibility,
because I believe in each area these are going to be different, but
you\'ve got to get the governors\' offices involved somehow, because
ultimately, it does come down that you\'re not going to make everybody
happy, and then they\'re going to want to blame somebody, and you need
to be able to figure that out.

MR. BILLY: Okay. Go ahead.

MR. SIMPSON: You know, the flexibility I was talking about was what you
can spend without spending it on resource stuff, you know, oysters,
shrimp, et cetera, but what we really wanted to do immediately was build
some of these docks back, and ice houses and so on. You couldn\'t do
that until the second. That\'s what I was talking about flexibility.

MR. CATES: Larry, is that because you had a resource for the fishermen
to go to, but they just couldn\'t get to it?

MR. SIMPSON: Well, yeah. We begged them on a conference call to let us
do infrastructure stuff. And they said, no, we want just resource
related. I knew what was going to happen.

MR. BILLY: Who\'s they?

MR. SIMPSON: Senate Commerce Committee. Gary, you were on that.

MR. REISNER: Well, the issue for those were that the language was
explicit about what it could be used for. So we were hamstrung by that.
MR. BILLY: And that speaks also a little bit to the flexibility in the
sense of ‑-

MR. SIMPSON: Yeah, I\'m looking ahead.

MR. BILLY: Yeah.

MR. SIMPSON: Not back.

MR. BILLY: Right, correct. Okay. Steve?

MR. JONER: I want to say, when Randy hands that money out, I don\'t
think it\'s a good thing. Don\'t quote me on that around the fishermen,
but \--

MR. SIMPSON: I know you\'ve tried to get a bunch of it.

MR. JONER: I know, and I look at that, and I think, well, define money,
but you know, I mean, it\'s not - what should I say here - it\'s not
really helping the fishery, and you know, I think this is where
something like an active demonstration project for, you know, fishing
communities doing aquaculture, you know, when you talk aquaculture
around fishermen, it\'s bad because it\'s competition, but if they get
beyond that, and look at maybe what\'s happening in places like Japan,
where they came in where, you know, the industry was dead, and revived
it through aquaculture and stock enhancements.

And I remember the first time I ever met Randy was at Manchester back
during the Penny Dalton era, and you gave a slide presentation, and you
know, we asked them, would NMFS do a demonstration project with the
community, because in the State of Washington, it seems like the money
always goes to something like developing tourism. So it started with
when the spotted owl situation shut down logging. It was they\'d turn
all the loggers into tour guides, and then when disaster hit with
fishing, we\'ll turn the fishing community into tourist destinations,
and so you\'re just really undermining the industry.

And somehow we need to step forward and say, here\'s a better way.

MR. BILLY: Randy.

MR. CATES: I\'m trying to figure out on all of these hard issues. I\'m
glad you said that, Steve. Where\'s MAFAC\'s role in this, number one?

And federal fisheries money. A lot of issues we\'re talking about are
state issues, state zoning. It\'s a kind of correlation. I can see
rebuilding fisheries, but I can\'t make that gap there. How do you go
from federal money for federal fisheries, and then you\'re putting it in
for basically, if I understand right, state infrastructures? Is there a
conflict there?

MR. BILLY: Sam?

MR. RAUCH: I think [that MAFAC\'s rule is broader than looking at any
one disaster, but trying to figure out what we should be doing if money
was available, and the issue is fishermen, nationally, are often under
attack, particularly when we have over-fished fisheries, and when we put
in regulations to put them on a more manageable tact, then there\'s
going to be economic dislocations.]{.mark}

[You can\'t take an over-fished fishery, and bring it to a sustainably
fished fishery without economic harm. Then the fishermen come in and ask
for disaster assistance because it\'s a disaster, and they suffer.
People are suffering because of that.]{.mark}

We get a lot of skepticism about whether or not we should be doing that,
and what should be the goal to do. Should we try to restore the fishing
communities to the way that they were before, which in some instances
were unsustainable? Should we take advantage of either our own creation
of regulatory issues, or a hurricane, which has, you know, created
capacity reduction, and not try to restore it?

And if we\'re not restoring what was there before the disaster, then
what should be the goal? Should we really use fisheries policy to
maintain the full breadth of what was there before, to maintain the
status quo, which we get a lot of pressure to do?

After Katrina, we got a lot of pressure to restore the status quo, when
in fact, it turns out that we needed to reduce shrimp effort because of
red snapper bycatch in the Gulf, and the combination of fuel prices and
Katrina and a lot of shrimp boats had the effect, although I don\'t
think anybody would have wanted to go there in that way, but had the
effect of decreasing shrimp efforts, which solved some of the red
snapper bycatch problems.

So should it be the policy of the government to be flexible and do
everything we can to restore people to what they were, or do you take
advantages of situations like that and try to achieve broader economic
goals? And then how are you going to do it?

So [I mean it\'s a complicated question, but that seems to me what MAFAC
is, rather than focusing on what could we do better in Katrina, or what
could we do better in the West Coast, is how should we be spending any
federal monies that became available? What policies should we try to
achieve with that?]{.mark}

MR. CATES: I\'m glad you brought that up.

MR. BILLY: Okay. Eric?

MR. SCHWAAB: Yeah, I was kind of thinking the same thing, which is
what\'s the \-- and Sam just put some of those thoughts on the table \--
but it seems to me there are a couple of things at work here, and one is
that the current system is very reactive. You know, we\'re not thinking
ahead to some of these issues, which creates kind of fertile soil for a
politically driven response.

So it\'s very difficult to come in and say, you know, in the midst of a
Katrina disaster and say, well, we shouldn\'t really rebuild this the
way that it was, because it wasn\'t sustainable the way it was, when in
fact, if we had a more sort of planned response, a better sort of a
regulatory framework going in, that there would be some more rational,
preplanned approach to the use of, you know, these disaster funds.

The other thing that I think is a bit problematic, and you know, I think
to some degree it\'s unfortunate we\'re having this discussion without
the benefit of the afternoon session, because they really both feed into
the same set of questions, but you can\'t necessarily equate the kind of
disaster relief that\'s needed in a Katrina type circumstance with the
kind of, quote, disaster relief that might be needed in response to, you
know, some kind of a long-term decline in habitat quality or, you know,
in the midst of some kind of regime shift.

And it seems to me that we need to be \-- I mean, there\'s one pot of
disaster money, and the rules that might apply in those circumstances
are going to vary dramatically depending upon, you know, sort of the
acuteness of the event.

The last thing that I would say, and I think, Tom, you sort of already
touched on this already, is that back, to the first point, you know, [we
don\'t really have a plan, and there are models out there, and we\'ve
heard some of them alluded to already, particularly in the agriculture
arena, that run the gamut from, you know, things like crop insurance to,
you know, sustaining the infrastructure necessary to support that, you
know, economic activity.]{.mark}

[And I think there are some lessons that could be drawn from the
agriculture world, and perhaps transferred in some fashion into NOAA to
sort of establish a framework for longer term, more proactive planning
around some of these challenges, and that maybe that\'s the role that
MAFAC can sort of help facilitate.]{.mark}

MR. BILLY: Thanks.

Dorothy?

MS. LOWMAN: Well, I mean, I guess I do think that just trying to rebuild
something that\'s going to be unsustainable, again, is not a good
government investment. One thing I know, there was some attempt to look
at capacity reduction as part of this, but I don\'t think, maybe I slept
through it, but I don\'t think we really talked about it this morning at
all.

And I\'d be interested just in hearing, how did you structure that a
little bit, and what were the work at all, and, you know, if you were
going to do it again, you know, what were the lessons learned from that
that might be useful in thinking of a more national policy as you go
forward?

And you know that there are certain things in a fishery that you don\'t
want to just rebuild an unsustainable system. I don\'t know who\'s the
right person to ask.

MR. BILLY: Larry?

MR. SIMPSON: It\'s a conflicts issue, and you\'re starting it, and I\'ll
get to this. In my opinion, if I was a dictator, then I would be a \-- I
have a finite, short period of time and money in which I would infuse
money to the fishermen themselves, not because they\'re special, but
because you want to keep that expertise. Okay?

But I would make them do something for it, like give you a report, clean
up debris. Then after that, I would make it flexible enough to allow you
to do something like Harlon said, put these floating ice plants and
mobile ice plants, have them set up and ready to go.

Then I would, as somebody talked about, make them whole. I don\'t think
you should ever make anybody whole after a storm back to where they
were, but I think you should look at docks and things of that nature
just like you look at roads to your houses. That\'s where you should go,
but it should never make them 100 percent whole, and it certainly
hasn\'t.

So that\'s that thing, and then the issue of over capitalized, putting
it in, making it like it was before, and again, I said I don\'t think
personally that you should make it like it was before. You should bring
it to a point, but that\'s about as far as you should go.

We have done limited permits on the shrimp issue, and economics has
weathered the storm, and heaven forbid that is the hardest and long way
to ever have to do this, but it did have some benefits.

Where is the level when you bring it back? We\'ve kept it, and it\'s
down, I don\'t know, under 60 percent. Sixty percent. It\'s nothing like
it used to be. Shrimp was king. Where is that percent that you let it
get back to? Because there\'s economies of scale, okay, and you can get
down to lower than a critical mass, and then where are you? And I don\'t
know where that is. I don\'t know where that line is, but it\'s no lower
than where we are right now, let me tell you that.

So those are some general thoughts, I think, that kind of addresses some
of these things, you know. Flexibility in the sense of getting them back
working, it\'s like roads. You know, working waterfront, keeping them
in, not making them 100 percent whole, but helping them, you know.

And Steve was a sage here. I don\'t like that give away directly to the
fisherman, except in that first, initial, finite way, because in the
long run, that doesn\'t help the fisheries. In the long run, which of
course fishermen don\'t like, you heard Harlon, is that replanting those
oysters, do debris removal so they can actually fish, things like
infrastructure, so they can get their product out. Those are the kind of
long-term things that you need to address.

Habitat, that\'s a big ticket item, but I mean, those are the kind of
things that you should have the policy to deal with, and we should
listen to everybody, try to incorporate everything we can. That\'s what
I would do.

MR. BILLY: Should we capture some of this on paper as sort of MAFAC,
some guidance to the Secretary?

MR. SIMPSON: I don\'t know how to use the \--

MR. BILLY: No, I understand, but we can look at it in the context of
some of our other experiences around the country.

Cathy.

MS. FOY: At some point in the future that may be a good idea, but I
personally would like to chew on this for a while first before I could
be content with anything put down on paper and feel like I have really
thought about it quite a bit. Every disaster is different.

I really thought that Eric was well spoken when he said that the
disaster of Hurricane Katrina is completely different than, you know,
the salmon stocks not coming back, and you shouldn\'t just throw money
at a problem that it\'s not going to help it.

Exxon-Valdez was a monstrous disaster, and because it was not a
government thing, there wasn\'t immediate government relief, and there
is not going to be any oil relief, but you know what? Fishermen are
resilient. They are some of the most vocal in their disappointment and
their angst, but if you just let them wallow in it for a while, they
restructure, and they then do what needs to be done. So I really think
we need to consider what type of disasters we\'re talking about and
whether or not it will help the long-term economic focus of the nation
to have a fishery in place.

MR. BILLY: Okay. Dave and then Eric.

MR. WALLACE: Well, I think that\'s a really good point. I\'ll just frame
it a little differently. What is a disaster? Let me suggest that I know
a lot of people who think that the collapse of the New England
groundfish is a disaster. Now, if you look at who collapsed the
groundfish fishery, the same people who now say it\'s a disaster and
want to be bailed out, and so I think if you\'re going to get into
public policy, you need to be very careful on the semantics, you know.
Senator Snow has already asked for monies to support her fishermen
because there\'s a disaster that fisheries has collapsed.

So I think that we need to be careful when we get into it. I do think
that we ought to draft a policy document that talks about major, major
catastrophes like these hurricanes that have hit the Gulf states and
hurricanes that have hit Florida, but I think that it needs to be a very
carefully drafted document.

I\'ll be happy to work on it with other people if we want to go down
that path to see if we can make a non-financial policy statement to
NMFS, you know, or to NOAA because I don\'t know where we\'re going to
go find money in the future. You know, I agree with Larry. It would be
great if we have portable plants on wheels and stored in trailers, a
hundred different stainless door tank trailers that were sterilized to
put potable water in, and you have a disaster and you fill them up with
water, you hook a tractor to them, and you pull them down to wherever
they need to go. That\'s all going good.

I don\'t see the federal government funding that at this time, you know,
and so now we need to have a broader policy statement on things that
they can look into.

Thank you.

MR. BILLY: Vince.

MR. O\'SHEA: Mr. Chairman, maybe one thing that I\'m sort of hearing is
a set of principles might be a way to start because there\'s a lot of
overarching themes, what everybody has said so far this morning, and I
think that might be a way to start and get this thing because you\'re
absolutely right. There\'s all kinds of different things, but there are,
I think, some central themes here that would lend themselves to
principles that MAFAC might consider giving advice, and that would be
helpful.

MR. BILLY: Randy.

MR. CATES: I have a question for Sam. In disaster relief if we develop a
plan, how much flexibility do you have or is this a pure political thing
where you\'re directed to spend it on fishermen or oysters or whatever?

I mean, what\'s the experience?

MR. RAUCH: Well, it\'s mixed experience. Our disaster declaration has
basically been meaningless. We\'ve spent a lot of time on it, and try to
make rational, sound decisions, and in the end Congress will choose not
to fund them, and then they will fund the ones where we say no.

So we really are influenced here by the language of the appropriations
bill. Even so, there\'s still a lot of flexibility with what we could
do, and the way I view it, is there has been no group that has come in
like MAFAC, clearly, and tried to figure out what a sound policy was
that the Secretary could then take to Congress and say, Look. In doing
these kinds of things you should look at these, sort of principles.

It has been very political, and I think ultimately it has not been
particularly helpful. We have spent a lot of money on things that have
done no good, and we have missed opportunities to spend money on things
that would. So I do think MAFAC\'s involvement if they did a broad set
of principles that we could use, that we could go to Congress
appropriators and we\'re working on a disaster rule that will help our
disaster guideline.

The sounder basis we have, I think, the more chance that we will do good
in the long run. There will always be political decisions, and frankly,
you know, Katrina we came out, we rushed out with this disaster
declaration before we knew the damage, and ultimately became \-- even if
we proved the truth, and we did the same thing with Gustav and Ike.

