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2010-06-10 Work SessionKodiak Island Borough Assembly Work Session Thursday, June 10, 2010, 7:30 p.m., Borough Conference Room Work Sessions are informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda packet and seek or receive information from staff. Although additional items not listed on the work session agenda are discussed when introduced by the Mayor, Assembly, or staff, no formal action is taken at work sessions and items that require formal Assembly action are placed on regular Assembly meeting agenda. Citizen's comments at work sessions are NOT considered part of the official record. Citizen's comments intended for the "official record" should be made at a regular Assembly meeting. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) ITEMS FOR DISCUSSION 1. Revenue Funding Options • Sales Tax • Alcohol and Tobacco Tax • Mill Levy Increase • Other Options MANAGER'S COMMENTS CLERK'S COMMENTS MAYOR'S COMMENTS ASSEMBLY MEMBERS COMMENTS 2. Fireworks 3. Crossing Guard Update 4. Code of Ethics 5. Title 1 Code Update PACKET REVIEW PUBLIC HEARING Ordinance No. FY2010 -09 Amending Title 16 Subdivision Chapter 16.90 Appeals to the Assembly Section 16.90.100 Hearing Examiner and Title 17 Zoning Chapter 17.225 Appeals to the Board of Adjustment Section 17.225.090 Hearing Examiner. UNFINISHED BUSINESS — None. NEW BUSINESS CONTRACTS Contract No. FY2010 -38 Between the Kodiak Island Borough and the Kodiak Chamber of Commerce of Kodiak, Alaska for Economic Planning and Project Development Within the Kodiak Island Borough for FY2011. Contract No. FY2010 -39 Between the Kodiak Island Borough and the Kodiak Island Convention and Visitors Bureau for Destination Marketing and Tourism Development Services for FY2011. RESOLUTIONS Resolution No. FY2010 -35 Adopting the Comprehensive Economic Development Strategy (CEDS) 2010. *Resolution No. FY2010 -36 Authorizing the Records Manager to Dispose of Certain Kodiak Island Borough Records. Resolution No. FY2010 -37 Appointing the Kodiak Island Borough Attorney. ORDINANCES FOR INTRODUCTION — None. OTHER ITEMS BOARD OF ADJUSTMENT - An Appeal of the Planning and Zoning Commission's Decision on Case No. 10 -013 of March 10, 2010, Overturning an Administrative Order Resulting in the Issuance of a Notice of Violation Regarding the Use of Lot 10, Block 1, Pasagshak Subdivision for a "Full - Service Lodge, Including Room Accommodations, Meals, Guiding, and Transport Services." The appellants are seeking specific relief. Appellants: Richard and Nancy Diemer. Kodiak Island Borough Assembly Work Session Thursday, June 10, 2010, 7:30 p.m., Borough Conference Room Work Sessions are informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda packet and seek or receive information from staff. Although additional items not listed on the work session agenda are discussed when introduced by the Mayor, Assembly, or staff, no formal action is taken at work sessions and items that require formal Assembly action are placed on regular Assembly meeting agenda. Citizen's comments at work sessions are NOT considered part of the official record. Citizen's comments intended for the "official record" should be made at a regular Assembly meeting. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) ITEMS FOR DISCUSSION 1. Revenue Funding Options • Sales Tax • Alcohol and Tobacco Tax • Mill Levy Increase • Other Options 2. Fireworks 3. Crossing Guard Update 4. Code of Ethics 5. Title 1 Code Update PACKET REVIEW PUBLIC HEARING Ordinance No. FY2010 -09 Amending Title 16 Subdivision Chapter 16.90 Appeals to the Assembly Section 16.90.100 Hearing Examiner and Title 17 Zoning Chapter 17.225 Appeals to the Board of Adjustment Section 17.225.090 Hearing Examiner. UNFINISHED BUSINESS — None. NEW BUSINESS CONTRACTS Contract No. FY2010 -38 Between the Kodiak Island Borough and the Kodiak Chamber of Commerce of Kodiak, Alaska for Economic Planning and Project Development Within the Kodiak Island Borough for FY2011. Contract No. FY2010 -39 Between the Kodiak Island Borough and the Kodiak Island Convention and Visitors Bureau for Destination Marketing and Tourism Development Services for FY2011. RESOLUTIONS Resolution No. FY2010 -35 Adopting the Comprehensive Economic Development Strategy (CEDS) 2010. *Resolution No. FY2010 -36 Authorizing the Records Manager to Dispose of Certain Kodiak Island Borough Records. Resolution No. FY2010 -37 Appointing the Kodiak Island Borough Attorney. ORDINANCES FOR INTRODUCTION — None. OTHER ITEMS BOARD OF ADJUSTMENT - An Appeal of the Planning and Zoning Commission's Decision on Case No. 10 -013 of March 10, 2010, Overturning an Administrative Order Resulting in the Issuance of a Notice of Violation Regarding the Use of Lot 10, Block 1, Pasagshak Subdivision for a "Full - Service Lodge, Including Room Accommodations, Meals, Guiding, and Transport Services." The appellants are seeking specific relief. Appellants: Richard and Nancy Diemer. MANAGER'S COMMENTS CLERK'S COMMENTS MAYOR'S COMMENTS ASSEMBLY MEMBERS COMMENTS ON- LEAVE: Branson — June 5 -19 (Personal, ACOA, NCOA) Fulp — June 17 -25 (Personal) Selby — July 15 -21 (NACo Conference — Reno, NV) Gifford — July 3 -9 (Personal) Kodiak Island Borough TO: Borough Mayor and Assembly THROUGH: Rick Gifford, Borough Manager Alti FROM: Karleton Short, Finance Director SUBJECT: Funding sources DATE: June 8, 2010 MEMORAND UM At the last work session three different funding options were discussed. These included: 1. A sales tax. A one percent sales tax would result in revenues of approximately $1,800,000. 2. Alcohol and tobacco tax. Based on the revenues generated in the Fairbanks North Star Borough adjusted for our population size an 8% tax would result in about $180,000 in tobacco taxes and $130,000 in alcohol taxes for total revenues of $310,000. 3. We can increase the property taxes on real and personal property. This also results in an increase in the severance tax rate. Each mill generates taxes of about $1,115,000. At the current time the Borough pays approximately 1.88 mills for debt service. As the 2011, 2012, and 2013 bonds for the High School Renovation and Addition Project are sold it will increase to a high of 4.18 mills in FY2014. After that we will be paying approximately 3.21 mills in debt service. The Facilities Fund should reduce all of these mill rates by % %. The Borough's annual debt service for the High School Renovation and Addition Bond is estimated as follows: FY2012 $ 789,319 FY2013 $1,578,637 FY2014 $2,409,317 The FY2011 budget approved a loan of $2,000,000 for Renewal and Replacement projects from the Facilities fund. For every $2,000,000 we "borrow" from the Facilities fund for 10 years at 5% we will have annual payments of $259,000. We need to do $11,982,342 in Renewal and Replacement projects over the next four years. We hope that the State will reimburse us $5,740,137 leaving us $6,242,205 to pay. If we are reimbursed by the state at the full amount our loan payments to the Facilities fund will be $808,000 per year over ten years. These payments will stair step up and then down with the first years payments only being $259,000. Fireworks code in other 2 class boroughs 4k Fairbanks NS Borough: sale prohibited; use restricted to a person's own real property or public display which requires permit and bond. Kenai Peninsula Borough: sale prohibited; use prohibited except for authorized displays requiring permit and bond. Ketchikan Gateway Borough: sale and possession prohibited; public display allowed with permit and bond. Mat -Su Borough: sale prohibited; use prohibited except for public display which requires permit and bond. Fireworks code in other municipalities (for comparison purposes) City of Houston: Muni of Anchorage: City of Palmer: City of Wasilia: sale is allowed with required permit; controlled use is allowed with some restrictions: on privately owned real property (with permission of the owner), pop bottle rockets prohibited, no discharge of fireworks while under the influence of alcohol, unlawful to discharge fireworks in a manner that could cause harm to life and property. sale prohibited; use prohibited. In 2007, an ordinance to allow the use of certain common fireworks for a limited time period annually in celebration of the New Year failed. sales prohibited; use prohibited except from 6:00 pm on 12/31 to 1:00 am on 01/01 on private property with direct supervision of someone 21 or older, not near certain health or public gathering places, not near fuel sources, not from within a vehicle or structure or on waterways within city limits. sale prohibited; use prohibited except annually on private property during the seven hour period from 6:00 pm on December 31 to 1:00 am on January 151 2 Chapter 8.08 FIREWORKS Page 1 of 3 Sections: 8.08.010 8.08.020 8.08.030 8.08.040 8.08.050 8.08.060 c ti S Gvoo- L Chapter 8.08 FIREWORKS' Defined. Sale prohibited. Use restricted. Displays — Permit required. Authorized sale and use. Penalty for violations. 8.08.010 Defined. "Fireworks" means and includes any combustible or explosive composition, or any substance or combination of substances, or article prepared for the purpose of producing a visible or an audible effect by combustion, explosion, deflagration or detonation, and shall include toy pistols, toy cannons, toy canes or toy guns in which explosives are used, the type of nonmanned balloons which require fire underneath to propel the same, firecrackers, torpedoes, skyrockets, Roman candles, daygo bombs, or other devices of like construction and any devices containing any explosive or flammable compound, or any tablets or other devices containing any explosive substance, except that the term "fireworks" shall not include auto flares, ammunition, paper caps, containing not in excess of an average of 0.25 of a grain of explosive content per cap manufactured in accordance with the Interstate Commerce Commission regulations for packing and shipping as provided therein, and toy pistols, toy canes, toy guns, or other devices for use of such caps, and sale and use of which shall be permitted at all times. (Ord. 72 -27, 1972; Ord. 72 -5, 1972; Ord. 69 -1, 1969; prior code § 32.05.010) 8.08.020 Sale prohibited. The sale of fireworks is prohibited. (Ord. 72 -27, 1972; Ord. 72 -5, 1972; Ord. 69 -1, 1969; prior code § 32.05.020) 8.08.030 Use restricted. Except as provided in FNSBC 8.08.050 and 8.08.060, no person shall, except on real property owned by him, under his control or with permission granted by owner, use or explode fireworks. (Ord. 72 -27, 1972; Ord. 72 -5, 1972; Ord. 69 -1, 1969; prior code § 32.05.030) 8.08.040 Displays — Permit required. A. Fireworks may be used for public displays by municipalities, fair associations, amusement parks and other organizations or groups of individuals, under the following conditions: 1. A permit is obtained from the borough mayor or his authorized representative after approval of the local fire authorities; 2. In determining whether to issue or deny a permit for the use of fireworks at a public display, the borough mayor or his designee shall consider the following: http:// www. codepublishing. com/ dtSearch/ dtisapi 6.d11 ?ernd— getdoc &DocId =94 &Index =... 5/7/2010 Chapter 8.08 FIREWORKS Page 2 of 3 a. The location of the proposed display and the surrounding b. The type of fireworks and the length of the proposed display; c. The danger of the proposed display to persons and property; d. The experience and the competency in handling fireworks of the person in charge of the proposed display; 3. A bond is filed with the borough, in the amount of at least $1,000 to ensure payment of all damages to persons or property caused by the display. The bond requirement will not be operative if the holder of the permit has in effect an insurance policy which accomplished the same purpose as the bond. B. No permit is transferable. C. Any fireworks that remain unfired after the display is concluded shall be immediately disposed of in a way safe for the particular type of fireworks remaining. (Ord. 72 -27, 1972; Ord. 72 -5, 1972; Ord. 69 -1, 1969; prior code § 32.05.040) property; and 8.08.050 Authorized sale and use. Nothing in this chapter shall be construed to prohibit any resident wholesaler, dealer or jobber to sell at wholesale such fireworks as are not herein prohibited; or the sale of any kind of fireworks provided the same are to be shipped directly out of the borough, in accordance with the Interstate Commerce Commission regulations covering the transportation of explosives and other dangerous articles by motor, rail, and water; or the use of fireworks by railroads or other transportation agencies for signal purposes or illumination, or the sale or use of blank cartridges for a show or theater, or for signal or ceremonial purposes in athletics or sports, or for use by military organizations. This chapter does not pertain to those explosives or devices used in construction, logging or mining and would not prohibit the use of these explosives or devices in such activities. (Ord. 72 -27, 1972; Ord. 72 -5, 1972; Ord. 69 -1, 1969; prior code § 32.05.050) 8.08.060 Penalty for violations. Every person, firm, corporation, club, association or organization violating any of the provisions of this chapter is guilty of a misdemeanor and upon conviction thereof shall be fined in an amount not exceeding $300.00 plus court costs, or be imprisoned in jail for a period not exceeding 30 days, or be both so fined and imprisoned. (Ord. 72 -27, 1972; Ord. 72 -5, 1972; Ord. 69 -1, 1969; prior code § 32.05.060) 1 For statutory provisions authorizing municipalities to regulate the offering for sale, exposure for sale, sale, use or explosion of fireworks, see AS 29.35. http: / /www.codepublishing. corn /dtSearch/dtisapi6.dll?cmd= getdoc &DocId =94 &Index =... 5/7/2010 Kenai Peninsula Borough CHAPTER 10.18. FI.REWORKS CONTROL 10.18.010. Title. This chapter shall be known as the fireworks control ordinance of the Kenai Peninsula Borough. (Ord. No. 85 -87, § 1(part), 1985) 10.18.020. Fireworks prohibition -- Exception. The use of fireworks is forbidden within the Kenai Peninsula Borough outside of the boundaries of the cities of Homer, Kachemak City, Kenai, Seldovia, Seward and Soldotna, except as otherwise provided in this chapter. (Ord. No. 85 -87, § 1(part), 1985) 10.18.030. Exceptions for authorized displays. Fireworks may be used for public displays by municipalities, fair associations, amusement parks and other organizations, or groups holding a cun permit issued by the borough mayor as provided elsewhere in this chapter. (Ord. No. 85 -87, § 1(part), 1985) 10.18.040. Use permits. A. The borough mayor or his designee may issue a fireworks use permit, within 30 calendar days from the date of application, to municipalities, fair associations, amusement parks and other organizations, or groups for public fireworks displays provided that the application shows, and issuance of the permit is conditioned upon: 1. The dates and locations of the proposed displays; 2. That all appropriate or required state licenses or certificates have been procured; 3. That a cash or corporate security bond has been filed with the borough in the amount of at least $1,500 to insure payment of damages to persons or property caused by the display. The bond requirements may be waived if the holder of the permit has in effect an insurance policy which accomplishes the sane purpose as the bond; 4. That the appropriate fire departments have been notified and invited to be in attendance for fire control purposes; 5. That the state fire marshal has issued the necessary permit if required by law; and 6. The name and address of the applicant, and, if required pursuant to this code, the name and address of the professional pyrotechnician or company who will be conducting the display. B. A professional pyrotechnician shall conduct all fireworks displays that include "dangerous fireworks" as defined in AS 18.72.100(1). A fireworks display involving no "dangerous fireworks" may be conducted without a professional pyrotechnician. C. In the event that an objection is received from the state fire marshal or any applicable fire department, within said 30 -day period, the mayor may deny the application for cause shown. (Ord. No. 96 -05, § 1(part), 1996; Ord. No. 85 -87, § 1(part), 1985) 10.18.050. Sale of fireworks forbidden. The sale or offering for sale of Class C fireworks is forbidden within the Kenai Peninsula Borough outside of the boundaries of the cities of Homer, Kachemak City, Kenai, Seldovia, Seward and Soldotna. (Ord. No. 85 -87, § 1(part), 1985) 10.18.060. Fireworks -- Miscellaneous provisions. A. No permit shall be issued for more than 3 displays per calendar year. B. No permit is transferable. C. This section does not authorize the mayor to approve displays within the boundaries of the cities of Homer, Kachemak City, Kenai, Seldovia, Seward and Soldotna. (Ord. No. 85 -87, § 1(part), 1985) 10.18.070. Definitions. For the purpose of this chapter the following definitions shall apply: A. "Dangerous fireworks" means dangerous fireworks as defined by AS 18.72.100(1), as it now exists or may from time to time be amended or changed by the legislature. B. "Display" means the detonation of fireworks at any time. C. "Fireworks" means fireworks as defined by AS 18.72.100(3), as it now exists or may from time to time be amended or changed by the legislature. D. "Professional pyrotechnician" shall mean an individual who has been licensed by the division of Alcohol, Tobacco, and Firearms to use Class A, Class B, and Class C fireworks. (Ord. No. 96 -05, § 2, 1996; Ord. No. 85 -87, § 1(part), 1985) 10.18.080. Penalties. Upon conviction, each violation of this chapter shall be subject to a fine of $500. (Ord. No. 85 -87, § 1(part), 1985) Sections: 27.10.010 Defined. 27.10.020 Sale and possession prohibited. 27.10.030 Displays; permit required. 27.10.040 Authorized sale and use. 27.10.050 Penalty for violations. 