Legislature(2015 - 2016)BILL RAY CENTER 208

06/01/2016 03:00 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB4003 MOTOR FUEL TAX TELECONFERENCED
Heard & Held
+= HB4005 MINING: LICENSE,TAX, FEES; EXPLOR. CREDIT TELECONFERENCED
Heard & Held
+= HB4006 FISHERIES: TAXES; PERMITS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 4006                                                                                                           
                                                                                                                                
     "An  Act relating  to  the  fisheries business  tax  and                                                                   
     fishery resource  landing tax; removing the  minimum and                                                                   
     maximum  restrictions on  the  annual base  fee for  the                                                                   
     reissuance  or   renewal  of  an  entry  permit   or  an                                                                   
     interim-use   permit;  relating   to   refunds  of   the                                                                   
     fisheries   business  tax   and  the  fishery   resource                                                                   
     landing tax  to local governments; and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
5:16:30 PM                                                                                                                    
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment 1, 29-                                                                           
GH2460\A.3 (Glover/Nauman, 5/28/16) (copy on file):                                                                             
                                                                                                                                
     Page l, lines 1 - 2:                                                                                                       
     Delete  "removing the minimum  and maximum  restrictions                                                                   
     on"                                                                                                                        
     Insert "relating to the calculation of'                                                                                    
                                                                                                                                
     Page 1, line 7, through page 2, line 3:                                                                                    
     Delete all material and insert:                                                                                            
     "*Section 1. AS 16.43.160(c) is amended to read:                                                                           
     (c) The  annual base fee  for issuance or renewal  of an                                                                   
     entry  permit   or  an   interim-use  permit   shall  be                                                                   
     established  under  this  subsection  [MAY NOT  BE  LESS                                                                   
     THAN $30 OR  MORE THAN $3,000. THE ANNUAL  BASE FEE MUST                                                                   
     REASONABLY  REFLECT  THE DIFFERENT  RA  TES OF  ECONOMIC                                                                   
     RETURN  FOR DIFFERENT  FISHERIES].  In  addition to  the                                                                   
     annual  base fee  established  by  the commission  under                                                                   
     this  subsection,  a  nonresident  shall pay  an  annual                                                                   
     nonresident  surcharge for  the issuance  or renewal  of                                                                   
     one or  more entry permits  or interim-use  permits. The                                                                   
     commission shall  annually determine the annual  fee for                                                                   
     the issuance  or renewal of an entry permit  or interim-                                                                   
     use permit as follows:                                                                                                     
                                                                                                                                
     (1) the annual  base fee for the issuance  or renewal of                                                                   
     an  entry permit  or  interim-use  permit  in a  limited                                                                   
     entry fishery  is 0.4 percent of the estimated  value of                                                                   
     the  entry permit,  subject to adjustment  under  (3) of                                                                   
     this subsection;  if insufficient  data is available  to                                                                   
     determine the  estimated value of an entry  permit or if                                                                   
     no permit  sale values have  been recorded for  the most                                                                   
     recent  three years,  the calculation  of an annual  fee                                                                   
     in a limited  entry fishery may be calculated  as if the                                                                   
     limited  entry fishery were  an unlimited entry  fishery                                                                   
     under  (2) of  this subsection,  subject to  adjustments                                                                   
     under (3) of this subsection;                                                                                              
                                                                                                                                
     (2) the annual  base fee for the issuance  or renewal of                                                                   
     an interim-use  permit in an unlimited entry  fishery is                                                                   
     0.4  percent of  the  estimated average  gross  earnings                                                                   
     for  each permit  in  the most  recent  three years  for                                                                   
     which data are available;                                                                                                  
                                                                                                                                
     (3) the commission  may make an adjustment  to an annual                                                                   
     base fee if                                                                                                                
          (A)more  than one permit  type allows the  directed                                                                   
          harvest of  the same species with the  same gear in                                                                   
          the  same   area  or  if  one  permit   allows  the                                                                   
          directed   harvest  of  the   same  species   by  a                                                                   
          combination of gear in the same area; or                                                                              
          (B)  the amounts  determined under  (1) and (2)  of                                                                   
          this  subsection  would result  in  an annual  base                                                                   
          fee  that  is  not  proportional  to  the  rate  of                                                                   
          economic return  for the fisheries covered  by that                                                                   
          permit [THE  COMMISSION SHALL ESTABLISH  THE ANNUAL                                                                   
          NONRESIDENT  SURCHARGE BY  REGULATION AT  AN AMOUNT                                                                   
          THAT IS  AS CLOSE AS IS PRACTICABLE  TO THE MAXIMUM                                                                   
          ALLOWED BYLAW]."                                                                                                      
                                                                                                                                
Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Wilson read from a prepared statement:                                                                           
                                                                                                                                
     The  fisheries business  tax is paid  by Alaska's  small                                                                   
     boat  fleet   -those  who   work  and  live   in  Alaska                                                                   
     communities.  The fisheries landing  tax is paid  by the                                                                   
     Seattle-based trawl fleet.                                                                                                 
                                                                                                                                
Representative  Wilson  believed  she was  referring  to  the                                                                   
incorrect talking points and requested an "at ease."                                                                            
                                                                                                                                
5:17:11 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:17:29 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Wilson  explained   Amendment  1.  She  noted                                                                   
there had been  a $3,000 cap, which had been  removed [in the                                                                   
CS]. However,  there was  an existing  regulation that  would                                                                   
maintain   fairness.    She   asked   to   hear    from   the                                                                   
administration  about the difference  between the  regulation                                                                   
and the cap.  She believed the smaller boats  were paying the                                                                   
full  amount because  they  were  underneath the  $3,000  cap                                                                   
when  the calculation  was  done.  She furthered  the  larger                                                                   
boats were  capped at  $3,000 and would  be paying  more. She                                                                   
remarked  it meant the  possibility of  "millions of  dollars                                                                   
currently not going."  She wanted to ensure it  was the right                                                                   
move to  make versus an overhaul  of the regulations  and the                                                                   
particular section of the fishing tax.                                                                                          
                                                                                                                                
Representative Edgmon  asked if the department  would address                                                                   
the committee.                                                                                                                  
                                                                                                                                
BENJAMIN  BROWN, COMMISSIONER,  ALASKA  COMMERCIAL  FISHERIES                                                                   
ENTRY  COMMISSION  (CFEC),  DEPARTMENT   OF  FISH  AND  GAME,                                                                   
answered  the   item  under   discussion  was  not   strictly                                                                   
speaking  a tax; it  was a  permit renewal  fee collected  by                                                                   
CFEC.  The fee amount  was not  set in  statute. The  statute                                                                   
required  the fee  to  proportionately  reflect the  economic                                                                   
value of  the fishery. A regulation  adopted by CFEC  set the                                                                   
formula at four-tenths  of one percent of either  the average                                                                   
value of a permit  or in the case of all  interim-use permits                                                                   
not in  limited entry fisheries,  four-tenths of  one percent                                                                   
of the  average gross earnings  in the fishery for  the three                                                                   
years before the  fee category was set. The fee  cap had been                                                                   
put into statute  (with SB 93 sponsored by  former legislator                                                                   
Senator Ben  Stevens) in  2005 when the  cap was  raised from                                                                   
$300.  At  the  time, there  had  been  testimony  by  Cheryl                                                                   
Sutton that the  $300 cap was artificial because  the statute                                                                   
stated  the  base  fee  needed   to  reasonably  reflect  the                                                                   
different rates  of economic return for  different fisheries.                                                                   
He  elaborated the  cap  resulted in  fisheries  with a  very                                                                   
high   economic  return   being   charged   fees  that   were                                                                   
disproportionately  low. He believed it  was fair to  say the                                                                   
statement  would apply  to the  current circumstance  related                                                                   
to  the  $3,000  cap.  He  explained   it  resulted  in  some                                                                   
fishermen not paying $7,000 they would otherwise pay.                                                                           
                                                                                                                                
Mr.  Brown elucidated  the  other side  of  the argument.  He                                                                   
explained  that  merely looking  at  the gross  earnings  for                                                                   
three years  before did not paint  a full picture of  how the                                                                   
fishermen  were  doing in  whether  or  not they  can  easily                                                                   
absorb  a $7,000  increase in  fees. The  current bill  dealt                                                                   
with  a permit  increase and  two different  kinds of  taxes.                                                                   
The items  were all  pieces of a  puzzle that inform  whether                                                                   
or  not removing  the cap  would  be the  fair and  equitable                                                                   
thing to do.  The commission would do whatever  the wisdom of                                                                   
the legislature  designated. He  furthered if the  $3,000 cap                                                                   
was  removed  the   CFEC  would  charge  fishermen   more  in                                                                   
accordance  with  the  four-tenths of  one  percent  formula.                                                                   
Alternatively, if  the cap was  not removed, CFEC  could look                                                                   
at some  of the more nuanced  elements of whether or  not the                                                                   
fees were fair  and if there was a superior  way to calculate                                                                   
them so  it did not unfairly  benefit or hinder  one category                                                                   
of fishermen.                                                                                                                   
                                                                                                                                
BRUCE TWOMLEY,  CHAIRMAN, ALASKA  COMMERCIAL FISHERIES  ENTRY                                                                   
COMMISSION,  DEPARTMENT OF  FISH AND GAME,  added that  there                                                                   
was  a formula  for interim-use  permits  (IUP) in  fisheries                                                                   
not limited  by the state. He  elaborated they were  the only                                                                   
permits that  would be  impacted by the  removal of  the cap.                                                                   
The function  of Section  1 was to  ensure all captains  were                                                                   
subject to the same formula.                                                                                                    
                                                                                                                                
