Legislature(2021 - 2022)ADAMS 519

04/22/2021 09:00 AM FINANCE

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HOUSE BILL NO. 28                                                                                                             
     "An Act relating to the registration of commercial                                                                         
     vessels; and providing for an effective date."                                                                             
9:04:27 AM                                                                                                                    
REPRESENTATIVE  GERAN TARR,  CHAIR  OF  THE HOUSE  FISHERIES                                                                    
COMMITTEE,   SPONSOR,   introduced  the   legislation.   She                                                                    
identified HB  28 as a  House Fisheries Committee  bill. She                                                                    
detailed that  Representative Louise Stutes had  carried the                                                                    
bill  in  the last  legislature,  but  it  had not  made  it                                                                    
through the committee process due  to the onset of COVID-19.                                                                    
There had  been agreement  by all House  Fisheries Committee                                                                    
members to sponsor the bill during the current session.                                                                         
Representative  Tarr explained  that  the  bill addressed  a                                                                    
problem shared by all coastal  communities and statewide due                                                                    
to the  number of  vessels in  Alaska. She  highlighted that                                                                    
several years  back, the legislature  had passed  a derelict                                                                    
vessel bill  [SB 92] with  the intention of creating  a fund                                                                    
to provide  funding for the  removal and  associated cleanup                                                                    
of derelict vessels around the  state. She reported that the                                                                    
passage  of  the  legislation  had  created  an  inadvertent                                                                    
problem   and   redundant  registration   requirement.   She                                                                    
elaborated that  HB 28  sought to fix  the error.  She asked                                                                    
her  staff  to explain  the  bill  and provide  a  sectional                                                                    
THATCHER   BROUWER,   STAFF,  REPRESENTATIVE   GERAN   TARR,                                                                    
introduced   himself.  reviewed   the  legislation   with  a                                                                    
prepared statement:                                                                                                             
     This  bill exempts  active  commercial fishing  vessels                                                                    
     from  a duplicated  registration  requirement that  was                                                                    
     created with  the passage of  the derelict  vessel bill                                                                    
     in  2018.  Since the  passage  of  the derelict  vessel                                                                    
     bill,  commercial fishermen  who already  register with                                                                    
     the  Commercial Fisheries  Entry  Commission, now  also                                                                    
     have to  register with the Division  of Motor Vehicles.                                                                    
     Prior  to  the passage  of  the  derelict vessel  bill,                                                                    
     documented  commercial  fishing  vessels  only  had  to                                                                    
     register   with   the    Commercial   Fisheries   Entry                                                                    
     Commission every year.                                                                                                     
     The rationale  behind the derelict  vessel bill  was to                                                                    
     provide  the  state  and local  municipalities  with  a                                                                    
     state  maintained database  on who  owned and  operated                                                                    
     vessels in Alaska's  waters, as well as  how to contact                                                                    
     those individuals.  As you all know  in this committee,                                                                    
     derelict  vessels  are  a   big  problem  coastwide  in                                                                    
     Alaska.  At  times,  an  owner  can  abandon  a  vessel                                                                    
     because they  can no  longer afford  to maintain  it or                                                                    
     properly dispose of it and  an abandoned vessel such as                                                                    
     the  Lumberman that  sat in  the Gastineau  Channel for                                                                    
     years,  can  cost  millions   of  dollars  to  properly                                                                    
     dispose  of.  If the  owner  of  the vessel  cannot  be                                                                    
     contacted or held  liable, the cost is  often passed on                                                                    
     to the city where the  vessel is moored or anchored, or                                                                    
     sometimes to state and federal governments.                                                                                
     Commercial  fishermen   understand  the   problem  with                                                                    
     derelict vessels  and often pay  the price if  a vessel                                                                    
     sinks and pollutes important fish habitat.                                                                                 
Mr.  Brouwer relayed  that  while HB  28 was  a  fix to  the                                                                    
derelict  vessel   bill,  it  maintained   the  registration                                                                    
requirement. He stated  that commercial fishermen understood                                                                    
the need to address derelict vessels.                                                                                           
9:08:17 AM                                                                                                                    
Mr.  Brouwer  communicated  that  with the  passage  of  the                                                                    
derelict vessel bill, commercial  fishermen were required to                                                                    
register  with  the Division  of  Motor  Vehicles (DMV).  He                                                                    
explained  that registration  with the  DMV was  unnecessary                                                                    
because  the Commercial  Fisheries  Entry Commission  (CFEC)                                                                    
already  maintained  a  public  online  database  containing                                                                    
information  on all  commercial  fishing  vessel owners  and                                                                    
their  vessels.   He  elaborated  that   commercial  fishing                                                                    
vessels were  required to renew their  license annually with                                                                    
CFEC  and   were  mandated  to  display   their  five  digit                                                                    
registration number on  both sides of the vessel  in 12 inch                                                                    
numbers.  Additionally, owners  were required  to display  a                                                                    
new  placard annually  on the  port side  of the  vessel. He                                                                    
explained that  the display  of the  license number  and the                                                                    
decal provided  enforcement officers  with the  tools needed                                                                    
to ensure commercial fishing vessels were registered.                                                                           
Mr.   Brouwer  explained   that  the   legislation  exempted                                                                    
undocumented fishing  vessels, a smaller subset  of vessels,                                                                    
from  registering  with  the DMV.  He  elaborated  that  the                                                                    
legislation  would require  undocumented fishing  vessels to                                                                    
register  with   CFEC  only.  He  reported   that  the  bill                                                                    
instituted  an  annual  $8  fee   for  all  CFEC  registered                                                                    
vessels,  which was  in  addition to  fees  already paid  by                                                                    
