Legislature(2017 - 2018)GRUENBERG 120

05/11/2017 10:00 AM FISHERIES

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10:01:17 AM Start
10:01:57 AM Presentation: Alaska Salmon Price & Production Report by Department of Revenue
10:32:45 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: AK Salmon Price & Production TELECONFERENCED
Reports by Dept. of Revenue
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                          May 11, 2017                                                                                          
                           10:01 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Louise Stutes, Chair                                                                                             
Representative Zach Fansler                                                                                                     
Representative Jonathan Kreiss-Tomkins                                                                                          
Representative Geran Tarr                                                                                                       
Representative David Eastman                                                                                                    
Representative Mark Neuman                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION:  ALASKA SALMON PRICE & PRODUCTION REPORT BY                                                                       
DEPARTMENT OF REVENUE                                                                                                           
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ELIZABETH NUDELMAN, Fish Manager                                                                                                
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Co-presented the Alaska Salmon Price and                                                                 
Production report.                                                                                                              
                                                                                                                                
MIKE KAZMAC, Auditor                                                                                                            
Fish Group                                                                                                                      
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Co-presented the Alaska Salmon Price and                                                                 
Production report.                                                                                                              
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:01:17 AM                                                                                                                   
                                                                                                                                
CHAIR  LOUISE  STUTES  called  the  House  Special  Committee  on                                                             
Fisheries  meeting  to  order  at  10:01  a.m.    Representatives                                                               
Stutes,  Kreiss-Tomkins,   Fansler,  Eastman,  and   Neuman  were                                                               
present at  the call  to order.   Representative Tarr  arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
^Presentation:    Alaska  Salmon  Price &  Production  Report  by                                                               
Department of Revenue                                                                                                           
   Presentation:  Alaska Salmon Price & Production Report by                                                                
                     Department of Revenue                                                                                  
                                                                                                                              
10:01:57 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES announced  that the only order of  business would be                                                               
a presentation  on the Alaska  Salmon Price &  Production reports                                                               
by the Department of Revenue.                                                                                                   
                                                                                                                                
10:02:34 AM                                                                                                                   
                                                                                                                                
ELIZABETH  NUDELMAN, Fish  Manager, Tax  Division, Department  of                                                               
Revenue  (DOR),  made  introductions  and then  deferred  to  the                                                               
agency auditor.                                                                                                                 
                                                                                                                                
10:03:20 AM                                                                                                                   
                                                                                                                                
MIKE  KAZMAC, Auditor,  Fish Group,  Tax Division,  Department of                                                               
Revenue  (DOR), directed  attention to  the committee  packet and                                                               
the  handout titled,  "Overview of  the Alaska  Salmon Price  and                                                               
Alaska Salmon  Production Reports;  May 11, 2017,"  and explained                                                               
that Alaska Statute 43.80 requires  salmon processors who sell at                                                               
least one million pounds of  salmon products at wholesale to file                                                               
price and  production reports, which  are then aggregated  by the                                                               
DOR Fish Tax Division.   Processors must file four reports during                                                               
the calendar  year, which  are:  an  annual production  report of                                                               
the quantity  of salmon products  produced; and  three tri-annual                                                               
price reports for monthly data  of wholesale sales activities for                                                               
the yearly  periods of January-April, May-August,  and September-                                                               
December.  He said that under  AS 43.80, there are six reportable                                                               
salmon product  forms, which  are filed  and pertain  to species,                                                               
the reporting  period, weight/cases,  value, and  other elements.                                                               
The six, reportable salmon products  are:  1) thermally processed                                                               
salmon products, 2)  fresh headed and gutted  salmon products, 3)                                                               
fresh fillet salmon products, 4)  frozen headed and gutted salmon                                                               
products, 5)  frozen fillet  salmon products,  and 6)  salmon roe                                                               
products.   The purpose of  the filing is to  provide information                                                               
about  wholesale  salmon prices  and  production  to the  public.                                                               
However, not  all salmon  products are  required to  be reported.                                                               
Excluded products  include salmon  oil, salmon skins,  and salmon                                                               
by-products.                                                                                                                    
                                                                                                                                
10:06:22 AM                                                                                                                   
                                                                                                                                
MS.  NUDELMAN  added  that  the  DOR  website  provides  all  the                                                               
reports, beginning in  1980.  In 1988, the  reports were expanded                                                               
to include thermal products, and  also increased the threshold of                                                               
reporting.                                                                                                                      
                                                                                                                                
10:07:32 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE FANSLER asked about thermally processed products.                                                                
                                                                                                                                
