04/05/2004 09:05 AM House FSH
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= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
April 5, 2004
9:05 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Peggy Wilson, Vice Chair
Representative Cheryll Heinze
Representative Dan Ogg
Representative Ralph Samuels
Representative Les Gara
MEMBERS ABSENT
Representative David Guttenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 458
"An Act relating to a one-day commercial fishing crewmember
license."
- MOVED CSHB 458(FSH) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 273(FIN)
"An Act amending the size, membership, and powers of the board
of directors of the Alaska Seafood Marketing Institute and
making a corresponding change in the quorum requirement;
authorizing the establishment of the seafood marketing
assessment at a rate of 0.5 percent or 0.6 percent of the value
of seafood products produced; providing for an election to
retain, terminate, or increase the seafood marketing assessment;
providing for the repeal of the salmon marketing tax and
provisions related to the salmon marketing tax; and providing
for an effective date."
- MOVED HCS CSSB 273(FSH) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 347(RES)
"An Act relating to moratoria on entry of new participants or
vessels into a commercial fishery; relating to vessel permits
for, and the establishment of a moratorium on entry of new
vessels into, state Gulf of Alaska groundfish fisheries; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 458
SHORT TITLE: SHORT-TERM COM FISHING CREWMEMBER LICENSE
SPONSOR(S): REPRESENTATIVE(S) MOSES BY REQUEST
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) L&C, FSH, RES
03/24/04 (H) L&C REFERRAL WAIVED
04/05/04 (H) FSH AT 9:00 AM CAPITOL 124
BILL: SB 273
SHORT TITLE: ASMI BOARD/ SEAFOOD TAXES & ASSESSMENTS
SPONSOR(S): SENATOR(S) STEVENS G BY REQUEST OF SALMON INDUSTRY
TASK FORCE
01/23/04 (S) READ THE FIRST TIME - REFERRALS
01/23/04 (S) L&C, FIN
02/03/04 (S) L&C AT 1:30 PM BELTZ 211
02/03/04 (S) Heard & Held
02/03/04 (S) MINUTE(L&C)
02/10/04 (S) L&C AT 1:30 PM BELTZ 211
02/10/04 (S) Moved SB 273 Out of Committee
02/10/04 (S) MINUTE(L&C)
02/11/04 (S) L&C RPT 1DP 2NR
02/11/04 (S) NR: BUNDE, FRENCH; DP: STEVENS G
02/26/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/26/04 (S) Scheduled But Not Heard
03/09/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/09/04 (S) Scheduled But Not Heard
03/10/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/10/04 (S) Heard & Held
03/10/04 (S) MINUTE(FIN)
03/22/04 (S) FIN RPT CS 3DP 4NR NEW TITLE
03/22/04 (S) DP: WILKEN, DYSON, STEVENS B;
03/22/04 (S) NR: GREEN, HOFFMAN, OLSON, BUNDE
03/22/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/22/04 (S) Moved CSSB 273(FIN) Out of Committee
03/22/04 (S) MINUTE(FIN)
03/24/04 (S) FIN CS ADOPTED Y14 N6
03/29/04 (S) TRANSMITTED TO (H)
03/29/04 (S) VERSION: CSSB 273(FIN)
03/31/04 (H) READ THE FIRST TIME - REFERRALS
03/31/04 (H) FSH, FIN
04/05/04 (H) FSH AT 9:00 AM CAPITOL 124
BILL: SB 347
SHORT TITLE: COMM. FISHING MORATORIA, INCL. AK GULF
SPONSOR(S): SENATOR(S) STEVENS B BY REQUEST
02/16/04 (S) READ THE FIRST TIME - REFERRALS
02/16/04 (S) RES
03/03/04 (S) RES AT 3:30 PM BUTROVICH 205
03/03/04 (S) Heard & Held
03/03/04 (S) MINUTE(RES)
03/05/04 (S) RES AT 3:30 PM BUTROVICH 205
03/05/04 (S) Moved CSSB 347(RES) Out of Committee
03/05/04 (S) MINUTE(RES)
03/08/04 (S) RES RPT CS 3DP 2NR NEW TITLE
03/08/04 (S) NR: OGAN, LINCOLN; DP: WAGONER,
03/08/04 (S) STEVENS B, ELTON
03/08/04 (S) FIN REFERRAL ADDED
03/09/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/09/04 (S) Moved CSSB 347(RES) Out of Committee
03/09/04 (S) MINUTE(FIN)
03/10/04 (S) FIN RPT CS(RES) 3DP 4NR
03/10/04 (S) DP: WILKEN, BUNDE, STEVENS B;
03/10/04 (S) NR: GREEN, HOFFMAN, OLSON, DYSON
03/22/04 (S) TRANSMITTED TO (H)
03/22/04 (S) VERSION: CSSB 347(RES)
03/24/04 (H) READ THE FIRST TIME - REFERRALS
03/24/04 (H) FSH, RES, FIN
03/29/04 (H) FSH AT 9:00 AM CAPITOL 124
03/29/04 (H) Heard & Held
03/29/04 (H) MINUTE(FSH)
04/05/04 (H) FSH AT 9:00 AM CAPITOL 124
WITNESS REGISTER
ADAM BERG, Staff
to Representative Carl Moses
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 458 on behalf of the sponsor,
Representative Moses.
ROLAND MAW, Executive Director
United Cook Inlet Drift Association (UCIDA)
Soldotna, Alaska
POSITION STATEMENT: Testified in support of HB 458.
PAUL SHADURA, President
Kenai Peninsula Fishermen's Association
Soldotna, Alaska
POSITION STATEMENT: Testified in support of HB 458.
GUY BELL, Director
Division of Administrative Services
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 458, explained the
Fishermen's Fund and answered questions.
KRIS WRIGHT, Licensing Supervisor
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 458, answered
questions.
REPRESENTATIVE CARL MOSES
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 458.
