Legislature(2013 - 2014)CAPITOL 120

04/17/2014 08:00 AM House FISHERIES

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08:05:23 AM Start
08:05:49 AM HB386
09:02:11 AM Adjourn
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Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                         April 17, 2014                                                                                         
                           8:05 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Paul Seaton, Chair                                                                                               
Representative Eric Feige                                                                                                       
Representative Lynn Gattis                                                                                                      
Representative Bob Herron                                                                                                       
Representative Kurt Olson                                                                                                       
Representative Jonathan Kreiss-Tomkins                                                                                          
MEMBERS ABSENT                                                                                                                
Representative Craig Johnson                                                                                                    
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 386                                                                                                              
"An  Act   repealing  the   Alaska  Commercial   Fisheries  Entry                                                               
Commission and transferring its  duties to a commercial fisheries                                                               
entry division  established in  the Department  of Fish  and Game                                                               
and the office of administrative hearings."                                                                                     
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 386                                                                                                                  
SHORT TITLE: REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG                                                                            
SPONSOR(s): RULES BY REQUEST OF FISHERIES                                                                                       
04/16/14       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/16/14       (H)       FSH, RES, FIN                                                                                          
04/17/14       (H)       FSH AT 8:00 AM CAPITOL 120                                                                             
WITNESS REGISTER                                                                                                              
LOUIE FLORA, Staff                                                                                                              
Representative Paul Seaton                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 386, on behalf of                                                                           
Representative Seaton, prime sponsor.                                                                                           
BRUCE TWOMLEY, Chair                                                                                                            
Commercial Fisheries Entry Commission (CFEC)                                                                                    
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 386.                                                               
BEN BROWN, Commissioner                                                                                                         
Commercial Fisheries Entry Commission                                                                                           
Alaska Department of Fish & Game                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 386.                                                               
KEVIN BROOKS, Deputy Commissioner                                                                                               
Office of the Commissioner                                                                                                      
Alaska Department of Fish & Game                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 386.                                                               
ANDY HEMENWAY, Administrative Law Judge                                                                                         
Office of Administrative Hearings (OAH)                                                                                         
Department of Administration                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 386.                                                               
ACTION NARRATIVE                                                                                                              
8:05:23 AM                                                                                                                    
CHAIR  PAUL   SEATON  called  the  House   Special  Committee  on                                                             
Fisheries meeting to order at  8:05 a.m.  Representatives Gattis,                                                               
Herron,  Feige, and  Seaton were  present at  the call  to order.                                                               
Representatives Olson  and Kreiss-Tomkins arrived as  the meeting                                                               
was in progress.                                                                                                                
         HB 386-REPEAL CFEC; TRANSFER FUNCTIONS TO ADFG                                                                     
8:05:49 AM                                                                                                                    
CHAIR SEATON announced  that the only order of  business would be                                                               
HOUSE  BILL NO.  386,  "An Act  repealing  the Alaska  Commercial                                                               
Fisheries  Entry  Commission and  transferring  its  duties to  a                                                               
commercial  fisheries entry  division established  in the  Alaska                                                               
Department  of   Fish  and  Game   (ADF&G)  and  the   Office  of                                                               
Administrative Hearings (OAH)."                                                                                                 
8:06:08 AM                                                                                                                    
CHAIR SEATON  pointed to  budget constraints.   He  explained the                                                               
