Legislature(2001 - 2002)
02/25/2002 03:52 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
HB 390-ASMI SALMON MARKETING CO-CHAIR WILSON said that the next matter before the committee would be HOUSE BILL NO. 390, "An Act extending the termination dates of certain activities and salmon marketing programs of the Alaska Seafood Marketing Institute and of the salmon marketing tax; expanding the allowable use of that tax for the salmon marketing programs of the Alaska Seafood Marketing Institute; relating to the Alaska Seafood Marketing Institute's salmon marketing committee; and providing for an effective date." [There was an unnecessary motion to put the bill before the committee.] Number 2795 REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, sponsor of HB 390, testified before the committee. She characterized HB 390 as relatively simple and said it was a technical bill more than anything. She said it contains one substantive policy decision but, primarily it extends the termination date for certain activities of salmon marketing. It extends the ability of the Alaska Seafood Marketing Institute (ASMI) to collect a 1 percent tax and use that money to market seafood. REPRESENTATIVE McGUIRE said that the substantive change in the bill was the removal of the word "domestic" from page 2, line 23, [paragraph] (9). TAPE 02-4, SIDE B REPRESENTATIVE McGUIRE made reference to her trip to Chile. [This trip was made in November 2001. Representatives McGuire, Coghill, and Scalzi as well as Mr. Paul Shadura were a few of the industry members and policymakers who attended.] She said that if the legislature was going to give power to a board, "We ought to give them as many tools as we can in their tool belt, and not try to micromanage their activities." She said the legislature has a great deal of issues to work on and micromanaging ASMI's marketing practices is not one of them. She said that HB 390 is a technical bill that would extend, for five years, the ability to collect a 1 percent tax and use it for marketing purposes. Number 2763 BARBARA BELKNAP, Executive Director, Alaska Seafood Marketing Institute, Department of Community & Economic Development, testified before the committee. She said she supported HB 390 and thanked Representative McGuire for bringing it forward. REPRESENTATIVE COGHILL asked Ms. Belknap if she envisioned a "shared marketing that could be a possible limitation if we don't take 'domestic' out." He clarified by asking if she thought of the "'domestic' language as being some degree of hindrance." MS. BELKNAP said that when the tax was instituted in 1993, the domestic market was restricted in order to develop the domestic market for Alaska salmon. She characterized it as a "developing market." She said taking the domestic restriction out would give ASMI more latitude. She said that it would allow ASMI to gain federal money for oversea marketing and also would facilitate ASMI's ability to decide where best to market. Ms. Belknap said she did not believe the board would allow the U.S. market to be "slighted in the least." Number 2693 REPRESENTATIVE COGHILL said that when he went to Chile to view its farmed salmon operations, he was told that the United States' market was second only to Japan's. He said that it is important to market in Japan but it is important not to ignore the American market. Number 2676 REPRESENTATIVE DYSON said there was no "ignore" in the bill. REPRESENTATIVE COGHILL agreed but added that he "just wanted to have that discussion of getting beyond that to make sure we don't ignore it." Number 2653 REPRESENTATIVE DYSON made a motion to move HB 390 out of committee with individual recommendations. CHERYL SUTTON testified before the committee. She said that she'd authored "the bill" when she worked in the legislature in 1993. She said that at the time there was a domestic marketing crisis. Ms. Sutton said there was a lot of federal money at the time, and that the legislature "had not totally whacked us at that point at ASMI." She added that she had been on the ASMI board for seven or eight years herself. She said she believes that micromanaging the ASMI marketing program is wrong. She said that if this provides the latitude ASMI needs to determine where best to market, "go for it." Ms. Sutton pointed out that the "tax theme" seems to be something that commercial fishermen are stepping forward with. She said they are not asking for a lot of money from the state. She encouraged passage of the bill to let ASMI decide how to spend the money. Number 2575 CHRIS BERNS, Kodiak Regional Aquaculture Association, testified via teleconference. He said he is a commercial fisherman who has paid the 1 percent ASMI tax since 1993, as has his wife, who also owns a salmon fishing business. He said that the tax was marketed to Alaskan fishermen to be used in the domestic market. Mr. Berns said the U.S. is probably a healthier market than Japan for a lot of Alaskan seafood products. He stated his total opposition to removing "domestic" from the language of the law. Mr. Berns said that the 1 percent tax had a "sunset on it and this bill is going to extend the sunset one more time." He said "nothing sunsets," and that he is starting to realize that fact. He said 1 percent of gross receipts is a substantial amount of money to his family because he and his wife own separate businesses. He said he does not want to see the money spent overseas because he feels the market is in the United States. He said he was upset about the "carte blanche" approach and misapplication of the 1 percent tax. Mr. Berns told the committee that there are many people upset with ASMI in general. He expressed his support of ASMI but said he would like to see it produce some quantifiable results. Number 2429 SUE ASPELUND, Cordova District Fishermen United (CDFU), testified via