Legislature(2001 - 2002)

03/04/2002 09:10 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CS FOR SENATE BILL NO. 282(L&C)                                                                                            
     "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."                                                                                          
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
SENATOR  BEN STEVENS, sponsor,  testified  this legislation  extends                                                            
the termination date of  the one-percent salmon tax to the year 2008                                                            
and  permits  the revenue  to  be  used in  current  Alaska  Seafood                                                            
Marketing Institute  (ASMI) programs. He informed  this would be the                                                            
second extension of this tax since its enactment in 1993.                                                                       
Senator Stevens told how  ASMI uses the funds to promote the quality                                                            
and "superiority" of Alaskan  seafood products and to increase world                                                            
consumption.  He emphasized  this  is the  only generic  program  in                                                            
Alaska  to promote  all  Alaska's  seafood  products in  the  global                                                            
protein market.                                                                                                                 
Senator Ward  asked if "niche"  marketing is  necessary to  focus on                                                            
certain fisheries, such as the Copper River sockeye salmon.                                                                     
Senator  Stevens replied  the "brand marketing  program" debate  has                                                            
been ongoing in ASMI but  that the organization continues to operate                                                            
as  a generic  marketing  program.  He expressed  that  to  allocate                                                            
funding to regional efforts would dilute the overall efforts.                                                                   
Senator Ward stated this  legislation may not be the entity to begin                                                            
these efforts,  but shared that Cook Inlet fisherman  have requested                                                            
a portion of the salmon tax be utilized to market their catch.                                                                  
Senator  Olson asked  about the  opinions from  within the  industry                                                            
regarding continuation of the one-percent tax.                                                                                  
Senator  Stevens relayed  the ASMI  Board favors  the extension  and                                                            
that  no testimony  heard  on  this bill  in  the Senate  Labor  and                                                            
Commerce Committee  opposed elimination of ASMI. He  qualified there                                                            
are some concerns that have always been present.                                                                                
Senator  Green  noted the  sponsor  statement  references  the  One-                                                            
Percent  Domestic Salmon  Marketing  Tax and  asked if  this is  the                                                            
official name.                                                                                                                  
Senator Stevens  affirmed  this is the official  name although  this                                                            
legislation would change the name to the Salmon Marketing Tax.                                                                  
BRUCE  SCHACTLER,  Commercial  salmon  fisherman,  At-Large  Member,                                                            
Board  of Directors,  United  Fishermen  of Alaska,  and  President,                                                            
United Salmon Association,  testified via teleconference from Kodiak                                                            
about a perceived  rush to pass this legislation.  He stated he does                                                            
not oppose using a portion  of the tax revenue for foreign marketing                                                            
efforts; however, the tax  originally gained approval in part from a                                                            
promise  that the  funds would  be expended  solely  to develop  the                                                            
domestic  market and  the  matter should  be discussed  before  such                                                            
changes  are  made. He  also  encouraged  further  consideration  of                                                            
expending  funds for lobbying  efforts in  Washington DC to  address                                                            
farmed salmon and foreign competition.                                                                                          
CHRIS BERNS  testified via  teleconference  from Kodiak that  he has                                                            
fished since 1970 and he  supported the one-percent industry tax and                                                            
had lobbied for  its implementation in 1993 based  on the assumption                                                            
that it  would be used  for domestic marketing.  He stated  that the                                                            
United States is the primary  market for farmed salmon. While he did                                                            
not oppose "giving  flexibility" to the ASMI marketing  committee to                                                            
expend funds  for foreign marketing,  he asserted, "foreign  markets                                                            
are just a big  giant hole" and past efforts have  been ineffective.                                                            
He suggested  giving this legislation  further consideration  as the                                                            
current extension does not expire until the following year.                                                                     
SFC 02 # 24, Side B 10:00 AM                                                                                                    
Mr. Berns  continued that  the salmon industry  is the only  seafood                                                            
producer  in the state to  pay a tax for  the marketing efforts.  He                                                            
did not see any benefit for himself from this tax.                                                                              
Co-Chair Kelly asked Senator Stevens to address the comments.                                                                   
Senator  Stevens  addressed   Mr.  Schactler's  comments   regarding                                                            
utilizing funds  to lobby in the nation's  capital. Senator  Stevens                                                            
noted this  was discussed but not  incorporated in the legislation,                                                             
as  the United  Salmon  Association  was  the only  organization  in                                                            
support of the  plan and because it was determined  this was not the                                                            
best use of  the funds given the limited  amount available.  He also                                                            
noted this  legislation  is not being  rushed and  that most  of Mr.                                                            
Schactler's  concerns   were  addressed  at  the  Senate  Labor  and                                                            
Commerce  Committee.   He  stated   the  extension  date   is  being                                                            
