Legislature(2003 - 2004)
04/05/2004 09:05 AM FSH
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 458-SHORT-TERM COM FISHING CREWMEMBER LICENSE CHAIR SEATON announced that the first order of business would be HOUSE BILL NO. 458, "An Act relating to a one-day commercial fishing crewmember license." Number 0120 ADAM BERG, Staff to Representative Carl Moses, Alaska State Legislature, presented HB 458 on behalf of the sponsor, Representative Moses. He explained that HB 458 would allow one- day commercial fishing crewmember licenses. This legislation would aid out-of-state visitors and others interested in commercial fishing. Currently, these individuals have to purchase a $60 resident license or a $120 nonresident license. The idea is to provide permit holders another avenue to raise money. Under this one-day license, this would allow permit holders to work as a boat for hire. Furthermore, this would allow visitors an affordable way to participate in the fishery as a crewmember. Number 0238 REPRESENTATIVE SAMUELS moved to adopt CSHB 458, Version 23- LS159\U, Utermohle, 3/31/04, as the working document. [No objection was stated, and therefore Version U was treated as adopted and before the committee.] MR. BERG explained the changes encompassed in Version U. Section 5 of the original legislation was deleted because that section had changed the definition of "fisherman" such that it didn't allow these one-day permit holders to qualify for the Fishermen's Fund. At the request of the Fishermen's Fund and the Department of Labor & Workforce Development (DLWD), Section 5 was deleted. The other change encompassed in Version U is the addition of the January 1, 2005, effective date. The aforementioned change was done per the request of Alaska Department of Fish & Game (ADF&G). Number 0341 REPRESENTATIVE WILSON inquired as to the current fee for a crewmember fishing license. MR. BERG answered that the fee is $60 annually for a resident and $180 for a nonresident. REPRESENTATIVE WILSON surmised that those who have never been on a boat before would have a higher propensity of having a mishap. Therefore, she expressed concern with the potential for these one-day crewmembers to use up the limited funds in the Fishermen's Fund if there are a lot of accidents. MR. BERG reminded the committee that this would be an option for the permit holder. He related his experience that safety is a high priority for boat captains. Representative Wilson's concern was the thinking that resulted in the original legislation not having these one-day crewmembers qualify for the Fishermen's Fund, he noted. However, this was a big concern for DLWD because restricting the definition in such a way that it precludes holders of the shorter-period licenses from obtaining benefits could be viewed as a denial of equal protection, which could be a basis for litigation. Furthermore, DLWD felt that altering the definition of "fishermen" may leave the fund's dedication vulnerable. Number 0611 REPRESENTATIVE WILSON surmised then that this legislation allows tourists to be a commercial fisherman for a day. MR. BERG replied yes. Currently, a tourist could go out on a [commercial fishing] boat, but couldn't participate in any way. Moreover, the current $180 crewmember license fee seems cost prohibitive. Although Mr. Berg said that he didn't know how many individuals would take advantage of this option for $30, it does provide the option. He noted that this would be another extreme tourism option. REPRESENTATIVE HEINZE questioned what these tourists would actually do and how many people might actually utilize this. MR. BERG replied that it would be up to the boat captain. In regard to how many individuals would take advantage of this, the fiscal note estimates 100 licenses. However, he said he didn't know how that estimate was reached. Number 0733 REPRESENTATIVE OGG inquired as to why a one-day license was chosen versus a license for a week because for most fishing one day doesn't even get the individual to the fishing spot. MR. BERG noted that originally there were one-, two-, and seven- day licenses. However, ADF&G was concerned that it would lose receipts on the licenses [because regular crewmembers would purchase these cheaper licenses]. Mr. Berg related that the sponsor didn't share that view because regular crewmembers aren't going to purchase a one-week license and leave; these individuals are typically here for the summer. The one-day crewmember license was introduced in order to have a piece of legislation that ADF&G wouldn't oppose. REPRESENTATIVE OGG asked if ADF&G would be extremely upset and oppose legislation that includes a one-week license for $150. MR. BERG said that he couldn't speak for ADF&G. REPRESENTATIVE OGG reiterated that it would likely take more than one day to be involved in commercial fishing. Therefore, he questioned whether the individual would have to purchase multiple licenses at the same time. MR. BERG confirmed that under the current legislation, individuals going on a three-day trip would have to purchase three one-day crewmember licenses. Number 0973 