When Ike came, like two days later, we came up with the disaster \-- we
knew nothing about what it was and, frankly, it had some political
overtones to it.

So it would be better to have \-- the declaration aside, how we
conceptually should allocate any money to Congress, what kind of money
we should seek. That\'s seems something the MAFAC gives, and it would be
quite useful to help steer the political powers that be into a
constructive force.

MR. CATES: I think what Larry stated was really telling. There are
certain steps.

MR. BILLY: Well, should this be an assignment for one of our
subcommittees, providing time at our next meeting to investigate it
further as appropriate and then take a run at drafting principles and
guidance? Does that sound like a \-- I mean, I like the idea and I
introduced it, but I\'d like to learn more about not only Ag. perhaps,
but how this has been done in other federal and maybe state programs and
what we could draw from there, even of a policy nature, not the
specifics so much, but we could learn more and then do what Sam just
suggested.

Go ahead, Eric.

MR. SCHWAAB: Yes, I agree completely. I mean, I think Vince said it
exactly right. You know, we could articulate some of them, the
beginnings of which could be drawn from the conversation that we\'ve had
over the last 45 minutes or so. We could articulate a series of
principles and, Mr. Chairman, the idea that there would be a work group
tasked with going back through the notes from this meeting and starting
to frame that out I think could be for consideration, and actually would
be very useful.

And it sounds from what Sam has to say that it\'s ground that really
hasn\'t been addressed by anybody else very effectively.

On the other substantive point that I would make in addition to looking
at, you know, some lessons from other places is some lessons that we
might draw from past expenditure of disaster money. You know, what kind
of expenditures have yielded, you know, long term benefits and what kind
of expenditures have just basically been, you know, mindless throwing to
the wind?

You know, there might be some history in working with staff we could
inform some future principles.

MR. BILLY: Dorothy.

MS. LOWMAN: \-- we\'ll probably encompass a lot of this afternoon in the
same broader \--

MR. BILLY: Heather.

MS. McCARTY: I think also something that we haven\'t talked about very
much except maybe the Barrier Islands and the rebuilding habitat. I
think that we need to make sure that we have a biological component to
the list of principles. The idea of restoration, of habitat restoration
of coastline and so forth, I think that\'s a huge issue.

MR. BILLY: Okay.

MR. JONER: I just have a question very fast. All upon this? I don\'t
know if Sam is the one to answer it, but you know, there\'s all this
money, millions of dollars thrown at whatever disasters, such as the
hurricane, salmon failures. Is there any kind of followup to what was
done and what were the results?

We just see the money spent. Those programs have to be accountable to
the taxpayers, I would think as a taxpayer.

(Laughter.)

MR. JONER: So who\'s doing that right now? We may as well start. Let\'s
start, and we could maybe see if there has been any evaluation so that
we get an idea of what works and what doesn\'t because I can tell you
what hasn\'t worked in our area.

MR. BILLY: And that\'s one of the principles.

Chris.

MR. DORSETT: And to that point, our NMFS folks might know better, but
when we geared up after the hurricane to look at how to best utilize the
money for Gulf fisheries, there were some reports on buy back programs
especially, and what results you got out of those, and I think they were
commissioned opposed to single fisheries acts. I think there are some
reports that can give you some good results to look at.

MR. FISHER: It\'s kind of an interesting question if you think about it
because, I mean, you could go around the United States and figure out
what fishery we need to have a disaster in in order to fix them. So then
the question is, well, why don\'t we fix them to start with so we don\'t
have to have a disaster for Christ\'s sake. You know, this is
ridiculous.

MR. BILLY: I hear you.

MR. FISHER: I mean, if you don\'t think it\'s political, you\'re nuttier
than a fruitcake.

(Laughter.)

MR. BILLY: Erika.

MS. FELLER: Well, I tend to think that things get a lot more political
the closer you are to the actual event, but one theme that kind of came
up during this whole conversation is kind of the community stability or
community sustainability and resilience in advance, and I think it would
be great if this group could also look. Because I know that like FEMA,
you know, under the previous administration did a lot of work on
community resilience planning and really trying to sort of think about
how you think ahead, and it would be really interesting to look at how
those lessons can be brought or applied to, you know, fishing
communities.

Because, you know, in the presentation the thing that struck me was that
the disaster was the loss of a shore-based infrastructure. You know, the
marine resources are going to bounce back and really in a lot of cases
weren\'t that impacted, but it\'s that human loss. So it\'s really
community planning is, I think, at the heart of it.

MR. BILLY: Randy.

MR. CATES: What Steve brought up, I think, is real important. I think
one of the things for us to make an informed document is going to get
more information from NMFS on what has worked and what hasn\'t. It\'s
not going to be a very quick thing. I think it\'s going to take some
time to get that information.

So I would ask to start looking at the next meeting or even the
following meeting, start bringing us those sets of information.

MR. BILLY: Okay. Martin.

MR. FISHER: It seems to me there\'s two different things happening here.
There\'s a response to disaster, and then there\'s a policy that needs
to be made to shore up or do what Randy says. Let\'s fix it before it\'s
broken.

But no matter how many times we fix it before it\'s broken, if there\'s
a natural disaster, it\'s going to get broken again. So there\'s two
different policies here.

MR. FISHER: Yes, I mean, it\'s like if success walked through the door,
what does it look like. I mean that\'s kind of what we\'re talking about
here. I mean, there will be natural disasters based on hurricanes and
those sorts of things.

There are other disasters that are declared because of stock problems,
and those are different issues, and the results are different. And so
then you do have to figure out the short-term fix on some of these
things which I believe is important because you\'ve got to get money
into those communities, and then you\'ve got to figure out, well, as a
result of this can you fix it for the long run. And I think that\'s
another issue.

And you almost have to go through each fishery and figure out what is
the problem in that area. I mean, the best thing that happened probably
in the Gulf was the fact that we had a big ass hurricane that wiped out
half of a fishery and they never came back. I mean, you know, you
wouldn\'t have got there if it weren\'t for that.

You know, and the same on the West Coast. We\'ve got a lot of people
salmon fishing \-- that\'s a joke, they shouldn\'t be fishing. But are
you going to buy them out? No, you\'re not going to buy them out because
buy-backs don\'t work usually. So \--

MS. LOWMAN: And if you keep giving them disaster relief and they\'re
staying in just for the \--

MR. FISHER: Oh, absolutely. Now we\'ve created a whole a damned mess of
people that are sitting around waiting for the next cap, you know, and
what is this all about?

MR. BILLY: I\'m going to wrap this up.

(Laughter.)

MR. BILLY: So the take-away from this discussion is that we will spend
some additional time further developing our understanding and views on
this to the point of targeting the development of a set of principles
that we would recommend to the Secretary and NOAA Fisheries, obviously,
to guide the approach on natural disasters and I\'m assuming also
fishery disasters. I\'ll say it that way.

And part of preparation for doing that as we plan the next meeting,
we\'ll allocate a certain amount of the meeting time, either assign it
to a subcommittee or a new working group, but it will be open for
participation. We\'ll invite some people perhaps from Ag., perhaps from
other places to provide more information about best practices, what\'s
worked, what hasn\'t, that kind of thing, and then ultimately leading to
a specific set of recommendations to the department.

Does that sound like \-- okay. Yes, Eric.

MR. SCHWAAB: For clarification, you\'re suggesting that some kind of a
work group would not begin until after the next meeting?

MR. BILLY: Well, I was thinking at the next meeting, but we could start
before that.

MR. SCHWAAB: I mean, it would seem to me that we would benefit from at
least asking some small group from the minutes of this meeting and this
discussion to start laying out those principles in advance, and I don\'t
know to what degree that NOAA staff could help with, you know, some of
the other investigations that were, you know, identified.

And I would suggest, Mr. Chairman, that maybe we should form that work
group later this afternoon so that we can find a chairman among somebody
who leaves early.

(Laughter.)

MR. BILLY: I was just thinking those that speak \--

MR. SCHWAAB: That\'s why I added that last point.

MR. BILLY: Yes, I\'m sure it is. I think that\'s a great idea.

Vince.

MR. O\'SHEA: Yes, I think my experience with this group is it has always
been a lot more productive when we had some paper in front of us, to
begin with, and I think to take this at the next meeting and have
somebody have some words in front of the entire group is going to use
your time a lot more productively. So I think that\'s going in the right
direction.

All it is is a strawman to frame the issues for the discussion.

MR. CATES: Sounds like the Vice Chair.

MR. BILLY: Eric?

(Laughter.)

MR. SCHWAAB: I would be willing to help in some fashion.

MR. BILLY: Thank you.

MR. SCHWAAB: Sam and Mark have to help me out and not get me cross-wise
with Senator Mikulski in this process.

MR. RAUCH: In a long-term view, I think you\'ll be okay.

MR. BILLY: So, Chris, you\'re willing to \-- I\'m sorry \-- [Eric,
you\'re willing to lead this group.]{.mark} Are there other volunteers?
Okay. Dave, Harlon. Okay. Bill, and then the three Commissioners. Yes.

DR. HOLLIDAY: Put your hands back up. Sorry.

MR. BILLY: And the three Commissioners?

MR. FISHER: Oh, yes. We\'ll be happy to.

MR. BILLY: In your interest. Okay.

(Laughter.)

MR. BILLY: That\'s fine. Bill.

MR. DEWEY: I just wanted to make the pitch that this same working group
also try to address what\'s being talked about this afternoon.

MR. BILLY: I\'m assuming that. Dorothy.

MS. LOWMAN: One presentation we have heard today that I\'d like not to
fall through the cracks is a little bit different, sort of on the
socioeconomic data that\'s needed maybe to help create some indicators
or some of the things that might help in either disaster or \-- you
know, I\'m assuming what\'s going to happen with a change in regulation,
and I don\'t know if it\'s useful for MAFAC to go on record saying that,
you know, the \$6 million that hasn\'t ever been funded really should be
a priority.

But also I also think, you know, this has always been \-- I mean, this
has not changed, you know, the fact that the \$6 million never gets
there, for years, but I do think we have \-- Heather and I were talking
\-- we do have some opportunities as we move toward LAPPs to get more
information like this, and I can\'t remember what the language is in the
Magnuson Act, but I really think there could be a role in MAFAC saying
that, you know, really there\'s resistance from the industry to provide
some of the additional information that would be useful. But, [if
you\'re also getting the right to use a public resource in the way that
you\'re going to have some asset value also, I think you have an
obligation to provide some of this information that will help and then
provide, you know, as we have more that we can maybe have some more
predictiveness of what another LAPP might do.]{.mark}

So I would like to see us go on record saying that, you know, in the
situations that there be an active economic information requirement for
LAPPs as part of that.

MR. BILLY: Would that be part of the working principles?

MS. LOWMAN: I mean, it could be, you know, as well.

MS. McCARTY: It kind of goes beyond just the disaster. It speaks as well
to Randy\'s other point, which was, let\'s see if we can understand what
needs to be done before we get a disaster, and the only way we\'re going
to understand it is to have the data.

We were talking about the programs that are being put in place,
including the cod program. The cod program is the only one I could think
of right now that has a requirement for data collection right in the
program. It\'s a requirement that\'s being resisted currently for
whatever reason. Maybe because it\'s not designed right, but there may
need to be a funding aspect to that as well, and I can\'t remember when
we were talking, Jim and I, about whether the three percent or whatever
percentage it is for cost recovery that\'s built into some of these
programs, whether that covers that data collection.

Maybe some of these folks know. But, obviously there is a funding issue
as well as a direction issue, but I agree with Dorothy.

MR. BILLY: Could you over lunch have the language?

All right. I\'d like to shift now and have the discussion regarding the
next meeting. We\'ve talked about targeting it for Washington, D.C.,
potentially moving it up from our typical schedule of June or July to
the spring, perhaps earlier than that if it\'s appropriate in terms of
the transition and other events or developments. It\'s not clear when
we\'ll have an Under Secretary or Administrator or a new head of
Fisheries. So those are all factors to be considered.

Mark.

DR. HOLLIDAY: Let me just add my two cents to this. It would be good to
try to plan out for the 2009 meetings, both of them.

MR. BILLY: Okay.

DR. HOLLIDAY: And so if that\'s not too insurmountable, I think that
would give us enough time to think through, and if we\'re concerned
about East Coast/West Coast splits and that sort of thing, we can
accommodate that.

Just one comment about moving up earlier in Washington, D.C. as the
location. I think that has been the discussion since our last meeting,
but in talking with a number of people, we started thinking about, well,
if we get together as MAFAC and we\'re going to have 24 people in a room
talking around a table, does that really provide us any competitive
advantage in helping to brief people. We\'re not going to go all en
masse necessarily to the Secretary\'s office to brief people. If we have
our strategy about who we want to represent MAFAC and we have our game
plan out there with respect to meeting with the appropriate Hill staff
and meeting with the Commerce Secretary or representatives, I don\'t
think it\'s necessarily required that the entire committee meet and will
convene for our three days. There\'s a convenience factor after a subset
want to meet with their representatives on the Hill, but it\'s not a
requirement, I think, if we do our planning and have our representation
out.

It\'s an option for you to think about, but I think we\'ve heard Jim
yesterday say about being nimble and be prepared. All of this could
happen within the next five weeks, these windows of opportunity, and
it\'s hard to plan a target, a date, if we don\'t know exactly when
these opportunities will arrive, and we could be a little bit on the
short end if we defer even out to March and April.

MR. BILLY: So let\'s confine it right now to the next meeting, and then
we\'ll talk about the subsequent meeting.

Heather.

MS. McCARTY: I think you\'re right, Mark, about meeting with the
transition team and that sort of thing needs to be done almost
immediately, I think, and then after that, if there\'s an opportunity to
bring people to D.C. who may not otherwise have the resources to come on
their own.

I mean, I hate to say that, but it\'s a good opportunity for people who
may not have those kind of resources or work for a big organization or
come there anyway. And so during that time, people could go to their own
representatives on the Hill and the staff for those folks and use that
as an opportunity and then be able to discuss what their reactions were
and how people responded to the messages and sort of maybe refined
things and worked together in that way rather than 24 people going to
every office.

DR. HOLLIDAY: Sure.

MS. McCARTY: It\'s a good opportunity, I think, still even though it\'s
too late for the transition element.

DR. HOLLIDAY: Right, and I agree with that 100 percent. I think that\'s
always a positive sort of side benefit of being in town that you can
take advantage of those opportunities to make those calls.

