Legislature(1995 - 1996)
03/20/1995 06:10 PM House FSH
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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
HOUSE SPECIAL COMMITTEE ON FISHERIES
March 20, 1995
6:10 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Chairman
Representative Kim Elton
Representative Carl Moses, Vice-Chair
MEMBERS ABSENT
Representative Scott Ogan
Representative Gary Davis
COMMITTEE CALENDAR
*HCR 12: Relating to management of the salmon fisheries of the
upper Cook Inlet area.
HEARD AND HELD
SB 3: "An Act relating to an antitrust exemption for persons
engaged in the fishing industry."
PASSED OUT OF COMMITTEE
(* First public hearing)
WITNESS REGISTER
REPRESENTATIVE BEVERLY MASEK
Capitol Building, Room 418
Juneau, AK 99801
Phone: 465-2679
POSITION STATEMENT: Prime Sponsor of HCR 12
JERRY MCCUNE, PRESIDENT
United Fishermen of Alaska
212 Fourth Street, Suite 112
Juneau, AK 99801
Phone: 586-2820
POSITION STATEMENT: Opposed HCR 12
ROSEMARY ALEXANDER, LEGISLATIVE AIDE
to Senator Jim Duncan
Capitol Building, Room 119
Juneau, AK 99801
Phone: 465-4766
POSITION STATEMENT: Provided sponsor testimony for SB 3
RICK LAUBER, LOBBYIST
Pacific Seafood Processor Association
321 Highland Drive
Juneau, AK 99801
Phone: 586-6366
POSITION STATEMENT: Supported SB 3 and offered amendment
SCOTT MCALLISTER
Southeast Seiners
820 Dixon Street
Juneau, AK 99802
Phone: 463-5831
POSITION STATEMENT: Supported SB 3
DEAN PADDOCK
Bristol Bay Driftnetters' Association
P.O. Box 21951
Juneau, AK 99802
Phone: 463-4970
POSITION STATEMENT: Supported SB 3
PREVIOUS ACTION
BILL: HCR 12
SHORT TITLE: UPPER COOK INLET SALMON FISHERIES MGN'T
SPONSOR(S): REPRESENTATIVE(S) MASEK, Mulder
JRN-DATE JRN-PG ACTION
02/22/95 447 (H) READ THE FIRST TIME - REFERRAL(S)
02/22/95 447 (H) FSH, RESOURCES
03/06/95 (H) FSH AT 05:00 PM CAPITOL 124
03/06/95 (H) MINUTE(FSH)
03/13/95 (H) FSH AT 05:00 PM CAPITOL 124
03/20/95 (H) FSH AT 05:00 PM CAPITOL 124
BILL: SB 3
SHORT TITLE: ANTITRUST EXEMPTION FOR FISHERMEN
SPONSOR(S): SENATOR(S) DUNCAN, Zharoff, Hoffman, Taylor, Halford,
Lincoln, Pearce, Donley,Salo,Leman; REPRESENTATIVE(S)
Grussendorf, Ivan
JRN-DATE JRN-PG ACTION
01/06/95 13 (S) PREFILE RELEASED - 1/6/95
01/16/95 13 (S) READ THE FIRST TIME - REFERRAL(S)
01/16/95 13 (S) RES, JUD
01/17/95 35 (S) COSPONSOR: ZHAROFF
01/25/95 (S) RES AT 03:30 PM BUTROVICH ROOM 205
01/25/95 (S) MINUTE(RES)
01/27/95 (S) RES AT 03:30 PM BUTROVICH ROOM 205
01/27/95 (S) MINUTE(RES)
02/01/95 133 (S) COSPONSOR: HOFFMAN
02/03/95 (S) RES AT 03:30 PM BUTROVICH ROOM 205
02/03/95 (S) MINUTE(RES)
02/06/95 180 (S) RES RPT 5DP
02/06/95 180 (S) ZERO FISCAL NOTE (LABOR #1)
02/22/95 (S) JUD AT 01:30 PM BELTZ ROOM 211
02/27/95 (S) JUD AT 01:30 PM BELTZ ROOM 211
02/27/95 (S) MINUTE(JUD)
02/28/95 417 (S) JUD RPT 3DP 2NR
02/28/95 417 (S) ZERO FN (LABOR #1)
02/28/95 425 (S) COSPONSOR(S): TAYLOR
03/02/95 (S) RLS AT 11:25 AM FAHRENKAMP ROOM 203
03/02/95 (S) MINUTE(RLS)
03/07/95 516 (S) RULES TO CALENDAR 3/7/95
03/07/95 521 (S) READ THE SECOND TIME
03/07/95 522 (S) COSPONSOR(S): HALFORD, LINCOLN,
PEARCE, DONLEY, SALO, LEMAN
03/07/95 521 (S) ADVANCED TO THIRD READING UNAN CONSENT
03/07/95 522 (S) READ THE THIRD TIME SB 3
03/07/95 522 (S) PASSED Y18 E2
03/07/95 525 (S) TRANSMITTED TO (H)
03/08/95 632 (H) READ THE FIRST TIME - REFERRAL(S)
03/08/95 632 (H) FISHERIES, RESOURCES, JUDICIARY
03/08/95 666 (H) CROSS SPONSOR(S): GRUSSENDORF, IVAN
03/20/95 (H) FSH AT 05:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 95-18, SIDE A
Number 000
CHAIRMAN ALAN AUSTERMAN called the meeting to order at 6:10 p.m.
