Legislature(2001 - 2002)

04/25/2001 03:50 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          HB 194-COMMERCIAL FISHING LICENSE & PERMIT FEES                                                                   
                                                                                                                              
CHAIRMAN  JOHN  TORGERSON  called  the  Senate  Resources  Committee                                                          
meeting  to order at  3:50 p.m. and  announced HB  194 to be  up for                                                            
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE GARY STEVENS,  sponsor of HB 194, explained that this                                                            
bill relates to the Carlson  class action suit that challenges state                                                            
statutes that  mandate that out-of-state fishermen  be charged three                                                            
times more  than resident fishermen  for licensure. The courts  have                                                            
said  this is simply  not  allowed as  it results  in excessive  fee                                                            
charges to non-residents.  The court has also said the state can use                                                            
a differential based on  the amount that residents pay for fisheries                                                            
management  versus  what non-residents  pay.  He said  HB 194  won't                                                            
affect the Carlson case,  but it will cause the state to stop adding                                                            
to this potential debt.  It will stop the addition of 250 plaintiffs                                                            
to this case every  year while it goes on. He said,  "HB 194 repeals                                                            
the statute that  charges three to one and replaces  it with wording                                                            
that allows  us to charge non-residents  the maximum amount  allowed                                                            
by the law."                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STEVENS  said this  issue  has already  been to  the                                                            
Supreme Court twice and  the Supreme Court ruled that the state must                                                            
use a formula.   The Supreme Court  remanded the case to  the Alaska                                                            
Superior  Court  to work  out  the budget  categories.  The  state's                                                            
attorney,  Mr. White, has  argued in Superior  Court that the  state                                                            
should  be able to  use six budget  categories  to justify  charging                                                            
non-residents more than  residents. In June 2000, the Superior Court                                                            
said higher  fees could be  charged on two  of those categories.  If                                                            
that ruling  stands, the  cost to  the state could  be around  $22.5                                                            
million as  of March 15,  2001 and that  figure is increasing  every                                                            
day.  He said  the state  will  be appealing  this  decision to  the                                                            
Alaska Supreme  Court and will try to get the other  four categories                                                            
included   in  the  formula.   Mr.  White   will  also  appeal   the                                                            
prejudgement  interest that has been  accruing in an attempt  to get                                                            
to the point where there are no interest charges.                                                                               
                                                                                                                                
REPRESENTATIVE  STEVENS said that even today, if anyone  were to get                                                            
a limited  entry  permit, they  would be  charged three  to one.  He                                                            
remarked, "That's the statute  they are operating under and continue                                                            
to operate  under, despite  this court ruling."   He said this  bill                                                            
will allow the Commercial  Fisheries Entry Commission (CFEC) to stop                                                            
charging  three to one  and to begin  to charge  the maximum  amount                                                            
that is constitutional.  If this bill passes, the CFEC will begin to                                                            
use the fee structure the court has said is permissible.                                                                        
                                                                                                                                
REPRESENTATIVE  STEVENS  said  HB  194  will  not  create  any  more                                                            
problems  for us.  It  will get rid  of the three  to one ratio;  it                                                            
shows the  court that the  legislature is  acting in good faith;  it                                                            
shows that when the legislature  realized what the state's liability                                                            
was,  it took  steps  to correct  things;  it  stops adding  to  the                                                            
state's liability each  year; and it will add to the strength of the                                                            
state's case when it appeals to the Alaska Supreme Court.                                                                       
                                                                                                                                
Number 355                                                                                                                      
                                                                                                                                
SENATOR LINOLN  asked him  to expound on  how this would  strengthen                                                            
court  action and  asked  if he  heard  any opposition  from  fisher                                                            
groups to this piece of legislation.                                                                                            
                                                                                                                                
REPRESENTATIVE  STEVENS said  the question  of it strengthening  the                                                            
state's  position in  court is very  important and  Mr. White  could                                                            
elaborate  on that.  He  said HB  194 doesn't  admit  any guilt.  It                                                            
simply  says that  we will  now move  on,  at the  direction of  the                                                            
court, and  try to use all  six of the categories,  which are  quite                                                            
broad.                                                                                                                          
                                                                                                                                
He said  he has not heard  any strong opposition  to this bill.  The                                                            
United  Fisherman's  Association  endorsed  it  and  has  agreed  to                                                            
increased  cost  to  fishermen  in  order to  put  more  money  into                                                            
commercial fisheries.                                                                                                           
                                                                                                                                