MR.  KAZMAC responded  that these  are products  which have  been                                                               
cooked and  sealed, and  include canned and  pouched items.   The                                                               
canning section of  the report is size  specific from one-quarter                                                               
pound to four pound containers.                                                                                                 
                                                                                                                                
10:08:20 AM                                                                                                                   
                                                                                                                                
MR. KAZMAC said the processors  report monthly sales activity for                                                               
each  salmon  species,  product form,  and  areas  of  production                                                               
designated as  Southeastern and Yakutat, Kodiak,  Bristol Bay, or                                                               
other.  When  all of the processors have filed  the price reports                                                               
for  a  given  period,  DOR  runs a  check  for  data  anomalies.                                                               
Confidentiality  tests are  performed,  as well,  to prevent  the                                                               
publication of  any sensitive taxpayer  data.  He  said anomalies                                                               
in salmon  price reports  may occur  in the  information received                                                               
from the processors, such as  over-reporting of sales for a given                                                               
month or the actual price per pound amounts received.                                                                           
                                                                                                                                
10:09:39 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  if  industry  holds incentives  for                                                               
misreporting.                                                                                                                   
                                                                                                                                
MR. KAZMAC  replied that  there would be  no specific  reason for                                                               
the  errors,  which  are usually  attributable  to  typographical                                                               
mistakes or misplaced decimals.                                                                                                 
                                                                                                                                
10:10:20 AM                                                                                                                   
                                                                                                                                
MR. KAZMAC  said the  confidentiality tests,  for a  given month,                                                               
are reported  when:   there are  three or  more processors  for a                                                               
given area;  no one processor  has over  80 percent of  the total                                                               
value; and  no two processors have  over 95 percent of  the total                                                               
value.    Following  the  data  and  confidentiality  tests,  DOR                                                               
publishes the Salmon Price report.   He referred to the committee                                                               
handout,  pages 8-16,  to point  out  the series  of tables  that                                                               
comprise the most recent, 8  page, tri-annual Alaska Salmon Price                                                               
report, for the period 9/1/16-12/31/16.   The report includes the                                                               
headed and gutted  statistics, which are the bread  and butter of                                                               
Alaska's fish report.  The  reports begins with two summary pages                                                               
by species and product, and  the remaining pages are the detailed                                                               
information.                                                                                                                    
                                                                                                                                
10:14:42 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES noted that the  report represents numerous man hours                                                               
on the  part of industry  and the  state to report,  compile, and                                                               
publish,  and asked,  "What's the  value  of this  report to  the                                                               
state?"                                                                                                                         
                                                                                                                                
10:15:05 AM                                                                                                                   
                                                                                                                                
MR.  KAZMAC  responded that  the  purpose  of  the report  is  to                                                               
provide fisherman  an idea  of the  price processors  receive for                                                               
their finished product, and economists  use the report to monitor                                                               
the health of the industry.                                                                                                     
                                                                                                                                
CHAIR  STUTES surmised  that there  is no  direct monetary  value                                                               
associated with the reports.                                                                                                    
                                                                                                                                
MR. KAZMAC said correct.                                                                                                        
                                                                                                                                
CHAIR STUTES  requested an estimate  of what it costs  to compile                                                               
the quarterly information.                                                                                                      
                                                                                                                                
MR. KAZMAC offered to provide further information.                                                                              
                                                                                                                                
10:16:22 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  NEUMAN expressed  similar  concern  and said  the                                                               
report  has  multiple,  associated   costs  without  any  direct,                                                               
monetary benefits to the state.                                                                                                 
                                                                                                                                
10:17:01 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES asked if the  report reflects the ex-vessel value of                                                               
the fish, or the finished product.                                                                                              
                                                                                                                                
MR. KAZMAC said all the data reflect finished products.                                                                         
                                                                                                                                
10:17:27 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  inquired whether  another  agency                                                               
compiles the ex-vessel value.                                                                                                   
                                                                                                                                
MR.  KAZMAC responded  that the  ex-vessel value  is compiled  by                                                               
Alaska Department of Fish & Game (ADF&G), a well as DOR.                                                                        
                                                                                                                                
10:18:11 AM                                                                                                                   
                                                                                                                                
CHAIR  STUTES  questioned whether  the  data  might be  available                                                               
through any other venue, such as the e-landing system.                                                                          
                                                                                                                                
MR.  KAZMAC replied,  "Not to  my  knowledge."   He offered  that                                                               
ADF&G  compiles  a  production  report  as  part  of  their  core                                                               
services, and deferred further comment.                                                                                         
                                                                                                                                