27.10.060 Seizure of fireworks, 27.10.010. Defined. "Fireworks" means and includes any combustible or explosive composition, or any substance or combination of substances, or device prepared for the purpose of producing a visible or an audible effect by combustion, explosion, deflagration, or detonation, and shall include blank cartridges, toy pistols, toy cannons, toy canes, or toy guns in which explosives are used, firecrackers, torpedoes, skyrockets, Roman candles, Dago bombs, sparklers or other devices of like construction, and any devices containing any explosive or flammable compound, or any tablet or other device containing an explosive substance, except that the term "fireworks" shall not include any auto flares, ammunition, paper caps containing not in excess of an average of twenty -five hundredths of a grain of explosive content per cap, and toy pistols, toy canes, toy guns or other devices for use of such caps, the sale and use ofwhich shall be permitted at all times. (Ord. No. 347, §1, 1 -7 -80) 27.10.020. Sale and possession prohibited. Except as hereinafter provided, no person shall offer for sale, expose for sale, sell or possess any fireworks within any area of the borough outside any city. (Ord No. 347, §1, 1 -7 -80) 27.10.030. Displays; permit required. (a) Fireworks may be used for public displays by municipalities, fair associations, amusement parks and other organizations or groups of individuals, under the following conditions: (1) A permit is obtained from the borough manager or his authorized representative after approval of the local fire authorities; (2) In determining whether to issue or deny a permit for the use of fireworks at a public display, the borough manager or his designee shall consider the following: a. The location of the proposed display and the surrounding property; b. The type of fireworks and the length of the proposed display; c. The danger of the proposed display to persons and property; and (3) Chapter 27.10 3/2002 ,,e)(111.04 6ire,NAJL. TITLE 27 FIREWORKS d. The experience and the competency in handling fireworks of the person in charge of the proposed display. A bond is filed with the borough, in the amount of not less than one thousand dollars (S 1,000.00) to ensure payment of all damages to persons or property caused by the display. Page 1 of 2 KetchIkan Gateway Borough Code of Ordinances The bond requirement will not apply if the holder of the permit has in effect an insurance policy which accomplishes the same purpose as the bond and files with the borough a certificate of insurance and an affidavit describing the current coverage. (b) No permit is transferable. (c) Any fireworks that remain unfired after the display is concluded shall be immediately disposed of in a safe and authorized manner. (Ord. No. 347, §1, 1 -7 -80) 27.10.040. Authorized sale and use. Nothing in this chapter [title] shall be construed to prohibit the use of fireworks by railroads or other transportation agencies for signal purposes or illumination, orthe sale or use of blank cartridges for a show or theater, or for signal or ceremonial purposes in athletics or sports, or for use by military organizations for military purposes. This chapter [title] does not pertain to those explosives or devices used in construction, logging or mining operations while possessed for or used in such activities. (Ord. No. 347, §1, 1 -7 -80) 27.10.050. Penalty for violations. Any violation of the provisions of this chapter [title] shall be a misdemeanor and upon conviction thereof shall be punishable by a maximum fine of five hundred dollars ($500.00) or imprisonment for not more than thirty (30) days, or by both such fine and imprisonment. (Ord. No. 347, §1, 1 -7.80) 27.10.060. Seizure of fireworks. The borough manager, his designee and any law enforcement officer may seize, take, remove or cause to be removed at the expense of the owner, all fireworks and stocks of fireworks held in violation of this title and may dispose of the same by destruction, donation to a person or group permitted under this chapter [title] to possess and use such fireworks, or in any other appropriate manner as determined by the borough manager. (Ord. No. 347, §1, 1 -7 -80) Chapter 27.10 3/2002 Page 2 of 2 Ketchikan Gateway Borough Code of Ordinances Document Page 1 of 2 Section e.z5 )U A,,;;;,1)70 Statutory reference: Applicability Title [Repealed] *Fireworks +4 defined Sale prohibition Use prohibition Exceptions for authorized displays Permissible sales and uses Penalty for violations [Repealed] Violations, enforcement, and penalties 8.35.005 APPLICABILITY. 8.35.020 *FIREWORKS 44 DEFINED. CHAPTER 8.35: *FIREWORKS w CONTROL For statutory provisions authorizing second -class boroughs to regulate or prohibit the offering for sale, exposure for sale, sale use or explosion of *fireworks H in areas outside cities, see A.S. 29.35.210(a)(2) For provisions authorizing municipalities to regulate the same, see A.S. 29.48.035(13) This chapter applies in all areas of the borough outside of the cities of Houston, Palmer, or Wasilla. (Ord. 94- OOIAM, § 8 (part), 1994; Ord. 92 -114, § 3, 1992) 8.35.010 Title. [Repealed by Ord. 92-114, SS' 4, 1992] In this chapter, " *fireworks 44" is defined as ICC Class C common *fireworks 44 and shall include only those *fireworks N enumerated as ICC Class C common *fireworks 41. in the regulations of the Interstate Commerce Commission. (Ord. 94- OOIAM, § 8 (part), 1994; Ord. 92 -114, § 5, 1992; Ord. 69 -12, § 12.05.060, 1969) 8.35.030 SALE PROHIBITION. A person may not sell, expose for sale, or offer for sale any *fireworks 44 within the corporate limits of the borough, except as otherwise provided by this chapter. (Ord. 94- 001AM, § 8 (part), 1994; Ord. 92- 114, § 6, 1992; Ord. 69 -12, § 12.05.020, 1969) 8.35.040 USE PROHIBITION. A person may not explode any *fireworks 44, except as otherwise provided by this chapter, within the corporate limits of the borough. (Ord. 94- OO1AM, § 8 (part), 1994; Ord. 92 -114, § 7, 1992; Ord. 69 -12, § 12.05.030, 1969) 8.35.050 EXCEPTIONS FOR AUTHORIZED DISPLAYS. (A) *Fireworks 44 may be used for public displays by municipalities, fair associations, amusement parks and other organizations or groups of individuals if: (1) A permit application for public display of *fireworks 44 shall be filed with the manager on a form provided by the manager. It shall be accompanied by an appropriate filing fee as established by the assembly and made payable to the Matanuska - Susitna Borough. The applicant shall be responsible for notifying the borough's division of emergency services 24 hours prior to the permitted activity taking place. (2) a bond is filed with the borough of at least $1,000,000 to ensure payment of all damages to persons or property caused by the display. The bond may not be required if the permit holder has in effect an insurance policy which accomplishes the same purpose as the bond. http: / /nt5.scbbs.com /cgi- bin /om_isapi.dll ?client1D= 6741495 &headingswithhits =on &hit... 5/7/2010 Document Page 2 of 2 (B) A permit issued under this chapter is non - transferable, non - delegable, and non - assignable, unless expressly authorized by the borough. (Ord. 94- OO1AM, § 8 (part), 1994; Ord. 92 -114, § 8, 1992; Ord. 69 -12, § 12.05.040, 1969) 8.35.060 PERMISSIBLE SALES AND USES. (A) Nothing in this chapter shall be construed to prohibit: (1) any resident wholesaler, dealer or jobber from selling at wholesale *fireworks f4 which are not prohibited by this chapter; (2) the sale of any kind of *fireworks 44 which are to be shipped directly from the state in accordance with regulations of the United States Interstate Commerce Commission; (3) the use of *fireworks 44 by railroads or other transportation agencies for signal purposes or ilium ination; (4) the sale or use of blank cartridges for a show or theater; (5) the use of *fireworks +4 for signal or ceremonial purposes in athletic events or parades; or (6) use by military organizations. (Ord. 94- OO1AM, § 8 (part), 1994; Ord. 92 -114, § 9, 1992; Ord. 69 -12, § 12.05.050, 1969) 8.35.070 Penalty for violations. [Repealed by Ord. 95- 088(SL'B)(ain), § 8 (part), 1995. See MSB , c:.35. 1 ?S9 for current provisions] 8.35.080 VIOLATIONS, ENFORCEMENT, AND PENALTIES. (A) Except as otherwise specified in this chapter violations of this chapter are infractions. (B) Remedies, enforcement actions, and penalties shall be consistent with the terms and provisions of MSB 1.45. (Ord. 95- 088(SUB)(am), § 19 (part), 1995) http: / /nt5. scbbs. com /cgi- bin/om_isapi. dll ?cl ientID= 6741495 &headingswithhits =on &hit... 5/7/2010 Sections: 8.05.005 Authority and purpose. 8.05.010 Definitions. 8.05.020 Sale of fireworks. 8.05.030 Permit to sell saleable fireworks. 8.05.032 Limit on number of retail permits. 8.05.034 Regulation of permittee operations. 8.05.040 Controlled use. 8.05.050 authorized displays. 8.05.060 Exempt sales and uses. 8.05.070 Penalties for violations. 8.05.080 Building requirements. 8.05.090 Storage of dangerous fireworks. Chapter 8.05 FIREWORKS CONTROL Page 1 of 5 8.05.005 Authority and purpose. The City of Houston has adopted this chapter to exercise the authority granted by AS 18.72.060 to regulate more restrictively in the offering for sale, exposure for sale, sale, use, or explosion of fireworks. (Ord. 09 -06, 2009; Ord. 00 -03, 2000) (Return to the ton) 8.05.010 Definitions. In this chapter, unless the context otherwise requires: A. "Dangerous fireworks" means all fireworks not other2wise defined as saleable fireworks. B. "Saleable fireworks" means fireworks defined as such in AS 18.72.100 as amended from time to time. C. "Personal and private use" means to use, ignite, detonate, or explode any fireworks with the intent that the use, ignition, detonate, or explosion be witnessed by no more than 24 persons. D. "Public display" means to use, ignite, detonate, or explode any fireworks with the intent that the use, ignition, detonation, or explosion be witnessed by more than 24 persons. (Ord. 09 -06, 2009; Ord. 00 -03, 2000; Ord. 88 -01, 1988) (Return to the tr'p) 8.05.020 Sale of fireworks. The retail sale of saleable fireworks in compliance with all federal, state and local regulations and the provisions of this chapter is permitted. All other retail sales of fireworks are prohibited. (Ord. 09 -06, 2009; Ord. 00 -03, 2000; Ord. 88 -01, 1988) (Return to the top) 8.05.030 Permit to sell saleable fireworks. A. Permit Required. No person may sell, expose for sale, or offer for sale any saleable fireworks in the city except in accordance with a permit issued to the person under this section. A permit is issued for a calendar year, becomes effective upon the later of January 1 of the calendar year and the date of its issuance, and expires on December 31 of the calendar year. B. Permit Fee. The permittee shall pay an annual fee of %5,000 for a permit. The permit fee may be paid in two installments of $2,500, the first being due no later than the submission of the permit application, and the second being due no later than 12:00 noon on the last business day before July 15 of that calendar year. The permit fee payments are non - refundable upon the issuance of the permit. C. Permit Application. The applicant or the applicant's authorized representative must deliver personally to the City Clerk the application for a permit and payment of the first installment for such permit under this chapter no later than 12:00 noon on the last business day in January of the year for which the permit is to be http: / /houstonak.com /vertical /Sites / %7B31 F8C92D- 033A- 4BBC- ADE0 -01 A4F0F270C... 5/7/2010 issued. The city will no accept any application for a permit to sell saleable fireworks during a calendar year after 12:00 noon on the last business day in January of the calendar year. The application shall be on a form approved by the City Clerk, shall be signed by the applicant or the applicant's authorized representative, and shall include: 1. The name and address of the applicant, and the name under which the applicant will do business under the permit; 2. If the applicant is not a natural person, the name and address of the adult officer, employee or agent of the applicant who will supervise operations of the applicant under the permit; 3. The location at which the applicant will do business under the permit; 4. Proof that the applicant holds a valid, current permit to sell fireworks issued by the State of Alaska; and Page 2 of 5 5. Proof that the applicant holds a valid, current city business license. D. Action on Application. If the City Clerk finds that a permit application is complete and timely, is accompanied by the annual permit fee, and meets all of the requirements in this chapter for the issuance of a permit, the City Clerk shall issue the permit. If the City Clerk finds that a permit application meets all requirements in this chapter for the issuance of a permit except that the issuance of the permit would cause the number of permits to exceed the number of permits authorized at that time, the City Clerk shall refer the application to the City Council for review under Section 8.05.032. E. Permit Renewal. A permittee may renew a permit for the next calendar year by delivering personally to the City Clerk the first $2,500 installment or the $5,000 annual permit fee and proof that the permittee holds a valid current city business license, on or before 12:00 noon on the last business day in December. The permit fee may be paid in two installments of $2,500, the first being due no later than the submission of the permit renewal application, and the second being due no later than the submission of the last business day before July 15 of the permit year. F. Permit Transfer. A permittee may not transfer a permit, or any right to sell fireworks under the permit, without the prior approval of the council. The council shall approve a permit transfer only after finding that the transferee is qualified to hold the permit under this chapter. (Ord. 09 -06, 2009; Ord. 08 -07, 2008; Ord. 05 -02 § 4, 2005; Ord. 00 -03, 2000; Ord. 99 -04, 1999; Ord. 99 -02, 1999; Ord. 96 -06, 1996; Ord. 92- 04, 1992; Ord. 90 -08, 1990; Ord. 89 -13, 1989; Ord. 89 -01, 1989; Ord. 88 -01, 1988) (Return to the top1 8.05.032 Limit on number of permits. A. No more than four permits to sell fireworks may be in effect at any one time with the following exceptions. The city council may increase or decrease the maximum number of permits for the next calendar year if it finds that public convenience and necessity require the increase or decrease; and provided that a number greater than four permits shall not be issued unless there is a finding by the council there exists a ratio of less than one permit for every three thousand (3,000) people residing in the City of Houston; and provided further that no decrease in the maximum number of permits shall have the effect of revoking or preventing the renewal of any existing permit. B. If an outstanding permit is not renewed, the city council shall determine whether to reduce the number of authorized permits to the number of permits that remain outstanding or to maintain the previous authorized number of permits. Before deciding to reissue a permit that was not renewed, the council must make the same findings that are required for an increase in the number of permits under subsection A of this section. If the council decides to reissue a permit that was not renewed, the City Clerk shall publish and post notice to the public soliciting applications for a permit to replace the expired permit. Applications shall be submitted to the City Clerk with the information and permit fee required in section 8.05.030. If qualified applicants submit more applications meeting the requirements of Section 8.05.030 than the number of available permits, the City Clerk shall determine by lot which applicants will receive the available permits. (Ord. 09 -06, 2009) (Return to the top) 8.05.034 Regulation of permittee operations. A. When a person is initially issued a permit under this chapter, the person shall not open for business http: / /houstonak.com /vertical /Sites / %7B31 F8C92 D -03 3 A -4B BC- ADE0 -01 A4F0F270C... 5/7/2010 Page 3 of 5 until the Fire Chief has inspected the premises where the person will sell fireworks, and determined that the premises comply with the requirements of this chapter. B. A permittee may sell fireworks only at a single location for each permit, and shall give the City Clerk ninety (90) days' notice of any change in that location. After a change in location, a permittee may not reopen until the premises have been inspected by the Fire Chief. Two or more permits may be used at the same location. C. Within sixty (60) days after any change in the officer, employee or agent of the applicant designated to supervise operations under a permit; the permittee shall notify the City Clerk in writing of the name and address of the successor. D. The Fire Chief may inspect the premises where a permittee sells fireworks at any time to determine whether the permittee is complying with applicable legal requirements, including without limitation those pertaining to: 1. Display of city and state permits to sell fireworks; 2. All applicable state and federal regulations; 3. Types of fireworks permitted to be offered for sale; 4. Display of required safety literature; 5. Fire suppression equipment; 6. Properly marked and accessible exits; and 7. No Smoking signs. E. Restriction on sale and use: 1. If at any time the State of Alaska division of forestry declares that the fire danger is extreme, the Fire Chief may restrict the sale or use of any and all fireworks. 2. From April 15 through September 15 the Fire Chief may restrict the sale or use of rockets, sky rockets or missiles, upon finding that the restriction is necessary for public safety due to weather or fire hazard conditions. 3. Between April 15 through June 15, the fire Chief may restrict the sale of use of any or all fireworks upon finding that the restriction is necessary for public safety due to weather or fire hazard conditions. F. In operating under a permit, the permittee shall comply with the following requirements: 1. The premises where fireworks are sold shall be located in a commercial district, as shown on the Land Use District Map of the City of Houston, adopted under Title 10 of the Houston Municipal Code, and comply with the requirements for signs and parking specified in Title 10 of the Houston Municipal Code. 2. The permittee shall comply will all safety requirements for the sale of fireworks in federal and state statutes and regulations, and as established by the State Fire Marshall, and shall distribute safety literature to each fireworks purchaser. 3. The permittee shall not sell fireworks to a person who is under the age of 18 years per International Fire Code. 4. The permittee shall be required to post any safety notices or legal notices as required by the Houston Fire Chief or Mayor which may include notices from the State of Alaska, division of Forestry, the Matanuska - Susitna Borough, the City of Wasilla, the City of Palmer, and the Municipality of Anchorage. 5. The permittee shall not sell fireworks to any person who appears to be intoxicated. G. where the fire Chief finds that a permittee is operating in violation of any applicable legal requirement the following actions can occur: 1. In the case of a violation of this ordinance, the Fire Chief may issue a notice to correct and /or a citation to the permittee. The citation penalty for the selling of fireworks in violation of this ordinance and may be up to $300. 2. The Fire Chief may order the closure of the premises, in the case of a life safety violation as determined by the Fire Chief, where the permittee sells fireworks and the discontinuance of all fireworks sales by the permittee until the violation is corrected. 