Legislature(2015 - 2016)CAPITOL 120
03/19/2015 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| HB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 112 | TELECONFERENCED | |
HB 112-REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG
10:03:07 AM
CHAIR STUTES announced that the only order of business is HOUSE
BILL NO. 112, "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; and
providing for an effective date."
10:04:14 AM
REID HARRIS, Staff, Representative Louise Stutes, Alaska State
Legislature, presented HB 112 on behalf of Representative
Stutes, sponsor. He said HB 112 would: repeal the Alaska
Commercial Fisheries Entry Commission (CFEC); assign the
commission's adjudicatory functions to the Office of
Administrative Hearings [in the Department of Administration];
and transfer the commission's other duties, as well as
employees, to a new commercial fishery entry division within the
Alaska Department of Fish & Game (ADF&G). He noted that last
year Representative Seaton introduced House Bill 386 with the
same language as HB 112 and said a Legislative Budget and Audit
Committee report on the commission is due out this spring.
MR. HARRIS provided a history of the CFEC, stating that in 1973
the Alaska State Legislature enacted the Limited Entry Act (AS
16.43), creating the first comprehensive limited entry program
in the country. The Act created the CFEC as a regulatory body
and quasi-judicial agency to implement and administer the
program. Since its inception the CFEC has limited entry to 68
fisheries (now 67), considered approximately 23,000
applications, and issued over 29,000 fishing permits and vessel
licenses annually. [Paraphrasing from a January 2015 report
prepared by Tom Lawson, Special Projects Coordinator, ADF&G],
Mr. Harris reported that the early period of the commission
through the mid-2000s could be described as a triage situation.
The workload was immense and the backlog of adjudications
daunting and the commission rightly chose cases where the
immediate right to fish was at stake. This could explain a
delay of weeks or months, he said, but likely not the decades
that have passed for some of these cases to be finalized. Since
that time the workload has diminished along with the
commission's output. The commission averaged 115 final
decisions per year from 1982-2006, but over the past two years
the adjudication average dropped to three cases per year.
Currently, there are 28 license applications remaining and few
fisheries are being monitored for limited entry. He drew
attention to a graph included in the CFEC's 2007 annual report
depicting a steady decline in the commission's workload.
Additionally, he noted, the last fishery to enter limited entry
was in 2004.
10:06:47 AM
MR. HARRIS said HB 112 offers a significant cost savings to the
state by deleting the three commissioner positions and creating
a division director position within ADF&G. Section 122 of the
bill provides that all remaining CFEC employees will become
ADF&G employees upon the effective date of the Act. The fiscal
note shows a savings of $425,000 a year, but greater potential
savings and operating costs could be determined as the functions
between the two entities are reviewed and efficiencies
identified given there would be some overlap in the research,
licensing, and information technology sections of ADF&G and the
commission. He drew attention to page 49 of the Lawson report
which presents a table comparing the CFEC exempt positions to
comparable classified service positions. He noted the salaries
for most of the employees would remain essentially the same,
with possibly a step-down of one or two points. He reported
that a legal memorandum [from Alpheus Bullard, Legislative Legal
and Research Services, 2/3/15] states that the moving of exempt
employees into the classified service could be an issue.
However, he continued, there is precedent for this because in
2009 House Bill 63 moved the Council of Domestic Violence from
exempt service into classified service.
MR. HARRIS explained that Section 20 of HB 112 provides that
adjudications currently handled by the commissioners would be
conducted by the Office of Administrative Hearings (OAH), an
independent office with the mission to "provide for the delivery
of high quality adjudication services that ensure fair hearings
conducted in a timely, efficient, and cost-effective manner."
He said the Office of Administrative Hearings usually works with
a timeline of 120 days from when it receives an application to
holding a hearing. The OAH bills on an hourly cycle, while the
CFEC works differently with three full-time commissioners with
salaries. The OAH would bill whenever it is working on an
actual adjudication; the Department of Administration's fiscal
note shows the OAH billing at 375 hours at $165 per hour for a
total of $61,900. Over the years the CFEC's progress through a
large caseload has produced a manageable situation. The sponsor
has been assured by the OAH that it can wrap up the remaining
cases in a timely manner and with a high degree of success.
10:09:10 AM
MR. HARRIS pointed out that CFEC revenue is generated by fees it
collects from commercial fishing permits and vessel licenses.
Total revenue for fiscal year 2014 was $7.8 million, of which
the commission used around $4 million. Under HB 112, revenue
collected from permit fees would go to the Division of
Commercial Fisheries to benefit the resource and the fishermen
who depend on it. Paraphrasing from the Lawson report, he said
there is a clear direct relationship between the operations of
the Division of Commercial Fisheries and the CFEC. The mission
of the Division of Commercial Fisheries is to manage
subsistence, commercial, and personal use fisheries in the
interest of the economy and the wellbeing of the citizens of the
state. The mission at CFEC is to control entry into Alaska's
fishery resources and economic health of commercial fishing. He
maintained that administering limited entry permits under the
ADF&G umbrella would streamline the permitting and licensing
process for fishermen - ADF&G could issue permits from its many
offices around the state, whereas the CFEC issues permits from a
centralized location in Juneau.