But someone made the point that, you know, when the Vice Admiral was
appointed it was almost a year later, and so if we\'re targeting to talk
to new administration people, there will be a Secretary of Commerce, but
there\'s no guarantee at what point in time. We\'ll have a NOAA
Administration, but there\'s a new NMFS Administrator. So it\'s hard to
lock yourself into having a meeting to coincide with that when we don\'t
know exactly when that will play out.

But whenever you have that meeting, whether it\'s in March or June, I
mean, congressional representatives will be in place obviously, and you
can schedule those things whenever that next meeting is proposed.

MR. BILLY: Other comments?

MS. LOWMAN: Well, just a followup, because, again, on a congressional
thing I do think we do know we\'re losing some of the or are potentially
losing some of the advocates for fisheries, and we need to develop some
new ones. So at some point, whenever it is, I think that\'s going to be
important.

MR. BILLY: Okay. Randy.

MR. CATES: If we have a meeting in D.C., I would suggest just allowing
an extra day either prior, preferably prior to our MAFAC meeting to
travel, and that way whatever we learn we can share at the meeting.

I think the big question is going to be in strategy, whether we should
have the next meeting in D.C. or following D.C., and that\'s really what
we ought to figure out. I agree it might be too soon.

PARTICIPANT: Too late for some, too soon for others.

MR. BILLY: Other thoughts? Anyone? Martin.

MR. FISHER: If the Committee decides not to go to D.C., I would like to
recommend Monterey.

MR. BILLY: Okay.

MR. CATES: Anywhere on the West Coast.

MR. BILLY: All right.

DR. HOLLIDAY: Just to be fair, the last four meetings have been East
Coast centric. I mean, the Gulf is not the East Coast, but New York,
D.C. and St. Pete. It has been a haul for people coming from West to
East and so \--

MR. SIMPSON: I kind of liked it.

DR. HOLLIDAY: I can see why.

MR. JONER: I hope this wasn\'t inconvenient for you.

(Laughter.)

MR. FISHER: That\'s another reason why Monterey makes sense, but
somebody who is more familiar with Monterey, like Topher, would be a
good person to speak to the really good reasons to go there.

MR. HOLMES: There is a national marine sanctuary there. If you guys want
to continue your discussions about protected area discussions. There is
also one of \-- the National Marine Fisheries Service has one of their
labs in Pacific Grove. There\'s a National Estuary Research Rreserve in
the area. It\'s a historical fishing port. It\'s an active fishing port,
and it can be quite gorgeous at times.

MR. BILLY: Having listened to everyone, and monitoring the time, \--

DR. HOLLIDAY: Topher also has the regional council schedule for the rest
of the year. You can put them up there in terms of windows.

MR. BILLY: One of the thoughts that occurs to me is we can be flexible,
I assume with the scheduling of both of the meetings, such that if
there\'s some advantage to not think only about the second meeting next
year being towards the end of the year, but if there was some advantage
to move it up a little bit we could do that.

Our fiscal year comes into play. So I don\'t know financially if that
makes a difference or not.

MR. CATES: Sam, can I get your opinion on D.C. and planning? What do you
think?

MR. RAUCH: I think if you go to D.C. in March and April you might could
talk to the Secretary\'s representatives if they\'re willing, because
there will be a Secretary \-- a spike in past years. There really won\'t
be many people to talk to at the NOAA level.

MR. CATES: So should it be the following?

MR. RAUCH: You know, I agree with what Mark said. It\'s unlikely that
this entire group is going to be talking to them, and it\'s potentially
likely that a new NOAA administrator will come to this group when it\'s
in \-- if it\'s in D.C. I think that\'s a legitimate possibility, and
that would be a goal. To meet that goal you might want to have it a
little bit later to make sure we get one. I don\'t think the Secretary
is going to come to you, but maybe, but just realistically I think it\'s
more likely that some people will go to the Secretary.

MR. BILLY: So talking about June in D.C. and then late in the year on
the West Coast somewhere? I see several heads nodding. Heather?

MS. McCARTY: I was thinking spring in Monterey and October-November in
D.C. I don\'t know. Just to make sure, if you really do want to target
the new NOAA people, I think you need to leave it maybe a little bit
longer judging on history. I don\'t know, longer than June.

MR. CATES: What do you think, Sam?

MR. RAUCH: That would make sense. I mean, you could always, as I said,
if you\'re \-- I think it\'s important that you guys figure out the
location and you can be flexible on the dates to get a NOAA
administration. You could always try to move it up if it works.

MR. CATES: I second that thought. I think it\'s wiser to go that way.
We\'re going to miss our opportunity if we go to D.C. too soon, at least
with NOAA.

DR. HOLLIDAY: I think we talked a little bit about it yesterday. In
terms of supporting travel of one or two individuals to represent MAFAC
from out of the Washington area to address transition people, or other
people in the administration is feasible, but not a third meeting of 24
people coming to D.C..

PARTICIPANTS: Right.

MR. BILLY: So April-May in Monterey and late fall, Washington.

MR. CATES: Second.

MR. BILLY: Well, we don\'t have all \--

DR. HOLLIDAY: To go back to August \-- so we look at the April-May
thing, make that bigger if you could?

MS. McCARTY: Yes, do you have the North Pacific in there? It\'s at the
very end of March and goes into the first week of April.

DR. HOLLIDAY: Yes, March 30th.

MR. BILLY: So that May period between the 7th and the 18th?

MS. McCARTY: North Pacific Council starts March 30th and goes through
the first week of April, and then the next one is June.

MR. SIMPSON: We can do it the week before the CCC meeting and some of us
can extend if we want to stay the weekend and go on to the next.

MR. BILLY: And that\'s the 18th to the 22nd?

MR. SIMPSON: The week before.

MR. BILLY: That\'s in Boston.

PARTICIPANT: That\'s not near Monterey.

(Laughter.)

MR. SIMPSON: Oh, I\'m sorry. We could have all of our meetings in Wade,
Mississippi for all I\'m concerned.

MR. BILLY: That time period, any major conflicts?

MR. DEWEY: What\'s the date range you\'re looking at?

MR. BILLY: Well, between the 7th and the 18th of May. That\'s Monterey.
Yes, go ahead.

MR. O\'SHEA: I don\'t have a calendar, but I\'m thinking the 7th is a
Thursday.

MR. BILLY: Okay. So it would be the following week?

MR. O\'SHEA: Yes, that would be fine. I mean it works for me.

MR. BILLY: Okay.

MR. DEWEY: Later that following week would be better for me.

PARTICIPANT: The week of the 17th?

MR. BILLY: No, it\'s the week of the 12th.

DR. HOLLIDAY: May 2009?

MR. BILLY: Yes.

DR. HOLLIDAY: Sunday is the 10th.

PARTICIPANT: So May 11th is Monday.

MS. McCARTY: We might put out the dates, and then \--

MR. BILLY: We will. We will.

DR. HOLLIDAY: We\'re trying to narrow it down to at least a month.

MR. BILLY: Okay. All right. So we\'ve got an approximate time, and
we\'ll follow up and suggest the specific time and location. We know
Monterey, but I need more detailed information. Okay?

All right. The following meeting, Washington, D.C. Can we get the fall
schedule?

MS. McCARTY: And you need to put the North Pacific in there, too.

DR. HOLLIDAY: That\'s October 1st; is that what that is?

MS. McCARTY: The first week of October. I don\'t know \--

DR. HOLLIDAY: I\'m looking on the Website.

MS. McCARTY: Yes, okay.

DR. HOLLIDAY: One October, Anchorage open.

PARTICIPANT: The second week of November.

MR. BILLY: The second week of November.

DR. HOLLIDAY: Council starts on Saturday.

MR. BILLY: So the second week of November? So the latter part of that
week? The second week of November going once? Yes, Vince.

MR. O\'SHEA: I\'m pretty sure that week will have Veterans Day in it
again.

MR. BILLY: Right.

PARTICIPANT: That\'s, yes, the 11th. Wednesday is Veterans Day.

MR. BILLY: That\'s a problem. Yes, Vince.

MR. O\'SHEA: I wasn\'t raising that as a show stopper. I just wanted to
make people \-- I wasn\'t objecting to that. I was just making people
aware of it.

MR. BILLY: Martin.

MR. FISHER: I\'m just concerned that Heather and Dorothy both had a
really good point that we should be able to utilize that time to speak
with our state representatives. If we bump it up to the week before
Thanksgiving, are they going to be there?

MR. BILLY: They\'ll be there the week we\'re talking about, I think.

MR. FISHER: They will be?

MR. BILLY: Yes.

MS. McCARTY: They won\'t be there right up against Thanksgiving, no.

MR. BILLY: They won\'t be there Thanksgiving week.

End of September?

(Simultaneous speakers.)

MR. WALLACE: You have the week between October 22nd and October 31st is
open.

MS. McCARTY: So the very end of September is what you\'re suggesting,
Sam?

DR. HOLLIDAY: Yes, Monday is the 28th of September. So the 29th and
30th.

MR. BILLY: Twenty-ninth, 30th and 1st.

MS. McCARTY: And when did you say the North Pacific Council was?

DR. HOLLIDAY: October 1st.

MR. BILLY: All right. I\'m going to shoot for that week.

MS. McCARTY: The earlier the better because it sounds like it\'s going
to butt right up against \--

MR. BILLY: All right.

All right. Let\'s take an hour for lunch.

(Whereupon, the above-entitled matter went off the record at 12:08 p.m.
and resumed at 1:18 p.m.)

[AFTERNOON SESSION]{.underline}

(1:18 p.m.)

MR. BILLY: Okay. I know there are a lot of people who are very
interested in meeting their flight schedules, and I\'m going to do my
best to move things along.

In that regard, we\'re going to shift the sequence a little bit this
afternoon and invite Ralph Cantral to speak first. He\'s the senior
advisory for NOS Office of Ocean and Coastal Resource Management. He\'s
going to share with us one perspective in terms of the policies
influencing U.S. Fisheries\' infrastructure.

So Ralph.

MR. CANTRAL: Yes. Thanks for inviting me today.

I\'ve been in the ocean and coastal resource management business for a
long time, I guess, and I started out in local government working on
local planning and zoning and all of those types of things, and then
went to work for state government, worked in North Carolina for many
years, and I was the Director of the Florida Coastal Management Program
.

So I got to NOAA just a few years ago, but hopefully we\'re working on
some things that you\'ll find interesting and maybe you can figure out
some ways to help us.

So with that, let me just say that about two and a half years ago or
almost three, I guess, by now, Jack Dunnigan became head of the National
Ocean Service, and he looked around and said, Gee, an awful lot of the
things that happened in the Ocean Service are related to coastal zone
management, and the Coastal Zone Management Act, in particular. And so
I\'m going to just very quickly tell you about how the Coastal Zone
Management Act works, and then talk a little bit about how it relates to
waterfront uses, and then conclude with some comments about where we\'re
headed with and conclude with some comments about where we\'re headed
with the new vision for coastal management that Jack has really marched
us down the path towards.

So the Coastal Zone Management Act dates from 1972. The only state that
doesn\'t participate at this point is Illinois. So we have all of the
other coastal states and territories. We have estuarine research
reserves, which are locally based programs to actually try out things on
the ground and also do some monitoring that\'s helping coastal managers
understand their areas better.

We have two other programs or three actually, a coastal estuarine land
conservation program. In its biggest year it got about \$60 million for
land acquisition for habitat and other types of areas.

We have a non-point pollution control program jointly with EPA, and we
have something called the National Marine Protected Area Center, which
I\'m sure you\'d know about as well.

The objectives of the CZMA, just very quickly, there was an overall
theme to preserve, protect, and develop and, where possible restore or
enhance the resources of the coastal zone. It was also to encourage and
assist states. Our management is done through state programs, and
looking at programs to achieve the wise use of the land and water
resources of the coastal zone.

And then the third one is really to look at the public and make sure the
public is involved and guiding us in our activities.

It\'s a comprehensive approach that looks at resource protection and
looks a water quality, public access, coastal hazards, and then two that
I think you talked about earlier today, the whole idea of community
development and coastal dependent uses.

Working waterfronts, we have something called special area management
planning specifically written into the Coastal Zone Act, which enables
us to work with a variety of federal agencies and state and local
governments to focus on some key areas where we can focus our management
activities.

Two of the programs I just want to touch on briefly. When I was in
Florida we started something called Waterfronts Florida. It\'s an effort
to work with a small number of communities over a two-year period, to
focus on how they can better integrate environmental protection hazard
mitigation, public access and economic revitalization into their
waterfronts. That started in the late \'90s, and by now more than 20
communities have participated in that program.

New York\'s Waterfronts Program has been going on for an even longer
period of time. Sixty-nine communities from New York State from Lake
Ontario to Long Island Sound, the Hudson River, 69 communities have
waterfront plans.

And then we have a couple of specialized areas that we\'re working on.
Something called Portfields, it was an effort to address brownfields in
port communities. EPA had an existing brownfields program. They joined
with us and the Corps of Engineers and the Economic Development
Administration to really look at several pilot communities of how we
might focus on the waterfront in terms of brownfields, and the three
pilot communities were Bellingham, New Bedford, and Tampa.

We ran out of money, and so there are no more pilot projects, but we
think we learned a lot. We learned that it really takes a concerted
effort by all three levels of government to actually achieve anything in
terms of trying to look at the ways that the port community can, not
going into greenfields, as they say, but reuse the areas in the
community that were already devoted to some type of other use, whether
existing ports or industrial areas.

And then Representative Allen from Maine who will no longer be in the
House this year because he lost a Senate rate, but in 2007 he introduced
the Keep Our Waterfronts Working Act. It basically established a grant
program for insuring access for commercial and recreational fishermen.
It was focused, once again on the states, and the states developing
plans, and that\'s why it was tied directly to the Coastal Zone
Management Act.

One of the things that we looked at with that was trying to really
expand that beyond just recreational and commercial fishing to look at
other public access uses in the area. We think that it was a good bill.
We think that in discussions just a couple of weeks ago with the House
Resources Committee the staff, anyway, maybe not the members, but the
staff is very interested in reintroducing this in the new legislative
session in January.

And then we have Smart Growth, which a project between the Ocean
Service, Sea Grant, EPA, and the City Managers Association \--
International City Managers Association, to really look at what are some
principles for redevelopment in coastal areas and waterfronts. And just
some of these points here focusing on mixed uses, including water
dependent uses, protecting waterfront access, preserving a sense of
place based on the waterfront\'s heritage, and providing land and
water-based transportation alternatives.