SENATOR GARY STEVENS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor, by request of the
Joint Legislative Salmon Industry Task Force, of SB 273.
RAY RIUTTA, Executive Director
Alaska Seafood Marketing Institute (ASMI)
Juneau, Alaska
POSITION STATEMENT: Testified that the ASMI board hasn't met to
discuss the current version of SB 273.
ACTION NARRATIVE
TAPE 04-19, SIDE A
Number 0001
CHAIR PAUL SEATON called the House Special Committee on
Fisheries meeting to order at 9:05 a.m. Representatives Seaton,
Wilson, Heinze, Ogg, and Samuels were present at the call to
order. Representative Gara arrived as the meeting was in
progress.
HB 458-SHORT-TERM COM FISHING CREWMEMBER LICENSE
CHAIR SEATON announced that the first order of business would be
HOUSE BILL NO. 458, "An Act relating to a one-day commercial
fishing crewmember license."
Number 0120
ADAM BERG, Staff to Representative Carl Moses, Alaska State
Legislature, presented HB 458 on behalf of the sponsor,
Representative Moses. He explained that HB 458 would allow one-
day commercial fishing crewmember licenses. This legislation
would aid out-of-state visitors and others interested in
commercial fishing. Currently, these individuals have to
purchase a $60 resident license or a $120 nonresident license.
The idea is to provide permit holders another avenue to raise
money. Under this one-day license, this would allow permit
holders to work as a boat for hire. Furthermore, this would
allow visitors an affordable way to participate in the fishery
as a crewmember.
Number 0238
REPRESENTATIVE SAMUELS moved to adopt CSHB 458, Version 23-
LS159\U, Utermohle, 3/31/04, as the working document. [No
objection was stated, and therefore Version U was treated as
adopted and before the committee.]
MR. BERG explained the changes encompassed in Version U.
Section 5 of the original legislation was deleted because that
section had changed the definition of "fisherman" such that it
didn't allow these one-day permit holders to qualify for the
Fishermen's Fund. At the request of the Fishermen's Fund and
the Department of Labor & Workforce Development (DLWD), Section
5 was deleted. The other change encompassed in Version U is the
addition of the January 1, 2005, effective date. The
aforementioned change was done per the request of Alaska
Department of Fish & Game (ADF&G).
Number 0341
REPRESENTATIVE WILSON inquired as to the current fee for a
crewmember fishing license.
MR. BERG answered that the fee is $60 annually for a resident
and $180 for a nonresident.
REPRESENTATIVE WILSON surmised that those who have never been on
a boat before would have a higher propensity of having a mishap.
Therefore, she expressed concern with the potential for these
one-day crewmembers to use up the limited funds in the
Fishermen's Fund if there are a lot of accidents.
MR. BERG reminded the committee that this would be an option for
the permit holder. He related his experience that safety is a
high priority for boat captains. Representative Wilson's
concern was the thinking that resulted in the original
legislation not having these one-day crewmembers qualify for the
Fishermen's Fund, he noted. However, this was a big concern for
DLWD because restricting the definition in such a way that it
precludes holders of the shorter-period licenses from obtaining
benefits could be viewed as a denial of equal protection, which
could be a basis for litigation. Furthermore, DLWD felt that
altering the definition of "fishermen" may leave the fund's
dedication vulnerable.
Number 0611
REPRESENTATIVE WILSON surmised then that this legislation allows
tourists to be a commercial fisherman for a day.
MR. BERG replied yes. Currently, a tourist could go out on a
[commercial fishing] boat, but couldn't participate in any way.
Moreover, the current $180 crewmember license fee seems cost
prohibitive. Although Mr. Berg said that he didn't know how
many individuals would take advantage of this option for $30, it
does provide the option. He noted that this would be another
extreme tourism option.
REPRESENTATIVE HEINZE questioned what these tourists would
actually do and how many people might actually utilize this.
MR. BERG replied that it would be up to the boat captain. In
regard to how many individuals would take advantage of this, the
fiscal note estimates 100 licenses. However, he said he didn't
know how that estimate was reached.
Number 0733
REPRESENTATIVE OGG inquired as to why a one-day license was
chosen versus a license for a week because for most fishing one
day doesn't even get the individual to the fishing spot.
MR. BERG noted that originally there were one-, two-, and seven-
day licenses. However, ADF&G was concerned that it would lose
receipts on the licenses [because regular crewmembers would
purchase these cheaper licenses]. Mr. Berg related that the
sponsor didn't share that view because regular crewmembers
aren't going to purchase a one-week license and leave; these
individuals are typically here for the summer. The one-day
crewmember license was introduced in order to have a piece of
legislation that ADF&G wouldn't oppose.
REPRESENTATIVE OGG asked if ADF&G would be extremely upset and
oppose legislation that includes a one-week license for $150.
MR. BERG said that he couldn't speak for ADF&G.
REPRESENTATIVE OGG reiterated that it would likely take more
than one day to be involved in commercial fishing. Therefore,
he questioned whether the individual would have to purchase
multiple licenses at the same time.
MR. BERG confirmed that under the current legislation,
individuals going on a three-day trip would have to purchase
three one-day crewmember licenses.
Number 0973
REPRESENTATIVE SAMUELS related his understanding that if someone
had a week-long stay at a lodge, this would allow a [commercial
fishing] tour operator the ability to offer a one-day trip,
particularly in Bristol Bay. Therefore, the locals could create
a tourism business that is in conjunction with commercial
fishing. He said he didn't believe people would fly from
Anchorage to commercial fish. Representative Samuels stated
that he liked the legislation and didn't see a downside to it.
REPRESENTATIVE GARA commented, "I could see this working if a
lot of people did it." However, he expressed disbelief that
anyone would be able to obtain the liability insurance to make
it cost effective to bring tourists onto a commercial fishing
boat. He acknowledged that one could go without liability
insurance. If one purchases liability insurance, there would
have to be a lot of potential customers in order to do it.