purpose of  HB 386  is as  a consolidating,  cost-saving measure,                                                               
while at  the same time continuing  important, necessary services                                                               
without  harming the  management  of fisheries.   He  underscored                                                               
that this  bill is not an  attempt to denigrate the  work that is                                                               
accomplished   by   the    CFEC   [Commercial   Fisheries   Entry                                                               
Commission].   He acknowledged some parallel  licensing occurs by                                                               
the CFEC and  the ADF&G.  The proposed  consolidation of services                                                               
has not been  predetermined and instead, the intent of  HB 386 is                                                               
to  start the  conversation  and identify  the  ways, means,  and                                                               
probability for  taking this proposed  next step.  There  are two                                                               
ways to  approach this type  of action, by legislative  action or                                                               
administrative reorganization.   He  hoped the committee  will be                                                               
able to review  the myriad of changes and that  this meeting will                                                               
assist in setting the stage  for integrating CFEC into a division                                                               
within the ADF&G.                                                                                                               
8:11:32 AM                                                                                                                    
LOUIE  FLORA, Staff,  Representative  Paul  Seaton, Alaska  State                                                               
Legislature,  stated that  the  overarching theme  of  HB 386  is                                                               
whether  the state  should maintain  a  separate commission,  the                                                               
Commercial  Fisheries Entry  Commission to  handle limited  entry                                                               
into  fisheries  when  no  new limited  entry  fishery  has  been                                                               
established  in the  past 10  years.   The  CFEC was  established                                                               
after the  1972 voter  approval of the  Limited Entry  Act, which                                                               
the  legislature  enacted in  1973,  creating  the limited  entry                                                               
fishery  program  and  giving the  CFEC  the  responsibility  for                                                               
administering  the  program.    He  reviewed  some  documents  in                                                               
members'  packets, including  the CFEC  2012 Annual  Report.   He                                                               
read the duties  of the commission, such that the  CFEC serves as                                                               
a  regulatory and  quasi-judicial  agency of  the  state.   Three                                                               
commissioners are appointed by the  governor and confirmed by the                                                               
legislature.   Commission staff is organized  into five sections,                                                               
including  administration, adjudication,  research and  planning,                                                               
licensing, and information technology.                                                                                          
MR. FLORA  said the commission  is charged with  establishing the                                                               
maximum   number  of   permits  for   limited  entry   fisheries,                                                               
processing  limited   entry  permit   applications,  adjudicating                                                               
claims, issuing  annual reports in  both limited and  open access                                                               
fisheries,  processing  requests   for  emergency  and  permanent                                                               
transfers, as  well as research  and coordination with  state and                                                               
federal management agencies in developing fisheries policy.                                                                     
MR. FLORA reported that between  1974-2013, limited entry fishery                                                               
permits have  been issued in  65 commercial  fisheries, including                                                               
26 salmon  fisheries, 19 herring  fisheries, 9 crab  fisheries, 5                                                               
sablefish fisheries,  3 shrimp fisheries,  and 3  dive fisheries.                                                               
To  date, a  total of  79 permit  types have  been issued  for 65                                                               
limited  entry  fisheries.   He  said  this summary  provides  an                                                               
historic sweep of the Limited Entry  Act and the act's effects on                                                               
Alaska's fisheries.                                                                                                             
8:14:22 AM                                                                                                                    
MR. FLORA  directed attention to the  document entitled, "Changes                                                               
in   Distribution   of   Alaska's  Commercial   Fisheries   Entry                                                               
Commission  Permits, 1975-2013."    He noted  that  since 1975  a                                                               
large number of fisheries have  been limited through the decades,                                                               
ending in 2004.  In 2004,  the last fishery limited in Alaska was                                                               
the Kodiak  tanner bairdi  pot fishery.   He  acknowledged future                                                               
limited  entry fisheries  could  occur;  however, he  anticipated                                                               
that  these   would  be  relatively  small   fisheries  with  low                                                               
participation numbers.                                                                                                          
