Legislature(2015 - 2016)BARNES 124
04/04/2016 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB266 | |
| SB32 | |
| HB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 32 | TELECONFERENCED | |
| *+ | HB 112 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 266 | TELECONFERENCED | |
HB 112-REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG
2:27:22 PM
CO-CHAIR TALERICO announced that the final 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." [Before the
committee was CSHB 112(FSH).]
CO-CHAIR NAGEAK moved to adopt the proposed committee substitute
(CS) for HB 112, Version 29-LS0485\N, Bullard, 3/2/16, as the
working document.
REPRESENTATIVE TARR objected for discussion purposes.
REPRESENTATIVE LOUISE STUTES, Alaska State Legislature, spoke as
the sponsor of HB 112. She explained that Version N is in
response to Governor Walker's Administrative Order (AO) 279,
which moves the administrative and research functions of the
Alaska Commercial Fisheries Entry Commission (CFEC) to the
Alaska Department of Fish & Game (ADF&G). Version N defines
executive compensation for the three CFEC commissioners and
compensation for CFEC employees that are moved from an exempt to
a classified service. Staff salaries would take effect
immediately and commissioner salaries would take effect on
January 1, 2017. She deferred to her aide, Mr. Reid Harris, to
elaborate further on the bill.
REID HARRIS, Staff, Representative Louise Stutes, Alaska State
Legislature, reiterated that [Version N] is in response to
Administrative Order 279. The prior version of HB 112 did much
of what AO 279 accomplished and therefore the bill went down
from about 58 pages to one and a half pages. Version N defines
executive compensation for the CFEC commissioners, setting them
at Range 27A, and changes the commissioners from being on a
monthly rate to a daily, much like what is done for the Board of
Fisheries and Board of Game. Version N also provides that CFEC
employees who were transferred from exempt to classified service
under ADF&G will remain at the same rate of pay. Sections 3 and
4 of Version N are the effective dates.
2:31:26 PM
REPRESENTATIVE SEATON asked whether the bill has any provisions
that are not consistent with the recommendations of the
legislative audit that was performed.
MR. HARRIS responded that the bill is drafted to the
recommendations of the audit. The audit recommended that over a
three-year period the commissioners go to less than 15 hours a
week without benefits. The sponsor felt, however, that due to
the administrative order being such a shock to the commission it
would be unfair to ask them to go to less than 15 hours a week
in such a short timeframe and would not give the commission time
to get its house in order. So, the bill adjusts their pay rate
from a monthly to a daily rate and at a future date it would be
a good idea for this body to revisit this and consider putting
different stipulations on the hours of the commissioners' work.
2:32:49 PM
REPRESENTATIVE TARR removed her objection. There being no
further objection, Version N was before the committee.
2:32:55 PM
CO-CHAIR TALERICO opened public testimony.
MARTIN LUNDE, Southeast Alaska Seiners Association, stated that
his association is opposed to anything in HB 112 because it
would help to implement Administrative Order 279, which the
association has severe difficulties with. If done at all, this
should have been done with an executive order rather than an
administrative order. The association cannot in good conscience
support anything that is implementing Administrative Order 279,
which is specifically addressed in Version N. Additionally, the
association has questions about the financial implications of
moving [staff] from exempt to classified and what the long-term
fiscal impacts of that would be. He assumed it would mean
higher rates of overtime pay during licensing and research
functions at the time when fishermen need to have their gear in
the water, because if there are difficulties during that time
there would be higher costs associated with that. Fundamentally
it is frustration over the administrative order and further
implementing it.
2:35:32 PM
REPRESENTATIVE TARR noted the audit results have been under
consideration for some time now. She asked how Mr. Lunde's
organization would have addressed the audit results to provide a
solution had Administrative Order 279 not been put in place.
The conversation had been that a bill would be forthcoming and
that there would be some changes. She asked what could have
been done that would have been more in line with what the
Southeast Alaska Seiners Association might have been expecting.