MR. BERG noted that any [permit holder] wanting to use this
option would have to do advertising in order to solicit
customers. He also noted that boats for hire have to have a
six-pack license and other requirements. This legislation
merely provides an option for fishermen to try out.
REPRESENTATIVE GARA inquired as to how large the demand is for
this legislation.
MR. BERG said that the original idea came from an individual in
Naknek, and therefore it's difficult to say what the demand is.
The sponsor's office has taken several calls from interested
groups, and there has been no negative reaction, he related.
REPRESENTATIVE GARA surmised that under a one-day license, an
individual would only be able to touch the gear that one day,
but could be on board and not touch the gear other days.
MR. BERG clarified that if one wanted to be out more than one
day and participate, the individual would have to purchase
stacking licenses.
CHAIR SEATON informed the committee, "I think that we have to be
clear that at some point if you are not a crewmember ... and you
are on the boat, then you're not covered by the Fishermen's
Fund, which means all the liability would be on the boat owner
or they would have to be as a six-pack boat. If it's a
commercial fishing boat and you only have your crew on board,
you don't have to be a six-pack boat."
Number 1359
ROLAND MAW, Executive Director, United Cook Inlet Drift
Association (UCIDA), informed the committee that he has been a
commercial fisherman for salmon in the Upper Cook Inlet for
about 30 years. Mr. Maw announced support of HB 458 for both
himself and UCIDA; the $30 fee is reasonable and could certainly
be used in the Soldotna area. Mr. Maw informed the committee
that [this legislation is the result] of a suggestion he and
others brought forth to the Joint Salmon Industry Task Force.
MR. MAW, in light of today's testimony and questions, offered
the following information. He informed the committee that he
carries liability insurance for his vessel in the amount of
$500,000 per incident, as well as liability insurance for his
crew in the amount of $500,000 per crewmember per incident. He
explained that he can rotate crew in and out of his policy for
coverage purposes. Over the years, when he has had a guest on
board the issue becomes whether the individual is crew or not
for the purposes of liability insurance. "And so we've always
been kind of in this no man's land between a six-pack boat or a
charter boat and some kind of a commercial boat," he remarked.
Mr. Maw addressed the question regarding the demand for [one-day
commercial fishing crewmember licenses]. He related that his
son put a one-day commercial fishing trip on the Internet and it
received 1,200 hits in 12 hours. Therefore, Mr. Maw didn't
doubt that this is necessary and the public will respond.
Furthermore, he felt that those who would take advantage of a
one-day commercial fishing crewmember license] would have
insurance, including liability insurance.
MR. MAW related that last summer he had an 18-year-old
crewmember who, on his day off, took a river rafting trip during
which he dislocated his shoulder. This all happened the evening
before the fishing trip was to begin. Therefore, this [one-day
commercial fishing license] would've been helpful in this case
in which temporary crew was needed. Mr. Maw turned to the
question of what these one-day crewmembers could do and related
that on his boat he would envision these individuals bleeding
and icing the fish. Mr. Maw said that he believes 100 licenses
a year is a [conservative/small] estimate. He mentioned that he
would like the option of a two-day and three-day license as
well.
Number 1676
PAUL SHADURA, President, Kenai Peninsula Fishermen's
Association, related the association's support of HB 458 because
it provides a way in which to diversify while providing a
service to those nonresidents and tourists who visit the Kenai
Peninsula. He mentioned that often in a season such as that
forecasted for this next summer, it's difficult to find crew who
will stay for any length of time. The $180 nonresident license
is fairly cost prohibitive for many. He acknowledged that there
is a liability issue that individual businesses would have to
address. Mr. Shadura informed the committee that the insurance
is based on the numbers of individuals fishing with each permit
holder rather than the individual names. The insurance costs
for crewmembers on a setnet site are fairly reasonable. Mr.
Shadura reiterated his support and expressed the desire to have
this be in effect as soon as possible, at least by June 1 in
order to allow individual crewmembers to purchase licenses at an
Alaska Department of Fish & Game (ADF&G) office because the
licenses might not be available to vendors at the time.
Number 1876
GUY BELL, Director, Division of Administrative Services,
Department of Labor & Workforce Development (DLWD), informed the
committee that the Fishermen's Fund receives 39 percent of the
licensed revenue for commercial fishermen. The fund was
established in 1951 as a payer of last resort for medical
expenses associated with injuries that occur while commercial
fishing. Therefore, if an individual has any other insurance,
it would apply first before the Fishermen's Fund goes into
effect.
CHAIR SEATON recalled testimony from last year that the
Fishermen's Fund is in good shape and has money still in its
account. The Fishermen's Fund is a dedicated fund that can't be
rolled over to other uses. Chair Seaton asked if there is any
concern that this legislation would cause any fiscal problems
for the Fishermen's Fund.
MR. BELL said that the department projects a small increase in
revenue as a result of this legislation. It's difficult, he
said, to estimate the potential liability of the Fishermen's
Fund. Currently, the Fishermen's Fund is solvent and in good
financial condition. He acknowledged that untrained crew do
bring forth concern for potential injuries, although he surmised
that those bringing untrained crew would exercise discretion in
the type of activities in which the one-day participants will be
involved. Mr. Bell acknowledged the concern regarding the fund
taking in money and an individual not receiving the
corresponding level of coverage provided to others actively
involved in the commercial fishing business.
Number 2016
REPRESENTATIVE GARA surmised that the Fishermen's Fund would go
into effect because along the line an individual's insurance
didn't [cover the incident]. He asked if the Fishermen's Fund
requires that the employer of the injured individual have
insurance, and therefore the Fishermen's Fund can go after the
employer who didn't have the required liability insurance. He
likened the aforementioned to workers' compensation.
MR. BELL answered that he didn't believe so, but offered to
confirm that. In further response to Representative Gara, Mr.
Bell said he didn't believe there is a requirement that
[employers] must provide medical insurance in the fishing
industry, but, again, he offered to confirm that.