MR. FLORA  reviewed the possibilities  for limiting  fisheries in                                                               
the future,  for example,  he anticipated  that the  Togiak seine                                                               
herring  and  some Pacific  cod  fisheries  could become  limited                                                               
entry fisheries.  He suggested one  question would be to ask what                                                               
staff levels  would be  required to  research and  administer any                                                               
new fishery limitation.  He  further asked whether the commission                                                               
is the best structure for today's fishery limitations in Alaska.                                                                
8:16:32 AM                                                                                                                    
MR.  FLORA directed  attention  to page  1.   In  1998, the  CFEC                                                               
adjudicated  105   permit  cases,  42  transfer   cases,  and  10                                                               
miscellaneous cases.  He contrasted  this with the cases in 2013,                                                               
in  which the  commissioners adjudicated  a total  of six  cases,                                                               
three entry  permit applications,  two permit transfers,  and one                                                               
remand from the  adjudication section.  He  further reported that                                                               
seven  permit  applications  are pending  before  CFEC's  hearing                                                               
officers.  After  the hearing officer issues a  decision on these                                                               
seven  cases, the  cases will  be  passed to  the commission  for                                                               
review  so   the  commissioners'   total  future  case   load  is                                                               
approximately 30 cases.   He compared these figures  back to 1998                                                               
in which  227 cases were  before the commissioners and  363 cases                                                               
were before the adjudication staff.                                                                                             
MR. FLORA said the compelling argument  is that the case load has                                                               
been  significantly diminished.   In  addition, the  governor has                                                               
not appointed a  third commissioner, which has  been vacant since                                                               
2012.   He emphasized  that the  CFEC has done  its job  well and                                                               
argued its cases successfully.  In  fact, its cases are not being                                                               
rejected by  the Alaska Supreme  Court.  He emphasized  that this                                                               
demonstrates that the CFEC has succeeded in its mission.                                                                        
8:18:12 AM                                                                                                                    
MR. FLORA  directed attention  to the  sectional analysis  for HB
386 in members'  packets.  He explained that a  number of changes                                                               
in  the bill  are conforming  amendments.   He offered  to review                                                               
each section, if the committee preferred him to do so.                                                                          
REPRESENTATIVE HERRON asked why fix something that isn't broken.                                                                
8:19:04 AM                                                                                                                    
CHAIR  SEATON, in  response to  Representative Herron,  explained                                                               
the genesis of  the bill.  He  said that he served  on the Alaska                                                               
Department  of  Fish  &  Game House  Finance  subcommittee.    He                                                               
reported  that   the  meetings  revealed   the  need   for  cuts,                                                               
consolidations,  and efficiencies.   He  acknowledged that  while                                                               
the subcommittee  did not propose any  cuts to the CFEC,  some of                                                               
CFEC's funding stems  from permits.  With respect  to the state's                                                               
impending fiscal  shortfalls, this bill would  review whether the                                                               
state  is  being  efficient  in  accomplishing  its  issuance  of                                                               
permits and  management of fisheries  to fulfill  its obligations                                                               
under  Article VIII  of Alaska's  Constitution.   He  underscored                                                               
that  he doesn't  question CFEC's  job, but  given the  declining                                                               
caseload, the  question is  whether the  CFEC's functions  can be                                                               
done  more  efficiently  and  effectively  [by  transferring  the                                                               
function to  ADF&G].  He  hoped the hearing would  reveal whether                                                               
the  CFEC's  hearings  are   significantly  different  enough  to                                                               
require separate  hearing officers  rather than using  the Office                                                               
of Administrative  Hearings (OAH)'s [administrative  law judges].                                                               
He offered  his belief that  tough budgetary decisions  will need                                                               
to be made  next year.  Therefore, this bill  and today's hearing                                                               
are necessary  to identify  the actual  needs in  this area.   He                                                               
envisioned  that  consolidation efforts  such  as  this could  be                                                               
difficult to  tackle during a  legislative session  without first                                                               