MR. HARRIS allowed a number of issues have been brought up with
HB 112. One concern is that it would be like having the fox
guarding the hen house, that there would be lack of separation
between political will and fish policy. The sponsor's feeling
is that the new Division of Commercial Entry would be able to
maintain a high degree of political separation because its
director would be exempt and the Office of Administrative
Hearings would manage the adjudications. Another concern is
brought by the United Fishermen of Alaska (UFA) and relates to
pet capital projects. He stated that if all permits and license
revenue are under the Division of Commercial Entry, all monies
allocated would be for the direct benefit of the fishermen,
whereas now ADF&G can allocate that money where ever it wishes.
Also of concern is that this might affect the Fishermen's Fund.
However, he explained, the Fishermen's Fund is administered
through the Department of Labor & Workforce Development and
funded through CFEC receipts and is unaffected by this bill.
MR. HARRIS summarized by stating that during times of limited
budgetary resources a hard look must be taken at making cuts to
keep vital state services in place. He added that HB 112 would
become effective 90 days after signed into law by the governor.
10:11:57 AM
REPRESENTATIVE JOHNSON moved to adopt Amendment 1, labeled 29-
LS0485\A.1, Bullard, 3/18/15, which read:
Page 11, line 22:
Delete "and quasi-judicial"
Page 13, line 18:
Delete "hearing procedures"
Insert "hearings"
Page 13, lines 21 - 24:
Delete all material and insert:
"(b) An administrative hearing on a contested
case under this chapter shall be conducted by the
office of administrative hearings (AS 44.64.010).
Notwithstanding AS 44.64.060(e), the office of
administrative hearings shall render the final
administrative decision."
Page 13, line 25, through page 14, line 7:
Delete all material.
Reletter the following subsection accordingly.
Page 14, lines 12 - 17:
Delete all material and insert:
"administrative adjudication procedures of
AS 44.62 (Administrative Procedure Act) [DO NOT] apply
to administrative hearings on contested cases
conducted by [ADJUDICATORY PROCEEDINGS OF] the office
of administrative hearings (AS 44.64.010) held under
this chapter. Final [COMMISSION EXCEPT THAT FINAL]
administrative determinations by the office of
administrative hearings [COMMISSION] are subject to
judicial review as provided in AS 44.62.560 -
44.62.570."
Page 32, lines 26 - 27:
Delete "regulations adopted by the department
[COMMISSION] under AS 16.43.110."
Insert "AS 16.43.110(b) [REGULATIONS ADOPTED BY
THE COMMISSION UNDER AS 16.43.110]."
Page 34, line 7:
Delete "department"
Insert "office of administrative hearings"
Page 34, line 16:
Delete "department"
Insert "office of administrative hearings"
Page 34, line 24:
Delete "department"
Insert "office of administrative hearings"
Page 34, lines 27 - 30:
Delete "The show cause hearing shall be
[CONDUCTED BEFORE A QUORUM OF COMMISSIONERS AND SHALL
BE] presided over by a hearing officer appointed by
the office of administrative hearings [COMMISSION] who
shall rule on the presentation of evidence and other
procedural matters."
Insert "The show cause hearing shall be conducted
and a decision shall be issued [BEFORE A QUORUM OF
COMMISSIONERS AND SHALL BE PRESIDED OVER BY A HEARING
OFFICER APPOINTED] by the office of administrative
hearings under AS 16.43.110(b) [COMMISSION WHO SHALL
RULE ON THE PRESENTATION OF EVIDENCE AND OTHER
PROCEDURAL MATTERS]."
Page 35, line 13:
Delete "department"
Insert "office of administrative hearings"
Page 42, following line 16:
Insert a new bill section to read:
"* Sec. 112. AS 44.62.330(a)(27) is amended to
read:
(27) the Department of Fish and Game as to
functions relating to the protection of fish and game
under AS 16.05.871 or commercial fisheries under
AS 16.43;"
Renumber the following bill sections accordingly.
CHAIR STUTES objected for discussion purposes.
10:12:12 AM
MR. HARRIS explained Amendment 1 would change how the OAH makes
a ruling on adjudications. Usually OAH reviews the case and
issues a recommendation to the head of the department for a
final ruling. For tax and revenue cases, however, OAH does
actually issue a final decision. Amendment 1 would make a
language change to empower the OAH itself to make a final
decision on adjudications without the approval or oversight of
the commissioner of ADF&G. Having OAH make the ruling is an
additional step to removing departmental oversight of permit
adjudications. However, having OAH make final decisions on
cases could signal an increase in its workload and therefore a
fiscal note could be required from the Department of
Administration if Amendment 1 is accepted by the committee.
10:13:15 AM
CHAIR STUTES removed her objection. There being no further
objection, Amendment 1 passed.