REPRESENTATIVE WILSON posed a situation in which a fisherman has
insurance, but has not met the deductible. She asked if the
Fishermen's Fund would pick up the deductible.
MR. BELL said that he didn't believe the Fishermen's Fund would
pick up the deductible. Furthermore, the general standard is
that the maximum payment from the fund is $2,500 unless there
are some exceptional circumstances.
CHAIR SEATON informed the committee that a few years ago the
Fishermen's Fund raised its [maximum payment] to $2,500, upon
which all the marine insurance carriers in Alaska raised their
deductible to $2,500. "Although it's an insurance of last
resort, ... if you have a policy that has a deductible of $2,500
you are not covered by any other insurance, and therefore
Fishermen's Fund covers the first $2,500," he explained. The
way the [marine insurance] industry is structuring, one could
almost refer to the Fishermen's Fund as the payer of first
resort.
REPRESENTATIVE WILSON surmised then that the insurance industry
has gotten around the fact that the Fishermen's Fund doesn't
cover the deductible by raising the deductible, and therefore an
individual isn't insured until $2,500 has been spent.
CHAIR SEATON highlighted that 39 percent of the commercial
licensing fee goes to the Fishermen's Fund, which has been
growing over the years because it has been taking in more than
it has paid out.
REPRESENTATIVE WILSON clarified then that the Fishermen's Fund
basically pays the deductible on every fisherman's insurance.
Number 2311
REPRESENTATIVE GARA asked if the funds generated by the $30 one-
day commercial fishing license will cover the department's
costs.
KRIS WRIGHT, Licensing Supervisor, Alaska Department of Fish &
Game (ADF&G), said that the department took a good guess as to
how many of these licenses would be sold. She explained that
the January 1 start date was requested because the plan was to
add this as a box on the license. Therefore, there would be no
additional cost. However, the suggested date of June 1 would
result in costs to the department. She opined that most vendors
would probably be unhappy if they didn't receive the opportunity
to sell that license from the very beginning.
REPRESENTATIVE GARA asked if the license fee was a bit more than
$30 for this year in order to cover the costs of getting a
special license to those businesses that want to sell it this
summer.
MS. WRIGHT replied yes. She mentioned that the story about the
number of hits an Internet site received for a one-day
commercial fishing trip was surprising and thus she is a bit
concerned with regard to the number of [licenses] that should be
printed. Ms. Wright said that this could be worked out.
REPRESENTATIVE GARA related his intention to provide an
immediate effective date so that this license could be available
this summer. He surmised that the department would work with
the sponsor to determine the amount of the fee for the summer.
MS. WRIGHT replied yes.
Number 2448
REPRESENTATIVE OGG asked if having a three-day license at a cost
of $50 would be problematic.
MS. WRIGHT recalled that when the department initially worked on
this legislation, there was a one-day, three-day, and seven-day
license. The department requested that there not be so many
options available until it determines "where this fishery is."
She further recalled working on a fiscal note for a seven-day
license under which the department would make money. The next
[version of the legislation] she saw was for a one-day license,
which she understood to be at the request of the associations
because there would be people who wouldn't want to go out for
seven days, although one might want to go out for three days.
Ms. Wright clarified that the department wasn't against a three-
day or seven-day license.
REPRESENTATIVE OGG inquired as to the fee for a seven-day
license.
MR. BERG answered that the fee was $100 for a seven-day license.
CHAIR SEATON recalled that when the committee had legislation
before it with a one-day [crewmember] license, it was determined
that the administrative cost per license would be $10.
MS. WRIGHT explained that if this license is just part of the
license that already exists, there wouldn't be any additional
printing costs or mailing costs.
Number 2693
CHAIR SEATON, upon determining no one else wished to testify,
closed the public hearing on HB 458.
REPRESENTATIVE HEINZE remarked that it seems that the three-day
license would be appropriate and provide some flexibility,
although she said that she didn't have a problem with a one-day
license. She further remarked that HB 458 is a good bill that
she would like to see moved.
REPRESENTATIVE GARA recommended that the legislation be changed
to have an immediate effective date and the sponsor could work
with ADF&G to determine the cost of a three-day license.
Therefore, perhaps an amendment could be made in the next
committee of referral, the House Resources Standing Committee,
to add a three-day license. He also suggested that ADF&G could
determine the additional cost necessary for the department to
implement this proposal this summer.
CHAIR SEATON noted that the fiscal notes would be changed by
Representative Gara's recommendation.
MS. WRIGHT requested that the effective date not be immediate
but rather June 1, which would provide some time for the
department.
REPRESENTATIVE GARA agreed and then suggested that the changes
to the effective date could be worked out in the House Resources
Standing Committee as well.
REPRESENTATIVE HEINZE said that she, as a member of the House
Resources Standing Committee, would be glad to offer an
amendment [implementing the recommendation by Representative
Gara].
Number 2811
REPRESENTATIVE CARL MOSES, Alaska State Legislature, sponsor,
stated that he would prefer a three-day license. He indicated
that the industry should have some advance notice in order to be
able to advertise, and therefore he didn't have any problem with
a January 1, 2005, effective date because much needs to be done
in order to create an effective program.
Number 2840
REPRESENTATIVE OGG moved that the committee adopt the following
amendment:
Page 2, line 15;
Delete "one"
Insert "three"
Page 2, line 15;
Delete "$30"
Insert "$50"
REPRESENTATIVE SAMUELS objected and suggested that the
legislation allow for a one-day license as well as a three-day
license.
REPRESENTATIVE WILSON suggested that the amendment stand because
if one wants to go out bad enough, he or she will pay the $50
for a three-day license. Therefore, she suggested that if one
wants to go out for six days the license fee could be $100.
REPRESENTATIVE HEINZE agreed with Representative Wilson because
she suggested that it would be easier in regard to printing and
distribution to offer just the three-day.
