SB 93-FISHING PERMIT AND VESSEL LICENSE FEES CHAIR CON BUNDE announced SB 93 to be up for consideration. CHERYL SUTTON, staff to Senator Ben Stevens, sponsor of SB 93, explained that the Commercial Fisheries Entry Commission (CFEC) receives no general funds, has been on a downward trend in revenue and will continue like that under the current fee structure. Some of the contributing factors are the Carlson v. Alaska case, the decline in value of certain fisheries and the consolidation of various fisheries. SB 93 would bring the state into compliance with rulings in Carlson v. State of Alaska, a class action brought against the state by non-resident fishermen who claimed that the fee structure was not lawful. The state had charged a 3 to 1 fee differential for non-residents. The court agreed that the fees could not be established in this manner and issued a mandated formula that is now calculated by the Office of Management and Budget (OMB). CHAIR BUNDE asked for her indulgence to step aside for a moment. SB 93-FISHING PERMIT AND VESSEL LICENSE FEES  MS. SUTTON resumed her testimony on SB 93. The major component of SB 93 is removal of the $300 cap for annual permit renewal currently in statute. It is an artificial cap because the statute states that the base fee must reasonably reflect the different rates of economic return for different fisheries. The cap results in fisheries with a very high economic return being charged fees that are disproportionately low. She explained that the CFEC would develop fees through a public hearing process. Individuals who qualify for a poverty fee would still be required to pay the full non-resident fee differential. 1:54:28 PM She said that vessel license fees are also addressed in this bill. A modest modification is proposed to the six vessel length categories and the fees are raised by $15, $30, $45, $60, $75 and $90 respectively. She pointed out that the fee structure had not been amended since 1995. 1:55:04 PM MR. FRANK HOHMAN, Commissioner, CFEC, agreed with Ms. Sutton's testimony. The Carlson case is a factor in CFEC's decline in revenues and lower values of fishery permits along with consolidation of fishing fleets in federal and state waters lowering the values of fishery permits upon which the fees are based. There is a reduction in the number of permits that are purchased and the non-transferable permits, which are held until the permit holder dies are retired. He estimated that in FY'06 the commission would not be able to cover its budget by generating revenues alone. The new fee structure will help for a few more years. 1:57:15 PM The $300 cap for lesser value fisheries might have only a modest increase, but higher value fisheries will fall into position on the fee schedule. The formula is calculated as .04% of the value of the permit, which won't be held down artificially. 1:58:12 PM CHAIR BUNDE asked if the non-resident who qualified for the poverty fee would still pay the non-resident differential, $115 this year. 1:58:51 PM MR. HOHMAN replied that is correct, but it applies to only 20 or so people. A resident also can claim a poverty fee, which is half of the base fee, but his taxes have already paid for the differential. 2:00:04 PM CHAIR BUNDE mused that it seemed a contradiction of terms to have a non-resident come to Alaska to fish, but then claim poverty. 2:00:45 PM MR. AL BURCH, Alaska Draggers Association, Kodiak, supported SB 93. His problem was with the proposed methodology for implementing it. He represents 45 trawlers in the Gulf that also do halibut long lining. As trawlers, their fees would go from $300 to $3,975. As long liners, they would go from $300 up to $1,500. His little trawlers that might gross $200,000 per year are being lumped in with the super trawlers in the Bering Sea that might do over $30 million per year. The fee structure is not equitable as it is now; however he is not adverse to a reasonable fee increase. CHAIR BUNDE said he would hold the bill over for Senator Ben Stevens' insights. 2:03:41 PM MR. HOHMAN commented on the issue of small boats that get caught up with large boats. If the bill passed with the fee cap removed, CFEC regulation would establish fee classes through a public hearing process. If classes were not proper for small boats, he would be happy to make an amendment. It was never an issue with a $300 cap, which is small enough to not matter. CHAIR BUNDE said the bill would be held.