5:22:16 PM                                                                                                                    
                                                                                                                                
Representative  Gara deduced  if four-tenths  of one  percent                                                                   
of  the  value  of for  a  small  fishing  operation  equaled                                                                   
$3,000,  the fisherman  would be paying  a higher  percentage                                                                   
than someone  with a large  factory trawler, which  also paid                                                                   
the $3,000  fee. He asked  for verification that  the factory                                                                   
trawler  would be  paying a  much smaller  percentage of  the                                                                   
value of its vessel than a smaller vessel paying $2,800.                                                                        
                                                                                                                                
Mr. Twomley answered in the affirmative.                                                                                        
                                                                                                                                
Representative Gara  surmised in that instance  a person with                                                                   
a  small vessel  paid a  higher  percentage of  the value  of                                                                   
their operation. Mr. Twomley replied in the affirmative.                                                                        
                                                                                                                                
Representative Gara  asked for verification that  the bill as                                                                   
written  was  trying  to  make  the  situation  equitable  so                                                                   
everyone paid the same percentage.                                                                                              
                                                                                                                                
Mr. Twomley  replied the bill  would subject all  captains in                                                                   
fisheries not limited by the state to the same formula.                                                                         
                                                                                                                                
Representative  Munoz asked  for verification  that within  a                                                                   
certain  class of boat  and fisheries  (e.g. vessels  between                                                                   
60 and  90 feet), one vessel  could catch significantly  more                                                                   
than another vessel but pay the same fee.                                                                                       
                                                                                                                                
Mr. Twomley  answered that  the formula  was only  reflective                                                                   
of average  earnings  by permit  in the fishery;  it did  not                                                                   
attempt   to   measure   capacity.   Representative   Munoz's                                                                   
scenario   was  a   possibility,  which   would  require   an                                                                   
analysis.  He detailed  it  was  possible some  vessels  with                                                                   
lighter capacity  paid more  in fees  than some vessels  with                                                                   
less capacity.                                                                                                                  
                                                                                                                                
Representative  Munoz  provided   an  example  of  a  55-foot                                                                   
vessel with a greater  capacity than a larger boat  in the 60                                                                   
to 90-foot  category. She asked  if the change would  make it                                                                   
possible for the  smaller boat to pay less  than another boat                                                                   
with a smaller catch.                                                                                                           
                                                                                                                                
Mr. Twomley  answered that  it was possible  or the  fees may                                                                   
come  out  the  same depending  on  the  application  of  the                                                                   
formula.                                                                                                                        
                                                                                                                                
Representative  Munoz  stated  that the  fee  was  associated                                                                   
with the captain.  She reasoned some boats had  more than one                                                                   
skipper. She wondered  if the fee would be  assessed multiple                                                                   
times for  the same operation  [if a  boat had more  than one                                                                   
captain].                                                                                                                       
                                                                                                                                
Mr.  Twomley  answered  that the  fee  applied  to  captains;                                                                   
therefore, each captain would pay for the needed IUP.                                                                           
                                                                                                                                
5:26:16 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon   was  concerned  that   the  proposed                                                                   
change would  put into statute  what CFEC did  by regulation.                                                                   
He worried that  it would hinder the commission's  ability to                                                                   
make changes to the regulatory process in the future.                                                                           
                                                                                                                                
Mr. Twomley replied that it was a fair assessment.                                                                              
                                                                                                                                
Vice-Chair  Saddler  summarized   his  understanding  of  the                                                                   
amendment.  He believed  the  amendment  would eliminate  the                                                                   
$3,000 cap on the entry permit fee.                                                                                             
                                                                                                                                
Representative  Wilson interjected that  the cap  had already                                                                   
been  removed.  The  concern  was  the  regulation  could  be                                                                   
easily changed  without going before the  legislature because                                                                   
the  cap had  been removed.  She agreed  the amendment  would                                                                   
tie the commission's hands, which was the purpose.                                                                              
                                                                                                                                
Co-Chair  Thompson  confirmed   that  the  CS  reflected  the                                                                   
elimination of  the $3,000 cap.  The amendment would  put the                                                                   
formula in statute.                                                                                                             
                                                                                                                                
Representative  Edgmon stated that  it captured his  concern.                                                                   
He  believed the  committee was  doing  things on  an ad  hoc                                                                   
basis related  to the bills. He  had spoken with  Mr. Twomley                                                                   
and  he wanted  to  ensure the  committee  was taking  action                                                                   
with  the proper  amount of  analysis and  foresight. He  was                                                                   
uncertain he could "get there" on the amendment.                                                                                
                                                                                                                                
Vice-Chair  Saddler  believed  the  primary  purpose  of  the                                                                   
amendment was to  set the formula for the fee  in statute. He                                                                   
pointed to page  2, line 6, paragraph 3, which  gave CFEC the                                                                   
ability  to adjust the  fee under  certain circumstances.  He                                                                   
asked for an explanation of the conditions.                                                                                     
                                                                                                                                
Mr. Twomley  provided an  example related  to Southeast  crab                                                                   
fisheries CFEC  had limited (i.e.  red king, brown  king, and                                                                   
tanner),  more often  than not  in the recent  past, the  red                                                                   
king crab  fishery had not  opened. Under the  circumstances,                                                                   
when a fishery  did not open, the permit holder  was entitled                                                                   
to  a  refund  if  they  had  paid  the  fee.  The  authority                                                                   
provided  under the  aforementioned section  would allow  the                                                                   
commission  to value  the permit  at  zero during  a year  in                                                                   
which the  fishery would  not open.  The ability would  avoid                                                                   
the  refund procedure  and meant  CFEC could  yield a  fairer                                                                   
evaluation  of  the value  of  a  permit combining  king  and                                                                   
tanner crab fisheries.                                                                                                          
                                                                                                                                
Mr. Brown elaborated  that in his 6 years of  work with CFEC,                                                                   
the research staff  annually prepared and provided  the gross                                                                   
earnings and  average permit  values, provided  commissioners                                                                   
with  detail on  the  fee class  would  be  according to  the                                                                   
formula,  and pointed  out potential  anomalies  such as  the                                                                   
Southeast  king crab  fishery. Almost  all of  the fees  were                                                                   
decided according  to the formula  - CFEC only  deviated from                                                                   
the formula when  there was clear evidence it  was necessary.                                                                   
Based on his  experience, any deviation from  the formula was                                                                   
always  in  the  interest  of  ensuring  fishermen  were  not                                                                   
unduly burdened by a fee they would not be able to pay.                                                                         
                                                                                                                                
Vice-Chair  Saddler  asked if  the  amendment  would make  it                                                                   
more  difficult, impossible,  or  have little  impact on  the                                                                   
commission's ability to operate.                                                                                                
                                                                                                                                
Mr. Twomley  answered that the amendment  accurately captured                                                                   
the formula  portion of  CFEC's regulations.  As long  as the                                                                   
remainder  of the regulations  remained  in place CFEC  could                                                                   
function.                                                                                                                       
                                                                                                                                
Mr.  Brown  referred  to  consultation   with  Representative                                                                   
Wilson when  she had  prepared the  amendment. He shared  she                                                                   
had  been  concerned  about  unduly  tying  the  commission's                                                                   
hands.  He explained  the commission  was already  generating                                                                   
millions  of  dollars  in  excess  of  its  operating  costs.                                                                   
Additionally,  CFEC  had  taken   a  "sizeable  hit"  in  the                                                                   
current  year  and  was  also  downsizing.  He  believed  the                                                                   
concern  would come  into  play  if a  commission  were in  a                                                                   
position  to change  a  regulation and  had  an incentive  to                                                                   
dramatically  increase  the  revenues.  He did  not  believed                                                                   
CFEC's structure  gave incentive to  do that, but he  did not                                                                   
know what the future would hold.                                                                                                
                                                                                                                                
5:32:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Neuman  disputed a statement that  regulations could                                                                   
be  easily  removed.  He  stated  regulations  were  hard  to                                                                   
change and required  30 days of public comment.  He furthered                                                                   
that  statutes  were  very difficult  to  change  because  it                                                                   
required  going  through  the legislature.  He  surmised  the                                                                   
legislature did  not know how  fees changed and did  not know                                                                   
what  was coming  in  the future.  He  opposed the  amendment                                                                   
because of that  issue. He reasoned every time  something was                                                                   
put  in  statute it  made  it  much more  difficult  to  make                                                                   
adjustments. He  referred to Mr. Brown's testimony  that CFEC                                                                   
did not expect  to have to change regulations  for quite some                                                                   
time and  the commission would  try to ensure any  change did                                                                   
not  unduly burden  anyone within  the  fishing industry.  He                                                                   
asked   what   process   the  commission   took   to   change                                                                   
regulations.                                                                                                                    
                                                                                                                                
Mr.  Twomley  answered  that   CFEC  went  through  a  fairly                                                                   
rigorous  process dictated  by  the Administrative  Procedure                                                                   
Act.  The  process  required  notification,  public  hearings                                                                   
(some  near the  Board  of Fish)  and  other. The  commission                                                                   
took the  public comment period  very seriously  and reviewed                                                                   
it prior to taking action.                                                                                                      
                                                                                                                                
