Legislature(1999 - 2000)
03/28/2000 02:05 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 28, 2000
2:05 P.M.
TAPE HFC 00 - 84, Side 1.
TAPE HFC 00 - 84, Side 2.
TAPE HFC 00 - 85, Side 1.
TAPE HFC 00 - 85, Side 2.
TAPE HFC 00 - 86, Side 1.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 2:05 P.M.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Representative G. Davis Representative Moses
Representative Austerman Representative Phillips
Representative J. Davies Representative Williams
Representative Bunde was not present for the meeting.
ALSO PRESENT
Joanie Waller, Staff, Representative Austerman; Bruce
Schactler, United Salmon Association, Kodiak; David Forbush,
Ward's Cove Packing Company, Seattle; John Garner, NorQuest
Seafoods, Seattle; Brett Fried, Economist, Department of
Revenue; Stephanie Madsen, Vice President, Pacific Seafood
Processors, Juneau; Scott McAllister, United Salmon
Association, Juneau; Steve Okerlund, Chief Operating
Officer, Trident Seafoods, Seattle; Jim Eason, ANG LING
Sponsor Group, Anchorage; Chris McDowell, Project Manager,
Salmon Market Information Service, McDowell Group, Juneau.
TESTIFIED VIA TELECONFERENCE
Nan Thompson, Alaska Regulatory Commission, Anchorage;
Jeffrey Bailey, Anchorage; Pat Hardina, Alaska Processing,
Kenai; Virginia Adams, Kodiak; Tom Wishcher, Kodiak; Ken
Roemihildt, North Pacific Processors, Cordova; Bill Bailey,
Copper River Fine Seafoods, Cordova.
SUMMARY
HB 18 An Act making a special appropriation from the
earnings reserve account to the principal of the
permanent fund; and providing for an effective
date.
HB 18 was HEARD and HELD Committee for further
consideration.
HB 265 An Act extending the termination date of the
Alaska regional economic assistance program; and
providing for an effective date.
HB 265 was POSTPONED for consideration.
HB 290 An Act relating to stranded gas pipeline carriers
and to the intrastate regulation by the Regulatory
Commission of Alaska of pipelines and pipeline
facilities of stranded gas pipeline carriers.
CS HB 290 (FIN) was reported out of Committee with
"no recommendation" and with a fiscal note by the
Department of Community and Regional Affairs dated
2/21/00.
HB 363 An Act relating to salmon product reports; and
providing for an effective date.
CS HB 363 (FIN) was reported out of Committee with
"no recommendation" and with a new fiscal note by
the Department of Revenue.
HB 366 An Act relating to the rights of crime victims,
the crime of violating a protective order or
injunction, mitigating factors in sentencing for
an offense, and the return of certain seized
property to victims; expanding the scope of the
prohibition of compromise based on civil remedy of
misdemeanor crimes involving domestic violence;
amending Rules 10, 11, 13, 16, and 17, Alaska
District Court Rules of Civil Procedure and Rule
9, Alaska Rules of Administration.
HB 366 was POSTPONDED until March 29, 2000 at 9:00
a.m.
CSSB 269(RLS) am
An Act relating to legislative powers and
responsibility with respect to collective
bargaining agreements between the state and a
labor or employee organization representing state
employees; and providing for an effective date.
CS SB 269 (RLS) am was POSTPONED until March 29,
2000 at 9:00 a.m.
HOUSE BILL NO. 290
An Act relating to stranded gas pipeline carriers and
to the intrastate regulation by the Regulatory
Commission of Alaska of pipelines and pipeline
facilities of stranded gas pipeline carriers.
Co-Chair Therriault spoke to Amendment #1, 1-LS1269\K.1,
Chenoweth, 3/23/00. [Copy on File]. He noted that the
amendment addressed the rate setting methodology. Previous
testimony from Alaska Regulatory Commission (RCA) explained
the State user position. Co-Chair Therriault did not believe
that establishing a tariff rate would endanger the product.
Co-Chair Therriault WITHDREW Amendment #2, 1-LS1269\K.2.
Co-Chair Therriault MOVED to adopt Amendment #1.
Representative Phillips OBJECTED. She noted that there had
been serious discussion regarding the concern in the House
Oil and Gas Committee. Representative J. Davies emphasized
that the amendment would place the rate making structure
under utilities only.