So those are the types of things that the several agencies and
organization are looking at how we can incorporate those principles into
the rest of our programs.

Okay. Then I mentioned that when Jack Dunnigan became the AA, the
Assistant Administrator, of the Ocean Service, he sent us down a path
with the Coastal States Organization to go around the country and learn
more about what had been successful over the 35 years of coastal zone
management and where we could improve the processes.

There was a white paper. There were interviews. There were regional
stakeholder meetings. All in all, more than 500 people participated, and
we also met with many federal agencies and non-governmental
organizations.

The major findings were that the areas where people thought we needed to
focus increased attention were controlling development, a very difficult
thing for either the federal or state governments to do since most land
use in the United States is dealt with by local government. Also,
looking at improving water quality, protecting habitat and making
coastal communities more resilient, and I\'ll come back to resilient in
a minute.

The emerging issue is climate change. I think it was on everybody\'s
mind, and looking at how do we adapt to climate change, but in some of
our recent activities at the Ocean Service, we\'ve also started looking
at mitigation and how we can work with other federal agencies to reduce
carbon emissions in the coastal area.

Major needs for legislation identified through visioning process. First
of all, they feel that the state programs should be performance based.
At this point they\'re really programmatic. It\'s if you have a program
established that has all of the right parts in it you get funding, but
there\'s really no requirement for performance, and funding is tied to a
formula that Congress came up with many years ago and really doesn\'t
focus on where people have the need or where they could actually achieve
results.

Prioritized and strategic, accountable and coordinated, really looking
at, as I mentioned if land use is one of the big issues in the coastal
zone, how do we really get all three levels of government to work
together?

We\'ve come up with recommending two goals for the Coastal Zone
Management Act. I didn\'t have a slide that said this, but this is the
first slide in really what NOAA\'s approach is going to be to Coastal
Zone Management Act reauthorization, switching from the visioning to
what our response will hopefully be, and we\'re currently developing an
administration bill for introduction soon after the first of the year.

Anyway, the first one, the first goal is sustaining health ecosystems,
looking at doing that in a number of ways, including land acquisition,
and then avoiding minimizing or mitigating impacts on resources from
development, pollution, nutrient loading and climate change, really a
broad wealth of causes of problems as well as potential solutions for
maintaining healthy ecosystems.

I think since Hurricane Katrina everybody has been trying to figure out
what is a way that we can actually contribute to this, and the goal of
the Coastal Zone Management Act as we propose to amend it would be to
minimize impacts from hazards and foster adaptation to climate change,
direct developments to more suitable lands, reduced conflicts among
coastal and ocean uses, protect and enhance working waterfronts and
water dependent uses, improve the siting of energy and aquaculture, and
preserve and improve public access.

We feel that there\'s a real need to look up the watershed. Many of the
coastal states have very narrow coastal zones in their states. Other
states, Florida, for instance, the entire state is the coastal zone. So
we need to look upstream, look at new techniques and new partners,
including non-coastal states.

One of the things that we\'ve talked about is how do we really look at
the Mississippi River basin if we\'re dealing with hypoxia in the Gulf
of Mexico and things like that. Is there a way for the Coastal Zone Act
to actually provide funding or assistance to inland states to deal with
these issues.

Also, the idea of working with property owners, environmental groups,
businesses and industries and farmers in addition to just dealing with
local governments and state governments.

And then the idea of looking out to sea with especially offshore energy
issues these days, many of the states are trying to figure out how they
can respond and so we hope to, through the Coastal Zone Management Act
encourage them to do better planning to look at their interests in the
extra territorial areas of the United States out in the sea.

The idea of conflict resolution is central to this. When I was in
Florida we did some GIS work that discovered that there were fishing,
there were military, there were oil leases, there were all of these
things in exactly the same area, and different groups looking at their
individual interests were placing high priorities on the same areas. So
how do we resolve some of those conflicts through better planning?

Achieving local participation as I mentioned earlier, most land use
decisions are made there at the local level, and local governments
better reflect the needs of their citizens for specialized efforts, such
as redeveloping waterfronts. You know, not every community may be
interested in expending a lot of energy on improving their waterfronts,
but those that are ought to get help to do it so that we can really make
improvements where the communities are eager to get that done.

And one of the key things that we\'ve really learned is that especially
dealing with local governments, but also some states, there really
isn\'t a lot of technical expertise, a lot of background in trying to
manage their resources better, and staying up to date on the latest in
science and technology, and so what we hope to do and one of the central
pieces of our legislative package would be to develop an integrated
national program that would range all the way from research to helping
local governments with capacity building and looking at synthesizing and
translating information from the scientific community into words that
common people can understand so that they can actually make better
decisions both as individuals and as communities.

The next steps, we\'ve got draft legislation. The Coastal States
Organization has just developed their own bill that\'s been shared
around on Capitol Hill, and as I said earlier, we hope to have a bill
soon after the first of the year, and so that\'s my contact information
and that\'s kind of the end of my prepared remarks, but I\'d be glad to
answer any questions that you have as well.

MR. BILLY: Very good. Thank you.

So the act is up for reauthorization, and this is in anticipation of
that?

MR. CANTRAL: Yes, the act actually, the authorization expired in 1999 or
something like that. The last time it was reauthorized was 1996. The
last major comprehensive reauthorization of the act was 1990. So kind of
like the Clean Water Act hasn\'t been reauthorized since the \'70s,
we\'re at about that same stage with Coastal Zone Management.

MR. BILLY: Eric.

MR. SCHWAAB: Thanks.

I agree with your comments about local governments, but I didn\'t hear
at all anything about coordination across the other federal resource
agencies, and I just wondered to what degree you all are now or envision
working with, you know, and when you talk about the watershed with like
USDA or the EPA to deal with some of these coordination opportunities at
the federal level.

MR. CANTRAL: Thanks, because you know, putting this together I didn\'t
put those slides in, and that\'s a really good question. What we\'ve
been trying to do is work with a number of federal agencies ranging from
EPA whom we have a built in partnership with on non-point source
pollution, but also sitting down with USDA, working with the Corps of
Engineers, working with the Defense Department on a lot of dealing with
their installations, and USDA is an excellent example, and I mentioned
the watershed.

The way that they fund their projects, I was really surprised to learn
this and maybe I\'m naive, but the way they fund their projects is
really a first farmer in the door type of process, and so if a farmer
who is not even living near a stream that has a problem wants to do some
improvements on their land, if they\'re the first one in the door, they
get funding for improvements before farmers who live in an area where
there\'s, you know, high interest and a big problem.

And so we\'ve been working with them to talk about how can NOAA through
some of our water quality and monitoring efforts help to identify areas
where there should be some key funding. Governor O\'Malley in Maryland
has really stepped forward in the Chesapeake Bay area to say the State
Department of Agriculture will start to do things based on priority
watersheds and needs, but we\'ve got to get that in other areas where
there are problems. We need to get that same type of thinking going on.

So we\'re working with USDA. They just have a new farm bill which gives
us some opportunities, but it also sets some other old practices more in
concrete.

So hopefully there are ways that we can do that, but one of my
responsibilities is getting out to other agencies and trying to find
better ways to do things.

MR. SCHWAAB: So I can just push for a little bit on that?

MR. CANTRAL: Sure.

MR. SCHWAAB: And ask if you envision any of that being codified or
proposed for codification in the reauthorization of Coastal Zone Act,
and I appreciate the commercial for my boss, but I work for Governor
O\'Malley.

MR. CANTRAL: Do you really? That\'s hilarious. Gee, I wish everybody had
a little name tag that says what you do.

(Laughter.)

MR. SCHWAAB: But, you know, it seems to me that USDA, in particular, is
not going to change unless somebody pushes. So you know.

MR. CANTRAL: What we are saying in our proposed legislation is something
that was actually brought it up at one of our regional stakeholder
meetings. It was actually a person from the Corps of Engineers who was
about to retire. So he said, \"Well, I\'m going to say this even though
my bosses may not like the fact that I\'m saying it.\"

And that is that he wants to put something in our act that places right
at the very start of our act that it is the duty of all federal agencies
to support the mission of this act. We\'re not saying that it\'s going
to be a huge consultation process like Endangered Species Act or
something like that, but the same concept.

And so we can at least have some leverage, we hope, to sit down with
agencies and work with them on these issues.

MR. BILLY: Okay. Randy.

MR. CATES: I had a quick question. Offshore energy, what\'s out there
now generally speaking? Are there established projects?

MR. CANTRAL: Well, there\'s a number of applications in the mill ranging
from on the East Coast it\'s primarily wind energy. We\'ve seen
applications in Delaware \-- I\'m trying to think \-- Massachusetts, a
number of states. There are active proposals that the states are trying
to respond to. It has been such a big deal in Massachusetts that
they\'ve just passed an Ocean Resources Act in the state and are
developing a plan for ocean resources.

Oregon, we\'ve seen applications for tidal energy, which would involve
placing machines in the water offshore to deal with both tide and wave.
There\'s two different types of applications, one for tide and one for
wave.

MR. CATES: So basically planning stages right now.

MR. CANTRAL: Yes, trying to figure out how we even react to it.

One of the other things that\'s interesting about the Coastal Zone Act
is that on a lot of these energy issues the responsibility is placed
with the Minerals Management Service because they already have leasing
and regulatory programs in place on the outer continental shelf, but one
of the things that remains with NOAA is the idea of OTE, ocean thermal
energy, where we actually have had interest. Lockheed Martin Corporation
is interested in developing a project off of Hawaii dealing with taking
warm water from way down in and letting it come up and spin turbines.

So, you know, there\'s all sorts of things out there that aren\'t really
to the stage of development, but they\'re to the stage of planning and
permit applications.

MR. RAFTICAN: Desal the same?

MR. CANTRAL: Desal is \-- pretty much all of those are in state waters,
and so we\'ve already seen a lot of permitting and activities by the
various states, but you know, they haven\'t been well planned in a lot
of instances. I know when I was in Florida there were a lot of issues
related to brine discharge and fisheries, nursery areas, things like
that.

So you know, we\'re trying to get a better handle on planning for that.

MR. BILLY: Okay. Erika.

MS. FELLER: On the vision stuff, I\'m curious if any suggestions kind of
came up in that, you know, as part of the picture for re-envisioning
coastal zones that you find that we can implement the existing
ordinances.

MR. CANTRAL: Yes, a lot of things. We think that a lot of the planning
activities can actually be done today, but one of the things that we
found, and this has been found by independent studies as well as our
vision process, is that Coastal Zone Management has been drastically
under funded over the years for the broad goals of the act, and that\'s
especially true of non-point source pollution, that some years the
budget has given zero for non-point source pollution.

And so you know, in looking at any number of types of planning or even
regulatory programs. We think that they can be done today, but the
states really don\'t have the ability without some sort of matching
money to develop new programs to do that, and so we feel that, you know,
specific authorities helps, and additional funding would help.

And, yes, we realize that there is limited money out there in the world
today, but something to talk about performance based doesn\'t really
require new money. Talking about really focusing on national priorities
instead of the states all focusing on different things, and so how can
we really accomplish some things with better focus of money as well as
if there were additional funding.

MS. FELLER: A follow-up question. So are there friends in OCRM to start
trying to comment on these measures kind of at the same time you\'re
working on legislation?

MR. CANTRAL: Yes. Actually working with OMB they\'ve asked us several
times now to fine tune our approach to what can we do today in terms of
prioritizing, and even though Congress keeps giving us funding and says,
\"Deal with a formula,\" we\'re trying to figure out are there ways that
we can bend that a bit to really get some national priorities in the
focus of all of the programs as opposed to just giving a lump sum to a
state and saying, \"Go off and do your state cards.\"

MR. BILLY: Bill.

MR. DEWEY: I\'m Bill Dewey, and I work for Taylor Shellfish in
Washington State.

MR. CANTRAL: Right.

MR. DEWEY: And we had this before as actually CZMA reauthorization of
course back in December. At the MAFAC meeting we looked at the top ten
concepts papers that came from the listening sessions, and actually
asked Bill Hogarth to weigh in on our behalf on concept number six,
which was trying to get states to develop plans that would show how
they\'re going to accomplish some of the national priorities.

And we asked specifically that aquaculture be called out as one of those
priorities. It\'s an area I\'m keenly interested in. We\'re challenged
in Washington State as we try to grow our industry with use conflicts.
So I was pleased to see in your earlier slide that you had something
specific to that. You went by pretty quickly. I\'m just wondering if you
could elaborate at all on that.

MR. CANTRAL: Well, in essence, what we\'ve done is raise the level of
aquaculture in the plan so that it\'s an element that would have to be
dealt with by all of the states in terms of the plan.

And you know, placing it in the same area as energy facilities which are
already in the act, it\'s a requirement that the states have to address.

And something that I didn\'t mention is that we\'re really looking at
each of the \-- we currently have programs which some of them date back
to the mid-\'70s and actually Washington State is one of the oldest, but
there isn\'t any requirement that the states ever look at, well, what
are the tools that the state has to really address coastal issues and to
update those programs.

And so what we\'re hoping to institute is the idea of each state has to
do an assessment; that NOAA would actually lead, do an assessment of
coastal resources in all of the states, and then each of the states
would have to develop a plan based on those assessments to talk about
what their priorities are and have some measurable objectives for those
plans.

And then each of those plans, each assessment and each plan, would be
required to be updated every five years, and so I think it will make it
a much more active process, especially for the public to get involved in
the states where there will at least once every five years be a
concerted effort to reach out and figure out what the issues are or what
the states should be focusing on.

And in looking at not only aquaculture, but a number of other issues,
such as climate change, you know, in 1972 when the act was originally
approved, those really weren\'t even thought about, and so how do we
keep it moving, keep it up to date is where we\'re headed.

MR. DEWEY: Just a quick follow up. I mean, I\'m excited to hear that
aquaculture has been elevated up. Thank you for that, and also I\'m just
curious if it\'s possible to get MAFAC a copy of the CSO draft bill
you\'re circulating.

MR. CANTRAL: [Yes, I can get you the CSO bill. I can\'t get you
ours.]{.mark}

MR. DEWEY: I understand that, but that would be good. Thank you.

MR. CANTRAL: Okay.

MR. BILLY: Okay. Thank you.

MR. CANTRAL: Sure. Glad to.