3. A permittee may appeal an order or citation issued under this paragraph to the council by appearing as a "person to be heard" at the next regular council meeting and http: / /houstonak.com /vertical /Sites / %7B31 F8C92D- 033A- 4BBC- ADE0 -01 A4F0F270C... 5/7/2010 Page 4 of 5 presenting the reasons for the appeal to the city council. After hearing the permittee, the city council may affirm, modify or reverse the order appealed from. In the interim, a permittee may request an emergency appeal to the Mayor until such time as the city council convenes. (Ord. 09 -06, 2009) (Return tot ,e top) 8.05.040 Controlled use. A. It is unlawful for any person to explode any fireworks, except as otherwise provided in this chapter, within any City park or upon any public property or rights -of -way. B. Subject to any limitations in other sections of this chapter, a person may use saleable fireworks within the City for personal and private use on real property owned by the person, or on real property owned by another with prior consent of the property owner. C. The sale of fireworks to any person under the age of 18 is prohibited. It is unlawful for persons under 18 years of age to purchase fireworks. Purchasers of fireworks must show proof of age upon request by seller. D. The sale of the following types of saleable fireworks is prohibited: pop bottle rockets. E. It is unlawful for any person under the influence of alcohol to discharge fireworks. The penalty for violation of HMC 8.05.040.E may result in seizure of the fireworks and /or a fine of up to #300. F. It is unlawful for any person to negligently or unlawfully discharge fireworks in a manner that could reasonably cause harm to life and property. Any such use, ignition, detonation or explosion of fireworks may result in seizure of the fireworks and /or a fine of up to $300. (Ord. 09 -06, 2009; Ord. 00 -03, 2000; Ord. 97 -06, 1997; Ord. 96 -06, 1996; Ord. 88 -01, 1988) (Return to the topl 8.05.050 Authorized displays. A. Saleable fireworks and /or fireworks other than saleable fireworks may be used for public displays by fair associations, amusement parks and other organizations or groups of individuals if: 1. A permit for a public display of fireworks is obtained from the Mayor or his designee after approval of the Fire Chief or his designee; and 2. A bond is filed with the City in the amount of at least $5,000 to insure payment of damages to any persons or property caused by the display. The bond requirement may be waived if the holder of the permit has in effect an insurance policy that names the City of Houston as an additional insured which accomplishes the same purpose as the bond. B. In determining whether to issue or deny a permit for the use of fireworks at a public display, the Mayor or his designee shall consider the following: 1. The location of the proposed display and the surrounding property; 2. The type of fireworks and the length of the proposed display; 3. The danger of the proposed display to persons and property; and 4. The experience and competency of the person in charge of the proposed display in the use of fireworks. C. No display permit is transferable under this chapter. D. Display permits will be issued only for a specific location, E. Any fireworks that remain unfired after the display is concluded shall be immediately disposed of in a safe manner for that particular type of fireworks. (Ord. 00 -03, 2000; Ord. 97 -06, 1997; Ord. 88 -01, 1988) (Return to the top) 8.05.060 Exempt sales and uses. Nothing in this chapter shall be construed to prohibit: A. Any resident wholesaler, dealer or jobber from selling at wholesale those fireworks which are not prohibited by this chapter; B. The sale of any kind of fireworks which are to be shipped directly from the state in accordance with regulations of the United States Department of Transportation; C. The use of fireworks by railroads or other transportation agencies for signal purposes of illumination; http: / /houstonak.com /vertical/ Sites / %7B31 F8C92D- 033A- 4BBC- ADE0 -01 A4F0F270C... 5/7/2010 D. The sale or use of blank cartridges for a show or theater; E. The use of fireworks for signal or ceremonial purposes in athletic events or parades; F. Use by public safety personnel; G. Use by military organizations. (Ord. 09 -06, 2009; Ord. 88 -01, 1988) (Return to the top) Page 5 of 5 8.05.070 Penalties for violations. Any person violating any of the provisions of this chapter is guilty of an infraction and upon conviction thereof may be fined an amount not to exceed $300 and may be assessed additional costs of prosecution for each separate offense. (Ord. 09 -06, 2009; Ord. 05 -11 § 3, 2005; Ord. 00 -03, 2000; Ord. 88 -01, 1988) (Return to the top) 8.05.080 Building requirements. The City Council will adopt an ordinance that specifies the types of buildings which complies with the International Building Code as adopted by the State of Alaska. The permittees will have three years from the end of the calendar year in which such ordinance is adopted to build new structures that comply with the ordinance. A one year extension on this requirement may be granted upon approval of the City Council. (Ord. 09 -06, 2009) (Return to the top) 8.05.090 Storage of dangerous fireworks. A. All storage of dangerous fireworks shall be in compliance with all local, state and federal regulations. B. A storage permit must be obtained from the City of Houston for the storage of dangerous fireworks. The annual fee that is payable by a person who holds a permit to sell saleable fireworks under this chapter for a permit to store dangerous fireworks at the location where the person is permitted to sell saleable fireworks shall be $100. In all other cases, the annual fee for a permit to store dangerous fireworks shall be $1,500. C. Storage shall be subject to inspection by the Houston Fire Chief. D. The requirements of this section do not apply to the temporary storage of fireworks for thirty (30) calendar days or less for use in a public display that has been permitted by the City of Houston under section 8.05.050. (Ord. 09 -06, 2009) http: / /houstonak.com /vertical /Sites / %7B3 F8C92D -03 3A- 4BBC- ADE0 -01 A4F0F270C... 5/7/2010 Municipality of Anchorage 8.75.040 Fireworks. A. It is unlawful for any person to knowingly sell, possess, or use any explosive fireworks or stench bomb to which fuses are attached or which are capable of ignition by matches or percussion, without permission of that municipal official charged with issuing permits for such activities. This section does not apply to sale, possession, or use of highway or other warning flares, or of ammunition for firearms, unless used for other than their intended purposes. B. It is unlawful for any person to advertise for sale any explosive fireworks or stench bomb to which fuses are attached or which are capable of ignition by matches or percussion without a specific declaration in the advertising stating: "it is unlawful for any person to sell, possess or use fireworks within the Municipality of Anchorage. AMC 8.05.270 A." C. Violation of this section shall be punished by a fine of not more than S500.00. D. As an alternative to the remedies, procedures and penalties provided in this Title andSection 1.45.010, a violation of this section may be charged as a civil violation subject to and prosecuted in accordance withTitle 14and in such case shall be punishable by a civil penalty in accordance withChapter 14.60. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 12) '' IJn THE ANCHORAGE ASSEMBLY ORDAINS: 8.75.040 Fireworks. Submitted by; ASSEMBLY MEMBER TRAINI Prepared by: Assembly Counsel For reading: December 11, 2007 ANCHORAGE, ALASKA AO NO. 2007- 132(S) AN ORDINANCE OF THE ANCHORAGE MUNICIPAL ASSEMBLY AMENDING ANCHORAGE MUNICIPAL CODE SECTION 8.75.040, FIREWORKS, TO PERMIT THE USE OF CERTAIN COMMON FIREWORKS FOR A LIMITED TIME PERIOD ANNUALLY IN CELEBRATION OF THE NEW YEAR. Section 1. Anchorage Municipal Code section 8.75.040, Fireworks, is hereby amended to read as follows: A. Unless specifically authorized in this subsection, [I]it is unlawful for any person to knowingly sell, possess, or use any explosive fireworks or stench bomb to which fuses are attached or which are capable of ignition by matches or percussion, without permission of that municipal official charged with issuing permits for such activities. 1. Provisions of AMC 15.70.0608.6 notwithstanding, the discharge of Class C Common Fireworks, excepting mines, shells, and firecrackers, defined as salable under AS 18.72.100, lawfully purchased outside the jurisdiction of the municipality, shall be allowed without permit during the 6 -hour [5 -HOUR1 annual period beginning 7:00 111:301 p.m. Alaska Standard Time on December 31 and ending 1:00 [4:301 a.m. Alaska Standard Time on January 1, except in these restricted areas: a. Central Business District Core; b. PLI Public Lands and Institutions District; c. Municipal parks; d. Within 500 feet of any visitor accommodation, health care or assisted living facility, library, school, or place of worship; e. Within 500 feet of any automotive service station or other premises where flammable liquids or gases are stored; 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 AO 2007- 132(S) Page 2 of 2 ATTEST: Municipal Clerk f. Within or from any structure, vehicle, or vessel, g, Any location designated a noise - sensitive zone under AMC 15.70.040A.7 or determined to pose a danger to the public or property. 2. This section does not apply to sale, possession, or use of highway or other warning flares, or of ammunition for firearms, unless used for other than their intended purposes. B. It is unlawful for any person to advertise for sale any explosive fireworks or stench bomb to which fuses are attached or which are capable of ignition by matches or percussion without a specific declaration in the advertising stating: "it is unlawful for any person to sell, possess or use fireworks within the Municipality of Anchorage except in compliance with AMC 8.75.040 during the annual 6- hour [5 -HOUR1 New Year limited discharge period in non - restricted areas beginning 7:00 [11:301 p.m. AST on December 31 and ending 1:00 [4:301 a.m. AST on January 1. JAMC 8.75.040A1 [8.05.270 Al" C. Violation of this section shall be punished by a fine of not more than $500.00. D. As an alternative to the remedies, procedures and penalties provided in this Title and Section 1.45.010, a violation of this section may be charged as a civil violation subject to and prosecuted in accordance with Title 14 and in such case shall be punishable by a civil penalty in accordance with Chapter 14.60. (GAAB 18.05.010.Y; AO No. 97 -90, § 1, 7 -1 -97; AO No. 98- 59(S), § 1, 5- 19 -98; AO No. 2001- 145(S -1), § 4, 12- 11 -01; AO No. 2003 -73, § 3, 4- 22 -03) Section 2. This ordinance shall become effective immediately upon its passage and approval by the Assembly. PASSED AND APPROVED by the Anchorage Assembly this day of 2007. Chair West's Alaska Statutes Annotated Title 18. Health, Safety, and Housing Chapter 72 State Regulation of Fireworks -+§ 18.72.100. Definitions In this chapter and fireworks regulations adopted in the state fire safety code, (1) "dangerous fireworks" includes all fireworks that are not defined as salable fireworks; (2) "fire safety code" means the fire safety code of the state adopted and administered by the division of fire prevention of the Department of Public Safety; (3) "fireworks" means salable fireworks or dangerous fireworks; (4) "salable fireworks" are ICC Class C Common Fireworks and shall include only those fireworks enumerated as ICC Class C Common Fireworks in the regulations of the Interstate Commerce Commission, as the regulations are presently constructed, and, more specifically, shall include and be limited to the following: (A) roman candles, not exceeding 10 balls spaced uniformly in the tube, total pyrotechnic composition not to exceed 20 grams each in weight, any inside tube diameter not to exceed 3/8 inch; (B) skyrockets with sticks, total pyrotechnic composition not to exceed 20 grams each in weight, and the inside tube diameter not to exceed 1/2 inch, with the rocket sticks being securely fastened to the tubes; (C) helicopter type rockets, total pyrotechnic composition not to exceed 20 grams each in weight, and the inside tube diameter not to exceed 1/2 inch; (D) cylindrical fountains, total pyrotechnic composition not to exceed 75 grams each in weight, and the inside tube diameter not to exceed 3/4 inch; (E) cone fountains, total pyrotechnic composition not to exceed 50 grams each in weight; (F) wheels, total pyrotechnic composition not to exceed 60 grams for each driver unit or 240 grams for each complete wheel, and the inside tube diameter of driver units not to exceed 1/2 inch; (G) illuminating torches and colored fire in any form, total pyrotechnic composition not to exceed 100 grams each in weight; (H) dipped sticks, the pyrotechnic composition of which contains chlorate or perchlorate, that do not exceed five grams, and sparklers, the composition of which does not exceed 100 grams each and that contains no magnesium or magnesium and a chlorate or perchlorate; (1) mines and shells of which the mortar is an integral part, total pyrotechnic composition not to exceed 40 grams each in weight; (J) firecrackers with soft casings, the external dimensions of which do not exceed one and one -half inches in length or one - quarter inch in diameter, total pyrotechnic composition not to exceed two grains each in weight; (K) novelties consisting of two or more devices enumerated in this paragraph when approved by the Bureau of Explosives. SLA 1969, ch. 116, § 1. © 2007 Thomson/West. No Claim to Orig. U.S. Govt, Works. Sections: 8.42.010 8.42.020 8.42.030 8.42.040 8.42.050 8.42.060 Chapter 8.42 FIREWORKS Definitions. Sales prohibited. Use prohibited. Authorized use December 31st — January 1st. Permit required for authorized public displays. Permissible uses. 8.42.010 Definitions. In this chapter, the definition of "fireworks" includes any: A. Combustible or explosive composition or any substance producing a visible or an audible effect by combustion, explosion, deflagration or detonation; B. Blank cartridges, toy pistols, toy cannons, toy canes or toy guns in which explosives are used; C. Roman candles, daygo bombs, or any other fireworks of like construction which contain any explosives or flammable compound, or any tablets or other device containing any explosive substance; D. The term "fireworks" shall not include auto flares, paper caps not containing in excess of an average of 25 hundredths of a grain of explosive content per cap manufactured in accordance with the Interstate Commerce Commission regulations for packing and shipping, as provided therein, and toy pistols, toy canes, toy guns, or other devices for use of such caps, the same any use of which shall be permitted at all times. (Ord. 09 -025 § 3, 2009) 8.42.020 Sales prohibited. It is unlawful for any person to sell, display, or offer to sell fireworks within the city. (Ord. 09 -025 § 3, 2009) 8.42.030 Use prohibited. Except as provided in this chapter, it is unlawful to discharge fireworks within the city. (Ord. 09 -025 § 3, 2009) 8.42.040 Authorized use December 31st — January 1st. A. The discharge of Class C common fireworks defined as saleable under AS 18.72.100, lawfully purchased outside the jurisdiction of the city, shall be allowed annually without a permit on private property with the permission of the property owner and under the direct supervision of a person 21 years or older, during the seven -hour period beginning at 6:00 p.m. Alaska Standard Time on December 31st and ending at 1:00 a.m. Alaska Standard Time on January 1st, except in these restricted areas: 1. Within 250 feet of any health care facility or assisted living facility, library, school, or place of worship; 2. Within 500 feet of any automotive service station or other premises where flammable liquids or gases are stored; 3. Within or from any structure or vehicle; 4. On or within 50 feet of waterways within the city limits. Page 1 of2 http : / /www.codepublishing.com/AK /Palmer /cgiiNewSmartCompile.pl ?code= palmer &e... 5/7/2010 B. Permission to discharge fireworks in this section shall not apply during any period when the State of Alaska Division of Forestry or the city of Palmer has issued a ban on open burning. (Ord. 09 -025 § 3, 2009) 8.42.050 Permit required for authorized public displays. A. Public displays are permissible when conducted by a state licensed pyrotechnic operator. B. Fireworks may be used on public property by municipalities, fair associations, amusement parks, and other organizations or groups of individuals if a permit is obtained from the city manager or designee. C. Permits are designated for a specific location and are not transferable. (Ord. 09 -025 § 3, 2009) 8.42.060 Permissible uses. Nothing in this chapter shall be construed to prohibit: A. The use of fireworks by railroads or other transportation agencies for signal purposes or illumination; B. The sale or use of blank cartridges for a show or theater; C. The use of fireworks for signal or ceremonial purposes in athletic events or parades in accordance with the permit issued in PMC 8.42.050; D. Use by military organizations. (Ord. 09 -025 § 3, 2009) Page 2 of 2 http : / /www.codepublishing.com /AK/ Palmer/ cgi/ NewSmartCompile .pl ?code—palmer &e... 5/7/2010 Chapter 8.04 FIREWORKS Page 1 of 3 Chapter 8.04 FIREWORKS Sections: 8.04.010 Short title. 8.04.020 Definitions. 8.04.030 Sales prohibited 8.04.040 Use prohibited. 8.04.050 Authorized displays. 8.04.060 Permissible sales and uses. 8.04.070 Remedies and penalties. 71 9 8.04.010 Short title. This chapter shall be known as the "fireworks control ordinance" of the city of Wasilla. (Prior code § 13.06.010) 8.04.020 Definitions. In this chapter, "fireworks" includes any combustible or explosive composition or any substance producing a visible or an audible effect by combustion, explosion, deflagration or detonation, and includes blank cartridges, toy pistols, toy cannons, toy canes or toy guns in which explosives are used, Roman Candles, Daygo Bombs, or other fireworks of like construction which contain any explosives or flammable compound, or any tablets or other device containing any explosive substance, except that the term "fireworks" shall not include sparklers, auto flares, paper caps containing not in excess of an average of twenty -five hundredths of a grain of explosive content per cap manufactured in accordance with the Interstate Commerce Commission regulations for packing and shipping, as provided therein, and toy pistols, toy canes, toy guns or other devices for use of such caps, the same any use of which shall be permitted at all times. (Prior code § 13.06.020) 8.04.030 Sales prohibited. Except as provided herein, it is unlawful for any person to sell or display or offer to sell fireworks within the city. (Prior code § 13.06.030) 8.04.040 Use prohibited. A. Except as provided in this chapter, it is unlawful to discharge fireworks within the city. B. The discharge of Class C common fireworks defined as saleable under AS 18.72.100, lawfully purchased outside the jurisdiction of the city, shall be allowed annually without permit on private property with permission of the property owner, during the seven -hour period beginning at 6:00 p.m. Alaska Standard Time on December 31st and ending at 1:00 a.m. Alaska Standard Time on January 1st, except in these restricted areas: 1. Within two hundred fifty (250) feet of any health care facility or assisted living facility, library, school or place of worship; http: / /www.codepublishing.com/AK/ Wasilla /Wasil1a08 /Wasil1a0804.html 5/7/2010 Chapter 8.04 FIREWORKS Page 2 of 3 2. Within five hundred (500) feet of any automotive service station or other premises where flammable liquids or gases are stored; 3. Within or from any structure or vehicle; or 4. On or within fifty (50) feet of lakes and waterways within city limits. C. Permission to discharge fireworks in subsection B of this section will not apply during any period when the State of Alaska Division of Forestry has a ban on open burning in effect. (Ord. 07- 67(AM) § 2, 2007: prior code § 13.06.040) 8.04.050 Authorized displays. A. Fireworks may be used on public property by municipalities, fair associations, amusement parks and other organizations or groups of individuals if: 1. A permit is obtained from the city mayor or any city employee designated by him or her; 2. A bond is filed with the city in amount of at least five hundred dollars ($500.00) to insure payment of all damages to persons or property caused by the display. The bond requirement will not be effective if the holder of the permit has in effect an insurance policy which accomplishes the same purpose as the bond. B. No permit is transferable. C. Permits are for a specific location. (Prior code § 13.06.050) 8.04.060 Permissible sales and uses. Nothing in this chapter shall be construed to prohibit: A. The use of fireworks by railroads or other transportation agencies for signal purposes or illumination; B. The sale or use of blank cartridges for a show or theater; C. The use of fireworks for signal or ceremonial purposes in athletic events or parades; D. Use by military organizations. (Prior code § 13.06.060) 8.04.070 Remedies and penalties. Remedies and penalties for violations of this chapter are as provided in Chapter 1.20. (Ord. 01 -47 § 6, 2001: Prior code § 13.06.070) http:// www. codepublishing. com/ AK/ Wasi1la /Wasi11a08 /WasiIla0804.html 5/7/2010 2 Version 02/11/2010 3 4 5 6 7 Kodiak Island Borough Form Ver. 06/30/2009 KODIAK ISLAND BOROUGH ORDINANCE NO. declares the high moral and ethical standards of public official WHEREAS, it is declared that holding public office o people require public officials to adhere to a code of e Section 1: This ordinance is of a general and permanent Kodiak Island Borough Cod ° ; �Ordinances, and Introduced by: Requested by: Drafted by: Introduced: Public Hearing: Adopted: 8 AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH AMENDING 9 TITLE 2 ADMINISTRATION AND PERSONNEL BY RENAMING CHAPTER 2.35 10 CONFLICT OF INTEREST TO CODE OF ETHICS, REPEALING OLD 11 SECTIONS 2.35.010 AND 2.35.020 AND INSTITUTING NEW SECTI . 2.35.010 TO 2.35.100 12 13 WHEREAS, members of the assembly wish to establish a more ,•rehensive ethics code that 14 15 16 17 18 19 20 21 22 23 24 25 Section 2: This ordinance amends Title 2 `�i • and Per / Chapter 2.35 Conflict Of 26 Interest by Renaming Chapter 5 Co nteresto Code of Ethics, Repealing 27 Old Sections 2.35.010 and 2.3 .020 nd g New Sections 2.35.010 to 28 2.35.100 as f 29 } p +� 30 w E - Cha _ tef Ye DE OF ETHICS 32 Sestiens 33 34 35 36 37 38 39 employment. 