JIM EASON, REPRESENTATIVE OF ANS LNG SPONSOR GROUP,
ANCHORAGE, stated that there are a number of issues that the
Committee should consider. He suggested to amend the bill
would be premature and counter productive. The issue of a
proposed tariff would be best considered when the facts are
available. Under existing law, both the Pipeline Act and
the Public Utilities Act give the Regulatory Commission the
authority to require what is "reasonable and just". Mr.
Eason argued that the State is three to four years away from
having enough information to determine what it will cost.
That decision is not critical at this time. He pointed out
that this would be the first time in the State's history
that a pipeline project would be required to file a tariff
under the Utility Act even though it would be regulated
under the Alaska Pipeline Act. He recommended there be
further discussion on the matter.
Co-Chair Therriault asked if the language had been included
in the Oil and Gas Committee version of the legislation and
the House Resources Committee removed if it was then. Mr.
Eason acknowledged that was correct.
NAN THOMPSON, (TESTIFIED VIA TELECONFERENCE), ALASKA
REGULATORY COMMISSION, ANCHORAGE, referenced the memo
included in member's packets which outlines the excluded
items from the rate:
? Public relations costs;
? Lobbying expenses;
? Charitable contributions;
? Association dues;
? Extraordinary management compensation;
? Research and development costs;
? Acquisition adjustments; and
? Pensions and employee benefits.
She understood that the ANG LNG sponsor group would not want
to limit their options in reserving space. She suggested
that the Committee remember the small percentage of the coal
product which will go to the user. The pipeline is being
constructed mainly for export. Only a very small percentage
of the product will be used in the State. There also exists
a timing question. The issue is what potential can predict
when they could make the decision. The proposed methodology
encourages more in-State use providing a clearer idea of
what the costs will be.
A roll call vote was taken on the motion to adopt Amendment
IN FAVOR: Austerman, J. Davies, Grussendorf, Moses,
Therriault
OPPOSED: Williams, G. Davis, Foster, Phillips
Representative Bunde and Co-Chair Mulder were not present
for the vote.
The MOTION PASSED (5-4).
Representative Foster MOVED to report CS HB 290 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS HB 290 (FIN) was reported out of Committee with "no
recommendation" and with a fiscal note by Department of
Community and Regional Affairs and two zero notes by
Department of Natural Resources and Department of Revenue
dated 2/21/00.
HOUSE BILL NO. 363
An Act relating to salmon product reports; and
providing for an effective date.
JOANIE WALLER, STAFF, REPRESENTATIVE AUSTERMAN, stated that
HB 363 renames the existing Wholesale Price Report (WPR,
also referred to as AWPR or WCPR) to become the Alaska
Salmon Price Report (ASPR) by updating it to include all
salmon products. The report captures the bulk of Alaska's
commercial salmon trade information in a timely and accurate
manner.
Ms. Waller pointed out that currently, AS 43.80.050 requires
processors who sell 240,000 pounds or more of thermally
processed salmon in a calendar year, to report three times
each year, the volume and price of cans sold. She suggested
that the ASPR would reflect the changing times in the
industry, which has evolved to include all salmon products,
thermally processed and fresh, frozen, and roe products.
Ms. Waller pointed out that HB 363 would expand the
information base for ex-vessel value, production, and
wholesale price reporting. In order to track the production
of the State's resource, ASPR adds a section that requires
processors to report the quantity of each salmon product
form and species, by area of production, along with the
wholesale prices of product sold.
Ms. Waller emphasized that the tax revenue realized from
salmon fishing is generated from the ex-vessel price, which
is the price that is paid to the fishermen. Fishery business
taxes, raw fish tax, landing tax, Alaska Seafood Marketing
Institute (ASMI) tax and aquaculture assessments are all
based on the ex-vessel values of salmon products. The ASPR
information is important for anyone planning income streams
derived from the sale of Alaska's salmon.
Ms. Waller stated that issue has been debated for a long
time. In 1984, the Department of Commerce and Economic
Development published a report on the possible development
of a program to determine wholesale price averages for
salmon products.
Ms. Waller noted that the reasons for presenting the
information were two-fold:
? Accuracy of information available to the State;
? The sharing of information between harvesters and
processors.
Co-Chair Therriault asked if thermally processed salmon was
cooked salmon. Ms. Waller replied it is.