MR. BILLY: Okay. Let\'s move on. Gary, industry assistance.

MR. REISNER: Okay. I\'m going to try to go through this quickly. You\'ll
have the slides as a resource. So I won\'t spend that much time on
these. I\'m going to cover essentially four programs that we currently
have available: disaster assistance, capacity reduction programs,
fishery finance loan program that we have, and the capital construction
fund program, which is sort of a different kind of animal than the other
ones.

So disaster assistance, we do disaster assistance under two different
laws. One is the Magnuson-Stevens Act, Section 312(a). That\'s been in
placed since \'96. It was revised in \-- the latest revisions, they
actually added the Section 315 there.

They also added language that expanded the eligibility for disaster
determinations to include, in addition to natural and determined manmade
causes. It also includes regulatory restrictions including those imposed
as a result of judicial action, imposed to protect human health of the
marine environment.

And we\'re struggling with that a little bit in trying to develop some
guidelines around that. I\'ll talk a little bit more about that in a
second.

The other authorization we have is in the Interjurisdictional Fisheries
Act. This act actually is older than the other one. I think the first
language was in \'92, and then we got some funding in \'94, and it
authorizes a commercial fishery failure or serious disruption affecting
future production due to a fishery resource disaster.

So quickly, if you look at Magnuson-Stevens, it requires a commercial
fishery failure due to a fishery resource disaster. So you sort of have
to have both of them. You have to have a fishery resource disaster and
then a commercial fishery failure associated with that.

In Interjurisdictional Fisheries Act, it\'s a commercial fishery failure
or a serious disruption due to a fishery resource disaster. So you can
actually have a disaster determination just based on a fishery resource
disaster, and in fact, if you look at Gustav and Ike, we made those
determinations under Interjurisdictional Fisheries Act because we
didn\'t have the information. I mean, it was fairly evident that there
was a serious commercial fishery failure, but we didn\'t have the data.
So we made it under this.

But you\'ll hear both of these acts. In many ways they\'re the same, but
they do have a nuanced difference.

These are a list of the fishery disasters that we\'ve made over the
years since \'94 to 2008. Actually just today the Secretary made
announcements for a fishery disaster determinations in Red Tide, New
England and Sockeye Salmon in Washington in Puget Sound tribes. So that
was announced today.

We have pending still disaster requests that have come in on Florida
shark, highly migratory species, hard shell clams off of Long Island,
and a request to reconsider our denial of the New England groundfish
disaster request from last year. The State of Maine came in and asked us
to reconsider that.

On those three we haven\'t made a determination yet. Anyway, out of all
of these we have about \$800 million that has been appropriated
associated with the determined disasters, but in addition to that, since
2000, Congress has appropriated about \$175 million for 16 disasters
that they decided were disasters even though we didn\'t make the
determination on them.

So you can see there\'s getting more visibility, higher visibility, and
I mentioned, you know, in the past we used to get one, two, maybe three
a year. Then we\'d go with none and then a couple more. Well, in 2008
we\'ve made five of them already and we\'ve got three pending. So it\'s
exponential.

MR. RAUCH: We got a new one from Alabama yesterday.

MR. REISNER: Excuse me. That\'s right. It\'s before my notes were done
\-- after my notes were done.

So that\'s the history of the disasters. So because of that and because
of those changes in the MSRA that created this sort of new category to
include regulatory restrictions, we felt we needed to get a regulation
out. We actually have guidelines that we use, but we don\'t have
codified regulations that are out there for the public. So we\'re in the
process of developing those regulations, and hopefully we can get them
out relatively shortly, at least in a draft form. But they will provide
a little more transparency.

And it would establish procedures and requirements for initiating an
evaluation, who\'s authorized to request it, what we expect in terms of
information that we\'ll need.

We also establish some definitions and characteristics that are more
clear, particularly, you know, this phrase of impact to the marine
environment and how do you define the marine environment and its
relationship to regulatory changes.

So we\'re in the process of working on that and hopefully in the near
term we can get something out.

I think that was all I was going to say on disasters. Why don\'t I run
through this quickly and we can ask questions?

Okay. Let me talk about fishery capacity reduction programs. So
Magnuson-Stevens 312(a) was the disaster assistance program. There\'s
also a component of that that authorizes capacity reduction programs,
and they\'re available to assist in rationalization and create
instability in the fishery.

We need to receive a request from the governor or a fishery management
council. They have to reduce capacity and make sure that that capacity
can\'t be replaced in the future on the programs associated with loans.

When we run these capacity reductions, there\'s two ways to do them.
Congress can appropriate money and use that money to do a direct buyout.
In fact, they\'ve done that in components of New England where they
bought out a number of permits. There\'s a high level of latent capacity
there, and so an actual capacity reduction didn\'t really occur.

But the other way of doing this is to have a loan program where
components of the industry develop a plan within the industry that comes
into us that would authorize the federal government to make a loan to
the industry to actually buy out vessels.

And so we create a plan with the industry. We then do a referendum that
requires a vote of all the eligible permit holders in that fishery, and
assuming that\'s successful, we go through the process of evaluating and
accepting bids from vessel owners and permit holders in the fishery.

We use in general reverse auction. So the most capacity for the least
cost would be the first one that would be bought out and so on until we
run out of money. And the way this works is we buy out the permit
holders and their vessels, and then we institute a charge on the
remaining landings in that fishery until the loan is repaid. And that
loan can be anywhere from, you know, two percent up to five percent of
the value of the landings in any given year.

We currently have in place and operating four buyouts. The first one was
the Bering Sea/Aleutian Island pollock, and we removed nine large
catcher processors, 17 permits.

This one actually the \-- let me back up a second. Magnuson-Stevens Act
312 sets up a framework for councils to develop buy-back plans. It\'s
fairly cumbersome. It has actually never been used. All of the buyouts
that I\'m talking about here have been implemented through special
legislation.

Now, that special legislation tended to incorporate components of the
Magnuson-Stevens requirements, but not all of them, and so each of these
was done under a separate piece of legislative authority. So back to the
Bering Sea/Aleutian Island pollock, we removed these nine vessels. It
was about ten percent of the capacity in the fishery. In general, we
would remove from either ten to 40 percent of the capacity in the
vessels in each of these fisheries.

Total financing is about \$286 million, of which those balances are
going down and most of these are amortized over 30 years, but frankly,
if landings go down and don\'t cover the amortized amount, the loan just
keep going until it gets paid back.

On the other hand, if you have a really good year, you can actually pay
back more in a year, and I think in the \'98 and the Bering Sea/Aleutian
Island pollock we\'re ahead of schedule on the payback of that loan.

This is a list of pending requests for buy-backs, and again, on each of
these there\'s actually legislative language that\'s been enacted either
through an appropriation or an authorization bill that\'s provided this.

On the southeast Alaska purse seine salmon fishery, that\'s a unique
animal. That\'s actually a state fishery that they\'ve asked for federal
assistance in running a buy-back on, and so we\'re working with the
purse seine community now in the state to see whether we can fashion a
buy-back that\'s consistent with, you know, our requirements of being
cost effective, most capacity with the least cost, and also making sure
that we permanently retired that capacity.

They have a draft plan, and we are reviewing that now, and we\'re
working with them and go back and forth, and ultimately then we\'ll go
out with a regulatory published stuff in the [Federal
Register]{.underline} and go out with a referendum, and if it passes,
we\'ll implement it. If it doesn\'t, it dies.

Additional authority for Bering Sea/Aleutian Island pollock, there were
four sections, and I don\'t remember what they were offhand, in the
Bering Sea non-pollock groundfish buy-back authority. We\'ve implemented
one buy-back in the long line fleet.

The other sectors have not requested a buy-back, and starting next year
the money that wasn\'t used in the first buy-back is available for
anybody, any of the sectors to use, and the long liners have indicated
that they may come back in to get additional money to do additional
buyouts.

The Gulf of Mexico reef-fish fishery, you heard a little bit about that
yesterday. This one did not come to fruition. It was shot down. However,
it sounds as though because of the transferable quota system that it
addressed a lot of the issues that buyouts have.

One other thing about these buy-backs. There wasn\'t very much excess
capacity in this. So there weren\'t very many \-- what\'s the term? \--
latent permits. Okay? That was an issue to some degree in the reef-fish
fishery. It\'s certainly an issue in the northeast multi-species
groundfish fishery where they had a couple of starts to try to get a
buy-back, and those have sort of fallen away, probably won\'t go
anywhere.

And the New England lobster fishery, we\'ve got no interest in that.
Nobody has expressed an interest in that. At one time I guess there was
a small group that was interested. They got legislation passed, but
there has been no action on it.

So that\'s it for capacity reduction programs that we use our loan
authorities for. But, again, I mean, it\'s not chump change. There\'s
\$286 million in loan value out there that\'s being repaid in these
fisheries.

Fishery finance programs, these are our more traditional loan programs.
Let me talk about them a little bit. We have a traditional loan program
that was actually authorized in the Merchant Marine Act. It has been
around for a while. It was originally created and expanded to fisheries
back, I think, in the \'70s because of when we kicked out the foreign
fleets and the federal government wanted to build up fleets, they
created this authority. We were more successful than we thought.

In the \'90s, they put a prohibition on the program to prohibit any
loans that would increase capacity in a fishery. So all of the loans
that we have made since then have been capacity neutral. I\'ll get into
the vessel components.

There are three different types of loans that we make under this
program. One is aquaculture facilities where we\'ll make loans for
purchase of equipment, purchase of whole plant improvements,
construction and refinancing of existing debt. The same with shore side
processing facilities to expand processing capacity.

These you can expand capacity on. It\'s the fishing vessels that you
can\'t expand capacity on, but you can get a loan to purchase a used
vessel, to buy some vessel equipment for safety purposes, and equipment
that\'s going to be permanently attached to the vessel for
reconstruction, and we do do refinancing.

And with the new bill, there were some provisions on loans for
sustainable purposes as authorized, and we\'re working on defining them
and making some regulatory changes. They would be things like reducing
bycatch, improved safety, assisting transition to reduce capacity and
upgrades in design to target your catch more effectively.

But we don\'t have in place yet the regulatory language to entertain
that.

MR. FISHER: When are you going to have that in line?

MR. REISNER: It won\'t be until the next administration. We\'ll probably
get some regulations over there early in the administration, but then
they\'ll have to go through the process.

One of the issues with our traditional loan program and one of the
things I\'m working with folks are even though we\'re not expanding
capacity, should we make loans to vessel owners and fisheries that are
currently over capitalized? There\'s no prohibition as long as it\'s not
increasing capacity, and on the one hand, it helps fishermen in those
fisheries if you extend their amortization schedule so that their annual
payments are less. They can sustain some of the reductions, say, in New
England in fishing days at sea.

[On the other hand, are you keeping people in the fishery longer than
what would otherwise happen? That\'s actually some questions that I\'d
be looking to you guys for some assistance on.]{.mark}

Let me go to the other type of loan program that we have as part of
Magnuson-Stevens reauthorization also, and for the two that are
currently ongoing, it was in the language that created them, an IFQ loan
program. We had in place one for the halibut/sablefish fishery, and then
we\'re putting in place as we speak a Bering Sea/Aleutian Island crab
IFQ loan program, and the idea is that these loans would be available to
address new entrants and there will be criteria around that, either, you
know, making loans only to those who have new entrants or have minimum
income or maybe only to individuals who have less than a certain percent
of your quota share to them.

We have about \$50 million. Annually we have about eight million now in
loan authority that\'s created, and in total we have loans of \-- we
have made loans of about \$58 million.

There\'s a new program that was created that we don\'t have up and
running yet. It\'s the community development quota system, community
development loan program for communities in Alaska. I think there are
six CDQ groups that would be eligible. The money when we get it up and
running would be available for them to acquire fishing vessels,
processing vessels, shoreside facilities. They could use the funds to
buy permits and quotas, and we actually have about \$200 million in loan
authority, and we\'re in the process of working with communities. We\'ve
met with them on developing criteria for that.

So in total, this is our loan activity. There\'s about \$785 million in
total on there of loans that we\'ve approved. About \$400 million are
related to the first three categories, the traditional program. All of
our buy-backs, as you saw earlier, at least the current buy-backs that
are in place are on the West Coast and Alaska. And so it\'s a
substantial amount of money and assets that\'s out there on loan.

Now, when I say it\'s on loan, it is actually a loan. There\'s not
approporiated BA. There is an amount that\'s appropriated associated
with the subsidy related to this, which is essentially the expected
default level and so it\'s a net present value calculation that\'s
fairly arcane, but so this loan authority is not dollars appropriated
like yesterday when I said our budget is about \$800 million a year,
we\'re not getting \$862 million in budget authority every year for
loans. That\'s different kind of animal.

Talk for a couple of minutes on our capital construction fund program.
This is another program that was created back in the \'70s. It\'s called
the fishing vessel capital construction fund. It\'s an income tax
deferral program, and it\'s available to fishing vessel operators. You
either have to own the vessel or have a long-term lease in the vessel to
be able to participate, and what you do is essentially set aside a
portion of your income that you\'ve earned into a separate account,
equivalent to an IRA essentially, and you develop a plan for, okay, I\'m
going to buy a vessel in ten years. So I\'m going to put aside so much
money every year and you do it pre-tax, and then you can withdraw that
money to acquire or reconstruct the vessels as you move forward in time.

We currently have about 2800 active agreements throughout the country,
and again, \$227 million in assets, and we don\'t actually hold that
money. That money is held in bank accounts, but every year with
fishermen who have these agreements report to us, and on their income
taxes they give us that and then we can report to the IRS along with
them who can compare to make sure that the money is being held properly
and properly segregated, and when it\'s drawn down, used for the
purposes for which it was put in the account.

There are some issues with this, and in fact, Senator Smith before he
lost was working on some legislation that was going to change this. So
we have \$227 million in savings accounts, fishermen do out there, and
they can\'t use them in the fisheries that they would want to use them
for.

Frankly, we would prefer people not invest in over capitalized
fisheries. However, there are limitations on what they can do with the
money, and there\'s severe consequences if you don\'t use it for
qualified purposes. So in some degree it just sits there, and your
plant, your money has to be used within ten years. So if it hasn\'t been
used within ten years, it\'s automatically considered a non-qualified
withdrawal, and you can be penalized.