REPRESENTATIVE SAMUELS suggested that the license could merely
have another box [option].
REPRESENTATIVE MOSES related that his preference would be for a
one-day and a three-day license.
TAPE 04-19, SIDE B
REPRESENTATIVE SAMUELS commented that "we" don't want commercial
fishermen to purchase these licenses.
Number 2909
REPRESENTATIVE OGG withdrew his amendment and moved that the
committee adopt the following amendment:
Page 2, line 15, after "$30"
Insert "or a three-day crewmember fishing license for
a fee of $50"
There being no objection, it was so ordered.
REPRESENTATIVE SAMUELS asked if there are any wage issues if one
were to go out fishing for a one-day trip.
REPRESENTATIVE OGG said that it's a contractual issue between
the boat captain and the fisherman.
CHAIR SEATON related that there is a law that states before [a
fisherman] leaves port, he or she must have a contractual
agreement stating the fisherman's percentage.
Number 2833
REPRESENTATIVE WILSON moved that the committee adopt the
following amendment:
Page 5, line 9;
Delete "January 1, 2005"
Insert "July 1, 2004"
REPRESENTATIVE GARA objected for discussion purposes, and
inquired as to Representative Moses' preference with regard to
the effective date.
REPRESENTATIVE MOSES said that he would like for this
legislation to take effect as soon as is practical. He
reiterated that he didn't mind the January 1, 2005, effective
date.
REPRESENTATIVE WILSON withdrew the above amendment and offered
the following amendment:
Page 5, line 9;
Delete "January 1, 2005"
Insert "June 1, 2004"
REPRESENTATIVE WILSON recalled that ADF&G had said it could do
this by June 1, 2004, which would allow some operators the
opportunity to receive revenue they haven't in the past.
REPRESENTATIVE GARA agreed, but asked if ADF&G should be given
the authority to [include in the license fee] the printing costs
for this summer.
REPRESENTATIVE SAMUELS mentioned that if this legislation picks
up a fiscal note, then it faces a longer process.
REPRESENTATIVE MOSES reiterated that practically, January 1,
2005, would probably be best.
CHAIR SEATON pointed out that this is a House bill, which still
needs to go through the Senate and the governor for signing.
However, the department has to have everything in order for the
vendors to sell the licenses rather than just have it restricted
to a few locales. Chair Seaton announced that for practical
purposes he objected to Representative Wilson's amendment.
REPRESENTATIVE HEINZE stated her agreement with Representative
Wilson and her desire to help [fishermen] as much as possible.
REPRESENTATIVE WILSON inquired as to what date the department
believes it can implement this license.
MS. WRIGHT surmised that she could implement the proposed
license within a month of the governor signing the legislation.
REPRESENTATIVE WILSON surmised that July 1, 2004, would be a
good date.
Number 2580
REPRESENTATIVE WILSON withdrew her previous amendment and moved
that the committee adopt the following amendment:
Page 5, line 9;
Delete "January 1, 2005"
Insert "July 1, 2004"
CHAIR SEATON reminded the committee that there was an objection.
A roll call vote was taken. Representatives Heinze, Ogg, Gara,
and Wilson voted in favor of Representative Wilson's amendment.
Representatives Samuels and Seaton voted against it. Therefore,
the amendment was adopted by a vote of 4-2.
Number 2503
REPRESENTATIVE GARA pointed out that with the adoption of the
above amendment, there will now be a fiscal note because the
department will have to develop extra forms. Therefore,
Representative Gara expressed his desire to add to the
legislation a section authorizing the department to charge an
additional preparation and mailing fee to cover the applications
for 2004.
MS. WRIGHT replied yes, adding that the department is always
looking for cost savings. Therefore, it would be beneficial to
charge a fee for that first year of the proposed license. In
response to Representative Wilson, Ms. Wright said that the
additional fee for this year only wouldn't be very much, and
therefore she suggested that $1-$2 would be plenty. She said
she is thinking of mailing.
CHAIR SEATON suggested that no fee has to be established in the
legislation now, it could be left to be determined in the House
Resources Standing Committee. Therefore, the administrative fee
could be based on more than guess work.
REPRESENTATIVE GARA clarified that his intention is to provide
the department the authority to set a cost-reimbursement fee for
the summer. He indicated that he would agree to letting the
House Resources Standing Committee address it.
MS. WRIGHT informed the committee that if the department is
given this authority, it would require an administrative
regulation. The aforementioned would take time that would
result in her inability to make the July 1 date, "it would have
to be in the statute."
Number 2357
REPRESENTATIVE OGG moved that the committee adopt the following
conceptual amendment, which would say: "there will be an
administrative fee charged in excess of the cost of the license
'X' that will be filled in now and the Resources Committee
meeting for the year 2004."
CHAIR SEATON objected for discussion purposes. He asked if the
intent is to specify that it only applies to 2004.
REPRESENTATIVE OGG replied yes.
REPRESENTATIVE OGG clarified that his conceptual amendment
should specify "only the year 2004."
CHAIR SEATON removed his objection. There being no other
objections, the conceptual amendment [as amended] was adopted.
Number 2281
REPRESENTATIVE HEINZE moved to report CSHB 458, Version 23-
LS1591\U, Utermohle, 3/31/03, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 458(FSH) was reported from the
House Special Committee on Fisheries.
SB 273-ASMI BOARD/ SEAFOOD TAXES & ASSESSMENTS
CHAIR SEATON announced that the next order of business would be
CS FOR SENATE BILL NO. 273(FIN), "An Act amending the size,
membership, and powers of the board of directors of the Alaska
Seafood Marketing Institute and making a corresponding change in
the quorum requirement; authorizing the establishment of the
seafood marketing assessment at a rate of 0.5 percent or 0.6
percent of the value of seafood products produced; providing for
an election to retain, terminate, or increase the seafood
marketing assessment; providing for the repeal of the salmon
marketing tax and provisions related to the salmon marketing
tax; and providing for an effective date."
