Legislature(2019 - 2020)ADAMS 519

03/09/2020 09:00 AM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 159(FIN) Out of Committee
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 9, 2020                                                                                            
                         9:02 a.m.                                                                                              
9:02:46 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair  Johnston   called  the  House   Finance  Committee                                                                    
meeting to order at 9:02 a.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Ben Carpenter                                                                                                    
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
ALSO PRESENT                                                                                                                  
Erin   Shine,  Staff,   Representative  Jennifer   Johnston;                                                                    
Representative Louise  Stutes, Bill Sponsor;  Matt Gruening,                                                                    
Staff, Representative Louise Stutes.                                                                                            
PRESENT VIA TELECONFERENCE                                                                                                    
Stephanie   Butler,  Alaska   Commission  on   Postsecondary                                                                    
Education;  Dale  Kelley,  Commissioner, CFEC,  Juneau;  Lt.                                                                    
Jonathan  Streifel,  Lt.  Wildlife  Troopers,  DPS,  Kodiak;                                                                    
Jenna   Wamsganz,  Deputy   Director,   Division  Of   Motor                                                                    
Vehicles,  Anchorage;  Rachel  Lord, Alaska  Association  of                                                                    
Harbormasters, Homer; Representative Kelly Merrick.                                                                             
HB 159    MEDICAL EDUCATION PROGRAM                                                                                             
          CSHB 159 (FIN) was  REPORTED out of committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          indeterminate  fiscal note  by  the Department  of                                                                    
          Education and Early Development.                                                                                      
HB 185    REGISTRATION OF BOATS: EXEMPTION                                                                                      
          HB 185 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
Co-Chair Johnston reviewed the agenda for the day.                                                                              
HOUSE BILL NO. 159                                                                                                            
     "An Act relating to repayment conditions for medical                                                                       
     education program participants."                                                                                           
9:03:39 AM                                                                                                                    
Co-Chair   Foster   MOVED   to  ADOPT   proposed   committee                                                                    
substitute  for HB  159, Work  Draft 31-LS0981\M  (Caouette,                                                                    
3/6/20). (copy on file).                                                                                                        
Co-Chair Johnston OBJECTED for discussion.                                                                                      
9:04:05 AM                                                                                                                    
ERIN   SHINE,  STAFF,   REPRESENTATIVE  JENNIFER   JOHNSTON,                                                                    
reviewed the  two changes to  the Committee  Substitute. She                                                                    
reported that  on page 1,  line 2, the words   and providing                                                                    
for an effective  date  were added. The  second change found                                                                    
on page  2, line 11 added  new Section 3, which  read:  This                                                                    
act takes  effect on  January 1,  2021.  She  explained that                                                                    
Section 3 was added to  exclude the students that had signed                                                                    
their contracts  under the  current WWAMI  program. Students                                                                    
entering the program  after January 1, 2021  were subject to                                                                    
the bills 100 percent repayment provision.                                                                                      
9:04:54 AM                                                                                                                    
Co-Chair  Johnston WITHDREW  her OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
Co-Chair  Johnston asked  the department  to review  the new                                                                    
fiscal note.                                                                                                                    
STEPHANIE   BUTLER,  ALASKA   COMMISSION  ON   POSTSECONDARY                                                                    
EDUCATION  (via  teleconference),   offered  to  answer  any                                                                    
questions concerning the zero fiscal note.                                                                                      
9:06:40 AM                                                                                                                    
Co-Chair  Foster  MOVED  to  report  CSHB  159(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
There being NO OBJECTION, it was so ordered.                                                                                    
CSHB  159(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation  and with one new  indeterminate fiscal                                                                    
note by the Department of Education and Early Development.                                                                      
HOUSE BILL NO. 185                                                                                                            
     "An Act relating to the registration of commercial                                                                         
     vessels; and providing for an effective date."                                                                             
9:07:33 AM                                                                                                                    
REPRESENTATIVE  LOUISE  STUTES,   BILL  SPONSOR,  introduced                                                                    