And so what has happened over time, as fisheries have become over
capitalized or stocks have fallen, all of a sudden you had thoughts of,
well, I was going to buy a new vessel or whatever, and it\'s no longer a
good idea from a fishery management perspective or a personal business
perspective.

So Senator Smith and others were looking at some legislation. I don\'t
know where that will go, whether it will be revisited, in expanding the
uses for the capital construction fund so that you could use it to
acquire or invest in aquaculture facilities, shoreside facilities or use
it to purchase limited access permits, IFQs, if they\'re available.

Another option was to allow transfer to an IRA. So the fisherman would
just take it out and put it in an IRA, and then it would be subject to
the conditions of the IRA.

And a third alternative was to have a window in which fishermen can
actually close out their accounts, withdraw the money, and not be
subject to the penalties associated.

They would still have to pay taxes on it, but not the penalties. Right
now if you make a non-qualified withdrawal, you have to pay income taxes
at the highest marginal rate of taxation available. Whether your actual
income would put you in that bracket didn\'t matter. So if you were in
the 28 percent bracket normally and you withdrew money, you would still
have to pay in a 35 percent tax bracket for these funds. Plus you\'d
have to pay interest back to the time when that tax would have actually
been due when you made the deposit.

So fairly severe penalties for non-qualified withdrawals and some
serious restrictions on it.

So in the interest of time, Topher put these slides. I don\'t know if
they\'re available on the Website yet or not.

MR. HOLMES: I can send them out to the group.

MR. REISNER: Okay, but those are sort of the three main program areas
which my folks are responsible for in this process, in developing the
regs. for the disaster assistance programs, which by the way I\'m hoping
Alan is going to take over here shortly, and I won\'t be responsible for
that.

And then the loan programs and the capacity reduction programs and the
capital construction.

Any questions?

MR. BILLY: Okay. Dave.

MR. WALLACE: I guess, we came up with an idea that we would write a
document to the Secretary talking about, you know, what constituted a
disaster, and then you know, you tell us that you have almost completed
that. Should we just not do that and wait until you finish and then we
critique your proposed regulation?

MR. REISNER: I don\'t know exactly when we\'re going to get regulations
out, but if it\'s in the short run that might not be a bad idea. I\'m
looking to Sam.

MR. RAUCH: I think that there\'s a significant possibility that the
whole thing is going to be delayed or the disaster regulations are going
to be delayed and not come out. They\'re still proposed rules. Even if
they do come out, there\'s no chance we\'re going to before the next
administration.

Even if those come out, they are dealing with some of these existing
issues, and I don\'t think that they\'re going to be well suited to
dealing with the kind of policy discussions that you\'re talking about
here. They\'re more mechanical, and this, this, and this is required as
opposed to if Congress gives the money what should they do with it or
what kind of things would we look for.

[So I don\'t think that the two efforts will compete with each
other.]{.mark}

MR. BILLY: Randy.

MR. CATES: Regarding your loan program, which I\'m real familiar with,
it seems like MAFAC has a role maybe to play in helping you guys draft
new language and rules that is not working very well. It\'s very
difficult for aquaculture, especially with qualifying requirements, and
the level of capital that you\'ve got to put up, it\'s really
problematic.

MR. REISNER: Yes, let me talk to that. So on the loan program there are
two components to it. There\'s the loan ceiling, the actual how much
you\'re going to make the loan for, and then there\'s the subsidy
associated with that loan ceiling.

So, for example, in our buy-back loans we have a standard rule of thumb
of a one percent subsidy. So if I have a \$200 million loan program for
a buy-back, you would need to appropriate \$2 million for that.

The traditional loan program at least within the administration, we have
not been requesting a loan subsidy for that. It has been enacted or,
well, we haven\'t requested loan subsidy or ceiling for them. The
subsidy is calculated based on the net present value of the expected
return on the loan. So if it\'s a 25-year loan or 20-year loan, you do a
net present value on that, and you build into that any expected
defaults, and you come up with a current number, and that\'s what needs
to be appropriated.

Well, our loan programs, all of them charge right now two percent over
the cost of borrowing money for a relevant time frame. So if it\'s a
20-year loan, we go into federal market and get the rate for their
20-year bonds. We tack on two percent, and that becomes the loan rate.

So you can see net present value, unless, you know, inflation and stuff
change significantly, our loans have a negative subsidy. So we actually
don\'t need an appropriation of the subsidy amount to make them, but we
do need authority for the loan ceiling to make them. If we were to make
more risky loans, we would need subsidy because the loans would default
more. So since we don\'t have any money appropriated for the subsidy,
the qualification criteria for our loans is fairly high.

And so when you have a new industry come in, aquaculture being an
example, it makes it hard because you don\'t have a history that we can
use to do an evaluation, and we don\'t have a lot of collateral
associated with the facilities themselves or a lot of experience on that
collateral.

So at one time actually a couple of years ago, and Mike Rubino is not
here, we had proposed getting some subsidy associated with aquaculture
so we could reduce or increase the risk on our aquaculture loans with
the expectation that some of them would fail. I mean, that\'s what the
loan program is for in the federal government, and that wasn\'t approved
and Congress didn\'t enact it. So we didn\'t have that authority.

[We still have a priority to aquaculture loans if they come in, but
because we don\'t have any subsidy we have to keep the standards fairly
high. It is a problem.]{.mark}

MR. CATES: Just to follow up on that real quick, down on our level what
that means is, for example, we were approved for an \$8 million loan.
It\'s not really a loan. The company has to go and spend the money
first, then request 80 percent of it back. So you don\'t get the money
up front to go build your facility. You have to have \$8 million to
spend and then request to get it back.

Once we were approved, it took a year to get the funds in. The other
part of the problem is the legal documentation is extremely heavy, and
so I would like to support you in trying to make it more flexible or
where more companies can utilize it.

MR. REISNER: Yes, I don\'t know the specifics on your loan, but
certainly to the degree that we can make it easier for shore side
facilities and aquaculture, I think there would be support in the
administration for that, this one and the next one.

MR. BILLY: I\'m ready to stop us right here and invite Alan to share his
remarks. I know he\'s on a flight pretty soon.

MR. RISENHOOVER: Okay. What could be more exciting than ending with a
report on capacity building?

(Laughter.)

MR. BILLY: Two reports on capacity.

MR. RISENHOOVER: It\'s about 58 pages long. So we\'re going to go
through it more or less line by line.

(Laughter.)

MR. RISENHOOVER: It was really one of my first exposures to some really
deep economics, not economies of agglomeration or whatever, but close.
And so I\'m very glad that Rita is still here so when I get stuck on
what the economy or the economics of this are we can turn to her.

But the full report is up on your Website. I suggest you do take a look
at it, like the executive summary at the beginning, the summary at the
end, and then some of the tables, and I\'ll point those out because
there\'s a lot of data and there are a lot of things to consider, and I
don\'t want to get too wrapped up in the specifics of which fishery and
how much capacity, all of that, but the overview because I think it fits
more into what we\'re talking about here when you\'re looking at, you
know, how do you react to a disaster or how do you react to capacity
reduction. Here\'s some of the larger principles, but sometimes the
details we could get lost in pretty easily there.

So let\'s just start going through. So the Magnuson Act required us to
do a report that had two main components to it. First was to identify
those fisheries with the most severe cases of capacity, over capacity in
them, and then second, to look at some cost effective methods, that is,
that the government didn\'t have to fund, that would solve those
problems.

So if you think of the disaster side and do you rebuild or not, what
happens to the disaster that\'s declared? You know, how do you handle
that disaster? Do you reduce capacity? Or do you pay fishermen or what?
These are some of the considerations we address in the report.

So real quick on definitions. Instead of using an output, we did use the
output based model or definition instead of input. I\'m not going to go
into that because I couldn\'t explain it twice the same.

So we did choose it for three reasons, that a lot of what we do deals
with the management side of things and not the capacity of the
individual vessels, but then also try and compare it to all other
economic sectors as well.

So our definition here is that harvesting capacity is the maximum amount
of fish the fishing fleets can reasonably be expected to catch,
\"reasonably\" meaning under current circumstances, regulations,
maintenance, fuel prices. Fuels prices, see? I knew that.

So simply stated, we\'re defining excess harvesting capacity as too much
harvesting capacity given the current situations, and we were only able
to look at about 25 specific fisheries because of data limitations, and
then an additional 60 what we call fleets in the report, which were
similar vessels using similar gear in similar areas and generally
catching the same type of fish.

So it\'s not a very specific report on that, and then the final caveat
I\'m going to use was the best data we had was from 2004. So it\'s a
little old and it\'s a little I don\'t know if the word is loose, but
it\'s not the detailed, analytical look that I think that folks would
probably want, and it\'s based on a series of three other reports on
capacity that the science and technology folks coordinated.

So if you\'re really into this, there\'s a history you can read up on.
So let\'s go just to the definitions here. Excess capacity, that\'s
harvesting capacity in excess of the recent harvests, that is, you have
the physical ability to harvest more of the current harvest.

I\'m reading that off the slide. I try not to read off the slides, but
that\'s an important concept if you get into this.

The second one is over capacity, and that\'s capacity in the excess of a
management target or the quota. So you\'re going over quota.

So there\'s an example there of how these rates were calculated. I\'m
not going to go into that. I think it\'s probably better if we go into a
little bit on the findings because that\'s what is important.

So the report to Congress looked at these or Congress required us to
look at excess capacity, over capacity. We added a third measure in
there to look at as well, and that is the over harvests because you may
have over capacity and excess capacity, but you\'re not over harvesting.
Well, is that a problem?

Probably from an economic standpoint of the fishery. So that\'s another
part we looked at in the report, but we found that of the 25 fisheries
we looked at, almost half of them did show levels of excess capacity,
which is what? Who remembers what excess capacity is?

(Laughter.)

MR. RISENHOOVER: Excess capacity is harvesting capacity in excess of
recent harvests, that is, the physical ability to harvest more than the
current harvests. So you were limited for some reason, fuel prices or a
quota, but you had the capacity to harvest more.

Additionally, and this isn\'t in the slide, but of the 60 fisheries, 60
fleets we looked at, 18 of those had excess capacity above 50 percent.
So there were problems there or issues there as well.

I think that\'s probably all I\'m going to say about that.

So as I mentioned what the report said was the Congress asked us to
highlight those 20 fisheries with the worst capacity problems, and so
any time you show those, people are going to want to know, well, why is
my fishery there or why is it not there. So here\'s the list.

And there goes the list, right?

(Laughter.)

MR. RISENHOOVER: We don\'t want to spend a lot of time on that, but no,
to go back, so this was one thing when the staff first drafted the
report, and I went through the first draft of the report, you know, you
look at the language, what was required to be there. They had no list of
the 20 worst. So we went back and we put that in.

This is the list of the 20 worst based on those characteristics I had
mentioned. So what is interesting about this is what\'s on the list, and
so, you know, kind of in our minds we think of fisheries that are, you
know, kind of managed well and they are not having over fishing problems
and the economics of them are well. You don\'t really associate capacity
problems with that, but look at Atlantic sea scallops. The most valuable
fishery in the nation right now is on the list. Of course, that\'s from
2004. Things may have changed.

So that\'s something in reading the reports and the results of this we
have got to be very careful and kind of finish every sentence with \"but
things may have changed,\" because the data is from 2004.

So you see, you know, some of the fisheries we think as being better
managed, sea scallops. Another interesting one is surf clam/ocean
quahogs. That\'s interesting because it\'s under an IFQ. So we\'ve
talked about IFQs reducing capacity or matching capacity with the
harvest. It\'s on the list.

So we may have some problems. Again, this is from 2004, but what I think
it highlights to me is capacity isn\'t the only thing at work here.
It\'s one of a number of variables that contribute to the health of the
fishery or the detriment of the fishery or contribute to pressure where
if you have a lot of capacity to harvest above your harvest level, that
may lead to over fishing. It leads to pressure on the management system
to manage right up at those lines.

And then, of course, there are some fisheries in there that we know
there are problems. The first one, the northeast multi-species, there
are some problems in there. Is capacity the only problem there? Probably
not. There\'s probably some other things.

So we need to be careful just looking at this list and saying, well,
these are the fisheries that need capacity reduced because the data is
from 2004. Things may have changed, and there may be other things at
play as well. So that\'s important.

So if we compare those and the table I really like best in the report
\-- I know folks probably don\'t want to go look at that right now \--
is the one where we ranked things. We did look at the capacity measures.
We talked about excess capacity, over capacity and looked at those, but
also is over fishing occurring in the fishery? Because that\'s kind of
the result. You have excess capacity and you\'re not over fishing the
stock. Does it matter? We\'ll vote on that later.

So a little bit on some of the problems here. So there\'s no one size
fits all, as I\'ve been talking about here. We\'ve got the conditions
I\'ve mentioned here. It\'s 2004 data. Resources may have changed.
Characteristics of the fisheries may have changed. There may be new
management measures in place.

And then kind of the bottom line is the Magnuson Act doesn\'t require us
to manage capacity. There\'s nothing in the Magnuson Act that says that
Secretary shall. So capacity is part of what we take into account when
we\'re doing things. It should be a planning part of it.

But as it says here at the bottom, nonetheless, the rates of over
capacity and excess capacity do show us that there are some management
problems that we probably should look at, and that was the second thing
Congress mentioned, was what are some of the cures. What are some of the
ways to address these capacity issues?

While I mentioned that the MSA doesn\'t mandate, you know, specific
actions related to capacity, we do have a national plan of action on
capacity that NMFS put out, I think, in 2004. It\'s in the policy
directive system that says NMFS is going to work on capacity, and our
goal is by 2009 to reduce capacity significantly in 25 percent of the
fisheries.

So over the next year we\'ll be looking between 2004 and where we are in
that goal, and I think we\'re probably in pretty good shape because of
the management measures put into place since 2004 probably have reduced
capacity problems in about a quarter of the fishery. So, again, it\'s
something to look at as we go through.

And then probably the one I want to spend a little more time in is the
\"so what?\" So we\'ve got this data. Yes, there are some limits to the
data. Yes, we can see that, you know, northeast groundfish is on that
list and sea scallops and ocean quahogs are on that list. You know, are
there problems? What\'s the difference? How do we compare those?

And what we found in the report was, in fact, that limited access
privilege programs are good at helping with capacity, helping match it
as opposed to the second one, which will be Congress specifically asked
us to look at industry funded buyouts. I don\'t know that there has
really been any industry funded buyouts, but buyouts in general, you
know. Are you buying out the active capacity? Are you buying out latent
capacity? Some of the issues Gary mentioned with buyouts.