40 41 42 43 44 45 46 47 48 rocult. 49 50 51 52 NOW, THEREFORE, BE IT ORDAINED BY '�SSEMY OF THE ISLAND BOROUGH THAT: e and shall become a part of the Ordinance No. ublic trust and the Page 1 of 6 53 54 55 56 57 58 59 60 61 62 63 64 57 1984; Ord. 79 11 0, 1979. Formorly §2.18.020]. 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 2.35.010 Declaration of po 81 It is declared that high hift ethical sta among municipal officers of the borough 82 are essential to the cqnduct of frai,,government land that the assembly believes that a code of 83 ethics for the guidance,of municiPal officers will ncourage those officers to act in the public 84 interest. This will improv *Ma 89 2.35:0 pe of code o ics. 90 A. The embly affirms.: at each municipal officer holds office as a public trust, and any 91 effort to bend a substantial rsonal interest or a substantial financial interest through official 92 action is a viola�,of that trust. The public trust and this chapter do not prohibit an officer from 4 /N 93 following indepen so long as those pursuits do not interfere with the full and faithful 94 discharge of an officeenOtlic duties. The assembly further recognizes that: 95 1. In a represe tative democracy, the representatives are drawn from society and, 96 therefore, cannot and should not be entirely without personal and financial interests in the 97 decisions and policies of government; 98 2. Citizens who serve as municipal officers retain their rights to interests of a personal or 99 financial nature; and 100 3. Standards of ethical conduct for municipal officers need to distinguish between those 101 inconsequential conflicts which are unavoidable in a free society, and those which are 102 substantial and material. 103 B. There is no violation of this code of ethics if, as to a specific matter, a municipal officer's: 104 1. Personal or financial interest in the matter is insignificant, or of a type that is possessed 105 generally by the public or a large class of persons to which the municipal officer belongs; Sections: 2.35.010 Declaration of policy. 2.35.020 Scope of code of ethics. 2.35.030 Misuse of official position. 2.35.040 Gifts. 2.35.050 Improper use or disclosure of information. 2.35.060 Improper representation. 2.35.070 Disclosures of conflicts by municipal officers others employees. 2.35.080 Actions voidable. 2.35.090 Criminal sanctions additional. 2.35.100 Definitions. and confdenceof the people It is furtnae" that ding public people require muni Chapter 2.35 CODE OF ETHICS oaf public serve, and will promote and strengthen the faith r municipal officers. ce or employment is a public trust and that the icers *Adhere to a code of ethics. Kodiak Island Borough, Alaska Ordinance No. FY200X -XX Page 2 of 6 106 2. Action or influence would have an insignificant or conjectural effect on the matter; or 107 3. Action consists of voting in favor of introduction of an ordinance. 108 C. In order for the rules governing conduct to be respected both during and after leaving 109 public service, the code of ethics must be administered fairly without bias or favoritism; 110 D. No code of ethics, however comprehensive, can anticipate all situations in which violations 111 may occur nor can it prescribe behaviors that are appropriate to every situation; in addition, laws 112 and regulations regarding ethical responsibilities cannot legislate morality, eradicate corruption, 113 or eliminate bad judgment; and 114 E. Compliance with a code of ethics is an individual responsibility; thus all who serve the 115 borough have a solemn responsibility to avoid improper conduct and prevent improper behavior 116 by colleagues and subordinates. 117 F. The borough attorney shall be guided by this section when issAs opinions and reaching 118 decisions. ., 119 % 120 2.35.030 Misuse of official position.' 121 A. A municipal officer may not use, or attempt to use a1 fficial ' ion in order to gain a 122 benefit, and may not intentionally secure for, or grant aN perso�gyvarranted benefits, 123 treatment, or advantage. ' 124 B. A municipal officer may not: ! 125 1. Seek other employment or contracts throes he use c, attempted use tt powers of 126 official position; .. 84_ 127 2. Accept, receive, or solicit compensation foN erformance of official duties or 128 responsibilities from a person other tha the borough; ., 129 3. Use borough time, property, a t4jment, or othemilities with intent to secure a 130 benefit; • , 131 4. Take or withhold official action in. rae ct a mattellik which the municipal officer 132 has a substantial personal or financial intere ` ; 133 5. Attempt to affect a personal or finan 'al i te res1 coercion of a subordinate; or 134 6. Restrict, or thr restrict, a co ctor's eligi sty or opportunity to contract with 135 the borough solely in o to s an unwarrted advantage for the borough or the officer. 136 C. An assembly er or ber of any bird or commission may not deliberate or vote 137 on any matter in wtich' emb as a substantlrsonal or financial interest. 138 s 139 2.35.040 Gift 'y�;R# 140 A. No rpt - sir sha ''eii; ectly or Thdirectly, solicit or accept any gift to the officer's 141 benefit, *Tether in th -c. of a service, loan, travel, entertainment, hospitality, promise, 142 or otr -e under circu ces iri' let it could reasonably be inferred that the gift is intended 143 to inmue 'e officer in th ±• rforma a of the officer's official duties or constitutes a reward for 144 official 145 146 2.35.050 Impro .'Y se or dik losure of information. 147 A. A municipa � er tray not disclose or use information gained in the course of, or by 148 reason of, the officer' : al duties for the purpose of affecting a personal or financial interest of 149 the officer or the office immediate family member. 150 B. A municipal offf"cer shall not disclose confidential information concerning the documents, 151 property, government, or affairs of the borough unless authorized or required by law to do so. 152 C. This section does not apply to information concerning programs or services available to 153 the public or to borough employees generally. 154 155 2.35.060 Improper representation. 156 A. A municipal officer may not represent, advise, or assist another person in any matter 157 pending before the agency that the officer services, if the representation, advice or assistance is: 158 1. For compensation, unless the representation, advice, assistance, and compensation 159 are required by statute, regulation, or court rule; or Kodiak Island Borough, Alaska Ordinance No. FY200X -XX Page 3 of 6 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 2. Without compensation, but rendered to affect a personal or financial interest of the municipal officer. B. The borough mayor or any borough assembly member shall not falsely represent themselves as being the official authorized spokesperson for the borough assembly on a given issue. 2.35.070 Disclosures of conflicts by municipal officers other than employees. A. A municipal officer other than an employee, who is involved in a matter that may result in a violation of this chapter, shall disclose the matter on the public record and ask to be excused from the discussion and official action on that matter. B. A municipal officer, prior to comment, deliberation or decision gm matter coming before the body, shall disclose any personal or financial interest in the mattib the personal or financial involvement of an immediate family member. 1 C. The nature of the personal or financial interest shall 14 'sed in sufficient detail to permit the other members of the body to determine if the lest is + 'stantial. It shall be the duty of a municipal officer to disclose and identify sufficier fa s and cir A IN -tances to permit the body to exercise its judgment in an informed manner. , • . ' D. The presiding officer shall determine wheth $,The municipal officer's • Ivement would violate this chapter. If the presiding officer determ hat a v' ation would exi Q municipal officer continues to participate, the officer shall rdfrai ' votir deliberating, or rticipating in the matter. 4 * ! , E. The presiding officer's decision may be overrid by a majority vote of the body. Determination of whether a personal or t n ncial interest is s ii ntial shall be made by the body on a case -by -case basis. •• iv71 F. The body may in its sole discretion' rticipation o , the question to avoid a conflict on the whole. '► G. The body shall be the final authori ' on wiOt volsonal or financial interest as disclosed is substantial un tk [Cle Vote: T ction covers the provisions in AS m • - '' 2.35.080 Actions voi A. In addition to an entered into in xi • ation of section of vIlath • id damageri''tnay be ta' . borou rant, contract, 1 a viola i • der this chap l h 2.35.090 Cri To the ext criminal penalty is provided 14 law, a borough grant, contract, or lease slay the borough. In a determination under this contract, ease, the interests of third parties who could be The borough attorney shall give notice of intent to void a PO section no later than 30 days after a determination of sanctiondditional. at viola ns under this chapter are punishable in a criminal action, the diti o the civil remedies set out in this chapter. 2.35.100 Definitions. The following words, terms and phrases, when used in this chapter, shall have the following meanings ascribed to them, except where the context clearly indicates a different meaning: "Agency" means the body, a department, the borough manager's office, or other entity in or of the government of the borough, including the school district, and all boards and commissions. "Benefit" means anything that is to a person's personal or financial interest. "Board, body, or commission" means a board, commission, committee, council, task force, or other body or sub - committee thereof, created by charter or the Kodiak Island Borough Code, or by the body, the mayor or the borough manager. The school board, elected by the public, is not a "board" of the borough body for purposes of this title. "Borough" means the Kodiak Island Borough. Kodiak Island Borough, Alaska Ordinance No. FY200X -XX Page 4of6 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 "Business" means a corporation, company, firm, partnership, sole proprietorship, trust or foundation, or any other individual or entity carrying on a business, whether operated for profit or not for profit. "Child" means a biological child, an adopted child, a stepchild, or a dependent child. "Compensation" means any money, thing of value, or economic benefit conferred on or received by a person in return for services rendered or to be rendered by the person for another. "Financial interest" 1 An interest held by a person or entity subject to this chap member, which includes an involvement or ownership including a property ownership, or a professional or source of income, or from which, or as a result of expects to receive anything of value; or Holding a position in an entity, as an officer Aljr position of management. This definition, however, shall be interpreted between minor and insubstantial conflicts that conflicts of interest that are substantial and m disqualified from participation in matters in which the p 1. Has a financial interest which is insubstantial; ed gain, be eans a an officer's hou ndation, d persons, t" means a b °'' 2. Has a financial interest that persons to which the • ublic 3. Merely performs some duty or con'ectural notional effect on t 4. Has an interest because it involve ublic official d "Gain" means actua "Immediate fami dependents, a reg "Official action" mea similar action, i ding ina "Organ two or offi Kodiak Island Borough, Alaska associa applie navoid en r =E f:.• ecifi r, trus artner, or holding a d in a mann= "ti` " "a -t distinguishes le in a free s nd those a public offic shall not be al: or an immediate family terest in a business, ivate relationship, that is a person has received or the public or a Iarge class of ossessed gene s influence w uld have insubstantial or benefits for the • erformance of it, profit, orcompensation. l cipal officer's spouse, minor children and , or parent. ion, approval, disapproval, vote, or other cer. ociety, political party, or other entity made up of d for profit or not for profit. r n adoptive parent, or a stepparent of the municipal rson,`a business, or an organization. an interest other than a financial interest, person where the ben `" is eculiarl personal, where it could benefit a small class of which the individual is a memb r. It is an interest affecting, belongin , or accruin to an individual or private enti as distinct from the a ublic interest at large. "Public employee" and "employee" mean a permanent, probationary, seasonal, temporary, or provisional employee of the borough.. "Municipal officer" and `officer" mean: "Municipal officer" and "officer" mean: 1. Mayor; 2. An assembly member; Ordinance No. FY200X -XX Page 5 of 6 266 3. A member or member - designate of a board or commission; 267 4. Manager, administrative official, clerk, or attorney; and 268 5. A municipal employee. 269 "Municipal officer other than an employee" means: 270 1. Mayor; 271 2. An assembly member; 272 3. A member or member - designate of a board or commission; and 273 4. Manager, administrative official, clerk, or attorney. 274 275 276 277 278 279 280 281 ADOPTED BY THE BODY OF THE KODIAK ISLAND BOROUGH THIS DAY OF ? KompdrisLAND BOROUGH i 1 1 282 ATTEST: 283 284 285 286 Nova M. Javier, MMC, Borough Clerk Ng 4 1 5. - one M. Seorough Mayor ■ Kodiak Island Borough, Alaska Ordinance No. FY200X -XX Page 6of6 ALV Section Explanation 1.01.010 Change to accurate reference from 29.48.180 to 29.25.050 And AS 29.25.050 1.01.030 "Within three years after incorporation of a municipality, the municipal clerk or the clerk's designee shall have prepared a general codification of all municipal ordinances of general applicability having the force and effect of law. The municipal code shall be revised and printed at least every five years, unless the code is kept current by regular supplements." 1.01.040 1.10.020 Included historical wording regarding the code. April 4, 1974 original code was published by Book Publishing Company and was updated by supplements by the same company. January 1987 clerk's office assumed the responsibility of updating the code by supplements. December 1, 2008 the code was republished by Code Publishing Company. Supplements were also updated by the same company. Included wording to make this section agree with 1.05.010 C which states "The clerk shall edit and revise the laws as they are enacted by the assembly, without changing the meaning of any law, so as to avoid the use of pronouns denoting masculine or feminine gender." 1.20.010 Sec. 29.25.070. Penalties. (a) For the violation of an ordinance, a municipality may by ordinance prescribe a penalty not to exceed a fine of $1,000 and imprisonment for 90 days. For a violation that cannot result in incarceration or the loss of a valuable license, a municipality may allow disposition of the violation without court appearance and establish a schedule of fine amounts for each offense. Sec. 12.55.039. Surcharge. (2) violation of a misdemeanor offense under AS 28.33.030 , 28.33.031, AS 28.35.030 , or 28.35.032, or a violation of a municipal ordinance comparable to a misdemeanor offense under AS 28.33.030 , 28.33.031, AS 28.35.030, or 28.35.032 and adopted under AS 28.01.010 , shall be assessed a surcharge of $75; Introduced by: Requested by: 1 Drafted by: 2 ill Introduced: 3 Public Hearing: Adopted: 4 5 KODIAK ISLAND BOROUGH 6 ORDINANCE NO. 7 8 AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 9 AMENDING THE KODIAK ISLAND BOROUGH CODE OF ORDINANCES 10 TITLE 1 GENERAL PROVISIONS 11 12 WHEREAS, the Kodiak Island Borough Assembly recognizes that some sections of the 13 Kodiak Island Borough code are outdated; and 14 15 WHEREAS, the Kodiak Island Borough Assembly wishes to correct deficiencies, conflicts, 16 or obsolete provisions and citations; and 17 18 WHEREAS, the Kodiak Island Borough Assembly wishes to update different sections to 19 bring them into compliance with existing laws and regulations; and 20 21 WHEREAS, staff research and proposal considered Alaska Statutes, codes from other 22 municipalities, and consultation with Borough staff; and 23 24 WHEREAS, this ordinance has been reviewed by the Borough Attorney for compliance. 25 26 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND 27 BOROUGH THAT: 28 29 Section 1: This ordinance is of a general and permanent nature and shall become a part 30 of the Kodiak Island Borough Code of Ordinances. 31 32 Section 2: The Kodiak Island Borough Code of Ordinances Title 1 General Provisions is 33 hereby amended as follows: 34 Title 1 35 GENERAL PROVISIONS 36 Chapters: 37 1.01 Code Adoption 38 1.05 Supplemental Codification 39 1.10 General Provisions 40 1.15 Borough Seal 41 1.20 General Penalty 42 Chapter 1.01 43 CODE ADOPTION 44 Sections: 45 1.01.010 Adoption. 46 1.01.020 Title — Citation — Reference. 47 1.01.030 Codification authority. 48 1.01.040 Ordinances passed prior to adoption of the code. 49 1.01.050 Reference applies to all amendments. Kodiak Island Borough Ordinance No. FY2010 -XX Page 1 of 6 50 1.01.060 Title, chapter, and section headings. 51 1.01.070 Reference to specific ordinances. 52 1.01.080 Effective date. 53 1.01.090 Constitutionality. 54 1.01.100 Severability. 55 1.01.110 Effect of repeals or amendments. 56 1.01.120 Provisions self- executing. 57 * For statutory provisions requiring municipalities to codify each ordinance after adoption, 58 see AS 29.25.050. 59 1.01.010 Adoption. 60 As authorized by AS 29.48.18029.25.050, there is adopted the "Kodiak Island Borough 61 Code," as compiled, edited, and published by Book Publishing Company of Seattle, 62 Washington in 1974. The "Kodiak Island Borough Code" was republished by the Code 63 Publishing Company of Seattle, Washington in 2008. 64 1.01.020 Title — Citation — Reference. 65 This code shall be known as the "Kodiak Island Borough Code," and it is sufficient to 66 refer to the code as the "Kodiak Island Borough Code" in any prosecution for the violation of 67 any provision thereof or in any proceeding at law or equity. It shall be sufficient to designate 68 any ordinance adding to, amending, correcting, or repealing all or any part or portion thereof 69 as an addition to, amendment to, correction, or repeal of the Kodiak Island Borough Code. 70 Further reference may be had to the titles, chapters, sections, and subsections of the Kodiak 71 Island Borough Code and such references shall apply to that numbered title, chapter, 72 section, or subsection as it appears in the code. 73 1.01.030 Codification authority. 74 This code consists of all the regulatory and penal ordinances and certain of the 75 administrative ordinances of the Kodiak Island Borough, Alaska, codified pursuant to the 76 provisions of AS 4329.25.050. 77 78 79 80 81 82 83 84 85 86 1.01.040 Ordinances passed prior to adoption of the code. The last ordinance included in the initial code published by Book Publishing Company is Ordinance 74 -13 -0, passed April 4, 1974. thic code: Ordinance 71 '12 0. During original codification, the ordinances were compiled, edited, and indexed by the editorial staff of Book Publishing Company. Since January 1987, the Borough Clerk's Office has been responsible for keeping the code current up to Ordinance No. FY2007 -16. On December 1, 2008, the code was republished by Code Publishing Company which included Ordinance No. FY2008 -17 passed March 20, 2008. Code Publishing Company is responsible for subsequent supplements. 87 1.01.050 Reference applies to all amendments. 88 Whenever a reference is made to this code as the "Kodiak Island Borough Code" or to 89 any portion thereof, or to any ordinance of the Kodiak Island Borough, Alaska, the reference 90 shall apply to all amendments, corrections, and additions heretofore, now or hereafter made. 91 1.01.060 Title, chapter, and section headings. 