Legislature(2003 - 2004)
03/09/2004 09:03 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 09, 2004
9:03 AM
TAPES
SFC-04 # 34, Side A
SFC 04 # 34, Side B
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:03 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Ben Stevens
Senator Donny Olson
Senator Lyman Hoffman
Also Attending: JACQUELINE TUPOU, Staff to Senator Lyda Green;
FRANK HOMAN, Commissioner, Commercial Fisheries Entry Commission,
Department of Fish and Game; SUE ASPELUND, Federal Management
Research Coordinator, Office of the Commissioner, Department of
Fish and Game; MARY MCDOWELL, Commissioner, Commercial Fisheries
Entry Commission, Department of Fish and Game; SUE STANCLIFF, Staff
to Representative Pete Kott; LANDA BAILY, Special Assistant, Office
of the Commissioner, Department of Revenue
Attending via Teleconference: From Homer: ED DERSHAM, Chairman,
Alaska Board of Fisheries; From Offnet Sites: BRUCE SCHACTLER; JOHN
NORRIS, President, U-Haul Company of Alaska; MICHAEL BELL,
Representative, Alaska Trucking Association
SUMMARY INFORMATION
SB 288-EMERGENCY CHILD CUSTODY PLACEMENT
The Committee heard from the sponsor and the bill reported from
Committee.
SB 315-ENTRY PERMIT BUY-BACK PROGRAM
The Committee heard from the sponsor, the Department of Fish and
Game, and took public testimony. The bill reported from Committee.
SB 347-GULF OF ALASKA GROUNDFISH MORATORIUM
The Committee heard from the sponsor, the Commercial Fisheries
Entry Commission, and the Alaska Board of Fisheries. The bill
reported from Committee.
HB 347-EXEMPT TAXIS FROM VEHICLE RENTAL TAX
The Committee heard from the bill's sponsor and took public
testimony. One amendment was adopted and the bill was held in
Committee.
SB 273-ASMI BOARD/ SEAFOOD TAXES & ASSESSMENTS
This bill was scheduled but not heard.
CS FOR SENATE BILL NO. 288(JUD)
"An Act relating to temporary custody hearings, and to certain
determinations concerning placement of a child in child-in-
need-of-aid proceedings; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained that this bill "clarifies the language
regarding the findings the court is required to make when a child
is removed from his or her home by the Department of Health and
Social Services."
JACQUELINE TUPOU, Staff to Senator Lyda Green, the bill's sponsor,
communicated that current State law specifies that in order to
determine whether a child's removal from their home is "contrary to
the welfare of the child," a hearing must be conducted within 48
hours of the child's removal. She informed that while State
regulations do not require specific language in this regard,
federal requirements mandate that the judge's ruling must contain
the language "contrary to the welfare of the child." Therefore, she
continued, the purpose of this legislation is to align the State's
language with federal requirements. As a result, she continued, the
State could receive approximately $500,000 in additional federal
funding in FY 05.
Senator Dyson asked whether the legislation would provide any
benefit to the affected children, as he noted that the bill appears
to focus on increasing the State's ability to garner additional
federal funding.
Ms. Tupou responded that the bill would not result in any
substantive changes. She stressed that the timeframe requirement in
which the judge must determine whether the child's removal from the
home is warranted would remain unchanged, and she reiterated that
the bill would require the judge to specify, on the record, that
allowing the child to remain in their home would be "contrary to
the welfare of the child." Therefore, she summarized, this bill
would serve "to clarify a process that is already occurring."
Senator Dyson asked the reason that this seemingly "straight
forward matter" has prompted the development of numerous committee
substitutes.
Ms. Tupou referred the Committee to language in Section 1, page
one, line 14 of the Judiciary committee substitute that reads as
follows.
…During the continuance, the child remains in the temporary
legal {EMERGENCY} custody of the department,….
New Text Underlined [DELETED TEXT BRACKETED]
Ms. Tupou stated that as a result of dialogue between the
Department of Law and the Legislative Legal division, this language
has undergone three revisions ranging from "emergency custody" to
"temporary emergency custody" to "temporary legal custody." She
stated that the language in the Judiciary committee substitute is
acceptable to the aforementioned entities.