Representative  Gara thought the  maker of the  amendment was                                                                   
trying to  reestablish the $3,000  cap; however,  he believed                                                                   
the amendment removed the cap.                                                                                                  
                                                                                                                                
Co-Chair  Thompson clarified  that the  cap had been  removed                                                                   
in the CS. The  amendment addressed "how to  do the brackets"                                                                   
in statute.                                                                                                                     
                                                                                                                                
Representative  Gara  thought  the amendment  simply  removed                                                                   
the cap,  but it actually related  to the brackets.  He asked                                                                   
the commission how the amendment would change the bill.                                                                         
                                                                                                                                
Mr. Brown  answered that in  addition to removing  the $3,000                                                                   
cap [the CS  removed the cap], if the amendment  were adopted                                                                   
it  would put  the four-tenths  of one  percent formula  into                                                                   
statute   (it  was   currently  only   in  the   department's                                                                   
regulations);   therefore,   it   would  require   a   future                                                                   
legislative action  to change the formula. The  formula could                                                                   
currently  be  changed  by  CFEC at  its  own  discretion  in                                                                   
compliance with the Administrative Procedures Act.                                                                              
                                                                                                                                
Representative Gara  asked for verification the  amendment in                                                                   
no way  implemented the  cap. He  asked for confirmation  the                                                                   
cap had been removed in the bill.                                                                                               
                                                                                                                                
Mr. Brown answered in the affirmative.                                                                                          
                                                                                                                                
Representative Gara  asked for a recap of what  the amendment                                                                   
would do.                                                                                                                       
                                                                                                                                
Representative  Wilson explained that  when the cap  had been                                                                   
removed there had  been concern from fishermen  who were fine                                                                   
with the  formula. The  commission currently had  regulations                                                                   
in  place. Although  regulations  were  not easy  to  change,                                                                   
they were  easier to change  than statute. The  fishermen she                                                                   
had   heard  from   felt  more   comfortable  uplifting   the                                                                   
regulations  in place  of  the  cap so  the  small and  large                                                                   
fishermen  would be  treated  equitably  because the  formula                                                                   
would  be equal.  Currently with  the cap  removed, it  would                                                                   
still  be  equal,  but  would take  a  different  process  to                                                                   
change the formula.                                                                                                             
                                                                                                                                
5:37:05 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  if the amendment  had any  fiscal                                                                   
impact.                                                                                                                         
                                                                                                                                
Mr. Brown answered  in the negative. The commission  would be                                                                   
able  to  implement  its fee  structure  with  no  additional                                                                   
staff or fiscal impact.                                                                                                         
                                                                                                                                
Representative  Gara wondered  if  the amendment  would  have                                                                   
any impact on revenue to the state.                                                                                             
                                                                                                                                
Mr. Brown  answered  that the  removal of the  fee cap  could                                                                   
yield  approximately $2.1  million.  Putting  the formula  in                                                                   
statute would  in theory mean  revenue would remain  the same                                                                   
going forward  if average  gross earnings  and permit  values                                                                   
remained the  same. If those  items changed dramatically  and                                                                   
it  became  necessary  to  change   the  four-tenths  of  one                                                                   
percent formula  it would have  to be done legislatively  and                                                                   
not  by  regulation.  The  amendment would  not  have  a  big                                                                   
fiscal  impact. The  removal of  the  cap was  the item  that                                                                   
would result in a $2.1 million positive fiscal impact.                                                                          
                                                                                                                                
Representative  Gara understood  that the  formula was  based                                                                   
on the  average earnings  of a vessel.  He asked  for detail.                                                                   
Mr.  Twomley answered  that it  was the  average earnings  of                                                                   
the permit in  the fishery, which was measured  over the most                                                                   
recent  3-year  period.  The   formula  applied  to  IUPs  in                                                                   
fisheries  not  limited  by  the  state.  The  earnings  were                                                                   
averaged, which provided a figure to plug into fee classes.                                                                     
                                                                                                                                
Representative Gattis  asked if the fishermen  Representative                                                                   
Wilson had heard  from were from the Bristol  Bay region. She                                                                   
asked  if   it  was  a   region-specific  fishery   issue  or                                                                   
encompassed all fisheries.                                                                                                      
                                                                                                                                
Representative  Wilson  replied the  concern  related to  all                                                                   
fishermen. The  amendment was in  response to a  concern that                                                                   
once  the  cap  was  removed,  the  amounts  may  be  changed                                                                   
arbitrarily.  She  believed some  of  the fishermen  she  had                                                                   
spoken with  probably did not know  what it took to  change a                                                                   
regulation.                                                                                                                     
                                                                                                                                
Representative   Munoz  asked   for  clarification   on  fees                                                                   
associated with  permit classes.  She asked for  verification                                                                   
that the fee  pertained to an entire population  of fisherman                                                                   
in a  particular class.  Alternatively,  she wondered  if the                                                                   
fee was directed to a specific boat operation.                                                                                  
                                                                                                                                
Mr. Twomley  answered that  the fee was  derived from  all of                                                                   
the permits  fishing in  a given  fishery. In some  fisheries                                                                   
the  IUPs were  sold  based on  vessel  length  (there was  a                                                                   
cutoff  point). Fees  could  be different  but  it was  still                                                                   
traceable in the average.                                                                                                       
                                                                                                                                
Representative Munoz  stated that her concern  about removing                                                                   
the cap was within  the class of fishery a  vessel was paying                                                                   
the same  fee, but  may have a  different total catch,  which                                                                   
varied a great deal in the fee class.                                                                                           
                                                                                                                                
Mr.  Twomley  answered that  the  fee  was traceable  to  the                                                                   
average of all participants.                                                                                                    
                                                                                                                                
Mr. Brown  elaborated that  the way  to solve  Representative                                                                   
Munoz's concern  was to redefine the interim-use  open access                                                                   
fisheries where  some of the vessel length  designations that                                                                   
were  part of  the gear  definition may  not reflect  current                                                                   
practices in the  fishery. He stated it was  a separate issue                                                                   
from whether  or not the fee  cap should remain in  place. He                                                                   
understood from  the perspective of a fisherman  who believed                                                                   
someone else's  fee was  going to  increase but theirs  would                                                                   
not  or vice  versa.  He  reasoned  some fishermen  would  be                                                                   
happy  while  others  would  not be.  He  agreed  the  policy                                                                   
question  was important,  but it  was separate  from the  fee                                                                   
cap.                                                                                                                            
                                                                                                                                
5:42:00 PM                                                                                                                    
                                                                                                                                
Representative Pruitt  relayed he had spoken with  several of                                                                   
his  colleagues from  coastal communities  who had  different                                                                   
thoughts  about the  issue. He  was  concerned the  amendment                                                                   
would  potentially  limit  the  ability of  young  people  to                                                                   
captain boats  if every  captain would have  to pay  the fee.                                                                   
He  asked if  the  amendment would  prevent  CFEC from  being                                                                   
able to address  the concern if the bill removed  the cap. He                                                                   
asked what  the department  had the ability  to do  under the                                                                   
current  regulation that  had not been  done and  potentially                                                                   
needed to  be done  and how the  amendment could  potentially                                                                   
CFEC's hands to be able to address the concerns.                                                                                
                                                                                                                                
Mr. Twomley  pointed out that  the vessels and  IUPs impacted                                                                   
by removing  the fee cap were  among some of the  largest and                                                                   
most  productive  vessels  fishing  in  Alaska.  He  did  not                                                                   
foresee the issue  coming up in those fisheries.  He detailed                                                                   
all of  the other  fisheries would  remain  in place as  they                                                                   
currently  existed.  The  amendment  only  impacted  IUPs  in                                                                   
place in  fisheries within  the $3,000  fee cap (i.e.  larger                                                                   
boats,   high   seas   fisheries,   factory   trawlers,   and                                                                   
etcetera).                                                                                                                      
                                                                                                                                
Representative  Pruitt  shared  that one  of  his  colleagues                                                                   
from a  coastal region  had highlighted  the potential  for a                                                                   
ship under  the 60-foot limit to  have a larger catch  than a                                                                   
larger  vessel, but  to not pay  the same  amount the  larger                                                                   
vessel had  to pay. Whether  the cap  was removed or  not, he                                                                   
believed the  issue needed to  be addressed. He asked  if the                                                                   
amendment would  bind CFEC's hands  from fixing  something he                                                                   
believed needed to be addressed.                                                                                                
                                                                                                                                
Mr.  Twomley replied  it had  been said  that fishermen  were                                                                   
slow   to  change,   but   quick   to  adapt.   He   believed                                                                   
Representative  Pruitt's   example  related   to  adaptations                                                                   
where  fishermen increased  their capacity.  He detailed  the                                                                   
phenomenon had  existed in  Bristol Bay for  the life  of the                                                                   
fishery where  a 32-foot limit  existed, but fishermen  found                                                                   
ways to  expand their  capacity. It was  an issue  CFEC would                                                                   
be happy to  look at in any  given fishery and could  make an                                                                   
effort to correct an inequity if there was a solution.                                                                          
                                                                                                                                
Representative Pruitt  believed it addressed the  concern his                                                                   
colleague had  brought to  him about whether  or not  the cap                                                                   
was  removed  or  maintained.  He  addressed  the  amendment,                                                                   
which  would place  the  current  regulation in  statute.  He                                                                   
asked if  the amendment limited  the department's  ability to                                                                   
address the  various aspects of  how CFEC assessed  the fees.                                                                   
He  wondered if  the  amendment would  bind  CFEC's hands  to                                                                   
address the fee structure.                                                                                                      
                                                                                                                                