having a thorough discussion in the interim.                                                                                    
8:21:33 AM                                                                                                                    
REPRESENTATIVE   KREISS-TOMKINS  concurred   with  Representative                                                               
Herron's  caution  in  changing  a commission  process  that  has                                                               
worked well.   He asked for any projected  savings by integrating                                                               
the CFEC into the ADF&G.   Perhaps a downsizing of CFEC to better                                                               
represent the caseload needs would  be more appropriate and allow                                                               
efficiencies to be found in-house.                                                                                              
MR. FLORA  deferred to  representatives from  CFEC and  ADF&G who                                                               
could better respond.                                                                                                           
8:22:31 AM                                                                                                                    
CHAIR SEATON  indicated that the  lateness in introducing  HB 386                                                               
is  related  to  his  intention  to  initiate  discussions.    He                                                               
cautioned  that this  bill is  not  an effort  to predetermine  a                                                               
transfer of the  CFEC to ADF&G, but to hold  discussions with all                                                               
the parties  to explore whether  this would  provide efficiencies                                                               
and cost-savings and be in the best interests of the state.                                                                     
REPRESENTATIVE OLSON  asked whether  he intends to  hold hearings                                                               
during the legislative interim.                                                                                                 
CHAIR SEATON said he was unsure;  it would depend on the progress                                                               
the  committee  makes  and  responses by  CFEC,  ADF&G,  and  the                                                               
Department  of Law  as  to the  feasibility of  a  transfer.   He                                                               
acknowledged that  one outcome could  be that it is  obvious that                                                               
it won't work  and downsizing may be the best  approach, but with                                                               
the budget  constraints on the  horizon he felt it  was important                                                               
to begin outlining a means for addressing the situation.                                                                        
8:24:30 AM                                                                                                                    
BRUCE  TWOMLEY,  Chair,  Commercial Fisheries  Entry  Commission,                                                               
Alaska Department  of Fish &  Game, appreciated that  the sponsor                                                               
considers HB 386  a conversation starter.  He said  that the CFEC                                                               
and  ADF&G  each  issue  licenses   and  both  are  supported  by                                                               
information technology  (IT) so  he could  understand considering                                                               
combining the two functions; however,  he offered his belief that                                                               
the  functions  of  these  agencies   are  very  different.    He                                                               
explained that HB 386 will  set out standards for moving forward,                                                               
but two questions need to be  considered: first, if it would risk                                                               
undermining statutory  or constitutional  functions.   Second, if                                                               
it is  practical to  combine the  two agencies,  and if  it would                                                               
save  money to  do so.   He  suggested that  a comparison  of the                                                               
functions needs  to be taken, but  these functions may not  be as                                                               
parallel as they initially appear.                                                                                              
MR. TWOMLEY  said it was suggested  that the CFEC's case  load in                                                               
2013 was  reduced to six cases  in the past few  years.  However,                                                               
one case  that took  time in  2013 was  the Carlson  case [State,                                                             
CFEC v.  Carlson, 191  P.3d 137  (Alaska 2008).  ("Carlson IV")].                                                             
He pointed  to the caseload,  41 cases from hearing  officers and                                                               
adjudication  staff,  with  only   six  from  the  commissioners;                                                               
however, he  noted the commissioners  have a duty to  review each                                                               
of the  41 cases and rule  on them.  Normally,  these cases would                                                               
have  been completed  by  the end  of the  year,  but extra  time                                                               
necessary  for  the Carlson  case  and  his own  personal  travel                                                               
interrupted this review.  The result  is that this means the 2013                                                               
cases will increase to about 40 cases.                                                                                          
MR.  TWOMLEY   remarked  that  the   CFEC  recently   received  a                                                               
maintenance budget  while the ADF&G  was subject to  budget cuts.                                                               
He  reviewed   the  CFEC's  budget  historically   to  provide  a                                                               
perspective.   He  explained that  the  CFEC is  a small,  exempt                                                               
agency,   which   allows   for  creativity   outside   of   union                                                               