10:14:01 AM
BRUCE TWOMLEY, Chair and Commissioner, Commercial Fisheries
Entry Commission (CFEC), Alaska Department of Fish & Game
(ADF&G), called attention to the committee packet and CFEC's
March 19, 2015, memorandum to Representative Stutes with the
subject line "CFEC Specific Comments on HB 112 Repeal CFEC;
Transfer Functions to ADF&G (29-LS0485\A)." He began by
addressing the bill in general terms. Regarding the bill's
assigning of duties within the department, he noted that duties
are assigned to the commissioner, the division, and the
department. But, in looking at the bill overall, there are some
instances where the same duties are assigned to two different
entities. Regarding the bill's discussion of a moratorium and
authorization of the commissioner to request a moratorium from
the Board of Fisheries, it is unclear whether the public has a
part in that process and, if so, whether the public to take
requests to the commissioner or to the board. A contrast is
also presented because the commissioner seeking a moratorium is
required to get the approval of the Board of Fisheries, but the
commissioner himself has authority to impose full-bore limited
entry for an indefinite period on a fishery. So, the question
arises as to why the board's approval is needed for a temporary
four-year moratorium. Another provision in the bill addresses
the power to revoke limited entry permits, a power that the
commission has had almost from the inception of the Limited
Entry Act. The bill would assign that power to a single hearing
officer at OAH. However, when creating the [Limited Entry Act]
the legislature thought that this kind of decision was too
momentous to entrust to a single hearing officer and created a
procedure whereby the three CFEC commissioners sit as a whole
and participate in the evidentiary hearing and make the final
decision. Additionally, the bill calls for all current hearings
and proceedings to continue, but the question begged is how that
is to happen. This is because there is no savings clause in the
bill for commission regulations or the body of administrative
law developed by the commission that applies to those
proceedings. There are regulations and a number of decisions
that serve fishermen, helping them get to what they are entitled
to under the Act. It's unclear under this bill what's to become
of that body of control, regulation, and precedent. Regarding
CFEC employees going over to ADF&G, the questions are: Will
they become part of the classified service? Will they be
required to join a union? Will it be subject to a probationary
period?
10:18:05 AM
MR. TWOMLEY then addressed what, in his opinion, will be lost if
HB 112 is passed. Regarding Amendment 1, he said one must
consider what happens if limited entry is put into the
classified service and what happens if the final decision is
entrusted to a single hearing officer at the Office of
Administrative Hearings. One loss will be limited entry's
flexibility as an exempt agency to absorb budget reductions.
For example, there was the time the commission received a mid-
year budget cut applied to all exempt personnel. With its
flexibility, the commission was able to assign reductions in
hours and reductions in salaries to all of its employees to get
through that period. This was done by assigning the
commissioners a 12 percent hit, with the hits reduced going down
to the lower salary schedules. A remarkable thing about the
commission is that, unlike other agencies, someone can be found
at work at almost any time of any day of the week. Even with
that budget crisis, most employees continued to work their
normal hours without quibbling. Another element will be lost.
Commissioners are the final decision makers in the limited entry
commission and they are more than administrative law judges in
the agency because they make the rules, they adopt regulations.
That power to adopt regulations can be very helpful to
fishermen. Fishermen have come before the CFEC to argue that
some of the CFEC's regulations are unconstitutional or unfair.
When commissioners have been persuaded of that, they had the
power to change the CFEC's regulations. But the OAH doesn't
have that power; the OAH doesn't have the authority to modify
the regulations of an agency whose hearing it conducts. Another
loss will be the element of agency expertise; agency expertise
actually serves efficiency. The commissioners know the issues
and know the authority and can more efficiently resolve cases
than can someone who is paid to learn all of this material.
[The Alaska Supreme Court] has described the body of law
governing limited entry as arcane. It is a very specialized
area, few people are really functional in this area, and there
is a lot to be learned to be able to make this work. Drawing
attention to the committee packet, he said the "Bruno case"
demonstrates the CFEC's expertise and is a companion case to the
[Numamta Aulukesti v. State of Alaska, Sup. Ct S-14560/14579
(2015) of which Violet Willson was a party] which is the case
about the grandmother threatened with the loss of some $40,000
of her life savings. Those two cases illustrate the utility of
agency expertise and the ability to step in, do something
timely, and be responsive to the needs of the people before the
commission. Mr. Twomley stated that a threat hangs over limited
entry decisions; it comes from the [indiscernable] cases and the
Cashen cases. If the agency is reversed by the Alaska Supreme
Court, there is a risk that the reversal can be applied
retroactively to re-open previously closed applications and to
allow new applications in a limited fishery long after the
deadline. This holds the possibility of undermining a fishery
on which Alaskans depend for their livelihood. The CFEC has
been able to successfully avoid this happening and the CFEC has
a very good record before the [Alaska] Supreme Court over the
last 20 years. The CFEC has a handle on how to avoid this
happening and he thinks that is one of the reasons why
Recommendation 19 in the Lawson Report states that the current
structure be maintained until the commission can get through at
least the remaining cases out of the 68 originally limited
fisheries. Lastly, he continued, there is the question of speed
in cases where the immediate right to fish is at stake. Those
are the emergency transfers that come up on the eve of every
season. The immediate right to fish is at stake - if those
cannot be handled very quickly fishing time will be lost. When
those cases are appealed to the CFEC, the CFEC can turnaround in
a matter of days, not the 120 days allowed for in the Office of
Administrative Hearings. The [Aulukesta] case is an example of
the commission being able to intervene on very short notice and
provide some timely relief, and to actually make relief
available under the system. This system is complicated to
penetrate, understand, and apply, but it is something that the
CFEC is practiced in doing and the CFEC has been able to serve
fishermen.
