Legislature(2001 - 2002)
04/28/2001 10:22 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 194(FIN)
"An Act relating to fees for commercial fishing licenses and
permits; and providing for an effective date."
REPRESENTATIVE GARY STEVENS stated that HB 194 would repeal current
statute that requires the Commercial Fisheries Entry Commission
(CFEC) to charge non-resident fishers three times the amount
charged a resident fisher and would replace it with a provision
that gives CFEC the authority to charge non-resident fishers as
close as is practicable to the maximum amount allowed by law.
By passing the legislation, CFEC would discontinue the practice of
charging three to one and instead would charge the maximum amount
that is allowed by law. Starting in January, CFEC would calculate
the fee differential based on the two budget categories that the
court has allowed. The Department of Law is hopeful that they will
prevail in their appeal and once the court makes it final ruling,
CFEC would be able to include some of the other four budget
categories into the formula. He added that the bill will
strengthen the States position in the current court case.
Senator Green asked if the court case was not passed, will the
State owe $22 million dollars.
Representative Stevens explained that if the State is not allowed
any additional categories through the court system, the State is
facing a pay back of $22 million dollars. Alaska has been charging
out-of-state fishermen more than in-state fishermen.
Senator Green asked who is the "we".
Representative Stevens replied that the "we" is the State of Alaska
and the CFEC and that the State is being sued.
Senator Green clarified that the State is the entity that will be
liable if the class action suit is lost.
Senator Wilken asked what the reduced fee count was.
Representative Stevens explained that was a fee allowed at a
reduced level for those that live at poverty level.
Senator Wilken asked who was the impoverished non-resident
commercial fisherman.
Representative Stevens replied that the criteria was quite
explicate through CFEC documentation. He requested that question
be deferred to the CFEC Commissioner. He added that there are
only a limited number of fishermen in that category.
Senator Wilken referenced the proposed amounts, to which the bill
recommends that the rates be raised. He asked if it would be
essential to stay within the 3 to 1 category.
Representative Stevens countered that the intent is to get away
from the 3 to 1 rating.
Senator Austerman interjected that the "poverty" question also
applies to sport fishermen.
Representative Stevens noted that poverty level was based on
household income, assets, and financial resources.
Senator Hoffman voiced concern that through the legislation, in all
cases, residents would be increased and in all other cases, non-
residents would be decreased. He asked if there was any possible
way to hold residents 'harmless'.
Representative Stevens explained that the legislation would no
longer make the 3-1 ratio available. It would be based on other
categories. The United Fishermen of Alaska (UFA) are fully in
agreement with the resident fees. The money going into the CFEC,
will be used for the commercial fisheries. He added that the
legislation was a recommendation from the fishermen of Alaska.
Senator Hoffman pointed out that the only increases were to the
poverty category.
Representative Stevens acknowledged that was true and the reason
for that increase was that CFEC was paying into the fisherman fund
more than they are receiving from those peoples.
Senator Austerman explained that part of the issue is how much
money the State puts into the management of their fisheries.
MARY MCDOWELL, Commissioner, Commercial Fisheries Entry Commission
(CFEC), Juneau, offered to answer questions of the Committee.
Senator Olson asked when the fees were first implemented.
Commissioner McDowell replied that the fees currently charged have
been in place for at least twenty years. The individual fisheries
between those categories changes often. She acknowledged that the
original fees are somewhat dated.
Senator Leman stated that there are no provisions for the increased
value for the Alaska fisheries. He thought someone in the high
value fisheries receives a greater value and should pay more for
the use of the facilities. He added that the biggest disparity is
for the child crewmember going from $5 dollars to $140 dollars. He
asked if that was a direction of the Court.
Commissioner McDowell explained that the legislation could make a
policy call on all the fees indicated. In the case of other permit
costs, the bill has been drafted to allow the State to tack on the
most cost possible for every non-resident fee.
Senator Leman clarified that the Court stated that the State could
not tack on the differential on the bases of the value of the
fishery.
Commissioner McDowell clarified that the State could charge less
than that if the Legislature chooses to do it. The State has opted
to tack on the most possible, in every fee class. She commented
that was optional.
Senator Leman maintained that the Court had seriously errored.
Commissioner McDowell acknowledged that the hope is that the Courts
will agree with the State so that all categories would be allowed.
Senator Leman asked if the listing of categories include
investments which the State has made through corporations such as
Alaska Industrial Development Export Authority (AIDEA).
SFC 01 # 90, Side B 11:16 AM
Senator Leman referenced capital expenditures used to support the
fishing industry as measured by annual depreciation.
Commissioner McDowell answered that the Office of Management and
Budget and the Department of Law combed through the budget and
attempted to find everything conceivable that could be problematic.
Senator Hoffman questioned how much currently was being collected
with the fee structure in place and what is the anticipated amount
that will be collected thorough the proposed legislation.
Commissioner McDowell referenced the two fiscal notes. She pointed
out that there would be a "slight" gain in overall revenue received
from non-residents through the bill. She added that the bill does
not bring in fewer revenues from non-residents, but instead
shuffles the burden down. There will be a slight reduction in the
high-end charge permits.
Senator Hoffman requested information be provided to the Committee
regarding the number of residents and non-residents in each of the
classes. He claimed that information was important for the
Committee to make a decision.
Commissioner McDowell offered to provide that information.
Senator Leman remembered that the Court did not use the denominator
that the State recommended.
Commissioner McDowell acknowledged that was correct.
Senator Leman asked if that issue was under appeal. He believed
that either the court misunderstood or misrepresented the reality.
Co-Chair Donley agreed with Senator Leman that the judge involved
in the case did a very poor job. He added that Judge Michalski
should be held responsible for his "terrible" legal performance in
that case.
Senator Austerman recommended that the bill be moved from Committee
and then find a way to highlight the work of those specific judges
during their re-election time.
Co-Chair Kelly commented that the court decision is flawed and that
the bill would help to address those concerns.
Senator Wilken repeated his question of what an impoverished non-
resident would be.
Commissioner McDowell explained that is defined in regulations used
at this time. Regulations that were used in the past did not have
eligibility standards. She referenced Page 6, Line 6, and noted
the use of the asset caps.
Senator Wilken recommended investigating the public policy of that
group. He asked what would happen if that language was deleted.
Commissioner McDowell noted that the Department of Law advised that
the State would probably be challenged by not offering that option
to non-residents.
Senator Austerman pointed out that was not the issue with this bill
and that concern should be addressed in separate legislation.
Senator Austerman moved to report CS HB 194 (FIN) out of Committee
with individual recommendations and with the accompanying fiscal
notes.
Senator Leman objected in order to take testimony by the Department
of Law.
STEVE WHITE, Assistant Attorney General, Department of Law,
referenced the Carlson Case. He noted that he had argued that case
to the Supreme Court last time. He offered to answer questions of
the Committee.
Co-Chair Donley asked the possibility of success if the legislation
followed recommendations made by Senator Wilken.
Mr. White stated that it was a policy call whether to eliminate the
entire fee schedule for everyone. If it was limited to only non-
residents, then there would be an equal protection problem with the
same magnitude that the State is currently having.
Senator Wilken requested that the Department of Law submit a
written defense for the poverty section of the bill.
Mr. White explained that there would be no legal implication if the
poverty section were removed for both the residents and the non-
residents.
There being no further objections, CS HB 194 (FIN) MOVED from
Committee with "no recommendations" and with fiscal note #3 by
Department of Fish & Game and #4 by Department of Fish & Game,
CFEC.
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