constraints.    Throughout  the  CFEC's  history,  it  has  asked                                                               
employees to take  leave without pay and  forego merit increases.                                                               
He pointed  out that the  commissioners' salaries  were initially                                                               
set  at  a  level  equal  to  district  court  judges  since  the                                                               
legislature recognized  that the  decisions the  commission makes                                                               
have  as much  impact as  decisions that  come from  the district                                                               
court.  Certainly, people feel  deeply about their fishing rights                                                               
in  Alaska.   However,  the district  court  judge salaries  have                                                               
increased  over   time  but  not   the  salaries  for   the  CFEC                                                               
commissioners.   He  provided an  example to  illustrate how  the                                                               
commissioner salaries have been held  in place, without any merit                                                               
increase for 25 years to contribute to a balanced budget.                                                                       
MR. TWOMLEY noted  the CFEC has made  major contributions through                                                               
employee cuts.   The CFEC  cut its executive  director's position                                                               
in  order to  meet budget  cuts; however,  such a  cut meant  the                                                               
remaining  28  full-time  positions   had  to  absorb  additional                                                               
responsibility.   The  administrative functions  have essentially                                                               
been absorbed and distributed, he  said.  In 1986, the commission                                                               
had  41  full-time  positions,  which have  been  reduced  to  28                                                               
positions; hence,  this represents a 30  percent reduction during                                                               
that time.   He suggested that the commission  is performing more                                                               
complex  work  with fewer  people,  which  he compared  to  being                                                               
reduced to  all "muscle and  bone."  He suggested  members should                                                               
visit the agency  to attain a visible understanding.   He offered                                                               
his  belief that  this  agency may  not be  the  best target  for                                                               
budget  cutting.    Adjudications  also  represent  a  source  of                                                               
efficiency within  the state,  with 68  limited fisheries  and 86                                                               
Alaska  Supreme Court  cases  addressing  applicants for  limited                                                               
entry permits.  For the sake  of efficiency it is critical to win                                                               
these cases  in court.  The  Alaska Supreme Court held  that when                                                               
it  reverses  a commission  rule,  the  reversal can  be  applied                                                               
retroactively    to   require    reopening   previously    closed                                                               
applications  and  to  require   the  commission  to  accept  new                                                               
applications for those who did not apply during eligibility.                                                                    
8:35:22 AM                                                                                                                    
MR. TWOMLEY  elaborated that what  this means is that  with every                                                               
decision  made,  the CFEC  walks  a  tightrope.   Thus,  reversed                                                               
decisions could undermine  fisheries on which Alaskans  rely.  He                                                               
reported that in the overall  3,000 decisions he has participated                                                               
in, no retroactive decisions have  occurred.  He reported that of                                                               
32 appeals since 1996, only  two partial reversals have occurred.                                                               
In  both instances,  the CFEC  avoided a  retroactive application                                                               
since the  commission was careful  to limit adjudications  to the                                                               
facts  affecting the  specific individuals.   Of  the 68  limited                                                               
fisheries,  only   30  cases  are   left  to  be  decided.     He                                                               
characterized  the  CFEC  as  being  "in the  last  lap  of  this                                                               
process."  He  urged members to take great care  in reviewing the                                                               
adjudication  functions.    He  cautioned  against  altering  the                                                               
adjudication  process  which could  hand  a  cause of  action  to                                                               
attorneys representing applicants.   He further cautioned that it                                                               
is late  in the  game for  the state  to be  assuming risks.   He                                                               
acknowledged the  commission has  a finite  number of  cases, but                                                               
recommended that the process that  currently exists be allowed to                                                               
continue   forward   until   the    CFEC   can   achieves   final                                                               
determinations  in   the  remaining  30  cases.     He  suggested                                                               
proceeding from that point before making any decisions.                                                                         
8:38:02 AM                                                                                                                    
CHAIR SEATON  asked how many  CFEC hearing officers are  on staff                                                               
