Legislature(1995 - 1996)
03/20/1995 06:10 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HFSH - 03/20/95 SB 3 - ANTITRUST EXEMPTION FOR FISHERMEN ROSEMARY ALEXANDER, Aide, Senator Jim Duncan, testified, "Senate Bill 3 will allow fishermen to form associations to collectively negotiate fish prices with processors. While this bill covers collective bargaining between fishermen and a processor, or a group of processors, it does not authorize processors to agree among themselves on the prices they will pay fishermen. Senator Duncan believes that a state antitrust exemption is a first step to stabilizing Alaska's fishing industry. This exemption applies only to state antitrust laws, it will also be necessary to gain Congressional approval for a federal exemption. But once the legislature has approved SB 3, the state, fishermen and processors would be in a better position to request a federal antitrust exemption. The attitude toward a federal exemption may be favorable now that Alaska's congressional delegation is in the majority. MS. ALEXANDER continued, "SB 3 also clarifies an ambiguity in state law, which does not expressly allow fishermen to market and sell their fish as a group. Currently state antitrust law only permits them to form associations to catch and prepare their fish for market. As you know, federal law expressly permits them to form associations to catch and prepare their fish for market. As you know, federal law expressly permits fishermen to collectively engage in more activities, including marketing their fish. The incongruities between current state and federal law make it possible for some fishermen's organizations to be in compliance with federal antitrust law, yet breaking state law, or be in compliance with state antitrust law and violating federal law. Passage of SB 3 will make state law consistent with federal law. During previous hearings on SB 3, CDFU testified that the inconsistency between state and federal law had become a real problem for some members. A state and the corresponding federal exemption were recommended in the 1993 Alaska Attorney General's Report on the Bristol Bay sockeye salmon industry. The fishing industry is Alaska's largest private employer, and contributes to the state's general fund. Collective bargaining between fishermen and processors will help stabilize commercial fishing prices, bolstering local and state economies. Stable raw fish prices will promote stable consumer prices for processed seafood products, which means greater sales of Alaska seafood." MS. ALEXANDER concluded, "SB 3 passed the Senate without opposition on March 7. It has a zero fiscal note. You will find letters of support in your packets from fishing organizations, the Department of Commerce and Economic Development, and the Department of Labor. The Pacific Seafood Processors Association also has testified in favor of the legislation. A similar bill was introduced last year with the complete support of the former Hickel Administration. It passed the Senate, but got caught in the final rush of legislation in the House and did not get to the House floor but it did have complete support from the former Hickel Administration as it does from the Knowles Administration." NUMBER 430 RICK LAUBER, LOBBYIST, Pacific Seafood Processors Association, testified, "We have had continuing problems, we in fish price negotiations, and I'm not going to attempt to mislead you that this bill standing as it does will resolve all those problems, but at least it will take care of some of the more, what I would consider ridiculous situations where fish processors and fishermen could not be in the same room when someone else for instance is discussing fish prices." He continued, "The major problem would still remain and that's the federal antitrust law but as I repeatedly said, this would be an excellent first step. You've got to start someplace. You've got to change both the state law and the federal law in order to do what this bill would attempt to do. Let me say again what Senator Duncan has said a number of times and it's very clear in the legislation and that is that this law, if there's a corresponding law passed by the federal government would still not allow processors to sit down and fix prices. There was a recent article by a major news service that reported on passage of this bill, I believe in the Senate, and they implied that that was the case. Nothing can be further from the truth. There is never going to be any law in the United States that would allow price fixing on the part of fishermen or processors." MR. LAUBER added, "In working with this bill last year and again, this year and having turned it over to attorneys to review. I apparently neglected a section of the bill is probably not going to be the end of the world but I am getting so much, not flack in the sense of anybody telling me that this is the end of the world but I hate to have anyone laugh at a piece of legislation and particularly one that I testified in favor of. I'm referring to on page two, line 12, the language for the rest of the sentence starting with '(2) minimum price that fish processors will accept for the sale of processed aquatic products'. What in effect this says, if you read (1) and (2) together, the fish processors and fishermen could talk about price paid for the fishermen for aquatic products and that, of course, is what we are attempting to do to be in discussions