Mr.  Twomley  replied the  fee  structure  was based  on  the                                                                   
average  permit earnings  in the  fishery. Within  particular                                                                   
fisheries sometimes  there were divisions between  the vessel                                                                   
lengths. Analyzing  the problem  presented by  Representative                                                                   
Pruitt would  require an analysis  of the fishery,  which was                                                                   
possible irrespective of the passage of the amendment.                                                                          
                                                                                                                                
5:47:23 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  was  opposed  to  the  amendment.  He                                                                   
believed  the discussion  underscored the  complexity of  the                                                                   
issue. He  liked the direction  the sponsor of  the amendment                                                                   
was going,  but believed there  should be an  analysis before                                                                   
making the  change. He did not  want to tie  the commission's                                                                   
hands if circumstances changed down the road.                                                                                   
                                                                                                                                
Mr.  Brown  noted  that  his   term  ran  through  2019,  Mr.                                                                   
Twomley's term ran  through 2018, and the  third commissioner                                                                   
position  was  currently  vacant. He  relayed  Governor  Bill                                                                   
Walker had recently  solicited applications for  the vacancy.                                                                   
He stated  "in an uncertain  world, that's as  much certainty                                                                   
as we  can tell  you about  what the  commission might  do if                                                                   
there's not a  statute mandating that there  be a four-tenths                                                                   
of  one percent  formula."  He believed  he  and Mr.  Twomley                                                                   
were of  the mind  to address the  concerns raised  about the                                                                   
potential for inequities  based on fisheries that  use vessel                                                                   
length  in their  classifications.  He stated  the issue  was                                                                   
separate from the fee cap and whether or not the four-                                                                          
tenths of one percent formula was in regulation or statute.                                                                     
                                                                                                                                
Co-Chair Thompson  remarked that they appeared  to be looking                                                                   
for a  problem with a  solution, but  the answer had  not yet                                                                   
been determined.                                                                                                                
                                                                                                                                
Representative  Wilson provided a  wrap up on  the amendment.                                                                   
She  explained the  amendment  aimed to  address the  concern                                                                   
that when  the cap was removed  it may become easier  for the                                                                   
department  to   increase  fees.  The  amendment   maintained                                                                   
CFEC's  current regulation  and  would put  it into  statute.                                                                   
She summarized  the amendment  would put into  statute CFEC's                                                                   
current regulations  for the calculation  of the  annual base                                                                   
fee, a  renewal and  issuance of an  entry permit  or limited                                                                   
use  permit. With  the  removal  of the  statutory  cap of  a                                                                   
maximum fee  in the  current bill, there  was a concern  that                                                                   
fees could  be raised arbitrarily  in the future  because the                                                                   
calculation for  the fee was in regulation.  She acknowledged                                                                   
there was  a process to change  the fee, which would  have to                                                                   
be followed.  She  detailed the  amendment protected  smaller                                                                   
Alaskan fishing  operations as well as larger  operations and                                                                   
retained  the current  fiscal  impact  of removing  the  cap,                                                                   
while  ensuring   the  calculation  for  the   fees  remained                                                                   
consistent with  the current regulation and  calculation CFEC                                                                   
approved of. She  relayed she had spoken with  CFEC about the                                                                   
amendment.  She  observed there  appeared  to be  many  other                                                                   
concerns that were unrelated to the regulation.                                                                                 
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION.                                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson                                                                                                                
OPPOSED: Pruitt,  Saddler, Edgmon, Gara,  Gattis, Guttenberg,                                                                   
Kawasaki, Munoz, Neuman, Thompson                                                                                               
                                                                                                                                
The MOTION to adopt Amendment 1 FAILED (1/10).                                                                                  
                                                                                                                                
5:51:24 PM                                                                                                                    
                                                                                                                                
Representative  Munoz   MOVED  to  ADOPT  Amendment   2,  29-                                                                   
GH2460\A.5 (Martin/Nauman, 5/28/16) (copy on file):                                                                             
                                                                                                                                
     Page 1, lines 1 - 2:                                                                                                       
     Delete "removing the minimum and maximum restrictions                                                                      
     on the annual base fee for the reissuance"                                                                                 
     Insert "relating to the nonresident surcharge for the                                                                      
     issuance"                                                                                                                  
                                                                                                                                
     Page 1, lines 9 - 10:                                                                                                      
     Delete "[MAY NOT BE LESS THAN $30 OR MORE THAN $3,000.                                                                     
     THE ANNUAL BASE FEE]" Insert "may not be less than $30                                                                     
     or more than $3,000. The annual base fee"                                                                                  
                                                                                                                                
Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Munoz  explained that Mr. Brown  had discussed                                                                   
the inequities where  vessel length was part  of the criteria                                                                   
in establishing  permit fees. She detailed the  fees followed                                                                   
the  captain  or  boat  skipper.   She  furthered  that  many                                                                   
vessels  had multiple  skippers;  therefore,  the removal  of                                                                   
the  fee  would  significantly  impact  the  operations.  She                                                                   
discussed  that in a  certain vessel  length class  where the                                                                   
length  was  one of  the  criteria  in establishing  the  fee                                                                   
(e.g. 60  to 90 feet),  there could be  a great variation  in                                                                   
the  actual  catches  on the  various  vessels.  The  current                                                                   
formula  used an  average  of the  fishery  permits within  a                                                                   
specific  class; therefore,  there was  an inherent  inequity                                                                   
in  the  way  the  permits  were  currently  calculated.  She                                                                   
believed it  was necessary  to maintain  the cap until  there                                                                   
was   a   more   thorough   analysis   of   the   issue   and                                                                   
recommendations on a comprehensive change.                                                                                      
                                                                                                                                
Representative  Edgmon  mentioned  that the  House  Fisheries                                                                   
Committee chair  was present  in the room  and had  been very                                                                   
active  on  the  issue  [Representative  Louise  Stutes].  He                                                                   
asked  if the  cap  was removed  whether  it  would give  the                                                                   
commission  the opportunity  to  begin working  on points  of                                                                   
concern raised  by House members.  He thought it was  a valid                                                                   
point.  Alternatively,  he  asked  if  the  commission  would                                                                   
prefer  to have  the cap  in place  with a  separate plan  to                                                                   
address  the other  issues in  the following  year. He  noted                                                                   
the removal  of the cap  would mean $2  million to  the state                                                                   
in a time it was looking everywhere for revenue.                                                                                
                                                                                                                                
Mr. Twomley answered  that he did not believe  the removal of                                                                   
the  cap  would  enhance  or  hinder  CFEC's  chances  to  do                                                                   
something. He detailed  it would require analysis  and review                                                                   
of specific cases. He relayed CFEC was neutral on the bill.                                                                     
                                                                                                                                
Mr.  Brown  added that  HB  4006  had  an effective  date  of                                                                   
January 1,  2017. He  noted the  original effective  date was                                                                   
July 1, 2016, which  would have been a bad idea  because CFEC                                                                   
fees were  assessed on  a calendar  year basis. He  explained                                                                   
that individuals who  did not want to pay a  higher fee would                                                                   
not be  happy about  it when they  received their  notices in                                                                   
the fall. The  commission's research staff had  been cut from                                                                   
four  positions   to  two   -  a   hiring  freeze   had  been                                                                   
implemented   and   other   there   were   other   structural                                                                   
existential  issues  affecting  the  agency;  therefore,  the                                                                   
present  was  not the  easiest  time  for the  commission  to                                                                   
commit to  doing a full-blown  analysis of the  issues raised                                                                   
by November.  The removal  of the cap  was a policy  call for                                                                   
the  legislature.  The  commission   would  do  its  best  to                                                                   
address   the  inequities   if   the  cap   was  removed   or                                                                   
maintained.   He  relayed   CFEC   would   do  whatever   the                                                                   
legislature directed it to do.                                                                                                  
                                                                                                                                
5:56:09 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  asked   for  verification  that  CFEC                                                                   
believed it  would not have the  ability to achieve  the goal                                                                   
of the  amendment at least in  the first year  the additional                                                                   
fees may  be issued  if the cap  was removed.  Alternatively,                                                                   
Mr. Brown  was telling the committee  CFEC would do  the best                                                                   
it could and did not know what the outcome would be.                                                                            
                                                                                                                                
Mr. Brown answered  that if the cap was removed  it would not                                                                   
be  difficult   for  the   commission's  research   staff  to                                                                   
calculate  the  fees  -  the  exercise  would  be  formulaic.                                                                   
Alternatively,  it  would  be  difficult to  do  an  analysis                                                                   
quickly on whether  or not some skippers  paying dramatically                                                                   
increased fees  were being unfairly  burdened because  of the                                                                   
removal  of  the  cap. He  reiterated  implementing  the  cap                                                                   
removal would  not be  difficult. He  detailed that  the more                                                                   
challenging research  project would  be analyzing  the effect                                                                   
of the  cap removal  on a 6  skipper operation where  varying                                                                   
quotas impacted the ability to pay the increased fee.                                                                           
                                                                                                                                
Representative  Edgmon  surmised that  CFCE  would require  a                                                                   
statutory change  in order to  do the analysis  properly. Mr.                                                                   
Brown  answered  in  the  negative.  He  explained  that  the                                                                   
commission  would  need certainty  about  its future  and  an                                                                   
ability to hire  one or two more researchers to  look at each                                                                   
permit issued  in the entry  permit fisheries where  the fees                                                                   
would be  increasing by $75 to  $7,000 in order  to determine                                                                   
how the  removal of the cap  was impacting the  fishermen and                                                                   
why it was or was not equitable.                                                                                                
                                                                                                                                
