Legislature(2003 - 2004)

02/27/2004 08:52 AM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 478-COMMERCIAL FISHING INTERIM USE PERMITS                                                                                 
CHAIR SEATON announced that the  first order of business would be                                                               
HOUSE  BILL  NO.  478,  "An  Act  relating  to  the  issuance  of                                                               
commercial  fishing interim-use  permits;  and  providing for  an                                                               
effective date."                                                                                                                
Number 0085                                                                                                                     
REPRESENTATIVE WILSON,  sponsor, referred to the  written sponsor                                                               
statement and  said HB  478 relates to  issuance of  a commercial                                                               
fishing interim-use permit.   The court of  appeals recently held                                                               
that  the Commercial  Fisheries  Entry  Commission (CFEC)  lacked                                                               
authority to  issue these interim-use  permits in  fisheries that                                                               
they don't  have authority to  limit.  Calling it  a housekeeping                                                               
measure,  she said  this  clarifies that  CFEC  has authority  to                                                               
issue   interim-use   permits   in   these   fisheries.      This                                                               
clarification is consistent with  the original intent and purpose                                                               
of the current  statute, she said, and is what  has been done all                                                               
along.  She deferred to Mr. Homan for further details.                                                                          
Number 0201                                                                                                                     
FRANK   M.  HOMAN,   Commissioner,  Commercial   Fisheries  Entry                                                               
Commission  (CFEC), Alaska  Department  of Fish  & Game  (ADF&G),                                                               
noting  that Jon  Goltz of  the Department  of Law  would address                                                               
legal aspects,  said HB 478  is short but  has a lot  of meaning.                                                               
For the last 30 years, since  the beginning of CFEC, two types of                                                               
permits have  been issued:   an entry  permit for  fisheries that                                                               
were limited, and an interim-use  permit (IUP) for fisheries that                                                               
MR.  HOMAN explained  that a  couple of  EEZ [Exclusive  Economic                                                               
Zone]  fishermen  in the  halibut  fishery  came into  the  state                                                               
without an interim-use permit probably  a couple of years ago and                                                               
were cited;  it went to  court, and  the Alaska Court  of Appeals                                                               
took a  very narrow reading of  the statute and said  CFEC didn't                                                               
have authority  to issue  IUPs for  fisheries it  couldn't limit.                                                               
Since the halibut fishery is  limited by international agreement,                                                               
[CFEC] doesn't have that authority.   Mr. Homan said this bill is                                                               
to clarify that the legislature,  in the beginning, meant that an                                                               
IUP could be  used for any fishery  that was not limited.   It is                                                               
to  broaden the  language,  he  said, and  to  reaffirm that  the                                                               
legislature  meant  CFEC  could  issue an  IUP  for  those  other                                                               
Number 0482                                                                                                                     
MR. HOMAN, suggesting [Mr. Goltz] could speak to it further,                                                                    
     Apparently, the wording here that  ... got the court of                                                                    
     appeals' attention  was ... in the  existing statute it                                                                    
     says  pending the  establishment of  a maximum  number,                                                                    
     and that means pending  a limited entry designation; we                                                                    
     call it a  maximum number, but it means  when you limit                                                                    
     the fishery.   But then it  goes on to say  that in all                                                                    
     other  cases  the  commission  will  issue  interim-use                                                                    
     permits for  each fishery to all  applicants who apply.                                                                    
     So, because  the fishery is  not limited, we  give IUPs                                                                    
     to anyone for  any fishery that has not  come under ...                                                                    
     So those two used to,  for 30 years, cover all features                                                                    
     of  ...  people who  needed  permits  to sell  fish  in                                                                    
     Alaska.  It got a  little bit more complicated in 1984,                                                                    
     when there  was established  a landing permit.  ... But                                                                    
     it had a  very narrow focus and was  discretionary - it                                                                    
     wasn't  a mandatory  permit -  and this  was up  to the                                                                    
     commissioner  of [ADF&G]  to issue  when it  arose that                                                                    
     [an] EEZ  fisherman would come  in to state  waters and                                                                    
     wanted to unload fish that  were already limited by the                                                                    
     Because  they  were  not  part  of  the  limited  entry                                                                    
     permit, they couldn't get a  limited entry permit.  And                                                                    
     they  couldn't  get an  IUP  because  that fishery  was                                                                    
     already limited.   So there was a dilemma  in 1984, and                                                                    
     so they  established what they call  a "landing permit"                                                                    
     in those  cases, and ... at  that time it was  only two                                                                    
     boats that this applied to.                                                                                                