92 Title, chapter, and section headings contained in this code shall not be deemed to 93 govern, limit, modify, or in any manner affect the scope, meaning, or intent of the provisions 94 of any title, chapter, or section of this code. Kodiak Island Borough Ordinance No. FY2010 -XX Page 2 of 6 95 1.01.070 Reference to specific ordinances. 96 The provisions of this code shall not in any manner affect matters of record which refer 97 to, or are otherwise connected with, ordinances which are therein specifically designated by 98 number or otherwise and which are included within the code, but such reference shall be 99 construed to apply to the corresponding provisions contained within this code. 100 1.01.080 Effective date. 101 This code shall become effective on the date the ordinance adopting this code as the 102 "Kodiak Island Borough" becomes effective. 103 1.01.090 Constitutionality. 104 If any section, subsection, sentence, clause, or phrase of this code is for any reason 105 held to be invalid or unconstitutional, such decision shall not affect the validity of the 106 remaining portions of this code. The assembly declares that it would have passed this code, 107 and each section, subsection, sentence, clause, and phrase thereof, irrespective of the fact 108 that any one or more sections, subsections, sentences, clauses, or phrases had been 109 declared invalid or unconstitutional, and if for any reason this code should be declared 110 invalid or unconstitutional, then the original ordinance or ordinances shall be in full force and 111 effect. 112 1.01.100 Severability. 113 Every title and chapter of this code and every ordinance or resolution heretofore or 114 hereafter enacted by the assembly which lacks a severability clause shall be construed as 115 though it contained the clause in the following language: 116 If any provision of this ordinance or resolution or application thereof to 117 any person or circumstance is held invalid, the remainder of this 118 ordinance or resolution and the application to other persons or 119 circumstances shall not be affected thereby. 120 1.01.110 Effect of repeals or amendments. 121 A. The repeal or amendment of any ordinance or resolution does not release or 122 extinguish any penalty, forfeiture, liability incurred, or right accruing or accrued under such 123 law, unless the repealing or amending act so provides expressly. The law shall be treated as 124 remaining in force for the purpose of sustaining any proper action or prosecution for the 125 enforcement of the right, penalty, forfeiture, or liability. 126 B. The expiration of a temporary law does not release or extinguish any penalty, 127 forfeiture, or liability incurred or right accruing or accrued under such law unless the 128 temporary law so provides expressly and such law shall be treated as still remaining in force 129 for the purpose of sustaining any proper action or prosecution for the enforcement of such 130 penalty, forfeiture, or liability, or right accruing or accrued. 131 C. When any ordinance repealing a former ordinance, section, or provision is itself 132 repealed, the repeal does not revive the former ordinance, section, or provision, unless it is 133 expressly so provided. 134 1.01.120 Provisions self- executing. 135 The provisions of this code shall be construed to be self- executing whenever possible. 136 137 Kodiak Island Borough Ordinance No. FY2010 -XX Page 3 of 6 138 Chapter 1.05 139 SUPPLEMENTAL CODIFICATION 140 Sections: 141 1.05.010 Codification procedure generally. 142 1.05.010 Codification procedure generally. 143 A. Subject to the general policies which may be promulgated by the assembly for the 144 preparation and publication of the cumulative supplements to the code of ordinances of the 145 Kodiak Island Borough, the clerk shall revise for consolidation into the code of ordinances of 146 the Kodiak Island Borough all ordinances of a general and permanent nature enacted by the 147 assembly. 148 B. The clerk shall edit and revise the ordinances for consolidation without changing the 149 meaning of any ordinance in the following manner: 150 1. Number or renumber sections, parts of sections, articles, chapters, and titles; 151 2. Change the wording of section or subsection titles, or delete subsection titles, and 152 change or provide new titles for articles, chapters, and titles; 153 3. Change capitalization for purpose of uniformity; 154 4. Substitute the proper calendar date for "effective date of this ordinance," "date of 155 passage of this ordinance," and other phrases of similar import; 156 5. Substitute the proper designation for the terms "the preceding section," "this 157 ordinance," and like terms; 158 6. Strike out figures if they are merely a repetition of written words or vice versa for 159 the purpose of uniformity; 160 7. Correct manifest errors which are clerical, typographical, errors in spelling, or 161 errors by way of additions or omissions; 162 8. Correct manifest errors in reference to ordinances; 163 9. Rearrange sections, combine sections or parts of sections with other sections or 164 parts of sections, divide a long section into two or more sections, and rearrange the order of 165 sections to conform to a logical arrangement of subject matter as may most generally be 166 followed in the code of ordinances; 167 10. Change all sections, when possible, to read in the present tense, indicative 168 mood, active voice, third person, and singular number, or any other necessary grammatical 169 change in the manner generally followed in the code of ordinances; 170 11. Delete or change sections or parts of sections if a deletion or change is 171 necessary because of other ordinance amendments which did not specifically amend or 172 repeal them; and 173 12. Omit all temporary ordinances, all titles to ordinances, all enacting and repealing 174 clauses, all declarations of emergency and all purpose, validity, and construction clauses 175 unless, from their nature, it may be necessary to retain some of them to preserve the full 176 meaning and intent of the ordinance. 177 C. The clerk shall edit and revise the laws as they are enacted by the assembly, without 178 changing the meaning of any law, so as to avoid the use of pronouns denoting masculine or 179 feminine gender. 180 D. The clerk shall make recommendations to the assembly concerning deficiencies, 181 conflicts, or obsolete provisions in the code and at the direction of the assembly, the clerk 182 shall draft ordinances for consideration by the assembly to correct and remove deficiencies, 183 conflicts, or obsolete provisions in ordinances of the borough. 184 185 Kodiak Island Borough Ordinance No. FY2010 -XX Page 4 of 6 186 Chapter 1.10 187 GENERAL PROVISIONS 188 Sections: 189 1.10.010 Grammatical interpretation. 190 1.10.020 Tense, number, and gender. 191 1.10.030 Definitions. 192 1.10.040 Effective dates of ordinances, resolutions, and other actions of the 193 assembly — Time. 194 1.10.010 Grammatical interpretation. 195 Words and phrases shall be construed according to the rules of grammar and according 196 to the common and approved usage. Technical words and phrases, and those which have 197 acquired a peculiar and appropriate meaning whether by legislative definition or otherwise, 198 shall be construed according to the peculiar and appropriate meaning. 199 1.10.020 Tense, number, and gender. 200 A. Words in the present tense include the past and future tenses, and words in the future 201 tense include the present tense. 202 B. Words in the singular number include the plural and words in the plural number 203 include the singular. 204 C. As much as possible pronouns denoting masculine or feminine gender should be 205 avoided. If there are words of the masculine gender, they include the feminine and neuter 206 and when the sense so indicates, words of the neuter may refer to any gender. 207 1.10.030 Definitions. 208 As used in the ordinances and resolutions of the Kodiak Island Borough, unless the 209 context otherwise requires: 210 "Administrative official" means the individual designated by assembly resolution to act as 211 manager during the manager's absence or disability; 212 "Assembly" means the elected governing body of the Kodiak Island Borough; 213 "Attorney" means the legal advisor of the governing body and other officials of the 214 borough; 215 "Borough" means the Kodiak Island Borough; 216 "Clerk" means the borough clerk duly appointed by the assembly; 217 "Code" means the code of ordinances of the borough; 218 "Deputy presiding officer" means the deputy presiding officer of the assembly appointed 219 by the assembly; 220 "Law" includes ordinances of the borough; 221 "Manager" means the chief administrator of the borough; 222 "Mayor" means the elected mayor of the borough and presiding officer to the assembly; 223 "Oath" means an oath or an affirmation in all cases where by law an affirmation may be 224 submitted for an oath and in such case the words "swear" and "sworn" shall be equivalent to 225 the words "affirm" and "affirmed"; 226 "Owner," as applied to building or land, means an owner, part owner, tenant in common, 227 or tenant by the entirety of the whole or part of the land or building; 228 "Person" means a corporation, partnership, firm, association, organization, business, 229 trust, or society as well as a natural person; 230 "Registered mail" means registered or certified mail; 231 "School board" means those persons elected to the Kodiak Island Borough School 232 Board of Education; and 233 "Seal" means the corporate seal of the borough. Kodiak Island Borough Ordinance No. FY2010 -XX Page 5 of 6 234 1.10.040 Effective dates of ordinances, resolutions, and other actions of the assembly 235 — Time. 236 An ordinance, resolution, or other action takes effect at midnight on the day of adoption 237 unless the ordinance, resolution, or other action provides that it shall take effect at a 238 specified time, in which case the ordinance, resolution, or other action takes effect at the 239 time specified. If the ordinance, resolution, or other action specifies that it shall become 240 effective on a given day, but does not specify a time, the ordinance, resolution, or other 241 action shall become effective at midnight on the day specified. 242 243 Chapter 1.15 244 BOROUGH SEAL 245 Sections: 246 1.15.010 Adopted — Description. 247 1.15.010 Adopted — Description. 248 The following is adopted as the official corporate seal of the Kodiak Island Borough: A 249 two -inch circle circumscribed around a one and one - quarter -inch circle with the words 250 "Kodiak Island Borough" on the upper half of the seal between the larger and smaller 251 inscribed circles, and the word "Alaska" and the date "1963" placed between the larger and 252 smaller circles on the bottom half of the seal between the larger and smaller inscribed 253 circles, with a star centered between them, and the borough logo inscribed within the 254 smaller circle. 255 256 Chapter 1.20 257 GENERAL PENALTY 258 Sections: 259 1.20.010 Designated. 260 1.20.020 Scope of prohibitions. 261 * For statutory provisions authorizing the assembly to prescribe punishment not to exceed 262 a fine of $1,000 or imprisonment for 90 days, or both, for violation of codified ordinances, 263 see AS 29.25.070. 264 265 1.20.010 Designated. 266 A violation of a provision of this code is an offense punishable upon conviction by a fine 267 of not more than $500.001,000 or by imprisonment not to exceed 390 days, or both, in 268 addition to the surcharge required to be imposed under AS 12.55.039. If another penalty is 269 established by ordinance for the provision violated, that penalty shall apply. Each day during 270 which a continuing violation exists or is repeated shall be a separate and distinct violation. 271 1.20.020 Scope of prohibitions. 272 When an ordinance of the borough prohibits an act or an omission, it shall be construed 273 to prohibit causing, aiding, abetting, or concealing the fact of the act or omission. 274 275 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 276 THIS DAY OF U10 277 278 KODIAK ISLAND BOROUGH 279 280 281 282 ATTEST: Jerome M. Selby, Borough Mayor 283 284 285 286 Nova M. Javier, MMC, Borough Clerk Kodiak Island Borough Ordinance No. FY2010 -XX Page 6 of 6 KODIAK ISLAND BOROUGH ASSEMBLY WORK SESSION Work Session of: —jD - 020/0 Please PRINT your name Please PRINT your name 1 T 1 : 1 11 I 1 . I 1 IL Li. JU N 1 0 2010 , ,........., , , 1 r n i I - i- F afd Backus ackey chotz Mgt 2010 ntCourcfki , e Of thlaC- ecotrust WORKING PAPER SERIES 1 '•• tc ecotrust 721 NW Ninth Ave, Suite 200 Portland, OR 97209 www.ecotrust.org 0 2010 Ecotrust This report is additionally published under a Creative Commons Attribution- Noncommercial -No Derivative 3.0 license and may be freely reproduced as long as it is attributed to Ecotrust, is available free of charge, and contains another license with these same terms. (For more information about this license, see: www.creativecommons .org/licenses /by- nc- nd /3.0/.) Q Ecotrust Working Paper Series No. 6 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery by Eric Enno Tamm, with Ed Backus, Megan Mackey, and Astrid Scholz Published June 2010 ISBN #978 -0- 9779332 -5 -9 For more on the Working Paper Series, visit. www.ecotrust.org /workingpapers About Ecotrust Ecotrust's mission is to inspire fresh thinking that creates economic opportunity, social equity and environmental well- being. Ecotrust is headquartered in Portland and is a unique organization; it integrates public and private purpose and for -profit and non -profit structures. About the Working Paper Series Ecotrust Working Papers integrate ecological and socioeconomic data to present a more holistic view of human interactions with the natural world. Drawing upon the research and analysis of a wide range of project partners, this series presents the results of an ongoing effort to envision a more reliable prosperity for the region's citizens. Executive Summary 1 Introduction 3 Background 4 Economic Recommendations 6 Social Recommendations 13 Ecological Recommendations 20 Setting a Precedent 24 Endnotes 25 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery EXECUTIVE SUMMARY The Pacific Fishery Management Council is advancing a catch share program to rationalize the West Coast non - whiting trawl fleet with an implementation deadline of January, 2011. The proposed program would downsize the existing trawl fleet and assign quota shares in the fishery to remaining members with the goals of "increase[ing] economic efficiency within the Pacific coast groundfish trawl fishery and reduc[ing]" bycatch. The program fails to address critical economic, social and ecological objectives, and currently stands to disadvantage crews, small owner - operators, fishing communities and new entrants. In order to balance the interests of all affected parties, the Council needs to address several weaknesses in the program design. Economic flaws should be addressed through the inclusion of owner -on -board rules and caps on leasing, which would keep quota and lease costs affordable. In addition, an online quota exchange would increase market transparency, while auctions would improve quota market liquidity, To address social shortcomings, the Council's proposal should invest in fishing communities by including them in initial allocations and facilitating the ability of communities and new entrants to purchase quota. Captains, crew and small operators should also be protected by being included in initial allocations, and monitoring costs should be revisited to ensure small operators are not unduly burdened. On the ecological front, the Council should create a system that allows fixed -gear vessels to harvest trawl quota through more equitable intersector allocations and gear - switching rules. Further, policies should be included to protect against the economic and ecological impacts of hoarding overfished species quota, and the spillover of trawl vessels into crab, shrimp and other fisheries. In this report, Ecotrust lays out ten program features that the Council should address to improve the design of this catch share program so that it meets the economic, social and ecological objectives and requirements of the Magnuson - Stevens Act. Our solution would ensure a fair catch share program that fosters efficient, responsible quota markets while ensuring strict conservation to protect the interests of future generations. 1 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery Summary of Recommendations Economic • Foster an affordable fishery by limiting quota to active fishermen. • Regulate quota leasing to prevent unfair profiting from absentee quota ownership, and to prevent perpetual leasing. • Increase market transparency by creating an online quota exchange. • Improve market liquidity by auctioning a portion of quota for fixed terms. Social • Invest in fishing communities through initial quota allocations and allowing Community Fishing Associations to purchase further quota while protecting against excessive concentration. • Safeguard crew earnings by providing initial allocations to captains and crew. • Support new entrants and small operators by establishing owner -on -board rules and providing an initial allocation for new entrants. Ecological • Provide incentives for low- impact, low - carbon fishing gear by reconsidering intersector allocations and gear - switching rules to provide a more equitable basis and incentives for fixed -gear vessels to harvest trawl quota. • Prohibit hoarding and profiteering on overfished species by placing overfished species quota in a public conservation trust that leases the quota to fishermen at prorated fees. • Prevent inter -fleet spillover by implementing policies to prevent or mitigate negative impacts of spillover of trawl vessels into crab, shrimp, and other fisheries. 2 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery INTRODUCTION The proposal of the Pacific Fishery Management Council to implement a catch share system to downsize the non - whiting trawl fleet is the first introduction of new "limited access privileges" on the West Coast since Congress reauthorized the Magnuson - Stevens Fisheries Conservation and Management Act (MSA) in 2006. It will set a precedent that could shape fisheries in the future. As it currently stands, the Council's individual fishing quota (IFQ) proposal misses many opportunities to balance social, economic and ecological objectives. It runs contrary to the "national standards" articulated by Congress in the Magnuson - Stevens Act. The proposal appears to contradict sections of the Act, and ignores others. It takes a hands -off approach to regulating the prospective market for leasing, buying and selling fishing quota. The proposal lacks rules to prevent speculative bidding, to increase market transparency and to safeguard the interests of crews, small owner - operators, fishing communities and new entrants — all of whom may be disadvantaged by the Council's proposal. Catch shares are controversial, polarizing public debate and pitting prospective "winners" of quota ownership against "losers." The stakes are high, especially for those whose livelihoods depend on fishing. That's especially true because revoking or reforming catch share programs is expensive and difficult to do. Those who are initially allocated quota or subsequently invest in quota typically push for rules to maximize their financial returns and oppose any changes that either reallocate quota or otherwise undermine the value of their investments.' For this reason, vested interests often come to dominate decision - making in IFQ programs, while non - vested interests, such as communities, crew and prospective new entrants, are marginalized.' Based on the Council's current proposal, the market value of non - whiting groundfish quota could be as high as $250 million.' But getting the design right is not just a matter of fairness. A poorly designed catch share program will not only lock in imbalances between social equity and market efficiency that will be expensive to correct afterwards, but also compromise the effectiveness of the program. It is therefore critical that responsible rules, fair allocations and smart market design must be enacted from the very beginning of the catch share program. Poor design can lead to unintended — and negative — consequences for conservation, working fishermen and fishing communities. In reauthorizing the Magnuson - Stevens Act, Congress was explicit in setting forth requirements and criteria for consideration in the design of catch share programs. Lawmakers went so far as to prescribe requirements for limited access privileges, including fair and equitable initial allocations, provisions for fishing communities, strict monitoring and enforcement, and much more. NOAA also recently presented a draft catch share policy, specifically outlining several elements that need to be carefully designed. "The key to success is a thoughtful program design process," states the draft policy.' 