Number 2196
REPRESENTATIVE OGG moved to adopt HCS CSSB 273, Version 23-
LS1366\J, Utermohle, 4/2/04, as the working document.
CHAIR SEATON objected for discussion purposes.
Number 2159
SENATOR GARY STEVENS, Alaska State Legislature, sponsor by
request of the Joint Legislative Salmon Industry Task Force,
highlighted that Version J includes two simple changes located
on page 7, lines 15 and 30. After discussing this legislation
with the director of the Division of Elections, it was
discovered that there are a couple of small errors in the
current statutes regarding the seafood marketing assessment
election. He explained that an election is made by the
processors with regard to what they want to tax themselves. The
current statute specifies that the Alaska Seafood Marketing
Institute (ASMI) would mail out and receive the ballots.
However, the director of the Division of Elections preferred
that the division mail out and receive the ballots if the
division is ultimately responsible for them. The aforementioned
led to the changes on page 7, lines 15 and 30.
SENATOR GARY STEVENS turned to the legislation as a whole. He
began by relating that the Joint Legislative Salmon Industry
Task Force, from the beginning, realized the importance of ASMI,
the need to fund it properly, and have a reasonable size board
of directors. Therefore, the Joint Legislative Salmon Industry
Task Force proposed this legislation, which would change the
size of the ASMI board from 25, an unmanageable size, to seven
or nine members. This legislation also attempts to establish a
sounder financial basis for ASMI. Senator Gary Stevens pointed
out that the committee packet should include a copy of a chart
that compares the current tax structure, the tax structure if
the .5 percent is approved, the tax structure if the .5 percent
isn't approved, and the tax structure if the processors vote to
eliminate the assessment.
SENATOR GARY STEVENS reviewed the current tax structure, and
explained that ASMI is funded with $1.5 million from the salmon
marketing tax paid by the fishermen and almost a $3 million tax
paid by the processors and $2 million from the federal Fisheries
Marketing Board. Therefore, the total funding for ASMI today is
$6.5 million. This legislation would require a vote of the
processors in March to decide whether to eliminate the ASMI
assessment, which is illustrated in the last column of the
chart. The members/processors of ASMI have the right to decide
whether to continue ASMI, and over the past 20 years there has
never been a vote to not fund ASMI. However, if processors
voted not to fund ASMI, the processors assessment would no
longer exist and thus the total funding for ASMI, with a nine-
member board, would be $3.5 million. Another choice would be to
maintain the current tax with the .3 percent the processors are
paying, which is illustrated in the third column of the chart.
Under the aforementioned, the funding would remain the same and
ASMI would receive about $6.5 million. The final choice the
processors would be allowed in this March election is to
increase the tax on themselves, which is illustrated in the
second column. If the processors choose a .5 percent tax on
themselves, the salmon marketing tax would be eliminated, or
could become regional, while the processors assessment would
increase to about $5 million and the federal funds from the
Fisheries Marketing Board would remain at about $2 million.
Therefore, the ASMI board, consisting of seven members, would
receive approximately $7 million.
CHAIR SEATON passed the gavel to Vice Chair Wilson.
REPRESENTATIVE SAMUELS turned attention to the second column of
the chart, which illustrates the funding if the .5 percent
processor tax is approved and the board decreases in size to
seven. Therefore, he inquired as to who the seven are.
SENATOR GARY STEVENS answered that the seven-member ASMI board
would consist of four large processors, one small processor, and
two fishermen. The idea is that if the processors are paying
for the entire [tax], then they should have control.
REPRESENTATIVE SAMUELS surmised then that the options with the
nine-member ASMI board would merely add two fishermen while the
processor membership would stay the same.
SENATOR GARY STEVENS commented that he wanted to be sure that
any changes didn't make it less likely that the processors would
move to the .5 percent, which he viewed as the best solution.
Number 1695
REPRESENTATIVE OGG turned to the last column, which addresses
the option of the processors eliminating their assessment. If
the aforementioned were to happen, would the processors remain
on the board, he asked.
SENATOR GARY STEVENS replied yes. He reminded the committee
that the salmon marketing tax is repealed December 31, 2005. If
that happens, he assumed that ASMI would begin a shut down
phase.
REPRESENTATIVE OGG surmised then that if the processors
eliminate their assessment, the salmon marketing tax would go to
zero.
SENATOR GARY STEVENS reiterated that the salmon marketing tax
sunsets on December 31, 2005. In further response to
Representative Ogg, Senator Gary Stevens explained that annually
the Fisheries Marketing Board decides whether the federal funds
will be provided. He further explained that under the option of
the processors eliminating their assessment, he assumed that the
Fisheries Marketing Board wouldn't fund ASMI either.
REPRESENTATIVE OGG highlighted that the Fisheries Marketing
Board could choose or not choose to fund ASMI under any of the
options presented today.
SENATOR GARY STEVENS replied yes.
REPRESENTATIVE OGG surmised then that the funding from the
Fisheries Marketing Board can't really be counted on definitely.
SENATOR GARY STEVENS agreed, and interjected his assumption that
should the funding from the Fisheries Marketing Board not be
provided, there should be an entire review of the entire funding
of ASMI. However, he noted that the federal funds seem to be
secure for now.
VICE CHAIR WILSON returned the gavel to Chair Seaton.
Number 1543
REPRESENTATIVE HEINZE recalled that the sponsor mentioned, under
the scenario of the .5 percent tax being approved, the
possibility of the salmon marketing tax becoming regional.
Therefore, she requested that the sponsor elaborate on that.
SENATOR GARY STEVENS informed the committee that Representative
Ogg is the sponsor of legislation on regional marketing. "It's
always been our thought that ... if this 1 percent salmon
marketing tax would be eliminated that it might be a very good
time to move those funds into regional marketing organizations,"
he explained. This legislation, SB 273, can't really be tied to
Representative Ogg's legislation, he noted.