Senator Dyson understood, therefore, that this wording issue
required numerous committee substitutes to be drafted.
Ms. Tupou confirmed that numerous drafts of the bill were required
in order to reach a consensus regarding this language.
Co-Chair Wilken stated that while not originally referred to the
Committee, the development of the $500,000 Department of Health and
Social Services fiscal note prompted the bill's referral to the
Committee.
Co-Chair Green moved to report the bill from Committee with
individual recommendations and accompanying fiscal note.
There being no objection, CS SB 288(JUD) was REPORTED from
Committee with fiscal note #1, in the amount of $500,000, from the
Department of Health and Social Services.
SENATE BILL NO. 315
"An Act relating to the administration of commercial fishing
entry permit buy-back programs."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this legislation "relates to the
limited entry fishing permit buy-back program" in that it would
allow the commercial Fisheries Entry Commission "to front fund a
buy-back program if the money is available."
Senator B. Stevens, the bill's sponsor, reported that this bill "is
the product of the Joint Legislative Salmon Industry Task Force."
He noted that the bill would alter statutes to allow the Commercial
Fisheries Entry Commission to implement "a loaded buy-back permit"
program were money available. He shared that current statutes allow
for a fishery levy to be assessed, and, upon completion of an
optimum number study for the permits in that fishery, a permit buy-
back could occur. Continuing, he explained that this legislation
would provide money to accelerate the buy-back process. The funds
provided by this legislation, he noted, could be paid back via
multiple options including an assessment of the remaining permit
holders. He stressed that while this legislation would maintain the
requirement that an optimum number study be conducted, it would
provide a funding mechanism to quicker implement a buy-back if one
were to occur. He pointed out that the legislation has no fiscal
impact as it is "just a management tool" to allow a quicker
process.
Senator Hoffman asked the status of the optimum number of fisheries
permit studies.
FRANK HOMAN, Commissioner, Commercial Fisheries Entry Commission,
Department of Fish and Game, responded that two or three optimum
number studies have been completed and one is currently being
conducted in the Bristol Bay region fishery. He declared that these
studies are very extensive, involve a lot of manpower, and
therefore require a long time to conduct. He stated that due to the
difficulty in managing these studies, one study is conducted at a
time. He assured that a study would be required were a buy-back in
a fishery desired.
Co-Chair Wilken asked whether the funds involved in this
legislation would be general funds or federal funds.
Senator B. Stevens responded that numerous funding options could be
available, including federal funding. He noted that while it is not
the issue with this legislation, other federally funded buy-backs
that have occurred in the State primarily involved fisheries in
which there were depleted stock assessments. Other funding options,
he continued, could be in the form of a federal loan or grant;
however, he opined that a federal loan would be the more likely
because this legislation would address "an economically distressed
region rather than a biologically distressed region." He stated
that no funding source has been identified at this time as this
legislation is just an option that the task force desired to have
in place where a buy-back situation to occur.
Co-Chair Wilken asked for verification that this legislation is the
result of Salmon Task Force efforts.
Senator B. Stevens confirmed. He stated that the Commercial
Fisheries Entry Commission brought the concept to the Salmon Task
Force which then brought the idea forward.
Co-Chair Green asked for further information regarding the current
buy-back program as she noted that the bill analysis indicates that
the current buy-back program structure would be maintained.
Senator B. Stevens explained that the current program requires an
optimum number study to be conducted before a buy-back program is
implemented. In addition, he noted that the Limited Fisheries Entry
Commission has the authority to assess a seven percent "up-front"
assessment on "the permit holder based on their value." He stated
that the assessment is coordinated with the permit holders annual
permit re-application. Continuing, he shared that the assumption is
that the assessed funds would accumulate and allow for permits to
be purchased in order to reduce the number of permits in the
fishery. However, he stated, the issue is that to collect the
amount of funds required would take a long time. Therefore, he
stated that the purpose of this legislation is to provide upfront
funds, make the assessments, and reimburse the fund later.
Mr. Homan concurred.
Senator B. Stevens stated that currently the program must be
sufficiently funded, through the assessment process, before the
buy-back program could occur.