Representative  Edgmon   asked  for  verification   that  the                                                                   
commission  could achieve  the amendment's  action without  a                                                                   
statutory change.                                                                                                               
                                                                                                                                
Mr.  Brown believed  the commission  had  submitted a  fiscal                                                                   
note for  another bill (HB 241)  showing there would  be zero                                                                   
cost to  the commission  if the  cap were  to be removed.  He                                                                   
stated   a  simple  cap   removal  was   absorbable  by   the                                                                   
commission's   existing   staff    resources.   Whereas,   an                                                                   
exhaustive  analysis on  the  effect of  the  cap removal  on                                                                   
fishermen was more of an unknown quantity of work.                                                                              
                                                                                                                                
Co-Chair Neuman surmised the answer was no.                                                                                     
                                                                                                                                
Representative  Edgmon understood that  it was a  complicated                                                                   
issue,  but he  was  not getting  a clear  "yes"  or "no"  he                                                                   
needed  in  order  to make  a  decision.  He  summarized  the                                                                   
amendment  was  not  needed  in  order for  CFEC  to  do  its                                                                   
analysis, but an  additional research person would  be needed                                                                   
to get the analysis  done due to the complexity  of the work.                                                                   
At the  same time,  there was a  significant amount  of money                                                                   
attached  to  the  amendment.  He  wanted  to  make  sure  he                                                                   
understood what he  was voting on. He surmised  the issue was                                                                   
not clear cut.                                                                                                                  
                                                                                                                                
5:59:53 PM                                                                                                                    
                                                                                                                                
Co-Chair Neuman  saw some  fairly simple  changes in  the tax                                                                   
structure but  now it appeared  the community was  taking the                                                                   
opportunity  to try to  change other  pieces of statute  that                                                                   
did not  seem to have been  vetted in the House  Fisheries or                                                                   
Resources  Committees. He  could not  support something  that                                                                   
the committee did  not know about and had not  discussed. The                                                                   
committee  had  heard  CFEC  needed   to  analyze  the  issue                                                                   
further. Additionally,  he believed  CFEC could already  take                                                                   
action  under regulation.  He reasoned  that when  amendments                                                                   
were  not  fully  vetted,  mistakes could  be  made.  He  was                                                                   
uncomfortable with the amendment.                                                                                               
                                                                                                                                
Representative Munoz  replied that the biggest  impact was on                                                                   
individual  fishermen. She  thought  it was  necessary to  be                                                                   
careful in  removing the  cap due  to any inadvertent  impact                                                                   
it could have  on Alaskan fisheries operations,  specifically                                                                   
on  individual  captains.  She  believed in  some  cases  the                                                                   
permit fee  could go from $3,000  to $6,000 overnight  for an                                                                   
individual  skipper.  She  furthered   that  many  operations                                                                   
required  six  skippers over  the  course  of a  season.  She                                                                   
agreed  with Co-Chair  Neuman's  comments,  but she  believed                                                                   
the removal  of the cap  rose greater concerns  and supported                                                                   
his comments more than leaving the cap in place.                                                                                
                                                                                                                                
Co-Chair Neuman stated  he did not believe CFEC  was ready to                                                                   
take the  action because  analysis was needed.  Additionally,                                                                   
he believed  the agency could  already take the action  if it                                                                   
chose to do so.                                                                                                                 
                                                                                                                                
Representative   Gara  noted   the  CFEC  commissioners   had                                                                   
already testified  the formula was  based on the  earnings of                                                                   
the  vessel.  He wondered  what  kind  of vessels  would  pay                                                                   
above the current $3,000 cap if it was removed.                                                                                 
                                                                                                                                
Mr. Twomley answered  that the applicable vessels  were large                                                                   
high  sea  factory  trawlers  and  crab  vessels,  which  had                                                                   
substantial earnings.                                                                                                           
                                                                                                                                
Representative  Gara asked  for further  explanation on  high                                                                   
sea  vessels that  were  not  factory trawlers.  Mr.  Twomley                                                                   
answered  that  he  was  referring   to  substantial  vessels                                                                   
capable of functioning in high seas.                                                                                            
                                                                                                                                
Representative  Gara surmised captains  were not the  same on                                                                   
every boat,  but they shared the  value of the catch  in some                                                                   
way. Mr. Twomley  answered that captains were  compensated in                                                                   
some way by the venture.                                                                                                        
                                                                                                                                
Representative  Gara stated the  cap applied to  the captain.                                                                   
Mr. Twomley affirmed.                                                                                                           
                                                                                                                                
Representative  Gara   provided  an  example  of   a  factory                                                                   
trawler with  three captains  in one  year and five  captains                                                                   
the next.  He asked if each  captain paid the same  amount if                                                                   
the  boat had  the same  costs each  year. Alternatively,  he                                                                   
wondered if the  cost was proportional and divided  among the                                                                   
number of captains.                                                                                                             
                                                                                                                                
Mr. Twomley  responded that each  captain would pay  the same                                                                   
fee;  the fee  applied  to the  IUP,  which  was a  captain's                                                                   
ticket  to operate  the vessel.  A number of  vessels at  sea                                                                   
for long periods had numerous captains.                                                                                         
                                                                                                                                
Representative  Gara asked if  a captain's  share of  the fee                                                                   
decreased   when  the   number  of  captains   on  a   vessel                                                                   
increased.   Mr. Twomley  answered in  the negative;  the fee                                                                   
would remain the same for the IUP for each captain.                                                                             
                                                                                                                                
6:05:15 PM                                                                                                                    
                                                                                                                                
Representative Munoz  asked for verification the  captains on                                                                   
a high sea  vessel of 80 feet  or more would pay the  same as                                                                   
captains on  a 60-foot vessel if  it they fell into  the same                                                                   
vessel length category.                                                                                                         
                                                                                                                                
Mr.  Twomley   answered  that  it   could  be  but   was  not                                                                   
necessarily  the  case.  He  elaborated  there  would  be  an                                                                   
average  based  on  the  vessel   length  within  the  vessel                                                                   
category. He furthered  the fee could come out  the same, but                                                                   
could vary; it would depend on the vessel earnings.                                                                             
                                                                                                                                
Representative  Munoz stated  there could  be a category  for                                                                   
vessels  between 60  to 90 feet  and CFEC  would average  out                                                                   
the  earnings  within  the fishery  in  the  specific  vessel                                                                   
category. Mr. Twomley answered in the affirmative.                                                                              
                                                                                                                                
Representative  Munoz surmised a  captain on a  larger vessel                                                                   
over 80  feet would pay  the same as  a captain on  a 60-foot                                                                   
vessel.                                                                                                                         
                                                                                                                                
Mr. Twomley  replied in the  negative. He detailed  IUPs were                                                                   
issued based  on vessel size;  CFEC averaged per  vessel size                                                                   
category, which would  yield a different fee  from one vessel                                                                   
category to another within the same fishery.                                                                                    
                                                                                                                                
Representative   Munoz   asked   for   examples   of   vessel                                                                   
categories.                                                                                                                     
                                                                                                                                
Mr.  Twomley  answered  there  were  vessels  over  90  feet,                                                                   
vessels under  90 feet. He stated  there could be  a variety.                                                                   
The  categories  were based  on  data  and where  there  were                                                                   
cutoff   points  that   made  sense   when  categories   were                                                                   
established.                                                                                                                    
                                                                                                                                
Representative Munoz  asked if 60 feet was a  cutoff point on                                                                   
the low end. Mr. Twomley answered yes, in some fisheries.                                                                       
                                                                                                                                
Representative Munoz  asked for verification 90  feet was the                                                                   
cutoff  on  the  high  end  within  the  same  category.  Mr.                                                                   
Twomley answered yes, in some fisheries.                                                                                        
                                                                                                                                
Representative Munoz  believed captains on a 90-foot  and 60-                                                                   
foot  vessels  were  paying  the  same  fee  because  it  was                                                                   
averaged over the fishery within the category.                                                                                  
                                                                                                                                
Mr.  Twomley  replied  in  the  negative.  He  detailed  that                                                                   
within  the vessel  categories  the fees  were  based on  the                                                                   
average earnings of the IUPs within the categories.                                                                             
                                                                                                                                
Mr.  Brown clarified  that  every fishery  was  defined by  a                                                                   
geographical  area that  could  be statewide  and a  species,                                                                   
which  could  be  miscellaneous   finfish.  He  detailed  all                                                                   
skippers fishing  statewide waters for miscellaneous  finfish                                                                   
on vessels  that were 60  feet applied  for the same  kind of                                                                   
IUP.  He  elaborated  that  if  the  next  category  was  for                                                                   
vessels between 60  to 90 feet, those vessels  would all fall                                                                   
into  the same  category. He  explained the  skippers in  the                                                                   
first group  would not  pay the same  amount as the  skippers                                                                   
in  the  second  group; however,  people  within  the  second                                                                   
group  may  be   earning  different  amounts   of  money.  He                                                                   
continued  that skippers  may  not even  pay  their own  fee,                                                                   
which  could be  paid by  whoever owned  the boat;  it was  a                                                                   
contractual  arrangement CFEC  was not  aware of. The  agency                                                                   
only  had visibility  into was  the  average boat's  earnings                                                                   
landed  on  a specific  permit  category  in the  past  three                                                                   
years  multiplied  by 0.04;  the  fee  was then  charged  and                                                                   
capped at  $3,000 at present.  He expounded that it  would be                                                                   
a hardship  for some people and  not for others. The  fee was                                                                   
not  arbitrary in  the sense  that  someone on  a very  large                                                                   
boat  was paying  the same  fee as  someone on  a very  small                                                                   
boat; it  only became an  issue at the  margins of  where the                                                                   
fishery  was defined by  vessel length  that the  disparities                                                                   
were arising.                                                                                                                   
                                                                                                                                