and noted, for the record, Representatives Moses and Elton were in
attendance and that a quorum was present.
HFSH - 03/20/95
HCR 12 - UPPER COOK INLET SALMON FISHERIES MGN'T
Number 022
REPRESENTATIVE BEVERLY MASEK, PRIME SPONSOR OF HCR 12, testified,
"I am here before you today because a vital resource is in a crisis
situation. I use the term 'vital' because there is a large economy
built upon this resource. An economy which starts at the dinner
table of Alaskan families and extends outward to those whose
livelihood depends on a healthy resource. We can all agree there
is a critical problem with king salmon in Upper Cook Inlet. We can
all agree serious measures are needed to correct the problem. The
sport fish users in my district are very upset. The people who
bring fish home to their families are very upset. They are upset
because this has happened. They are upset because they are losing
fish and an important economy but they have all agreed to support
the closures and reductions to save the resource. Mr. Chairman
this resolution is asking the board to look very closely at this
crisis, to determine what other measures may be necessary to build
back as rapidly as possible, a threatened resource. I feel it is
wrong to zero one user group out and let other user groups continue
to take fish needed for escapement. It is wrong to cripple one
economy and let another continue to fish if they are taking Susitna
Bound Kings. If the Board has made a mistake with management do
not make my constituents absorb all the damage. This resolution,
this committee, can not solve this crisis. But it can act so the
board is sent a clear message. A message to revisit this issue.
To make sure everything is being done to assist the resource that
can be done. A message to not let this happen again. If over
harvest is the problem then do not let it happen again. If
intercept fisheries are the problem do not let them continue.
Finally, this resolution will hopefully help to get the Governor
involved in the issue. My constituents back home are feeling
neglected by this Administration. Imagine for a moment that these
are your district businesses, livelihoods, and traditional family
activities being zeroed out. Mr. Chairman, I ask this committee to
assist me on behalf of the resource in bringing all parties to the
table to accomplish this critical task. If the language of this
resolution can be better drafted to accomplish this goal, I
encourage you as chairman to use your prerogative to accomplish
this. I do ask in the interest of time to expedite this
resolution. We must request the board to act before any more kings
are taken by anyone. We can work out allocation issues after the
resource is healthy again. But now we must act. We must
concentrate on the resource. I am not a biologist, not an expert
on any of the details. I am however, fully committed to bring all
those parties together. We must quit using outdated management
plans which have little relevance to the problems we are facing
today in the Northern Districts of Cook Inlet. Human populations
have increased dramatically in Upper Cook Inlet over the last ten
years, and yet the board still has not developed a new allocation
plan for making allocation decisions. It is time for us to provide
a serious nudge to those who allocate our resources. It is time we
explain that the legislature, not the board has to ultimately
accepted the blame if they, the board, fail. It is the legislature
that confirms appointees and gives the board its authority and
guidelines. Not the other way around. We are, whether we like it
or not, where the fish buck stops."
Number 137
CHAIRMAN AUSTERMAN brought forth a committee substitute for HCR 12.
REPRESENTATIVE CARL MOSES moved that the CS be adopted.
There were no objections.
CHAIRMAN AUSTERMAN ascertained that the sponsor was familiar with
the committee substitute adopted.
REPRESENTATIVE MASEK indicated her familiarity and said, "As in my
previous statement, I encourage you to do what you can to help
bring the issues on the table and I support your CS."
