Legislature(2005 - 2006)CAPITOL 124
04/01/2005 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR16 | |
| HB174 | |
| HB142 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 142 | TELECONFERENCED | |
| + | HB 71 | TELECONFERENCED | |
| = | HJR 16 | ||
| = | HB 174 | ||
HB 174-FISHING PERMIT AND VESSEL LICENSE FEES 1:08:16 PM CO-CHAIR SAMUELS announced that the next order of business would be HOUSE BILL NO. 174 "An Act relating to commercial fishing permit and vessel license fees; and providing for an effective date." REPRESENTATIVE OLSON moved to adopt CSHB 174(RES), labeled 24- LS0676\F, Utermohle, 3/29/05, as a work draft. The committee took an at-ease from 1:09 p.m. to 1:10 p.m. 1:10:19 PM CO-CHAIR SAMUELS said the state was involved in litigation, the Carlson case, which forbade it from charging nonresident fishermen three times the fee charged to residents. Under current law, four tenths of one percent of the value of the fishery is divided up and charged to the permit holder, he said. It is now capped at $300, and the Commercial Fisheries Entry Commission (CFEC) is not getting adequately funded. He explained that the original bill had no cap, but in the current committee substitute (CS) there is a $3,000 cap. The CS also slightly increases the license fee on a vessel, dependent on length, he said. HENRY WEBB, Staff to Representative Ralph Samuels, Alaska State Legislature, said the CS changes the original bill in two ways. It creates a cap of $3,000 for an entry permit. The vessel fees in the original bill had a compounding $15 increase, but in the CS, the fees go up 20 percent across the board for all classes of vessels. 1:13:06 PM MR. WEBB said the vessel fees have been in place for ten years, so annually it is a two percent increase per year. 1:15:00 PM FRANK HOMAN, Commissioner, Commercial Fisheries Entry Commission (CFEC), said the Carlson case, the consolidation of fisheries, and reduced permit values have created a trend of decreasing revenues to the CFEC. There are no general funds in the CFEC, and it has obligations to the fishermen's fund and the Division of Commercial Fisheries in the Alaska Department of Fish & Game. The CFEC predicts staff layoffs or general fund requests, he said. He added that this is a good opportunity to increase revenue, but there will still likely be a downward trend. He predicted HB 174 will cover costs for another seven years. MR. HOMAN said the current $300 cap is artificial, and the CS would raise it to $3,000. He said high-value fisheries will be paying their proportional share of the fees. The statute says that the fee should reflect the economic return of the fishery, he added. He also noted that there is a number plate required for vessels, and the CFEC charges $2, but it costs $7 to make the plate. There is a spreadsheet in the committee packet showing the revenue generated by the legislation, he said. 1:19:58 PM REPRESENTATIVE SEATON expressed concern about equity, because the cap only affects the highest value fisheries who will be paying proportionally less than the smaller inshore fisheries. MR. HOMAN said the original bill had no cap, and "there was some concern expressed about a no-cap that the commissions would be able to charge the maximum ... where it would actually fall. I think there were some concerns by some of the fisheries that that could be unlimited." The cap at $3,000 only affects the highest value fisheries, but all those below it will be paying their proportional share. REPRESENTATIVE SEATON said it is not truly proportional because of the cap, because a "very wealthy fishery" won't pay its proportion and the burden will be shifted to the less-profitable fisheries. He noted the growing trend and possibility of consolidation of fisheries, which means fewer vessels. So the cap could extremely depress the amount of revenue, he said. MR. HOMAN said that is a correct assessment, and that is why he considers the downward trend will continued. CO-CHAIR SAMUELS said he had a balancing act, and he could argue either way for or against the cap. The cap won't cause a big loss in revenue because there will be higher fees from boat length. He said he wants to make the process go forward, and nobody wants the legislation killed. 1:24:20 PM CO-CHAIR SAMUELS said Representative Thomas was comfortable. "We have done our juggling," he added. 1:24:46 PM REPRESENTATIVE LEDOUX asked how many boats will be over the new cap. 1:25:07 PM MR. HOMAN said out of 21,000 vessels, 265 will be affected by the cap. REPRESENTATIVE LEDOUX asked what the additional revenue would be without the cap. MR. HOMAN guessed approximately $200,000. CO-CHAIR SAMUELS noted that they will also pay more in the vessel licensure. MR. HOMAN said the original fiscal note was $2.3 million, and now it is about $1.9 million. REPRESENTATIVE LEDOUX asked if Mr. Homan was still working with boats that may be in a "higher end fishery, but in a different location, for example, boats that fish around Kodiak aren't charged the same as boats that fish out at the Bering Sea." MR. HOMAN said the bill will simply lift the cap, but by regulation the CFEC will establish a new fee structure. It will be a public process, he said. With a $300 cap, many vessels were in the same category, and now larger vessels will pay more. REPRESENTATIVE LEDOUX asked if there is justification for eliminating the cap for the small percentage of very, very affluent vessels. MR. HOMAN said the $3,000 cap was put on after discussion and "a lot of give and take." It was a balance, he said. 1:29:31 PM REPRESENTATIVE SEATON said the larger vessels are going from $750 to $900, so it doesn't seem like a good balance to try to recoup the money lost by the cap for only a $150 vessel fee. He said he is glad that the commission is looking at the vessel sizes. He suggested a per foot rate instead of broad categories. A 76-foot vessel will pay the same as a 149-foot vessel, even though there is "hugely different fishing power." MR. HOMAN said there could be different ways to do it, and said the CFEC does not have any ability to change it; the vessel fees are in statute. He said the CFEC did not come up with the vessel lengths. The lengths went into statute "some years ago." It would take time to make the statutory change, he added. 1:31:39 PM REPRESENTATIVE SEATON said, "We are making a statutory change, and it seems like we've got this inequity," of 76-foot vessels in the same category as 150-foot vessels. It would be more equitable and consistent to tax by size, for example, $20/foot. MR. HOMAN said the vessel license fee is the smaller part of the bill and the permit fee is where the money will come in relation to the economic return of the fishery. He said the original license fee was to just make sure any vessel operating in Alaska was licensed. It hasn't been the major contributor of the revenue, he added. REPRESENTATIVE SEATON said it may not be a major contributor to the revenue, but it is a "major grouse among fishermen." He repeated that it might be more appropriate to tax vessels on a per foot length. CO-CHAIR SAMUELS said not today. REPRESENTATIVE SEATON said he understands but he wants the bill drafters to consider it. MR. HOMAN said, "We could look at that." 1:35:12 PM REPRESENTATIVE ELKINS moved to report CSHB 174(RES) out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE SEATON objected for discussion. He said he has a problem with the cap when the industry is becoming more consolidated. He stated that the "scallop fishery is now all being taken by three vessels--it may all be taken by one vessel because the person doesn't have to be on board." Restructuring now makes it legal to do an entire fishery with one boat, and the total recovery will only be $3,000, he noted. With the cap, "we are setting ourselves up" to repeat this restructuring, so why not do it now, he said. He then removed his objection. 1:37:33 PM There being no objection, CSHB 174(RES) moved out of the House Resources Standing Committee. 1:37:48 PM
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