REPRESENTATIVE SAMUELS related his understanding that if someone had a week-long stay at a lodge, this would allow a [commercial fishing] tour operator the ability to offer a one-day trip, particularly in Bristol Bay. Therefore, the locals could create a tourism business that is in conjunction with commercial fishing. He said he didn't believe people would fly from Anchorage to commercial fish. Representative Samuels stated that he liked the legislation and didn't see a downside to it. REPRESENTATIVE GARA commented, "I could see this working if a lot of people did it." However, he expressed disbelief that anyone would be able to obtain the liability insurance to make it cost effective to bring tourists onto a commercial fishing boat. He acknowledged that one could go without liability insurance. If one purchases liability insurance, there would have to be a lot of potential customers in order to do it. MR. BERG noted that any [permit holder] wanting to use this option would have to do advertising in order to solicit customers. He also noted that boats for hire have to have a six-pack license and other requirements. This legislation merely provides an option for fishermen to try out. REPRESENTATIVE GARA inquired as to how large the demand is for this legislation. MR. BERG said that the original idea came from an individual in Naknek, and therefore it's difficult to say what the demand is. The sponsor's office has taken several calls from interested groups, and there has been no negative reaction, he related. REPRESENTATIVE GARA surmised that under a one-day license, an individual would only be able to touch the gear that one day, but could be on board and not touch the gear other days. MR. BERG clarified that if one wanted to be out more than one day and participate, the individual would have to purchase stacking licenses. CHAIR SEATON informed the committee, "I think that we have to be clear that at some point if you are not a crewmember ... and you are on the boat, then you're not covered by the Fishermen's Fund, which means all the liability would be on the boat owner or they would have to be as a six-pack boat. If it's a commercial fishing boat and you only have your crew on board, you don't have to be a six-pack boat." Number 1359 ROLAND MAW, Executive Director, United Cook Inlet Drift Association (UCIDA), informed the committee that he has been a commercial fisherman for salmon in the Upper Cook Inlet for about 30 years. Mr. Maw announced support of HB 458 for both himself and UCIDA; the $30 fee is reasonable and could certainly be used in the Soldotna area. Mr. Maw informed the committee that [this legislation is the result] of a suggestion he and others brought forth to the Joint Salmon Industry Task Force. MR. MAW, in light of today's testimony and questions, offered the following information. He informed the committee that he carries liability insurance for his vessel in the amount of $500,000 per incident, as well as liability insurance for his crew in the amount of $500,000 per crewmember per incident. He explained that he can rotate crew in and out of his policy for coverage purposes. Over the years, when he has had a guest on board the issue becomes whether the individual is crew or not for the purposes of liability insurance. "And so we've always been kind of in this no man's land between a six-pack boat or a charter boat and some kind of a commercial boat," he remarked. Mr. Maw addressed the question regarding the demand for [one-day commercial fishing crewmember licenses]. He related that his son put a one-day commercial fishing trip on the Internet and it received 1,200 hits in 12 hours. Therefore, Mr. Maw didn't doubt that this is necessary and the public will respond. Furthermore, he felt that those who would take advantage of a one-day commercial fishing crewmember license] would have insurance, including liability insurance. MR. MAW related that last summer he had an 18-year-old crewmember who, on his day off, took a river rafting trip during which he dislocated his shoulder. This all happened the evening before the fishing trip was to begin. Therefore, this [one-day commercial fishing license] would've been helpful in this case in which temporary crew was needed. Mr. Maw turned to the question of what these one-day crewmembers could do and related that on his boat he would envision these individuals bleeding and icing the fish. Mr. Maw said that he believes 100 licenses a year is a [conservative/small] estimate. He mentioned that he would like the option of a two-day and three-day license as well. Number 1676 PAUL SHADURA, President, Kenai Peninsula Fishermen's Association, related the association's support of HB 458 because it provides a way in which to diversify while providing a service to those nonresidents and tourists who visit the Kenai Peninsula. He mentioned that often in a season such as that forecasted for this next summer, it's difficult to find crew who will stay for any length of time. The $180 nonresident license is fairly cost prohibitive for many. He acknowledged that there is a liability issue that