herself.  She thanked  the committee  for hearing  her bill.                                                                    
She  explained  that  the legislation  would  exempt  active                                                                    
commercial  fishing   vessels  with  a   current  Commercial                                                                    
Fisheries Entry  Commission (CFEC) license  from duplicative                                                                    
registration requirements. The  duplicative registration was                                                                    
created  by  the  passage  of   SB  92  [SB  92  -  Vessels:                                                                    
Registration/Titles;  Derelicts   -  Chapter  111   SLA  18,                                                                    
10/11/2018]  known as  the "the  derelict vessel  bill.  The                                                                    
legislation would remove the requirement  for vessels with a                                                                    
current CFEC license to register  every three years with the                                                                    
Department of  Motor Vehicles (DMV). She  furthered that the                                                                    
CFEC  required  annual  renewal  and  already  provided  the                                                                    
necessary  contact   information  in  an   accessible  state                                                                    
database.  She believed  the bill   streamlined registration                                                                    
on one of the states most vital industry.                                                                                       
9:09:25 AM                                                                                                                    
MATT GRUENING, STAFF,  REPRESENTATIVE LOUISE STUTES, further                                                                    
introduced  the bill.  He explained  the difference  between                                                                    
undocumented or documented  vessels noting that undocumented                                                                    
vessels  were not  nationally  registered.  He related  that                                                                    
vessel   documentation   was  a   national  form  of  vessel                                                                    
registration   through  the   United  States   Coast  Guard.                                                                    
Documentation  was  one  of  the  oldest  functions  of  the                                                                    
federal government,  dating back  to 1789.  He pointed  to a                                                                    
Coast Guard  brochure titled   Documentation and  Tonnage of                                                                    
Smaller  Commercial  Vessels   that   was  included  in  the                                                                    
members  packets   (copy  on   file).  He   elaborated  that                                                                    
documentation   provided    evidence   of    ownership   and                                                                    
nationality, facilitated  interstate commerce,  and admitted                                                                    
vessels  of certain  restricted  trades. He  added that  all                                                                    
fishing  vessels  over  5  net  tons  were  required  to  be                                                                    
documented. He shared that he  was the owner of a commercial                                                                    
fishing vessel  and would benefit  from the  legislation. He                                                                    
read the sponsor statement:                                                                                                     
     This   legislation  would   exempt  active   commercial                                                                    
     fishing    vessels   from    duplicative   registration                                                                    
     requirements largely  created by the passage  of SB 92,                                                                    
     "the derelict vessel bill," in 2018.                                                                                       
     Specifically, HB  185 would remove the  requirement for                                                                    
     vessels  with  a  current  Commercial  Fisheries  Entry                                                                    
     Commission  (CFEC)  license  to  register  every  three                                                                    
    years with the Department of Motor Vehicles (DMV).                                                                          
     Prior to the passage of  SB 92, U.S. Coast Guard (USCG)                                                                    
     documented vessels  were exempt from  DMV registration;                                                                    
     however, that  exemption was repealed  in the  bill and                                                                    
     as  a  result,  larger  vessels fell  under  the  DMV's                                                                    
     The  rationale  was  to provide  the  State  and  local                                                                    
     municipalities with a  state-maintained database on who                                                                    
     owned and  operated vessels in Alaskan  waters, as well                                                                    
     as  how  to   contact  those  individuals;  overlooked,                                                                    
     however, was the CFEC database.                                                                                            
     Vessel licensure with the  CFEC requires annual renewal                                                                    
     and already provides  the necessary contact information                                                                    
     in a sharable, state database.                                                                                             
     In addition  to removing a duplicative  registration on                                                                    
     larger fishing vessels that was  created by SB 92, this                                                                    
     legislation  takes  the  additional step  of  exempting                                                                    
     USCG  undocumented  CFEC  vessels, those  under  5  net                                                                    
     tons,  from  a  pre-existing  registration  requirement                                                                    
     with the  DMV. These vessels  will still be  subject to                                                                    
     the new  titling requirement with  the DMV, as  well as                                                                    