Co-Chair Green understood therefore that in a situation in which
there is the desire to buy-back permits in a fishery, the process
would be required to wait until sufficient funds accumulate to
support it.
Senator B. Stevens concurred.
Co-Chair Green concluded therefore, that the program is currently a
fishery self-assessment program with the Commercial Fisheries Entry
Commission managing the funds that are assessed and collected.
Senator B. Stevens replied that the funds could result from a self-
assessment, a grant, or a loan for instance from the National
Marine Fisheries fishing vessel obligation guarantee.
Co-Chair Green asked for confirmation that these options are
currently available.
Senator B. Stevens confirmed that they are.
Senator Olson asked how the optimum numbers study "relates" to
studies conducted by the Board of Fish for the State's fishing
regions; specifically Area M.
Senator B. Stevens responded that he is unsure of how the optimum
number study would relate to a situation wherein there is an
allocation conflict between various regions. He stated that the
optimum number study is unique to a fishery and is a gauge for
determining the economic output, the number of participants, and
the number of sustainable participants in the future.
Mr. Homan stated that while he is unsure how the optimum numbers
study would relate to regions such as Area M, the Bristol Bay
optimum study survey, for instance, would review historical catch
records on the resources, as well as the economic value of the
fisheries and the number of vessels required to catch that resource
overtime. Then, he continued, the information would be used to
project into the future to estimate the resource and economic
return to the fisherman in that district. He stated that a
complicated series of questions are used to calculate such things
as the minimal number of vessels that would be required to catch
the resource over the next twenty years once the number of the
resource is determined, as well as how many permits would be
required to provide an economic return to the fishermen in that
district. He commented that the historical record of the area would
be affected by factors such as whether an area, like Area M might
be open or closed to fishing.
Senator Olson noted that decisions regarding areas such as Area M
are affected by Administrative and Board of Fisheries changes.
Mr. Homan assured that the optimum numbers survey is a long-range
study that could encompass twenty or more years. He voiced
uncertainty as to how a single event, like that occurring in Area
M, would impact the study overtime.
Senator B. Stevens stressed that an optimum number study, which is
the process that determines the economic capacity of a fishery in a
region, must be conducted before a buy-back program could be
implemented. He clarified that a buy-back program would not apply
to the entire industry of a region, but would be limited to a
certain percentage of that fishery's participants in order to
reduce the number to economically sustain and stabilize its
participants. He clarified that the purpose of the buy-back is not
to eliminate the fishery within the region, but is rather to ensure
that the participants desiring to remain in that fishery could be
more economically sustained and "the capacity able to endure the
swings in the market volatility into the future." He reiterated
that the self-assessment program is simply a measure to allow those
who wish to remain in the industry more stability in the future.
Senator Hoffman, noting the "reasonable costs to be offset by the
Department" language located in Section 1, page one, lines 13 and
14 that pertains to the expenses of managing the program, asked
whether a definition or percentage estimation is provided to
clarify what the costs of managing the program might be.
Mr. Homan responded that the costs have not been established at
this time, as he stated, these expenses would be addressed during
the planning of the buy-back program. Continuing, he noted that
this planning and the level of the assessment must adhere to State
regulations.
Senator Dyson stated, for the record, that he has divested himself
of his investments in this area, and therefore, he has no conflict
of interest regarding this legislation. Continuing, he
characterized government efforts to manage the economic component
of fisheries as "well-intended and wide of the mark and quite
ineffective." He speculated that, in the long run, a review of
fishery resource management practices would "indicate that the
limited entry program was a bad idea," and that the industry and
its participants have been "masked from the price signals" that
should have been an indicator of the economics of the fisheries. He
stated that this legislation would "help extricate fishermen from
bad or sub-optimal government interference." He stated that he
would support this legislation, and that he "personally" feels that
government "does very badly in its efforts to manage virtually
every enterprise." He voiced the hope that government would learn
from this experience and refrain from getting involved in the
future.
Co-Chair Wilken inquired regarding the authority through which the
Commission would be authorized "to incur debt" for the program as
specified in Section 1, page two, line one.
