Legislature(2013 - 2014)CAPITOL 120
04/17/2014 08:00 AM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| HB386 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 386 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
April 17, 2014
8:05 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Eric Feige
Representative Lynn Gattis
Representative Bob Herron
Representative Kurt Olson
Representative Jonathan Kreiss-Tomkins
MEMBERS ABSENT
Representative Craig Johnson
COMMITTEE CALENDAR
HOUSE BILL NO. 386
"An Act repealing the Alaska Commercial Fisheries Entry
Commission and transferring its duties to a commercial fisheries
entry division established in the Department of Fish and Game
and the office of administrative hearings."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 386
SHORT TITLE: REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG
SPONSOR(s): RULES BY REQUEST OF FISHERIES
04/16/14 (H) READ THE FIRST TIME - REFERRALS
04/16/14 (H) FSH, RES, FIN
04/17/14 (H) FSH AT 8:00 AM CAPITOL 120
WITNESS REGISTER
LOUIE FLORA, Staff
Representative Paul Seaton
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 386, on behalf of
Representative Seaton, prime sponsor.
BRUCE TWOMLEY, Chair
Commercial Fisheries Entry Commission (CFEC)
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 386.
BEN BROWN, Commissioner
Commercial Fisheries Entry Commission
Alaska Department of Fish & Game
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 386.
KEVIN BROOKS, Deputy Commissioner
Office of the Commissioner
Alaska Department of Fish & Game
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 386.
ANDY HEMENWAY, Administrative Law Judge
Office of Administrative Hearings (OAH)
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 386.
ACTION NARRATIVE
8:05:23 AM
CHAIR PAUL SEATON called the House Special Committee on
Fisheries meeting to order at 8:05 a.m. Representatives Gattis,
Herron, Feige, and Seaton were present at the call to order.
Representatives Olson and Kreiss-Tomkins arrived as the meeting
was in progress.
HB 386-REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG
8:05:49 AM
CHAIR SEATON announced that the only order of business would be
HOUSE BILL NO. 386, "An Act repealing the Alaska Commercial
Fisheries Entry Commission and transferring its duties to a
commercial fisheries entry division established in the Alaska
Department of Fish and Game (ADF&G) and the Office of
Administrative Hearings (OAH)."
8:06:08 AM
CHAIR SEATON pointed to budget constraints. He explained the
purpose of HB 386 is as a consolidating, cost-saving measure,
while at the same time continuing important, necessary services
without harming the management of fisheries. He underscored
that this bill is not an attempt to denigrate the work that is
accomplished by the CFEC [Commercial Fisheries Entry
Commission]. He acknowledged some parallel licensing occurs by
the CFEC and the ADF&G. The proposed consolidation of services
has not been predetermined and instead, the intent of HB 386 is
to start the conversation and identify the ways, means, and
probability for taking this proposed next step. There are two
ways to approach this type of action, by legislative action or
administrative reorganization. He hoped the committee will be
able to review the myriad of changes and that this meeting will
assist in setting the stage for integrating CFEC into a division
within the ADF&G.
8:11:32 AM
LOUIE FLORA, Staff, Representative Paul Seaton, Alaska State
Legislature, stated that the overarching theme of HB 386 is
whether the state should maintain a separate commission, the
Commercial Fisheries Entry Commission to handle limited entry
into fisheries when no new limited entry fishery has been
established in the past 10 years. The CFEC was established
after the 1972 voter approval of the Limited Entry Act, which
the legislature enacted in 1973, creating the limited entry
fishery program and giving the CFEC the responsibility for
administering the program. He reviewed some documents in
members' packets, including the CFEC 2012 Annual Report. He
read the duties of the commission, such that the CFEC serves as
a regulatory and quasi-judicial agency of the state. Three
commissioners are appointed by the governor and confirmed by the
legislature. Commission staff is organized into five sections,
including administration, adjudication, research and planning,
licensing, and information technology.
MR. FLORA said the commission is charged with establishing the
maximum number of permits for limited entry fisheries,
processing limited entry permit applications, adjudicating
claims, issuing annual reports in both limited and open access
fisheries, processing requests for emergency and permanent
transfers, as well as research and coordination with state and
federal management agencies in developing fisheries policy.
MR. FLORA reported that between 1974-2013, limited entry fishery
permits have been issued in 65 commercial fisheries, including
26 salmon fisheries, 19 herring fisheries, 9 crab fisheries, 5
sablefish fisheries, 3 shrimp fisheries, and 3 dive fisheries.