     annual CFEC vessel licensure.                                                                                              
     Alaska's commercial  fishing fleet  is the  backbone of                                                                    
     our state's  most vital industry. We  shouldn't require                                                                    
     those vessels  to register every  three years  with the                                                                    
     DMV, at  additional cost,  only to  provide information                                                                    
     that the State already  has through the vessel's annual                                                                    
     license renewal process.                                                                                                   
Mr. Gruening continued to provide information on HB 185. He                                                                     
offered to briefly review the CFEC vessel registration                                                                          
9:13:37 AM                                                                                                                    
Mr. Gruening read from a prepared statement:                                                                                    
      Who must register with CFEC?                                                                                              
      With  very  few  exceptions,  all  commercial  fishing                                                                    
     vessels,    including    tenders,    processors,    and                                                                    
     transporters, engaged in  commercial fishing in Alaskan                                                                    
     waters require CFEC licensure.  The exceptions found in                                                                    
     AS 16.05.495  are primarily limited  to skiffs  used in                                                                    
     setnet operations in specific areas.                                                                                       
      For  reference,  the  licensing  statute,  16.050.490,                                                                    
     states that "as  a condition of delivery  or landing of                                                                    
     fish or engaging in commercial  fishing in the state, a                                                                    
     license is required for a commercial vessel.                                                                               
      To give an idea of  the scope, the CFEC licensed 8,806                                                                    
     vessels in  2019 for a  total of $629,052  in licensing                                                                    
      One  of the  questions  to ask  when considering  this                                                                    
     bill is what type of  information is collected when you                                                                    
     file for a CFEC vessel license?                                                                                            
      16.05.530 requires CFEC to file  "the name and address                                                                    
     of  the vessel  owner or  the owners  authorized agent,                                                                    
     the name  and number of   the vessel, a  vessel license                                                                    
     number,  the   area  to  be  fished,   and  "any  other                                                                    
     reasonable information required by CFEC"                                                                                   
      The CFEC license forms themselves  require quite a bit                                                                    
     of additional  reasonable information. I would  like to                                                                    
     point members  to a document in  packets containing the                                                                    
     various  CFEC  license  forms. The  pertinent  sections                                                                    
     have been highlighted in yellow.                                                                                           
      Pointing specifically to the  form titled "2020 vessel                                                                    
     license  application"  Under  penalty of  perjury,  the                                                                    
     applicant must  identify the legal owner  of the vessel                                                                    
     and   a  contact   person  if   that  is   a  different                                                                    
     individual, the owner's  mailing and permanent address,                                                                    
     SSN, phone number, DOB, and email address.                                                                                 
      If the vessel is new to an individual or the                                                                              
     fisheries, the applicant MUST submit  a current copy of                                                                    
     the vessel's  USCG documentation or  State registration                                                                    
     to the CFEC  and fill out the  "vessel history" section                                                                    
     on Page 2, requiring  additional vessel information and                                                                    
      Every  year, in  order to  relicense  that vessel  and                                                                    
     fish,  the  same  information  needs  to  be  verified,                                                                    
     updated, and signed under penalty of perjury.                                                                              
      Intentionally  providing  false information  on  these                                                                    
     forms  is  a  crime  punishable  by up  to  a  year  of                                                                    
     imprisonment  and/or a  $25,000 fine  and subjects  the                                                                    
     permit holder  to suspension  of fishing  privileges or                                                                    
     outright permit revocation.                                                                                                
      The short  of it  is, we know  who CFEC  vessel owners                                                                    
     and  operators are  and  how  to get  a  hold of  them.                                                                    
     Another  question  to ask  is  how  is the  CFEC  decal                                                                    
     displayed  on  the vessel  and  how  easily can  it  be                                                                    
