Legislature(1997 - 1998)

03/30/1998 03:40 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
       HB 285 - POINT SYSTEM FOR COMMERCIAL FISH VIOLATION                     
CHAIRMAN HALFORD announced HB 285 to be up for consideration.                  
REPRESENTATIVE IVAN, sponsor, said HB 285 addresses some concerns              
about illegal fishing activities in his district and others.  It               
seeks to protect honest fishermen.  It's been stated that these                
illegal activities have become a philosophy among some fishermen               
and they are just the cost of doing business if they are cited for             
it.  The bill establishes a point system against the commercial                
fishing permit holder for convictions of Title 16 commercial                   
fishing laws.  Twelve or more within a 36 month period would result            
in a one year suspension by the Commercial Fishery Entry                       
Commission, 16 or more within a 48-month period results in two-                
years, and progresses up to 18 points or more in a 60-month period             
which results in a three-year suspension of the permit.  The                   
assessment of points, the suspension process, noticing, etc. are               
provided for in the bill.  Sections 5 - 9 were suggested by the                
Commercial Fisheries Entry Commission and are a revision of current            
statutes.  References to forfeiture have been deleted, because it              
is believed suspension and revocation of fishing privileges by the             
Entry Commission are more consistent with the legislature's prior              
determination that fishing privileges are use privileges and not               
This legislation is strongly supported by the Department of Public             
Safety and the Commercial Fisheries Entry Commission.  He has                  
worked with the lending institutions, namely CFAB and the Division             
of Investments, the Commercial Fisheries Entry Commission, Public              
Safety, and attorneys well-versed in commercial fishing laws.                  
Number 165                                                                     
SENATOR LEMAN asked if he had worked with the Division of                      
Investments on loan obligations and valuation of the permits since             
the January 26, 1998 letter was written.                                       
REPRESENTATIVE IVAN answered that they were concerned because as a             
lending institution, they make loans secured by pledges of limited             
entry permits.  Pursuing the individual permit holder alleviated               
some of their concerns.                                                        
CHAIRMAN HALFORD noted when the legislature tried this a few years             
ago, they attached it to the permits and it was successful in                  
getting out of the Senate, but it died in the House.                           
MR. TOM WRIGHT, Staff to Representative Ivan, said initially the               
points were going to be attached to the permit, but Mr. Cameron                
Jenson, an attorney well-versed in commercial fishing lending laws,            
said if a permit was going to be revoked after a certain number of             
points accumulated, they ran into the questions of takings, due                
process, and equal protection laws.  They would have had to rewrite            
a number of statutes for CFAB and the Division of Investments in               
order to do the revocation.  That's why they came up with the                  
suspension for one, two or three years with the thought being if               
someone has their permit suspended for a two-year period, they are             
going to get out of the fishery, because they couldn't afford to               
sit on the beach for two years.                                                
SENATOR LEMAN said he thought this was a good idea, but he is                  
concerned about an accumulation of points for a series of pretty               
minor violations, like trailer buoys.                                          
MR. WRIGHT said they had discussed this with the Department of                 
Public Safety and they usually take those things into consideration            
before issuing a citation.                                                     
SENATOR LEMAN asked in the case of trailer buoys, each buoy                    
wouldn't be a separate violation.                                              
MR. WRIGHT answered that would be his impression from conversations            
with Colonel Glass.                                                            
Number 267                                                                     
CHAIRMAN HALFORD asked if the individuals who have to "sit out"                
would have an opportunity to do an emergency transfer of their                 
permit, and then crew on that boat.                                            
MR. WRIGHT answered if the license is suspended, they cannot                   
transfer it.                                                                   
CHAIRMAN HALFORD asked what happens if they have a violation, but              
not a conviction and while they are waiting to go to court, they               
transfer the permit.                                                           
MR. BRUCE TWOMLEY, Commercial Fisheries Entry Commission, answered             
if he hasn't reached the point where the permit is suspended, and              
with it the transferability of the permit which would stop that                
process cold, he would need to make an independent showing that he             
is qualified for an emergency transfer under the existing law.  He             
could get one with that showing.  One of the provisions in the bill            
may address that in part.  If there is a violation during an                   
emergency transfer, the demerit points are assessed against both               
the permit holder and the transferee.                                          
CHAIRMAN HALFORD said there is a lot of time after a violation                 
before a sentence or final disposition during which  a person could            
just do a straight transfer to his brother or his best friend, or              
to whomever.  He asked how can they could stop that.                           
MR. TWOMLEY answered the points are going to track the individual,             
so if he's caught in a subsequent violation, the points are going              
to build up against him.  He didn't see that as being a real                   
opportunity to escape the effect of this bill.                                 