To date, a total of 79 permit types have been issued for 65
limited entry fisheries. He said this summary provides an
historic sweep of the Limited Entry Act and the act's effects on
Alaska's fisheries.
8:14:22 AM
MR. FLORA directed attention to the document entitled, "Changes
in Distribution of Alaska's Commercial Fisheries Entry
Commission Permits, 1975-2013." He noted that since 1975 a
large number of fisheries have been limited through the decades,
ending in 2004. In 2004, the last fishery limited in Alaska was
the Kodiak tanner bairdi pot fishery. He acknowledged future
limited entry fisheries could occur; however, he anticipated
that these would be relatively small fisheries with low
participation numbers.
MR. FLORA reviewed the possibilities for limiting fisheries in
the future, for example, he anticipated that the Togiak seine
herring and some Pacific cod fisheries could become limited
entry fisheries. He suggested one question would be to ask what
staff levels would be required to research and administer any
new fishery limitation. He further asked whether the commission
is the best structure for today's fishery limitations in Alaska.
8:16:32 AM
MR. FLORA directed attention to page 1. In 1998, the CFEC
adjudicated 105 permit cases, 42 transfer cases, and 10
miscellaneous cases. He contrasted this with the cases in 2013,
in which the commissioners adjudicated a total of six cases,
three entry permit applications, two permit transfers, and one
remand from the adjudication section. He further reported that
seven permit applications are pending before CFEC's hearing
officers. After the hearing officer issues a decision on these
seven cases, the cases will be passed to the commission for
review so the commissioners' total future case load is
approximately 30 cases. He compared these figures back to 1998
in which 227 cases were before the commissioners and 363 cases
were before the adjudication staff.
MR. FLORA said the compelling argument is that the case load has
been significantly diminished. In addition, the governor has
not appointed a third commissioner, which has been vacant since
2012. He emphasized that the CFEC has done its job well and
argued its cases successfully. In fact, its cases are not being
rejected by the Alaska Supreme Court. He emphasized that this
demonstrates that the CFEC has succeeded in its mission.
8:18:12 AM
MR. FLORA directed attention to the sectional analysis for HB
386 in members' packets. He explained that a number of changes
in the bill are conforming amendments. He offered to review
each section, if the committee preferred him to do so.
REPRESENTATIVE HERRON asked why fix something that isn't broken.
8:19:04 AM
CHAIR SEATON, in response to Representative Herron, explained
the genesis of the bill. He said that he served on the Alaska
Department of Fish & Game House Finance subcommittee. He
reported that the meetings revealed the need for cuts,
consolidations, and efficiencies. He acknowledged that while
the subcommittee did not propose any cuts to the CFEC, some of
CFEC's funding stems from permits. With respect to the state's
impending fiscal shortfalls, this bill would review whether the
state is being efficient in accomplishing its issuance of
permits and management of fisheries to fulfill its obligations
under Article VIII of Alaska's Constitution. He underscored
that he doesn't question CFEC's job, but given the declining
caseload, the question is whether the CFEC's functions can be
done more efficiently and effectively [by transferring the
function to ADF&G]. He hoped the hearing would reveal whether
the CFEC's hearings are significantly different enough to
require separate hearing officers rather than using the Office
of Administrative Hearings (OAH)'s [administrative law judges].
He offered his belief that tough budgetary decisions will need
to be made next year. Therefore, this bill and today's hearing
are necessary to identify the actual needs in this area. He
envisioned that consolidation efforts such as this could be
difficult to tackle during a legislative session without first
having a thorough discussion in the interim.
8:21:33 AM
REPRESENTATIVE KREISS-TOMKINS concurred with Representative
Herron's caution in changing a commission process that has
worked well. He asked for any projected savings by integrating
the CFEC into the ADF&G. Perhaps a downsizing of CFEC to better
represent the caseload needs would be more appropriate and allow
efficiencies to be found in-house.
MR. FLORA deferred to representatives from CFEC and ADF&G who
could better respond.
8:22:31 AM
CHAIR SEATON indicated that the lateness in introducing HB 386
is related to his intention to initiate discussions. He
cautioned that this bill is not an effort to predetermine a
transfer of the CFEC to ADF&G, but to hold discussions with all
the parties to explore whether this would provide efficiencies
and cost-savings and be in the best interests of the state.
REPRESENTATIVE OLSON asked whether he intends to hold hearings
during the legislative interim.
