Legislature(1993 - 1994)
05/04/1993 03:10 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 275(FIN) am: An Act relating to the Alaska Seafood Marketing Institute and a salmon marketing tax; and providing for an effective date. Co-chair Pearce invited Kim Elton, Executive Director, Alaska Seafood Marketing Institute, to join the committee at the table and speak to CSHB 275(FIN) am. KIM ELTON spoke to the sections of CSHB 275(FIN) am. Senator Kelly asked what changes had been made to the bill in the Senate version. Mr. Elton said that one of the changes provided for a separate salmon committee that would advise the whole board on the salmon marketing program. He also believed that a change had been made to the salmon enhancement tax legislation. Senator Kelly asked if a public member had been reinstated to the board. Mr. Elton answered affirmatively. Mr. Elton said that United Fisherman of Alaska (UFA) are interested in amending this bill to reestablish the salmon marketing subcommittee, and ASMI board had no objection to that amendment. REPRESENTATIVE BILL HUDSON, sponsor of HB 275, said that amendment 1 revised (copy on file) had been forwarded by UFA. He said that the concept was in the Senate version of the bill but had been removed when it was in the House. It would establish the salmon marketing committee with representation from around the coast to advise the ASMI board. It would also delete the provision that establishes the executive board which would still be up to the majority of the board members who will now consist of 12 fishermen and 12 processors. He said that he was in support of amendment 1 revised. SENATOR JUDITH SALO spoke in favor of amendment 1 revised. She said that it would make the fishermen in her area much more comfortable with the bill. Senator Kelly questioned setting up the executive board. Representative Hudson said that the amendment would eliminate the executive board. Senator Kelly said that he was satisfied with the amendment. Senator Kerttula MOVED for adoption of amendment 1 revised. No objections being heard, amendment 1 revised was ADOPTED. Senator Jacko asked what part of the state would contribute the majority of the tax money. Mr. Elton said that if it was evaluated by region, Bristol Bay would contribute the majority of the tax money. In answer to Senator Kelly, Representative Hudson said he had introduced separate legislation providing for a one percent assessment change. He felt it was not appropriate to include it in CSHB 275(FIN) because there had not been adequate time to analyze this assessment. Senator Jacko MOVED for adoption of amendment 2 (copy on file). Co-chair Pearce OBJECTED for discussion purposes. Senator Jacko explained that since the majority of the tax revenue would be realized from the Bristol Bay area, there was concern that this area was being asked to pay an additional tax. This area already is forced to pay a good amount of municipal and raw fish taxes. He explained that his amendment would require that the ASMI board would be comprised of 13 fishermen from the Bristol Bay, Alaska Peninsula, Bering Sea, or Yukon-Kuskokwim region. One member of the board would be a lay person selected by the Governor. He felt that this would insure representation by this area in the decision making process in regard to where the tax money is spent. In answer to Co-chair Pearce, Senator Jacko said the total number of board members would remain at 25 but representation of the board members would change. Representative Hudson voiced his opposition to amending the language of the bill and requiring all of the commercial fishing members be from the Bristol Bay, Alaska Peninsula, Bering Sea, or Yukon-Kuskokwim region. He said this would mean there would be no fishermen from the balance of the state of Alaska. Co-chair Pearce asked Senator Jacko's intent of the amendment. Senator Jacko answered that since 50 percent of the tax money would be received from that area that 50 percent of the board members should be from the area. Representative Hudson said that the purpose of CSHB 275(FIN) was to provide broad representation throughout the maritime regions of Alaska on the ASMI board to control not the only the domestic marketing program but to control all other aspects of the ASMI program. To only draw from this specific area to represent the entire coast of Alaska would be objectionable by fisherman in Cook Inlet, Prince William Sound, southeast Alaska and other areas. Discussion followed between Co-chair Pearce and Senator Jacko regarding other members of the board. It was determined that this amendment would say that all the fishermen on the board would have to be from Bristol Bay, Alaska Peninsula, Bering Sea, or Yukon-Kuskokwim region. Co-chair Pearce said that she could understand objections to the amendment. Recess 3:44pm Reconvene 4:00pm Co-chair Pearce announced that amendment 2 had been offered. Senator Kelly OBJECTED to amendment 2. Representative Hudson said that amendment 2 would break the bill's intent of having an even-handed approach between the processors and fishermen. The Governor makes these appointments and to require all fishermen to come from one region in Alaska would mean that the rest of the state would not be represented. He said this amendment would destroy the merits of this bill. Senator Kelly maintained his OBJECTION. JERRY MCCUNE, President, United Fisherman of Alaska, voiced his opposition to having all 13 fishermen from the Bristol Bay, Alaska Peninsula, Bering Sea, or Yukon-Kuskokwim region and asked how the other fishermen from areas such as Copper River and Kenai would be represented. Co-chair Frank said that there should be fair representation from all areas of Alaska. Senator Jacko said that the experience of most of the fishermen was that