10:24:37 AM
BENJAMIN BROWN, Commissioner, Commercial Fisheries Entry
Commission (CFEC), Alaska Department of Fish & Game (ADF&G),
stated that HB 112 is a complex bill and Amendment 1 makes a
very substantive change to the bill. As originally drafted, the
largest ambiguity in the bill was who was making these final
decisions. So, to the extent Amendment 1 assigns the maximum
amount of decision-making power to the Office of Administrative
Hearings, it clarifies what the proposed policy change is. A
new conceptual fiscal note needs to come out for that, however,
because Amendment 1 will massively increase the resources the
OAH has to deploy in order to handle the maximum amount of
decision-making capacity that the amendment seeks to transfer to
that agency. Drawing attention to the current fiscal note, he
pointed out that OAH had to rely on six or seven assumptions in
the fiscal note and those are based on information that OAH was
given by ADF&G about the least amount of decision-making
capacity being transferred to OAH. The provision of Amendment 1
is basically a 180 degree turn from the original bill. The
fiscal notes are very important. The fiscal notes for CFEC are
easy to draft because the CFEC just gets zeroed out, but the
fiscal notes from ADF&G and OAH are incredibly important and the
policy change under Amendment 1 is something that should take a
great deal of time and caution to look at.
MR. BROWN suggested it would be beneficial to everyone involved
if a sectional analysis is provided that entails more than just
a title of each section. He drew attention to an assumption in
the OAH fiscal note that states ADF&G doesn't envision limiting
entry to any new fisheries in the next five years. On its face
that is inconsistent with the statutory duty to consider
petitions to limit fisheries, he argued. Whether it is a
division director or the current independent commission, the
whole basis of the Limited Entry Act is that Alaskans, and non-
Alaskans who are permit holders, have a right to come forward
and say they think there is too much activity going on and it
needs to be limited. So, it is of grave concern to him if a
decision has been pre-judged by someone in ADF&G that the agency
is not going to limit fisheries for five years.
MR. BROWN brought attention to a one-page statement by the CFEC,
noting he has attempted to bring this statement to each
committee member and answer questions one-on-one. He said the
CFEC is an agency in transition. Like everyone else in state
government, the CFEC is in a position where it must scrutinize
how much is being spent on its operations and what value is
being delivered to Alaskans with those scarce funds. Even
though the CFEC generates a significant excess in revenues,
which [under HB 112] would be applied to the operations of the
Division of Commercial Fisheries, that doesn't excuse the CFEC
from the duty to spend those public funds as economically and
cost-effectively as possible. Because the CFEC is an exempt
agency, the commissioners are extremely committed to analyzing
what the CFEC does, how it is done, how much is paid to do it,
and every possible way for how it could be done better. During
the interim, the CFEC will come up with a re-organization plan
to present to the committee and the legislature. At that time
the CFEC will continue to make the case that there is a reason
the CFEC was created independently and that the benefits of the
CFEC remaining independent outweigh the relative costs of that
independence. If those in the agency to which the bill proposes
to transfer the CFEC believe that they are going to be more
efficient and more effective, it will be incumbent upon them to
be very specific about what those efficiencies and
"effectivenesses" will be. Paragraph 3 of the sponsor statement
states that ADF&G can find efficiencies in the research,
licensing, and information technology functions at the CFEC.
That is an inchoate promise to save money, he argued. More
specificity would make that a much more compelling argument and,
if the wisdom of the legislature is to go forward and merge the
CFEC in there, he would hope that it is on the basis of
specific, tangible things and not vague visions of how things
might be one day in the future. He said the CFEC's one-page
statement offers a good synopsis of where the CFEC is at as an
agency. The CFEC can do a lot of things on its own, given its
existing structure, that will assuage many of the sponsor's
concerns, and a look can be taken at how the CFEC can go forward
and continue to provide great service to Alaskans as an
independent agency in the future.
10:30:50 AM
CHAIR STUTES inquired why, if the CFEC knows that as an agency
there are things that could be done more effectively and
efficiently, this wasn't addressed when the bill came out last
year. She said nothing has been done. Two cases were
adjudicated last year and her question is why the CFEC is
waiting.