License limitation programs, yes, help, but they a start in the right
direction of reducing capacity over time.

And then the conventional management we think of, you know, gear
closures, seasonal closures, gear restrictions probably don\'t do that
much for capacity. So, again, the excess and the over capacity rates
themselves don\'t determine, you know, again, if capacity should be
reduced or by how much; rather, that it\'s just a consideration that we
need to make in management.

And so the fishery specifics are very important. What are the bycatch?
How many fisheries do they operate in? If you\'re measuring the capacity
in one fishery, well, maybe that boat participates in two different
fisheries. Therefore, you know, they\'re using two different stocks.
They may need more capacity. So there\'s a lot to look at there.

Are the stocks in a rebuilding program? Are they over fished? Is over
fishing occurring? How is the capacity related to them?

And we have seen if you look on that list, and, again, there\'s a table
in there, where we look at those where the capacity rates, the over
capacity rates are higher, and you\'ll notice those with the higher
rates have more over fishing occurring. So it may not be a one for one
connection, but again, it\'s another connection that we need to look at.

So this is kind of a common management problem, is, you know, are you
reducing the capacity or is your management just working around it? In
other words, you do seasonal closures, but the same capacity is out
there and now you start creating races for fish during certain periods
of time, and once you start creating those races for fish, there\'s an
incentive to increase your capacity, bigger and faster boats to haul
things in quicker.

So I think the bottom line of this is not so much the specifics but the
over arching things. Yes, capacity is something we need to look at. It
needs to be considered. It\'s not the root of all evil. It\'s not the
root of all fishing, but it is something that can lead to those things
that we need to look at as we move forward in the larger context of
fisheries management, but then also in any buyouts or disaster type
assistance programs we pursue in the future.

And unless you do want to go through the report line by line, I\'ll
stop.

MR. BILLY: Okay. Thank you.

MR. RISENHOOVER: And hopefully answer Jim Gilmore\'s questions. He\'s
just taking notes.

MR. BILLY: Okay. Larry.

MR. SIMPSON: You know, the industry funded buy-back, it\'s state, not
industry. In Texas they bought back in shore shrimp licenses and bay
ship licenses.

MR. RISENHOOVER: When we get into some of this we need to look at how it
is reduced in some fisheries that were affected and then see if we can
apply those tools elsewhere.

MR. BILLY: Mark.

DR. HOLLIDAY: You said the report was based on information from 2004.

MR. RISENHOOVER: Yes.

DR. HOLLIDAY: So is there an effort underway that periodically will give
you another snapshot of this in the future or is that just a one time
event?

MR. RISENHOOVER: We\'ve talked a little bit about following this up.
What I\'ve mainly talked to folks about is, you know, this 2009 goal we
kind of said for reducing. We need to have some sort of update or
something to look specifically at that. I guess we\'ll have to explain
how we met our goal or at least I would like to know.

But this report just came out in April. I don\'t know if there\'s any
\-- there was a similar, not a similar, but another complementary report
that S&T put out in 2008. The title escapes me, but I think that was the
third of the series. So, yes, there needs to be additional work on
capacity. No, we haven\'t planned exactly what that is.

MR. BILLY: Jim.

MR. RISENHOOVER: I was joking, Jim.

MR. GILMORE: Yeah, I know. You woke me up though.

(Laughter.)

MR. GILMORE: You know, thinking back from the way the pollock industry
was back in the mid-1990s when we had excess capacity, we had over
capacity, we had abundant capacity, we had irrational capacity. We had
every kind of \--

MR. RISENHOOVER: How about exuberant capacity?

MR. GILMORE: Exuberant capacity, but we had a conservative TAC and we
stayed within that. Monitoring enforcement wasn\'t an issue, but we had
a lot of bankruptcies in that sector, and it was interesting kind of
listening to sort of trying to measure the excess capacity and the over
capacity and then trying to correlate that to over fishing. I wonder if
you have sort of a third category there that can somehow say, \"And
here\'s the relative socioeconomic health of the industry.\"

MR. RISENHOOVER: right. In the report we also did look at the values at
the fishery. We didn\'t try to measure any kind of economic health, but
we also tried to look at some of the ex vessel values of these fisheries
as well. So there\'s a lot of kind of data in there and tables, you
know, different ways of looking at things because we wanted to have kind
of an alternative to there\'s the list - go fix it. And have some
modifiers on that that, well, you know, maybe in ocean quahog, surf clam
a little excess capacities is fine. There\'s no reason to reduce it.

MR. BILLY: Chris.

MR. DORSETT: I\'m just curious in looking at the fisheries if there was
just limited to commercial fisheries or did you explore, for example,
the for-hire sector in the Gulf o Mexico to see if it might fit.

MR. RISENHOOVER: I don\'t believe that we did. I think it was all
commercial, although I think there was one category of a diving fishery.
I don\'t know, but I would think that was probably a commercial one, as
far as I know.

Somebody else had mentioned earlier in the week how do you measure
capacity in recreational fisheries. I meant to mention that. That\'s
something we do need to address.

MR. BILLY: Okay. Dave.

MR. WALLACE: Yeah. I guess I would hope that Congress would not say fix
all of the fisheries that you say are over capacity because I just
happen to know a little bit about certain co-ops, and I can assure you
that the capacity in that fleet is just what the owners want it to be,
and since it\'s a year found fishery, but there is a high demand time in
the fall, and so they tie up vessels through the summer during the low
demand period and bring them back just so that instead of putting
product in inventory, they let their products be inventoried in the
ocean and captured when they need it.

MR. RISENHOOVER: Right, right. And that\'s why I try to, you know,
always go right by that 21, because it just says it exists.

MR. WALLACE: Right.

MR. RISENHOOVER: It doesn\'t say why or it doesn\'t say if it\'s good or
bad. It just says when you do the math, you know, through that one
example, it exists.

MR. WALLACE: When you have ITQs with unlimited transferability and the
good thing about the clam fishery which some IFQs don\'t have is that if
they need to add capacity they can. A lot of the IFQ programs put a cap
on it, and so they\'re going to have to have a new management plan to
allow additional capacity as the stocks grow.

MR. RISENHOOVER: Right.

MR. WALLACE: And so the clam fishery should just be ignored as far as
capacity is concerned because the participants get to set the level,
whichever, but their company.

MR. RISENHOOVER: Right, and that\'s something, again, this is a slice in
time here. If the stock is severely over fished and we\'re saying
there\'s excess capacity, we didn\'t try to figure out, well, when it
rebuilds to its full, you know, BMSY, what is it. We didn\'t do that. We
just said at this time in 2004, this is what it is.

We did submit this report to Congress. Once it was submitted I started
sweating, figuring, you know, the briefings, the calls, the legislative
proposals would start rolling in, and they haven\'t.

So you know, I think instead of a report to Congress, it\'s something we
can use a little bit more internally to kind of guide what we do in the
future.

MR. BILLY: Cathy.

MS. FOY: I\'m going to pass.

MR. BILLY: Okay.

MR. RISENHOOVER: Before you leave, you\'ve got to tell me what over
capacity means.

MR. BILLY: Bob.

MR. RISENHOOVER: I don\'t have to day that before I leave.

MR. FLETCHER: Alan, West Coast Highly Migratory Species is a curious one
on there because they\'re a minor player in the international fishery
for, say, albacore which is probably one of the key species that West
Coast Highly Migratory target. How can you consider that being excess
capacity when they\'re taking such a minor share of the overall
resource?

MR. RISENHOOVER: Again, I can\'t speak to the individual ones. I just
know that based on the data they used, they did that little equation,
and it\'s look like that one is about at 12 percent. So, yeah, I could
find out for you, Bob, but I don\'t know off the top of my head the
specifics that led to that calculation that put it on the evil slide.

MR. BILLY: I think Cathy has something.

MS. FOY: I can\'t stand it. I have some more.

MR. RISENHOOVER: Can I answer the question?

MS. FOY: I don\'t know, maybe you can, and maybe it\'s just that I\'m
just not really getting the whole socioeconomic part of this, but we
have ecosystem management, and we\'re going towards fluctuating TACs so
that we can account for shifts in stock and climate change, and if we
overly control our fleet, how are we going to rapidly change to reach
maximum sustainable yield with the stocks.

MR. RISENHOOVER: Right. That\'s why you can\'t look at this as the only
thing saying you should match your capacity to exactly what the harvest
level is now.

MS. FOY: So that\'s not really the goal, is to pare back the fleet.

MR. RISENHOOVER: No, the goal of this was to show where there may be
some capacity issues, and that\'s why we added that third category
Congress didn\'t really require.

MS. FOY: Right.

MR. RISENHOOVER: Isn\'t subject to over fishing, and there was really no
way to show that on a slide of, you know, which ones are fishery or
other than picking them out, which ones are subject to over fishing or
just stocks over fished or have they been over harvesting their quota.

We tried to pull that in to mute some of those things that were just,
you know, an example of something that may be meaningless. So you\'ve
got to look at the specifics for each fishery and say in this case, yes,
maybe some excess or over capacity is fine because the stock is
rebuilding or it\'s at a high level or it may be at a higher level or
prices have changed.

I don\'t know if there was an answer.

MS. FOY: It was good enough to confuse me further.

MR. RISENHOOVER: Then I\'ll be quiet.

MR. BILLY: Okay. Tom.

MR. RAFTICAN: I\'m intrigued by Chris\' question about over capacity at
a recreational fishery, and we\'re looking at Southwest Coastal
pelagics, West Coast HMS, Pacific Coast groundfish. It brings up an
interesting quandary for us on the West Coast. I don\'t know how you
define that. You know, a lot of what we do is on opportunity and not
necessarily take.

Have you done anything on that or has anybody looked at things like
that? I would just like to see what you\'ve got on it.

MR. RISENHOOVER: We didn\'t do anything as part of this report. I don\'t
know if that exists or not. Off the top of your head?

MS. CURTIS: No. The NMFS economists, the recreational economists
actually don\'t think it\'s a useful method for the recreational
fisheries. It\'s a useful method for the commercial fisheries, but it\'s
limited in some ways, but it\'s just not a useful method for looking at
recreational.

MR. RISENHOOVER: You know, after you read the report tonight, and I\'m
sure you will, if you have other questions let me know and I\'ll find
somebody smart enough to answer because it ain\'t me.

MR. BILLY: Okay. Thank you.

MR. RISENHOOVER: Thanks.

MR. BILLY: All right. So where do we stand here?

DR. HOLLIDAY: I think a question to ask from this afternoon is does
anything that we\'ve heard change the terms of reference for the group
that was discussed prior to lunch.

MR. BILLY: Okay.

DR. HOLLIDAY: Or are we happy that that charge we defined would be
changed by this information about CZMA or capacity implications or the
NMFS programs specifically? That question just to pose.

MR. BILLY: Yeah. We\'ve heard now about the CZMA and capacity and the
various NMFS assistance programs. I guess the question to you is: is
there anything we heard that ought to change the terms of reference that
we set up this morning for the follow-up on disaster assistance and our
approach there?

I mean, we\'re free to consider these aspects as part of that. Is there
anything, any adjustment anyone thinks we should make?

(No response.)

MR. BILLY: I guess not. Okay.

MR. CATES: I guess I\'m confused what you\'re asking. What we\'ve heard
so far relating to the disaster relief?

MR. BILLY: We\'re going to follow up along the lines that we talked
about this morning. We can also incorporate into our thinking and
analysis these other considerations as appropriate. So do we need to
change the approach we\'ve decided on this morning?

MR. DEWEY: Can we hear again? Did someone capture in writing our
direction from this morning?

DR. HOLLIDAY: Not verbatim. The motion that was made was we\'ll go back
to the tapes and synthesize from the discussion of the morning what this
working group of 11 or 12 people would be looking at with [the goal of
developing a work plan with an ultimate product of a set of principles
for the department with respect to policies affecting fisheries disaster
assistance and other federal policies that influence fisheries,
long-term sustainability of fisheries communities and
infrastructure.]{.mark}

So we heard all of these different presentations. We go back with this
group and we look at that transcript and develop a terms of reference,
what the group would be looking at, but we had some basic ideas or
principles based on what the speaker said this morning that we\'d look
out for with respect to, you know, roles and responsibilities, what NOAA
was looking for as far as direction.

So I don\'t have a verbatim motion. We didn\'t have a formal motion. We
just said \--

MR. DEWEY: Well, I think you\'ve captured it.

DR. HOLLIDAY: \-- we\'d assemble this group.

MR. DEWEY: Captured it pretty well with your summary right there, but at
least from this afternoon I know Randy and the capital construction
account there, the capital construction funds, you had an interest in
interacting more with NOAA and trying to make those more applicable
throughout the culture.

And for myself, on CZMA reauthorization, I\'m very interested in
pursuing the ability for states to do aquaculture planning. You know,
whether we do that through MAFAC or individually, I fully intend to.

MR. BILLY: Randy.

MR. CATES: Having heard what you just said, it\'s my firm belief that if
we\'re going to have resilient coastal communities, it\'s going to
involve aquaculture. It seems to me we just haven\'t really accepted it
yet, but it\'s just a fact of reality if you look at the seafood
industry.

If you\'re going to do that any less, we have to redo the loan program.
I\'m here to tell you from personal experience it will not work the way
it\'s set up now. The loan program themselves are asking for help from
us to give them a new set of rules. I think MAFAC will play a really
important role in that because the rules that they have to play by right
now, it\'s a square peg trying to put in a round hole. It just doesn\'t
fit, and they don\'t know how to. They can\'t lobby. They can\'t change
things. We have to change them.

So I think definitely we\'re going to have a vibrant industry if we have
to look at that loan program to make it work.

MR. JONER: This is related to the sustainable communities, and I was
thinking about what Dave said this morning about the lobstermen selling
their palace for a million dollars or whatever. You know, the hot thing
where we live, where I live on the peninsula, there\'s an area in the
rain shadow of the Olympics, squid dungeness valley, and there\'s a few
farms left. It used to be all farms not long ago.

So they got these groups like Friends of the Fields, and what they\'re
trying to do is buy up the development rights of the remaining farms,
and the community is really behind it because then you have locally
grown produce, and you don\'t have to truck everything in from
California, even though they are trucking in Californians to buy up the
\-- and Alaskans.

(Laughter.)

MR. JONER: I can\'t believe the number of Alaskans that move there.