individual businesses would have to address. Mr. Shadura informed the committee that the insurance is based on the numbers of individuals fishing with each permit holder rather than the individual names. The insurance costs for crewmembers on a setnet site are fairly reasonable. Mr. Shadura reiterated his support and expressed the desire to have this be in effect as soon as possible, at least by June 1 in order to allow individual crewmembers to purchase licenses at an Alaska Department of Fish & Game (ADF&G) office because the licenses might not be available to vendors at the time. Number 1876 GUY BELL, Director, Division of Administrative Services, Department of Labor & Workforce Development (DLWD), informed the committee that the Fishermen's Fund receives 39 percent of the licensed revenue for commercial fishermen. The fund was established in 1951 as a payer of last resort for medical expenses associated with injuries that occur while commercial fishing. Therefore, if an individual has any other insurance, it would apply first before the Fishermen's Fund goes into effect. CHAIR SEATON recalled testimony from last year that the Fishermen's Fund is in good shape and has money still in its account. The Fishermen's Fund is a dedicated fund that can't be rolled over to other uses. Chair Seaton asked if there is any concern that this legislation would cause any fiscal problems for the Fishermen's Fund. MR. BELL said that the department projects a small increase in revenue as a result of this legislation. It's difficult, he said, to estimate the potential liability of the Fishermen's Fund. Currently, the Fishermen's Fund is solvent and in good financial condition. He acknowledged that untrained crew do bring forth concern for potential injuries, although he surmised that those bringing untrained crew would exercise discretion in the type of activities in which the one-day participants will be involved. Mr. Bell acknowledged the concern regarding the fund taking in money and an individual not receiving the corresponding level of coverage provided to others actively involved in the commercial fishing business. Number 2016 REPRESENTATIVE GARA surmised that the Fishermen's Fund would go into effect because along the line an individual's insurance didn't [cover the incident]. He asked if the Fishermen's Fund requires that the employer of the injured individual have insurance, and therefore the Fishermen's Fund can go after the employer who didn't have the required liability insurance. He likened the aforementioned to workers' compensation. MR. BELL answered that he didn't believe so, but offered to confirm that. In further response to Representative Gara, Mr. Bell said he didn't believe there is a requirement that [employers] must provide medical insurance in the fishing industry, but, again, he offered to confirm that. REPRESENTATIVE WILSON posed a situation in which a fisherman has insurance, but has not met the deductible. She asked if the Fishermen's Fund would pick up the deductible. MR. BELL said that he didn't believe the Fishermen's Fund would pick up the deductible. Furthermore, the general standard is that the maximum payment from the fund is $2,500 unless there are some exceptional circumstances. CHAIR SEATON informed the committee that a few years ago the Fishermen's Fund raised its [maximum payment] to $2,500, upon which all the marine insurance carriers in Alaska raised their deductible to $2,500. "Although it's an insurance of last resort, ... if you have a policy that has a deductible of $2,500 you are not covered by any other insurance, and therefore Fishermen's Fund covers the first $2,500," he explained. The way the [marine insurance] industry is structuring, one could almost refer to the Fishermen's Fund as the payer of first resort. REPRESENTATIVE WILSON surmised then that the insurance industry has gotten around the fact that the Fishermen's Fund doesn't cover the deductible by raising the deductible, and therefore an individual isn't insured until $2,500 has been spent. CHAIR SEATON highlighted that 39 percent of the commercial licensing fee goes to the Fishermen's Fund, which has been growing over the years because it has been taking in more than it has paid out. REPRESENTATIVE WILSON clarified then that the Fishermen's Fund basically pays the deductible on every fisherman's insurance. Number 2311 REPRESENTATIVE GARA asked if the funds generated by the $30 one- day commercial fishing license will cover the department's costs. KRIS WRIGHT, Licensing Supervisor, Alaska Department of Fish & Game (ADF&G), said that the department took a good guess as to how many of these licenses would be sold. She explained that the January 1 start date was requested because the plan was to add this as a box on the license. Therefore, there would be no additional cost. However, the suggested date of June 1 would result in costs to the department. She opined that most vendors would probably be unhappy if they didn't receive the opportunity to sell that license from the very beginning. REPRESENTATIVE GARA asked if the license fee was a bit more