3 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery When measured against the Magnuson- Stevens Act, the recommendations of the U.S. Commission on Ocean Policy, NOAA's draft catch share policy and current research on market design, the Council's proposal for trawl IFQs comes up short. The Council, in fact, ignores lessons learned from the shortcomings of existing IFQ programs in Alaska, British Columbia and elsewhere.' Ecotrust has identified ten design flaws in the current IFQ proposal and offers solutions to improve it to meet the economic, social and conservation objectives and requirements of the Magnuson - Stevens Act. Our recommendations reflect the desire to balance the interests of crews, communities and vessel owners in a fair and equitable way, that both harnesses market efficiencies and ensures conservation outcomes to protect the interests of future generations. We recommend initial allocations, ownership rules and other market mechanisms and regulations that will foster a responsible quota market and a "fair catch share" for all.' The Council or its Committees considered many of these options to a certain extent, but did not incorporate them into the final proposal. We believe they should be a part of U.S. policy on best practices in the design of any catch share program. BACKGROUND The West Coast groundfish trawl industry is beset by conservation and economic viability challenges that date back to the early 1990s. Some are typical of challenges experienced in fisheries around the world, including overcapitalization in vessels and equipment, ambiguous science and stock assessment, and ineffective management controls. Others are unique to the ecology of this mixed -stock fishery. The non - whiting trawl fishery spans a coastline stretching 1,300 miles from southern California to Washington. Bottom trawlers catch some 90 species, including rockfish, flatfish, roundfish, sharks, skates and others. A mid -water trawl fishery also targets whiting, by far the largest catch by volume. The abundance, life cycle and commercial value of each species vary widely. In this type of mixed -stock fishery, catch limits are therefore constrained by the conservation requirements of the weakest stock. These are incidentally caught as "bycatch" when fishermen target more abundant or valuable species. Substantive conservation measures were not introduced into the fishery until the early 1990s. In 1992, the Pacific Fisheries Management Council introduced limited entry into the fishery, which restricted the number of trawl permits. The Council also began to implement effort controls, which led to bimonthly cumulative trip limits for vessels by 1996. Yet these measures proved ineffective. By 1999, three species — bocaccio, lingcod and Pacific Ocean perch — were declared legally "overfished" and the next year the Secretary of Commerce declared the entire trawl fishery a "Federal disaster." Five more rockfish species were subsequently designated overfished. Rebuilding plans were announced for these stocks, which curtailed the catch of more 4 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery abundant species. In 2002, new Rockfish Conservation Areas also closed some fishing grounds to provide refugia for scarce species. Needless to say, the economics of the fishery deteriorated. Groundfish Trawl Landings and Fleet Size 1981 -2007 82 84 86 88 90 92 94 96 98 00 02 04 06 SOURCE PFMC, Draft Environmental Impact Statement, 2009. Note that roundfish do not including whiting. 5 600 500 400 300 200 100 0 In 2003, a buyback of fishing permits downsized the fleet from approximately 260 to 170 trawlers to improve the economic viability of fishermen.' The buyback cut 91 vessels, representing 40 percent of the fleet's catch history. Although bimonthly cumulative trip limits prevented fishing mortality from exceeding optimal yields, the regulations did not provide individual accountability for bycatch. The system allowed fishermen to discard species for which they had already reached their cumulative limit. The Council began discussions about an IFQ program to rationalize the fleet further, improve efficiency and provide fishermen with flexibility in their operations. In November 2008, the Council recommended the introduction of IFQs to further non - whiting trawl rationalization. (See sidebar). The Council is seeking approval of its proposal by the Secretary of Commerce in 2010. Implementation is set for the 2011 fishing season. The Council's "preferred alternative" includes cooperative structures to manage the whiting fishery and IFQs for the non - whiting groundfish fishery. FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery ECONOMIC RECOMMENDATIONS The Council's IFQ proposal will change the economics of the groundfish trawl fishery. Improving the "net economic benefits" and "individual economic stability" of the trawlers is its primary goal.' Fleet consolidation will boost the landings of the vessels remaining in the fishery and improve the remaining fishermen's economies of scale. Yet the changes are more fundamental and complex than the Council describes in its Draft Environmental Impact Statement (DEIS). The proposal is set to reshape capitalization and operating costs in the industry, create a new market for intangible capital assets (quota shares), and institutionalize competitive advantages for fishermen gifted initial allocations. Collectively these changes might render the program less effective than the Council anticipates, and raise issues regarding the economics of the catch share program. 1. Foster an affordable fishery The Council should limit eligibility for quota ownership to active fishermen, thereby moderating the market value of quota and ensuring quota purchasing and leasing remains affordable for new entrants, fishing communities and small operators. An owner -on -board rule is one option. However, the requirement would be temporarily suspended in extenuating circumstances such as injury, illness or the sudden death of a fisherman. A sunset clause would require non - fishing interests that receive initial allocations to sell their quota or become active fishermen within a set time period. 6 Trawl Rationalization and IFQs Also known as Amendment 20 and 21 of the Groundfish Fishery Management Plan, the proposal to rationalize the West Coast trawl fleet through IFQs consists of the following key elements: • Intersector allocations: Approximately 90 percent of all groundfish will be allocated to limited -entry trawl permit holders. The rest will be divided among tribal fisheries, fixed - gear commercial fishermen and the recreational sector. • Initial allocations: Ninety percent of the groundfish trawl quota will be allocated to limited -entry permit holders. Catch shares will be based on a formula combining historical catches and the equal redistribution of the catch history of permits retired in the buyback program. • Overfished species. For "overfished" species, 80 percent of the total allowable catch will be allocated to permit holders based on their need to cover incidental catch under current fishing practices. Fleet average bycatch rates for targeted species will determine these allocations. • Adaptive Management: Ten percent of groundfish quota pounds will be set aside for communities, processors, unintended consequences, new entrants and conservation. • Eligibility: Any American citizen eligible to own a fishing vessel permit can buy, hold, lease or sell quota shares. • Transferability: Vessel and control limits restrict the amount of quota that can be accumulated on a single vessel or by a single entity. There are no owner -on -board rulers or other restrictions. • Monitoring: At -sea observers, augmented by video cameras, will be required on all vessels and dockside monitoring for all off - loading. • Review: The IFQ program will be reviewed within five years. The program could be terminated, quota shares revoked or other modifications made. Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery The most immediate impact of the IFQ program will be the downsizing of the fishing fleet, as fishermen buy out each others' quotas and thereby consolidate the fleet. The active trawl fleet of about 120 vessels is expected to decrease by 50 to 66 percent, leaving 40 to 60 vessels remaining. The Council's analysis shows that the downsized fleet could increase its profits by $14 to $23 million through consolidation." However, increased access to more catch per vessel will come at a cost. By gifting initial allocations to vessel owners, the Council is effectively converting a public trust resource into a private capital asset, what one report on IFQs called "private economic gains at public expense. " Remaining vessels will need to purchase or lease groundfish quota from fishermen who exit the fishery. The Council's financial model does not take into account lease costs or the capital costs of purchasing additional quota shares. This cost can be high and distort the functioning of the quota market. The B.C. groundfish trawl IFQ fishery — the model for the Council's rationalization plan — is a case in point. The value of the approximately 75 active trawlers is less than $45 million (CDN). In contrast, the market value of groundfish trawl quota in B.C. was estimated at $263 million (CDN) in 2008." Total capitalization in tangible and intangible assets has increased because of IFQs. As a result of the Council's IFQ proposal, capitalization in intangible assets (quota shares) is estimated to rise by fivefold to eightfold above current levels. One way to estimate prospective quota market values is to look at the ratio of the quota value to ex vessel price in a given year. In the B.C. groundfish trawl industry the ratio has ranged from 4:1 to 9:1. The ratio of halibut IFQs has ranged from 6:1 to 8:1 in B.C. and is currently at 5:1 in Alaska. Based on low (4:1) and high (8:1) ratio estimates, U.S. non - whiting groundfish trawl quota could be worth somewhere between $125 and $250 million. Under the Council's preferred alternative, ninety percent of this will be transferred from the public trust to individuals as a private capital asset. 0 E FAIR CATCH: Ten ways to inprove the catch share proposal for the West Coast trawl fishery $800 $700 $600 $500 $400 $300 $200 $100 $0 Groundfish Trawl Quota Capitalization (Scenarios based on 2008 landed values) ■ Whiting • Groundfish 3 4 5 6 7 8 9 quota value /ex vessel price ratios SOURCE: PFMC, Draft Environmental Impact Statement 2009 Under the Council's program design, market prices for quota are likely to be bid to high levels for two reasons. First, gifting allocation will provide those that are initial recipients of quota shares with a financial advantage. Initial allocations will increase their wealth and thereby increase their willingness to pay for additional quota, driving up quota demand and prices. Initial recipients will be able to generate earnings from their "gifted" quota and therefore can afford to make only small margins on subsequent purchases of quota." In other words, they can use their "gifted" quota to leverage the purchase of more quota. This will drive up market prices. Second, the Council has placed virtually no restrictions on who can own quota and modest caps on quota ownership for vessels and corporate entities. There are no owner -on -board rules or other restrictions limiting ownership to active fishermen. Such rules would lower demand and moderate market prices for quota shares. Processors and non - fishing investors, including speculators, will be able to bid on quota and drive up market prices. This is especially true since processors typically have more collateral and capital than fishermen. By way of example, owner -on- board rules in the Alaskan halibut fishery have lowered quota value /ex vessel price ratios compared to the B.C. halibut fishery which has no such restrictions. Since 1996, the average ratio is about 7:1 in B.C. compared to 4:1 in Alaska. 8 10 9 8 7 6 5 4 3 2 1 2. Regulate quota leasing As part of a catch share proposal, an owner -on -board rule would help keep quota values — and in turn lease costs — affordable. However, recognizing that active fishermen would need to lease some quota among themselves to facilitate fishing flexibility and to meet bycatch needs, caps could be placed on the percentage of quota that a fisherman could lease or the percentage of leased quota that could be fished on a given vessel. The exact cap — either on the owner or leaser or both — would need to be designed to meet the need for fishing flexibility while restricting fishermen from unfairly profiting from absentee quota ownership. Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery Alaska - B.C. Halibut Fisheries 1996 -2008, Quota Market Value /Ex. Vessel Price Ratios 1996 1998 2000 2002 2004 2006 2008 9 — BC (Pinkerton) —BC (Turris) — Alaska 3A Alaska 2C — Alaska 3B Alaska 4A SOURCE NMFS Statistics for Alaska halibut quotas in Areas 2C, 3A, 38 and 4A; Fisheries and Oceans Canada does not collect data on quota market values as systematically as Alaska. The B.C. halibut data is from two sources: Pinkerton and Edwards (2009), and Turris (2009). Based on the Council's estimates, 50 to 60 percent of quota shares will need to be purchased or leased from retiring vessels by the remaining, downsized fleet. The high cost of quota shares will force many fishermen to take out loans to finance their purchase or to lease quota pounds each season. Assuming lease rates of 60 to 70 percent of ex- vessel prices (based on experience in other catch share fisheries) and assuming 50 to 60 percent of a fisherman's quota will be leased, total lease fees and financing could consume as much as 30 to 42 percent of total gross revenues in the FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery trawl fishery. If a vessel is leasing all of its quota, this cost could be as high as 70 percent of a vessel's gross revenue. This will be money diverted away from working fishermen to banks, finance companies or absentee owners of quota shares. The Council largely ignores the cost of leasing quota, although research shows this cost is considerable. A study of the Alaskan King crab IFQ program found lease rates equivalent to 50 to 70 percent of ex vessel prices. In British Columbia, lease fees in the fixed -gear groundfish fisheries are as high as 60 to 80 percent of ex vessel prices. Measured another way, a B.C. study in 2009 found that lease fees in the halibut and sablefish IFQ fisheries were the single largest fishing cost, ranging from 44 to 63 percent of total expenses (not including crew shares). A similar study of B.C. groundfish trawlers found that when 40 percent of quota is leased, the associated lease fees range from 28 to 45 percent of total fishing expenses. $200,000 $150,000 $100,000 E 1 $50,000 SO $198,939 B.C. Groundfish Vessel Earnings & Quota Leasing Scenarios 5150,215 % quota leased SOURCE Nelson, 2009. 10 • Sablefish Fixed Gear • Halibut Fixed Gear Groundfish Trawl 5101,501 $36,543 $31,627 0% 30% 60% 100% 427,355 Studies have shown that lease fees can decrease the earnings of fishing vessels2 An analysis of the 2007 financial performance of the B.C. halibut and sablefish fisheries shows that when 60 percent of quota is leased on a vessel, earnings can decline by 42 percent and 48 percent, respectively.' This same analysis uncovered a dilemma in the halibut fishery: "it is difficult to earn the same returns through fishing as it is through leasing.n The study found that an individual leasing 90,000 pounds of halibut quota would receive $270,000 (CDN) in lease payments, more than the $239,000 (CDN) in fishing earnings.23 3. Increase market transparency As shares in public companies are traded on government - regulated exchanges, so too should fishing quota shares of a public resource be traded on an official exchange. In fact, as originally enacted in 1996, the Magnuson - Stevens Act (Section 305h) mandates the creation of "an exclusive central registry system." In its draft catch share policy, NOAA too calls a central registry "an extremely useful service to provide to fishermen interested in buying, selling, leasing or collateralizing catch shares.i The establishment of an online Groundfish Quota Exchange (GQX) would increase market transparency, facilitate trading and create more perfect information between all buyers and sellers. The GQX could also be used to levy resource royalties on quota, collect management fees and facilitate auctions of fixed -term quota allocations. It could also collect mandatory socio - economic and other data needed for the performance evaluation of the program, monitor vessel and control limits on ownership, and register financial liens on quota. Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery The Council's proposal provides no provision for facilitating the buying, selling and leasing of quota shares or quota pounds. Without a central quota exchange or registry, it could be time consuming and expensive for fishermen to find out who owns the various species- and area - specific quotas. This can lead to imperfect information in the marketplace and inefficiencies. Private brokerages and processors are likely to step in as the go- betweens in the market — at a cost to both fishermen and the public. Processors have an inherent competitive advantage in the quota marketplace since they have connections to many fishermen and detailed information on fishermen's landings. They are product aggregators and information hubs in the supply chain. In the B.C. groundfish fishery, by way of example, some fish processors have hired "quota managers" whose job is to broker quota for fishermen. A recent California Institute of Technology study on IFQ market design suggests a central registry could also act as an online quota exchange. "At such a website," states the study, "fishermen could easily see current bids and offers as well as historical information on prices and quantities of previous trades. They could also easily make bids or offers and complete profitable trades. " This would improve market transparency, creating a level playing field about information on quota prices and supply for all market participants. 11 4. Improve market liquidity Besides creating an online quota exchange, the Council should auction a portion of the quota for fixed terms. This would improve the liquidity of the quota market, ensuring full efficiency gains from the IFQ program. Auctions would also foster efficient price discovery and transparency. In determining the portion to be auctioned, the Council will need to weigh the need for secure allocations for fishermen against the need for liquidity in the marketplace. Revenues generated from auctions could be provided to the public as resource royalties. Auctions could also be used to generate revenue from crew and community allocations, or to distribute overfished species. Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery The Council is sending mixed signals to the market regarding the duration of the initial allocations of quota. On the one hand, the Council rejected auctioning fixed - term allocations for distributing quota; on the other, the Council states that upon the five -year review quota shares could be revoked, terminated or modified. "Holders of quota shares should remain cognizant of this fact when making decisions regarding their quota shares, including buying, selling, and leasing of these shares," states the Council's Draft Environmental Impact Statement. However, the Council points out that the MSA stipulates that before the end of the mandatory ten -year period catch shares "will be renewed" unless a fisherman is found in violation of the program or the program itself is modified. That, according to the Council, effectively makes catch shares "more like an unlimited or indefinite term. " The Council appears to be saying that while the law limits initial allocations to a fixed ten -year term, they are, in fact, in perpetuity. This confusion could reduce market liquidity by creating uncertainty about the value and duration of quota shares and thereby hamper buying and selling The small size and geographically dispersed nature of the quota market will also create inefficiencies. Ownership will be consolidated onto 40 to 60 vessels, and perhaps even fewer controlling entities that are located in fishing towns along 1,300 miles of coastline. The number of quota transactions may not be sufficient to create an efficient market. According to the California Institute of Technology IFQ study, "Search costs interfere with the finding process and asymmetric information interferes with the negotiation process. Together, these frictions will prevent fishermen from taking advantage of much of the potential gains from trade. " Even with a central quota exchange that improves market transparency, there may not be enough liquidity — that is quota buying and selling transactions — to create an efficient market. "Without both transparency and liquidity, trading will be incomplete," states the study. 12 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery SOCIAL RECOMMENDATIONS Congress was quite clear in the Magnuson - Stevens Act regarding the need to balance economic and social objectives. In developing limited access privileges, the MSA called for ensuring "fair and equitable allocations" and policies to "promote the sustained participation of small owner - operator fishing vessels and fishing communities, prevent excessive consolidation, and assist new entrants, small operators, captains, crews and fishing communities through set - asides of harvesting allocations." The MSA even describes eligibility and criteria for initial allocations to fishing communities and regional fishing associations. Despite these legislated provisions, the Council's proposal provides a meager ten - percent set -aside for "adaptive management" to respond to community and processor stability, conservation, unintended consequences and new entrants. 5. Invest in fishing communities Because of their financial value, initial allocations are a form of investment. Through eligibility rules and allocation formulas, the Council selects individuals and corporate entities to invest in and thereby transfers resource wealth from the public trust to private capital assets. The Council should consider investing in fishing communities, as defined by the Magnuson - Stevens Act. The Council should reconsider its initial allocation policy in light of the adverse community impacts of IFQs and the need for long -term community investment and stability as envisioned in the MSA and NOAA's draft catch share policy. Besides an initial allocation to fishing communities, the Council should establish specific rules that would allow Community Fishing Associations, as defined in the MSA, to purchase further quota, while protecting against excessive quota concentration. Rules could restrict quota purchases to within a specific geographic range of a given community. Furthermore, the Council could require that fishing communities auction their quota to local fishermen through fixed -term allocations, thereby improving the transparency and liquidity of the quota market, and ensuring that all fishermen have an equal opportunity to access their local community quota. A portion of the community quota could also be earmarked for new entrants. Analysis The Council's catch share proposal will result in fleet consolidation and changing fishing patterns. The impact on each community will vary and depend on their economic dependence on groundfish and the overall resilience of the local community economy. Council staff conducted an analysis showing that Neah Bay, Washington, (a Makah Indian reservation) is likely to be the most disadvantaged fishing community and Astoria, Oregon; Coos Bay, Oregon; and Eureka, California, the most advantaged. The analysis also showed that Neah Bay and Moss Landing, California, were the most vulnerable to these impacts. Despite this analysis, the Council has 13 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery provided only the ten - percent "adaptive management" set -aside to mitigate adverse impacts and has excluded fishing communities from initial allocations. In a study on IFQs and community protection, the U.S. General Accounting Office found that "the easiest and most direct way to help protect communities under an IFQ program is to allow the communities themselves to hold quota.n In its draft catch share policy, NOAA has also committed to support "the creation of fishing community trusts or permit banks to help retain access to fisheries resources by fishermen in local communities. " By way of example, in 1993 six Community Development Quota entities were provided initial allocations of groundfish and subsequently halibut and crab quota in Western Alaska. By 2008, these six entities were generating $190 million in annual revenue and had acquired net assets worth $427.6 million 3 In contrast, Community Quota Entities (CQE), established by the state of Alaska in 2004, must purchase or lease quota. As a result, they have struggled to acquire quota due to the financial risks and high costs. As of 2010, only one CQE on Kodiak Island has acquired 30,000 pounds of halibut quota. Despite the MSA provisions, NOAA's draft policy and its own socio - economic analysis, the Council has provided no comprehensive mitigation strategy or initial allocations for fishing communities. Nor has the Council provided a sufficient rationale for how a ten - percent "adaptive management" set -aside will meet the needs of multiple social and ecological objectives. In reality, purchasing quota without significant financial assistance may prove unfeasible for communities since they won't enjoy the financial advantages of being gifted an initial allocation. 14 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery Impacts on Individual Communities Pita ■ wry vulnerable (low or medium resilience varying dependence) ■• • vun liable (meditxn to high resilience but higher depe,xience) ■••• • not vulnerable (highest resilience, varying dependence) SOURCE :adapted from Pacific Groundfish FMP Amendment 20 Draft Environment Impact Statement, Ch. 4, 'Impacts on Individual Communities pp. 537 - 550 6. Safeguard crew earnings The Council should provide an initial allocation to captains and crewmembers, which would provide compensation to those who will lose their jobs from fleet consolidation and protect crew earnings for those remaining in the fishery. The Council should consult with stakeholders regarding the level of allocation, which would need to balance the interests of crewmen, vessel owners (permit holders) and fishing communities. Because of owner -on -board rules, crewmen who initially lose their jobs due to rationalization would need to sell their quota or fmd active fishing jobs within a period established by a sunset clause. The allocation among crewmen should be determined through a consultation process with captains and crewmembers themselves. Initial allocations could be given to individual crewmen, held in trust by a crew association that could generate revenues through fixed -term auctions or a combination of both. A crew association could also fund pension and medical plans, life insurance, training and professionalization for its members. 15 Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery Captains and crews are likely to face the most negative impact from the Council's proposal for two reasons: fast, half are expected to lose their jobs without compensation as a result of fleet downsizing, and second those who remain in the fishery could face reduction in crew shares as a result of rising lease and financing costs of quota. Deteriorating economic conditions for crew over time could, in turn, affect safety, In its IFQ proposal, the Council plans to allocate 90 percent of quota to trawl permit holders. In its assessment, the Council cites technical challenges in establishing crew participation and adverse fmancial impacts on "fixed capital assets" (vessels) as reasons why initial allocations were not made to captains and crew. However, in the MSA, Congress also lists "employment in the harvesting" and "dependence upon" the fishery as criteria for initial allocations. The Council's logic for excluding crews needs to be reexamined for a variety of reasons. First, up to 40 percent of a vessel's gross revenues go to captains and crew, who could claim that this portion of the catch represents their "fair and equitable" allocation since it has been historically used to pay their earnings. Second, technical challenges in determining crew participation cannot be used as an excuse to exclude this group. Crews could receive equal quota shares or their quota could be held in trust by a crew association that could auction the quota as fixed -term allocations. Revenues could then be distributed to captains and crews prorated on their groundfish earnings for that season. In any event, how to distribute quota should be an issue settled fairly among captains and crew themselves. And third, at least half the crewmen will lose their jobs due to consolidation. An initial allocation would provide these individuals with some compensation for their years in the fishery. For those who remain in the fishery, there's growing evidence that quota leasing and financing quota purchases drain revenue from working fishermen. One study of scenarios in the B.C. trawl IFQ fishery shows that when 100 percent of quota is leased on a vessel, crew shares can decline by almost fifty percent 3 ' The Groundfish Development Authority, which enforces a code of conduct to protect trawler crews in B.C., reported in 2006 that "crew members' take -home pay continues to diminish; sometimes they come back from a trip with deliveries of 80,000 lbs of high-value groundfish only to find that they are actually `in the hole' after all expenses are deducted. * A 2007 financial profile of the B.C. halibut fishery also shows that as quota leasing rises to 60 percent of a vessel's catch, total crew shares decline by 39 percent. An analysis of the Bristol Bay Red King Crab fishery also estimated that rationalization through IFQs cut total payments to captain and crew by 38 to 50 percent. While earnings per crewmember increased because of rationalization, in reality, this smaller number of crew worked the same number of total days and lifted 16 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery the same number of pots as did the much larger labor force before rationalization. Indeed, the study's financial model shows that crew earnings per day at sea declined by 13 percent because of quota leasing costs. In short, crewmen did significantly more work, but for less pay. 5250,000 $200,000 5150,000 $100,000 $50,000 so B.C. Groundfish Vessel Crew Payment and Quota Leasing Scenarios $224,533 $156,759 $193,067 5124,276 17 $161,600 $91,801 0% 30% 60% % quota leased SOURCE All figures in Canadian dollars. Nelson, 2009. Groundfish Trawl • Sablefish Fixed Gear • Halibut Fixed Gear $119,645 $48,495 $33,884 100% $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery $0 Alaska King Crab Fishing Vessel Expense Model Lease Fees • Vessel Payment • Crew Payment • Fuel, Bait & Groceries Taxes S199 796 $136.061 $34.127 Without Rationalizaton With Rationalization SOURCE: Gunnar Knapp, 2006. Although catch shares can end the "race to fish" and immediately improve safety, deteriorating economic conditions for crews as a result of IFQs can have a gradual and negative effect on safety. In the B.C. IFQ trawl fishery, declining crew shares have caused vessels to go out to sea with fewer crewmen. According to the B.C. Groundfish Development Authority, "This is a major safety concern that crew members believe is a contributing factor in the loss of several vessels in the past few years." Another trawl industry study confirmed this practice." The statistics speak for themselves: From 2003 to 2008, seven trawl fishermen have been killed in B.C., double the annual fatality rate compared to the 18 -year average. Lost days due to injury on trawl vessels skyrocketed by 76 percent in the same period and the number of fatality and disability claims jumped 48 percent. Anecdotal and statistical evidence suggest that the economics of IFQs have gradually created safety problems of their own. 18 35 30 25 F 20 T 15 10 0 Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery B.C. Groundfish Trawl Fishing Safety Record 03 04 05 06 year SOURCE Work Safe BC, 2009, and Fish Safe BC, 2009. 7. Support new entrants and small operators 19 07 08 4,000 3,500 3,000 2,500 2,000 1,500 1, 000 500 0 Besides establishing owner -on -board rules to contain quota costs, the Council should provide an initial allocation for new entrants. This set -aside could be folded into the initial allocation for fishing communities and earmarked for new entrants. The Council should also revisit how on -board and dockside monitoring is financed to reduce the burden on small operators. According to the U.S. General Accounting Office's report on IFQs, consolidation tends to reduce quota availability and increase market prices. "As a result," the report states, "it is harder for new fishermen to enter the fishery, especially fishermen of limited means, such as owners of smaller boats or young fishermen who are just beginning their fishing careers. " To support these disadvantaged stakeholders, the GAO recommends allocation set - asides for new entrants and quota transfer rules that constrain demand, thereby making it more affordable to buy quota. The Council, however, has chosen not to implement any of these proactive measures. Financial analysis of IFQs in the B.C. groundfish trawl, halibut and sablefish fisheries shows that earnings are not sufficient to support the purchase and financing of 100 percent of the quota fished.' In other words, it is not financially viable to enter these FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery fisheries without access to initial allocations, outside capital or special loans. The value of halibut quota, the study states, is "justified more by incremental returns for existing participants than by expected returns for new entrants." Another study also fmds that "fishermen entering the LAPP [limited access privilege program] after the initial quota allocation will realize zero economic profit because of the cost of purchasing quota.' " Although strict on -board monitoring is a welcomed change in the Council's proposal, the formula for paying for monitoring costs will disadvantage new entrants and small operators. Each vessel will pay the same daily costs for an onboard observer and dockside monitoring, no matter how much fish the vessel catches. This will encourage consolidation onto more efficient vessels and provide an additional barrier to new entrants who may only be able to afford a small fishing operation, both in terms of vessel size and allocation. ECOLOGICAL RECOMMENDATIONS Economic efficiency — and not conservation — is the primary goal of the Council's IFQ rationalization proposal. The Council lists three overriding economic objectives and states that its IFQ proposal merely "considers environmental impacts" (emphasis added). Yet Congress is dear in the Magnuson - Stevens Act that conservation must primarily guide management plans. In the Council's catch share proposal, the only clear conservation measures are mandatory onboard observers and dockside monitoring for all groundfish catches. This is intended to ensure compliance with rules and collection of accurate and timely data on catches and discards. It should be noted that these measures could be implemented irrespective of IFQs. This positive measure, however, is overshadowed by several ecological shortcomings. 8. Provide incentives for low- impact, low- carbon fishing gear The Council should revisit its intersector allocations and gear - switching rules to provide a more equitable basis and incentives for fixed -gear vessels to harvest trawl quota. Analysis Bottom trawling is well established as the most destructive and least selective fishing technology in use today. Several scientific studies have confirmed this fact 4 However, the Council, through Amendment 21 on intersector allocation, has decided to allocate some 90 percent of all groundfish to the bottom trawl sector. For some species, the percentage is as high as 95 percent. According to the Council, this sharing arrangement reflects the "understanding that trawl gear is the only gear that can viably harvest much of the groundfish." 20 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery However, that is not the case for several species in question, including lingcod, thornyhead rockfish and sablefish that are viably harvested by fixed gear, induding longlines and pots. The Council did not assess the ecological and economic impacts to the fixed -gear sector of this initial allocation to the trawl sector. Nor did it assess the carbon footprint of trawlers versus smaller fixed -gear vessels. Moreover, it put in place gear switching rules that advantage trawlers over fixed -gear vessels. Under the Council's proposal, trawlers can switch to fixed gear and thereby compete with this other harvesting sector. In fact, this measure, according to the Council, "could depress the price of fixed- gear - caught sablefish slightly if IFQ holders are more efficient producers. "49 By contrast, fixed -gear vessels cannot buy or lease trawl quota without purchasing a limited -entry trawl permit. The rules clearly advantage trawlers over fixed -gear fishermen. If anything, the Council's intersector allocation and gear - switching rules should provide advantages and incentives to fixed -gear vessels to purchase trawl quota. The result would be less habitat damage, more jobs and higher landed value for many species. 9. Prohibit hoarding and profiteering on overfished species The Council should put in place initial allocation policies and other rules that would penalize fishermen who catch overfished species, but protect against hoarding of and profiteering on this scarce quota. Instead of a cap- and -trade system that lets individuals profit from the initial allocation of overfished species, the Council should place overfished species quota in a public conservation trust that leases the quota to fishermen each season at prorated fees: the more overfished species that a fisherman catches the higher the incremental lease fee. In this way, the Council would maintain a market incentive to avoid overfished species, but protect against profiteering on the scarcity of this quota. A fixed price for overfished species would also create certainty for fishermen. Another alternative would be for the Council to provide fishermen with the opportunity to lease a portion of their overfished species at prorated lease rates and then to auction off the rest each season. The auctions could be used to determine the price of the fixed rates for the coming fishing season. Furthermore, the Council could require that fishermen relinquish earnings on overfished species, thereby completely removing any economic incentive to catch these weak stocks. Revenue from the lease fees and relinquished earnings could be distributed equitably back to fishermen, provided as royalties to the public or used for conservation initiatives. The Groundfish Quota Exchange would be tasked with leasing and /or auctioning overfished quota. This would be similar to the "cap and dividend" system currently being discussed by Congress for the carbon market. 