Legislature(2003 - 2004)
03/10/2004 09:05 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 273
"An Act relating to the Alaska Seafood Marketing Institute,
the seafood marketing assessment, the seafood marketing tax,
and the seafood product tax; and providing for an effective
date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, sponsored by Senator Gary
Stevens, "reduces the size of the Alaska Seafood Marketing
Institute (ASMI) Board of Directors from 25 members to nine, and
changes ASMI's tax structure to raise approximately $2.8 million."
Co-Chair Green moved for adoption of CS SB 273, 23-LS1366\E as a
working document.
Without objection the committee substitute was ADOPTED as a working
document.
SENATOR GARY STEVENS stated that the Joint Salmon Task Force
discussed the issues in this bill. The two main issues that need to
be addressed within ASMI are the size of the ASMI Board of
Directors and the tax structure. This legislation brings ASMI "into
the 21st century". This bill would reduce the Board of Directors to
seven or nine members. A taxing structure must be established to
pay for industry marketing. ASMI is the only organization that
broadly markets Alaskan seafood products. A trigger mechanism
exists within this bill, which would allow the fishing industry to
determine the level of taxation they are willing to accept to fund
ASMI. Currently, a one-percent salmon fisherman tax and a
processors' tax are in place. This bill would require a vote of the
processors, based on their value, to determine the tax; a majority
vote would be required to implement a tax rate. The processors
could decide to impose a 0.5-percent tax, maintain the current 0.3-
percent tax, or they could opt out of the tax entirely. If the 0.5-
percent tax were adopted the Board of Directors would have seven
members, and if the 0.5-percent tax were rejected two fishermen
would be added to the Board of Directors bringing the total
membership to nine.
[Note: in this paragraph Senator G. Stevens' references to ASMI
relate specifically to the seafood marketing assessment component
of ASMI.] Senator G. Stevens furthered that a determination must be
made whether rational exists to continue ASMI. He expressed his
support of ASMI, but emphasized that the processors should be given
the opportunity to determine whether they want ASMI to continue.
The processors would then be given the opportunity to decide if
they want to keep the current 0.3-percent tax, terminate the tax,
or increase the tax to 0.5-percent.
Senator G. Stevens indicated that with the adoption of the
committee substitute, the fiscal note would become zero.
Co-Chair Green asked if a revised fiscal note has been prepared to
the committee substitute.
Senator G. Stevens answered an updated fiscal note has not been
prepared, but noted a representative of the Department of Revenue
is present to address the matter.
Co-Chair Wilken shared that members of the Committee have requested
that this legislation be held in Committee until they can fully
review the committee substitute. An updated fiscal note could be
presented at the next Committee hearing of this bill.
Co-Chair Green also requested an updated sectional analysis of the
committee substitute.
Senator G. Stevens clarified that significant changes were made to
this legislation in the committee substitute.
Co-Chair Green cited the original sectional analysis and asked if
the committee substitute would require that an appropriation from
seafood marketing tax receipts not be made using unrestricted
general funds.
Senator G. Stevens replied that the committee substitute would
involve no general fund spending.
Senator B. Stevens thanked Senator G. Stevens for his efforts on
this issue.
Senator B. Stevens emphasized the need to inform industry
participants that while the election would determine the amount of
the landing tax, revenues from the tax would be utilized for
marketing the entire seafood industry, and not just salmon. Concern
existed that the a few processors would dictate the tax structure
for the entire seafood industry. This concern is unwarranted
because though there are a limited number of salmon processors, a
large number of other seafood processors exist.
Co-Chair Wilken addressed Senator Hoffman and Senator Olson, and
asked them when they would be prepared to take action on this
legislation.
Senator Olson replied they would be prepared to take action by the
next regularly scheduled Committee meeting in approximately two
weeks.
Co-Chair Wilken ordered the bill HELD in Committee.
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