BRUCE SCHACTLER, UNITED SALMON ASSOCIATION, KODIAK, noted
that the report was a continuation of efforts of the past
three years to bring to light for fishermen the value of the
resource. He stated that they have attempted to keep it at
a "level of public trust" to evaluate the resource. He
emphasized that there is inaccurate user information
available and that it has been damaging. The legislation
would bring that information into a more accurate place.
Mr. Schactler pointed out that the most recent legislation
was dated 1998. The last salmon forum was last year and one
of the recommendations was that there should be an increase
in reporting and frequency of prices. The design has come
from recommendations from processors and the industry. The
intent was to create a forum which would protect
confidentiality.
Representative G. Davis asked if the forums would create a
report or recommendations. Mr. Schactler explained that
there had been a 1999 Salmon Forum and that the
recommendations from that were that there should be at least
one more reporting period within the current database. At
present time, there has been no designing done.
Representative G. Davis commented that there is currently a
lot of information available. He questioned if that
information was not adequately representing the product.
Mr. Schactler reiterated that the essential information is
not out there. What is needed is a detailed report, and now
only is stipulated in regulation, not in statute.
Therefore, the Department of Fish and Game is not able to
make it available until late summer of the following year.
For users of that database, that is too late. The United
Salmon Association is looking for something that is timelier
and that would provide more of a moving picture of the
resource.
Representative Williams asked how the information could be
used confidentially and if that would hurt the processors.
Mr. Schactler replied that the numbers could not hurt the
processors. He noted that there have been a number of
amendments to specifically address confidentiality.
Representative Williams asked why the processors chose not
to participate. Mr. Schactler stated that the processors
believe that the information is "no ones business" but their
own. They have indicated that the information supplied by
the Department of Fish and Game is adequate for the needs of
the association.
Representative Phillips inquired about the salmon in Cook
Inlet and how that process worked. She asked if the
fisherman had been paid after the report came out. Mr.
Schactler replied not necessarily. Some contracts are
careful not to place the processors in a position with the
buyer when they are not certain what they will be receiving
from the fish. Every contract currently used has a portion
which provides an advance. The data base is used at a later
date to access the revenue that was received based on the
contract and shared at a later date.
Representative Phillips questioned if the legislation was a
request for filing three reports a year. Mr. Schactler
replied it was. At this time the way it works, there is
data three to six months after the fish are sold.
Representative Phillips noted that the report indicates,
"after it was caught", and that time ends August 31st. At
that time, they have thirty days from which to put the
report together. It would take six to eight weeks for the
Department of Revenue to consolidate the report. If the
fish were caught in May, the fisherman would not know until
sometime in November what the value was. Mr. Schactler
emphasized that the report only deals with fish "sold".
Representative Phillips asked if a fisherman could
conceivably not receive their money for the fish they
caught, six to nine months out. Mr. Schactler replied that
is how it works today. He added, however, it depends on the
agreement the fisherman has with their buyer. At this time,
there is no way to know what your share will be. That
number does not exist.
Representative Moses inquired if 80% of the data would be
adequate. Mr. Schactler replied that it partially would be.
He explained that the canned product makes up 36% of the
products by volume. The 20% comes from the more innovative
processors. The last 20% is the "head of the movement".
Representative Moses maintained that the legislation would
be difficult for small processors in State. Representative
Austerman pointed out that current law indicates a 240
thousand-pound limit. Representative Moses proposed that
the number be changed to one million pounds, so to protect
the smaller processor.
JEFFREY BAILEY, (TESTIFIED VIA TELECONFERENCE), COMMERCIAL
FISHERMAN & SMALL SEAFOOD PROCESSOR, ANCHORAGE, voiced
strong opposition to the proposed legislation. He believed
that the bill would place unusual burdens upon the smaller
processors. He noted that price information is available
and that the prices can change in a matter of seconds. It
would be very difficult for the small processors to be
competing in that arena. Mr. Bailey reiterated that
legislation would be very difficult for these processors and
that the bill will result in isolating the two industries
from each other. He believed that it would affect the price
for fishermen.
Mr. Bailey commented that the action is not coming from the
Department of Revenue. He emphasized that the bill is going
in the wrong direction. There is risk in harvesting fish,
and given the world market, dealing with salmon, the risk is
even larger. He invited members to look at the "bigger"
picture and find a way of working together in the world
market.
Representative Williams asked for suggestions of how to work
more closely. Mr. Bailey responded that profit sharing
works directly with the fishermen. He reiterated the risks
that the processors experience.
