Legislature(2003 - 2004)
04/30/2004 08:43 AM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 273(FIN)
An Act amending the size, membership, and powers of the
board of directors of the Alaska Seafood Marketing
Institute and making a corresponding change in the
quorum requirement; authorizing the establishment of
the seafood marketing assessment at a rate of 0.5
percent or 0.6 percent of the value of seafood products
produced; providing for an election to retain,
terminate, or increase the seafood marketing
assessment; providing for the repeal of the salmon
marketing tax and provisions related to the salmon
marketing tax; and providing for an effective date.
Co-Chair Williams commented that Work draft Version G,
Utermohle, 4/26/04, was adopted on 4/29/04. Testimony was
also heard the previous day, and the Committee would now
consider the amendment by Representative Croft.
In response to a question by Co-Chair Williams,
Representative Croft clarified that he had talked to the
bill sponsor, Icicle Seafoods, the UFA and House members
from fishing communities. The sponsor still preferred his
version of a 7-member or a 9-member board. The Alaska
Seafood Marketing Institute (ASMI) had a unanimous
resolution supporting a 15-member board, while the Salmon
Task Force recommended a 9-member board.
Representative Croft stated that there is agreement that
this should be a smaller board with some increase in the
representation of the processors to encourage their adoption
of the processor tax. The question is whether to tilt it in
favor of processors generally, and big processors
specifically. He and Senator Stevens still disagreed on the
tilt.
Co-Chair Williams commented that he had been on the Salmon
Task Force, and he experienced that boards with 15 members
or 18 members were "like a convention." The Task Force
worked for two years with fishermen and processors to lower
the board membership to get a workable composition.
SENATOR GARY STEVENS, SPONSOR, explained that through two
years of work, the Salmon Task Force crafted a delicate
balance on the board to ensure that the right decisions are
made. Processors have a legal right to go to zero and decide
to put no money in, but he would encourage the processors to
go to 0.5% or $5 million, and allow the salmon fishermen's
tax to "spin off into the regional organizations."
He felt that would be the ideal situation. He pointed out
that the bill had gone through several committees, and the
House Fisheries Committee moved it out quickly and, he
thought, without opposition. He hoped that the bill would
remain intact.
Representative Croft explained that his amendment is in the
form of a Committee Substitute, Work Draft Version M. He
pointed out that Version G is the original bill version that
has 7 or 9 board members on page 2.
Representative Croft MOVED to ADOPT Version M instead of the
Version G. Co-Chair Williams OBJECTED.
Co-Chair Williams asked about the changes in Version M.
Representative Croft explained that the main issue is the
composition of the board. Sections 2 and 3 on page 2
establish either an 11-member or a 13-member board. He
reiterated that ASMI wanted a 15-member board, the Salmon
Task Force wanted a 9-member board, and he wanted a
compromise between those figures. An 11-member board would
be comprised of 5 big processors, 2 small processors and 4
fishermen. He noted that Representative Seaton had expressed
concern in the Fisheries Committee that the big processors
could be a quorum by themselves, with the ability to pass
measures without even one vote from small processors or
fishermen.
Representative Croft explained that his only concern is to
have an Alaskan check on the board's decisions. He conceded
that the board should be smaller and the processors' power
should increase because of their marketing knowledge. But he
did not want the processors to have a majority or quorum on
the board. On an 11-member board with 5 big processors, only
one Alaskan fisherman or one Alaskan small processor would
be needed to pass their plan. He likened it to the checks
and balances in government systems. He concluded that is the
primary difference between Version M and Version G.
Co-Chair Williams informed the Committee that he was a
member of the 13-member Fish Task Force that covered every
region of state. Participation was better in the second
year. He felt that it isn't important if the processors are
from Seattle or Alaska because they make decisions on buying
and selling [emphasis] Alaskan product. The processors had
some farmed fish but they preferred to buy Alaskan salmon.
He expressed strong opposition to Representative Croft's
proposed committee substitute.
Senator Stevens commented on the ASMI Board, explaining that
he'd been a legislative ex officio member. He felt that
there was misunderstanding about the board, which is not
about absolute power, but an organization that decides how
to generically market Alaskan seafood products. He feared
that if the board became parochial, it would eliminate those
who know how to market Alaskan products.
Representative Chenault pointed to the $1.5 million that the
current fishermen would pay if the bill passed, and asked if
it would revert to them to specialty market their own
product. Senator Stevens explained that there is another
bill relating to regional marketing. If the Legislature
passed this bill, the salmon marketing tax of 1% on
fishermen would be eliminated on January 1, 2005.
Representative Croft concluded that it is possible for an
11-member board to be functional. Major companies have a
worldwide interest that includes Alaska, and often make
difficult marketing decisions. Marketing in this new phase
of competition with farmed salmon requires a new structure
to balance the legitimate interests of major corporations
with Alaska's interests.
Co-Chair Williams commented that Alaskans John Sund, a
former Representative in the state House, and Terry
Gardiner, a former Speaker of the House, own Norquest. He
said that they know Alaskan fish and the industry. Co-Chair
Williams stated that the Fish Task Force had discussed the
issue for hours and agreed on this number [in Version G].
A roll call vote was taken on the motion.
IN FAVOR: Moses, Croft, Joule
OPPOSED: Meyer, Stoltze, Chenault, Fate, Foster, Hawker,
Harris, Williams
The MOTION FAILED (3-8). Work Draft Version M was not
adopted.
Co-Chair Harris MOVED to report Version G, HCS for CSSB
273(FIN) out of Committee with individual recommendations
and the accompanying fiscal note. There being NO OBJECTION,
it was so ordered.
HCS CSSB 273(FIN) was REPORTED out of Committee with
individual recommendations and two previously published
fiscal notes.
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