Legislature(1999 - 2000)
05/03/1999 05:10 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 146 - COM. FISH LICENSE/FISHERMEN'S FUND CHAIRMAN HUDSON announced that the next order of business was CS for Senate Bill No. 146(FIN) am, "An Act relating to the amount and disposition of the commercial fishing license fee and to the fishermen's fund; and providing for an effective date." LLEWELLYN LUTCHANSKY, Senate Finance Committee Aide for Senator Torgerson, Alaska State Legislature, read the sponsor statement: Senate Bill 146 increases the cost of a crew-member's fishing license from $30 per resident and $90 per non-resident to $60 for a resident and $125 for a non-resident license. At the current time, 60 percent of the crew-member license fees goes into the Fisherman's Fund. Senate Bill 146 reduces the percentage of license fees that goes into the fund from 60 percent to 39 percent. At the 39 percent level, the Fisherman's Fund will have the same amount of funding it receives now. The current balance of the fund is over $9 million. Senate Bill 146 directs 61 percent of the crew license fees to the Fish and Game Fund to be made available for appropriation to Commercial Fisheries Management in the FY 2000 operating budget. The intent is to direct the crew license fees to benefit the commercial fisheries industry. MS. LUTCHANSKY added that people from the Department of Law and the Department of Fish and Game were present to answer questions on calculations. REPRESENTATIVE HARRIS referred to the fiscal note and wondered why it would be a savings of $20,900 versus the following year of $53,300. MS. LUTCHANSKY deferred the question to the department that prepared the fiscal notes. Number 1673 JIM BALDWIN, Assistant Attorney General, Civil Division, Department of Law, said that he wanted to familiarize the committee with a legal issue that is raised in SB 146. He explained that the bill proposes to change the rate of dedication for a pre-existing dedicated fund. The Fisherman's Fund, by law, takes a percentage of the license fees. The dedication existed before statehood, which means that it was grandfathered in under the Constitution of the State of Alaska. The opinion of the Department of Law is that any change in the rate of dedication has the potential of destroying it, since the constitution talks about continuing dedications in there present state; therefore, the effect would be that the revenues derived, if they are to be sent to the Fisherman's Fund, would have to be appropriated there, because they would no longer be dedicated. Basically, the way a dedication works is that the money cannot be used for another purpose. It was the policy when the state was formed and the constitution was adopted that dedicated funds should be minimized as much as possible; the Fisherman's Fund being an exception. MR. BALDWIN continued. He indicated that there is a difference of opinion between the Department of Law and the Legislative Affairs Agency. The Legislative Affairs Agency places emphasis on the ability to change the rate of the dedication. This was of importance a couple years ago when there was a considered change in the tobacco tax. At that point the Department of Law advised the relevant standing committees that the way to approach it was if they disagreed with the departments advise that an appropriate safeguard would be to have some backup provisions. In case of a successful legal challenge of the change in rate of the dedication they should have a backup that would impose the increase in the license fee, or tax, and that increase in revenues would go to the general fund subject to the discretion of the legislature to appropriate the Fish and Game Fund. The benefit of doing that, at least in the case of the tobacco tax, is that it removes any incentive for someone to sue to try to reverse it, because the outcome would be that the increase would be imposed and the revenue would go to a specified source. With regards to the tobacco tax there has been no incentive to sue to reduce the tax, because there is a backup to deal with that situation. In SB 146, Senator Torgerson, chose not to do that. He noted that he doesn't think Senator Torgerson is really against resolving the legal problems, but he didn't want to change the bill when they brought it to his attention in the Senate Finance Committee. He feels that without at least a disincentive to sue the bill proposes a risk for the ability to continue the dedication for the Fisherman's Fund. He added that there is no requirement to continue a dedicated fund if the legislature chooses not to, but the department wouldn't want them to just stumble into that without having been informed of the risks. Number 1964 CHAIRMAN HUDSON asked, in the event there was a challenge and the court found that it was unconstitutional or legally improper, whether or not it would have any impact on the fund as it is currently constituted. MR. BALDWIN replied that the answer to that question involves the consideration of two issues; one, could the dedication continue or the stream of revenue, which he thinks the answer is clearly "No", and two, the question about the balance in the fund, which he feels intuitively would do in the dedication and make those funds apart of the general fund, but he is unsure. There has not been a problem like that arise in the state where the power to dedicate on a pre-existing fund was lost. He explained that what has happened in the past is whenever the legislature say fit to increase the tobacco tax, before the legislature embraced the opinion of the Legislative Affairs Agency, they would incrementally change the law and leave the existing law alone; add new sections to the law. He indicated that it is the type of thing he would propose for the backup, but it is a financial matter and might be better addressed in the Finance Committee. CHAIRMAN HUDSON pointed out that there is a letter from Mr. Baldwin in the packet addressed to Senator Torgerson. Number 2091 KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game, stated that the department has worked with Senator Torgerson's office throughout the subcommittee process on their budget trying to mitigate general fund reductions within the Division