MR. BROWN said that is a fair question and if he could go back
and do things the way the CFEC has been doing them now over the
past year, he would probably choose to do that. He stated he
did expect this bill to be reintroduced and he met with
Representative Seaton who authored last year's bill and
Representative Seaton did not characterize it as something that
is necessarily a definitive answer to how to fix the problem,
but is one way to go about doing it. He argued that the CFEC
has done some things over the past year. A new website was
launched a few weeks ago. Dialogues with staff have continued
about optimum number studies and monitoring these fisheries that
may be subject to potential limitation going forward. While
that is not as far as long as it should be, he allowed, that
work is something the CFEC has done since House Bill 386 was
introduced at the end of last session. There are some
technological efficiencies that the CFEC should try hard to
implement, including the live-time ability to renew one's permit
on line. There is a difference of views among staff about
whether that is practical or a good idea. After hearing from
commercial fishermen, he is now of the opinion that the CFEC
cannot accept that the difficulties prevent it from doing that.
The CFEC needs to have an easier, user-friendly on-line presence
so that that renewal process isn't burdensome for fishermen.
The bill sponsor has raised the question about why the CFEC
cannot deliver these permit cards in remote locations as was
previously done in Kodiak, and the CFEC needs to solve that
problem. A recommendation in the Lawson Report is that the CFEC
have an executive director because right now it has three quasi-
judicial administrative law judge officers who are also managing
personnel and this has led to a diffusion of decision making in
a manner that has prevented some of these actions taking place.
He said he owns up to this responsibility and should not have
let that happen on his watch and he promises that that will not
be what happens going forward. The CFEC has the capacity to
make these changes and the CFEC needs to do it.
CHAIR STUTES commented she appreciates what Mr. Brown said, but
that Talk is cheap and actions are what is seen.
MR. TWOMLEY stated the CFEC hopes to give action. He said that
last year the CFEC adjudicated collectively 143 decisions, some
of them were very significant, including [Aulukesti]. Two
decisions were made on applications in 2014 and another was
concluded in January 2015. Some interruptions crowded out some
of the other cases that the CFEC could have gotten to, he added.
10:34:43 AM
VERNE RUPRIGHT, Commissioner, Commercial Fisheries Entry
Commission (CFEC), Alaska Department of Fish & Game (ADF&G),
stated that in regard to the CFEC he is a great believer in the
historical analysis of why things are, the focus, the what, the
where, and what was the intent. Historically there was a
tremendous crisis in the fisheries industry in the Territory of
Alaska and early statehood, particularly with salmon which was
one of the drivers of statehood. Every attempt to regulate met
with failure due to the conflict with the federal constitution,
such as challenges on the Commerce Clause. There were also
equal protection problems and discrimination between residents
and nonresidents when the state attempted to lock out
nonresidents. In early 1972, in order to stabilize fisheries,
the Alaska Constitution was put to the voters of the state and
it passed 78 percent to modify Article VIII, Section 15,
providing for the limited entry and the creation of AS 16.43,
the law that governs the CFEC, and then promulgating the CFEC.
On January 10, 1973, then-Governor Egan transmitted a 23-page
letter to Senate President Terry Miller outlining the structure
in the CFEC. The governor and the legislature understood that
neither the state nor the federal constitution prohibited a
state statutory program regulating the access to commercial
fishery so long as the regulatory classifications establishing a
permitting of some people to fish and to exclude others are
reasonably related to valid legislative purpose and are fairly
applied. The Alaska Constitution does not confer on its
citizens a constitutional right to fish. Article VIII, Section
3, reserves fish, wildlife, and waters to the people for the
common use. So, that it is something completely within "our"
authority to do, but in no case prohibits legislative regulation
of that use, nor does the federal constitution permit a
regulatory program which discriminates unreasonably against non-
residents. Close attention must be paid to the constraints
imposed by the Commerce Clause under which a legally sound
limited entry program cannot unreasonably burden or discriminate
against interstate commerce. A regulatory program which
disqualifies non-residents merely to secure an advantage for
residents will fail, as will any clear discrimination.
Interpreting the Commerce Clause in any given situation is a
matter of degree or justification used. The court will look to
the reasonableness of the regulation, which is a type of
scrutiny applied by the federal court where the Alaska Supreme
Court uses a sliding scale. It is a rationally related and
reasonable basis test because it is not a "fundamental right"
that is being dealt with. Prevention of the economic distress
amongst fishermen is almost as certainly a valid purpose for
this, in that the same standards applied for the qualification
of fish in these waters, the regulation stands an excellent
chance of being upheld. The rationale of the limited entry
commission was to establish a regulatory, quasi-judicial
commission to administer a permit system. Moderating who is
permitted to fish and who will be excluded [indisc. - coughing]
legally and practically is a direct legislative function.
However, a full-time regulatory commission can apply general
legislative standards to each as to vessels and permits.
