03/12/2013 10:00 AM House FISHERIES

         HB 143-COMMERCIAL FISHING CREWMEMBER LICENSES                                                                      
                                                                                                                                
10:53:24 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON announced that the  final order of business would be                                                               
HOUSE  BILL  NO. 143,  "An  Act  relating to  crewmember  fishing                                                               
licenses."                                                                                                                      
                                                                                                                                
10:53:34 AM                                                                                                                   
                                                                                                                                
DOUGLAS DUNCAN,  Staff, Representative Paul Seaton,  Alaska State                                                               
Legislature, paraphrased from the sponsor statement, which read:                                                                
                                                                                                                                
                                                                                                                                
     HB 143  increases the cost  for a  seven-day commercial                                                                    
     fishing  crewmember license  by  $30, establishing  the                                                                    
     cost at $60.   This increase in  license cost addresses                                                                    
     the growing problem  of multiple consecutive short-term                                                                    
     license purchases.   The seven-day license  was created                                                                    
     by the Legislature as a  way for tourists to experience                                                                    
     commercial fishing  in Alaska.   These  short-term crew                                                                    
     licenses  (also  known  as  dude  licenses)  have  been                                                                    
     successful  in  their  original intent,  but  there  is                                                                    
     concern that  fishing crew members who  would otherwise                                                                    
     purchase  an  annual  license  are  instead  purchasing                                                                    
     numerous consecutive short-term licenses.                                                                                  
                                                                                                                                
     As a  trend, this decreases license  receipt revenue to                                                                    
     the  state and  impacts  the Fishermen's  Fund (a  fund                                                                    
     administered by  the Department of Labor  and Workforce                                                                    
     Development  to  assist  with   the  medical  costs  of                                                                    
     accidents    incurred    during   commercial    fishing                                                                    
     operations).   As a group, those  purchasing short-term                                                                    
     licenses  may  be  less  experienced  on  a  commercial                                                                    
     vessel, and thus more likely  to get injured, placing a                                                                    
     burden  on  the  Fishermen's Fund  without  helping  to                                                                    
     adequately pay for the program.                                                                                            
                                                                                                                                
                                                                                                                                
MR. DUNCAN stated that the  use of multiple licenses had resulted                                                               
in a revenue  loss to the Fishermen's Fund, as  39 percent of the                                                               
license fee went  to the fund.  He estimated  the loss of revenue                                                               
to the  state and the Fishermen's  Fund to be $285,000  since the                                                               
implementation of  the program  in 2005.  He reiterated  that the                                                               
proposed bill  would increase the  cost of the  seven-day license                                                               
to  $60, up  from $30,  to encourage  the purchase  of an  annual                                                               
license.   He stated  that the  current program  was not  able to                                                               
effectively  limit  the purchase  to  one  temporary license  per                                                               
person per year.                                                                                                                
                                                                                                                                
10:56:36 AM                                                                                                                   
                                                                                                                                
CHAIR  SEATON  reminded  the  committee that  there  had  been  a                                                               
presentation about  this from  Alaska Department  of Fish  & Game                                                               
and Department  of Labor  & Workforce  Development.   He directed                                                               
attention to  the charts  from that  presentation.   [Included in                                                               
members' packets]                                                                                                               
                                                                                                                                
10:56:57 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON opened public testimony.                                                                                           
                                                                                                                                
10:57:05 AM                                                                                                                   
                                                                                                                                
MR. JORDAN stated  his support for HB 143,  and offered follow-up                                                               
comments on  HB 110.  Regarding  proposed HB 143, he  offered his                                                               
belief that a  problem did exist when it was  cheaper to purchase                                                               
seven-day  commercial fishing  licenses  in  succession versus  a                                                               
seasonal  license.   He suggested  that the  seven-day commercial                                                               
licenses be priced at $30.00 for residents and $100.00 for non-                                                                 
residents.    Directing  attention  to  page 1,  line  7  of  the                                                               
proposed  bill,  he pointed  out  that  the seven-day  commercial                                                               
license did  not allow  fishing with  a rod and  reel while  on a                                                               
commercial  fishing vessel.   He  expressed his  support for  the                                                               
proposed bill, with  his suggested amendment for a  change in the                                                               
price of the license.                                                                                                           
                                                                                                                                
