03/06/1996 03:10 PM House L&C

 HB 118 - SEAFOOD MARKETING / AQUATIC PRODUCT TAX                            
                                                                               
 AMY DAUGHERTY, Legislative Assistant to Representative Alan                   
 Austerman, Alaska State Legislature, explained CSHB 118(FSH) brings           
 two new sources of revenue to the Alaska Seafood Marketing                    
 Institute (ASMI).  First, the bill imposes an aquatic farm product            
 marketing assessment at .3 percent on the value of oysters.  She              
 explained Representative Austerman was approached by Roger Painter,           
 and he wanted, on behalf of the mariculture industry, to be                   
 assessed this amount to contribute to ASMI at the rate of .3                  
 percent.  Ms. Daugherty explained that also incorporated in the               
 bill is the 1 percent ASMI assessment to apply to cost recovery               
 salmon.  According to information from the Department of Revenue              
 these fish are not currently assessed or taxed whatsoever.  She               
 noted she has been assured that is the case by Paul Dick and Bob              
 Bartholomew.  Ms. Daugherty pointed out according to the fiscal               
 note, it will only bring in $120,000 to ASMI.  It is not a big                
 money maker and it is something that the fishermen approached                 
 Representative Austerman on.                                                  
                                                                               
 Number 931                                                                    
                                                                               
 BRUCE SCHACTLER, a fisherman from Kodiak, came before the                     
 committee.  He informed committee members he is testifying on                 
 behalf of United Fishermen of Alaska.  He said his organization is            
 getting towards the end of their annual legislative board meeting.            
 He explained he is a member of the Marketing Committee as well as             
 a member of the Aquaculture Committee, both of which have voted               
 unanimously to support HB 118.  He said the Aquaculture Committee             
 as well as the entire board voted unanimously to support the bill.            
 Mr. Schactler pointed out that not all the hatcheries in the state            
 do cost recovery, but nearly all of them do.  Those fish are caught           
 and sold on the open market to the same people who are buying all             
 the rest of the fish.  The monies are used for the cost of running            
 the hatchery.  He said he doesn't know where the $128,000 figure              
 came from because according to the Department of Commerce and                 
 Economic Development there was $19.23 million worth of fish cost              
 recovered last year.  At 1 percent, that comes out to $192,300.               
 The fishermen all support HB 118.  Cook Inlet Aquaculture                     
 Association and Prince William Sound Aquaculture Association are              
 neutral on the bill.  Mr. Schactler pointed out that all the                  
 members of all the aquaculture associations are represented on the            
 Board of United Fishermen of Alaska.                                          
                                                                               
 MR. SCHACTLER referred to a previous hearing on the bill and said             
 there was opposition to the bill coming from the executive                    
 directors of the aquaculture associations.  Since that time, there            
 has been a lot of discussion.  He said he didn't think any of the             
 corporations had met with their fishermen before the previous                 
 hearing on the bill.  He said the fishermen support this bill.  He            
 urged that the committee talk with the people who are opposing the            
 bill, if any.  Mr. Schactler said if anyone still opposes the bill,           
 it would probably be someone from management and not the people who           
 would actually be paying the bill.  He said in Western Alaska,                
 which he considers the Kodiak area, there is an aquaculture                   
 association where they do not do cost recovery.  They are in the              
 black so they don't need to.                                                  
                                                                               
 MR. SCHACTLER said, "The people from out West, I've spoken with the           
 people from Sand Point and King Cove.  We feel that we're                     
 subsidizing this batch of fish.  Nineteen million dollars worth of            
 fish that is being put on the market and the other fish from                  
 Alaska, from Nome all the way to the first guys in Cook Inlet that            
 do cost recovery, are paying for the marketing of those fish                  
 through ASMI.  So I believe this is a bill that is a winner for               
 everybody and I don't think you'll find any body in opposition of             
 it."                                                                          
                                                                               
 Number 1194                                                                   
 REPRESENTATIVE KUBINA referred to a provision in the bill and said            
 he thinks it is a foolish provision because it is just going to               
 take more fish and money out of fishermen's pockets.  The                     
 hatcheries can get as many fish as they need to run.  He said it              
 doesn't make sense to tax nonprofit organizations.                            
                                                                               
 MR. SCHACTLER said, "My only response is when we first brought this           
 to the floor, that was exactly the response we got from several               
 people from Southern Southeastern Aquaculture Association, in fact,           
 a representative of that organization.  When you look at it from a            
 strictly regional point of view, that is correct.  It is sort of              
 like just take it from this hand, put it in this hand.  But when              
 you look at it on a statewide level from the perspective of my                
 presentation just now, you stood back and said, `You're right, I'm            
 wrong, I stand corrected.'  Because it is -- we're dealing with a             
 worldwide market of fish and you have people in Alaska that are               
 supporting the marketing of those fish that are getting absolutely            
 no benefit from those fish.  And the marketing, as you all know, is           
 in such sad shape that it needs all the help we can get."                     
                                                                               
 Number 1372                                                                   
                                                                               
 There being no further testimony, REPRESENTATIVE ELTON made a                 
 motion to move CSHB 118, Version O, with attached fiscal notes and            
 individual recommendations out of committee.                                  
                                                                               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, CSHB
(FSH) moved out of the House Labor and Commerce Committee.