6:09:25 PM                                                                                                                    
                                                                                                                                
Representative  Gattis believed  the issue  should be  vetted                                                                   
through the  House Fisheries Committee.  She did  not believe                                                                   
the  committee  could  do  the  necessary  due  diligence  it                                                                   
should. She was  uncomfortable the committee may  be breaking                                                                   
open an issue that was bigger than the committee.                                                                               
                                                                                                                                
Representative   Wilson   stated   that  the   governor   was                                                                   
responsible  for  bringing  up   the  issue.  She  questioned                                                                   
whether  to keep or  discard the  cap. She  referred to  CFEC                                                                   
testimony  that it was  easy to  do the math  if the  cap was                                                                   
removed,   but  the   problem  involved   needing  time   and                                                                   
personnel  to do  the research  to understand  the impact  of                                                                   
removing  the  cap.   She  noted  the  information   was  not                                                                   
something    the   committee    had    received   from    the                                                                   
administration.  She stressed the  topic was being  discussed                                                                   
because it  is a tax issue.  She stressed the removal  of the                                                                   
cap could  mean a person currently  paying the cap  of $3,000                                                                   
could pay  upwards of  $15,000. She  observed the  difference                                                                   
was substantial.  She surmised a  boat may be big  enough and                                                                   
earn enough  to pay the amount,  but that was not  known. The                                                                   
bill would  remove the cap and  bring the state  $2.1 million                                                                   
in revenue,  but she  wondered  how many boats  could be  put                                                                   
out of  business because of that  decision. She did  not know                                                                   
the answer. She  would vote to maintain the cap  to give time                                                                   
for CFEC  to do the  research and  present the analysis.  She                                                                   
agreed  the  committee  should  know  the  answers  prior  to                                                                   
voting on  the bill, but  she would be  fine to set  the bill                                                                   
aside  until  the following  session  in  order to  make  the                                                                   
right  decisions based  on information  that  would help  the                                                                   
economy.  She   did  not  want   to  devastate   the  state's                                                                   
fisheries.  She  would vote  for  the amendment  because  the                                                                   
current  cap  was  working.  Although  smaller  vessels  were                                                                   
paying  the full  amount,  she was  nervous  about what  they                                                                   
could be "doing  on the outside" and she could  wait one year                                                                   
to find out.                                                                                                                    
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION.                                                                                     
                                                                                                                                
Representative  Pruitt expressed  frustration with  the issue                                                                   
and  believed  the  legislature  had been  given  half  of  a                                                                   
solution.  He   had  heard   from  colleague  who   supported                                                                   
maintaining  the cap to  fix it  later and another  colleague                                                                   
who wanted  to remove the  cap in order  to force  the agency                                                                   
to   fix   the   problem   sooner.   He   wondered   if   the                                                                   
administration believed  the legislature would  be addressing                                                                   
the issue again  the following year. He believed  the problem                                                                   
needed  to  be  fixed.  He noted  the  situation  was  not  a                                                                   
failure on CFEC's  part, but he wanted to know  if the agency                                                                   
could come back  the following year with information  to help                                                                   
the legislature address the issue.                                                                                              
                                                                                                                                
Mr. Twomley  answered that  CFCE could  use its best  efforts                                                                   
to try to analyze  the problems put forward  by the committee                                                                   
to  determine  if  there  was   a  practicable  solution.  He                                                                   
communicated  the   agency  would  appreciate   hearing  from                                                                   
fishermen experiencing  a problem.  The agency would  hope to                                                                   
come back with the best information it could generate.                                                                          
                                                                                                                                
Representative Pruitt  stated that he would vote  to keep the                                                                   
cap. He  was expecting to  have a conversation  the following                                                                   
year  where the  entire issue  was  addressed. He  reiterated                                                                   
his frustration  with the  bill. He  surmised it appeared  to                                                                   
be more of a money grab than addressing an equity scenario                                                                      
within an industry. He wanted a whole picture instead of an                                                                     
incomplete one.                                                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson, Pruitt, Gattis, Munoz, Kawasaki                                                                               
OPPOSED: Saddler, Edgmon, Gara, Guttenberg, Thompson,                                                                           
Neuman                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment 2 FAILED (5/6).                                                                                   
                                                                                                                                
6:15:49 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
6:25:42 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Wilson MOVED to ADOPT new Amendment 3, 29-                                                                       
GH2460\A.4 (Glover/Nauman, 5/28/16) (copy on file):                                                                             
                                                                                                                                
     Page 2, line 8:                                                                                                            
     Delete "five"                                                                                                              
     Insert "4.5"                                                                                                               
                                                                                                                                
     Page 2, line 12:                                                                                                           
     Delete "four"                                                                                                              
     Insert "3.5"                                                                                                               
                                                                                                                                
     Page 2, following line 14:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*Sec. 3. AS 43.75.015(b) is amended to read:                                                                              
     (b)  Instead  of  the  taxes   levied  by  (a)  of  this                                                                   
     section,   a   person   who   processes   a   developing                                                                   
     commercial fish  species is liable  for and shall  pay a                                                                   
     tax equal to                                                                                                               
     (1) 3.5  [ONE] percent  of the  value of the  developing                                                                   
     commercial  fish  species  processed  by  a  shore-based                                                                   
     fisheries business during the year; and                                                                                    
     (2) six [THREE]  percent of the value of  the developing                                                                   
     commercial   fish  species   processed  by  a   floating                                                                   
     fisheries business during the year."                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 19:                                                                                                           
     Delete "one"                                                                                                               
     Insert "3.5 [ONE]"                                                                                                         
                                                                                                                                
     Page 2, line 21:                                                                                                           
     Delete "four"                                                                                                              
     Insert "3.5"                                                                                                               
                                                                                                                                
     Page 2, lines 28 - 29:                                                                                                     
     Delete "The  amount of tax revenue equal  to one percent                                                                   
     of the  value of each  fishery taxed under  this chapter                                                                   
     shall be deposited into the general fund."                                                                                 
                                                                                                                                
     Page 2, line 30, through page 3, line 1:                                                                                   
     Delete  "and  not including  the  revenue  equal to  one                                                                   
     percent of  the value of  each fishery taxed  under this                                                                   
     section deposited in the general fund"                                                                                     
     Insert "and  not including the revenue derived  from the                                                                   
     value  of   each  fishery   taxed  under  this   chapter                                                                   
     deposited  in the  general fund  as provided  in (h)  of                                                                   
     this section"                                                                                                              
                                                                                                                                
     Page 3, following line 11:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*Sec.  7.  AS 43.75.130  is  amended  by adding  a  new                                                                   
     subsection to read:                                                                                                        
     (h) Notwithstanding  (a) of this section,  the amount of                                                                   
     tax   revenue  from   the  following   sources  in   the                                                                   
     following  amounts  shall be  deposited  in the  general                                                                   
     fund:                                                                                                                      
     (1)  one-half  percent  of  the  tax  revenue  collected                                                                   
     under                                                                                                                      
     AS 43.75.015(a)(l) and (2);                                                                                                
     (2) one  percent of the  tax revenue collected  under AS                                                                   
     43.75.015(a)(3);                                                                                                           
     (3)  two  and  one-half   percent  of  the  tax  revenue                                                                   
     collected under AS 43.75.015(d)(l); and                                                                                    
     (4)  one-half  percent  of  the  tax  revenue  collected                                                                   
     under                                                                                                                      
     AS 43.75.015(d)(2)."                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
     Page 3, line 19:                                                                                                           
     Delete "one"                                                                                                               
     Insert "five [ONE]"                                                                                                        
                                                                                                                                
     Page 3, line 21:                                                                                                           
     Delete "four"                                                                                                              
     Insert "five"                                                                                                              
                                                                                                                                
     Page 3, lines 23 - 24:                                                                                                     
     Delete "The  amount of tax revenue equal  to one percent                                                                   
     of the  value of each  fishery taxed under  this chapter                                                                   
     shall be deposited into the general fund."                                                                                 
                                                                                                                                
     Page 3, lines 25 - 27:                                                                                                     
     Delete  "and  not including  the  revenue  equal to  one                                                                   
     percent of  the value of  each fishery taxed  under this                                                                   
     section deposited in the general fund"                                                                                     
     Insert "and  not including the revenue derived  from the                                                                   
     value  of   each  fishery   taxed  under  this   chapter                                                                   
     deposited in  the general fund as provided in  m of this                                                                   
     section"                                                                                                                   
                                                                                                                                
     Page 4, lines 12 - 13:                                                                                                     
     Delete "The  amount of tax revenue equal  to one percent                                                                   
     of the  value of each  fishery taxed under  this chapter                                                                   
     shall be deposited in the general fund."                                                                                   
                                                                                                                                