MR. LUNDE replied that there certainly was room for streamlining
within the agency, which he believes the agency was already
doing. At issue is that the CFEC is funded entirely by
commercial fishing fees. The [fishing industry] pays its own
way, it brings in roughly $7 million and it is roughly $4
million to operate. [Fishermen] get really nervous when there
are elements about that put into danger $1.2 billion worth of
permit values and limited entry itself. Commercial fishing men
and women in Alaska have invested heavily in permits and their
boats; these are small businesses. Streamlining government is
always a good thing, but [fishermen] get really nervous when too
much is taken away from something that they are paying for.
[His association] likes the idea of having competent folks at
the CFEC full time and ready to address the issues that come up.
It is like firemen - they are paid to be there just in case even
though they are not always out there fighting fires. There are
always waves of heavier business times and there are times where
there is going to be some potential buybacks in different
fisheries throughout the state and times in the not-too-distant
future of limiting some fisheries out west. Those are the
things for which the association would like to have a strong,
capable Commercial Fisheries Entry Commission and having three
commissioners there to do the job.
2:38:19 PM
REPRESENTATIVE JOSEPHSON understood the audit recommended the
CFEC not be subsumed into ADF&G. He posited that there would
still, under the bill, be a CFEC.
MR. LUNDE agreed.
REPRESENTATIVE JOSEPHSON inquired whether the fees that Mr.
Lunde talked about would still be collected and, if so, what
would be done with them.
MR. LUNDE answered he is not entirely sure what is going on.
His organization has asked many questions of ADF&G, but has had
a difficult time getting any answers.
REPRESENTATIVE JOSEPHSON asked what the difference is between an
administrative order versus an executive order, as seen by Mr.
Lunde's organization.
MR. LUNDE replied that his organization did not want to see any
of this done in the first place. However, there are steps the
legislature can take to reject an executive order and that would
be through a simple majority vote in a joint session, which is
why an administrative order was probably done. Also, according
to Legislative Legal and Research Services, Administrative Order
279 goes beyond the parameters of an administrative order.
2:41:23 PM
REPRESENTATIVE TARR understood the preference is that none of
this would be happening. But, given the administrative order is
now in place, she inquired whether some of the bill's provisions
would help improve the circumstances relative to what was put in
place with the administrative order.
MR. LUNDE responded that he does not honestly think so,
especially in light of where things may go with an hourly rate
for the commissioners. The bill is really looking to just trim
in the commissioners and that is not something his organization
would like. His organization wants a strong, capable, fully
staffed Commercial Fisheries Entry Commission as it exists now
with all three commissioners.
2:43:04 PM
ROBERT THORSTENSON, Executive Director and Lobbyist, Southeast
Alaska Seiners Association, and lobbyist for Kenai Peninsula
Fishermen's Association, Alaska Bering Sea Crabbers, Armstrong-
Keta, Inc., and Alaska Pacific Environmental Services, LLC,
stated he has talked to everyone he works for in the fishing
industry. He related that he has told the commissioner that "we
would back off on our position opposing this CFEC orders and
these bills that have come flying at us the last couple years if
they could come up with one permit holder, one single permit
holder, and I have yet to find anybody ... of one of the 11,000
permit holders who hold $1.2 billion worth of permits." This is
a special agency, it is not just some agency that is holding
some general funds (GF), and it is an agency that is funded by
his members. His members pay $700,000 a year in fees and do not
mind paying larger fees because they know the general fund has
been short on overall fish and game management. While his
members love ADF&G, ADF&G houses personal use, sport, wildlife
viewing, charter, commercial, and hunting, so it has a lot of
different functions. He reported that former state legislator
Clem Tillion has urged that the CFEC not be merged into ADF&G,
because the CFEC needs to be separate. There may still be a
couple of commissioners and one secretary remaining and no
research or other functions.
MR. THORSTENSON pointed out that recently the harvest in state
waters in the Bering Sea went from 0 to 36 million pounds of cod
and the fishery is going to get closed three weeks early this
year. It will probably be at a level of 50-100 million pounds
within the next couple years of a new state waters fishery.
Fishing will be expanding into areas that are going to be really
hard to deal with. The weakening of CFEC by sliding it over to
ADF&G "is going to hamper us in all of our abilities for all of
our new state waters fisheries; we've got hundreds of boats in
state water fisheries in the gulf that have not been put under a
system yet." This system is a special system, it is a special
agency. There is not another one like it in the world. Every
other state that has limited entry, every other state that has
some type of a management plan, does not have the same type of
constitution that Alaska has. That fragile, constitutionally
protected privilege of Alaskans to commercially harvest salmon
is threatened by AO 279 and goes far, far deeper and further and
far more destructive than the audit itself was.