     verified by law enforcement?                                                                                               
      I would like  to point members to a  document in their                                                                    
     packets titled "CFEC vessel  license, number plate, and                                                                    
      This depicts  real-sized examples of the  license that                                                                    
     must  be   carried  onboard,  as  well   as  the  metal                                                                    
     triangular plate and annual decals  that are affixed to                                                                    
     all CFEC registered vessels.                                                                                               
      The  first  time any  vessel  is  registered with  the                                                                    
     CFEC, it  is assigned  a permanent 5-digit  number from                                                                    
     ADF&G  that is  specific to  that vessel.  This numeric                                                                    
     must be  displayed on both  sides of the vessel  in 12-                                                                    
     inches-high by-1-inch-wide numbers.                                                                                        
      The  vessel is  also assigned  an aluminum  triangular                                                                    
     plate with  that same 5-digit  number stamped  into it.                                                                    
     The  plate must  stay permanently  affixed to  the port                                                                    
     side of the vessel in a visible location.                                                                                  
      Every year,  the CFEC issues  a triangular  decal upon                                                                    
     renewal of  the license similar  to a vehicle  tag only                                                                    
     considerably  larger.   That decal  must be  affixed on                                                                    
     top  of  the triangular  plate  as  shown. The  5-digit                                                                    
     number on the decal must match the one on the plate.                                                                       
      The  decals are  good  for one  year,  are uniform  in                                                                    
     color,  with  the  color alternating  every  year.  For                                                                    
     example, all CFEC decals in  2012 were purple with "12"                                                                    
     embossed on them, in 2017  they were green with "17" on                                                                    
     them, and so on and so forth.                                                                                              
      This system,  again similar  to vehicle  license plate                                                                    
     tags, provides  an easy visual identifier  for wildlife                                                                    
     troopers  as they  drive  by a  vessel.  It's the  same                                                                    
     decal  troopers  have  used  to  check  compliance  for                                                                    
     decades  under Title  16, so  no  adjustments would  be                                                                    
     needed for enforcement or CFEC.                                                                                            
      Additionally,  the  size  and   color  coding  of  the                                                                    
     triangle make  it an easy visual  inspection for harbor                                                                    
     masters, port administrators, and others.                                                                                  
9:16:21 AM                                                                                                                    
Mr. Gruening  pointed to a  document that provided  a visual                                                                    
aide  of the  permit,  license, and  metal triangular  decal                                                                    
that  was required  to be  affixed to  a commercial  fishing                                                                    
vessel (copy on file).                                                                                                          
9:18:07 AM                                                                                                                    
Mr. Gruening reviewed the sectional analysis (copy on                                                                           
      Section 1 on Page 1, line 4 through Page 2, line 16:                                                                      
     amends   the  current   list  of   exemptions  to   DMV                                                                    
     registration  found in  05.25.055 (i)  to include  CFEC                                                                    
     registered vessels.                                                                                                        
      Section 2 on Page 2, lines 17 through 21:                                                                                 
     Amends  the existing  DMV  titling  statute to  clarify                                                                    
     that  undocumented  registered CFEC  licensed  vessels,                                                                    
     although  exempt  from  registration through  the  DMV,                                                                    
     will still be required to title through that agency.                                                                       
      Section 3 on Page 2, lines 22 through 26:                                                                                 
     A new subsection was added  to institute the previously                                                                    
     mentioned $8 annual fee upon  CFEC registration in lieu                                                                    
     of the  3-year $24 fee.  The fee will be  accounted for                                                                    
     separately for  as provided in  AS 05.25.096(b),  to be                                                                    
     made  available   for  used  by  the   legislature  for                                                                    
     appropriations   to   DNR,   the  Department   of   the                                                                    
     Administration,  and  the   purposes  of  the  derelict                                                                    
     vessel act. This maintains current funding and uses.                                                                       