commercial  fishing vessel  owners  for  vessel renewal  and                                                                    
permits.  The $8  annual  fee  was in  lieu  of the  current                                                                    
three-year $24  fee charged  by DMV.  He expounded  that the                                                                    
bill  would be  cost-neutral  as  commercial fishing  vessel                                                                    
registration was transferred back  to CFEC. He detailed that                                                                    
the  $8 annual  fee  helped support  programs including  the                                                                    
Kids Don't  Float and the  Alaska Marine  Safety Association                                                                    
boating safety  programs. Additionally,  a small  portion of                                                                    
the fees would go to the derelict vessel fund.                                                                                  
Mr.  Brouwer  highlighted  that commercial  fishing  vessels                                                                    
were the  backbone of  the state's  most vital  industry and                                                                    
the   legislation   would    streamline   the   registration                                                                    
requirements  for the  vessels,  while  still providing  the                                                                    
necessary  contact   information  created  under   the  past                                                                    
derelict vessel bill.                                                                                                           
Co-Chair Merrick asked to hear the sectional analysis.                                                                          
9:11:12 AM                                                                                                                    
Mr. Brouwer provided a sectional analysis (copy on file):                                                                       
     Section One                                                                                                                
     Amends  AS 05.25.055(i)  to  exempt commercial  vessels                                                                    
     with  a   valid  license   issued  by   the  Commercial                                                                    
     Fisheries Entry  Commission, under  AS 16.05.490  or AS                                                                    
     16.05.530, from  the provision that requires  owners to                                                                    
     register  their  vessel  with  the  Division  of  Motor                                                                    
     Vehicles and display the  registration number issued by                                                                    
     the Division.                                                                                                              
     Section Two                                                                                                                
     Amends AS 05.25.056(a), the  existing Division of Motor                                                                    
     Vehicles titling statute,  to clarify that undocumented                                                                    
     registered   Commercial    Fishing   Entry   Commission                                                                    
     licensed  vessels,  will  still be  required  to  title                                                                    
     through the Division of Motor Vehicles.                                                                                    
Mr.  Brouwer  noted  that the  derelict  vessel  legislation                                                                    
[passed   several  years   back]   had   included  a   title                                                                    
requirement   for   undocumented   vessels.   He   continued                                                                    
reviewing the sectional analysis:                                                                                               
     Section Three                                                                                                              
     Adds a  new section to  AS 16.05.475, that  assesses an                                                                    
     annual $8  registration fee  for vessels  licensed with                                                                    
     the  Commercial Fisheries  Entry Commission,  beginning                                                                    
     January 1, 2022. This is  in lieu of the current 3-year                                                                    
     $24 fee collected by the  Division of Motor Vehicles at                                                                    
     the time of registration or registration renewal.                                                                          
     The  fee  will  be  accounted  for  separately  for  as                                                                    
     provided in  AS 05.25.096(b), to be  made available for                                                                    
     use  by  the  Departments  of  Administration,  Natural                                                                    
     Resources   and   Commerce,  Community   and   Economic                                                                    
     Section Four                                                                                                               
     Adds a new  section to the uncodified law  of the State                                                                    
     of  Alaska  which  requires  the  Commercial  Fisheries                                                                    
     Entry Commission waive the  $8 dollar registration fees                                                                    
     for calendar  year 2022 for vessel  owners that already                                                                    
     paid  the registration  fee to  the  Division of  Motor                                                                    
     Vehicles for 2020.                                                                                                         
Mr. Brouwer elaborated  that if a vessel owner  had paid the                                                                    
three-year fee  in 2020 to the  DMV, the owner would  not be                                                                    
charged  again by  CFEC as  the state  transitioned back  to                                                                    
registering vessels  with CFEC only. He  continued reviewing                                                                    
the sectional analysis:                                                                                                         
     Additionally,   the  commission   will  waive   the  $8                                                                    
     registration fee  for both calendar year  2022 and 2023                                                                    
     if a  vessel owner has  paid their registration  fee to                                                                    
     the Division of Motor Vehicles in 2021.                                                                                    
     This section ensures that  as vessel owners' transition                                                                    
     to paying an  extra $8 to register  with the Commercial                                                                    
     Fisheries  Entry  Commission,  that   do  not  pay  the                                                                    
     Commission for  the years they have  already registered                                                                    
     for with the Division of Motor Vehicles.                                                                                   
     Section Five                                                                                                               
     Adds a new  section to the uncodified law  of Alaska to                                                                    
     make section one of this  act retroactive to January 1,                                                                    
Mr.  Brouwer  expounded  that  if  the  legislation  passed,                                                                    
vessels that did not register with  the DMV in 2021 would be                                                                    
fine.  He concluded  his review  of  the sectional  analysis                                                                    
with Section 6:                                                                                                                 
     Section Six                                                                                                                
     Establishes  an   immediate  effective  date   for  the                                                                    
     remainder of the bill.                                                                                                     
9:14:14 AM                                                                                                                    
Representative  Edgmon  recalled  that  when  Senator  Peter                                                                    
Micciche's  bill SB  92  had passed  three  years back,  the                                                                    
Department  of Public  Safety  (DPS)  had essentially  stood                                                                    
down. He  clarified he  was speaking in  the context  of the                                                                    
Bristol Bay region and explained  that he had been contacted                                                                    
numerous  times.  He  detailed  that he  had  recently  been                                                                    