     There  was   a  landing   permit  established   at  the                                                                    
     discretion  of the  commissioner of  [ADF&G] for  those                                                                    
     cases  where a  fisherman from  outside wasn't  able to                                                                    
     get  an  IUP  for  a fishery  because  it  was  already                                                                    
     limited  internally. ...  But  this was  never used;  a                                                                    
     landing permit  has never  been issued.   So  ... those                                                                    
     two fishermen  went away,  and I  don't know  what ever                                                                    
     happened   to  them,   but   they   never  came   back,                                                                    
Number 0711                                                                                                                     
MR.  HOMAN reiterated  that [HB  478] is  needed to  clarify that                                                               
CFEC can  issue an IUP to  fisheries it doesn't limit.   However,                                                               
it's a complex  legal matter because the issue is  in the supreme                                                               
court right now; he suggested Mr. Goltz could speak to that.                                                                    
Number 0762                                                                                                                     
REPRESENTATIVE OGG expressed concern  about liability and whether                                                               
there may be a class of  people out there, if this effective date                                                               
is used, who  might say the state didn't have  the right to issue                                                               
these  permits and  thus  they  want their  money  back for  that                                                               
period of time.                                                                                                                 
MR. HOMAN deferred to Mr. Goltz.                                                                                                
CHAIR SEATON suggested that may relate to the Carlson case.                                                                   
Number 0881                                                                                                                     
JON   GOLTZ,  Assistant   Attorney  General,   Natural  Resources                                                               
Section, Civil  Division (Anchorage),  Department of  Law, noting                                                               
that he has  worked with CFEC on issues related  to this bill for                                                               
a  few  months,  said  the  Department  of  Law  agrees  this  is                                                               
essentially a  technical fix to  the statute; the  goal primarily                                                               
is to  eliminate the word  "pending", which has  been interpreted                                                               
broadly by the agencies since  the Act was initially adopted, but                                                               
has  been subject  to a  narrower  constriction by  the court  of                                                               
appeals recently.                                                                                                               
MR.  GOLTZ explained  that  the bill  would  close the  potential                                                               
loophole that  Mr. Homan  mentioned whereby  there might  be some                                                               
fisheries that  are neither  subject to a  maximum number,  so no                                                               
entry  permit   can  be   issued  for   them,  nor   pending  the                                                               
establishment of a  maximum number, so no  interim-use permit can                                                               
be  issued for  them.   The result  would be  reduced ability  to                                                               
enforce the  fisheries laws and reduced  data-collection ability.                                                               
Therefore, it would be helpful to close this loophole.                                                                          
MR.  GOLTZ said  he believes,  based on  his research,  that this                                                               
bill is consistent with the  original intent of the law regarding                                                               
the   issuance  of   interim-use  permits,   and  is   especially                                                               
consistent  with the  legislature's  1977  decision to  eliminate                                                               
gear  licenses.   He explained  that from  statehood until  1977,                                                               
gear licenses were required for  the operation of fisheries gear.                                                               
They were eliminated in 1977  primarily because it was recognized                                                               
that they  were duplicative of  the interim-use and  entry permit                                                               
requirements.  Thus the bill is consistent with that.                                                                           
Number 1040                                                                                                                     
MR.  GOLTZ turned  to the  question posed  by Representative  Ogg                                                               
about potential  liability.  He  said the issue has  already come                                                               
up,  in the  sense that  since the  court of  appeals issued  the                                                               
decision  that Mr.  Homan mentioned,  there have  been two  class                                                               
action  cases filed  against the  state.   Each alleges  that the                                                               
plaintiffs  are owed  reimbursement for  interim-use permit  fees                                                               
they paid  in the  past for  participation in  halibut fisheries;                                                               
their claims  are based on the  holding of the court  of appeals,                                                               
which was that CFEC lacks  authority to issue interim-use permits                                                               
in  the  halibut fisheries  because  a  maximum number  of  entry                                                               
permits is not pending in those fisheries.                                                                                      
MR.  GOLTZ  explained  that  those  cases  are  currently  stayed                                                               
because the court of appeals  decision on which they're based has                                                               
been appealed by the state to  the supreme court.  If the supreme                                                               
court accepts the state's argument  in that case, it will address                                                               
the main issue that the agencies  and the Department of Law have.                                                               