UFA was not that supportive of fishermen from southwestern Alaska. If this legislation was passed, processors in 1993 would pay $3.2 million and fishermen at 1% would pay $5 million. The majority of the $5 million would come from the regions he indicated in his amendment. Senator Jacko would support the number of processors reduced on the board in order to make room for other fishermen from other areas. Mr. Elton said that over the last 15 years, ASMI has gone to great lengths to not only include regional representation but gear type representation as well to insure that large processors and small operations were included in their program. He said that this tax could vary from year to year. ASMI is Alaska Seafood Marketing not just salmon marketing. He said he understood Senator Jacko's concern but a balance needed to be maintained for ASMI. He felt assured that ASMI would listen to all the different fishermen and regions regarding ASMI's marketing plans. Mr. McCune said that he would be willing to work with Senator Jacko regarding this amendment but he maintained his opposition to having all the fishermen coming from one region. Representative Hudson suggested that the words "commercial fishermen members shall be appointed proportional to the amount of salmon taxes by region to the extent possible" added to page 2, line 2. He said that this wording would provide legislative intent to the Governor in his appointment process giving consideration to those regions that pay the highest taxes. End SFC-93 #72, Side 2 Begin SFC-93 #74, Side 1 Senator Jacko said that he would consider amending his amendment 2 to include one fisherman from another part of Alaska. SENATOR BERT SHARP asked if there was any other tax in statutes that required fishermen other than the processors to contribute a salmon tax. Mr. Elton said there had been discussion about having 1 percent across the board on all different types of fishing. Mr. Elton said there are some groups that are in favor of that tax. The biggest problem facing the seafood market is the salmon market. The decision was made to see how this tax works in this bill and then another tax could be added later for other fisheries. Mr. Elton said that problems in the halibut and king crab market were being faced but at this time salmon is the main problem. Representative Hudson said that ASMI markets its products worldwide and millions of federal dollars have been used to try and enhance the marketplace of Alaskan products. This money can only be used for overseas marketing. Mr. Elton said that $8.5 million of federal dollars were spent this year, partially matched by the state. Representative Hudson said that one part of salmon marketing that has been missing for years is the fresh and frozen salmon. This present challenge is to increase the consumption of Alaska salmon in the domestic market. Alaska is not alone in its efforts to look to the domestic market. Japan, Chile, the Norwegians, New Zealanders, etc. are all looking at the U.S. domestic market. If this legislation would pass, ASMI should be able to bring the fishermen and processors together, moving them into the domestic market with more knowledge. He wanted to emphasize that the goal of increasing the domestic market for all fishermen and processors must not be lost in side issues. He asked the committee to consider the wording he had suggested for amending the bill. Recess 4:15pm Reconvene 4:50pm Co-chair Pearce announced that amendment 2 was still before the committee. Senator Kelly maintained his objection. Co- chair Pearce called for a show of hands and amendment 2 FAILED on a vote of 6 to 1. Co-chairs Pearce and Frank, Senators Rieger, Sharp, Kerttula, and Kelly opposed the amendment. Senator Jacko voted in support of amendment 2. Senator Jacko MOVED for adoption of amendment 3 (copy on file). Senator Kelly OBJECTED. Senator Kelly said he was opposed to the word majority in the amendment. Co-chair Frank said that this amendment would assure that there would be proportional representation on the board. Senator Kelly said that he was not sure that "majority" was proportional. Co-chair Frank said that it was not the number of fishermen but it should be proportionally based upon the value of the product. Senator Kelly maintained his objection to amendment 3. Co-chair Pearce called for a show of hands and amendment 3 passed on a vote of 4 to 3. Co-chairs Frank and Pearce, Senators Jacko, and Sharp voted in support of amendment 3. Senators Kerttula, Rieger and Kelly were opposed. DEAN PADDOCK, Bristol Bay Driftnetters Association, spoke in support of the original bill, HB 275. His association believed that Alaska was in desperate need of a domestic marketing program. He voiced his opposition to amendment 3 and would have preferred the wording as submitted by Representative Hudson. He said that getting Alaskan fishermen to work together was a difficult thing to accomplish. He feared that amendment 3 would polarize the fishermen and the processors. He reiterated that everyone needed to work together. He said that after attending meetings of the ASMI board and after contact with them, he had never had any problems. He hoped that this legislation would work for the good of all. Senator Kerttula MOVED for passage of SCSCSHB 275(FIN) as amended with individual recommendations and a fiscal note for the Department of Commerce & Economic Development for $5,640.3 and a fiscal note for Department of Revenue for $109.7 with revenue of $5,750. Senator Jacko OBJECTED. Co- chair Pearce called for show of hands and SCSCSHB 275(FIN) as amended was REPORTED OUT of committee with the accompanying fiscal notes on a vote of 4 to 3. Co-chairs Frank and Pearce signed "do pass." Senators Sharp, Kerttula, Rieger, Kelly, and Jacko signed "no recommendation."