Another advantage is that it is easier to defend legally as long
as the statutory purpose and the standards are valid; any point
of legal tact would be aimed at a particular regulation and not
the statute itself, application of a statutory standard as by
regulation, which the CFEC has the ability to modify and put
into place. The loss of a point or action by the commission
does not jeopardize the valid basic program. When attacks have
come, it's on a regulation and not the entire statutory scheme,
which could overturn the entire notion of limited entry, which
potentially is a risk in the court. The standards of finding a
fact of economic dependence and extent of past participation and
ability and readiness to do so are weighted, transferability is
allowed, permits stay in the hands of families who are dependent
on the dollars derived, and the commission can also choose
fisheries overburdened. Those are all ensconced in the duties
of AS 16.43.100. The Alaska Department of Fish & Game and the
Board of Fisheries have no authority to deal directly in the
economic sense with a decision as to who receives the economic
benefit of the resource. They serve three masters -
subsistence, sports fish, and commercial fish. They do look at
the economics to where the allocations are going to lie. Only
the Commercial Fisheries Entry Commission actually deals with
who, by the point system, by their merit in that point system,
gets to derive the direct economic or dollar benefit out, "and
it stands alone for one of those salient purposes because all of
a sudden you find yourself in a ... department that has a
broader mission and has to serve all the benefit for the maximum
use of Alaskans, that resource." Then the question becomes,
"Which masters do you serve?" These are all potential legal
challenges. The CFEC is charged with that duty and by its
duties of conservation and economic distress, not who gets the
resource under the common use doctrine.
10:41:05 AM
MR. RUPRIGHT noted that a recent article written by U.S.
Congressman Don Young mentions a re-write of the Magnuson-
Stevens Act to ensure it is keeping up with its promise for
making the commercial fisheries of the Alaskan waters
economically viable and beneficial to Alaskans and that Alaskans
can survive on that because it employs nearly 80,000 people in
the state, Alaska is dependent upon it, and it is the biggest
employer in the state. To get to the point of reviewing an
agency or writing an analysis on an agency, it must first be
known why it was created, who created it, and what their purpose
was. As evidenced by Governor Egan's 23-page letter, a lot of
thought was given for the vital role it plays in Alaska. The
legislature put AS 16.43 together and it went into law in 90
days and has been fairly successful so far because the CFEC has
met those court challenges by its reasoned decisions. The CFEC
has the unique ability to look at its regulations and modify
them and avoid traps. This needs to be considered no matter
which way things go and how the CFEC may be reorganized. The
three commissioners and the administrative assistant have had se
discussions in regard to the bill and getting things done.
10:44:06 AM
REPRESENTATIVE KREISS-TOMKINS inquired about the types of
actions that are accounted for in the 143 cases mentioned, such
as whether those were emergency transfers.
MR. TWOMLEY replied that the bulk are transfer cases, and
transfer cases, particularly emergency transfer cases, are the
CFEC's highest priority because the immediate right to fish is
at stake. The CFEC has always considered transfers the highest
priority and they do push aside application cases. The CFEC
found some very significant cases there as the CFEC found that
some of the notices going out of the agency were not telling
fishermen everything they needed to know and weren't securing
fishermen the rights they have under the CFEC's Act and
regulations. So, a big part of it was that the CFEC had to do
quite a bit of analysis to improve those notices and give
direction to the staff who provides that notice. Another big
part of it was the [Aulukesti] case wherein he received a call
from a citizen in a village who said there is something wrong
and the CFEC needs to look at it. The CFEC checked it out and
intervened immediately; the effect of the case was that the CFEC
saved $40,000 of a grandmother's life savings in a village in
Bristol Bay. That was significant to the CFEC and something the
CFEC did by putting everything else aside to get it done. Other
cases include Donald H. Carlson v. State of Alaska, Superior Ct.
3AN-84-5790 appeals, together with appeals from point
determinations and suspensions in the salmon fisheries, and
other transfer cases, as well as some application cases.
10:46:18 AM
REPRESENTATIVE KREISS-TOMKINS asked how many emergency transfers
were included in the143 cases.
MR. TWOMLEY said he estimated about 75 cases.
REPRESENTATIVE KREISS-TOMKINS stated that the question remains
as to why the commission has not managed to bring the case
backlog to zero. While the backlog is low, it doesn't seem to
be getting smaller in recent years. He inquired as to why the
backlog hasn't been worked through.
MR. TWOMLEY responded there have been some interruptions in the
form of the Carlson case and also the CFEC spent time trying to
work on the "quality one decision," which rises to the level of
the Internal Revenue Service, and The CFEC got to a point in
this last year where transfer cases took precedents. The CFEC
is committed to using its best efforts to get through those
remaining cases in 2016, he said, and he thinks the CFEC can do
that. A means of doing that is a recommendation by Tom Lawson
that CFEC hire an executive director to take those
administrative responsibilities away. Long ago the CFEC
eliminated its executive director in response to cost cutting.
It was a situation that worked at a time when the CFEC had more
staff. At this point the CFEC is substantially reduced - in
1986 the CFEC had 41 full-time authorized positions and today
the CFEC has 28. For two years the CFEC went with two
commissioners which spread the agency thin; the CFEC needed an
appointment of a third commissioner to get a quorum to complete
one of the application cases. The CFEC is committed to getting
through the backlog and if an executive director could be had to
take on the administrative responsibilities, he said he believes
the CFEC can achieve final determinations in those cases.