21 Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery The Council states that by creating individual accountability and market incentives fishermen will reduce their bycatch of overfished species. Technically, this is correct. "Since overfished species are marketable [under the IFQ proposal], they could be retained, reducing bycatch," states the Council's Draft Environmental Impact Statement. However, because overfished species are so scarce, "harvest limits will, for the most part, be fully utilized. " In other words, the catch of overfished species will remain the same, providing no conservation benefits. The only change is that they cease to be bycatch and become marketable. Overfished species, including bocaccio, Pacific Ocean perch, darkblotched rockfish, widow rockfish, canary rockfish, cowcod, and yelloweye rockfish, will play a critical role in the IFQ fishery. These scarce quotas will constrain the catch of more abundant fish stocks. "The cost of this quota is likely to be expensive," the Council states, "since these species restrict access to other, targeted species." Fishermen who unluckily land a "disaster tow" of overfished species could find themselves facing exorbitant prices for overfished species quota to cover their incidental catch. The Council hasn't properly considered market distortions that may occur in the leasing and sale of quota for overfished species. Control limits on accumulation, ranging from four to 17.7 percent for overfished species, may not be strict enough to prevent quota hoarding and profiteering from fishermen needing to cover "disaster tows." 3 60000 50000 40000 20000 10000 Overfished Species: Rockfish Stock Dedine and Designations weekly trip limns introduced multi week! monthly (pp limits 2 month cumulative b mits 82 84 86 88 90 92 94 96 98 00 02 04 06 SOURCE: PFMC, Draft Environmental Impact Statement, 2009. 22 Lingcod Pacific perch and bocaccao declared overf■shed variable limits introduced cowcod and darkblotched declared overfished widow and canary rockfish declared overfished Yellow eye declared overfdsne° Lingcod de- listed 10. Prevent inter -fleet spillover The Council should implement policies that will prevent, or at least significantly mitigate, the negative effects of the spillover of trawl vessels into the Dungeness crab, pink shrimp and other fisheries. The Council should engage other fishing sectors and levels of government to solve this dislocation of effort, including the implementation of a policy to retire or buyback latent permits in state fisheries. Analysis FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery The Council's IFQ proposal will likely downsize the active non - whiting trawl fleet by 40 to 60 vessels. That represents a significant amount of stranded capital, and owners will likely try to sell these excess vessels to fishermen in other fisheries or re- activate the vessels by purchasing permits in other federal or state fisheries. There is risk that former groundfish trawlers may spillover into the pink shrimp and Dungeness crab fisheries in Oregon, Washington and California because of the large numbers of latent permits in these fisheries. Fishermen in these fisheries have already expressed concern about the economic and ecological effects of this spillover of fishing effort. As part of the 2003 buyback of groundfish trawl permits, the Council specifically designed the buyback "to minimize spillover effects in the Coastal Dungeness crab and pink shrimp fisheries. " Realizing that many trawlers were also permitted for state crab and shrimp fisheries, the Council permanently retired all licenses on vessels, and permanently excluded the vessels from participating in other fisheries. This measure effectively prevented any spillover. In the end, the buyback retired 91 vessels, including 91 trawl and 121 crab and shrimp permits. In the current trawl IFQ proposal, the Council has not included any safeguards to prevent spillover into the crab and shrimp fisheries through the purchase of latent permits. Indeed, the Council dismisses the issue. "Since the limited entry systems for these other fisheries are state managed," writes the Council, "it was thought best that the latent permit issue be addressed outside the Council process. " This position contradicts the Council's earlier position regarding the buyback. Furthermore, the Council states that its proposal may cause spillover, but has sidestepped any responsibility for mitigating this negative impact on the conservation or economics of other fisheries. 23 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery SETTING A PRECEDENT When creating a catch share program, design matters. In order to avoid expensive corrections to problems illuminated by hindsight, it is critical that economic, social and ecological objectives be considered in full and addressed from the beginning. The Pacific Fishery Management Council's IFQ proposal fails to fully address these objectives. Catch shares are one instrument within the suite of tools available to fisheries managers, and they are employed in fisheries worldwide as a means of promoting economic efficiency. However, the Magnuson - Stevens Act also requires inclusion of social and ecological considerations. In order to adequately meet economic, social and ecological sustainability requirements, the Council's proposal must be reconsidered. At present, the Council needs to take a step back and address several shortcomings in the program's design. These fixes would improve market efficiency, strengthen conservation and ensure fair catch shares for the men and women, and communities that depend on the commercial groundfish fishery for their livelihood. The Council will be setting a precedent for fisheries of the future, and in so doing shouldn't repeat the mistakes of the past. 24 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery ENDNOTES 1 Pacific Groundfish FMP Amendment 20 Draft Environment Impact Statement, Executive Summary, p. v. 2 Nat Research Council. Sharing the Fish: Toward a National Policy on Individual Fishing Quotas. Washington, D.C.: National Academy Press, 1999, p. 198. s In allocations provide recipients with collateral to obtain loans to purchase more quota, "resulting in significant shifts in the power of quota holders versus others in the fishery and changes in the composition of stakeholders involved in managing the fishery." See National Research Council. Sharing the Fish: Toward a National Policy on Individual Fishing Quotas. Washington, D.C.: National Academy of Sciences, 1999, pp. 201- 202. 4 The ratio of the quota market value to annual landed value varies from fishery to fishery, and from year to year. Alaskan halibut ratios have fluctuated from three to eight. In B.C., ratios in groundfish fisheries range from six to nine. The 2008 landed value of non - whiting groundfish was $31.5 million. A ratio of eight would put quota market values above $250 million. See ex- vessel landed values in the Council's Draft Environmental Impact Statement (DEIS), p. 112. 5 NOAA. Catch Share Draft Policy, p. 5. 6 See Pinkerton, E. and D. N. Edwards. 2009. The elephant in the room: The hidden costs of leasing individual transferable fishing quotas." Marine Policy 33, pp. 707 -713; Knapp, Gunnar. Economic Impacts of BSAI Crab Rationalization on Kodiak Fishing Employment and Earnings and Kodiak Businesses: A Preliminary Analysis. Anchorage: University of Alaska, June 2006; and Ecotrust Canada. A Cautionary Tale about ITQ Fisheries. 2009, http: / /www.ecotrust.ca /fisheries /cautionarytale Ecotrust, the Pew Charitable Trust and Environmental Defense have all produced reports and manuals on good design for catch share programs, although opinions do differ on various elements. See Ecotrust. Market Design for Limited Access Privileges Programs in U.S. Fisheries. Proceedings of a workshop, Oct 3 -4, 2007; Environmental Defense. Catch Share Design Manual, http: / /www.edf.org /catchshares; and Pew Charitable Trust. Design Matters: Making Catch Shares Work. Nov. 2009: http: / /www.pewtrusts.org /our work_report_detail.aspx ?id= 55872. 8 The 170 vessels include whiting and non - whiting trawlers, but exclude 10 whiting catcher - processors. DEIS, p. 551. 9 DEIS, p. iv. Also, a National Research Council study aptly captures the economic efficiency logic of IFQs: "Individual Fishing Quotas are not a conservation tool, they are mainly an economic tool." National Research Council. Sharing the Fish: Toward a National Policy on Individual Fishing Quotas. Washington, D.C.: National Academy Press, 1999, p. 3 10 Concentration of IFQs in the hands of a few large fishing companies has sparked a great deal of debate, with concerns including monopoly power development and increased social inequity. Sumaila, U.R. and Watson, R. In Ecosystem -Based Management for Marine Capture Fisheries: A Policy Direction (eds. Ward, T., Tarte, D., Hegerl, E. and Short, K.). World Wildlife Fund, 2002, pp. 41 -43. 11 DEIS, p. 279. 12 Redstone Strategy Group and Environmental Defense. Assessing the Potential for LAPPS in U.S. Fisheries. March 26, 2007, p. 3. 13 The 2008 value of the 142 vessels with trawl permits was $45 million, although only about 74 vessels actively fish each year. Nelson, Stuart. An Analysis of Commercial Fishing Licence, Quota and Vessel Values as at March 31, 2008: West Coast Fishing Fleet. Vancouver: Department of Fisheries and Oceans, 2008, pp. 57 -58. 14 P and Edwards, 2009. 15 The one exception is a rule in the Magnuson- Stevens Act that prohibits "any person other than a United States citizen, a corporation, partnership, or other entity established under the laws of the United States or any State, or a permanent resident alien" from owning quota shares. MSA, Section 303A. 16 Knapp, Gunnar. Economic Impacts of BSAI Crab Rationalization on Kodiak Fishing Employment and Earnings and Kodiak Businesses: A Preliminary Analysis. Anchorage: University of Alaska, June 2006. 17 Nelson, Stuart. Pacific Commercial Fishing Fleet: Financial Profiles for 2007. Vancouver: Fisheres and Oceans Canada, April 2009. 25 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery 18 Nelson, Stuart. Analysis of Quota Leasing in the Groundfish Trawl Fishery. Canadian Groundfish Research and Conservation Society, 2006. 19 The scenarios are based on 2007 financial assumptions. However, the author inexplicably used historically low 2008 quota lease fees (6 cents per pound) to calculate the scenarios for 2007. We have corrected this to the 2007 lease fee of 15 cents. The trawl scenario does not include hake. The scenarios are for middle tier vessels in each fishery. 20 P and Edwards, 2009. 21 The analysis is based on figures in Nelson, Stuart. Pacific Commercial Fishing Fleet: Financial Profiles for 2007. Vancouver: Fisheries and Oceans Canada, April 2009. 22 Ibid., p. 63. 23 Ibid. 24 NOAA. Draft Catch Share Policy, p. 11. 25 Ledyard, John. 0. Market Design for Fishery IFQ Programs. Pasadena: California Institute of Technology, Social Science Working Paper No. 1301, April 2, 2009, p. 16. 26 See Macinko, S., and D.W. Bromely. Who Owns America's Fisheries? Washington, D.C.: Island Press, 2002; and Bromley, D. "Abdicating Responsibility: The Deceits of Fisheries Policy." Fisheries 34(6), 2009, pp. 280 -302; discussing the use of quota auctioning in some fisheries to address problems of initial allocation and equity implications. 27 DEIS, Appendix D, p. D -18 28 See DEIS Appendix A, page A -421 for a discussion of this point. 29 Ledyard. p. 16. 30 Ibid., p. 19. 31 U.S. General Accounting Office. Individual Fishing Quotas: Methods for Community Protection and New Entry Require Periodic Evaluation. Washington, D.C., February 2004, p. 8. 32 NOAA. Draft Catch Share Policy. January 2010, p. 6. 3333 Western Alaska Community Development Association: 2008 Annual Report: Western Alaska Community Development Quota Program. 34 MSA § 303A (5A). 35 Also see recommendations on captains and crew in National Research Council. Sharing the Fish, p. 204. 36 DEIS, p. 135. 37 Nelson, Stuart. Analysis of Quota Leasing in the Groundfish Trawl Fishery. Canadian Groundfish Research and Conservation Society, 2006. 38 Reported in Coastal Community Network. Minutes of 2005 -2006 Annual General Meeting. Prince Rupert, January 20, 2006. The Coastal Community Network has also described the issues of crew treatment and groundfish quota leasing on its website: http: / /www.coastalcommunitynetwork.ca /main.cfm ?cid= 122£tnid =7347 39 Nelson, Stuart. Pacific Commercial Fishing Fleet: Financial Profiles for 2007. Vancouver: Fisheries and Oceans Canada, April 2009, p. 63. 40 Knapp, Gunnar. Economic Impacts of BSAI Crab Rationalization on Kodiak Fishing Employment and Earnings and Kodiak Businesses: A Preliminary Analysis. Anchorage: University of Alaska, June 2006, p. 41. 41 The scenarios are based on 2007 financial assumptions. However, Nelson used historically low 2008 quota lease fees (6 cents per pound) for the 2007 groundfish trawl scenarios. We have corrected this to the 2007 lease fee of 15 cents. The trawl scenario does not include hake. The scenarios are for middle tier vessels in each fishery. 42 Nelson, Stuart. Analysis of Quota Leasing in the Groundfish Trawl Fishery. Canadian Groundfish Research and Conservation Society, 2006. 43 GAO, p. 11. 26 FAIR CATCH: Ten ways to improve the catch share proposal for the West Coast trawl fishery Nelson, Stuart. Pacific Commercial Fishing Fleet: Financial Profiles for 2007. Vancouver: Fisheries and Oceans Canada, April 2009, p. 79. as Michel Mark G. Development and Operational Expenses of Limited Access Privilege Program or "Catch - Share" Fisheries. Gordon and Betty Moore Foundation, September 2007, p. 29. 46 FMPs and amendments must be consistent with the national standards. § 1853 (a)(1)(C); § 1854 (a)(1)(A). 47 See Morgan, Lance E. and Ratana Chuenpagdee. Shifting Gears: Addressing the Collateral Impacts of Fishing Methods in U.S. Waters. Pew Science Series, 2003; Proceedings of the Pew Oceans Commission, Ecological Effects of Fishing. 2003, pp. 26 -29; Peter J. Auster, The Effects of Fishing on Fish Habitat, American Fisheries Society Symposium, 1999; National Research Council. Effects of Trawling and Dredging on Seafloor Habitat. 2002. 48 DEIS, p. 52. 49 DEIS, p. 574. so DEIS, p. 580. 51 DEIS, p. 590. 52 DEIS, p. 586. ss Nat Marine Fisheries Service. Environmental Assessment and Regulatory Impact Review for a Final Notice of a Fishing Capacity Reduction Program in the Pacific Coast Groundfish Fishery. July 2003, p. 5. 54 http:// www. pcouncil .org /groundfish /gfbuy.html ss DEIS, Appendix A, p. 471. 56 According to the Council's DEIS, Appendix A, p. 471, "A rationalized trawl fishery may have an effect on other West Coast fisheries through the transfer of effort and capital into other fisheries (spillover). 27 PRESS RELEASE EMBARGO: Wednesday, June 9, 2010,12 AM EST American Seafood Defense Fund establis fisheries lawsuit - 3) [ 1 I JUN 1 0 2010 1 I DOUGH CLERK'OFFICE j Legal action against Federal Government backed by largest New England port cities, Members of Congress Fund to be administered by New Bedford Harbor Development Commission NEW BEDFORD, MA June 9 — A national campaign has been launched to raise funds in support of a lawsuit filed against the federal government last month by New England's two largest fishing ports — New Bedford and Gloucester, Massachusetts — together with private fishing interests from Massachusetts, New Hampshire, New York, Connecticut, Rhode Island, and North Carolina. The Port of New Bedford, through the city's Harbor Development Commission, will manage the American Seafood Defense Fund. The suit challenges regulations that came into effect on May 1, 2010, and names the Administrator of NOAA and the Secretary of Commerce as defendants. "Sector management ", a version of NOAA's "catch share" national management initiative, has been implemented in New England, and is expected to impose annual costs of $17,000 to $27,000 per vessel -- in a fishery where gross landings are only approximately $130,000 per vessel. These costs are predicted to force consolidation of the fleet to 1/3 to 1/6 its present size; from 600 active vessels (down from 1,400 in 1994) to as few as 100 -200. This will affect not only boat owners and crew, but also the shore -side businesses that supply and service vessels, and create jobs in coastal communities. Additionally, special interests exerted influence on the New England Fisheries Council during the development of the "sector" system resulting in preferential treatment being granted to two groups, a violation of the Magnuson- Stevens Act. To date, those expressing positive sentiments about the new policies are groups that received preferential treatment, federal government employees, organizations subsidized by environmental lobbies, and the environmental lobbies themselves. The New England fishery consists of a number of interrelated stocks, including cod, haddock, pollock, redfish and flounder. It has been undergoing extensive rebuilding since 1994, and has substantially recovered. Congressman Barney Frank (D- Mass.) has publicly stated his approval of the legal action, and his intention to file an amicus brief in support of the suit. The Commonwealth of Massachusetts is considering joining the suit as well. Massachusetts Governor Deval Patrick has said he believes it would be a "good idea ". "The reason that we are attracting more and more plaintiffs, and the reason that we have the strong support of Congressman Frank and other lawmakers is because we are right on the merits," said New Bedford Mayor Scott Lang. The mayor continued, "This is an example of the government running afoul of the law and being doctrinaire, arbitrary, and in some cases punitive in their implementation of the Magnuson Act." Gloucester Mayor Carolyn Kirk pointed out that "NOAA took a program developed in single - species fisheries and replicated it in the New England multi - species complex. That will put our ground fishery out of business." Mayor Kirk continued, "We're seeing wage cuts and job losses and we are asking the Court to intervene on behalf of fishermen." Dr. Brian Rothschild, Dean Emeritus of the University of Massachusetts Dartmouth School for Marine Science and Technology noted "It is now clear to most observers that NOAA was derelict in implementing catch shares on May 1. The necessary scientific and economic analyses were not in place, and as a result, family income for many employed on vessels or in related businesses are being damaged." Kristin Decas, executive director of the New Bedford Harbor Development Commission, who is spearheading the fundraising effort points out that "NOAA has failed to analyze the impacts these regulations will have on small businesses, fishing and coastal communities. And they did not consider ways to mitigate costs and the regulatory burden." Ms. Decas continued, "In the past decade, Federal regulations have driven many small fishermen out of business. We can't afford further consolidation of the industry." Additional industry members are invited to join the suit, and can obtain details on how to become plaintiffs by contacting the lead attorneys. Contributions may be sent to: American Seafood Defense Fund New Bedford Harbor Development Commission PO Box 50899 New Bedford, MA 02745 In- person contributions will be accepted at the New Bedford Harbor Development Commission offices at 52 Fishermen's Wharf in the Wharfinger Building on the New Bedford Waterfront. Contact: Kristin Decas New Bedford Port Director 508- 961 -3000 kristin.decas@a,newbedford- ma.gov Attorneys: Pamela F. Lafreniere 888 Purchase St., Suite 217 New Bedford, MA 02740 Tel: 508- 979 -5911 Fax: 508- 993 -3117 e -mail: pamelalafreniere @verizon.net Stephen M. Ouellette 127 Eastem Ave., Suite 1 Gloucester, MA 01930 Tel: 978 - 281 -7788 Fax: 978 - 281 -4411 e -mail: stephen.ouellette@fishlaw.com