contacted by  a fisherman in  Bristol Bay who  was concerned                                                                    
the department  would enforce  the rule under  SB 92  if the                                                                    
current  legislation   did  not   pass.  He   asked  whether                                                                    
Representative  Tarr had  heard the  department would  stand                                                                    
down for another  year in terms of  enforcing the provision.                                                                    
Alternatively, he  asked if fishermen  would be  required to                                                                    
comply with  the duplicative registration requirement  if HB
28 did not pass.                                                                                                                
Mr.  Brouwer replied  that he  did not  have the  answer. He                                                                    
notified the  committee that the DMV  director was available                                                                    
online for  questions. He added  that he had  not personally                                                                    
reached out to DPS to  ask whether the department planned to                                                                    
stand  down  another  year.  He  reported  that  information                                                                    
provided by DMV showed  there were commercial fishing vessel                                                                    
owners registering  with the DMV  in case the  provision was                                                                    
enforced. He would follow up with the information.                                                                              
Representative Edgmon  highlighted a problem in  Bristol Bay                                                                    
where thousands  of people congregated in  small areas where                                                                    
there were minimal DMV services.  He explained the situation                                                                    
created  a bottleneck.  He noted  that as  innocuous as  the                                                                    
bill may appear, it was important to many fishermen.                                                                            
JEFFREY  SCHMITZ,  DIRECTOR,  DIVISION  OF  MOTOR  VEHICLES,                                                                    
DEPARTMENT OF  ADMINISTRATION (via  teleconference), replied                                                                    
that in  regard to Representative Edgmon's  question, he did                                                                    
not have information about what law enforcement would do.                                                                       
9:16:50 AM                                                                                                                    
DALE  KELLEY,   COMMISSIONER,  COMMERCIAL   FISHERIES  ENTRY                                                                    
COMMISSION (via  teleconference), introduced herself  as one                                                                    
of  the two  CFEC commissioners.  She provided  a PowerPoint                                                                    
presentation titled "Commercial  Fishing Vessel Licensing in                                                                    
Alaska,"  dated March  2021 (copy  on file).  She read  from                                                                    
prepared remarks beginning on slide 2:                                                                                          
     Owners and operators of commercial  vessels used by the                                                                    
     seafood industry  are subject  to many  state, federal,                                                                    
     and international requirements.  Each state and country                                                                    
     handles  licensing  according  to their  unique  needs.                                                                    
     CFEC  has licensed  Alaska's  commercial fishing  fleet                                                                    
     for  decades and  has amassed  a significant  amount of                                                                    
     information  on these  vessels and  their owners.  It's                                                                    
     our  hope  that  CFEC experienced,  extensive  database                                                                    
     will be of assistance in  helping the state achieve the                                                                    
     goals and objectives of  the derelict vessel prevention                                                                    
9:18:46 AM                                                                                                                    
Ms. Kelley turned  to slide 3 and  addressed 2021 commercial                                                                    
fishing vessel licensing rules:                                                                                                 
     Generally,  all  commercial fishing  vessels,  tenders,                                                                    
     processors, and transporters, must  be licensed by CFEC                                                                    
     every  year.  However,  some vessels  are  exempt  like                                                                    
     those used  solely at  salmon setnet  sites or  in some                                                                    
     westward  Alaska waters.  Fees  for commercial  fishing                                                                    
     vessels are based on the  overall length of the vessel,                                                                    
     as  defined  by  the  U.S. Coast  Guard.  A  commercial                                                                    
     vessel  license consists  of a  triangular metal  ADF&G                                                                    
     numbered  plate   issued  when  the  vessel   is  first                                                                    
     licensed with  CFEC an then  a color-coded  sticker and                                                                    
     receipt are  issued each year.  If the vessel  owner is                                                                    
     licensed for salmon net fishing,  the license will also                                                                    
     include an area tab specific to the fishing permit.                                                                        
Ms. Kelley advanced to slide 4 and continued reading from                                                                       
prepared remarks:                                                                                                               
     CFEC  is the  licensing agency  for commercial  vessels                                                                    
     operating   in   Alaska,   but  we   require   specific                                                                    
     information from  DMV and U.S.  Coast Guard as  part of                                                                    
     that process. Either U.S.  Coast Guard documentation or                                                                    
     state  registration  is   required  for  all  motorized                                                                    
     vessels  used  in  commercial fishing  activities.  The                                                                    
     U.S.  Coast  Guard   registers  and  titles  documented                                                                    
     vessels,  the  DMV  registers and  titles  undocumented                                                                    
     vessels  that  require  registration. Each  year,  CFEC                                                                    
     licenses   roughly    5,000   documented    and   4,000                                                                    
     undocumented  vessels. The  U.S.  Coast Guard  requires                                                                    
     documentation for any U.S. vessel  over 5 net tons that                                                                    
     engages in commerce between  two U.S. ports. Documented                                                                    
     vessels  are usually  32 feet  or  longer. Owners  must                                                                    
     prove that U.S.  citizens own a 75  percent interest in                                                                    
     the vessel  and that  the vessel  meets all  U.S. build                                                                    
     requirements. U.S.  Coast Guard  documentation includes                                                                    
     an Abstract of Title, which  tracks the full history of                                                                    
     the vessel.                                                                                                                
     Undocumented  vessels are  generally under  5 net  tons                                                                    
     and 32  feet or less  in length. These vessels  must be                                                                    
     registered  and  titled  by  the  Department  of  Motor                                                                    
     Vehicles. In order to be  eligible for an annual vessel                                                                    
     license,  vessel owners  must first  provide CFEC  with                                                                    
     either U.S.  Coast Guard documentation  or a  DMV title                                                                    
