F/V Lorena Marie
Kodiak, Alaska
© K. Anthony Lara Photography



The Adjudications Section processes applications for entry permits in limited fisheries and conducts hearings for those contesting Commission decisions affecting them. The section also investigates potential violations of Commission 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 qualifications for reduced (poverty) 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 may 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. 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. These hearings are held in the presence of the Commissioners.

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.

Decisions Completed

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.

Judicial Rulings and Appeals

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.

Help for Individual Fishers in Financial Crisis

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.

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