than $30 for this year in order to cover the costs of getting a special license to those businesses that want to sell it this summer. MS. WRIGHT replied yes. She mentioned that the story about the number of hits an Internet site received for a one-day commercial fishing trip was surprising and thus she is a bit concerned with regard to the number of [licenses] that should be printed. Ms. Wright said that this could be worked out. REPRESENTATIVE GARA related his intention to provide an immediate effective date so that this license could be available this summer. He surmised that the department would work with the sponsor to determine the amount of the fee for the summer. MS. WRIGHT replied yes. Number 2448 REPRESENTATIVE OGG asked if having a three-day license at a cost of $50 would be problematic. MS. WRIGHT recalled that when the department initially worked on this legislation, there was a one-day, three-day, and seven-day license. The department requested that there not be so many options available until it determines "where this fishery is." She further recalled working on a fiscal note for a seven-day license under which the department would make money. The next [version of the legislation] she saw was for a one-day license, which she understood to be at the request of the associations because there would be people who wouldn't want to go out for seven days, although one might want to go out for three days. Ms. Wright clarified that the department wasn't against a three- day or seven-day license. REPRESENTATIVE OGG inquired as to the fee for a seven-day license. MR. BERG answered that the fee was $100 for a seven-day license. CHAIR SEATON recalled that when the committee had legislation before it with a one-day [crewmember] license, it was determined that the administrative cost per license would be $10. MS. WRIGHT explained that if this license is just part of the license that already exists, there wouldn't be any additional printing costs or mailing costs. Number 2693 CHAIR SEATON, upon determining no one else wished to testify, closed the public hearing on HB 458. REPRESENTATIVE HEINZE remarked that it seems that the three-day license would be appropriate and provide some flexibility, although she said that she didn't have a problem with a one-day license. She further remarked that HB 458 is a good bill that she would like to see moved. REPRESENTATIVE GARA recommended that the legislation be changed to have an immediate effective date and the sponsor could work with ADF&G to determine the cost of a three-day license. Therefore, perhaps an amendment could be made in the next committee of referral, the House Resources Standing Committee, to add a three-day license. He also suggested that ADF&G could determine the additional cost necessary for the department to implement this proposal this summer. CHAIR SEATON noted that the fiscal notes would be changed by Representative Gara's recommendation. MS. WRIGHT requested that the effective date not be immediate but rather June 1, which would provide some time for the department. REPRESENTATIVE GARA agreed and then suggested that the changes to the effective date could be worked out in the House Resources Standing Committee as well. REPRESENTATIVE HEINZE said that she, as a member of the House Resources Standing Committee, would be glad to offer an amendment [implementing the recommendation by Representative Gara]. Number 2811 REPRESENTATIVE CARL MOSES, Alaska State Legislature, sponsor, stated that he would prefer a three-day license. He indicated that the industry should have some advance notice in order to be able to advertise, and therefore he didn't have any problem with a January 1, 2005, effective date because much needs to be done in order to create an effective program. Number 2840 REPRESENTATIVE OGG moved that the committee adopt the following amendment: Page 2, line 15; Delete "one" Insert "three" Page 2, line 15; Delete "$30" Insert "$50" REPRESENTATIVE SAMUELS objected and suggested that the legislation allow for a one-day license as well as a three-day license. REPRESENTATIVE WILSON suggested that the amendment stand because if one wants to go out bad enough, he or she will pay the $50 for a three-day license. Therefore, she suggested that if one wants to go out for six days the license fee could be $100. REPRESENTATIVE HEINZE agreed with Representative Wilson because she suggested that it would be easier in regard to printing and distribution to offer just the three-day. REPRESENTATIVE SAMUELS suggested that the license could merely have another box [option]. REPRESENTATIVE MOSES related that his preference would be for a one-day and a three-day license. TAPE 04-19, SIDE B REPRESENTATIVE SAMUELS commented that "we" don't want commercial fishermen to purchase these licenses. Number 2909 REPRESENTATIVE OGG withdrew his amendment and moved that the committee adopt the following amendment: Page 2, line 15, after "$30" Insert "or a three-day crewmember fishing license for a fee of $50" There being no objection, it was so ordered. REPRESENTATIVE SAMUELS asked if there are any wage