     and registration.                                                                                                          
     Vessel licenses must be renewed  annually, and fees are                                                                    
     based  on Coast  Guard  definition of  length with  few                                                                    
     exceptions,    all    permitted   commercial    fishing                                                                    
     activities in  state waters must  be associated  with a                                                                    
     CFEC licensed  vessel. Due  to COVID-19,  fewer vessels                                                                    
     were licensed in 2020 than  normal. So, 2019 provides a                                                                    
     more typical  snapshot of  recent year  vessel numbers.                                                                    
     That  year, CFEC  licensed 8,806  vessels  and took  in                                                                    
     over $629,000 in fees.                                                                                                     
Ms. Kelley showed a screenshot of the CFEC website on slide                                                                     
     Slide  5  should be  a  screenshot  of CFEC's  webpage,                                                                    
     where  commercial   fishermen  and   commercial  vessel                                                                    
     owners  can access  all  CFEC  licensing forms.  Vessel                                                                    
     owners have  two options, they can  download and submit                                                                    
     CFEC license application forms  or apply through CFEC's                                                                    
     online licensing portal, which we refer to as Leon.                                                                        
9:21:13 AM                                                                                                                    
Ms. Kelley turned to slides 6 through 8 and continued                                                                           
reading from prepared remarks:                                                                                                  
     There  are multiple  forms available  to assist  vessel                                                                    
     owners  with  their  licensing  needs  from  change  of                                                                    
     information  to securing  a  duplicate  license in  the                                                                    
     event the original is lost.                                                                                                
     Slide  7  is the  vessel  license  application. I  have                                                                    
     highlighted various  information CFEC gathers  in order                                                                    
     to  verify vessel  ownership. Whether  the owner  or an                                                                    
     agent secures the vessel license,  they are required to                                                                    
     provide   all  of   the  requested   information  about                                                                    
     ownership.  Both  paper  and  online  applications  are                                                                    
     signed by the applicant under penalty of perjury.                                                                          
     Vessel information  is also required on  the commercial                                                                    
     fishing permit  application. The name of  the vessel is                                                                    
     embossed  on  the fishing  permit  card,  which is  not                                                                    
     printed until  the permit is  associated with  a vessel                                                                    
     for the fishing season. Note  that it isn't unusual for                                                                    
     one person  in a  fishing operation  to own  the permit                                                                    
     and the other to own or lease the vessel.                                                                                  
9:22:18 AM                                                                                                                    
Ms. Kelley addressed slide 9 with prepared remarks:                                                                             
     Finally, the  Leon online  renewal system  requires the                                                                    
     applicant to  state whether or  not they are  the owner                                                                    
     or the agent of the  vessel owner before even advancing                                                                    
     to the licensing document.                                                                                                 
Ms. Kelley  advanced to slide  10 showing  various documents                                                                    
commercial  fishermen and  vessel  owners  may receive  from                                                                    
CFEC  during the  annual licensing  process.  She read  from                                                                    
prepared remarks:                                                                                                               
     All permit  cards and  associated paperwork  are color-                                                                    
     coded by year for ease  of enforcement. The permit card                                                                    
     in the lower left  includes essential information about                                                                    
     the permit  holder and vessel  and is used  when making                                                                    
     fishery  landings.  Note  that  a  fisherman  will  not                                                                    
     receive  that  card until  a  fishing  permit has  been                                                                    
     linked to  a properly  licensed vessel for  the fishing                                                                    
     year  in  question.  A triangular  shape  and  numbered                                                                    
     ADF&G vessel  plate must be  prominently posted  on the                                                                    
     side of the  vessel. A licensing sticker  is affixed to                                                                    
     it as visible proof  of current year licensing, similar                                                                    
     to  DMV's vehicle  license  and registration  stickers.                                                                    
     The  vessel license  receipt  includes key  information                                                                    
     about the vessel  and its owner. If the  vessel is used                                                                    
     in  a  salmon  net  fishery, there  will  be  a  letter                                                                    
     designating the permitted fishing  area. If the license                                                                    
     holder  has a  salmon  net license  for  more than  one                                                                    
     region  and wishes  to change  areas  during a  season,                                                                    
     they  must   contact  CFEC  and  often   ADF&G  to  get                                                                    
     permission to trade out the area tab.                                                                                      
9:24:06 AM                                                                                                                    
Ms. Kelley showed a sampling of color coded fishing cards                                                                       
issued annually on slide 11. She reviewed slides 12 through                                                                     
14 with prepared remarks:                                                                                                       
     CFEC  has  developed  and  maintained  a  sophisticated                                                                    
     online public permit and vessel  lookup system. Using a                                                                    
     few key pieces of information,  we can find out a great                                                                    
     deal  about both  documented and  undocumented vessels.                                                                    
     Note the tabs along the  top, which will help guide you                                                                    
     to select search  options. Just this week  a change was                                                                    
     made  to this  page. The  status column  now shows  the                                                                    
     dates the  vessel license  is valid.  In this  case, we                                                                    
     used  quite a  bit  of information  to  search for  the                                                                    
     documented fishing vessel  Ida Lee, who was  owned by a                                                                    
     person some of you might  remember. Note that the first                                                                    
     search  attempt will  provide the  information seen  in                                                                    