Generally, over the history of the program, he has been the
recipient of a class action in the form of the Carlson case, for
which he was one of the respondents. He has also represented
plaintiffs in class actions suing the state and the federal
government. Those class actions took 30 years at least to
conclude. The work of the commission is more labor intensive,
fact intensive, and complicated. There are different point
systems for almost every fishery that has been limited. It is
more demanding than the work going into those class actions. It
is very labor intensive and takes a lot of time and blocks of
time are needed to produce decisions. But, if the CFEC conducts
the administrative responsibilities by hiring an executive
director, then the blocks of time can be committed to get the
decisions out and that is what the CFEC is pledged to do.
10:50:24 AM
REPRESENTATIVE KREISS-TOMKINS commented that from the testimony
of the commissioners it appears one of the prime arguments for
maintaining the status quo is legal risk associated with moving
everything over to ADF&G and the Office of Administrative
Hearings. He asked whether there are plans to have the
Department of Law or some other outside perspective shed some
light on this.
CHAIR STUTES replied she will have Mr. Harris address that [at a
later time].
10:51:17 AM
CHAIR STUTES requested that the commissioners provide the
committee with a breakdown of the 143 cases as to which type
they were.
MR. TWOMLEY agreed to do so.
CHAIR STUTES inquired as to when the last fishery was limited.
MR. TWOMLEY answered it goes back to 2004.
10:52:18 AM
KEVIN BROOKS, Deputy Commissioner, offered his recognition for
the sponsor's efforts in taking up such a substantive piece of
legislation. He further recognized the significant work and
contribution that the CFEC has made for more than 40 years on
behalf of Alaskan fishermen and for keeping permits in the
state. He said the CFEC seems to have changed and evolved over
those 40 years and is now in a period of having gone from 900
cases to 28 and has not limited a fishery since 2004.
Addressing the question of whether the current structure is
appropriate for the current workload, he said the challenge
before the committee in considering HB 112 is how to maintain
that presence in the event another fishery needs limiting or
continuing to do appeals and issuing licenses. How to maintain
a core level to take on a future body of work? The last few
months have been spent working through some pretty significant
budget challenges given the $3.85 billion deficit. All state
agencies are looking hard at how to streamline, how to do things
more efficiently or consolidate or fundamentally change how an
agency has been doing things over many years. He said ADF&G and
its divisions are actively engaged in that process and plans to
meet in May after the legislative session is over to map out the
next three years because budgets will continue being cut in the
coming years. The department must is strategizing on how to
offer its programs with the least negative impact on the
citizens who rely on what the ADF&G does and it is with that
consideration the department will review HB 112 and what the
legislature is trying to accomplish with it. He said ADF&G
believes it could make this work without service degradation to
commercial fishermen - issuing permits, doing emergency
transfers, and so forth. It is complicated but ADF&G believes
it can make it work, as well as find some improvements. On the
administrative side of things, ADF&G pays bills, does budgets,
has human resource issues, provides desktop support to
employees, and these types of administrative functions could
benefit from being part of a bigger team that could potentially
enhance service delivery. A big part of what CFEC does is
licensing, emergency transfers, and permit transfers, Mr. Brooks
continued, but ADF&G has licensing experience due to the issuing
of recreational hunting and fishing licenses to residents and
non-residents. While that is a different type of licensing,
ADF&G issues about 700,000 pieces of stock annually, generating
about $25 million. Additionally, ADF&G issues about 25,000
commercial crew licenses to crew members on vessels and does
that effectively and efficiently. The CFEC issues about 25,000-
30,000 licenses and permits and transfers. He agreed these are
important and it is necessary to do whatever it takes to put
fishermen in their boats and on the water making a living. The
department will look to its current staff performing licensing
functions and try to make as smooth a transition as possible.
He concurred there would be no impact on the Fishermen's Fund.
The fund has a statutory formula - the contribution is based on
a percentage of the license fees and that is deposited into the
fund. The department also makes a contribution to the
Fishermen's Fund with its commercial crew license revenue, so
that would be an easy thing to accommodate.
10:57:58 AM
REPRESENTATIVE JOHNSON asked whether current statute or
contracting would prohibit the transfer of CFEC employees.
MR. BROOKS understood that the CFEC employees would transfer
into the department and become classified employees. The
movement from exempt status to classified status has been done
before and even if it were to be complicated there is a process
for doing it and a path forward for doing it.
REPRESENTATIVE JOHNSON understood it would be mandatory that
[CFEC] employees became classified].
MR. BROOKS said he would look for a legal interpretation of
that, but his understanding is that all the staff, with the
exception of the executive director or division director, would
be classified.
10:59:29 AM
REPRESENTATIVE KREISS-TOMKINS requested a legal opinion
regarding the CFEC commissioners' concern about upsetting the
"legal applecart" should a precedent be reversed and could be
applied retroactively.