So is there any kind of program anywhere along the coast that has a
similar program in place where the development rights of these fish
plants, rather than selling it for multi-millions of dollars for a
condo, you sell the development rights and then that can\'t be developed
into something other than what it\'s intended for? Fish processing,
fishing boats, yachts.

And if not, I think that\'s something worth pursuing. Are you looking at
some of these safe the farms, save the fields programs that could be
applied to the fishing communities?

MS. FELLER: Well, I think that\'s an interesting idea. A lot of state
have established PDR programs for transfer of development rights to
compensate land owners, you know, for putting these restrictions on
their land voluntarily.

I mean, I know how they\'re used for conservation to kind of keep low
impact uses on the land and help farmers recoup some of the asset value
of their properties. It might be real interesting to get somebody maybe
from the Land Trust Alliance to come in and talk about PDR with MAFAC,
maybe come up with something to explore how that might be relevant to
working waterfront.

Trust for Public Land has done some work on working waterfront issues,
too. They are more intentional kind of urban issues.

MR. JONER: You know, what Randy said about trying to diversify and save
the communities by aquaculture. I think Bill can tell you once there\'s
million dollar homes up along the waterfront, nobody is going to even be
able to put a net down out there. So, you know, that\'s the thing we\'re
up against.

MR. DEWEY: There are some programs around this where development rights
on fishing docks have been purchased. There are some models out there,
some examples.

MR. JONER: I would just like to see when this group gathers again to
have some information like that that we could adopt or do something
with.

MR. CATES: One thing we need to try and get, I think, too, is the idea
that our industry represents the consumer. We always talk about our
fishing industry, but what we\'re really doing I heard it mentioned
yesterday. We\'re supporting a product for the consumer. Now, we really
don\'t have that consumer\'s voice. So that should mean to our community
that the fishing dock has a greater importance because we\'re providing
healthy seafood for the community and the bigger public.

We\'re kind of missing that link.

MR. BILLY: Martin.

MR. FISHER: I just wanted to offer Steve again you could approach your
state representatives and ask them to put something on the state
constitutional ballot to where working waterfront is taxed at a
different rate than the surrounding comparable real estate. It certainly
wouldn\'t take care of the deed restriction, but it would allow existing
enterprises to continue in the face of development around them without,
you know, having a two-face about the same tax rate. Because that\'s
what we did in Florida, and it worked. I know 69 percent of the vote was
in favor of it.

MR. JONER: When was that?

MR. FISHER: Just on the national election, November 4th.

MR. JONER: But what was the initiative or whatever, referendum, whatever
it was? Do you know the number of it?

MR. FISHER: It was a constitutional amendment.

MR. JONER: Oh, constitutional amendment. Okay. I\'ll just look it up.

MR. BILLY: Okay. Is there any other business? Yes, Dorothy.

MS. LOWMAN: Well, before lunch I brought up several little different
points on this economic research. I wrote up something for the
Committee\'s consideration as a motion.

[MAFAC believes that socioeconomic data collection is essential to
understand the impacts on communities and appropriate responses to both
fishery disasters and changes to fisheries management. We support the
NOAA fisheries budget request for increased appropriations for
socioeconomic research.]{.mark}

[In addition, we recommend that NOAA fisheries develop a policy that
LAPP programs include a requirement that quota shareholders provide
basic socioeconomic information that could assist evaluating the impacts
of the program. This data submission requirement should be mandatory,
but at the same time cost effective and not overly burdensome.]{.mark}

So that\'s it.

MR. BILLY: Is that in the form of a motion?

MS. LOWMAN: That\'s in the form of a motion.

MR. BILLY: Second?

PARTICIPANTS: Second.

MR. RAFTICAN: Would you read the last part of the sentence? I couldn\'t
hear.

MR. BILLY: Read it all again.

DR. HOLLIDAY: Do you want up to put it up?

MS. LOWMAN: Do you want to put it up there?

MR. CATES: Tom, while we\'re doing that, is this the time where you\'ll
take the other for future agenda, future ideas?

MR. BILLY: Yes.

MR. CATES: One thing I would like to hear is since it\'s an intricate
part of fisheries is the councils and are they working properly? Is each
area working differently?

I mean if we\'re an advisory committee, that seems to be an area that
should be looked at.

MS. FOY: Is there a standardized approach?

MR. REISNER: You\'re advising us on all of our programs.

MR. CATES: I mean, it seems from what I do know each area acts or
governs differently in what\'s working and what\'s not working.

MR. BILLY: Is there a review? I thought I read that there\'s a review of
the council process, councils. Does anyone know?

MR. REISNER: Alan is gone. We are going through redevelopment of the
grants associated with the councils. They have five-year grants, and
they\'re being renewed this next year, and in those grants we\'re asking
them to develop some performance metrics to say what are you going to
accomplish and how is it helping the mission and so we can essentially
document that, in fact, they\'re working towards the goal and they\'re
meeting metrics.

We don\'t really have them in place right now. So that\'s one area.

I think, and I\'m sort of looking at Martha, I know there are some
reports that are being done related to council membership, and I don\'t
know what the status of those are either.

MR. CATES: I think that is something that I view is worth reading about.

MR. SIMPSON: Mr. Chairman.

MR. BILLY: Yes.

MR. SIMPSON: I mean, it\'s somewhat subjective. Even metrics, you know,
Council A, B, C, D says I\'m going to do this, and they did it. What
they did may be off or not order. You heard how hard we worked on red
snapper and everything but drilling a hole in the bottom of the boat. It
somewhat didn\'t work. As far as metrics was concerned, it would be
great. In the long run we\'ve kind of gotten there. It\'s real
subjective.

MR. REISNER: Tom, if I can follow up.

MR. BILLY: Yes.

MR. REISNER: You\'ve heard the discussion on CZMA and part of the issue
was the program was giving grants to individual states, but there was
really no coherent effort to say, well, what are we accomplishing today,
and so part of what we\'re trying to do is to say to get some coherent
essence of what we\'re accomplishing, yes, it may be different for each
council because each council has different needs and priorities, but at
the end of the day handing over fishing or sustainability are going to
resonate throughout all of them, and getting some metrics associated
with that even though there may be some specific ones for individuals I
think would be worthwhile.

MR. CATES: Sure. I mean it might be something as simple as asking the
councils, if we ask them how can you improve this.

MR. SIMPSON: It\'s easy to do, but if you ask Chris\' opinion, the Gulf
Council, and my opinion, you might get two different answers. I mean, as
long as you\'re doing something that\'s fine, but if somebody wants you
to be doing it this fast, that\'s two different opinions.

MR. BILLY: [Maybe what we could consider is given the work that\'s being
done now in terms of renewal of five-year grants and adding these
criteria, at our next meeting we could learn more about that and where
that stands and then have a further discussion, maybe some additional
briefing on the councils and how they\'re working, you know, if there
are different approaches.]{.mark} I\'m not sure, but something that
would start to inform us more about a council and how it\'s functioning,
and then we can talk about where we go from there.

How does that sound? Yes, Chris.

MR. DORSETT: The councils do so many things. Do you want to look at
particular aspects of the things they\'re doing? Because it would
probably be a mixed review.

MR. BILLY: Yeah. That makes sense, but I don\'t know how to do that
right now.

MR. SIMPSON: Just start and let\'s see.

MR. DORSETT: Then maybe narrow it down.

MR. BILLY: And then narrow it down or maybe sequence and look at
different aspects over a series of meetings.

DR. HOLLIDAY: Well, why don\'t we and staff take a crack at trying to
define what we\'ve heard and send that back out for your consideration
\--

MR. BILLY: Okay.

DR. HOLLIDAY: \-- as something to chew on?

MR. BILLY: Okay. That sounds good.

DR. HOLLIDAY: Along these lines.

MR. BILLY: Okay. Now you can see the language. We have a motion and a
second. Any further discussion?

(No response.)

MR. BILLY: No? Okay. All in favor say \"aye.\"

(Chorus of ayes.)

MR. BILLY: Opposed?

(No response.)

[MR. BILLY: Pass.]{.mark}

MR. FLETCHER: I had a question for Gary, Tom, and it might be the
subject of some future discussion. You know, it seemed to be a
no-brainer that something has got to be done about capital construction
funds, and yet it just goes on and on and nothing ever gets
accomplished, and people are suffering, people who put money in their
accounts with all the right intentions of building an abode or upgrading
their abode and then were told you can\'t do that. Basically they were
screwed.

And yet every year we hear about bills that are introduced that don\'t
go anywhere. I don\'t have an answer, but I\'m frustrated because it
should be an issue that gets addressed.

MR. REISNER: I don\'t want to say it\'s quite that simple. I mean,
again, without saying that the administration has a position because it
really doesn\'t, I can tell you in Treasury Department and where IRS is,
they object to changes in this. They view it as, you know, people made
business decisions to put this money here, and if you expand the uses of
the money, then you reduce the federal revenues that are going to be the
tax base that is going to come in.

You know, in fact, that\'s what would happen. If you got more uses that
you can use it, there\'s going to be less tax revenue associated with
it. Is that a good societal use of our tax expenditures? I\'m not saying
that. I\'m just saying there are issues here that are just bigger than
what appears to be a no-brainer because sometimes it appears to be a
no-brainer to me.

MR. FLETCHER: Just a follow-up. Fishermen made business decisions with
the understanding that they were going to be able to use the money for
specific purposes. Now they can\'t do that.

MR. REISNER: Well, no. There\'s no prohibition for using this money the
way it was originally put in those accounts for us. Somebody in
northeast fisheries can take their money out and construct a new vessel
for fishing in the northeast groundfish fishery if they want to. I
understand from a business perspective that doesn\'t make sense.

But I\'m commenting, Bob, on your term they \"can\'t\" do it. They can,
but it doesn\'t make business sense and from a fishery management
perspective it\'s not something we would necessarily like to see.

MR. BILLY: Is this an item that we would like to delve into further at
our next meeting or one of our next meetings?

MR. FLETCHER: I mean this affects all sectors of the nation, Tom.

DR. HOLLIDAY: If you want to express an opinion on a legislative
priority or solution for the next administration, but I don\'t think
there\'s a \-- there\'s not going to be a lot of debate and further
discussion. The issue is pretty well presented.

MR. DORSETT: This falls into that larger umbrella associate principle
that may be something that might come up in that discussion.

MR. FLETCHER: The group part of this.

MR. BILLY: Could, yeah. Martin.

MR. FISHER: With the amount of money that the capital construction fund
in terms of what\'s actually in it represents, it\'s close to a third of
the annual budget of NOAA. It\'s no chump change. It\'s a big deal. I
think Bob\'s impassioned remarks are quite appropriate. [We should send
a message or give some guidance to rewrite the legislation so that
people that are stuck in this development will get some relief.]{.mark}

I don\'t really think that\'s \-- I mean, to me it\'s a no-brainer.
It\'s sort of a slam dunk situation. Even Gary is sort of supporting the
notion that this is antiquated legislation and this is a change, and
that some Senator who just got replaced was working on it. So if it has
the recommendation of MAFAC through the next administration to make it a
priority to take care of it.

PARTICIPANT: The views expressed were my own.

(Laughter.)

MR. BILLY:

Would proposed language, whatever, be, in terms of is it a
recommendation to the Secretary?

DR. HOLLIDAY: You can convey as one of the recommendations the results
of this meeting and [the action items that you want to inform the
Secretary of MAFAC\'s concern on this issue with the recommendation that
some legislative relief \-- that the department work with respective
members on the Hill to seek a solution to this issue.]{.mark}

MR. FLETCHER: I like it.

DR. HOLLIDAY: That\'s a perfectly legitimate thing for MAFAC to do.

MR. BILLY: Okay. Did everyone hear that? No? Can you say it?

DR. HOLLIDAY: Well, I was just giving the example. It \'s perfectly
legitimate for MAFAC to make as part of a recommendation or an action
coming out of this meeting that this item as discussed and that MAFAC is
advising the Secretary to work collaboratively with the legislature to
try to find a remedy for this problem that has these kinds of
consequences, and you know, the Committee would strongly endorse taking
action to fix it.

Not those exact words, but that\'s the gist of it. It\'s an action
recommendation coming out of the deliberations of your November meeting.
That would be sent forward specifically to the department.

MR. WALLACE: Do you need some help to do that?

MR. BILLY: Yes.

MR. FISHER: I would move for everyone to march outside.

(Laughter.)

MR. BILLY: Second? Okay. Seconded.

Any further discussion?

(No response.)

MR. BILLY: No? Okay. All those in favor say \"aye.\"

(Chorus of ayes.)

MR. BILLY: Opposed?

(No response.)

[MR. BILLY: We have it. Good.]{.mark}

MR. CATES: One last issue I would think that we need to look at is how
we deliver our advice. I know we touched on it the last meeting and this
meeting, but we haven\'t really refined that yet. I hope we don\'t
forget about that. We shouldn\'t be just talking to ourselves. We\'ve
got to deliver part of this.

MR. BILLY: That certainly could be a component of a discussion with the
new Secretary, highlighting two or three of the key recommendations in
addition to the other things we talked about.

MR. JONER: Or it would be helpful to have, you know, two or three of
these subjects have bullets prepared so that we go in, you know, at
least all with the same message and then we could give our personal
perspective on it.

MR. BILLY: Very good.

MR. JONER: That would be helpful. We\'re at least going to be hearing
the same song, our own rendition of it.

MR. BILLY: Okay.

DR. HOLLIDAY: For the benefit of the new members as well as the old, you
know, 30 days after the end of the meeting we\'re supposed to prepare a
written summary of the actions and recommendations coming out of the
Committee, which I forward to you for approval, and that becomes the
record that then goes forward to NOAA and to the department, and our
FACA obligation gets posted to the FACA Website as well for the public
to see what findings and recommendations.

And within that, the bullets will be identified by action and
recommendations. So there is a mechanism. I think Randy has talked in
the past about in addition to making a paper report, do we want to have
someone orally present that from the membership to higher leadership as
a new way of doing business. But you should note or remember that we do
this report on a routine basis.

MR. BILLY: We started to do that, and 2020 is a good example where we
hand carried it and made sure that the hierarchy was aware of it.

Okay. With that unless anyone has any other matters to raise?

(No response.)

MR. BILLY: No? Then I am pleased to call this meeting adjourned.

(Whereupon, the above-entitled matter was concluded at 3:15 p.m.)