     the white  rows that begin  with the year.  Clicking on                                                                    
     the plus  sign in  a white row  will reveal  a dropdown                                                                    
     box  with additional  information as  seen in  the blue                                                                    
     area with  the green circle. Data  here includes vessel                                                                    
     weight,   engine   type,   whether   the   vessel   has                                                                    
     refrigeration, and other details.                                                                                          
     This slide  shows the search of  an undocumented vessel                                                                    
     [slide 13] using only the  owner's name, in this case a                                                                    
     well-known  set   netter.  As  you  can   see,  a  more                                                                    
     streamlined search will lead you  to a similar array of                                                                    
     Those  folks who  would like  even more  information on                                                                    
     vessels and owners can use  the yearly downloads tab to                                                                    
     obtain  spreadsheets  that  can  be  sorted  to  create                                                                    
     spreadsheets that  can be sorted to  meet specific data                                                                    
9:25:45 AM                                                                                                                    
Ms. Kelley provided a summary on slide 15:                                                                                      
     With  few exceptions,  all commercial  fishing vessels,                                                                    
     tenders, floating processors,  and transporters must be                                                                    
     licensed   by   CFEC    every   year.   USCG   provides                                                                    
     registration  and  title  for documented  vessels.  DMV                                                                    
     titles   and  registers   undocumented  vessels.   CFEC                                                                    
     requires both  title and registration  documents before                                                                    
     issuing an ADF&G plate and  annual vessel license. CFEC                                                                    
     licensing  materials  require accurate  information  on                                                                    
     the vessel  and its ownership; applications  are signed                                                                    
     under penalty  of perjury. CFEC maintains  an extensive                                                                    
     database  on each  commercially licensed  vessel, which                                                                    
     is  both searchable  and downloadable  from our  public                                                                    
9:26:48 AM                                                                                                                    
Representative  Carpenter  was curious  how  an  owner of  a                                                                    
documented   or  undocumented   boat   would  remove   their                                                                    
registration from  the database if  they sold their  boat or                                                                    
were otherwise no longer responsible for a boat.                                                                                
Ms.  Kelley  believed  Representative Carpenter  was  asking                                                                    
whether  a prior  owner's  name would  be  removed from  the                                                                    
database.  She explained  that the  CFEC  database showed  a                                                                    
boat's entire ownership  history. She did not  know if there                                                                    
was a process for removing a name upon request.                                                                                 
Representative  Carpenter  made   a  comparison  to  vehicle                                                                    
registration where there  was a way to show  the vehicle had                                                                    
been  sold.  He was  curious  whether  there was  a  similar                                                                    
process for boats. He thought  it sounded like there was not                                                                    
a  similar  process. He  stated  his  understanding that  it                                                                    
sounded  like the  next owner  registration would  prove the                                                                    
boat  was owned  by a  new  person. He  wondered what  would                                                                    
happen if a new owner failed to register the boat.                                                                              
Ms. Kelley answered that by  law, fishermen were required to                                                                    
notify CFEC if  a vessel was sold. She  referenced slides 12                                                                    
and 13  showing the  CFEC online  database and  listing. She                                                                    
explained  that if  someone  did not  register  a vessel  in                                                                    
their own  name, it  would not be  licensed for  the current                                                                    
year.  She elaborated  that the  placard displaying  the DFG                                                                    
number remained with  a vessel for its  entire lifespan. She                                                                    
confirmed that if someone did  not license their vessel, the                                                                    
database would not reflect the new owner.                                                                                       
Representative  Carpenter observed  that  if  a person  sold                                                                    
their boat, the  individual should either keep  proof of the                                                                    
sale or sell to a responsible party.                                                                                            
9:29:39 AM                                                                                                                    
Representative  Wool asked  what distinguished  a documented                                                                    
vessel  from  an  undocumented  vessel.  He  referenced  Ms.                                                                    
Kelley's   testimony   that   DMV  titled   and   registered                                                                    
undocumented vessels.                                                                                                           
Ms. Kelley  answered in the affirmative.  She explained that                                                                    
documented vessels  had papers showing the  U.S. Coast Guard                                                                    
titled and documented a vessel.                                                                                                 
Representative  Wool observed  that  according  to the  CFEC                                                                    
chart [on  slide 4] an  undocumented vessel was less  than 5                                                                    
tons and less  than 32 feet. He asked  for verification that                                                                    
if  a  vessel  fit  the aforementioned  dimensions,  it  was                                                                    
considered undocumented and required the  owner to go to the                                                                    
Ms. Kelley  replied in the  affirmative. She  confirmed that                                                                    
undocumented vessels would  still go through the  DMV if the                                                                    
bill passed.  She elaborated that it  was documented vessels                                                                    
that had run into a  problem under the derelict vessel bill,                                                                    
where suddenly  the requirements had changed.  She explained                                                                    
that approximately 5,000 people  who had not previously been                                                                    
required to go  through the DMV were required  to go through                                                                    
the DMV [as  a result of the passage of  the derelict vessel                                                                    
bill]. She  stated it was  her understanding that HB  28 was                                                                    
intended to correct the problem.                                                                                                
Representative Wool referenced the  $8 registration fee with                                                                    
CFEC. He pointed to the table  on slide 4 and noted that the                                                                    
CFEC fee  for the  smallest vessel was  $24. He  asked where                                                                    