implemented one year earlier  to allow ASMI to make long-term plans.                                                            
Senator Ward  understood one witness  suggested that a subcommittee                                                             
of the proposed  salmon task could  address the concerns  raised. He                                                            
asked the sponsor's opinion.                                                                                                    
Senator Stevens  responded ASMI needs stability to  allow it to plan                                                            
for the future. He expressed  there is uncertainty as to the results                                                            
of the task force and therefore  ASMI should not be dependant on its                                                            
Senator Stevens  referenced the statement  that the salmon  industry                                                            
is the  only seafood  industry  paying a  tax. He  pointed out  that                                                            
processors pay a .3 percent tax for all seafood products.                                                                       
Senator   Austerman  supported   reauthorizing   ASMI  during   this                                                            
legislative session  because of the time lapse involved  in planning                                                            
efforts. He suggested the  task force could review the issues and if                                                            
it recommended, the extension could be repealed.                                                                                
SUE ASPELUND,  Executive Director,  Cordova Fisherman United,  spoke                                                            
to  the knowledge  of  the  organization  and  the full  support  of                                                            
continuation  of  the  one-percent  tax.  She  relayed  support  for                                                            
lifting  the restrictions  against foreign  marketing. She  stressed                                                            
the importance of seafood  marketing and preferred funding marketing                                                            
versus lobbying efforts.                                                                                                        
BARBARA  BELKNAP,  Executive  Director,  Alaska   Seafood  Marketing                                                            
Institute,  testified in  Juneau to respond  to witness statements.                                                             
She told  of the  history  and diversity  of representation  on  the                                                            
board. She  stated that the board  of directors supports  removal of                                                            
the domestic  marketing limitation,  and that the issue of  lobbying                                                            
was not addressed  during the previous  board meeting. She  stressed                                                            
ASMI is not a trade organization.  She spoke to the disadvantages of                                                            
lobbying, as any  standpoint the agency lobbies in  support of would                                                            
meet opposition from other  entities the agency represents. She told                                                            
of the Salmon  Marketing Committee that oversees the  expenditure of                                                            
the  marketing  funds.  She  mentioned  difficulties   incurred  the                                                            
previous time ASMI was  due for reauthorization as commitments could                                                            
not be made until continuance of the program was guaranteed.                                                                    
JERRY  MCCUNE, United  Fishermen  of  Alaska, testified  in  Juneau,                                                            
about the 29 groups represented  by the organization, which supports                                                            
the committee  substitute and international marketing.  He noted the                                                            
original intent  of the tax was to  focus marketing on the  domestic                                                            
market,  which  he  stated  has  occurred.  However,  he  noted  new                                                            
international markets are emerging for generic salmon.                                                                          
KATHY  HANSON,  Executive  Director,  Southeast  Alaska Fishermen's                                                             
Alliance testified  in Juneau in support of the renewal  of ASMI and                                                            
the importance  of renewing this year rather then  waiting until the                                                            
term expires.  She stated that removing the restrictions  related to                                                            
international  marketing would  be beneficial,  noting that  most of                                                            
the  funds  would  continued  to  be  used  for domestic   marketing                                                            
although  ASMI should  have  flexibility to  take  advantage of  the                                                            
international market. She  spoke of ASMI successes in using funds to                                                            
leverage additional funds.                                                                                                      
Ms. Hanson  addressed  changing the  number of members  on the  ASMI                                                            
board. She  stated the organization  was unable to reach  consensus.                                                            
She relayed some of the arguments in favor and opposition.                                                                      
AT EASE 10:17 AM / 10:19 AM                                                                                                     
Senator Austerman  emphasized this  bill must be adopted  this year.                                                            
He informed  that the original  version of  the bill maintained  the                                                            
domestic  marketing  restrictions  and  it  reduced  the  number  of                                                            
members on the board. He  relayed that productive debate occurred in                                                            
the Senate Labor  and Commerce Committee about these  issues as well                                                            
as the  potential for utilizing  a portion  of the tax revenues  for                                                            
lobbying  efforts.  He  stated  his opinion  is  that  the  domestic                                                            
marketing restriction  should remain  as it weakens the program.  He                                                            
shared that  he had made  the suggestion to  expend some of  the tax                                                            
revenues for lobbying efforts,  but withdrew after hearing arguments                                                            
against the proposal.  He expressed he would not offer  an amendment                                                            
to the committee substitute,  citing that "the industry has spoken".                                                            
Co-Chair  Kelly noted Co-Chair  Donley had  questions regarding  the                                                            
fiscal note and requested he consult with the sponsor.                                                                          
Co-Chair Kelly ordered the bill HELD in Committee.                                                                              
AT EASE 10:21 AM / 10:32 AM                                                                                                     

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