ALPHEUS BULLARD, Attorney, Legislative Legal Counsel,
Legislative Legal and Research Services, Legislative Affairs
Agency, Alaska State Legislature, replied he will review that
and does not know what the likelihood is of that scenario.
11:01:03 AM
MR. HARRIS provided a wrap-up on the bill. Addressing Mr.
Brown's statement that Amendment 1 would need a new and
significantly larger fiscal note because the workload will be
significantly higher than what OAH currently anticipates
handling, he offered his belief that the [current] fiscal note
is accurate. He read from page 2 of the Department of
Administration's fiscal note for $61,900 in fiscal year 2016,
which states: "(1) Section 121 of the bill provides that
litigation and hearings pending at the time the act becomes
effective 'may be continued and completed.' OAH understands
that that the continuing litigation and hearings pending would
be completed under the jurisdiction of OAH and ADFG." He said
he takes this to mean that OAH is already anticipating handling
the adjudications on these cases. In the sponsor's talks with
the department and with OAH, the sponsor has stated that is how
it would be. He allowed the bill was a bit nebulous at first,
which required the amendment as to who would truly be doing it:
what ADF&G would have control over and what OAH would have
control over. Amendment 1 makes it clear that OAH would be
hearing the caseload. He deferred to Mr. Chris Kennedy to
address this further.
11:02:27 AM
CHRIS KENNEDY, Deputy Chief Administrative Law Judge, Office of
Administrative Hearings (OAH), Department of Administration,
said the fiscal note was written on the assumption that the 28
initial, currently pending, permit cases will have reached the
stage by the time of the transfer of litigation to the Office of
Administrative Hearings that the remaining proceedings would
take place in the Alaska Department of Fish & Game. As a
result, OAH did not look closely at the process leading to a
final decision on that class of cases. He offered his belief
that the intent of Amendment 1 is probably to transfer final
decision authority over those cases to OAH and he will have to
go back and look at what that would entail as he is not in a
position to comment on whether that will have an impact on OAH's
fiscal note.
11:03:45 AM
Mr. HARRIS stated the sponsor will be ordering a fiscal note
from the Department of Administration as soon as a copy of the
amended bill is received. He added that he did a disservice to
the commission by stating it adjudicated two cases last year; he
meant to say that the commission handled two permit applications
last year. He concurred that the commission did 143 total
cases, including permit applications, transfer cases, and
emergency transfer cases. It is understandable that emergency
transfers can cause delays and create a spike in workload, he
said, and that some are admittedly complicated. But, these
cases have existed for 25-30 years and this begs the question as
to why HB 112 is necessary to get the CFEC to finalize all of
these cases. He directed attention to Section 121, page 46,
lines 16-21, of the bill which state:
Certificates, orders, and regulations issued or
adopted under authority of a law amended or repealed
by the Act remain in effect for the term issued, or
until revoked, vacated, or otherwise modified under
the provisions of this Act. Contracts, rights,
liabilities, and obligations created by or under a law
amended or repealed by this Act, and in effect on the
effective date of this Act, remain in effect
notwithstanding this Act's taking effect.
MR. HARRIS continued, noting the concern offered by Mr. Rupright
that changing the rules of how limited entry works could open a
Pandora's box of back cases where possibly someone who 30 years
ago did not get a permit could say that the rules for entry have
changed and he/she now wants another shot at this. He related
that he ran this by Mr. Bullard, the drafting attorney, and was
told this still holds - all of the rulings the commission has
done since limited entry began would still stand up.
CHAIR STUTES requested Mr. Bullard to address whether the state
would be opening itself to repercussions from previously
resolved cases or determinations by the CFEC should HB 112 take
effect.
MR. BULLARD answered he is unsure how that would happen. Things
would be different than they were before if HB 112 were enacted,
but he cannot imagine what avenue someone would have to claim
that a previously adjudicated decision should be re-opened.
11:07:34 AM
REPRESENTATIVE KREISS-TOMKINS, in regard to the two permit
applications resolved in 2014, inquired as to how that number
has changed year by year over the last decade.
MR. HARRIS responded by bringing attention to a graph in the
2007 CFEC annual report which has a graph in this regard,
depicting the number of total cases in 1997 at just under 600
and in 2007 at about 115. So, up to 2007 the cases were being
kicked off at a relatively rate; but he doesn't have last year's
report to know what the rate has been over the last decade.
11:08:58 AM
CHAIR STUTES held over HB 112. She announced that public
testimony on the bill will be taken on March 26, 2015.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 112 Support HB 126 Resources Rep't 1973.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB 112 Support HB 126 Intent 1973.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB 112 Fiscal Note ADM.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB 112 Fiscal Note DFG 1.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB 112 Fiscal Note DFG 2.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB 112 Support Egan Transmittal Ltr.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB112 Amendment 1.pdf |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |
| HB112 Oppose Svenson.PDF |
HFSH 3/19/2015 10:00:00 AM |
HB 112 |