Mr. Homan clarified that the Commission could not incur a debt and
that any appropriation to the Limited Fisheries Entry Commission
must be advanced by the Legislature.
Co-Chair Green understood therefore that even were this legislation
adopted, the Legislature would be involved in the process.
Mr. Homan affirmed.
Senator B. Stevens moved to report the bill from Committee with
individual recommendations and accompanying fiscal note.
There being no objection, SB 315 was REPORTED from Committee with
zero fiscal note #1 from the Department of Fish and Game.
CS FOR SENATE BILL NO. 347(RES)
"An Act relating to moratoria on entry of new participants or
vessels into a commercial fishery; relating to vessel permits
for, and the establishment of a moratorium on entry of new
vessels into, state Gulf of Alaska groundfish fisheries; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained that this legislation "would establish a
moratorium in the Gulf of Alaska State waters groundfish
fisheries."
Senator B. Stevens stated that he is sponsoring this bill at the
request of the North Pacific Fishery Management Council (NPFMC),
the Department of Fish and Game, and the Alaska Board of Fisheries.
He noted that components of Sections 2 through 8 would amend
"existing provisions in the Limited Entry Commission to establish
temporary moratoriums on the entrance of new participants into a
fishery." He characterized the change "as a technical correction
and modification to those provisions" as the Board currently has
this authority. He reminded the Committee that while the Commission
is allowed to consider the development of a moratorium to protect a
fishery, they are prohibited from implementing one without
Legislative authorization.
Senator B. Stevens continued that the bill would also establish a
specific moratorium on the Gulf of Alaska groundfish fisheries, as
suggested by the Board of Fisheries and as outlined in Sec. 9, page
seven of the bill. He also noted that the Department of Fish and
Game, the Board of Fisheries, and the Limited Fisheries Entry
Commission have been cooperatively involved in an extensive two-
year task force to align State programs with programs proposed by
the federal fisheries for the areas they manage. He reminded the
Committee that the State has the authority to manage fisheries up
to three miles from shoreline and that the federal government
manages the fisheries between three and 200 miles from shore. He
reiterated that this legislation is an effort to align Alaska's
same stock species management with the federal fisheries management
proposals.
Senator B. Stevens stressed that were the State's moratorium plan
not established at the same time as the federal quota management
plan, there would be a migration to the State's area as it would be
the "last open fishery." He clarified that were a quota plan
developed for the federal three to 200 mile area, and no plan
developed for the State's zero to three mile area, then there would
be "a massive influx into the zero/three fishery which would result
in increased pressure on the stock, increased pressure on the
managers," and a decrease in the historical participants' catch.
Therefore, he stated, this legislation would serve to provide a
check and balance between what is occurring in the management that
is "changing for the positive in the long run" for the
sustainability for the participants, the communities that depend on
the industry, and the resources.
Co-Chair Wilken asked whether a three to 200-mile federal
moratorium is currently in effect for the fisheries identified in
Sec. 9 of this bill.
Senator B. Stevens responded that a federal Licensed Limitation
Program (LLP) moratorium, in which the numbers of participants in
certain fisheries are fixed, has been in effect since 1991.
Co-Chair Wilken asked whether the twenty fisheries identified in
this legislation are included in the federal LLP.
Senator B. Stevens responded that the federal LLP does not pertain
to the bill's fisheries. He stated that this legislation applies to
the groundfish fisheries that are managed by the State, and which,
he clarified, are currently open to new participants. He reiterated
that the purpose of this legislation is "to prevent an influx
during this period of development." He exampled that the
halibut/sablefish quota management plans development process took
ten years, from 1985 through 1995, to finalize. He informed that in
1985 there were, on a statewide basis, 2,700 vessels fishing
halibut and 370 vessels fishing the black cod/sablefish market as
depicted on the spreadsheet he distributed titled "Number of Unique
Vessels - All Areas" (copy on file) that reflects the number of
vessels fishing halibut and sablefish in the State from 1980
through 1999. Continuing, he shared that the number of halibut
vessels increased from the 1985 level to a high of 4,400 in 1991
and the number of sablefish vessels increased to a high of 1,100 in
1994. He voiced that he "wholeheartedly" endorses this legislation
in order to prevent an influx of participants, which could create
"instability." He defined instability as a time when the catch
rates of historical participants declines, the communities
dependent on the industry are negatively affected, and the third
and "most important challenge of adequately managing the biomass,
is increased dramatically when there is an influx in the fishery."