MR. THORSTENSON charged that to add credence to an
administrative order that literally plucked a bill out of this
body and moved it over to the governor's office without any
public discourse when the entire board of United Fishermen of
Alaska was in town, if that is the way that this body decides to
conduct business with the rest of the industries in the state,
bar the doors. This is a huge mistake, this bill was a mistake
in the first place. While he appreciates the intent of cutting
the budget, there are some places where the cutting is too deep
and is putting at risk a huge system with the state's largest
employer. Currently the fishing industry is putting in about as
much tax as any other industry in the state.
2:47:18 PM
REPRESENTATIVE TARR addressed Mr. Thorstenson's statement that
ADF&G has many other duties besides commercial fishing. She
asked if Mr. Thorstenson's concern is that once the positions
are transferred to ADF&G they may then be diluted by having to
do other work or would somehow be influenced by the overall
department direction that could be in conflict with what would
otherwise have happened.
MR. THORSTENSON answered that maybe the intent here is to
unionize more state employees. What has made the CFEC a special
commission, a stand-apart commission, is that it is sitting on a
$1.2 billion existing permit bank. The members that he has in
Southeast Alaska are 30 percent Sealaska shareholders and they
own permits that fluctuate between $200,000 and $300,000 apiece.
Many Native Alaskans need an attorney just to look after their
own business, their own permit, and their own boat because it is
worth more than any other asset they have. They see their fees
paying two or three commissioners, who are extremely sharp
attorneys, to make sure this system stays afloat, because this
is the most tenuous, very carefully constitutionally balanced
system of its kind in the world. United Fishermen of Alaska
voted against this 33-0. Out of 11,000 Alaskan permit holders
he has yet to find one single permit holder who supports AO 279
or any version of any of these CFEC bills.
2:49:45 PM
BEN BROWN, Commissioner, Commercial Fisheries Entry Commission
(CFEC), said Version N of HB 112 is vastly simpler than the bill
as introduced. The debate that has started to happen does not
really address the four corners of this version of the bill.
The larger picture is that last year "we were gravely concerned
with what HB 112 would have done in its original form." During
the interim the audit results were released and the big takeaway
from the audit was that CFEC should continue to operate as an
independent regulatory quasi-judicial agency. The audit also
said that several of the CFEC's administrative functions could
be transferred over to ADF&G and the CFEC did not contest that,
but one point made on page 13 of the audit is that maintaining
CFEC's organizational structure allows the agency to expand as
necessary without changing statutes or regulations. The audit
also recommends that [the commissioners] be reduced to 15 hours
a week. While he respects the good and thorough job done by the
legislative audit, he sees an internal inconsistency in those
two recommendations.
MR. BROWN thanked Representative Stutes, noting that it is a
conundrum on how to proceed, but Version N of HB 112 threads
that needle quite well. Version N takes the commissioners to an
hourly rate of compensation, which is by definition scalable;
when the work is there the work can be done. Regarding Mr.
Lunde's reference to upcoming buybacks and certainly a future
limitation, he said that if a hard cap of two days a week at 7.5
hours is put into statute and then a limitation goes forward, a
backlog of work for the commissioners would immediately be
created. One of the three seats is vacant and there is no
indication from the governor's office at what point that third
commissioner's seat will be filled. He said he and CFEC
commissioner Bruce Twomley can support Version N because it just
deals with a very specific thing, which is the amount of work
the commissioners are able to do in a manner that is consistent
with the audit's recommendations.
MR. BROWN addressed Section 2 of Version N, saying he does not
know what the practical end result of AO 279 is going to be. He
said communication has been attempted with the commissioner and
deputy commissioner of ADF&G and also some folks at the
Department of Law to give [the CFEC] clarification about what
the practical effects of the administrative order will be. The
clutch of documents that Mr. Harris gave to the committee will
provide some more information but will probably create more
questions than provide answers. Therefore, he does not know
that it is practical if Representative Stutes wants to move
forward with her bill trying to solve one specific targeted
element of the problem to try to find an answer to the larger
debate, because he does not think that is going to happen today
or this week. So, the CFEC commissioners can support Version N
and can talk about the audit and AO 279 or the larger more
complicated things, but he does not know that that is necessary
for the committee to decide to move forward with Version N.