     Page 4, lines 15 - 16:                                                                                                     
     Delete  "equal  to one  percent  of  the value  of  each                                                                   
     fishery  taxed  under  this  section  deposited  in  the                                                                   
     general fund"                                                                                                              
     Insert  "derived from  the value  of each fishery  taxed                                                                   
     under  this chapter  deposited  in the  general fund  as                                                                   
     provided in (g) of this section"                                                                                           
                                                                                                                                
     Page 5, following line 10:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*Sec.  11.  AS  43.77.060  is  amended  by  adding  new                                                                   
     subsections to read:                                                                                                       
     (f) Notwithstanding  (a) of this section,  the amount of                                                                   
     tax   revenue  from   the  following   sources  in   the                                                                   
     following  amounts  shall be  deposited  in the  general                                                                   
     fund:                                                                                                                      
     (1) four percent  of the tax revenue collected  under AS                                                                   
     43.77.010(1); and                                                                                                          
     (2) two  percent of the  tax revenue collected  under AS                                                                   
     43.77.010(2).                                                                                                              
     (g) Notwithstanding  (b) of this section,  the amount of                                                                   
     tax   revenue  from   the  following   sources  in   the                                                                   
     following  amounts  shall be  deposited  in the  general                                                                   
     fund:                                                                                                                      
     (1) four percent  of the tax revenue collected  under AS                                                                   
     43.77.010(1); and                                                                                                          
     (2) two  percent of the  tax revenue collected  under AS                                                                   
     43.77.010(2)."                                                                                                             
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, line 13, following "AS 43.75.015(a)":                                                                              
     Insert", AS 43.75.015(b),"                                                                                                 
                                                                                                                                
     Page 5, lines 13 - 14:                                                                                                     
     Delete "secs. 2 and 3"                                                                                                     
     Insert "secs. 2 - 4"                                                                                                       
                                                                                                                                
     Page 5, lines 14 - 15:                                                                                                     
     Delete "secs. 2 and 3"                                                                                                     
     Insert "secs. 2 - 4"                                                                                                       
                                                                                                                                
     Page 5, line 16:                                                                                                           
     Delete "sec. 6"                                                                                                            
     Insert "sec. 8"                                                                                                            
                                                                                                                                
     Page 5, line 17                                                                                                            
     Delete "sec. 6"                                                                                                            
     Insert "sec. 8"                                                                                                            
                                                                                                                                
     Page 5, line 25:                                                                                                           
     Delete "Section 10"                                                                                                        
     Insert "Section 13"                                                                                                        
                                                                                                                                
     Page 5, line 26:                                                                                                           
     Delete "secs. 11 and 12"                                                                                                   
     Insert "secs. 14 and 15"                                                                                                   
                                                                                                                                
Representative Gattis OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative Wilson read from prepared remarks:                                                                               
                                                                                                                                
     The  fisheries business  tax is paid  by Alaska's  small                                                                   
     boat fleet  - the gillnetters,  trollers, and  more, who                                                                   
     live  and  work  in Alaska  communities.  The  fisheries                                                                   
     landing tax  is paid by  the Seattle-based  trawl fleet.                                                                   
     Our  tax rates should  be equitable  to those  fishermen                                                                   
     who  invest  in Alaska.  The  small boat  fleet  already                                                                   
     pays  into Alaska's  economy in more  diverse ways  than                                                                   
     through  taxes.  They  home port  in  Alaska's  harbors,                                                                   
     live in  Alaska communities,  hire local crews,  and buy                                                                   
     local  groceries.  The  revenue   gets  recirculated  in                                                                   
     Alaska  many  times  over  and the  economic  impact  on                                                                   
     Alaska  is  proportionately  far greater.  This  orients                                                                   
     Alaska's fisheries  tax structure in a way  that doesn't                                                                   
     penalize small  boat fishermen who generally  fish clean                                                                   
     with  very little  Chinook  salmon  or halibut  bycatch.                                                                   
     This is in  contrast to the largely  Seattle-based trawl                                                                   
     fleet,  which has  an unfortunate  track record of  vast                                                                   
     amounts of  halibut and king  salmon bycatch,  which are                                                                   
     caught,  killed,  and discarded  and  never  able to  be                                                                   
     caught   by    Alaska-based   sports    and   commercial                                                                   
     fishermen.                                                                                                                 
                                                                                                                                
Co-Chair   Thompson   clarified   that  the   committee   was                                                                   
addressing the new Amendment 3.                                                                                                 
                                                                                                                                
Representative Wilson responded in the affirmative.                                                                             
                                                                                                                                
Representative    Gara    supported   the    amendment.    He                                                                   
communicated he  did not care  who owned the trawl  fleet and                                                                   
relayed it  would be  unconstitutional for  the state  to tax                                                                   
fishermen  from Washington  a  different  tax than  fishermen                                                                   
from  Alaska. However,  he  cared that  the  trawl fleet  had                                                                   
cost  the state  significant money  in terms  of research  on                                                                   
king salmon  bycatch and  soon halibut  bycatch. He  detailed                                                                   
those  fisheries were  being decimated.  He  reasoned if  the                                                                   
state had  to keep  researching the  issue it would  continue                                                                   
to  cost the  state  money. He  surmised  if  the issue  kept                                                                   
costing the state  money, it needed to have the  means to pay                                                                   
for  the  research.  He  wished  he  could  solve  the  issue                                                                   
related to  bycatch of some of  the state's most  prized wild                                                                   
fish  and was  very troubled  by the  situation. He  reasoned                                                                   
there  was nothing  to  do about  the  issue  in the  current                                                                   
bill,  but the  legislature  could  factor in  the  knowledge                                                                   
that  continued  research  was  needed to  determine  how  to                                                                   
limit the bycatch.  He referred to page 3, lines  4 through 6                                                                   
of  the amendment  and referenced  the high  seas boats  that                                                                   
fished  beyond Alaska's  territorial  limit  and returned  to                                                                   
Alaska to  process or transport  their fish. He  stressed the                                                                   
boats  were costing  the state  a  huge amount  of grief  and                                                                   
money.  He suggested  increasing  the number  from  4 to  5.5                                                                   
percent.  He stressed  the  boats  were fishing  the  world's                                                                   
greatest fishery.  He reasoned  the boats  were not  going to                                                                   
leave  because  Alaska  was  one   of  the  last  great  wild                                                                   
fisheries in  the world. He  emphasized the factory  trawlers                                                                   
were  contributing   greatly  to  the  bycatch   problem  and                                                                   
damaging  the  fisheries.  He believed  the  trawlers  should                                                                   
help  contribute  to  the  cost   of  the  damage  they  were                                                                   
causing.                                                                                                                        
                                                                                                                                
6:30:42 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon   stated  that  the  numbers   in  new                                                                   
Amendment 3  were all  over the place.  He requested  to hear                                                                   
from  DOR.  He referred  to  Representative  Gara's  comments                                                                   
related to bycatch.  He mentioned federal  fisheries bycatch,                                                                   
the North Pacific  Fisheries Management Council,  and federal                                                                   
funds.  He  was  hearing  remarks   on  taxation  issues  and                                                                   
management  issues,   which  did   not  seem  to   be  linked                                                                   
together.                                                                                                                       
                                                                                                                                
Mr. Alper  summarized Representative Edgmon's  question about                                                                   
the  numbers  listed   in  the  amendment.  He   relayed  the                                                                   
administration's  intent  with   the  original  bill  was  to                                                                   
increase  tax rates  on the  fisheries  business and  landing                                                                   
taxes  by 1  percent.  Additionally, the  1  percent was  not                                                                   
subject to  the existing 50/50  revenue sharing  formula with                                                                   
municipalities.  The 1  percent was intended  to go  directly                                                                   
to  the state  and  the remaining  amount  (the original  tax                                                                   
prior  to the  proposed tax  increase) would  be split  50/50                                                                   
holding  municipalities harmless.  Amendment  3 changed  some                                                                   
of the  increases so the  shore-based processers,  which were                                                                   
primarily  buying  from  the  small  boat  fleet  in  coastal                                                                   
communities, would  receive a smaller tax  increase. Whereas,                                                                   
the  large  floating  processers   and  the  landing  tax  in                                                                   
particular  received a  larger tax increase.  The intent  was                                                                   
to  shift  the tax  burden  towards  those perceived  as  not                                                                   
supporting the local  economy to the same degree  or having a                                                                   
large amount  of bycatch.  He explained  the changed  numbers                                                                   
in the amendment  (some of the increases were  0.5 percent or                                                                   
2 percent).  He detailed if 1  percent went to the  state and                                                                   
the remainder  was split, it  created some distortion  to the                                                                   
revenue  sharing formula.  For example,  if a  4 percent  tax                                                                   
increased  to 5  percent the  state would  receive 1  percent                                                                   
and  remaining  4 percent  was  split,  municipalities  would                                                                   
still receive the  same 2 percent they received  prior to the                                                                   
increase. However,  if the tax  was raised from 4  percent to                                                                   
4.5   percent,  municipalities   would   only  receive   1.75                                                                   
percent. He  elaborated that  while benefiting the  fishermen                                                                   
with  a smaller  tax  increase, it  would  actually harm  the                                                                   
community. Therefore,  changes in  new Amendment  3 equalized                                                                   
the revenue sharing  formula by specifying the  state's piece                                                                   
was limited  to the  amount of the  increase (whether  it was                                                                   
0.5 percent,  1 percent, or  2 percent) and the  municipality                                                                   
received   half    of   the   remainder,    thereby   holding                                                                   
municipalities   harmless  in   the  changes   made  by   the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  Edgmon was  trying to assign  the numbers  to                                                                   
the  proper category.  He had  voted  against all  amendments                                                                   
during  the day  because the  theme had  been consistent.  He                                                                   
felt the  amendments could  not be  properly analyzed  during                                                                   
the meeting; therefore he would oppose the amendment.                                                                           
                                                                                                                                