and if they are full-time positions.                                                                                            
MR.  TWOMLEY answered  that the  CFEC has  two full-time  hearing                                                               
8:38:21 AM                                                                                                                    
CHAIR SEATON  suggested the committee  will try to  determine the                                                               
speed in which  those cases will be resolved.   He understood the                                                               
caseload  and  that  CFEC's  case law  has  developed  over  time                                                               
through  the  Alaska  Supreme  Court  cases.   He  asked  if  the                                                               
adjudicatory   hearings  also   have  case   law  to   assist  in                                                               
MR. TWOMLEY answered  that some of the cases  have been resolved,                                                               
but blind spots  exist and the Alaska Supreme  Court has reserved                                                               
discretion in the  area of limited entry fisheries.   He reminded                                                               
members that  CFEC must always be  aware of the possibility  of a                                                               
retroactive  application.    The late  Chief  Justice  Rabinowitz                                                               
advised  not  to  make   unnecessary  affirmative  findings  when                                                               
deciding factual  claims and instead confine  holdings to whether                                                               
the  applicant  has met  the  burden  of  proof.   However,  even                                                               
employing that approach, the court  has discretion, and as recent                                                               
as  the May  case  [May, v.  State, CFEC,  168  P.3d 873  (Alaska                                                             
2007)],  the  high court  can  present  surprises.   He  reviewed                                                               
specific cases to provide an  illustration of how the end results                                                               
affect fisheries.   For example,  he previously shared a  copy of                                                               
the  Kuzmin  case with  the  committee  [Kuzmin v.  State,  CFEC,                                                             
M.O.J. No. 1165  (Alaska 2004)].  What was  significant about the                                                               
Kuzmin case  was that while  it only affected two  applicants, it                                                               
actually resolved an entire fishery.   Another 13 applicants were                                                               
simply  pending  awaiting  the decision,  which  would  determine                                                               
whether they would  be eligible for their permits.   In addition,                                                               
since Kuzmin  did not  appeal, it  allowed CFEC  to close  out an                                                               
entire  fishery.   He emphasized  that  CFEC is  at a  manageable                                                               
point for the  first time since 1990, that it  can close out some                                                               
fisheries and  obtain an  end result it  can be  confident about;                                                               
however, the CFEC must still  get past the appeals pending before                                                               
the Alaska Supreme Court.                                                                                                       
8:41:31 AM                                                                                                                    
BEN BROWN,  Commissioner, Commercial Fisheries  Entry Commission,                                                               
Alaska  Department  of   Fish  &  Game,  hoped   members  had  an                                                               
opportunity  to review  the case  Mr. Twomley  distributed during                                                               
his confirmation  hearing.  He  emphasized the effort  that these                                                               
CFEC  cases take  and the  thorough  attention that  is given  to                                                               
extensive  evidence to  produce  a defensible  result.   He  said                                                               
reviewing the decision will better  illustrate what [Mr.] Twomley                                                               
is saying.                                                                                                                      
CHAIR  SEATON  responded  that  30  cases  are  pending,  so  the                                                               
question  remains about  the time  these cases  will take,  since                                                               
they could range from 5 to  30 years, depending on how many cases                                                               
are being resolved each year.   He said maintaining the budget to                                                               
see  these  cases through  may  or  may  not  be plausible.    He                                                               
appreciated  the thoroughness  CFEC  takes  and acknowledged  the                                                               
labor  and  difficulty  involved in  the  aforementioned  Carlson                                                               
case.   He commended the  job CFEC  has done, but  cautioned that                                                               
the legislature is  trying to figure out the timeline  and how to                                                               
balance budget needs.                                                                                                           
8:43:46 AM                                                                                                                    
MR. BROWN  considered the big  picture context, with a  very busy                                                               
ADF&G.  He  suggested that if the decision is  made to have ADF&G                                                               
perform   licensing   and   information   technology,   but   the                                                               
legislature  outsourced  the  hearing  officer  function  to  the                                                               
Office of Administrative  Hearings (OAH), it would  still need an                                                               
