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The Adjudications Section at the Commission is responsible for processing applications for entry permits in limited fisheries and conducting hearings for those who contest Commission decisions affecting them. The section also conducts investigations into potential violations of the Commission's statutes and regulations, and provides assistance to other enforcement agencies.
Entry permit applications are first evaluated by Commission paralegals who classify applicants in a ranking system that measures each applicant's past participation and economic dependence on the fishery. Applicants who disagree with their initial classifications may request hearings. Hearings are also available to contest initial decisions about permit transfer requests or about qualifications for reduced permit renewal fees.
Commission hearing officers conduct administrative hearings throughout the State and decide appeals of initial determinations about entry permit applications, permit transfer requests, and fee arrearages charged to those who wrongly claimed to be Alaska residents. The Commissioners review and affirm or modify hearing officers' decisions on their own motion, or upon the request of an affected party. If no review is ordered by the Commissioners, hearing officer decisions become final in 60 days.
Commission hearing officers also preside in "show cause" hearings. These hearings are held in the presence of the Commissioners. In these proceedings, the Commission may impose fines, or revoke or suspend the permits of those who attempt to mislead the Commission with false information.
During 1993, Commission paralegals continued to conduct hearings and decide appeals of denied emergency transfer requests.
The hearing officers conducted 163 hearings in 1993: 117 on permit applications, 45 on permit transfers, and 1 miscellaneous action. The hearing officers issued 142 decisions: 92 on permit applications, 48 on permit transfers, and 2 miscellaneous actions. At the end of the year, 606 cases were in various stages leading up to the issuance of a decision by a hearing officer.
The Commissioners adjudicated a total of 154 cases during 1993: 100 permit applications, 47 permit transfers, 3 show cause actions, and 4 on miscellaneous matters. At the end of the year, 191 cases were in various stages of the adjudication process leading to the issuance of final decisions by the Commissioners.
During 1993, the Commission received fines and arrearages of $31,400 due to the successful settlement of prior actions. The Commission continues to cooperate with State and federal law enforcement agencies.
The Alaska Supreme Court did not publish any decisions on the Commission's cases in 1993. The Court issued two memorandum opinions and judgments (M. 0. J.'s) upholding the Commission's decisions in 1993.
A new claim was briefed in the Kelley case pending in State Superior Court. For more information, see the discussion on page 18.
By way of background, during 1992, the Lorentzen case held that Alaska limited entry permits are subject to federal tax liens. In that same year, the Alaska legislature unanimously adopted Governor Walter J. Hickel's SB 449 (Chapter 55, SLA 1992) to govern involuntary transfers by the only two authorized creditors: the IRS and child support claimants. The legislation for the first time authorized such transfers, required them to conform to applicable State law, and, protected the State's interest in limited entry permits.
Late in 1992, the IRS auctioned five limited entry permits. Originally, the IRS had seized and planned to sell more than 20 Alaska limited entry permits. However, some of the permit holders avoided the auction by settling their claims with the IRS. Others avoided the auction by entering bankruptcy. Still others were spared the ordeal by assistance from the IRS' Problem Resolutions Office.
Throughout 1993, the Commission and the Department of Law continued to develop regulations to implement Chapter 55, SLA 1992. However, the successful buyers at the IRS auction withdrew their bids before regulations could be made effective to provide the Commission with authority to process the buyers' transfer requests.
Also during 1993, the IRS filed suit against the Commission in the Gatter case and announced its intention to strike down those elements of State law which it believed might present obstacles to IRS' efforts to seize and force the sale of Alaska limited entry permits. The Gatter case remains pending.
Despite the Gatter case, the Commission and Alaska Commercial Fishing and Agriculture Bank (CFAB) continued their dialogue with the IRS. In response to persistent urging by the Commission and CFAB, the IRS provided statistical information about the nature and extent of the problem. IRS statistics showed that 26% of all Alaska limited entry permit holders are in trouble with the IRS, and the highest incidence of trouble is in rural areas of Alaska where the loss of an entry permit could cause the most severe harm. However, among the Alaska permit holders in trouble, fully 1,111 have filed their returns but have been unable to pay the taxes owed. This is not surprising given depressed world salmon market conditions (coupled with user conflicts and some run failures) which have left the Alaska salmon industry in a severe financial crisis. The situation presents a problem of survival for Alaska salmon fishermen.
At the same time, the IRS statistics helped put the problem in perspective. Among the 1,111 individuals, 827 permit holders owe balances to the IRS of no more than $10,000. Add in the additional 130 individuals who owe the IRS up to $20,000, and fully 86% of this group of permit holders is covered. This information led the Commission to advocate for a change of law to allow existing revolving loan funds of the State Commercial Fishing Loan Program to be applied to help individual permit holders avoid seizure and forced sale of their entry permits by the IRS.
Throughout 1993, the Commission worked with members of the "Bad Times Group." This group of professionals includes accountants, lawyers, and business advisors, who have volunteered their time to conduct seminars throughout Alaska to help Alaska commercial fishermen avoid financial trouble. The group produced a valuable pamphlet, Alaska Commercial Fishermen and the IRS, which the Commission distributes for free. Additionally, the Commission continues to work with the Alaska Business Development Center, which provides direct help to individual permit holders in trouble with the IRS.
Also in response to the current financial crisis in the salmon industry, the Alaska Federation of Natives (AFN) established a task force concerning the IRS and Alaska commercial fishermen, and invited the Commission and CFAB to participate. The Task Force is looking favorably on a development in the Bristol Bay area, where the Bristol Bay Economic Development Corporation and the Bristol Bay Native Association have hired an individual to help entry permit holders resolve their tax problems. This laudable effort by local individuals in Bristol Bay may serve as a model for other areas of the State to help address financial problems faced by Alaska fishermen.
The Alaska Supreme Court did not publish any decisions on the Commission's cases in 1993. The Court issued two memorandum opinions and judgments (M. 0. J.'s) upholding the Commission's decisions in 1993.