Legislature(2001 - 2002)

03/04/2002 01:52 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 04, 2002                                                                                           
                         1:52 P.M.                                                                                              
                                                                                                                                
TAPE HFC 02 - 37, Side A                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House Finance Committee meeting                                                                    
to order at 1:52 P.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Williams, Co-Chair                                                                                          
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Con Bunde, Vice-Chair                                                                                            
Representative John Davies                                                                                                      
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Carl Moses                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Eric Croft                                                                                                       
Representative Jim Whitaker                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Drew Scalzi; Mary McDowell, Commissioner,                                                                        
Commercial Fisheries Entry Commission.                                                                                          
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 288    An Act relating to commercial fisheries limited                                                                       
          entry permit buy-back programs.                                                                                       
                                                                                                                                
          CS HB 288 (FIN) was reported of Committee with a                                                                      
          "do  pass"  recommendation  and  with  zero  fiscal                                                                   
          notes  by   #1,  the  Commercial   Fisheries  Entry                                                                   
          Commission and  two new notes by the  Department of                                                                   
          Revenue.                                                                                                              
                                                                                                                                
HOUSE BILL NO. 288                                                                                                            
                                                                                                                                
     An Act relating to commercial fisheries limited entry                                                                      
     permit buy-back programs.                                                                                                  
                                                                                                                                
                                                                                                                                
[Tape Malfunction].                                                                                                           
                                                                                                                                
                                                                                                                                
Vice-Chair Bunde MOVED to ADOPT  the work draft, 22-LS1108\S,                                                                   
Utermohle,  3/01/02, as the  version of  the bill before  the                                                                   
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
REPRESENTATIVE  DREW  SCALZI  explained  that  HB  288  would                                                                   
provide for  the establishment  of a  buy-back fund  when the                                                                   
optimum number  of entry permits  is less than the  number of                                                                   
entry  permits  outstanding  in  a fishery  as  indicated  in                                                                   
Section 5.                                                                                                                      
                                                                                                                                
HB  288 would  provide for  the establishment  of a  buy-back                                                                   
plan  as listed  in  Section 5.   It  also  provides for  the                                                                   
establishment  of  buy-back  assessments   and  programs  for                                                                   
fisheries  that are  proceeding  with a  buy-back  plan.   He                                                                   
pointed out that:                                                                                                               
                                                                                                                                
     ·    The assessment may not exceed 7% of the ex-vessel                                                                     
          (first wholesale) value of the fishery resource                                                                       
          and is paid by the commercial fishermen.                                                                              
     ·    It delineates the collection and appropriation                                                                        
          process for the assessment, and ensures that the                                                                      
          Commission expends the monies for the plan's                                                                          
          intended purpose.                                                                                                     
                                                                                                                                
Representative  Scalzi  claimed that  under  HB  288, when  a                                                                   
permit  is "bought  back",  the permit  no  longer exists  as                                                                   
outlined  in Section  6.  HB  288 provides  the same  revenue                                                                   
flow as the  hatchery and Alaska Seafood  Marketing Institute                                                                   
(ASMI)  tax  that  commercial   fishermen  currently  pay  as                                                                   
outlined in Section 8.  He stressed  that the concerns of the                                                                   
Committee had been met.                                                                                                         
                                                                                                                                
MARY  MCDOWELL,  COMMISSIONER,   COMMERCIAL  FISHERIES  ENTRY                                                                   
COMMISSION offered to answer questions of the Committee.                                                                        
                                                                                                                                
Co-Chair Mulder  requested for  a "walk through  description"                                                                   
of State funding versus "other" funding mechanisms.                                                                             
                                                                                                                                
Ms.  McDowell  explained  that   the  if  the  Limited  Entry                                                                   
Commission makes  a determination  of the optimum  number and                                                                   
that number is  less than determined in the  fishery, then it                                                                   
will  leave  the option  open  to  seek  federal funds.    It                                                                   
directs the Commission  to start a buy-back fund.   The State                                                                   
funding  leaves the  option  number open  in  order that  the                                                                   
Commission can go out and seek  federal funding sources.  The                                                                   
Legislature could appropriate  that money.  All the authority                                                                   
would be created but it would  not close the funding sources.                                                                   
She added that the intent of the  option would help to create                                                                   
the needed authority.                                                                                                           
                                                                                                                                
Co-Chair  Mulder  clarified  that  it  would  provide  double                                                                   
protection.     He  pointed  out   that  the   Limited  Entry                                                                   
Commission  was not  looking  for the  State  to create  that                                                                   
authority,  however, they  need  that authority  in order  to                                                                   
begin.                                                                                                                          
                                                                                                                                
Representative  Hudson  echoed   comments  made  by  Co-Chair                                                                   
Mulder.   He  noted  that the  legislation  was balanced  and                                                                   
protective.                                                                                                                     
                                                                                                                                
                                                                                                                                
[Tape Now Works].                                                                                                             
                                                                                                                                
                                                                                                                                
Representative Davies  MOVED to ADOPT a  conceptual Amendment                                                                   
#1.  [Copy on File].                                                                                                            
                                                                                                                                
     Page 2, Line  28, add language "Interest  accrued by the                                                                   
     buy-back fund remains in the fund".                                                                                        
                                                                                                                                
     Page 4,  Line 11, add a  new line 11,  language reading,                                                                   
     "amounts  collected  and  interest  accrued  from  these                                                                   
     amounts  for  each permit  buy-back  assessment  imposed                                                                   
     under AS 43.76.220".                                                                                                       
                                                                                                                                
     Line 4,  Section 12, new  line 12, language  reads, "The                                                                   
     Legislature  may  appropriate  revenue  generated  by  a                                                                   
     permit  buy-back  assessment 'and  associated  interest'                                                                   
     to".                                                                                                                       
                                                                                                                                
He asked that the legislative  drafter make the determination                                                                   
of where to insert the language.                                                                                                
                                                                                                                                
There  being  NO  OBJECTION,   conceptual  Amendment  #1  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Co-Chair  Mulder MOVED  to  report  CS HB  288  (FIN) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  288 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation  and with  two new  fiscal notes  by the                                                                   
Department of Revenue and the  zero note #1 by the Department                                                                   
of Fish & Game, Limited Entry Commission.                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 2:03 P.M.                                                                                          

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