Nonetheless,  he said,  [the department]  believes  this bill  is                                                               
desirable because it eliminates any  ambiguity about the scope of                                                               
interim-use  permits,  and  would  conform the  language  of  the                                                               
statute a  little closer to the  way it has been  interpreted and                                                               
applied for 30 years.                                                                                                           
Number 1178                                                                                                                     
MR. GOLTZ  addressed the effective  date, saying he  wasn't aware                                                               
of  any implication  it would  have on  either the  pending class                                                               
action cases  for reimbursement or  any other case  that somebody                                                               
might bring.   Explaining  that the  Department of  Law maintains                                                               
that  the [Alaska]  Court  of  Appeals decision  is  based on  an                                                               
erroneous interpretation of the current statute, he added:                                                                      
     We don't  believe that the term  "pending" was intended                                                                    
     to be as restrictive as  the court of appeals interpret                                                                    
     it to  be in the  scope of application  for interim-use                                                                    
     permits.  So  ... we actually would  take the position,                                                                    
     I  believe, that  this bill  and  the current  language                                                                    
     effectively mean the same thing  as to the scope of the                                                                    
     issuance of  interim-use permits.  It's  just that this                                                                    
     bill makes  it a little clearer  and, hopefully, avoids                                                                    
     the result that we are  living under currently with the                                                                    
     court of appeals [decision].                                                                                               
Number 1275                                                                                                                     
MR. GOLTZ, in  reply to a question from  Representative Ogg, said                                                               
he hadn't analyzed how a  retroactive effective date would affect                                                               
[those pending court cases].                                                                                                    
REPRESENTATIVE  OGG  suggested  perhaps the  situation  could  be                                                               
rectified through a  legislative Act and then there'd  be no need                                                               
to go through the courts.                                                                                                       
MR.  GOLTZ,  in  response  to  Chair  Seaton,  agreed  to  do  an                                                               
analysis.   In reply to  Representative Guttenberg,  he explained                                                               
that he'd  submitted the [appeal]  briefing to the  supreme court                                                               
at  the end  of January  and  that the  respondents' briefing  is                                                               
awaited.   "I think  we have  a good position  in that  case," he                                                               
remarked.  In  further response, he said this bill  has no direct                                                               
bearing on  that case, but if  it passes this session,  it likely                                                               
will be  mentioned during  an oral argument  as an  expression of                                                               
the state's reaction to the court of appeals decision.                                                                          
REPRESENTATIVE  GARA requested  that  Mr. Goltz  also provide  an                                                               
opinion on the constitutionality of a retroactive provision.                                                                    
MR. GOLTZ said he'd incorporate it into his analysis.                                                                           
Number 1496                                                                                                                     
CHAIR SEATON  observed that  the landing  permits that  Mr. Homan                                                               
discussed were  generated to  look at  the question  of fisheries                                                               
outside  of  state  waters;  a number  of  fisheries  might  have                                                               
vessels  operating totally  outside of  state waters.   He  asked                                                               
whether  clarification is  needed  that  this interim-use  permit                                                               
also  acts  as  a  landing  permit for  fish  coming  into  state                                                               
[waters],  instead   of  necessarily   for  fisheries   that  are                                                               
controlled by the state.                                                                                                        
MR.  GOLTZ said  it's  a  good question.    The  extent of  state                                                               
control over  fisheries, both within and  especially beyond state                                                               
waters, is complicated  and varies from fishery to  fishery.  For                                                               
example -  and to show that  halibut isn't the only  fishery that                                                               
this bill  would apply to -  he said the state  currently manages                                                               
many of  the crab  fisheries that  occur in  the EEZ,  in federal                                                               
waters adjacent  to state waters, through  a complex relationship                                                               
with the federal fishery managers.  He continued:                                                                               
     But  we  do require  interim-use  permits  for many  of                                                                    
     those fisheries,  even though they exist  outside state                                                                    
     waters.  There are statutes  that require a CFEC permit                                                                    
     for a  person to land  or deliver  or sell fish  in the                                                                    
     state waters.   And  that would  apply to  somebody who                                                                    
     legally harvested fish outside  of state waters without                                                                    
     an interim-use permit but then  brought them into state                                                                    