Number 178
JERRY MCCUNE, PRESIDENT, United Fishermen of Alaska, testified
saying, "I've had a chance to read the CS and I appreciate some of
the things that were changed in it but still our organization is
opposed to this resolution and there are several reasons why. It's
not for the good of the resource. We're always for the good of the
resource and also for (solving) the problems in the Cook Inlet.
Particularly one stock, we're talking one or two stocks, we're not
talking all the stocks of Cook Inlet are in crisis. We've seen a
lot of presentations, habitat presentations, everybody's view and
Fish and Game's view and our policy at the UFA is to keep the
legislature and the Governor out of the fish arena. This is the
Board of Fish and the Department of Fish and Game's issue. A lot
of these things are governed by this, Title 16, Alaska Statutes.
In this book here are the guidelines for sustained yield,
allocation plans in the different uses. I think, if I'm not
mistaken, there are 4 or 5 different management plans on the Kenai
River, all different stocks. So it's a complex problem and just to
deal from one segment is very hard. I'm for the message of yes,
the Department should do all they can, the users should do all they
can and the state of Alaska should do all they can to make sure
that the stocks are healthy. And that's under Title 16 that's the
Department of Fish and Games mandate, the first thing is, sustained
yield. So if there's a problem with sustained yield which we don't
quite know yet because the way I understand it is this is the first
year that the stocks have declined that far on the Deshka, king
salmon. We also need the tools. And this gets back to all the
budget talks that we've had around the state here and we see what's
going to happen most likely to the Fish and Game budget here. We
need these tools, weirs, index studies, not only in the Kenai, we
need them around the other river systems."
Number 231
REPRESENTATIVE ELTON said he appreciated the work that went into
the committee substitute as it is more "palatable". He then added,
"The problem that I've got is the resolves. We're resolving that
we're going to spend more money. We're resolving that we're going
to divert time and energy from an already stressed staff support
system. I mean, where does that additional effort come from," and,
"I know that we have interception problems elsewhere around the
state, and frankly, what we're doing as a legislature, if we pass
this, we're setting allocation priorities and that bothers me."
CHAIRMAN AUSTERMAN agreed with Representative Elton. He said,
"There is a priority problem as far as monies being allocated to
Fish and Game for example because I think the resource, fish
resource, in this state is so vast and so great, and the benefit to
this state is so vast and so great as far as that resource is
concerned that we are constantly cutting our own throat as far as
the fisheries are concerned by under funding Fish and Game and
their ability to research and figure out exactly what's happening
with that resource. That's one reason I guess that I do favor the
CS. Like you, this is more palatable than the original document
because I had a little bit of a problem with that but at the same
point in time, this doesn't necessarily delve into the allocation
issue, I don't think, so much as it delves into more emphasis on
taking care of that important resource. Whether the governor gets
involved or not, we have to as a legislature spend more time paying
attention to it and maybe put more funds into it."
Number 288
REPRESENTATIVE ELTON agreed and said, "This is an allocation, one
step removed. An example that I'll use is there is a proposal to
cut the habitat division by a third which essentially means that
we're going to be sending sportfish biologists and commercial fish
biologists out to make determinations on what trees can be taken
out of a stream set aside. There's a work group that was requested
by the Board of Fish on the Kodiak-Cook Inlet situation that they
just had. That further reduces the amount of staff resources that
can be done. And if we then add this as a priority for the
department, that further cuts it. So what we are doing, one step
removed, is we are making an allocation decision and we're saying
that these things are things that the legislature is mandating and
because of that we're going to have less attention paid elsewhere.
And I'm not so sure that we should be substituting the
legislature's judgement on what need to be addressed first. I'm
much more comfortable leaving that in the hands of the Board of
Fish and the department than I am to the whims of the political
winds."
CHAIRMAN AUSTERMAN pointed out that lines 10 and 11, on page 2 of
the CS, refers to a development of a "long-range management plan
for the protection and sustainable yield of the salmon stocks of
the upper Cook Inlet area."
REPRESENTATIVE CARL MOSES said, "I do get concerned when (we) infer
that somebody else is catching their fish. When I first served in
the legislature 30 years ago, that was a big issue between Bristol
Bay and False Pass and interestingly enough, since then Bristol Bay
has had some major runs (that) broke all records. Apparently, it
wasn't the False Pass fishery. Throughout the state we have the
same problem, everybody's accusing their brothers of catching their
fish."
Number 365
CHAIRMAN AUSTERMAN asked if a motion was in order. There being no
motion forthcoming, he tabled the CS for HCR 12.
