Administrative Proceedings and Decisions
The hearing officers issued 123 decisions in 1996: 58 on permit applications, 43 on permit transfers, and 22 on miscellaneous actions. Commission paralegals decided 39 appeals of denied emergency transfer requests in 1996. At the end of the year, 394 cases were in various stages leading up to the issuance of a decision by a hearing officer.
The Commissioners adjudicated a total of 110 cases during 1996: 51 permit applications, 43
permit transfers, and 16 miscellaneous actions. At the end of the year, 215 cases were in various
stages of the adjudication process leading to the issuance of final decisions by the Commissioners.
The Alaska Supreme Court's only decision on limited entry law during 1996 was Carlson v. State,
CFEC, 919 P.2d 1337, (Alaska 1996). The Carlson case is a class action challenging higher
permit fees charged to nonresidents of Alaska. In an earlier ruling, the court held nonresident fees
must be "substantially equal to those which must be paid by similarly situated residents when the
residents' pro rata share of state revenues to which nonresidents make no contribution are taken
into account." The 1996 Carlson decision addressed the formula used for comparing resident and
nonresident contributions to the State's costs of managing and promoting commercial fisheries
and remanded the case to the Superior Court to apply this formula.
To help individual fishers respond to financial crises and protect their fishing privileges, the
Commission participated in the new Rural Task Force sponsored by Child Support
Enforcement Division of the Department of Revenue, The Bristol Bay Native Association
(BBNA) Commission on Limited Entry, and the Alaska Federation of Natives Task Force on
the Internal Revenue Service (IRS). The Commission also worked closely with the Division of
Investments, Department of Commerce, the Commercial Fishing and Agriculture Bank, and
the Alaska Business Development Center. Additionally, with the Commission's
encouragement, the Bristol Bay Economic Development Corporation and the BBNA together
established the Bristol Bay Permit Brokerage. These collaborations helped the Commission
provide referrals for commercial fishers facing serious financial problems that could ultimately
endanger their fishing privileges.
The Commission also continues to cooperate with the IRS in an effort to help permit holders
achieve voluntary federal tax compliance. The Commission's efforts have included support for
the Fisher's Tax Obligation Loan Program administered by the Division of Investments.
Despite the State's efforts to cooperate, shortly before Christmas of 1996, IRS gave the State
only two days' notice of the forced sale of two entry permits offering minimum bids at a fraction
of the permits' estimated value.
The Alaska Business Development Center, with support from Senator Ted Stevens and
Representative Don Young, intervened and one of the sales was avoided. However, despite this
intervention and attempt to help the fisher, the IRS sold the remaining fishing privileges held by an
older Alaska Native for $5,005. The estimated value of the fishing privileges is $30,000.
Affidavits provided to CFEC state an IRS Revenue Officer advised possible buyers as follows: in
order to pursue the IRS' present dispute with the State, the IRS intended to sell the particular
permits for "substantially below the permits' fair market value" and, once a permit was transferred,
it would "open the floodgates" of permit seizures by the IRS. The affiants stated the Revenue
Officer volunteered "the Commissioner of the IRS is aware of the situation and the matter is
receiving attention at the highest levels at the IRS Washington D.C., headquarters."
Because the buyer withdrew, the sale was not completed by the IRS, and the Alaska Business
Development Center has had further opportunity to work with the permit holder in attempt to
achieve an agreement with the IRS. The Alaska Business Development Center reported to the
Commission that, during the year before the sale, the permit holder had paid the IRS a substantial
installment toward his tax obligation.
Despite these disturbing Christmas holiday events, the Commission continues to work with the
IRS to help fishers achieve voluntary compliance. We are very grateful to the individual Revenue
Officers who have diligently worked with fishers--particularly those in isolated Alaskan
communities. We hope IRS will recognize these and other continuing cooperative efforts are in
the best interests of the public and long-term revenue collection.
We continue to work with the Division of Investments, Department of Commerce in seeking an
extension of the fishers' Tax Obligation Loan Program.
Judicial Rulings and Appeals
Help for Individual Fishers in Financial Crisis
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