     waters for landing.                                                                                                        
     There also,  in fact,  is a  CFEC regulation  that says                                                                    
     that  anybody  who  possesses  fish  for  a  commercial                                                                    
     purpose in state waters has  to have either an entry or                                                                    
     interim-use  permit to  authorize ...  that possession.                                                                    
     So  I   think  that   with  those  statutes   and  that                                                                    
     regulation currently in effect,  ... the result is that                                                                    
     anybody  who  is  operating  in  a  commercial  fishery                                                                    
     inside  state  waters,  even  if  this  ...  harvesting                                                                    
     actually took  place in federal  waters, is  subject to                                                                    
     this permit requirement.                                                                                                   
Number 1685                                                                                                                     
CHAIR  SEATON  recalled  harvesting  tuna  outside  the  EEZ  and                                                               
attempting to get  a CFEC permit; CFEC didn't  and wouldn't issue                                                               
a permit and had  said it had no way to  do that in international                                                               
waters; ADF&G didn't  want any fish tickets; and he'd  had to pay                                                               
landing  fees  to  the  Department   of  Revenue.    Noting  that                                                               
fishermen are  starting to bring  tuna into Kodiak or  Homer from                                                               
international waters,  for example, Chair Seaton  highlighted the                                                               
need to  ensure that there  aren't any  loopholes in the  bill so                                                               
another bill  isn't required.  He  asked Mr. Goltz to  look at it                                                               
carefully in this regard.                                                                                                       
MR. GOLTZ agreed,  but said CFEC has a fair  bit of discretion to                                                               
determine what is  a fishery, which has an  impact on determining                                                               
when a permit is required for a particular fishery.                                                                             
Number 1896                                                                                                                     
PAUL    SHADURA,   President,    Kenai   Peninsula    Fishermen's                                                               
Association,  testified in  support  of this  change  to make  it                                                               
easier for CFEC  to issue interim-use permits.   He asked whether                                                               
this will  allow CFEC to  issue permits  for yet-to-be-classified                                                               
commercial-use fisheries.                                                                                                       
CHAIR SEATON requested clarification.                                                                                           
MR.  SHADURA said  he  sits  on the  board  for  the Kenai  River                                                               
Special  Management Area,  and though  he doesn't  represent that                                                               
board, it  is dealing with  contentious issues relating  to guide                                                               
restrictions  in  Kenai and  other  areas,  predominantly on  the                                                               
Kenai River.   In some of those discussions and  in discussion of                                                               
another bill  introduced by Representative  Heinze, he  said, "We                                                               
were  trying to  wrestle with  different ways  that possibly  the                                                               
guide  industry   could  be  accommodated   with  some   kind  of                                                               
limitations based on  CFEC regulations."  He added  that with the                                                               
change in  this language,  it allows  a little  more flexibility.                                                               
Acknowledging  that other  questions are  involved with  this, he                                                               
said this  is something he  wants to  bring back to  "the working                                                               
committees that  will be conducted  here in the next  month, with                                                               
the  possibility of  maybe  some changes  in  this language  that                                                               
would help facilitate, possibly, some guide limitations."                                                                       
Number 2018                                                                                                                     
CHAIR SEATON, saying  he didn't want to get into  the crux of the                                                               
other  bill that  was  alluded  to, asked  Mr.  Homan to  address                                                               
whether there  would be a  need in  that kind of  circumstance to                                                               
put anything in [HB 478] to address that issue.                                                                                 
MR.  HOMAN, asking  that  Mr. Goltz  assist if  he  was still  on                                                               
teleconference, related  his understanding that with  the ability                                                               
to issue an  interim-use permit, CFEC would be able  to cover all                                                               
commercial  fisheries.     He  said   he  believed   the  answer,                                                               
therefore,  was that  if it's  a commercial  fishery, CFEC  would                                                               
have authority with [HB 478] to issue those permits.                                                                            
REPRESENTATIVE  OGG  declared  a  conflict as  a  halibut  permit                                                               
REPRESENTATIVE  WILSON objected  [to  his  removing himself  from                                                               
voting on the bill].                                                                                                            
CHAIR  SEATON announced  that  he'd have  the  same conflict,  as                                                               
others on the committee might.                                                                                                  
REPRESENTATIVE OGG  objected [to Chair Seaton's  removing himself                                                               
from voting on the bill].  [HB 478 was held over.]                                                                              

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