(TAPE CHANGE, HFC 00 - 84, Side 2).
Representative Austerman asked if increasing the amount to
one million pounds would remove Mr. Bailey's concern in
recording requirements. Mr. Bailey stated that it would.
Representative J. Davies inquired if there was information
needed for the proposed plan, which is not currently being
collected. Mr. Bailey explained that when tax returns are
filed, the processors do not record poundage. The
requirement would stipulate that the number be broken down
according to portions, fillets, and pieces. Consolidating
that information would be very time consuming.
Representative G. Davis questioned where that information
currently could be found. Mr. Bailey explained that there
are a number of web sites that are listing products for sale
and the prices of those products. He emphasized that this
is a world market. The State of Alaska no longer dominates
the market and there are a lot of fish available. It is a
competitive marketplace.
KEN ROEMIHILDT, (TESTIFIED VIA TELECONFERENCE), NORTH
PACIFIC PROCESSORS, CORDOVA, voiced opposition to HB 363,
stating that the legislation is unnecessary. He noted that
the process could "back-fire" with the prices being lower
than currently being paid. He believed that not knowing
prices often encourages higher prices. Mr. Roemihilt
remarked that cost can play a part in future price
negotiations. He added that the proposal will be time and
work intensive.
BILL BAILEY, (TESTIFIED VIA TELECONFERENCE), COPPER RIVER
FINE SEAFOODS, CORDOVA, spoke in opposition to HB 363. He
stated that the proposed legislation is not the answer to
what the fishermen are looking for. He emphasized that the
processors are not the ones who determine the actual price
of fish. Ultimately, that goes back to the buyer. The
legislation will be a "night mare".
PAT HARDINA, (TESTIFIED VIA TELECONFERENCE), COOK INLET,
ALASKA PROCESSING, KENAI, spoke to the difficulty that would
be entailed in creating the report. She questioned who
would utilize the information, emphasizing that the
processors would not be. Ms. Hardina agreed that contrary
to what was heard, the information could backfire on the
fishermen. She believed that research and marketing
consultants would analyze and republish the information. She
stated that processors would need to be willing to sign the
contracts.
Ms. Hardina did not believe that the fishermen had given a
reasonable argument. She listed that the number of
processors that have closed over the past couple of years.
If the profits are not reinvested, the industry will die.
She stressed that it is not possible to educate every
fisherman about price. The bill will drive another wedge
between the fishermen and the processors. Ms. Hardina
questioned at what point does the Legislature have the
authority to force operations.
Representative G. Davis questioned if the one million-pound
limit would make a difference. Ms. Hardina replied that
change would not make much of a difference. To increase the
volume to one million pounds would only shift the burden to
the larger processors.
Representative Williams asked what Ms. Hardina would do to
close the gap. Ms. Hardina emphasized that no one will be
satisfied unless they are making a lot of money. The
processors acknowledge that a problem exists. She suggested
that the fishermen should use their own organization to read
the reports and bring that information back to a mutual
source. She reiterated that the information is available on
the Internet.
Representative Williams asked if her company placed their
information on the Internet. Ms. Hardina replied that they
did not.
VIRGINA ADAMS, (TESTIFIED VIA TELECONFERENCE), COMMERCIAL
FISHERPERSON, KODIAK, spoke in support of the legislation.
She noted that it would be well-used information. She
stated that fishermen are in contract with processing
companies to assess what they are being paid. To date,
there is nothing to hang that "trust" upon. Ms. Adams
stated that the intent of the legislation would remove the
"mystery" and that fishing people would then be sharing in
the risk. At present time, there is no core report but
rather a reduced wholesale one.
TOM WISCHER, (TESTIFIED VIA TELECONFERENCE), COMMERCAIL
FISHERMAN, KODIAK, testified in support of the legislation.
He acknowledged the "riff" between the fish industry and the
processors. The fishermen are asking to know what they are
entitled to, what is produced, and how the cost is
determined. He disagreed that this information is currently
available for the fishing industry.
BRETT FRIED, ECONOMIST, DEPARTMENT OF REVENUE, advised that
the Department has not taken a position on the collection of
the data. He stated that the Department does not believe
that this would be a function of the Department of Revenue
because there is no direct link with taxation. However, Mr.
Fried noted that the Department would be requesting one
position in order to create the proposed requirements to
build a $20 thousand dollar database.