Co-Chair Wilken asked how this legislation would affect the Prince
William Sound longline fishery that is specified in the list.
Senator B. Stevens noted that the Prince William Sound longline
groundfish fishery would include such things as Pacific cod and
rockfish, but not halibut. He stressed that the vessels having a
permit for those fisheries would continue to be able to fish, but
that no new entrants would be allowed during the three-year
moratorium. He stressed the fact that the moratorium implemented by
this legislation would be limited to a three-year period, and were
a long-term or allocation plan developed, it must be ratified by
the Legislature as specified in Sec. 9, subsection (k), page nine,
line 29 through page ten, line three that reads as follows.
(k) During the moratorium established under (d) of this
section, the commission shall, in cooperation with the
Department of Fish and Game and the Board of Fisheries,
conduct investigations to determine appropriate alternatives
for management of entry into Gulf of Alaska groundfish
fisheries in the state. The commission shall submit proposals
to the legislature for legislation or constitutional
amendments necessary to implement the recommendations of the
commission.
Co-Chair Wilken understood therefore, that those who currently hold
permits in the twenty identified fisheries in the bill would be
able to continue to fish, and that no new entrants would be allowed
for the next three years.
Co-Chair Wilken asked the definition of "non-pelagic" and
"pelagic," which are terms used in the list of twenty fisheries.
SUE ASPELUND, Federal Management Research Coordinator, Office of
the Commissioner, Department of Fish and Game, explained that the
term pelagic refers to fish "that swim up in the water column and
non-pelagic are those fish that live on the bottom."
Senator Hoffman understood that this legislation would allow
vessels owners who have never fished to be granted fishing rights,
and he asked why this would be good policy.
Ms. Aspelund clarified this is a vessel-based moratorium rather
than an individual-based moratorium. She explained that a vessel-
based moratorium was determined to be a more effective avenue to
contain growth during the three-year moratorium period. She
stressed that this temporary moratorium program would "freeze" the
fisheries at this point in time to allow for a rights-based system
to be developed by the Board of Fisheries, the Commission, and the
Department of Fish and Game.
Senator Hoffman asked whether it is the intent of the Department in
the future to invest the fishing rights with the skipper and the
crew rather than with the vessel.
Ms. Aspelund replied that the rights of skippers and crew would be
part of the deliberations. However, she stressed that until further
analysis is conducted, it is uncertain as to whether that would be
the final determination.
Senator Hoffman asked the expected timeframe for this
determination.
Ms. Aspelund anticipated that the earliest federal and State
determination date would be prior to the 2006 season; however, she
reminded that the halibut/sablefish plan took ten years to develop.
Senator Hoffman opined that transitioning fishing rights from the
multi-vessel owners to the skippers "and potentially the crew"
might be difficult. Therefore, he asked the Department's opinion on
the matter.
Ms. Aspelund responded that it is too early to make a determination
as the processes are in the initial stages. She reiterated that
skipper and crew rights are a component of the NPFMC analysis that
is currently being conducted. In addition, she noted that the Board
of Fisheries process in also in the early stages, and therefore,
she declared that it would be "premature" to comment. She assured
the Committee that a goal of this restructuring endeavor is to
provide maximum benefits to the fisheries, to residents and local
communities, and to the State.
ED DERSHAM, Chairman, Alaska Board of Fisheries, testified via
teleconference from Homer and noted that while the final plan is as
of yet undetermined, the work group does support a vessel-based
moratorium at this time in order to provide time to address the
issues. He stated that without this moratorium, the State's ability
to address the issue would be difficult, as the State's shoreline
to three-mile fishery would be overburdened as a result of the
federal "rationalization" plan. Overburdening, he attested would
result in serious economic issues and would require conservation
methods to be applied to such fisheries as the Pacific cod.