the $8 fee came in, which he believed seemed very low.                                                                          
Mr. Brouwer  clarified that the  fees shown on slide  4 were                                                                    
already   being  charged   by  CFEC   for  the   purpose  of                                                                    
registering  commercial fishing  vessels. He  explained that                                                                    
the $8 fee  would be in addition to existing  fees. He added                                                                    
that the  $8 fee was in  lieu of the current  three-year fee                                                                    
of $24  with DMV. He  elaborated that if  documented vessels                                                                    
no longer had to register  with DMV and only registered with                                                                    
CFEC, owners would pay an additional $8 annually.                                                                               
Representative  LeBon  recalled   his  past  work  financing                                                                    
vessels and  bank loans.  He shared that  the bank  had used                                                                    
the  DMV method  to report  a lien  as a  public record.  He                                                                    
asked how  a bank  would show  it had a  lien or  a security                                                                    
interest against a vessel.                                                                                                      
Mr. Brouwer believed  there were two different  ways to show                                                                    
the  information. He  detailed that  one method  was through                                                                    
the  U.S. Coast  Guard  documentation  process. He  believed                                                                    
members'  packets included  a document  describing the  U.S.                                                                    
Coast  Guard   documentation  process   ["Documentation  and                                                                    
Tonnage of  Smaller Commercial Vessels" (copy  on file)]. He                                                                    
explained that  when an  owner went  through the  process, a                                                                    
certificate was  received from the Coast  Guard. He reported                                                                    
that the certificate  could be used to secure  the lien with                                                                    
a bank.  Additionally, undocumented  vessels would  still be                                                                    
required to  title with  the DMV. He  relayed that  he would                                                                    
double  check, but  he believed  it  could be  used for  the                                                                    
Representative LeBon asked for  assurance there would not be                                                                    
a loophole  that would exclude  banks from  publicly showing                                                                    
their lien  interest. He  was very  familiar with  the Coast                                                                    
Guard  preferred marine  mortgage  process  that showed  the                                                                    
bank's interest.                                                                                                                
Mr. Brouwer answered that it was  not the intent of the bill                                                                    
and he  did not believe  there were any loopholes.  He would                                                                    
verify and follow up.                                                                                                           
9:34:22 AM                                                                                                                    
FRANCES LEACH, EXECUTIVE DIRECTOR, UNITED FISHERMEN OF                                                                          
ALASKA (via teleconference), spoke in support of the                                                                            
legislation. She provided prepared remarks:                                                                                     
     We represent  37 commercial  fishing groups  across the                                                                    
     state, ranging  from commercial crabbers in  the Bering                                                                    
     Sea  down to  commercial divers  in southern  Southeast                                                                    
     Alaska. UFA  fully supports House  Bill 28,  which will                                                                    
     allow vessels registered  with the Commercial Fisheries                                                                    
     Entry  Commission  [to  be]   exempt  from  needing  to                                                                    
     register with  the DMV. When  the derelict  vessel bill                                                                    
     was first  introduced, UFA was supportive  of the bill.                                                                    
     Fishermen know  all too well the  problem with derelict                                                                    
     vessels  as they  are  known  for causing  navigational                                                                    
     hazards  and  environmental   issues.  We  support  the                                                                    
     registration of  vessels so that  owners may  be linked                                                                    
     back  to vessels  in case  of abandonment;  however, at                                                                    
     the inception of this bill,  UFA asked the bill sponsor                                                                    
     that  vessels  registered  with  CFEC  be  exempt  from                                                                    
     having to  take that  extra step  to register  with the                                                                    
     DMV. However, as you know,  this didn't happen, so here                                                                    
     we are today trying to fix that oversight.                                                                                 
     The purpose  of this bill [SB  92] was to have  a state                                                                    
     managed  database  to  track  vessel  owners.  This  is                                                                    
     already  what  the   CFEC  does.  Commercial  fishermen                                                                    
     register   their  boats   annually  with   CFEC.  Their                                                                    
     information  such  as  owner   name,  boat  size,  fuel                                                                    
     carrying  capacity,  and  many other  details  are  all                                                                    
     housed  in a  state  managed database  operated by  the                                                                    
     CFEC.  As   previously  mentioned,  vessels   are  also                                                                    
     required to  display their registration sticker  on the                                                                    
     port side of their fishing  vessel, making them easy to                                                                    
     identify.  Requiring commercial  fishermen to  register                                                                    
     with the CFEC and DMV  is reinventing the wheel. Not to                                                                    
     mention,  making fishermen  have to  jump through  more                                                                    
     hurdles and pay more money.                                                                                                
     In closing, we thank everyone  who has been involved in                                                                    
     correcting this issue  so that boat owners  may be held                                                                    
     liable for  abandonment while  not having  to duplicate                                                                    
     what they already do as responsible boat owners.                                                                           
9:37:01 AM                                                                                                                    
Representative  Carpenter   asked  about   responsible  boat                                                                    
owners selling their boats. He  asked if there was currently                                                                    
a way  for prior owners to  notify the state about  the sale                                                                    
of a vessel, which would then be reflected in the database.                                                                     
Ms.  Leach  answered  that  new   owners  were  required  to                                                                    
register  with   CFEC  as  a   vessel  permit   holder.  She                                                                    
elaborated that a person was  required to register with CFEC                                                                    
if they planned to use a  vessel for fishing. She hoped that                                                                    
within the process, a transfer of ownership would be shown.                                                                     