Representative Gara  recalled that several years  earlier the                                                                   
legislature had  funded a king  salmon study, which  had been                                                                   
in part based  on bycatch (from boats outside  the state's 3-                                                                   
mile limit)  that  was damaging  the returns  of fish to  the                                                                   
state's streams.  The study  had been  to determine  how much                                                                   
of  the  issue  pertained  to  certain  areas;  it  had  also                                                                   
included what  the state  could do  to help enhance  returns.                                                                   
There  had  been  some  impact,   but  he  did  not  want  to                                                                   
exaggerate it.                                                                                                                  
                                                                                                                                
6:36:04 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler agreed  with  Representative Edgmon  that                                                                   
the  question  of bycatch  was  biological,  scientific,  and                                                                   
financial and  the North  Pacific Fishery Management  Council                                                                   
was  staffed  and   funded  and  scheduled  to   conduct  the                                                                   
complicated analysis,  but the state was not.  He did believe                                                                   
not  enough information  was available  to  make an  informed                                                                   
decision; therefore, he was opposed to the amendment.                                                                           
                                                                                                                                
Co-Chair Thompson  expressed confusion. He remarked  that the                                                                   
original  Amendment 3  had a  big impact  on communities.  He                                                                   
discussed the  governor's original bill designated  1 percent                                                                   
of the  value of  each fishery  tax to  the General  Fund and                                                                   
increased  the taxes  by  1 percent  on  each fishery,  which                                                                   
meant  many  of  the communities  did  not  get  the  revenue                                                                   
sharing back. He asked if that was still the case.                                                                              
                                                                                                                                
Mr.  Alper replied  that the  administration's  bill did  not                                                                   
affect the  municipalities. For  example, under existing  law                                                                   
a 4  percent tax was split  50/50 with municipalities.  Under                                                                   
the  original legislation  a  4 percent  tax  increased to  5                                                                   
percent  and the  state  received  the additional  1  percent                                                                   
increase,   while  the   original   4  percent   was   split;                                                                   
therefore,  municipalities still  received  2 percent,  while                                                                   
the  state  received   3  percent.  The  language   had  been                                                                   
included in  order to  exempt the  additional 1 percent  from                                                                   
the  50/50 split.  The amendment  increased  taxes on  shore-                                                                   
based  fisheries  by  0.5  percent   and  increased  floating                                                                   
fishery taxes  by 2  percent, which would  go to  directly to                                                                   
the state.  He explained the  new Amendment 3  maintained the                                                                   
idea that whatever  the tax increase was,  the municipalities                                                                   
would be  held harmless and  would continue to  receive their                                                                   
current amount.                                                                                                                 
                                                                                                                                
Representative Gattis WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
Co-Chair Thompson OBJECTED.                                                                                                     
                                                                                                                                
Representative  Wilson explained  that her  intent had  never                                                                   
been  to  take  any money  away  from  municipalities  -  the                                                                   
situation  had been  corrected in  the new  Amendment 3.  She                                                                   
explained  there  were  fishermen  who  required  more  state                                                                   
spending  because  it  was  necessary  for the  state  to  do                                                                   
research studies on  impacts. She relayed it was  one way for                                                                   
the  state   to  recoup   costs  from   people  using   state                                                                   
resources. The  amendment would also protect  local fishermen                                                                   
more and  charged more  to those  from out-of-state  who were                                                                   
not  investing the  same amount  into  Alaska's economy.  The                                                                   
amendment  tried  to  make  the  situation  more  equal.  She                                                                   
stressed the state was paying for the studies.                                                                                  
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson, Gara, Gattis, Kawasaki, Munoz,                                                                                
OPPOSED:   Edgmon,  Guttenberg,   Pruitt,  Saddler,   Neuman,                                                                   
Thompson                                                                                                                        
                                                                                                                                
The MOTION to adopt new Amendment 3 FAILED (5/6).                                                                               
                                                                                                                                
6:41:08 PM                                                                                                                    
At EASE                                                                                                                         
                                                                                                                                
6:41:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative   Gara  MOVED  to   ADOPT  Amendment   4,  29-                                                                   
GH2460\A.2 (Glover/Nauman, 5/28/16)(copy on file):                                                                              
                                                                                                                                
     Page 3, line 21:                                                                                                           
     Delete "four"                                                                                                              
     Insert "five"                                                                                                              
                                                                                                                                
Co-Chair  Thompson  OBJECTED  for discussion.  He  asked  for                                                                   
verification the  amendment was similar to the  amendment the                                                                   
committee had just voted against.                                                                                               
                                                                                                                                
Representative  Gara replied  in the  negative. He  explained                                                                   
that the amendment  increased the tax rate from  4 percent to                                                                   
5 percent.                                                                                                                      
                                                                                                                                
Co-Chair Thompson  noted new Amendment 3 would  have done the                                                                   
same thing.                                                                                                                     
                                                                                                                                
Representative Gara  replied that new Amendment  3 would have                                                                   
done  a number  of  things.  He  explained that  Amendment  4                                                                   
would increase  the tax on high  seas vessels fishing  from 4                                                                   
to 5 percent.  He elaborated the large vessels  fished beyond                                                                   
the  state's  3-mile   limit  and  returned  to   Alaska  for                                                                   
processing  or to  deliver  fish.  He continued  the  vessels                                                                   
(e.g.  factory  trawlers  and  other) had  the  privilege  of                                                                   
fishing some  of the  most pristine wild  fish in  the world.                                                                   
He underscored  the state  owned the  resource in common  and                                                                   
under  the  constitution  it  was  supposed  to  receive  the                                                                   
maximum  benefit   for  its  commonly  owned   resources.  He                                                                   
thought  that  the  percentage  increase  would  be  fair  to                                                                   
Alaska and reflected the value of the fisheries.                                                                                
                                                                                                                                
6:43:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION.                                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg, Kawasaki                                                                                            
OPPOSED:  Edgmon,  Gattis, Munoz,  Pruitt,  Saddler,  Wilson,                                                                   
Neuman, Thompson                                                                                                                
                                                                                                                                
The MOTION to adopt Amendment 4 FAILED (3/8).                                                                                   
                                                                                                                                
6:44:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson  MOVED to ADOPT Amendment  5, 29-GH2460\A.1                                                                   
(Martin/Nauman, 5/28/16) (copy on file):                                                                                        
                                                                                                                                
     Page 2, lines 1 - 3:                                                                                                       
     Delete "[AT AN AMOUNT THAT IS AS CLOSE AS IS                                                                               
     PRACTICABLE TO THE MAXIMUM ALLOWED BYLAW]"                                                                                 
     Insert "at an amount that is as close as is                                                                                
     practicable to the maximum allowed by law"                                                                                 
                                                                                                                                
Representative Guttenberg OBJECTED for discussion.                                                                              
                                                                                                                                
Co-Chair  Thompson  relayed  the   amendment  was  conforming                                                                   
regarding  the  Carlson  case  [a  class  action  case  filed                                                                   
against  the state  in  1984  related to  commercial  fishing                                                                   
fees].                                                                                                                          
                                                                                                                                
Mr. Brown relayed  that CFEC strongly supported  Amendment 5.                                                                   
When  the  commission had  seen  the  original bill,  it  had                                                                   
communicated there  was no reason to remove  language calling                                                                   
for a  nonresident surcharge  to be  as close as  practicable                                                                   
as  law to  the  maximum  amount. He  understood  Legislative                                                                   
Legal   Services   initially   thought   the   language   was                                                                   
superfluous.  He continued  that Mr. Twomley  could speak  to                                                                   
the  long history  of  the Carlson  case.  He emphasized  the                                                                   
language  was not  superfluous.  The state  did  not want  to                                                                   
return  to  undercharging  nonresidents   any  more  than  it                                                                   
wanted  to  be  accused  of  unconstitutionally  overcharging                                                                   
them.                                                                                                                           
                                                                                                                                
Co-Chair  Neuman asked  for clarification  on the  amendment.                                                                   
He observed the  language to be deleted was  identical to the                                                                   
language to be inserted.                                                                                                        
                                                                                                                                
Representative Gara had the same question.                                                                                      
                                                                                                                                
Mr.  Brown clarified  that the  current version  of the  bill                                                                   
deleted  the  language.  The amendment  would  reinstate  the                                                                   
language.                                                                                                                       
                                                                                                                                
Representative  Guttenberg  WITHDREW   his  OBJECTION.  There                                                                   
being NO further OBJECTION, Amendment 5 was ADOPTED.                                                                            
                                                                                                                                
HB  4006  was  HEARD  and  HELD   in  committee  for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Thompson  relayed the agenda for the  following day.                                                                   
The meeting was  recessed to a call of the chair.  [Note: the                                                                   
meeting never reconvened.]                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
HB 4006 UFA letter.pdf HFIN 6/1/2016 3:00:00 PM
HB4006
HB 4006 New Amendment 4 Gara.pdf HFIN 6/1/2016 3:00:00 PM
HB4006
HB 4006 New Amendment 3 Wilson.pdf HFIN 6/1/2016 3:00:00 PM
HB4006