Senator B. Stevens stressed that contrary to the argument that is
being raised, this bill does "not allocate future rights." He
declared that the Legislature has no desire to enter into the
discussion of future rights allocations as that, he declared, is
the responsibility of the managers of the fisheries such as the
Board of Fisheries and the North Pacific Fishery Management
Council. Continuing, he stressed that there is a process in place
and when a plan is developed, it would be presented to the
Legislature for further action. He avowed that this bill would
provide fisheries managers with a three-year window in which to
address how to protect the resource from an onslaught of
participants into fisheries that are currently sustainable and to
protect the economics of the current participants.
Senator Hoffman agreed that protection of the resource should be
"the driving concern;" however, he worried that utilizing vessel-
rights, as proposed, might provide multi-vessel owners with "the
upper hand," as they could argue that they have the rights. This,
he commented, is his primary concern because it is the crewmen and
the skippers working in this dangerous industry who are risking
their lives rather than the multi-vessel owners who potentially
might never be on any of the vessels. Therefore, he continued,
while vessel-rights might be the mechanism with which to address
the issue initially, the multi-vessel owners should not be provided
an edge "in the hierarchy" when the determination is being made
regarding who should be granted the rights."
Mr. Dersham informed that specifying the vessel-rights approach for
the three-year moratorium period was a decision of the work group
consisting of the DF&G, the Board of Fisheries and the NPFMC. He
stated that this approach was determined to be "the fairest and
only effective way to get our arms around the participants;"
however, he assured that Senator Hoffman's concerns would be
addressed as the process develops.
Senator Dyson, voicing appreciation for Senator Hoffman's concerns,
commented that there is no intention to grandfather in any
component for the future. He commented that it is very difficult
for resource managers to manage a resource if there are a huge
number of very efficient, large vessels harvesting the resource.
Therefore, he agreed that limiting that component would provide a
very effective job of managing the resource. He attested to the
validity of the bill's goal to integrate the State's management
practices of its shoreline to three-mile limit with those of the
federal government's management three to 200 mile area practices.
Continuing, he reiterated that another valid concern is that the
State should maximize the participation of Alaskan fishermen, as he
noted that a great number of the individuals in the fleets are from
outside of the State. However, he allowed that there are US
Constitutional constraints in this regard. Finally, he stated that
the financial interests of individual business people, is an area
that government does not handle very well. He voiced respect for
the NPFMC and that he would support this legislation as he
recognizes three of the legislation's goals to be valid.
Senator Olson asked whether the number of multi-vessel owners is a
significant number to matter in the issue.
Ms. Aspelund replied that one of the real problems with furthering
the analyses is the difficulty in gathering and integrating federal
and State data. However, she noted that preliminary numbers
indicate that during the three-year moratorium period, the
participation calculations are that 1,475 vessels and 1,655 persons
have participated. She estimated that 80 percent of the
participants are State residents.
Senator Olson asked regarding the owners of those vessels.
Ms. Aspelund responded that the Department does not know who the
owners of the vessels are.
Ms. Aspelund corrected, for the record, that as a result of a
technical amendment to align Sec. 9 with other Legislative
moratoriums and general sections of the bill, the committee
substitute before the Committee specifies there to be a four-year
moratorium. Therefore, she clarified that the moratorium would be
in effect from January 1, 2005 through December 31, 2008.
Co-Chair Wilken asked regarding the duration of the federal
moratorium.
Senator B. Stevens clarified that rather than establishing a
moratorium, the federal management plan incorporates an LLP, which
specifies that no more vessel licenses would be issued. Thus, he
continued, the number of licenses is set and licenses could only be
transferred where there is a disaster or a replacement scenario.
SFC 04 # 34, Side B 09:51 AM
BRUCE SCHACTLER, testified via teleconference from on offnet site,
and stated that this is "a convoluted" issue. He disclosed that he
has no involvement in groundfish fisheries and is participating
solely because of personal interest in the matter. He declared that
the participants are "the guys running the boats and catching the
fishing." Historically, he attested, there has not been one
management regulatory regime that has "actually given the crewmen"
or the permit holder "any consideration" beyond "the lip service"
conducted in the analysis stage of the issue. He further opined
that while crewmen rights are discussed and researched; the
politics of the decision makers and the interests that those people
have "in the people who put them there" override the fact that the
people who actually produce the product are "cut out of the deal."