Representative Carpenter  explained he  was trying  to gauge                                                                    
whether there had ever had a problem with the issue.                                                                            
Representative LeBon shared that he  had just been told that                                                                    
CFEC was  the vehicle for recording  a lien on a  vessel. He                                                                    
asked whether  individuals looking to confirm  that a vessel                                                                    
was  free   of  any  bank   liens  could  easily   find  the                                                                    
information through CFEC. He was  looking for assurance that                                                                    
the information was not complicated to access.                                                                                  
Mr. Brouwer  answered that the publicly  accessible database                                                                    
showed   current  registered   vessels  and   vessel  owners                                                                    
including address  and contact  information. He  deferred to                                                                    
Ms. Kelley for additional detail.                                                                                               
Ms. Kelley  clarified that  CFEC was  not a  titling agency,                                                                    
which   was  the   reason  it   needed   U.S.  Coast   Guard                                                                    
documentation  or DMV  registration and  title. She  did not                                                                    
believe CFEC  was the  appropriate entity  to talk  to about                                                                    
liens. She  suggested that DMV  may be able to  provide more                                                                    
clarity on the question.                                                                                                        
Representative LeBon  shared that  in the  past when  he had                                                                    
been approached to  finance the purchase of  an aircraft, he                                                                    
had called  the Federal  Aviation Administration  (FAA) with                                                                    
the  aircraft   N-Number  and  had  received   an  immediate                                                                    
response. He  explained that the  aircraft N-Number  was the                                                                    
only information required to initiate  a search. He asked if                                                                    
it  was possible  to use  the vessel  information number  to                                                                    
determine  whether a  boat of  any size  had an  outstanding                                                                    
lien. He  asked if  the system was  transparent and  easy to                                                                    
9:40:19 AM                                                                                                                    
Ms. Kelley replied that the  DFG number assigned to a vessel                                                                    
remained with the  vessel for its lifespan  and was included                                                                    
in  the CFEC  database;  however, lien  information was  not                                                                    
available on  the database. She  explained that she  was not                                                                    
the best  qualified to answer  because CFEC was not  a title                                                                    
agency.  She suspected  it would  be necessary  to look  for                                                                    
lien information through a title agency.                                                                                        
Co-Chair  Merrick  asked Mr.  Schmitz  to  weigh in  on  the                                                                    
question posed by Representative LeBon.                                                                                         
Mr.  Schmitz asked  for verification  that the  question was                                                                    
about whether DMV recorded liens on boats.                                                                                      
Representative  LeBon  stated that  it  depended  on what  a                                                                    
lender  was  financing.  He provided  tracking  methods  for                                                                    
other   assets  including   the  N-Number   used  to   track                                                                    
aircrafts, the  legal description used  for a piece  of real                                                                    
property, and  the license plate  or serial number  used for                                                                    
automobiles.  He  detailed  there  was an  easy  process  to                                                                    
determine  whether   there  was  a   lien  on  any   of  the                                                                    
aforementioned asset  types. He elaborated that  the process                                                                    
gave  purchasers assurance  they  were purchasing  something                                                                    
that was  free of any  liens. He  guaranteed that if  a bank                                                                    
discovered  a vessel  with a  lien was  sold, it  would move                                                                    
against the vessel immediately.                                                                                                 
Representative Rasmussen  asked whether proof of  sale would                                                                    
remove liability from a prior  vessel owner if the purchaser                                                                    
was a  bad actor and chose  not to register the  vessel. She                                                                    
wanted to  protect the individual  acting in good  faith and                                                                    
wanted to ensure responsibility fell where it should.                                                                           
Mr.  Brouwer replied  that he  would have  to look  into the                                                                    
lien  information   because  he  was  unfamiliar   with  the                                                                    
specific  topic.  He  relayed  that   to  the  best  of  his                                                                    
knowledge the bill did not  make any changes involving liens                                                                    
and it  was not the intent  of the bill to  make any changes                                                                    
related to liens. He would follow up on the questions.                                                                          
Representative Rasmussen  believed a  lien would  only apply                                                                    
if a  loan were taken  out. She referenced testimony  by Ms.                                                                    
Leach and wanted  to make sure that part of  the goal was to                                                                    
identify  the  responsible  party  if  a  vessel  was  found                                                                    
abandoned. She thought that because  there was not currently                                                                    
a mechanism  when a  boat was sold,  it could  force someone                                                                    
into  a  cash  sale.   She  believed  a  notarized  purchase                                                                    
contract could  be taken  to the court  to receive  a ruling                                                                    
clarifying  that the  prior  owner had  sold  the vessel  in                                                                    
question and was not liable.                                                                                                    
Representative  Tarr remarked  that "we're"  operating under                                                                    
the   assumption  that   people  would   follow  the   legal                                                                    
requirement to  register after a  sale. She  considered what                                                                    
would happen in the case of  a bad actor and believed it was                                                                    
prudent  to  seek  out information  from  Legislative  Legal                                                                    
Services. She would follow up.                                                                                                  
9:45:13 AM                                                                                                                    
Representative  Edgmon  sympathized  with the  bill  sponsor                                                                    
because the  bill intended to  correct an oversight  from an                                                                    
omnibus bill  that passed the legislature  three years back.                                                                    
He  remarked  that  questions from  committee  members  were                                                                    
delving into the  omnibus bill that had been  very broad and                                                                    
contentious.  He shared  that he  had been  in the  building                                                                    