CHAIR  STUTES  asked whether  the  information  collected by  the                                                               
different   agencies   could   be   shared   and   electronically                                                               
interfaced.                                                                                                                     
                                                                                                                                
MR.  KAZMAC  said  the  dates  for receiving  the  data  and  the                                                               
reporting  requirements   are  not   in  alignment   between  the                                                               
agencies.                                                                                                                       
                                                                                                                                
CHAIR STUTES opined that the reporting efforts may be redundant.                                                                
                                                                                                                                
10:20:18 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE NEUMAN  asked whether the requirement  for the DOR                                                               
report is held in statute.                                                                                                      
                                                                                                                                
MS.  NUDELMAN  replied  that  the DOR  reports  are  required  by                                                               
statute.  Further, the information  is electronically compiled at                                                               
DOR, and the reports issued  with confidential tax information in                                                               
mind.   Regarding the  core report  information issued  by ADF&G,                                                               
there may be duplication, which could  be a point for review, she                                                               
suggested, and offered to provide further information.                                                                          
                                                                                                                                
REPRESENTATIVE   NEUMAN  queried   whether  the   information  is                                                               
regularly  requested by  different  groups  and organization,  or                                                               
simply made accessible as a public service.                                                                                     
                                                                                                                                
MR. KAZMAC said that members of  the media and economists use the                                                               
information,  as  does  the Alaska  Seafood  Marketing  Institute                                                               
(ASMI).                                                                                                                         
                                                                                                                                
10:23:07 AM                                                                                                                   
                                                                                                                                
CHAIR  STUTES   maintained  her   interest  in   discovering  any                                                               
redundancy  in  the  collection  and  reporting  efforts  by  the                                                               
agencies.                                                                                                                       
                                                                                                                                
MS.  NUDELMAN agreed  that ADF&G  does collect  some of  the same                                                               
information as  is required by  DOR.   Confidentiality guidelines                                                               
would be held  by that agency, also.   A review would  need to be                                                               
conducted to identify any overlap or redundancy.                                                                                
                                                                                                                                
10:25:00 AM                                                                                                                   
                                                                                                                                
MR. KAZMAC moved  onto the Annual Salmon Price  Report, which DOR                                                               
publishes annually  by combining  the three  tri-annual processor                                                               
price reports,  and any  adjustments for the  calendar year.   Of                                                               
all the  reports, he  said, this  is the  one that  generates the                                                               
least   feedback.     It  is   published  because   of  statutory                                                               
requirement.  He reviewed the  three page report and the contents                                                               
on  each,  referring  to  the   committee  handout  pages  18-20.                                                               
Finally, he directed  attention to pages 22 and  23, to introduce                                                               
the  final report,  the Annual  Salmon  Production Report,  which                                                               
shows  the   quantity  of  salmon   products,  as   produced,  by                                                               
processor.    All of  these  reports  are  available on  the  DOR                                                               
website,  he finished.   To  a committee  question, he  said that                                                               
five  major  areas, previously  mentioned,  are  reported on  but                                                               
smaller  locales are  not,  in order  to  maintain tax  reporting                                                               
anonymity   requirements.      The  identification   of   certain                                                               
processors cannot be  held in confidence, when they  are the sole                                                               
operator in an area.                                                                                                            
                                                                                                                                
10:30:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE NEUMAN returned to  the question of redundancy and                                                               
the statutory requirements  for reporting.  He said  that, as the                                                               
legislature  continues to  seek out  government efficiencies,  it                                                               
appears that this is  an area in need of scrutiny.   The value of                                                               
the report  after forty years  should be visited,  and questioned                                                               
as whether or not to maintain the requirement in statute.                                                                       
                                                                                                                                
10:31:57 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES interjected that ASMI may be asked to comment on                                                                   
how the report is utilized for its programs; perhaps to great                                                                   
advantage of the state.                                                                                                         
                                                                                                                                
CHAIR STUTES thanked the participants.                                                                                          
                                                                                                                                
10:32:45 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 10:32                                                                   
a.m.                                                                                                                            

Document Name Date/Time Subjects
DOR Overview of Salmon Price and Production Reports - House Fisheries 5.11.17.pdf HFSH 5/11/2017 10:00:00 AM
Salmon Price Production Report
2016 Annual Price Report.pdf HFSH 5/11/2017 10:00:00 AM
Salmon Price Production Report
2016 Annual Production Report.pdf HFSH 5/11/2017 10:00:00 AM
Salmon Price Production Report
2016 Sept Dec Price Report.pdf HFSH 5/11/2017 10:00:00 AM
Salmon Price Production Report