Representative Austerman asked if changing the requirements
from 240 thousand pounds to one million pounds would require
more of a workload for the Department. Mr. Fried stated
that it would as it would reduce the number of processors
reporting and that would decrease costs.
Representative Austerman asked how long the Department had
been collecting the data. Mr. Fried replied that it has
been collecting data since at least 1983, and probably
before that.
STEPHANIE MADSEN, VICE PRESIDENT, PACIFIC SEAFOOD
PROCESSORS, JUNEAU, noted that they are opposed to the
proposed legislation. She emphasized that reporting is a
large part of the business.
Ms. Madsen spoke to the current reports required by the
Department of Revenue. The proposed legislation would
significantly change the required reports from the current
four-page report to a twenty-page report. She noted that
the reporting requirements would be increased fourfold.
Ms. Madsen noted that they agree with the Department of
Revenue regarding the change and level of complexity of the
expanded report. There will be an increased cost to the
State and to industry. Reporting wholesale prices by
production area would be very expensive. The current
production is not tied to the wholesale costs and values.
HB 363 would also change the availability of "in season"
wholesale value by area. Not only will the fishermen have
access to the reports, but also so would the customer. Ms.
Madsen identified consequences of changing the number from
240 thousand to one million pounds, which she believed would
reduce the number of processors. If there were less than
three processors, the information would not be released. She
believed that a problem with confidentiality could result.
Ms. Madsen emphasized the complexity of the salmon market
situation. She noted the differences among processors and
observed that the reporting is the same. She pointed out
that supporters of the legislation want to restore the trust
of State government, but she stressed that trust cannot be
legislated.
Ms. Madsen reiterated her opposition to the bill. She listed
examples of ways in which trust could be established without
implementing the legislation.
(TAPE CHANGE, HFC 00 - 85, Side 1).
Representative Moses clarified that his proposal would be to
place a 10 million-pound limit. Ms. Madsen replied that 10
million pounds would be worse as it would potentially drop
out more processors and then less information would be
available.
DAVID FORBUSH, WARD'S COVE PACKING COMPANY, SEATTLE, pointed
out that Ward's Cove Packing Company has twelve operating
plants in Alaska and would be over the 10 million-pound
limit. He noted that he had developed a plan as to what it
would cost the industry to supply the data as recommended in
the bill. He observed that $4.4 million dollars would be
needed for computer support if everyone complies. Mr.
Forbush stated that it takes three components to put
together a computer system.
? Start a plant and control the merchandise that
comes in;
? Create an inventory system; and
? Development of a billing sales system to provide
the reports.
In order to comply with the proposed legislation, the
earliest that Ward's Cove could, would be September 2001,
and that would cost approximately $600 thousand dollars for
the programs and equipment not including the training. Mr.
Forbush pointed out that they have not used the proposed
system. The federal government, when legislated changes to
the way in which taxes needed to be reported, gave companies
three years to make those changes. Most companies do not
have a tracking program to track the product from the plant.
Currently, there is a program for fish tickets.
Mr. Forbush recalled the first requirements for reporting of
canned product. He emphasized that the report being
requested is nothing that the plants will use. Sellers now
go to the buyers to obtain that information.
Representative Foster questioned how the money would be
recouped. Mr. Forbush stated that in the fish business, the
price is unknown. He observed that the consumer sets the
price. He did not think that the price would be passed on
to the consumer. Mr. Forbush recalled days when Alaska could
dictate the price of the product, however, he noted that he
now has to hustle to sell the product.
Representative Austerman questioned if Mr. Forbush computed
the average wholesale value when determining the price. Mr.
Forbush explained that they do not use the average wholesale
value for any purpose. They receive a report of the total
value of what was sold. He pointed out that there are
hundreds of values involved.
Representative Williams suggested that mistrust was the
underlying reason for the legislation. He questioned how
that could be addressed with the fishermen. Mr. Forbush
stressed that Ward's Cove, who has been in business since
1929, has always been honest and fair with their fisherman.
Representative Williams asked what caused the 1997 fish
strike in Ketchikan. Mr. Forbush gave a brief history of the
strike. He felt that due to competitive pricing, they were
required to pay more to meet competition. He maintained
Ward's Cove meets the competition and provides a fair market
price. He stressed that the good must be taken with the bad
and noted that the market price changes daily.