when one of the first  abandoned vessel bills had passed. He                                                                    
remarked that  many issues  attached to  registering vessels                                                                    
were outside the scope of the  bill. He clarified that HB 28                                                                    
was intended to correct an oversight [in past legislation].                                                                     
9:46:13 AM                                                                                                                    
Co-Chair  Merrick requested  a  review of  the fiscal  notes                                                                    
beginning with a note from the Division of Motor Vehicles.                                                                      
LESLIE ISAACS,  ADMINISTRATIVE SERVICE  DIRECTOR, DEPARTMENT                                                                    
OF ADMINISTRATION,  OFFICE OF MANAGEMENT AND  BUDGET, OFFICE                                                                    
OF THE  GOVERNOR (via  teleconference), reviewed  the fiscal                                                                    
note from  the Department  of Administration,  OMB Component                                                                    
Number  2348.   The  fiscal   note  showed   the  three-year                                                                    
registration  fee   at  the  $24   level  and   the  average                                                                    
collections  from  2019  and  2020  projected  out  for  the                                                                    
outlying years. He was available for any questions.                                                                             
Representative Rasmussen  noted that  there were  two fiscal                                                                    
notes  included in  members' bill  packets. She  highlighted                                                                    
that  the DMV  note showed  [annual change  in revenues  of]                                                                    
slightly over $79,000. She pointed  out that the CFEC fiscal                                                                    
note  showed $17,000,  $35,000, $52,000  [from FY  22 to  FY                                                                    
24], and  70,000 [from FY 25  to FY 27]. She  wondered where                                                                    
the disparity between  the two notes came  from. She thought                                                                    
the numbers should align.                                                                                                       
Mr. Isaacs  replied that  the issue  between the  two fiscal                                                                    
notes related  to timing. He  explained that  the Department                                                                    
of Administration, DMV fiscal  note reflected the average of                                                                    
two  known  fiscal  years.  He pointed  out  that  the  note                                                                    
included a $24 per registration  fee on a three-year renewal                                                                    
basis. Additionally, there was the  issue of a calendar year                                                                    
versus the fiscal year delineation.  When looking at the two                                                                    
notes,  they aligned  over a  period of  time. He  explained                                                                    
that the timing was slightly  off. He explained that the DMV                                                                    
revenue  forecast  was  $79,200  in the  same  time  period,                                                                    
whereas  CFEC  forecast  revenue   of  $70,500.  The  $9,000                                                                    
difference had  to do with  timing. He elaborated  that when                                                                    
current  registrations  expired,  they   would  have  to  be                                                                    
renewed on an annual basis.  The numbers began to align over                                                                    
time more closely.                                                                                                              
9:49:48 AM                                                                                                                    
Mr.  Brouwer  added  the bill  contained  a  provision  that                                                                    
exempted commercial  fishing vessel  owners who  had already                                                                    
paid  their three-year  registration  fee with  the DMV  for                                                                    
2020 and 2021  from also paying the fee with  CFEC. He noted                                                                    
it  was  a large  part  of  the  reason there  were  smaller                                                                    
numbers in FY 22 through FY 24 [in the DMV fiscal note].                                                                        
Co-Chair Merrick asked Ms. Kelley  to review the CFEC fiscal                                                                    
Ms.  Kelley agreed  with  previous  testimony regarding  the                                                                    
fiscal  notes.  She  reviewed  the  CFEC  fiscal  note,  OMB                                                                    
Component  Number  471.  She explained  there  had  been  an                                                                    
effort to align  numbers, some of which were  not yet known.                                                                    
She detailed  that the number  of boats registering  was not                                                                    
static  and  varied  year-to-year. She  explained  that  the                                                                    
number was always a projection.  She elaborated that the $24                                                                    
referenced  was a  three-year  payment of  the  $8 fee.  She                                                                    
reported that  CFEC did  not know the  number of  people who                                                                    
had paid  the registration  fee in  advance. She  added that                                                                    
part of  the issue was  about timing  in terms of  the money                                                                    
coming in and CFEC's  ability to forecast. Additionally, the                                                                    
alignment of the  numbers between the two  fiscal notes also                                                                    
involved the  timing of the  notes and working  on alignment                                                                    
with DMV while working to submit the note on time.                                                                              
Representative  LeBon supported  the bill.  He notified  the                                                                    
sponsor  that it  was unnecessary  to circle  back with  him                                                                    
regarding his  question on  protecting banks'  interests. He                                                                    
explained  that banks  used the  state's Uniform  Commercial                                                                    
Code  financing statement  filing system  to make  any liens                                                                    
they  were uncertain  about a  public  record. He  explained                                                                    
that the  system could  be used  for vessels,  equipment, or                                                                    
anything that  banks had any  uncertainty about.  He thanked                                                                    
the bill sponsor.                                                                                                               
Representative   Rasmussen   echoed    the   sentiments   by                                                                    
Representative  LeBon.  She  clarified   that  she  had  not                                                                    
intended to  make it appear  that the sponsor and  her staff                                                                    
were  unprepared. She  believed the  bill was  important and                                                                    
cleared  up  some  [past] oversights.  She  appreciated  the                                                                    
dialogue  associated   with  identifying  things   that  may                                                                    
possibly  be overlooked  in order  to  make any  corrections                                                                    
before something went into effect  and took a longer process                                                                    
to revise. She supported the bill.                                                                                              
Representative  Tarr answered  that  her  office would  look                                                                    
into the issues discussed during the meeting.                                                                                   
HB  28  was   HEARD  and  HELD  in   committee  for  further                                                                    
9:53:59 AM                                                                                                                    
AT EASE                                                                                                                         
9:55:35 AM