CHAIR SEATON said he was unsure; it would depend on the progress
the committee makes and responses by CFEC, ADF&G, and the
Department of Law as to the feasibility of a transfer. He
acknowledged that one outcome could be that it is obvious that
it won't work and downsizing may be the best approach, but with
the budget constraints on the horizon he felt it was important
to begin outlining a means for addressing the situation.
8:24:30 AM
BRUCE TWOMLEY, Chair, Commercial Fisheries Entry Commission,
Alaska Department of Fish & Game, appreciated that the sponsor
considers HB 386 a conversation starter. He said that the CFEC
and ADF&G each issue licenses and both are supported by
information technology (IT) so he could understand considering
combining the two functions; however, he offered his belief that
the functions of these agencies are very different. He
explained that HB 386 will set out standards for moving forward,
but two questions need to be considered: first, if it would risk
undermining statutory or constitutional functions. Second, if
it is practical to combine the two agencies, and if it would
save money to do so. He suggested that a comparison of the
functions needs to be taken, but these functions may not be as
parallel as they initially appear.
MR. TWOMLEY said it was suggested that the CFEC's case load in
2013 was reduced to six cases in the past few years. However,
one case that took time in 2013 was the Carlson case [State,
CFEC v. Carlson, 191 P.3d 137 (Alaska 2008). ("Carlson IV")].
He pointed to the caseload, 41 cases from hearing officers and
adjudication staff, with only six from the commissioners;
however, he noted the commissioners have a duty to review each
of the 41 cases and rule on them. Normally, these cases would
have been completed by the end of the year, but extra time
necessary for the Carlson case and his own personal travel
interrupted this review. The result is that this means the 2013
cases will increase to about 40 cases.
MR. TWOMLEY remarked that the CFEC recently received a
maintenance budget while the ADF&G was subject to budget cuts.
He reviewed the CFEC's budget historically to provide a
perspective. He explained that the CFEC is a small, exempt
agency, which allows for creativity outside of union
constraints. Throughout the CFEC's history, it has asked
employees to take leave without pay and forego merit increases.
He pointed out that the commissioners' salaries were initially
set at a level equal to district court judges since the
legislature recognized that the decisions the commission makes
have as much impact as decisions that come from the district
court. Certainly, people feel deeply about their fishing rights
in Alaska. However, the district court judge salaries have
increased over time but not the salaries for the CFEC
commissioners. He provided an example to illustrate how the
commissioner salaries have been held in place, without any merit
increase for 25 years to contribute to a balanced budget.
MR. TWOMLEY noted the CFEC has made major contributions through
employee cuts. The CFEC cut its executive director's position
in order to meet budget cuts; however, such a cut meant the
remaining 28 full-time positions had to absorb additional
responsibility. The administrative functions have essentially
been absorbed and distributed, he said. In 1986, the commission
had 41 full-time positions, which have been reduced to 28
positions; hence, this represents a 30 percent reduction during
that time. He suggested that the commission is performing more
complex work with fewer people, which he compared to being
reduced to all "muscle and bone." He suggested members should
visit the agency to attain a visible understanding. He offered
his belief that this agency may not be the best target for
budget cutting. Adjudications also represent a source of
efficiency within the state, with 68 limited fisheries and 86
Alaska Supreme Court cases addressing applicants for limited
entry permits. For the sake of efficiency it is critical to win
these cases in court. The Alaska Supreme Court held that when
it reverses a commission rule, the reversal can be applied
retroactively to require reopening previously closed
applications and to require the commission to accept new
applications for those who did not apply during eligibility.
8:35:22 AM
MR. TWOMLEY elaborated that what this means is that with every
decision made, the CFEC walks a tightrope. Thus, reversed
decisions could undermine fisheries on which Alaskans rely. He
reported that in the overall 3,000 decisions he has participated
in, no retroactive decisions have occurred. He reported that of
32 appeals since 1996, only two partial reversals have occurred.
In both instances, the CFEC avoided a retroactive application
since the commission was careful to limit adjudications to the
facts affecting the specific individuals. Of the 68 limited
fisheries, only 30 cases are left to be decided. He
characterized the CFEC as being "in the last lap of this
process." He urged members to take great care in reviewing the
adjudication functions. He cautioned against altering the
adjudication process which could hand a cause of action to
attorneys representing applicants. He further cautioned that it
is late in the game for the state to be assuming risks. He
acknowledged the commission has a finite number of cases, but
recommended that the process that currently exists be allowed to
continue forward until the CFEC can achieves final
determinations in the remaining 30 cases. He suggested
proceeding from that point before making any decisions.