additional level  of review after the  [administrative law judge]                                                               
determination.   He  wondered  if  this review  would  end up  on                                                               
Deputy Commissioner Brook's  desk for a final  review during this                                                               
busy  time.   Thus, squeezing  the  balloon could  cause a  bulge                                                               
elsewhere.    He  agreed  that  the committee  is  aware  of  the                                                               
complexity, which is one reason  for the discussion, noting there                                                               
is not a wand to be waved to make the decisions go away.                                                                        
CHAIR SEATON agreed, noting that  the complexity will need a full                                                               
review without  any predetermination on behalf  of the committee.                                                               
He  appreciated   CFEC's  participation   today  and   hoped  the                                                               
remaining CFEC's cases will be resolved quickly without delays.                                                                 
8:46:18 AM                                                                                                                    
CHAIR  SEATON related  CFEC's duties  that  would be  transferred                                                               
under the  bill.   He asked for  a broad sense  of whether  it is                                                               
feasible to absorb the commission.   He said the structure in the                                                               
bill may not be appropriate but is a starting point.                                                                            
8:47:33 AM                                                                                                                    
KEVIN BROOKS,  Deputy Commissioner,  Office of  the Commissioner,                                                               
Alaska Department  of Fish  & Game,  acknowledged the  length and                                                               
complexity of HB 386.  This  agency has performed great work.  He                                                               
recalled the length of time that  the Carlson case has taken over                                                               
the years.   He acknowledged that the workload  of the commission                                                               
has evolved,  but he would not  be able to adequately  assess how                                                               
the functions  would fit in  ADF&G.  He said  it may take  a fair                                                               
amount of  time to assess.   He acknowledged the  similarities in                                                               
licensing functions, but  the "devil is in the details"  so it is                                                               
difficult to  determine how well this  will fit in.   He recalled                                                               
receiving a call  from the Legislative Auditor,  Kris Curtis, and                                                               
suggested it  may be a  good approach  to have an  unbiased third                                                               
party ascertain  function and  whether the  functions need  to be                                                               
changed.  He supported having  that type of analysis and research                                                               
performed  and acknowledged  that  a number  of hearing  officers                                                               
have  been consolidated  into the  OAH,  and that  the Office  of                                                               
Administrative  Hearings handles  a multitude  of complex  cases.                                                               
He said  he is interested in  how that office views  the CFEC and                                                               
if the  adjudications will fit.   He  recalled that a  decade ago                                                               
hearing  officers were  scattered throughout  state agencies  and                                                               
some inconsistencies  existed.  He  offered his belief,  in part,                                                               
from the time spent in  the Department of Administration that the                                                               
consolidated OAH model has worked pretty well.                                                                                  
8:51:07 AM                                                                                                                    
CHAIR  SEATON reiterated  the purpose  of HB  386 is  to put  the                                                               
issue on the table for discussion.   The bill will help provide a                                                               
context for an independent third-party  audit.  He reiterated the                                                               
bill does not  criticize the CFEC's performance, but  is a matter                                                               
of  budgetary concern.   He  recalled  the adjudication  question                                                               
that was  raised by Mr.  Twomley and  agreed that it  wouldn't be                                                               
appropriate  to  elevate  adjudications  to  division  directors;                                                               
however, it may be more appropriate for OAH to handle the cases.                                                                
MR. BROOKS  responded that all  state agencies are subject  to an                                                               
audit and review  of financial records, but an audit  of the CFEC                                                               
would be a functional review.                                                                                                   
8:54:24 AM                                                                                                                    
ANDY    HEMENWAY,   Administrative    Law   Judge,    Office   of                                                               
Administrative  Hearings,  Department of  Administration,  stated                                                               
that  the  OAH has  ten  administrative  law judges  who  conduct                                                               
hearings for every department.   Hearings range in complexity and                                                               
