SENATE BILL NO. 93 "An Act relating to commercial fishing permit and vessel license fees; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Green noted a proposed committee substitute was distributed. Co-Chair Wilken moved for adoption of CS SB 93, 24-LS0504\F, as a working document. Co-Chair Green objected for an explanation. SENATOR BEN STEVENS, sponsor of the bill, outlined two changes proposed in the committee substitute: the first would impose a cap on the amount of the permit fee and the second change would provide for a 20 percent license fee increase to vessel class. The original language of this legislation contains no limitation and a fee structure that imposes a proportionately higher fee for smaller vessels. 9:12:41 AM Senator B. Stevens referenced a table titled, "DRAFT, CFEC Vessel Fees, Current and Proposed" [copy on file] which contains the following data. Vessel Length: 0-25' Number: 3,484 Current Fee: $20 Current Revenue: $69,680 Proposed 20% Fee: $24 Proposed 20% Revenue: $83,616 Vessel Length: 25-50' Number: 5,600 Current Fee: $50 Current Revenue: $280,000 Proposed 20% Fee: $60 Proposed 20% Revenue: $336,000 Vessel Length: 50-75' Number: 764 Current Fee: $76,400 Proposed 20% Fee: $120 Proposed 20% Revenue: $91,680 Vessel Length: 75-150' Number: 447 Current Fee: $250 Current Revenue: $111,750 Proposed 20% Fee: $300 Proposed 20% Revenue: $134,100 Vessel Length: 150-250' Number: 92 Current Fee: $500 Current Revenue: $46,000 Proposed 20% Fee: $600 Proposed 20% Revenue: $55,200 Vessel Length: 250' Number: 26 Current Fee: $750 Current Revenue: $19,500 Proposed 20% Fee: $900 Proposed 20% Revenue: $23,400 Total Number of Vessels: 10,413 Current Revenue: $603,330 Proposed 20% Revenue: $723,996 Note: A 20% across the board vessel fee increase would generate $120,666 in fees over the current vessel fees. In comparison the vessel fee proposal currently in SB 93 generates approximately $291,000. The current fiscal note for SB 93 would be reduced by $170,334 under this proposal. Source: CFEC 3/23/2005 9:13:42 AM Senator B. Stevens next referenced a chart titled, "State of Alaska, Commercial Fisheries Entry Commission, Comparison of Permit Renewal Fees for 2005 Licensing Year Under Current Fee Schedule and Under CFEC's Proposed Methodology for Implementing SB 93, Permit Counts and Estimated Revenue by Base Fee with $3000 Cap, March 23, 2005, Draft" [copy on file.] This demonstrates the impact to individual permit holders of the proposed fee increases with no change to the current formula for deriving those fees. He detailed the calculation of how the fees would be assessed under the provisions of the committee substitute. The majority of the large vessels impacted are the offshore deep sea fishing fleet. FRANK HOMAN, Commercial Fisheries Entry Commission, testified the increased fees would be assessed at four tenths of one percent of the permit value. 9:17:14 AM Co-Chair Green understood that the intent is to expand the existing fee structure. Senator B. Stevens affirmed the fee amounts have been limited, although the original language of this bill would eliminate this maximum cap. The proposed committee substitute instead increases the cap. The cap is justified because the fisheries at the higher end are multi-million dollar industries and fluctuate according to worldwide factors. 9:18:16 AM Senator Hoffman noted fees have not exceeded $300 in the past and asked the number of residents and nonresidents who would be subject to the higher amounts. Senator B. Stevens indicated he could calculate this and provide information at a later date. Senator Hoffman surmised the majority of the new revenue generated by this legislation would be derived from fees collected from nonresidents. Mr. Homan had not differentiated the residency source of the increased revenues. The value of a permit is not correlated to the residency of the permit holder, with the exception of a nonresident differential assessed to each nonresident-owned vessel. 9:19:42 AM Co-Chair Green asked the position of user groups on this legislation. Senator B. Stevens replied that the fee limit was reintroduced to be less onerous on smaller vessel owners. The limit would also assure those larger vessel owners participating in the offshore fleet that the fees would not increase as the fishery values increased. The majority of the fishing industry does not oppose this legislation. He noted a letter of support from the United Fishermen of Alaska organization dated March 7, 2005 [copy on file.] 9:21:17 AM Co-Chair Green requested an explanation of how the money is expended and the function of the Commission. 9:21:33 AM Senator B. Stevens deferred to Mr. Homan. 9:21:38 AM Mr. Homan replied that authorization to spend money collected from the fees is legislative. The Commercial Fisheries Entry Commission is a receipt-supported entity without general fund support. In many years and as recently as 1998, the Commission had a surplus of $2 million that was transferred to the State general fund. A practice was started in the year 2000 to appropriate a portion of the surplus to the Division of Commercial Fisheries for industry related programs. 9:23:21 AM Senator Stedman clarified that only the permit renewal fee would be changed under the provisions of the committee substitute. Be Senator B. Stevens stated the fee increase is unchanged from the original version of the bill with the exception that a $3,000 maximum fee would be established; the original language did not include a cap. 9:24:20 AM Senator B. Stevens noted a companion bill was introduced in the House of Representatives. JERRY MCCUNE, United Fishermen of Alaska, testified in support of the committee substitute. Members had complained about the higher end fees proposed in the original version of the bill. He indicated that the organization had received a letter from the commissioner of the Department of Fish and Game, assuring that these concerns would be considered. The organization was satisfied that the regulation and public hearing process would be adequate to address the matter. 9:25:51 AM Co-Chair Green noted letters from other industry organizations were received as well. 9:26:04 AM Co-Chair Green removed her objection to the adoption of the committee substitute and the committee substitute, Version "F" was ADOPTED. Co-Chair Wilken offered a motion to report CS SB 93, 24-LS0504\F from Committee with individual recommendations and new fiscal note. There was no objection and CS SB 93 (FIN) MOVED from Committee with a zero fiscal note dated 4/1/05 from the Department of Fish and Game.