HFSH - 03/20/95
SB 3 - ANTITRUST EXEMPTION FOR FISHERMEN
ROSEMARY ALEXANDER, Aide, Senator Jim Duncan, testified, "Senate
Bill 3 will allow fishermen to form associations to collectively
negotiate fish prices with processors. While this bill covers
collective bargaining between fishermen and a processor, or a group
of processors, it does not authorize processors to agree among
themselves on the prices they will pay fishermen. Senator Duncan
believes that a state antitrust exemption is a first step to
stabilizing Alaska's fishing industry. This exemption applies only
to state antitrust laws, it will also be necessary to gain
Congressional approval for a federal exemption. But once the
legislature has approved SB 3, the state, fishermen and processors
would be in a better position to request a federal antitrust
exemption. The attitude toward a federal exemption may be
favorable now that Alaska's congressional delegation is in the
majority.
MS. ALEXANDER continued, "SB 3 also clarifies an ambiguity in state
law, which does not expressly allow fishermen to market and sell
their fish as a group. Currently state antitrust law only permits
them to form associations to catch and prepare their fish for
market. As you know, federal law expressly permits them to form
associations to catch and prepare their fish for market. As you
know, federal law expressly permits fishermen to collectively
engage in more activities, including marketing their fish. The
incongruities between current state and federal law make it
possible for some fishermen's organizations to be in compliance
with federal antitrust law, yet breaking state law, or be in
compliance with state antitrust law and violating federal law.
Passage of SB 3 will make state law consistent with federal law.
During previous hearings on SB 3, CDFU testified that the
inconsistency between state and federal law had become a real
problem for some members. A state and the corresponding federal
exemption were recommended in the 1993 Alaska Attorney General's
Report on the Bristol Bay sockeye salmon industry. The fishing
industry is Alaska's largest private employer, and contributes to
the state's general fund. Collective bargaining between fishermen
and processors will help stabilize commercial fishing prices,
bolstering local and state economies. Stable raw fish prices will
promote stable consumer prices for processed seafood products,
which means greater sales of Alaska seafood."
MS. ALEXANDER concluded, "SB 3 passed the Senate without opposition
on March 7. It has a zero fiscal note. You will find letters of
support in your packets from fishing organizations, the Department
of Commerce and Economic Development, and the Department of Labor.
The Pacific Seafood Processors Association also has testified in
favor of the legislation. A similar bill was introduced last year
with the complete support of the former Hickel Administration. It
passed the Senate, but got caught in the final rush of legislation
in the House and did not get to the House floor but it did have
complete support from the former Hickel Administration as it does
from the Knowles Administration."
NUMBER 430
RICK LAUBER, LOBBYIST, Pacific Seafood Processors Association,
testified, "We have had continuing problems, we in fish price
negotiations, and I'm not going to attempt to mislead you that this
bill standing as it does will resolve all those problems, but at
least it will take care of some of the more, what I would consider
ridiculous situations where fish processors and fishermen could not
be in the same room when someone else for instance is discussing
fish prices." He continued, "The major problem would still remain
and that's the federal antitrust law but as I repeatedly said, this
would be an excellent first step. You've got to start someplace.
You've got to change both the state law and the federal law in
order to do what this bill would attempt to do. Let me say again
what Senator Duncan has said a number of times and it's very clear
in the legislation and that is that this law, if there's a
corresponding law passed by the federal government would still not
allow processors to sit down and fix prices. There was a recent
article by a major news service that reported on passage of this
bill, I believe in the Senate, and they implied that that was the
case. Nothing can be further from the truth. There is never going
to be any law in the United States that would allow price fixing on
the part of fishermen or processors."