Number 1488
REPRESENTATIVE GARA inquired as to who pays the salmon marketing
tax.
SENATOR GARY STEVENS answered that it's a 1 percent tax on
fishermen when the catch is delivered. In further response to
Representative Gara, he confirmed that none of the salmon
marketing tax is paid by processors. He also clarified that the
current ASMI board consists of 12 [fishermen], 12 [processors]
and one lay person.
REPRESENTATIVE GARA turned to the federal funds from the
Fisheries Marketing Board, which he considered to be state funds
because it comes to the state which decides how to distribute
it.
SENATOR GARY STEVENS related his understanding that the
Fisheries Marketing Board funds go directly to ASMI.
REPRESENTATIVE GARA expressed concern with regard to eliminating
the fishermen's voice from how ASMI money is spent in one of the
options and making the fishermen's voice a minority voice in the
other options.
SENATOR GARY STEVENS opined that if the processors fund the
majority of ASMI, then they would probably want control of the
ASMI board. Although the tax structure can be left as it is, he
felt that a 25-member board that meets once or twice a year is
inadequate and ineffective.
Number 1324
REPRESENTATIVE HEINZE related her understanding that the
processors took the lead in marketing and the fishermen have
been content with fishing.
SENATOR GARY STEVENS disagreed. He noted the importance of
having the input of fishermen on the ASMI board, but highlighted
that the processing industry really has the marketing staff.
REPRESENTATIVE GARA related that from some commercial fishermen
he has the understanding that they have more of an interest in
direct marketing of fresh fish rather than the processor's
marketing [strategies].
SENATOR GARY STEVENS explained that ASMI does generic marketing
because its job isn't to market for specific processors or
fishermen. With regard to who pays what, Senator Gary Stevens
related that virtually every step of the way there has been an
objection from everyone who would potentially be taxed. This
legislation provides options to the industry regarding whether
it wants to be taxed and by how much.
Number 1111
REPRESENTATIVE OGG turned to the option in the second column of
the chart, if the .5 percent is approved. He pointed out that
the salmon marketing tax is merely zeroed out because it ends.
SENATOR GARY STEVENS agreed, and reiterated that the salmon
marketing tax is repealed on December 31, 2005.
REPRESENTATIVE OGG clarified that the salmon marketing tax would
merely end and the money is no longer paid. There will be no
connection between this legislation and his regional [tax]
legislation.
Number 1010
RAY RIUTTA, Executive Director, Alaska Seafood Marketing
Institute (ASMI), began by thanking Senator Gary Stevens for his
efforts in putting together SB 273 and Senator Ben Stevens for
his leadership with the Joint Legislative Salmon Industry Task
Force, and all the work of the Joint Legislative Salmon Industry
Task Force. Mr. Riutta stated that the ASMI board hasn't met to
discuss the current version of SB 273. However, he felt
comfortable relating support for the technical amendment
[explained by Senator Gary Stevens earlier].
MR. RIUTTA related that the original legislation, SB 273, was
unanimously supported by the ASMI board with two points. First,
there is the need for a stable funding base for ASMI. As was
noted earlier, ASMI is highly dependent on federal funding. In
fact, federal funding amounts to about 60 percent of ASMI's
budget. However, it's unlikely that such federal funding will
continue. This original legislation and Version J both address
the need for a stable funding base for ASMI. Mr. Riutta also
related that the ASMI board's recommendation to reduce the size
of the board to 15 occurred quite some time ago. He reiterated
that the ASMI board hasn't met to discuss the current version of
SB 273.
Number 0833
REPRESENTATIVE WILSON remarked that it would be a shame if the
processors decided to eliminate their assessment. However, she
said she wasn't exactly happy with a nine-member board because a
larger board is necessary to gather the feelings of the various
fishermen and processors. She mentioned that some fishermen are
doing small processing in order to add value and obtain more
revenue. Representative Wilson related that she likes a 15-
member board best.
REPRESENTATIVE SAMUELS recalled that the processors vote every
year regarding whether to continue their tax.
MR. RIUTTA said that under current statute the processors could
vote to eliminate their assessment, although they have never
voted to do so.
REPRESENTATIVE SAMUELS offered his belief that the smaller the
board, the more can be accomplished.
Number 0624
REPRESENTATIVE HEINZE noted that there has been lots of talk
about the proposed Alaska Travel Industry Association (ATIA)
tourism tax that is modeled after ASMI. However, the concerns
with the tourism tax have been that although it could be
collected, it couldn't be dedicated like the ASMI tax can. "In
light of all this process, is this jeopardizing in any way
ASMI's funding," she asked.
MR. RIUTTA said that he wasn't sure of the arguments on the
tourism tax because he hasn't followed it. However, there are
some concerns with collecting money through the state and having
an organization such as ASMI use that money to promote products.
There have been court challenges to similar commissions in the
Lower 48, and some have even been successful. He noted that
ASMI reviewed this last year and determined that the way ASMI is
structured, as a state agency with the voluntary assessment from
the processors, somewhat shields ASMI from potential law suits.
The State of Washington is moving to adopt some of the same
procedures that ASMI currently follows in order to protect their
own commodity's commissions.
REPRESENTATIVE HEINZE said that [the concern] was more in regard
to the collection of taxes that are designated to [a specific
entity].
MR. RIUTTA recalled that it was an issue of free speech, in that
people are forced to pay taxes to an organization that speaks on
behalf of all those in the organization, although all those in
the organization may not agree.
Number 0370
REPRESENTATIVE OGG inquired as to how the appointment process
would take place were this legislation to become law.
MR. RIUTTA related his understanding that if the legislation
becomes law, the current board would end its tenure and the
governor would select a new board. However, he mentioned that
some of the same members may be appointed to the new board.
CHAIR SEATON, upon determining that there was no one else who
wished to testify, closed the public hearing.