2:53:28 PM
REPRESENTATIVE TARR observed that Version N would provide for
Range 27 and surmised the idea is a daily rate similar to other
boards, which, she calculated, could be a pay cut of 50 percent
or more for an individual commissioner. She inquired whether [a
commissioner] would have to find other work to supplement
his/her income and asked how would a commissioner shuffle the
deck to become available on a full-time basis when work is
available or when there is an emergency situation.
MR. BROWN first pointed to what he thinks is an error on page 1,
line 8, of Version N, stating he thinks "[A]" should be "[a]".
He then replied to Representative Tarr's question about how this
would work, saying that there are other examples of this such as
the Board of Fisheries and the Alaska Public Offices Commission
(APOC). He related the experience of a friend who was appointed
to APOC and discovered the great deal of work involved and
juggling that with her other affairs as an attorney. He said
APOC is a good example of a feast or famine kind of workload.
Going forward the governor would have to have to have his boards
and commissions people carefully look at whom they were going to
appoint to these seats knowing that an appointee could find
himself/herself having to work a full-time-plus job in the event
of a really thorny limitation that just produced an onslaught of
applications for permits. It could not be promised to someone
that there was going to be stability over the course of a four-
year term. That said, there are going to be people who are
interested in this work and who do not have a vested interest in
any commercial business, given that prohibition still remains in
the statute. It would become a personnel matter for future
governors to determine who had the right skill set and also the
right availability of time to be able to function for a full
four-year term in this newly configured model. He said he met
with several of the committee's members last year, as well as
members of the other body, in anticipation of the hearing on
this bill when it was doing a great deal more. In many of those
conversations he suggested going to some sort of part-time
model. So, that is one reason he is in a position to be able to
support this, but it is not going to be one size fits all.
2:57:10 PM
JERRY MCCUNE, President, United Fishermen of Alaska (UFA),
offered his understanding that an administrative order cannot
contain statute, while licensing is in statute. So, it is being
ordered to move the statute people over to ADF&G, which, he
understood, cannot be done under an administrative order, it
must be an executive order. Also of concern to UFA is that the
ADF&G commissioner sits on the [North Pacific Fisheries
Management Council]. Other fisheries are being developed in the
Bering Sea and part of these fisheries will be under the council
because of the quotas. Thus, there will be a big conflict for
the commissioner of ADF&G to make that decision and also do the
licensing and everything else under CFEC, especially if it
becomes limited. Right now a transfer of a permit, if it is
objected to, would have to go from ADF&G over to CFEC and then
back. So, there are two agencies, with one that is specialty
law, which will have to be relied upon to make some of these
decisions. The same thing can be accomplished by leaving the
CFEC where it is and still result in the savings talked about by
the audit. The CFEC has already been cut $650,000 and six staff
people and that will provide more profit to the state, plus $1.3
million is generally given to ADF&G. Everything can be
accomplished that was said by the audit and still keep the CFEC
a separate agency to run the limited entry law under the
constitution and also keep the CFEC separate out of politics.
Throwing the CFEC into the arena of ADF&G will be a big conflict
if there is a limited entry fishery, such as a Bering Sea cod
fishery that will involve quotas.
2:59:45 PM
REPRESENTATIVE TARR remarked that there seems to be a lot of
confusion about AO 279 and it is unclear how it will be
implemented. She asked whether the specific provision in
Section 1 of Version N to move the CFEC commissioners to a part-
time position is acceptable to UFA.
MR. MCCUNE replied that UFA is amenable to making CFEC stay
where it is at and be more efficient, whether that is with one
part-time and one full-time commissioner or three part-time
commissioners, whatever works for CFEC's workload in the future.
3:00:50 PM
CO-CHAIR TALERICO closed public testimony.