MR. LAUBER added, "In working with this bill last year and again,
this year and having turned it over to attorneys to review. I
apparently neglected a section of the bill is probably not going to
be the end of the world but I am getting so much, not flack in the
sense of anybody telling me that this is the end of the world but
I hate to have anyone laugh at a piece of legislation and
particularly one that I testified in favor of. I'm referring to on
page two, line 12, the language for the rest of the sentence
starting with '(2) minimum price that fish processors will accept
for the sale of processed aquatic products'. What in effect this
says, if you read (1) and (2) together, the fish processors and
fishermen could talk about price paid for the fishermen for aquatic
products and that, of course, is what we are attempting to do to be
in discussions about that. But I have not been able to find
anyone, either fishermen or processor that wants or thinks that
processors and fishermen would ever agree as to the minimum price
that fish processors will accept for the product when they sell the
finish product. It would probably be almost an impossibility to
reach such an agreement. I would compare this to a situation where
the Ford Motor Company is negotiating wages with their employees
and their employees are vitally interested in wages and working
conditions but the employees to my knowledge have never attempted
or requested to be able to dictate to the Ford Motor Company the
price that they will sell each individual automobile and its
various accessories on the open market. Or what each individual
dealer would then sell for. It just is so ludicrous that no one
would ever ask to do it. But yet that is in here. I guess one
could counter and say, 'Well, if they will never do it, then what
harm is done'. But it is beyond humorous. If this passes this way
it will make a law of the state of Alaska a kind of a ridiculous
document. I've discussed this with United Fishermen of Alaska and
asked sincerely, is there any legitimate reason for this, is there
someone that wants this for a valid purpose. Neither from UFA or
anyone else has been able to tell me any valid reason, anything
that this would do to help anything."
CHAIRMAN AUSTERMAN asked if Mr. Lauber was requesting that that
line be taken out.
MS. ALEXANDER explained, "That particular line did come out of the
Attorney General's recommendation to George Utermohle who wrote the
legislation. I have talked to Legal Services about this and I have
an opinion from Jim Forbes, the Assistant Attorney General in the
Fair Business Practices Section of the Attorney General's Office,"
and, "Mr. Lauber raised this question to us. This should be
something the processors would keep in consideration when they
negotiate this particular section, they felt that this would be
something that would help level the negotiation field, the playing
field, if you will, between fishermen and processors. Senator
Duncan is not here and whether or not we would want to amend this
without him, I don't think would be the case. I guess I would
appreciate it if you would consider talking to him about this
particular section."
Number 570
SCOTT MCALLISTER, Southeast Seiners, testified in support of SB 3,
saying, "I think that this bill does potentially go a long way to
level the playing field, so to speak, between the processors and
the fishermen." He said, "Giving the fishermen the benefit of the
wholesale arena where a fisherman with a processor or a group of
processors, could essentially sit down and have a tremendous
advantage in the marketplace enjoyed by very few in a free market
except for a few primary producers and the farming industries that
enjoy these antitrust exemptions as well, and together, to the
benefit and advantage of both control volumes of product and be
able to negotiate the wholesale level, prices to the advantage of
the seafood industry as a whole." He concluded, "I support this
bill, our organization supports this bill, in its current form.
Without that particular wording, it puts us back where we have
always been."
Number 652
REPRESENTATIVE ELTON said, "It seems to me that you're inducing
additional restriction that may be hard to live up to. It also
seems to me, and again, this is partly my background speaking, you
may be taking away a marketing capability. For example there may
be a lot of value to selling into the school lunch program at a
lower price than you might get if you hold your pack later. And
that advantage would be that you're creating new eaters of the
product. And it seems to me that you have the minimal price
language that you may be taking away some of those opportunities.
For example an opportunity to sell 200,000 cases into the school
lunch program at less than an agreed upon minimum wholesale price.
It seems to me we're complicating an awful lot."
Number 672
MR. MCALLISTER said, "Well, we could be. These are ponderables.
They're all what-ifs in a market place that is forever changes
(indisc.), it has a life of its own. And pondering minimum price
advantages or disadvantages into the future, are things that
(indisc.) those prices will be there regardless."
TAPE 95-18, SIDE B
Number 016
DEAN PADDOCK, LOBBYIST, Bristol Bay Driftnetters Association and
United Fishermen of Alaska, said, "Jerry McCune, because he wanted
to go to a basketball game and because I'm a member of the
Executive Committee of the UFA, authorized me to speak in behalf of
the United Fishermen as well. We urge your support for this bill.
The fishermen need all the help they can get. I think that this
legislation should have been introduced many many years ago." He
added, "This legislation should be motherhood and apple pie. I
think it is and I'm sorry that some attorney somewhere saw fit to
throw that clause in there. I don't think it adds a whole lot,"
and, "The deletion of the section mentioned by Mr. Lauber in my
mind would not notably reduce the value or the importance of this
bill or our support for it."
Number 155
REPRESENTATIVE ELTON moved to pass SB 3 out of committee with
individual recommendations proposing that the possible amendment
could be addressed in House Resources, the next committee of
referral.
There was no opposition.
CHAIRMAN AUSTERMAN adjourned the meeting at 7:04 p.m.
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