While understanding the reasoning behind establishing a moratorium,
he stated that it would be a temporary rather than permanent fix.
He asserted that the federal fisheries management problem and
"their inability to fix it," is the driving force that has resulted
in the federal government asking the State to address the issue in
a similar manner. He declared, "that people have bought off on
that" and are, therefore, moving this legislation forward.
Mr. Schactler suggested that the State disallow letting fishermen
with federal LLP licenses to fish in State waters. Were this to
occur, he continued, Alaskans who wish to fish in State waters
would be able to do so instead of being prevented from doing so for
four years as proposed in this legislation. He voiced that there
are other options available to protect the biomass as opposed to
"shutting the fishery off" as this legislation does.
Mr. Schactler declared that this bill would not fix the problem, as
there are 2000 LLP license holders who could fish in the State's
waters. He stated that, were this legislation to move forward, some
system must be in place to ensure that State residents would be
provided the ability to fish upon the conclusion of the moratorium
and "the fix" of the federal problem. He stated that this
moratorium does not need to become a permanent thing, although he
declared that every moratorium previously entertained became
permanent. He stressed that the State such not continue to let its
fisheries be run by the federal fisheries and their "failure to
deal with their problem." He urged the Legislature to take care of
the State's fishermen and the State's fisheries, and he stressed
that other solutions to the issue are available. He stated this
rather than correcting the issue, this course of action would not
fix the fishery or provide for State residents, but would instead
allow absentee owners to continue to be involved in it. He noted
that rather than allowing the Department and the Commission to
effectively deal with the issue, this legislation would allow the
Legislature to dictate action. In conclusion, he urged the
Committee to support actions that benefit Alaskan residents and to
not allow this temporary moratorium to become permanent.
Senator B. Stevens pointed out that, rather than being federally
driven, this legislation was brought forward at the request of the
managers of the Department, the Commission, and the NPFMC.
MARY MCDOWELL, Commissioner, Commercial Fisheries Entry Commission,
Department of Fish and Game, stated that the Commission does not
have the statutory authority to mandate a permanent limitation
program upon the termination of the moratorium. She disclosed that
the Legislature had previously authorized the Commission to
implement a vessel-based moratorium in the scallop and herring crab
fisheries; however, she pointed out; however, that no statutory
authority exists for any other fishery. She stressed that it was
not the Commission's decision to implement a vessel-based
moratorium as no analysis has been conducted in this regard;
however, she noted that the Commission does have the authority to
implement a person-based permit moratorium. She communicated that
the Commission would work with the Department to develop a plan for
future limitations, and she stated that were it determined that the
fisheries would be better served by a method other than the current
limited entry permit program, that plan would be presented in the
form of legislation to the Legislature for consideration.
Ms. Aspelund clarified that jig fisheries are exempt from this
moratorium in order to provide entry-level access to that Gulf
groundfish fishery.
Mr. Dersham stated, in response to Mr. Schactler's comments, that
the Board is very mindful of the need to protect its authority over
State's waters and to determine the best solution for the State and
the economies of the region. He stated that the Commission is
cooperating with the other entities to the point at which its
authority continues to be maintained. He noted that the option of
denying LLP license holders the ability to fish in State waters
might not work as almost every Alaskan fisherman also holds an LLP
license.
Senator B. Stevens moved to report the bill from Committee with
individual recommendations.
There being no objection, CS SB 347(RES) was REPORTED from
Committee with fiscal note #1 in the amount of $40,800 from the
Department of Fish and Game.
HOUSE BILL NO. 347
"An Act exempting taxicabs from the passenger vehicle rental
tax; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this legislation would exempt taxicabs
from the ten percent vehicle tax imposed on the lease and rental of
passenger vehicles. The bill, he continued, would also exempt
taxicabs from the definition of what constitutes a passenger
vehicle.
SUE STANCLIFF, Staff to Representative Pete Kott, the bill's
sponsor, concurred with Co-Chair Wilken's analysis of the bill.