CHAIRMAN   TORGERSON  asked   why  it  limits   deposits  into   the                                                            
Fishermen's Fund to $50 (page 6, line 17).                                                                                      
                                                                                                                                
REPRESENTATIVE  STEVENS explained that it keeps "them"  from putting                                                            
more money into the Fishermen's  Fund than "they" need to. He added,                                                            
"It holds them harmless as well."                                                                                               
                                                                                                                                
CHAIRMAN TORGERSON  responded that he would debate  that in a minute                                                            
and asked what is being repealed in Section 7.                                                                                  
                                                                                                                                
MR. KEVIN  BROOKS, Director,  Division of  Administrative  Services,                                                            
Alaska Department  of Fish and Game (ADF&G), said  that Section 7 is                                                            
a direct reference to AS  16.04.580 and crewmembers' licenses in the                                                            
ADF&G  statutes  that  address  $60  and  $125.  Title  16.43  deals                                                            
specifically with limited entry permits.                                                                                        
                                                                                                                                
He  noted   that  Section  6,  which   caps  contributions   to  the                                                            
Fishermen's Fund, is related  to a discussion that surrounded SB 146                                                            
a few years ago  about decreasing a 60 percent contribution  of that                                                            
revenue  to the Fund  to 39 percent.  As a result  of this bill,  he                                                            
said non-resident fees  have the potential to grow significantly and                                                            
that the current contribution  from a resident crewmember license is                                                            
$23.25 and about $48.25 from a non-resident crewmember license.                                                                 
                                                                                                                                
CHAIRMAN TORGERSON asked why ADF&G cares if it grows.                                                                           
                                                                                                                                
MR. BROOKS informed  the committee that the Fund has  received about                                                            
$800,000  from the  crew licenses  and about  $400,000 from  limited                                                            
entry  permits,   for  a  total  of  $1.2  million   per  year.  The                                                            
administrator  of the  Fund, Mr.  Paul Grossi,  said  it is in  good                                                            
shape. He  remarked, "I guess  there is no  down side to letting  it                                                            
grow, but the  other side of it is  that this revenue would  then be                                                            
deposited  into the  ADF&G fund  and be available  [for]  subsequent                                                            
appropriation   by   the   legislature   for   commercial    fishing                                                            
management…"                                                                                                                    
                                                                                                                                
CHAIRMAN TORGERSON  asked if he remembered the debate  on whether it                                                            
was actually constitutional to change the percentage.                                                                           
                                                                                                                                
MR. BROOKS answered yes.                                                                                                        
                                                                                                                                
CHAIRMAN TORGERSON  said he thought  Assistant Attorney General  Jim                                                            
Baldwin was  very clear about the  state staying out of numbers  and                                                            
sticking  with percentages.  He asked, "Now  we're saying it's  okay                                                            
this year, but not okay last year?"                                                                                             
                                                                                                                                
MR. BROOKS responded that  ADF&G discussed this with Mr. Baldwin and                                                            
there were  a couple of ways  of looking at  the issue of  dedicated                                                            
funds.  He pointed out,  "If left  unchecked, this  fund would  grow                                                            
far.  It  would  eventually  contribute  a  lot more  money  into  a                                                            
dedicated  fund, thereby  limiting the appropriation  powers  of the                                                            
legislature… One  rationale in the capping of this  is that it could                                                            
actually help to strengthen that position."                                                                                     
                                                                                                                                
He continued to say that  they want to avoid a situation where every                                                            
year  they would  have  to come  back and  "tweak  that percentage"                                                             
because it was  based on the previous years' actual  expenditures by                                                            
the state.                                                                                                                      
                                                                                                                                
MS.  MARY   MCDOWELL,  Commercial   Fisheries  Entry  Commissioner,                                                             
testified in support  of HB 194. Her testimony was  not recorded due                                                            
to transmission problems.                                                                                                       
                                                                                                                                
MR. JERRY MCCUNE,  United Fisherman of Alaska and  Cordova Fishermen                                                            
United,  supported HB  194. His testimony  was not  recorded  due to                                                            
transmission problems.                                                                                                          
                                                                                                                                
SENATOR ELTON moved to pass HB 194 from committee with individual                                                               
recommendations. There were no objections and it was so ordered.                                                                

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