The Daily Alaska empire., 1949-07-29
'FOLTA RULES AGAINST NEW FEE
Opinion Given in Case of Two Seattle Masters,
 KeiChikan Firm

AlaSka'S nOn-reSiQenJ 1lSnermenS license fee, as increased from $25 to $50 by the 1949 Legislature, is ruled invalid in decision by Judge George w Folta filed today.
 Judge Folta holds that the tax is unreasonably discriminatory be- tween residents and non-residents, and thus contravenes the Civil Rights Act and is therefore invalid. The opinion is in the case brought by Attorney A. H. ziegler of Ketchikan. controversy with out action" in which plaintiffs are Kristian Martinsen, Seattle owner of the halibut vessel Tatoosh; Ed ward Wick of Seattle, master of the halibut vessel Mary R., and Polar Fisheries. Inc, a Ketchikan firm which buys, processes and ships fish.
 Attorney General J. Gerald Will jams and Assistant Attorney Gener- al John H. Dimond represented Tax Commissioner M. P. Mullaney and the Territory of Alaska, against whom the suit was brought.
 Clause In Chapter
 As Chapter 66, SL.A. 1949, con- tained clause repeating the pre- vious $25-a-man fee and substitute ing $50. it is presumed that the earlier law is in effect as result of Judge Foltas ruling.
 To what extent will Territorial revenue be affected?
 While a number of fishermen have not yet come in, Tax Collector Mullaney reports that, in round figures, his office had collected $83, ,000 in nonresident license fees up to last night, and 24,000 from resident fishermen.
 Several points in Judge Folta's opinion are of legal interest:
 When a vessel loaded with hali- but taken from the high seas by residents or non-residents, he says, enters Territorial waters and un- loads it's catch. it falls into the category of floating equipment used in the handling of fish and is subject to tax"
 When the crew of a vessel en- ters Territorial waters enroute to the high seas or returns to unload catch from the high. seas in Canadian or state of Washington port. it is not subject to tax, not only because no taxable event takes place within the jurisdiction of the Territory, but because the vessel would be engaged in foreign or interstate commerce.
 Another Point
 "On the other hand. when such vessel catches or unloads within Territorial jurisdiction, the crew becomes subject to taxing power re- gardless of whether the halihut was taken in Territorial waters or in the high seas.
 F "The question remains as to whether imposition of the $50 fee on non-residents. is valid Plain- tiffs' contention that it is dis criminatory under Article 4, Section ? of the Federal Constitution and under the l4th Amendment can not be sustained because neither is applicable to the Territory :" Then, as has been stated, Judge Folta ruled it's invalidity on the third contention-that the tax con- travenes the Civil Rights Act.
 Plaintiffs also had challenged the validity of the measure in contentious that the Territory can not tax the taking of halibut in the high seas and that the fee does not apply equally to all non- residents. Under the International Halibut Treaty, Canadian subjects can fish beyond their three-mile limits and land their catches at Alaskan ports of entry without paying the license.)
 Concerning the ruling, Gov. Er- nest Gruening said today, T have not yet read Judge Folta's opin- ion. so cannot comment on it.
 However, I feel that the fish, ermen's license tax was not im- portant from revenue standpoint. It was no part of basic tax pro- gram"