issues if one were to go out fishing for a one-day trip. REPRESENTATIVE OGG said that it's a contractual issue between the boat captain and the fisherman. CHAIR SEATON related that there is a law that states before [a fisherman] leaves port, he or she must have a contractual agreement stating the fisherman's percentage. Number 2833 REPRESENTATIVE WILSON moved that the committee adopt the following amendment: Page 5, line 9; Delete "January 1, 2005" Insert "July 1, 2004" REPRESENTATIVE GARA objected for discussion purposes, and inquired as to Representative Moses' preference with regard to the effective date. REPRESENTATIVE MOSES said that he would like for this legislation to take effect as soon as is practical. He reiterated that he didn't mind the January 1, 2005, effective date. REPRESENTATIVE WILSON withdrew the above amendment and offered the following amendment: Page 5, line 9; Delete "January 1, 2005" Insert "June 1, 2004" REPRESENTATIVE WILSON recalled that ADF&G had said it could do this by June 1, 2004, which would allow some operators the opportunity to receive revenue they haven't in the past. REPRESENTATIVE GARA agreed, but asked if ADF&G should be given the authority to [include in the license fee] the printing costs for this summer. REPRESENTATIVE SAMUELS mentioned that if this legislation picks up a fiscal note, then it faces a longer process. REPRESENTATIVE MOSES reiterated that practically, January 1, 2005, would probably be best. CHAIR SEATON pointed out that this is a House bill, which still needs to go through the Senate and the governor for signing. However, the department has to have everything in order for the vendors to sell the licenses rather than just have it restricted to a few locales. Chair Seaton announced that for practical purposes he objected to Representative Wilson's amendment. REPRESENTATIVE HEINZE stated her agreement with Representative Wilson and her desire to help [fishermen] as much as possible. REPRESENTATIVE WILSON inquired as to what date the department believes it can implement this license. MS. WRIGHT surmised that she could implement the proposed license within a month of the governor signing the legislation. REPRESENTATIVE WILSON surmised that July 1, 2004, would be a good date. Number 2580 REPRESENTATIVE WILSON withdrew her previous amendment and moved that the committee adopt the following amendment: Page 5, line 9; Delete "January 1, 2005" Insert "July 1, 2004" CHAIR SEATON reminded the committee that there was an objection. A roll call vote was taken. Representatives Heinze, Ogg, Gara, and Wilson voted in favor of Representative Wilson's amendment. Representatives Samuels and Seaton voted against it. Therefore, the amendment was adopted by a vote of 4-2. Number 2503 REPRESENTATIVE GARA pointed out that with the adoption of the above amendment, there will now be a fiscal note because the department will have to develop extra forms. Therefore, Representative Gara expressed his desire to add to the legislation a section authorizing the department to charge an additional preparation and mailing fee to cover the applications for 2004. MS. WRIGHT replied yes, adding that the department is always looking for cost savings. Therefore, it would be beneficial to charge a fee for that first year of the proposed license. In response to Representative Wilson, Ms. Wright said that the additional fee for this year only wouldn't be very much, and therefore she suggested that $1-$2 would be plenty. She said she is thinking of mailing. CHAIR SEATON suggested that no fee has to be established in the legislation now, it could be left to be determined in the House Resources Standing Committee. Therefore, the administrative fee could be based on more than guess work. REPRESENTATIVE GARA clarified that his intention is to provide the department the authority to set a cost-reimbursement fee for the summer. He indicated that he would agree to letting the House Resources Standing Committee address it. MS. WRIGHT informed the committee that if the department is given this authority, it would require an administrative regulation. The aforementioned would take time that would result in her inability to make the July 1 date, "it would have to be in the statute." Number 2357 REPRESENTATIVE OGG moved that the committee adopt the following conceptual amendment, which would say: "there will be an administrative fee charged in excess of the cost of the license 'X' that will be filled in now and the Resources Committee meeting for the year 2004." CHAIR SEATON objected for discussion purposes. He asked if the intent is to specify that it only applies to 2004. REPRESENTATIVE OGG replied yes. REPRESENTATIVE OGG clarified that his conceptual amendment should specify "only the year 2004." CHAIR SEATON removed his objection. There being no other objections, the conceptual amendment [as amended] was adopted. Number 2281 REPRESENTATIVE HEINZE moved to report CSHB 458, Version 23- LS1591\U, Utermohle, 3/31/03, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 458(FSH) was reported from the House Special Committee on Fisheries.