      Section 4 on Page 2, lines 27 through 29:                                                                                 
     Adds  a retractive  effective date  of  January 1st  of                                                                    
     2020 for  the registration requirement in  Section 1 of                                                                    
     the bill. The effective date  reflects the first day of                                                                    
     this year's CFEC licensing cycle.                                                                                          
      Section 5 on Page 2, line 30:                                                                                             
     Adds a delayed  effective date to January  1st of 2021,                                                                    
     the first  day of next  year's CFEC license  cycle, for                                                                    
     the new $8 CFEC fee.                                                                                                       
      Section 6 on  Page 2 line 31, through Page  3, line 1:                                                                    
     Adds an  immediate effective date  to the  remainder of                                                                    
     the bill.                                                                                                                  
9:20:31 AM                                                                                                                    
Representative  Josephson asked  why  the new  fees did  not                                                                    
show up in the fiscal note  for FY 22. Mr. Gruening believed                                                                    
that the fee had a delayed  fiscal impact in FY 21 but would                                                                    
not carry  to the  following year.  Representative Josephson                                                                    
asked  about  the  solvency  of  the  program.  He  wondered                                                                    
whether  it  had the  revenue  necessary  to carry  out  the                                                                    
program. Mr.  Gruening answered that  he could not  speak to                                                                    
what the  statewide needs  were regarding  derelict vessels.                                                                    
He indicated  that the bill  provided the same  funding that                                                                    
was available in SB 92.                                                                                                         
9:22:14 AM                                                                                                                    
Representative   LeBon   appreciated   the  depth   of   the                                                                    
presentation  and explanation  of the  bill. He  asked if  a                                                                    
bank  originated a  preferred  marine  mortgage through  the                                                                    
Coast Guard  weather the bill  would affect  the transaction                                                                    
in any  way. Mr. Gruening did  not believe the bill  had any                                                                    
impact.  Representative  LeBon  inquired whether  an  unpaid                                                                    
licensing  or permit  fee would  be attached  to a  vessels                                                                     
loan as an unpaid lien.  Mr. Gruening responded that because                                                                    
the license was annual, if  the CFED annual registration was                                                                    
unpaid the  vessel owner fell  under the  regulatory purview                                                                    
of  DMV. He  added that  if the  fisher failed  to keep  the                                                                    
yearly CFED license current  the three-year DMV registration                                                                    
was required.  The yearly fee  would always be  paid, either                                                                    
by  CFED or  DMV. Representative  LeBon pointed  out that  a                                                                    
bank  carrying a  preferred marine  mortgage in  foreclosure                                                                    
would inherit the unpaid fees.                                                                                                  
Co-Chair Johnston asked  the Department of Fish  and Game to                                                                    
review the fiscal note.                                                                                                         
9:24:34 AM                                                                                                                    
DALE    KELLEY,    COMMISSIONER,     CFEC,    JUNEAU    (via                                                                    
teleconference),  reviewed the  zero fiscal  note for  CFEC.                                                                    
She understood that  the fee was a pass  through, similar to                                                                    
the Fishermans Fund and did not affect revenues.                                                                                
LT. JONATHAN  STREIFEL, LT.  WILDLIFE TROOPERS,  DPS, KODIAK                                                                    
(via  teleconference), did  not have  anything to  say about                                                                    
the fiscal note.                                                                                                                
Co-Chair Johnston indicated the  Department of Public Safety                                                                    
fiscal note was zero.                                                                                                           
9:25:40 AM                                                                                                                    
JENNA   WAMSGANZ,  DEPUTY   DIRECTOR,   DIVISION  OF   MOTOR                                                                    
VEHICLES,  ANCHORAGE  (via teleconference),  indicated  that                                                                    
the  bill  imposed  a  change  to  the  fee  structure.  She                                                                    
explained  that under  SB  92 the  DMV  was registering  the                                                                    
vessels every three  years at $24. The new  annual fee would                                                                    
replace  the three  year  fee and  was a  wash  for the  out                                                                    
years.  However, the  bills  effective  date was  January 1,                                                                    