CHAIR SEATON asked  for clarification about fishing  with rod and                                                               
reel,  and whether  the proposed  $100.00 non-resident  fee would                                                               
cover that aspect.                                                                                                              
                                                                                                                                
MR. JORDAN, in response, offered  his understanding that a seven-                                                               
day commercial  license would  not allow fishing  with a  rod and                                                               
reel  while  on  a  commercial fishing  vessel  whereas,  a  full                                                               
commercial  license would  allow use  of a  rod and  reel on  the                                                               
commercial vessel.  He expressed his support for this aspect.                                                                   
                                                                                                                                
11:02:48 AM                                                                                                                   
                                                                                                                                
JAMES  HERBERT, Commercial  Fisherman, opened  his comments  with                                                               
three questions:   what is the purpose of  the seven-day license;                                                               
who benefits  from this license;  and, what  is fair.   He stated                                                               
that  this idea  had first  been introduced  in the  Alaska State                                                               
Legislature  in  2004,  with  an  effective date  in  2005.    He                                                               
reported  that  this had  been  a  difficult financial  time  for                                                               
commercial  fishing in  Western Alaska,  and that  this idea  had                                                               
been to spur tourist interest  in commercial fishing.  He offered                                                               
his belief  that the implications  for licensing,  liability, and                                                               
insurance  associated with  this  had not  been  considered.   He                                                               
pointed  to the  data which  indicated  a rapid  increase in  the                                                               
sales of non-resident, seven-day  crew licenses, while the number                                                               
of resident  seven-day licenses  had decreased.   He  noted that,                                                               
although ADF&G did not indicate  the districts for these licenses                                                               
purchases, he conjectured  that the majority were  for the short,                                                               
intense  seasons  in Bristol  Bay  and  Cook Inlet,  as  multiple                                                               
shorter  licenses were  less expensive  than  an annual  license.                                                               
Referring  to the  attached fiscal  note,  [Included in  members'                                                               
packets]  he pointed  out  that the  projected  revenue from  the                                                               
proposed bill would  be appreciably more if it  also included the                                                               
sales  of seven-day  commercial licenses  for only  two or  three                                                               
extensions.  He offered his  support for the seven-day commercial                                                               
license  with "a  fair  allocation," for  the  benefit of  Alaska                                                               
residents,  while non-residents  should  be  fairly assessed  for                                                               
participation in commercial fishing.   Offering some guidance for                                                               
pricing, he reminded  the committee that the current  price for a                                                               
seven-day non-resident sport fishing  license was more than twice                                                               
the cost  of a resident  sport fishing  license.  He  stated that                                                               
the limit for a claim to  the Fishermen's Fund had been increased                                                               
to $10,000.   He reported that  39 percent from the  sale of each                                                               
fishing  license was  allocated  to  the fund.    He offered  his                                                               
belief  that an  increase to  the non-resident  seven-day permits                                                               
would  lead to  a decrease  in revenue,  with the  possibility of                                                               
more injuries to less experienced,  non-resident fishermen, and a                                                               
greater  burden  on  the  Fishermen's Fund.    He  expressed  his                                                               
support for the proposed bill.                                                                                                  
                                                                                                                                
11:09:25 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE HERRON asked  if there could be a limit  of two to                                                               
the number of consecutive licenses purchased.                                                                                   
                                                                                                                                
MR. HERBERT  offered his belief  that the points of  sale through                                                               
the large number of vendors would  make it difficult to track and                                                               
to enforce.                                                                                                                     
                                                                                                                                
11:10:33 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS  shared that  he had  also explored                                                               
this  possibility and  had  determined that,  although  it was  a                                                               
great idea, it was "just not logistically feasible."                                                                            
                                                                                                                                
11:11:18 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON closed public testimony.                                                                                           
                                                                                                                                
11:11:50 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON  moved to adopt Amendment  1, labeled 28-LS0520\A.1,                                                               
Bullard, 3/11/13, which read:                                                                                                   
                                                                                                                                
     Page 1, line 1, following "licenses":                                                                                    
                                                                                                                                