8:38:02 AM
CHAIR SEATON asked how many CFEC hearing officers are on staff
and if they are full-time positions.
MR. TWOMLEY answered that the CFEC has two full-time hearing
officers.
8:38:21 AM
CHAIR SEATON suggested the committee will try to determine the
speed in which those cases will be resolved. He understood the
caseload and that CFEC's case law has developed over time
through the Alaska Supreme Court cases. He asked if the
adjudicatory hearings also have case law to assist in
determinations.
MR. TWOMLEY answered that some of the cases have been resolved,
but blind spots exist and the Alaska Supreme Court has reserved
discretion in the area of limited entry fisheries. He reminded
members that CFEC must always be aware of the possibility of a
retroactive application. The late Chief Justice Rabinowitz
advised not to make unnecessary affirmative findings when
deciding factual claims and instead confine holdings to whether
the applicant has met the burden of proof. However, even
employing that approach, the court has discretion, and as recent
as the May case [May, v. State, CFEC, 168 P.3d 873 (Alaska
2007)], the high court can present surprises. He reviewed
specific cases to provide an illustration of how the end results
affect fisheries. For example, he previously shared a copy of
the Kuzmin case with the committee [Kuzmin v. State, CFEC,
M.O.J. No. 1165 (Alaska 2004)]. What was significant about the
Kuzmin case was that while it only affected two applicants, it
actually resolved an entire fishery. Another 13 applicants were
simply pending awaiting the decision, which would determine
whether they would be eligible for their permits. In addition,
since Kuzmin did not appeal, it allowed CFEC to close out an
entire fishery. He emphasized that CFEC is at a manageable
point for the first time since 1990, that it can close out some
fisheries and obtain an end result it can be confident about;
however, the CFEC must still get past the appeals pending before
the Alaska Supreme Court.
8:41:31 AM
BEN BROWN, Commissioner, Commercial Fisheries Entry Commission,
Alaska Department of Fish & Game, hoped members had an
opportunity to review the case Mr. Twomley distributed during
his confirmation hearing. He emphasized the effort that these
CFEC cases take and the thorough attention that is given to
extensive evidence to produce a defensible result. He said
reviewing the decision will better illustrate what [Mr.] Twomley
is saying.
CHAIR SEATON responded that 30 cases are pending, so the
question remains about the time these cases will take, since
they could range from 5 to 30 years, depending on how many cases
are being resolved each year. He said maintaining the budget to
see these cases through may or may not be plausible. He
appreciated the thoroughness CFEC takes and acknowledged the
labor and difficulty involved in the aforementioned Carlson
case. He commended the job CFEC has done, but cautioned that
the legislature is trying to figure out the timeline and how to
balance budget needs.
8:43:46 AM
MR. BROWN considered the big picture context, with a very busy
ADF&G. He suggested that if the decision is made to have ADF&G
perform licensing and information technology, but the
legislature outsourced the hearing officer function to the
Office of Administrative Hearings (OAH), it would still need an
additional level of review after the [administrative law judge]
determination. He wondered if this review would end up on
Deputy Commissioner Brook's desk for a final review during this
busy time. Thus, squeezing the balloon could cause a bulge
elsewhere. He agreed that the committee is aware of the
complexity, which is one reason for the discussion, noting there
is not a wand to be waved to make the decisions go away.
CHAIR SEATON agreed, noting that the complexity will need a full
review without any predetermination on behalf of the committee.
He appreciated CFEC's participation today and hoped the
remaining CFEC's cases will be resolved quickly without delays.
8:46:18 AM
CHAIR SEATON related CFEC's duties that would be transferred
under the bill. He asked for a broad sense of whether it is
feasible to absorb the commission. He said the structure in the
bill may not be appropriate but is a starting point.
8:47:33 AM
KEVIN BROOKS, Deputy Commissioner, Office of the Commissioner,
Alaska Department of Fish & Game, acknowledged the length and
complexity of HB 386. This agency has performed great work. He
recalled the length of time that the Carlson case has taken over
the years. He acknowledged that the workload of the commission
has evolved, but he would not be able to adequately assess how
the functions would fit in ADF&G. He said it may take a fair
amount of time to assess. He acknowledged the similarities in
licensing functions, but the "devil is in the details" so it is
difficult to determine how well this will fit in. He recalled
receiving a call from the Legislative Auditor, Kris Curtis, and
suggested it may be a good approach to have an unbiased third
party ascertain function and whether the functions need to be
changed. He supported having that type of analysis and research
performed and acknowledged that a number of hearing officers
have been consolidated into the OAH, and that the Office of
Administrative Hearings handles a multitude of complex cases.