REPRESENTATIVE SEATON said he is that first permit holder
[mentioned in Mr. Thorstenson's testimony] because he introduced
a bill to change CFEC in the previous legislature and there are
other permit holders he has talked to that knew the CFEC was a
very inefficient agency. As he sees it, the bill before the
committee would ensure that there is a transfer of personnel in
a way in which they can reasonably work on their daily schedules
instead of having full-time commissioners with not having full-
time duties to do. The committee heard from one of the
commissioners that this is a reasonable way because when there
is more work the commissioners can flex up for the workload.
Also, the bill provides some protection for individuals
transferring from one place to another. If there are legal
questions on what an administrative order can do, he is sure
those will get solved as they cannot be solved here. He does
not see it as a constitutional problem. He said he supports
this bill as a reasonable way of adjusting the work load to the
timeframe of what the CFEC commissioners will be doing and it
follows the recommendations of the legislative audit.
3:03:12 PM
CO-CHAIR TALERICO re-opened public testimony.
STEVEN SAMUELSON stated he fully agrees with the testimony he
has heard today. In his opinion, what is happening with the
CFEC has been in the works since his grandfather and so many
people have paid into the system and worked to have that CFEC
work on their behalf. He is concerned that mixing the CFEC with
ADF&G goes against what so many have worked for. His largest
concern is that the CFEC will get lost in the transition and
will become absorbed somehow within ADF&G so that it is not
seen. He therefore feels that HB 112 is premature. There is
also much concern with some of the other legislation coming
through and those will affect this directly and he wants to see
what will happen with that before changing the CFEC. The CFEC
knows the fishermen, their names, families, and boats.
Regarding the $1.3 billion in the industry, he said this is very
true under the permits, but it is not a huge group of people.
Many fishermen are just that - they own a permit and a boat and
they are floating around on their retirement. They need the
organizations to represent them, although he is here
representing himself as someone working in the industry. He
reiterated that HB 112 is premature.
CO-CHAIR TALERICO closed public testimony after ascertaining no
one else wished to testify.
3:06:34 PM
CO-CHAIR TALERICO offered his appreciation to the testifiers who
mentioned Administrative Order 279. He said he had no knowledge
that the administrative order was coming forward and that for
all intents and purposes it removed the original bill that was
before the committee. He posited that Representative Stutes is
trying to address policy and, while the end result is not known,
if something changes with the administrative order there would
at least be some type of policy in place if the AO continues
forward, regardless of the committee's support or opposition to
that particular administrative order.
CO-CHAIR TALERICO, in response to Representative Olson, said he
will be holding over HB 112.
REPRESENTATIVE JOHNSON said he would like to understand the
relationship between HB 112 and Administrative Order 279 and
what would happen if the bill becomes law and the administrative
order is overturned. He requested that someone from Legislative
Legal and Research Services address the committee at its next
meeting on the bill in this regard.
CO-CHAIR TALERICO noted he sees the sponsor giving confirmation
to the request.
REPRESENTATIVE OLSON also requested the committee be addressed
by someone from the governor's office regarding the rationale.
3:09:28 PM
CO-CHAIR TALERICO held over HB 112.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HCS CS SB 32 Ver N.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Support Letter.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Briefing Paper.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 1.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 2.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 3.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 4.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 5.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 6.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Letter of Support 7.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Resolution.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| CS SB 32 Sectional Analysis.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| SB0032B(1).PDF |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| SB32CS Fiscal Note.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| HB 112 ver P (RES draft CS).pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| HB 112 Sponsor Statement Ver P.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| HB 112 Sectional P.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| HB 112 Explanation of Changes W to P.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| CSHB 266N 4-1-16.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 266 |
| CSHB 266 explanation of changes.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 266 |
| HB 266 Supporting Document - Letter of Support Resident Hunters of Alaska.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 266 |
| CSHB112 ver P 4.3.16 CFEC opposing letter.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| SB 32 LOS Denali Log.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| HB 112 Oppose -UFA Hse Resources 040416.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| HB 112 Support LB&A CFEC Audit.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 112 |
| CSSB 32-RDC Support.pdf |
HRES 4/4/2016 1:00:00 PM |
SB 32 |
| HB 266 Opposing Written Testimony.pdf |
HRES 4/4/2016 1:00:00 PM |
HB 266 |