Representative Foster clarified that the $600 thousand
dollar cost would be a one-time cost. Mr. Forbush noted that
there would be additional costs for training and
modification of the program. He explained that there are at
least three different qualities of fresh fish. He maintained
that the report would not reflect the quantity of each fish
and noted that the costs of canned fish does not change.
JOHN GARNER, NORQUEST SEAFOODS, SEATTLE, testified in
opposition to the legislation, indicating that NorQuest was
a more than 10 million-pound company. He expressed his
sympathy to the fishermen's frustration regarding salmon
pricing. Mr. Garner noted concern that the proposed report
would not accurately reflect the value or cost of producing
the product. He mentioned that they produce 40 different
styles of chum style salmon fillets and that each has a
significantly different yield. Mr. Garner stressed the
difficulty of mirroring canned salmon reporting and noted
that products would be combined. Mr. Garner questioned the
value of the information. He pointed out that some fish are
being freighted with an unknown price.
STEVE OKERLUND, CHIEF OPERATING OFFICIER, TRIDENT SEAFOODS,
SEATTLE, noted that Trident Seafoods has plants in Ketchikan
and Bristol Bay and that most of the owners of the company
have come from a fishing background. He noted that they are
the largest seafood employer in the State of Alaska. Mr.
Okerlund pointed out that with respect to sockeye, farmed
salmon has taken the lead in Japan. It dominates the
domestic market. There is no identity in the domestic
market. He mentioned that the market place cannot handle
the increased costs and spoke to the complexity that
currently exists.
Mr. Okerlund stressed that this is not a system of costs and
that there is not a computer system that could track the
varieties. He spoke to the processor trying to build a
market in the domestic field. He noted that their mission
is to make the job of the fisherman easier and provide them
the largest gross stock that is available.
Mr. Okerlund reiterated that his mission was to jointly
communicate with the fishermen in creating a plan to work
together. The fisherman need to deliver every possible
pound of fish they can get in order to make themselves more
competitive. Currently, there exists an open door policy
with the fishermen. Mr. Okerlund reiterated that the
processor must be competitive. He noted that helping the
fishermen reduce costs, improve quality, and services to
keep them fishing is the goal of the processor.
Mr. Okerlund acknowledged that it is a complex sales system.
He pointed out that sales information is available in the
papers the following day. The bill has provided a "wake up
call" for the process to better communicate with the
fishermen. He agreed that intent was good.
SCOTT MCALLISTER, UNITED SALMON ASSOCIATION, JUNEAU,
explained how value had been derived, however, the missing
piece of information is determination of the wholesale
value. He emphasized that none of the processors have
shared the wholesale value. To harvest fish and take the
risks associated with that, it is important to know the
wholesale value. He stressed that is the "business end" of
the bill.
Mr. McAllister maintained that there is another element
which is one of trust. He acknowledged that this is a
public resource. As a harvester, he considered himself to
be a gatekeeper of that public trust. Without information
to enter intelligently into a contract, he asked how he
could represent his position in this resource. Mr.
McAllister commented that it is essential to be able to
provide that information in order to vie for a higher
position in the market place.
Mr. McAllister pointed out that this is not a bill to
leverage money out of the market place. The bill is brought
forth to understand the value that the product leaves and to
account for that changing value. He noted that he has made
a commitment to this legislation since 1997.
In response to Representative Foster, Mr. McAllister
explained the process is complicated. He gets paid, but
does not have any idea of what the relationship the pay is
based upon. It would be meaningful to understand the
aggregate when assessing the industry and harvesting.
(TAPE CHANGE, HFC 00 - 85, Side 2).
CHRIS MCDOWELL, PROJECT MANAGER, MCDOWELL GROUP, JUNEAU,
advised that his group had a contract with Alaska Seafood
Marketing Institute to conduct an information service.
Representative Williams asked what the graph in the packet
represented. Mr. McDowell replied that the graph indicates
a fluctuation in price and is included in the fiscal note.
The other graph is the Commercial Operators Handling report
(COHR) as distributed by the Department of Revenue. [Copy
on File]. Information in the graph was taken from the
Department of Fish and Game that had been available in June,
1999.
Representative Williams asked if the reports would coincide
with one another. Mr. McDowell explained that the advantage
of the program is that it provides a month to month report
regarding what the market is doing.