about that. But I have not been able to find anyone, either fishermen or processor that wants or thinks that processors and fishermen would ever agree as to the minimum price that fish processors will accept for the product when they sell the finish product. It would probably be almost an impossibility to reach such an agreement. I would compare this to a situation where the Ford Motor Company is negotiating wages with their employees and their employees are vitally interested in wages and working conditions but the employees to my knowledge have never attempted or requested to be able to dictate to the Ford Motor Company the price that they will sell each individual automobile and its various accessories on the open market. Or what each individual dealer would then sell for. It just is so ludicrous that no one would ever ask to do it. But yet that is in here. I guess one could counter and say, 'Well, if they will never do it, then what harm is done'. But it is beyond humorous. If this passes this way it will make a law of the state of Alaska a kind of a ridiculous document. I've discussed this with United Fishermen of Alaska and asked sincerely, is there any legitimate reason for this, is there someone that wants this for a valid purpose. Neither from UFA or anyone else has been able to tell me any valid reason, anything that this would do to help anything." CHAIRMAN AUSTERMAN asked if Mr. Lauber was requesting that that line be taken out. MS. ALEXANDER explained, "That particular line did come out of the Attorney General's recommendation to George Utermohle who wrote the legislation. I have talked to Legal Services about this and I have an opinion from Jim Forbes, the Assistant Attorney General in the Fair Business Practices Section of the Attorney General's Office," and, "Mr. Lauber raised this question to us. This should be something the processors would keep in consideration when they negotiate this particular section, they felt that this would be something that would help level the negotiation field, the playing field, if you will, between fishermen and processors. Senator Duncan is not here and whether or not we would want to amend this without him, I don't think would be the case. I guess I would appreciate it if you would consider talking to him about this particular section." Number 570 SCOTT MCALLISTER, Southeast Seiners, testified in support of SB 3, saying, "I think that this bill does potentially go a long way to level the playing field, so to speak, between the processors and the fishermen." He said, "Giving the fishermen the benefit of the wholesale arena where a fisherman with a processor or a group of processors, could essentially sit down and have a tremendous advantage in the marketplace enjoyed by very few in a free market except for a few primary producers and the farming industries that enjoy these antitrust exemptions as well, and together, to the benefit and advantage of both control volumes of product and be able to negotiate the wholesale level, prices to the advantage of the seafood industry as a whole." He concluded, "I support this bill, our organization supports this bill, in its current form. Without that particular wording, it puts us back where we have always been." Number 652 REPRESENTATIVE ELTON said, "It seems to me that you're inducing additional restriction that may be hard to live up to. It also seems to me, and again, this is partly my background speaking, you may be taking away a marketing capability. For example there may be a lot of value to selling into the school lunch program at a lower price than you might get if you hold your pack later. And that advantage would be that you're creating new eaters of the product. And it seems to me that you have the minimal price language that you may be taking away some of those opportunities. For example an opportunity to sell 200,000 cases into the school lunch program at less than an agreed upon minimum wholesale price. It seems to me we're complicating an awful lot." Number 672 MR. MCALLISTER said, "Well, we could be. These are ponderables. They're all what-ifs in a market place that is forever changes (indisc.), it has a life of its own. And pondering minimum price advantages or disadvantages into the future, are things that (indisc.) those prices will be there regardless." TAPE 95-18, SIDE B Number 016 DEAN PADDOCK, LOBBYIST, Bristol Bay Driftnetters Association and United Fishermen of Alaska, said, "Jerry McCune, because he wanted to go to a basketball game and because I'm a member of the Executive Committee of the UFA, authorized me to speak in behalf of the United Fishermen as well. We urge your support for this bill. The fishermen need all the help they can get. I think that this legislation should have been introduced many many years ago." He added, "This legislation should be motherhood and apple pie. I think it is and I'm sorry that some attorney somewhere saw fit to throw that clause in there. I don't think it adds a whole lot," and, "The deletion of the section mentioned by Mr. Lauber in my mind would not notably reduce the value or the importance of this bill or our support for it." Number 155 REPRESENTATIVE ELTON moved to pass SB 3 out of committee with individual recommendations proposing that the possible amendment could be addressed in House Resources, the next committee of referral. There was no opposition.
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