     Insert "; and providing for an effective date"                                                                           
                                                                                                                                
     Page 1, following line 10:                                                                                                 
                                                                                                                                
     Insert a new bill section to read:                                                                                         
                                                                                                                                
        "* Sec. 2. This Act takes effect January 1, 2014."                                                                  
                                                                                                                                
11:12:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE HERRON objected for discussion.                                                                                  
                                                                                                                                
CHAIR SEATON  reviewed the  need to  coincide the  effective date                                                               
with the publication of the ADF&G permit books.                                                                                 
                                                                                                                                
11:13:35 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  HERRON removed  his  objection.   There being  no                                                               
further objection, Amendment 1 was adopted.                                                                                     
                                                                                                                                
11:13:50 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS suggested  that  the  rate of  the                                                               
commercial license remain  at $30 for residents and  be raised to                                                               
a rate  of $60.00 for non-residents.   He opined that  it was the                                                               
non-residents  who were  "gaming the  system, right  now, to  get                                                               
these  multiple   permits,  instead  of  getting   the  year-long                                                               
commercial fishing license."   He stated that this  also kept the                                                               
seven-day  price lower  than a  seasonal permit  for an  in-state                                                               
family member.                                                                                                                  
                                                                                                                                
11:15:09 AM                                                                                                                   
                                                                                                                                
KEVIN BROOKS,  Deputy Commissioner,  Office of  the Commissioner,                                                               
Alaska Department of Fish &  Game (ADF&G), in response, said that                                                               
the statutes  would need to be  reviewed, as there was  an annual                                                               
resident fee with a differential,  currently $140, for the annual                                                               
non-resident fee.   He suggested that, for fee  construct, it was                                                               
easier for  a proposed bill  to have  the same fee  for residents                                                               
and  non-residents,  as  the   specified  differential  for  non-                                                               
residents   already  existed.      He  pointed   out  that   this                                                               
differential was reviewed every  three years; therefore the price                                                               
point would also change every three  years.  He reported that the                                                               
new  annual  differential  rate  would be  $190.    He  expressed                                                               
agreement for the lower  residential seven-day commercial permit,                                                               
as  the  records indicated  that  only  17 seven-day  residential                                                               
permits were purchased for a second  period.  He pointed out that                                                               
the  cost for  two  of these  residential  seven-day permits  was                                                               
equal to the  cost for an annual license.   He suggested that the                                                               
cost for  a seven-day commercial  license for both  residents and                                                               
non-residents  be  equal  to  half  of the  cost  for  an  annual                                                               
commercial license.                                                                                                             
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS stated  his disagreement  with the                                                               
increase of  the non-resident  commercial license,  and suggested                                                               
that a  non-resident commercial license  cost equal  to one-third                                                               
of  an annual  commercial license  would be  more equitable,  and                                                               
would be "pegged to that changing price point."                                                                                 
                                                                                                                                
MR.  BROOKS stated  that analysis  had indicated  that the  price                                                               
point  could change  the  behavior  of the  buyer,  and that  the                                                               
fiscal  note  reflected  an  annual price  which  would  be  less                                                               
expensive  than buying  more than  three seven-day  permits.   He                                                               
explained that the fiscal note would  be revised if the prices in                                                               
the proposed bill were changed.                                                                                                 
                                                                                                                                
CHAIR SEATON asked if the committee  wanted to work with ADF&G to                                                               
further  investigate an  option for  the differential  in license                                                               
price between residents and non-residents.                                                                                      
                                                                                                                                
11:20:53 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GATTIS  expressed  her  agreement  with  a  price                                                               
differential between resident and  non-resident licenses, and she                                                               
commented that the seven-day licenses were not always "gamed."                                                                  
                                                                                                                                
11:21:46 AM                                                                                                                   
                                                                                                                                
CHAIR  SEATON   reviewed  the  rate   proposals  that   had  been                                                               
considered as  a result from public  comment.  He asked  ADF&G to                                                               
consider the  differential, and suggest an  appropriate rate that                                                               
would be optimally effective for a seven-day license.                                                                           
                                                                                                                                
[HB 143 was held over.]