Representative G. Davis pointed out that the fluctuations
indicate what the processors have been testifying about and
that the market price changes too rapidly to keep tabs on
it. Mr. McDowell agreed that it does fluctuate rapidly.
Representative Williams questioned why the report had been
included in the packet. Mr. McDowell indicated that the
graph illustrates single numbers and a full year's average.
Co-Chair Mulder explained Amendment #1, 1-LS1298\I.1,
Utermohle, 3/28/00. [Copy on File]. He advised that the
amendment was not controversial, as it would clarify what is
in regulation regarding salmon that are not yet caught, and
requiring more accurate information. Co-Chair Mulder MOVED
to adopt the Amendment. Representative J. Davies requested
a brief at ease.
(TAPE CHANGE HFC 00 - 86, Side 1).
There being NO OBJECTION, Amendment #1 was adopted.
Representative Moses MOVED a change to Page 1, Line 6,
delete "240,000 pounds" and insert "10 million pounds".
Representative Austerman OBJECTED.
Representative Austerman stated that even the processors
indicated that would narrow it down too much to be
productive. He believed the change would be
"discriminatory".
Representative Moses testified that the Department of Fish
and Game had provided figures that given 10 million pounds,
they would still be able to provide 80% of the data. He
foresaw that some of processors at the 1 million-pound level
might not have access to a computer
Representative G. Davis noted that he supported the
amendment because of detail costs of the legislation. If
the changes are not made, the only ones who could afford to
make these changes, will be the larger processors.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, G. Davis, Foster, Grussendorf,
Moses
OPPOSED: Austerman, Phillips, Williams, Therriault,
Mulder
Representative Bunde was not present for the vote.
The MOTION FAILED (5-5).
Representative Foster MOVED a change to Page 1, Line 6,
deleting "240,000 pounds" and inserting "one million
pounds". There being NO OBJECITON, the Amendment was
adopted.
Representative Williams MOVED to report CS HB 363 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 363 (FIN) was reported out of Committee with a "no
recommendation" and with a fiscal note by Department of
Revenue.
HOUSE BILL NO. 18
An Act making a special appropriation from the earnings
reserve account to the principal of the permanent fund;
and providing for an effective date.
Co-Chair Mulder MOVED to adopt work draft HB 18, 1-LS0163\D,
Cramer, 3/20/00. [Copy on File]. There being NO OBJECTION,
it was adopted.
In response to Representative Foster, Co-Chair Mulder
explained that in the original bill, there was approximately
$4.1 billion dollars in available funds. Based upon the
testimony from the Permanent Fund Corporation, it was
determined that $2.5 million dollars was appropriate and
would not put the dividend in jeopardy.
Representative Foster asked if that action would affect the
State's ability to tap into that fund to pay future bills.
Co-Chair Mulder advised that this would be an earnings
reserve and that the Legislature has never spent any money
from that account. He reiterated that there is currently a
little more than $4.1 billion dollars in that account.
Representative Austerman advised that he did not support
this bill in its original form, however, now he does with
the changes made. He did not believe that this would have a
negative effect on the Permanent Fund Corporation.
Representative J. Davies noted his concern when
contemplating vehicles such as HB 411, which restructures
items by taking a percentage of the market value. He
recommended that there should be a large cushion in the
earnings reserve for those bad years. The problem with
making a deposit like the one being proposed is that it
would minimize the reserve shock absorber. Representative
J. Davies insinuated that the proposed action is premature
before having full discussion on HB 411.
Following concerns voiced by Representative Grussendorf, Co-
Chair Mulder proposed a conceptual amendment placing the
$250 million dollar amount into the title of the bill. Co-
Chair Mulder MOVED the conceptual amendment. There being NO
OBJECTION, it was adopted.
Representative G. Davis thought that the legislation would
limit the programs utilizing the savings account interest
for State government. He stated that he would oppose the
bill as he believes in keeping as much in the savings
account as possible.
Representative Moses stated that no more money should be
placed into the principle until the fiscal gap is satisfied.
Representative Phillips agreed.
Co-Chair Mulder MOVED to report CS HB 18 (FIN) out of
Committee. Representative Grussendorf OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Williams, Austerman, Mulder,
Therriault
OPPOSED: J. Davies, G. Davis, Grussendorf, Moses,
Phillips
Representative Bunde was not present for the vote.
The MOTION FAILED (5-5).
HB 18 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 4:50 P.M.
H.F.C. 19 3/28/00
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