He said he is interested in how that office views the CFEC and
if the adjudications will fit. He recalled that a decade ago
hearing officers were scattered throughout state agencies and
some inconsistencies existed. He offered his belief, in part,
from the time spent in the Department of Administration that the
consolidated OAH model has worked pretty well.
8:51:07 AM
CHAIR SEATON reiterated the purpose of HB 386 is to put the
issue on the table for discussion. The bill will help provide a
context for an independent third-party audit. He reiterated the
bill does not criticize the CFEC's performance, but is a matter
of budgetary concern. He recalled the adjudication question
that was raised by Mr. Twomley and agreed that it wouldn't be
appropriate to elevate adjudications to division directors;
however, it may be more appropriate for OAH to handle the cases.
MR. BROOKS responded that all state agencies are subject to an
audit and review of financial records, but an audit of the CFEC
would be a functional review.
8:54:24 AM
ANDY HEMENWAY, Administrative Law Judge, Office of
Administrative Hearings, Department of Administration, stated
that the OAH has ten administrative law judges who conduct
hearings for every department. Hearings range in complexity and
include ones where hundreds of millions of dollars are at stake,
like in the [State Assessment Review Board] hearings that will
be going on soon, to cases that involve pensions; PERS; child
support; Permanent Fund Dividends; procurement disputes; taxes;
and recently it started hearings on the Department of Health and
Human Services "fair hearings" caseload related to public
benefits. Thus, the OAH covers a full gamut of subjects and has
very diverse cases. Some are very straightforward and focused
on matters with a simple set of rules, while other cases entail
very complex statutory and regulatory matters with a great deal
of factual complexity. The OAH does not make the final
decision, except in a few narrow areas, and the vast majority of
will have a final review by a commissioner of the department or
to a board or commission that regulates a specific profession.
MR. HEMENWAY said from the discussions today, he understands one
question will be who will make the final decision and how would
that happen. The proposed legislation would effectively remove
the three CFEC commissioners who are charged with oversight of
all final decisions pertaining to the CFEC and transfer that
function to a commissioner or deputy commissioner, although it
is not specifically spelled out in the bill. He pointed out
this represents a significant policy decision as to how the
final decision would be made and by whom. In the OAH process,
the administrative law judge issues a proposed decision, the
parties have an opportunity to respond in writing, and the
proposed decision, along with attached comments are referred to
the final decision-maker who issues the decision, sometimes in
consultation with the administrative law judge, who will assist
in writing the final decision. From a functional hearing
standpoint, he anticipated that CFEC hearings would fall within
the scope of the types of hearings the OAH currently conducts.
8:58:15 AM
CHAIR SEATON said there is not a procedure for a three-judge
panel such as the one used by the 9th Circuit Court of Appeals.
MR. HEMENWAY answered no; that is correct. He highlighted the
process, such that a single administrative law judge takes
evidence, listens to any testimony, and writes the proposed
decision. The proposed decision would then be referred to a
board or commission - which would essentially be a panel - or to
a commissioner, who will make the final decision, although a
commissioner may delegate the final decision process to a deputy
commissioner to exercise policy oversight.
CHAIR SEATON suggested that the ADF&G might create a model to
delegate cases to a director or to the commissioner.
MR. HEMENWAY answered that it would be up to the legislature to
decide. Typically, OAH cases are directed to the commissioner,
but a commissioner would decide whether the matter will be
delegated to a deputy commissioner. In some instances, the
commissioner would delegate the final decision-making authority
to the OAH, in particular, in instances in which the parties
have not objected; however, the final process is determined by
the commissioner.
[HB 386 was held over.
9:02:11 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 9:02
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 386 Sponsor Statement.pdf |
HFSH 4/17/2014 8:00:00 AM |
HB 386 |
| HB 386 Sectional analysis.pdf |
HFSH 4/17/2014 8:00:00 AM |
HB 386 |
| Changes in the distribution of Alaska's Commercial Fisheries Entry Permits.pdf |
HFSH 4/17/2014 8:00:00 AM |
HB 386 |
| Annual report data on CFEC adjudications.pdf |
HFSH 4/17/2014 8:00:00 AM |
HB 386 |
| 2012 CFEC annual report excerpt.pdf |
HFSH 4/17/2014 8:00:00 AM |
HB 386 |