2021 and was  retroactive to the current  year. Because fees                                                                    
would  not be  collected  until January  2021,  there was  a                                                                    
negative impact to the current fiscal year.                                                                                     
9:26:38 AM                                                                                                                    
Co-Chair Johnston OPENED Public Testimony.                                                                                      
9:27:06 AM                                                                                                                    
RACHEL  LORD,  ALASKA  ASSOCIATION OF  HARBORMASTERS,  HOMER                                                                    
(via  teleconference),  spoke  in  support of  HB  185.  She                                                                    
relayed  that  the  association   along  with  a  number  of                                                                    
municipalities recently  passed a  resolution in  support of                                                                    
automatic  registration of  CFEC vessels  with the  DMV. She                                                                    
offered  that  automatic  registration  would  diminish  the                                                                    
bureaucratic burden and create  a single tracking repository                                                                    
for vessels  operating in state  waters. She voiced  that in                                                                    
deference  to the  work  done on  the  bill the  association                                                                    
supported the legislation.                                                                                                      
9:28:18 AM                                                                                                                    
Co-Chair Johnston CLOSED Public Testimony.                                                                                      
9:28:27 AM                                                                                                                    
Representative Wool  understood that there was  a redundancy                                                                    
in  the CFEC  and DMV  databases.  He thought  that was  the                                                                    
reason the bill was waiving  the DMV registration and the $8                                                                    
fee would  go directly to  the CFEC. Mr.  Gruening responded                                                                    
that  Representative   Wool's  summation  was   not  totally                                                                    
accurate. He  explained that the  fee would be  collected by                                                                    
CFEC and  pass through  to the Department  of Administration                                                                    
(DOA) for  the purposes of the  SB 92. In addition,  some of                                                                    
the  fee  was  collected   for  the  Department  of  Natural                                                                    
Resources  (DNR)  Boating  Safety   Program,  which  was  an                                                                    
existing program.                                                                                                               
Representative Stutes  further explained that  the provision                                                                    
in SB  92 required  a duplicative registration.  The fishers                                                                    
had to  register with the  DMV even though they  had already                                                                    
registered  with the  CFEC. Representative  Wool ascertained                                                                    
that SB  92 was created to  collect funds to help  deal with                                                                    
derelict  boats  and  named DMV  as  the  collecting  agency                                                                    
requiring boats to register with  them even though they also                                                                    
had to  register with the  CFEC. He asked  if the fee  of $8                                                                    
was in  addition to  the CFEC fee.  Mr. Gruening  replied in                                                                    
the affirmative.                                                                                                                
Representative  Wool  mentioned  an  exemption  for  certain                                                                    
types of  boats. He surmised  that the boats  were currently                                                                    
paying the DMV fee and were  not required under the bill. He                                                                    
wondered  about how  that  affected  the  bottom line.   Mr.                                                                    
Gruening  responded that  undocumented vessels  under 5  net                                                                    
tons had  been required to  register with the DMV  since the                                                                    
year  2000 under  HB  108  [HB 108  -  Use, Regulation,  and                                                                    
Operation  of Boats  - Chapter  28 SLA  00, 05/11/2000].  He                                                                    
further expounded that HB  185 exempted undocumented vessels                                                                    
from the preexisting SB 92  requirement to register with the                                                                    
DMV twice:  for their  title and  registration. Undocumented                                                                    
vessels  would  be subject  to  DMV  title registration  and                                                                    
registering with CFEC under  the legislation. The documented                                                                    
vessel over  5 tons would  need a CFEC registration  and the                                                                    
US Coast  Guard documentation. Representative Wool  asked if                                                                    
the vessels  still had   to register  with the CFEC  and pay                                                                    
the $8 fee. Mr. Gruening replied in the affirmative.                                                                            
Co-Chair  Johnston reviewed  the  agenda  for the  following                                                                    
HB  185  was  HEARD  and   HELD  in  committee  for  further                                                                    
9:33:57 AM                                                                                                                    
The meeting was adjourned at 9:33 a.m.