Number 350                                                                     
CHAIRMAN HALFORD said for example, there are three brothers from               
California who come up here every year and fish Bristol Bay; they              
are high-line line fishermen who are not popular with the locals               
and do very well.  They work the line as the cost of doing business            
and the first year they get a violation and brother A has the                  
permit in his name.  The second year, they get another violation               
and are cited (it's on video, so they know they are going to get               
caught), but it hasn't been to court, yet.  So brother A transfers             
the permit to brother B.  The third year, they go out and fish                 
again.  Brother A is now a crew member on his own boat with his                
brother now carrying the permit.  The permit isn't suspended                   
because it was transferred before it had 12 points against it.                 
MR. TWOMLEY said he thought this question points out the virtue of             
this bill and the fact that the demerit points track the                       
individual.  If that individual has a case pending against him,                
those points are going to apply to him if he's convicted.  Even                
during this period, if he's caught in another violation while his              
brother holds the permit and is cited, those points will be                    
assessed against him and build a record against him which could                
lead the Commission to suspending his fishing privileges.                      
CHAIRMAN HALFORD said it seems to him that three brothers could                
keep this thing moving for a long time.  He asked, suppose he's a              
crew member on the boat and his brother's running the boat and they            
are over the line again, is he going to get a violation as a crew              
member?  Is he going to get cited?  He didn't see them citing all              
the crew members.                                                              
MR. WRIGHT answered the point is if he transfers the permit to                 
Brother B, he is still the owner of that permit.                               
CHAIRMAN HALFORD said no, as far as the law is concerned, he sold              
the permit to his brother.  So the first two years are covered by              
the first brother, then the second brother has it on the third year            
and gets caught and again the fourth year.  So he transfers the                
permit before the second conviction in the fourth year to Brother              
C.  Brother C is in charge for the fifth and sixth years and then              
they are getting close to where they can go back to Brother A and              
start all over again.  If there are four brothers, he knows they               
can do it.                                                                     
He noted a letter from CFAB and said maybe one of the benefits the             
legislature wants out of this is that violations would result in a             
financial disadvantage to the offending permit holder in the event             
of a sale of permit during the period in which there are points                
effectively outstanding by being worth significantly less money.               
MR. WRIGHT pointed out that there are opportunities for the permit             
holder to duck this thing, assuming the points track the permit. He            
can unload the permit when he sees the prices of permits falling               
and buy one back that is free and clear of any points.                         
CHAIRMAN HALFORD wants to catch them both ways.  He said he is very            
pleased to see this bill because he thought it could do some good              
in the worst kinds of line fisheries.                                          
Number 409                                                                     
SENATOR SHARP asked if it was possible to make it statutorily                  
binding that if there's a pending violation that may result in                 
suspension, they cannot transfer the permit until the result of the            
court case.                                                                    
CHAIRMAN HALFORD said he thought that would slow it down, at least.            
MR. WRIGHT said it would be possible to do that, although the                  
premise of the bill is different than that.  The demerit points are            
not to be assessed until there was due process because you wouldn't            
know if a conviction would stick or not.  The bill operates from               
the point of conviction rather than citation.  They have found that            
not everything is recorded through the computer system.                        
MR. TWOMLEY said they have learned through work on this bill that              
there isn't one unified computer system for the courts right now.              
CHAIRMAN HALFORD asked if the Department could give it to you when             
they file the charge outside of the court system.                              
MR. TWOMLEY said they could give the citations to him, but a number            
of those wash out for any number of reasons.                                   
CHAIRMAN HALFORD said he wanted to work with CFAB and the sponsors             
and pass this bill.                                                            
MR. WRIGHT added that Division of Investments had an interest as               
CHAIRMAN HALFORD asked if they make direct loans.                              
MR. WRIGHT said he understands that they make loans for commercial             
fishing permits.                                                               
CHAIRMAN HALFORD asked if they are currently doing that or are they            
old loans.                                                                     
MR. JERRY MCCUNE, United Fishermen of Alaska, said one of the loan             
programs is for residents only.                                                
CHAIRMAN HALFORD said he didn't think it was a bad idea if a permit            
with some points on it was worth a little less.  This is the kind              
of thing that the bandits who work the lines the hardest                       
MR. WRIGHT said they had that conversation with Colonel Glass and              
that's one of the things you try to find your way around.                      
MR. MCCUNE said they wanted to attach the points to permits, but               
the reason they didn't was because of conversations with Division              
of Investments and CFAB indicating that people use their permits as            
collateral for their purchase.                                                 
CHAIRMAN HALFORD said one of the impacts of CFAB's exposure would              
be that they would be very careful when they looked at someone's               
record as to whether they would make them a loan to buy a permit in            
the first place.                                                               
MR. MCCUNE said they run afoul of some federal and state lending               
laws if they try to do something to the permits, like assess them              
to devalue them.                                                               
CHAIRMAN HALFORD said they have to be consistent with the State's              
IRS case which says that permits are really worthless.                         
REPRESENTATIVE IVAN said he would like to help them work through               
the issues.                                                                    

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