include ones where hundreds of  millions of dollars are at stake,                                                               
like in  the [State Assessment  Review Board] hearings  that will                                                               
be going  on soon,  to cases that  involve pensions;  PERS; child                                                               
support; Permanent  Fund Dividends; procurement  disputes; taxes;                                                               
and recently it started hearings  on the Department of Health and                                                               
Human  Services  "fair  hearings"   caseload  related  to  public                                                               
benefits.  Thus, the OAH covers  a full gamut of subjects and has                                                               
very diverse  cases.  Some  are very straightforward  and focused                                                               
on matters with  a simple set of rules, while  other cases entail                                                               
very complex statutory  and regulatory matters with  a great deal                                                               
of  factual  complexity.    The  OAH  does  not  make  the  final                                                               
decision, except in a few narrow  areas, and the vast majority of                                                               
will have a  final review by a commissioner of  the department or                                                               
to a board or commission that regulates a specific profession.                                                                  
MR. HEMENWAY said from the  discussions today, he understands one                                                               
question will be  who will make the final decision  and how would                                                               
that happen.   The proposed legislation  would effectively remove                                                               
the three  CFEC commissioners who  are charged with  oversight of                                                               
all  final decisions  pertaining to  the CFEC  and transfer  that                                                               
function to  a commissioner or  deputy commissioner,  although it                                                               
is not  specifically spelled  out in  the bill.   He  pointed out                                                               
this  represents a  significant  policy decision  as  to how  the                                                               
final decision  would be made and  by whom.  In  the OAH process,                                                               
the  administrative law  judge issues  a  proposed decision,  the                                                               
parties  have  an opportunity  to  respond  in writing,  and  the                                                               
proposed decision,  along with attached comments  are referred to                                                               
the final  decision-maker who issues  the decision,  sometimes in                                                               
consultation with  the administrative law judge,  who will assist                                                               
in  writing  the  final  decision.   From  a  functional  hearing                                                               
standpoint, he  anticipated that CFEC hearings  would fall within                                                               
the scope of the types of hearings the OAH currently conducts.                                                                  
8:58:15 AM                                                                                                                    
CHAIR  SEATON said  there is  not a  procedure for  a three-judge                                                               
panel such as the one used by the 9th Circuit Court of Appeals.                                                                 
MR. HEMENWAY  answered no; that  is correct.  He  highlighted the                                                               
process,  such  that  a single  administrative  law  judge  takes                                                               
evidence,  listens  to any  testimony,  and  writes the  proposed                                                               
decision.   The  proposed decision  would then  be referred  to a                                                               
board or commission - which would  essentially be a panel - or to                                                               
a  commissioner, who  will make  the final  decision, although  a                                                               
commissioner may delegate the final  decision process to a deputy                                                               
commissioner to exercise policy oversight.                                                                                      
CHAIR SEATON  suggested that  the ADF&G might  create a  model to                                                               
delegate cases to a director or to the commissioner.                                                                            
MR. HEMENWAY answered  that it would be up to  the legislature to                                                               
decide.  Typically,  OAH cases are directed  to the commissioner,                                                               
but  a  commissioner would  decide  whether  the matter  will  be                                                               
delegated  to a  deputy  commissioner.   In  some instances,  the                                                               
commissioner would  delegate the final  decision-making authority                                                               
to  the OAH,  in particular,  in instances  in which  the parties                                                               
have not  objected; however, the  final process is  determined by                                                               
the commissioner.                                                                                                               
[HB 386 was held over.                                                                                                          
9:02:11 AM                                                                                                                    
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 9:02                                                                    

Document Name Date/Time Subjects
HB 386 Sponsor Statement.pdf HFSH 4/17/2014 8:00:00 AM
HB 386
HB 386 Sectional analysis.pdf HFSH 4/17/2014 8:00:00 AM
HB 386
Changes in the distribution of Alaska's Commercial Fisheries Entry Permits.pdf HFSH 4/17/2014 8:00:00 AM
HB 386
Annual report data on CFEC adjudications.pdf HFSH 4/17/2014 8:00:00 AM
HB 386
2012 CFEC annual report excerpt.pdf HFSH 4/17/2014 8:00:00 AM
HB 386