teleconference. She said that CDFU has been involved in the successful promotion of Copper River salmon, and therefore they feel qualified to comment on the "absolute importance of seafood marketing in Alaska." She said the CDFU is in full support of the 1 percent salmon assessment reauthorization as well as the lifting of the domestic salmon marketing restriction. She said this would allow ASMI to adapt to changing market conditions. Number 2398 ROBERT HEYANO, Bristol Bay Economic Development Corporation (BBEDC), testified via teleconference. He said the BBEDC fully supports the bill because farmed salmon has taken over its traditional market. He said that ASMI has been "the first and only line of defense in this invasion" and that his group believes ASMI has been doing an excellent job in marketing Alaska's salmon resources. He said the BBEDC supports the removal of the domestic restriction. Number 2340 JIM KALLANDER, Vice Chairman, Alaska Seafood Marketing Institute (ASMI), testified via teleconference. He gave his wholehearted support to the renewal of the 1 percent tax. He agreed with Mr. Heyano's assertion that "it is the only defense we have." He spoke to Mr. Berns' claim that his prices were going down. Mr. Kallander said his own prices were going down as well and that he would not want to see where they would be without ASMI. He expressed his feeling that the decline in prices had been slowed [by ASMI]. MR. KALLANDER said some people like Mr. Berns were overly concerned about the ASMI board taking a "carte blanche" approach and spending money inappropriately with regard to the "domestic only clause." He expressed his position that people should not be concerned that ASMI will take a significant amount of money out of the domestic program. Rather, ASMI will put monies into the best prospects, and it will assist in meeting grant requirements in terms of matching funds. Number 2254 PAUL SHADURA, Kenai Peninsula Fisherman's Association, testified via teleconference. He said his organization supports the bill, but added it wishes that there were more fishermen on the board. He said the bill was important for the functions of ASMI. He told the committee that as a businessman, he does not have the resources or abilities to find markets and be able to utilize them in the way that ASMI allows him to do. He said that ASMI facilitates marketing on an individual basis, and he noted the importance of that. MR. SHADURA made note that ASMI's domestic programs went hand- in-hand with the grants offered by the Department of Community & Economic Development for marketing in individual areas, and he said he hoped those programs would continue. He said 1 percent is a small portion to pay, but added that it was a huge amount to a commercial fisherman at this time. MR. SHADURA made reference to the fact-finding trip he and several legislators took. He said he found the amount of money spent by the countries that farm salmon was in the tens of millions, unlike the single-digit millions spent by Alaska. Number 2133 DON JOHNSON testified via teleconference. He stated his opposition to changing from a domestic marketing direction to an international one. He said the intent of the previous law had a domestic focus, and changing to an international focus would be a new direction. He compared it to "funneling money down a rat hole." He said he did not believe that the State of Alaska could slow the meteoric rise of the international farmed salmon industry and should therefore concentrate on new techniques and services. He gave the example of "gas guzzlers" in the 1970s and the efforts to block more gas-efficient imports. He said he did not support the bill. Number 2052 GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska (UFA), testified before the committee. He said the UFA supports the bill as written. He said he is for keeping the domestic market but added that there are markets opening up in Asia. He said France and Germany are buying a great amount of frozen coho salmon fillets. He said the state has to look at it as a global economy. There are markets opening up in Europe, but it does not mean that ASMI would have to spend all of its marketing money there. He said, "Go where the fish are being sold." He said the industry must expand markets as far as possible and also take advantage of markets for natural foods in Europe. He said it is important not to give up on the domestic market. Number 1984 MS. BELKNAP told the committee that Rodrigo Infante, General Manager of Chile's Association of Salmon & Trout Harvesters, had recently stated that his group was slowing production because of heavy losses in overproducing. She said that this could lead to a slight rise in global salmon market prices. Number 1930 VIRGINIA ADAMS, United Salmon Association, testified via teleconference. She said her association has gone through extensive work on the bill in conjunction with the UFA. She said the United Salmon Association supports the bill, but it is wholly disappointed - not blaming ASMI - with the marketing efforts that have been made to promote Alaskan salmon worldwide. She said there is a tremendous amount of salmon being eaten in the rest of the United States, but "it is not ours." She said Alaska is not spending nearly the amount of funds that its competitors are to market its salmon. She characterized it as a systemic problem and said that this bill would be a small attempt to remedy it. She said she would like to see a much greater effort, as would ASMI, but "hands are all tied by funding." Number 1823 REPRESENTATIVE DYSON restated his motion to move the HB 390 out of committee with individual recommendations and attached fiscal note. There being no objections, HB 390 was moved out of the House Special Committee on Fisheries.
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