Amendment #1: This amendment changes the bill's title to read as
follows.
"An Act exempting taxicabs and certain other motor vehicles
from the passenger vehicle rental tax; and providing for an
effective date."
In addition, the amendment deletes, in Section 1, subsection
(2)(E), the word "or" on page two, line two and inserts language on
page two, line three following the word "taxicab." This language
would read as follows.
(E) a taxicab, [or]
(f) a vehicle that is used exclusively for the hauling or
delivery of cargo;
Furthermore, the amendment inserts new language in Sec. 2, page
two, line seven following "taxicabs" as follows.
IMPLEMENTATION. The Department of Revenue shall refund any tax
collected and remitted to the department under AS 43.52.010 -
43.52.099 on the rental of taxicabs and other rentals that are
exempt from the passenger vehicle rental tax because of the
amendments to AS 43.52.099(2) made by sec.1 of this Act for
rentals made on or after January 1, 2004,…
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Green moved for the adoption of Amendment #1.
Co-Chair Wilken objected for purposes of an explanation.
Co-Chair Green explained that this amendment would expand the
bill's title to include "and certain other vehicles," and would,
therefore serve to exclude certain vehicles used for the hauling
and delivery of cargo. She noted that vehicles exceeding 26,000
pounds are exempt from the tax and this amendment, she stated,
would expand that exemption to include such vehicles as U-Haul
moving vans that exceed 10,000 pounds. She noted that the
Municipality of Anchorage already exempts these vehicles from the
tax. She noted that this issue could either be addressed locally as
Anchorage has done or via this amendment. She noted that there
would be minimum fiscal impact incurred by this exemption.
Ms. Stancliff stated that the bill's sponsor has no objection to
the amendment. Continuing, she agreed that while the issue could be
addressed locally, amending the legislation would be "the simplest
approach." She stated that it was not the intent of the original
bill to negatively impact small businesses.
LANDA BAILY, Special Assistant, Office of the Commissioner,
Department of Revenue, stated that in addition to discussing the
amendment with the both the bill and the amendment's sponsors, she
had conferred with Dan Dickinson, Director, Tax Division,
Department of Revenue. Mr. Dickinson, she shared, stated that this
amendment mirrors the Municipality of Anchorage's exemption
language, and would not present any administrative issues to the
Tax Division.
Co-Chair Wilken removed his objection.
Senator Bunde objected, as he declared that taxes are imposed to
raise money. Therefore, he continued, exempting anyone from a tax
is contrary to the desired affect, particularly in light of the
State's current fiscal direction.
A roll call was taken on the motion.
IN FAVOR: Senator B. Stevens, Co-Chair Green, Senator Olson,
Senator Hoffman, Senator Dyson, and Co-Chair Wilken
OPPOSED: Senator Bunde
The motion PASSED (6 - 1)
Amendment #1 was ADOPTED.
JOHN NORRIS, President, U-Haul Company of Alaska, testified via
teleconference from an offnet site on behalf of the 54 U-Haul
locations in the State. He urged that the amendment be approved as
he noted that the ten percent tax as originally presented was
intended to apply to out-of-state tourists for any passenger car
rental rather than to Alaska residents using such things as rental
trucks. However, he stated that the original bill only exempted
vehicles in excess of 26,000 pounds. He stated that a ten percent
tax on truck rentals would present a hardship for citizens and
businesses.
Senator Bunde pointed out that the passenger car rental tax applies
to everyone renting a car, including Alaskan residents.
MICHAEL BELL, Representative, Alaska Trucking Association,
testified via teleconference from an offnet site and voiced support
for the amendment as he noted, "the vast majority" of trucks used
to transport and deliver goods in cities, such as grocery delivery
trucks, weight less than 26,000 pounds. He stated that were a
business's truck to breakdown, it would be required to rent a
replacement and be subject to the ten percent tax. He stated that
this tax would present a hardship to the company as in most cases
it would be unable to pass the burden of the tax on to the end
user, as rental surcharges are not usually included in contracts.
Co-Chair Wilken stated that this bill would be HELD in Committee.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 10:14 AM.
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