Courtesy of Steve Smith) NO SALES, Associated Press
This June 2010 photo provided by Steve Smith shows Smith, right, his daughter, Kaylee, and son, Hunter, show off Kaylee's 165-pound halibut in Ninilchik, Alaska. Smith's single-boat, bed and breakfast operation has grown into Captain Steve's Fishing Lodge, a two-boat, $1.7 million enterprise that not only keeps Smith's family working, but also provides employment for nine full-time summer employees.

HOMER, Alaska — In 1988, Steve Smith was intent on developing a successful charter fishing business in Ninilchik. In the years since, Smith has done just that. His single-boat, bed and breakfast operation has grown into Captain Steve's Fishing Lodge, a two-boat, $1.7 million enterprise that not only keeps Smith's family working, but also provides employment for nine full-time summer employees.

Smith's business has been cut in half, however, by National Marine Fisheries Service's new Charter Halibut Permit program for areas 2C, Southeast, and 3A, the central Gulf of Alaska including Cook Inlet and Kachemak Bay, which goes into effect Feb. 1.

Under this program, only one of Smith's boats has been granted a permit. The second boat failed to meet minimum participation standards during the program's qualifying years of 2004-2005.

Smith is one of about 300 permit applicants that have been or will be denied, according to program personnel.

"We've had roughly 800 applications and we expect about 530 will be eligible for something and we are actually coming up on 300 denials," said Jessica Gharrett, program administrator, Restricted Access Management Program, NOAA Fisheries Alaska Region.

Charter Operators of Alaska, a nonprofit organization, has recently been formed to address what the organization's board member Kent Haina of Poi Boy Fishing and Wilderness Lodge in Homer says are inequities in the program.

"I was getting phone calls nearly every day from other companies in the same situation as I was, having their permit applications denied," said Haina.

Haina envisions the new regulation will leave people standing on the dock, unable to find a charter operator to take them fishing.

"And that's just part of it. There'll be bed and breakfasts that don't get booked and there won't be a need for all this inventory because people come here for more than fishing. It will have a huge impact on tourism," said Haina. "There'll be no competition because now the people who do have permits will basically have a monopoly. I've already heard numbers as high as $500 that people are speculating they'll be raising prices to because they can get it."

In December, Haina and other charter business owners met with attorney Dan O'Phelan, who has offices in Alaska and New York. Haina said he has agreed to work with the nonprofit.

Charter Operators of Alaska has developed a four-part strategy:

— Legal action;

— Legislative action through the state's congressional delegation;

— Increased public awareness through media attention; and

— An effort to organize the disenfranchised.

"We'd like to try to modify, overturn or amend the rule," said Haina.

A website has been developed and is updated frequently. It includes information for making donations to help finance the legal effort.

In January 2010, NOAA announced the new regulations capping the guided-sport halibut charter fleet and requiring federal permits. To qualify, captains had to have logged a specified number of boat trips in either 2004 or 2005 and in 2008. Applicants can submit evidence to support their claims of being qualified. If denied, they can take their case to NOAA's Office of Administrative Appeal.

"Applicants get an initial administrative determination that has a deadline for appeal in it of 60 days," said May Alice McKeen, an administrative judge.

The length of time needed for the appeal process varies depending on the complexity of the appeal, but McKeen said it would last several months.

By Feb. 1, charter operators must have either a permit or an interim permit issued while a final decision on an application is pending.

"We don't expect to see a lot of charter fishing in February, but that's the date after which you must have a permit onboard," said Gharrett.

Enforcement is primarily NOAA's responsibility.

"The state can also do that, and, theoretically, the Coast Guard could board and take a look," said Gharrett.

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Permits are already being offered for sale. Some are priced as high as $100,000 and can be found on the website for the Southeast Alaska Guides Organization.

"I can't afford to spend $100,000 on one of these permits. Who can?" said Haina.

Already booking reservations for the coming summer, however, Smith is preparing to make an expensive pre-season purchase: an $80,000 permit that will allow him to keep his second boat in operation.

"I'm in a bind," said Smith. "I have a $1.7 million operation and I'm too big to fail."