of Commercial Fisheries Management and Development. He indicated that the department supports the measure to move the revenue from the sale of crew member licenses to the Fish and Game Fund. The department has also been consistent in their testimony that they do not want to do anything to harm the Fisherman's Fund; it has been the general consensus throughout the process. He referred to the question asked by Representative Harris on the differences in amounts in the first couple of years and said that it is attributed to the fact that the bill takes effect in relation to the calender year, which is halfway through the fiscal year and so the first year will be a partial year. Number 2165 CHAIRMAN HUDSON stated that there is no decrease according to the bill to the current recipients of the fund. He asked if that is correct. MR. BROOKS replied that is correct. He explained that by changing the amount from 60 percent to 39 percent, it is anticipated that 39 percent of the new fees will result in a modest increase to the contributions to the Fisherman's Fund. REPRESENTATIVE HARRIS wondered if Mr. Brooks has worked in cooperation with the commercial fisherman and whether they believe this is something that is going to be better for them. MR. BROOKS indicated that he would not presume to speak for the commercial fisherman. He pointed out that nobody likes increased fees, but he feels that there is a recognition that the state is in serious times with the general fund and this is one area where the increase is designed to go into the commercial fisheries budget, which will benefit the crew members. He said that they haven't built a consensus with all the fisheries groups, but there has been input by those groups in previous hearings and in working with Senator Torgerson's office. Number 2287 BRUCE GABRYS, Commercial Fisherman from Cook Inlet, testified via teleconference from Anchorage. He stated that the concern from the commercial fishing perspective is that if the increase is necessary the addition money should go back into the fishery; if it goes back into the commercial fisheries budget the net benefit of that to the commercial fisheries will be seen if those revenues are returned and used in fisheries management. CHAIRMAN HUDSON asked Mr. Brooks what the amount is that the resident fisherman pay presently compared with what the payment would increase to. Number 2352 MR. BROOKS replied that the resident fee would go from $30 dollars to $60 and non-residents would go from $90 to $125 per year. CHAIRMAN HUDSON asked Ms. Lutchansky if they have a record of testimony from commercial fisherman throughout the state. MS. LUTCHANSKY replied that they have received no testimony except from the Alaska Gillnetters Association here in Southeast. CHAIRMAN HUDSON wondered what the intent is of SB 146; to increase revenue or meet expenses. MS. LUTCHANSKY said that they were given a target in the fish and game budget during the department's subcommittee meeting and they were having a difficult time finding ways to cut the budget without hurting various divisions in the department. They thought if they could find a way to raise revenues and spend them on commercial fisheries that would be the best approach. CHAIRMAN HUDSON wondered if it is the intention of Senator Torgerson to pass on the additional revenues to the management of fish and game. MS. LUTCHANSKY replied yes. The additional revenues would go right back into the commercial fisheries management. Number 2471 JERRY MCCUNE, United Fisherman of Alaska, stated that his concern is that the Fisherman Fund continues to be fully funded at the same rate, because it is very valuable to the crew member. He said that even though they do not like increased fees, they recognize that SB 146 is a creative way to fund more money into fish and game. He pointed out that there is also the question being asked of why not charge the non-resident three times as much or $180 instead of $60. He referred to the "Carlson Case" and limited entry and said that they do not want to bring up another case, so that is why it is at the current rate. He indicated that they are not supporting SB 146, but they did work with Senator Torgerson to get some money that would go directly to fish and game. He added that if they were at the whim of the general fund he believes most groups would not be supportive of SB 146. Number 2560 REPRESENTATIVE HARRIS asked Mr. Baldwin if he thinks there is a way that the amount of money can be dedicated to the Division of Commercial Fisheries Management and Development. MR. BALDWIN stated that he is not sure it works that way. He explained that the way SB 146 works is it will be set up as a front section operation, meaning that in the front section of the budget there will be an appropriation that will appropriate the revenues to the Fish and Game Fund and then out of the fund; therefore, it is not going to be a dedication, but it will be a fairly routine matter. It basically hard wires it in, but it doesn't dedicate it. REPRESENTATIVE HARRIS stated that the concern of the fisherman and of the Department of Fish and Game is that they are going to be fully protected, but just because the appropriation is in the front section of the budget this time does not mean that the front section of the budget is guaranteed to remain there. He indicated that after being through a number of meetings he can guarantee that there is nothing sacred in the front section of the budget as the budget gets tighter. It is really the whim of the legislature to ensure that the money is appropriated and he hopes that intention remains there, because if the fishermen are asked to pay more, then the money should go towards helping the fishing industry. CHAIRMAN HUDSON indicated that he would like to move SB 146 along with the letter from the Department of Law, in order to draw the concern to the Finance Committee, as well as the comments by the committee. REPRESENTATIVE HARRIS made a motion to move CSSB 146(FIN) am out of committee with individual recommendation and the attached fiscal note. There being no objection, CSSB 146(FIN) am was moved out of the House Special Committee on Fisheries.
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