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ADJUDICATIONS

Overview

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.

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.


Administrative Proceedings and Decisions

During 1994, Commission paralegals continued to conduct hearings and decide appeals of denied emergency transfer requests.

The hearing officers conducted 106 hearings in 1994: 55 permit applications, 50 permit transfers, and one on eligibility for an interim-use permit during the Southeastern dungeness crab fishery moratorium. The hearing officers issued 157 decisions: 104 permit applications, 49 permit transfers, one administrative fine, and three notice to show cause actions. At the end of the year, 535 cases were in stages leading to the issuance of a decision by a hearing officer. The Commissioners adjudicated a total of 147 cases during 1994: 93 permit applications, 50 permit transfers, one fine and three show cause actions. At the end of the year, 232 cases were in stages of the adjudication process leading to the issuance of final decisions by the Commissioners.

Decisions Chart


Investigations

During 1994, the Commission received fines and arrearages of $21,180 due to the successful settlement of prior actions. The Commission continues to cooperate with State and federal law enforcement agencies.


Judicial Rulings and Appeals

The Alaska Supreme Court did not issue any decisions on CFEC cases in 1994.

A denied applicant for a Bristol Bay drift gill net entry permit appealed to the Superior Court and argued in the Kelley case that the Bristol Bay drift gill net fishery is too exclusive under Johns v. State, CFEC, 728 P.2d 1256 (Alaska 1988), and, therefore, limited entry for that fishery should be eliminated. During 1994, the Superior Court ruled in favor of the State, and the judgement was not appealed.

In Kelley, the State argued, among other things, that a royalty paid by permit holders into the general fund is a defense to such a claim. The State further argued that entry permit fees, based as they are on the rates of economic return for different fisheries, constitute such a royalty. The Superior Court reached its final decision without deciding this issue.

In Carlson v. State, CFEC, a Superior Court in Anchorage upheld the State law establishing the permit renewal fee for non-residents at three times the fee charged to Alaska residents. The plaintiffs have appealed this decision to the Alaska Supreme Court.


Internal Revenue Service

By way of background, during 1992, the Alaska Legislature unanimously adopted SB 449 (Chapter 55, SLA 1992) to govern involuntary transfers by only two authorized creditors: IRS and child support claimants. 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. During 1994, regulations implementing this legislation became final.

During 1993, the IRS filed suit against the State of Alaska in the Gatter case and asked the court to strike down much of Chapter 55, SLA 1992. During 1994, the Gatter case remained pending and unresolved. If the IRS succeeds in striking down State law, we believe that the result will be a chilling effect upon currently productive efforts (described below) to achieve voluntary compliance among rural Alaska fishers.

Despite IRS' lawsuit, the Commission maintained its dialogue with the IRS and extracted general information from the IRS about noncompliance among Alaska fishers. The Commission learned that the problem is extensive throughout rural areas of Alaska where the loss of an entry permit could cause the most severe harm. At the same time, the amount of taxes at issue tends to be relatively small.

With this new information about the problem, the Commission and the State Commercial Fishing Loan Program suggested a change of law to the Legislature which resulted in the new Commercial Fishing Tax Obligation Loan Program.

This new program presents a unique opportunity. With the cooperation of the IRS, the State Commercial Fishing Loan Program has been implementing the new program through extensive outreach. The program presents an opportunity for individuals to come forward without fear and settle their tax problems thereby preserving their entry permits and their ability to continue fishing. The State Commercial Fishing Loan Program reports that the response from individuals has been very good.

The Commission believes that recent depressed world salmon markets (coupled with user conflicts and some run failures) have crippled the Alaska salmon industry. The situation has aggravated tax compliance problems and presents an issue of survival for Alaska salmon fishers. From our experience with rural Alaska fishers, we believe that fear of the IRS (in some cases prompted by specific actions that the IRS has taken in villages) inhibits many individuals from coming forward to work out their tax problems. The cooperation between the State and the IRS achieved through the new loan program could serve to alleviate some of that fear.

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