Number 0233
CHAIR SEATON expressed concern if the processors choose a seven-
member board, which is outlined in Section 4 of Version J.
Having four of the members being processors with a payroll of
more than $2.5 million could potentially be seen as privatizing
within one sector the entire board. Therefore, he said he was
considering an amendment that would change the makeup to three
large processors and one small processor and one lay member. He
inquired as to the sponsor's thoughts.
SENATOR GARY STEVENS said that such was discussed some time ago
and the language was in an earlier version. He said that he
personally didn't object, but noted his concern [tape changes
midspeech].
TAPE 04-10, SIDE A
SENATOR GARY STEVENS reiterated his earlier statements that he
didn't want the processors to find reasons not to choose the .5
percent tax. He said he saw the logic in having a lay person.
However, he said he didn't see the danger in leaving [the seven-
member board] as it is. He said that he wouldn't object if it
was changed.
Number 0116
SENATOR GARY STEVENS turned to Representative Wilson's earlier
concern with regard to the size of the board. If one follows
the logic that every element needs to be represented on the
board, every region, fishery, and gear type would be represented
and result in a board of 125. Senator Gary Stevens recalled his
experience in working on other statewide organizations with
large boards, and related that large boards generally don't work
very well. He expressed the need for the board to consist of
statesmen who are present to do what's best for the industry and
not what's best for that individual's own piece of the industry.
Senator Gary Stevens said that he didn't know what's the best
size for the board, although he viewed a seven-member or nine-
member board as better than a board consisting of twenty-five
members. He related his experience that the larger the board,
the more difficult it is to work together. He further related
that all the data he has read suggests that an effective board
consists of seven to nine members. Furthermore, the board
should take on the responsibility of the entire industry.
SENATOR GARY STEVENS clarified that when this legislation is
signed into law, the old board would cease to exist and the
governor would appoint new members. He noted that it won't be
an easy job to find seven to nine members to fill the board. In
response to Representative Ogg, Senator Gary Stevens specified
that the language on page 6, line 5, specifies that the old
board will cease to exist.
Number 0605
CHAIR SEATON offered Conceptual Amendment 1 to Sections 4 and 5,
which read as follows [original punctuation provided]:
In the advent that a seven-member board is chosen,
[four] three members shall be from large processors,
two are fishermen, one is a small processor, and one
is a layperson with marketing expertise outside of the
seafood business.
In the advent that a nine-member board is chosen,
[four] three members shall represent large processors,
four fishermen, one small processor, and one is a
layperson with marketing expertise outside of the
seafood business.
REPRESENTATIVE SAMUELS objected for discussion purposes.
CHAIR SEATON, in response to Representative Samuels, explained
that the first paragraph of Conceptual Amendment 1 would occur
under the scenario presented in column 2 of the chart in the
committee packet. The second paragraph of Conceptual Amendment
1 would occur under the scenario presented in column 3 of the
chart.
REPRESENTATIVE SAMUELS inquired as to what would happen if the
processors eliminate their assessment as specified in the last
column of the chart.
CHAIR SEATON said that he didn't address that.
SENATOR GARY STEVENS clarified that under Conceptual Amendment 1
if the processors eliminate their assessment, the nine-member
board would consist of three large processors, one small
processor, four fishermen, and one lay person. He noted that in
the aforementioned case, it would be a very short-lived board.
REPRESENTATIVE OGG asked if Senator Gary Stevens supported
Conceptual Amendment 1.
SENATOR GARY STEVENS answered that he prefers the current
language in Version J, although he said he wouldn't object to
Conceptual Amendment 1. He opined that Conceptual Amendment 1
seems to make it less advantageous for the processors to go to a
.5 percent tax or to pay the entire tax.
Number 0994
REPRESENTATIVE HEINZE said that she could see where more
marketing input could be obtained. However, she expressed the
need to be careful not to introduce someone without the
expertise and thus waste the position.
REPRESENTATIVE WILSON said she could see the sponsor's concern
because if the desire is for the processors to put in more, then
they will need to have a little more than half the seats or they
won't put in more. Therefore, if the goal is to get the
processors to put in more, then the way in which the membership
is allocated within the industry shouldn't be changed.
REPRESENTATIVE OGG questioned why an individual without any
background in the seafood business would be placed on the ASMI
board.
CHAIR SEATON pointed out that marketing is a business itself and
is more than marketing a particular product. Therefore, the
requirement is that the layperson have expertise in marketing
rather than an individual who deals with a specific process or
product.
REPRESENTATIVE HEINZE opined that ASMI performs marketing.
CHAIR SEATON agreed, and explained that the executive director
of ASMI presents proposals and the board has to make decisions
on the proposals. When making the decisions, the marketing
expertise would come into play.
Number 1334
REPRESENTATIVE WILSON asked if Mr. Riutta believes that
Conceptual Amendment 1 would jeopardize what is trying to be
accomplished.
MR. RIUTTA answered that he couldn't speculate, and reminded the
committee that he would need to discuss it with the ASMI board.
REPRESENTATIVE HEINZE asked whether it would be valuable to have
a layperson with marketing expertise as a member of the ASMI
board.
MR. RIUTTA, speaking as the executive director, specified that
he would rather have individuals from the industry.
CHAIR SEATON withdrew Conceptual Amendment 1.
Number 1468
REPRESENTATIVE OGG moved to report HCS CSSB 273, Version 23-
LS1366\J, Utermohle, 4/2/04, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, HCS CSSB 273(FSH) was reported from the House
Special Committee on Fisheries.
SB 347-COMM. FISHING MORATORIA, INCL. AK GULF
CHAIR SEATON announced that the final order of business would be
CS FOR SENATE BILL NO. 347(RES), "An Act relating to moratoria
on entry of new participants or vessels into a commercial
fishery; relating to vessel permits for, and the establishment
of a moratorium on entry of new vessels into, state Gulf of
Alaska groundfish fisheries; and providing for an effective
date."
CHAIR SEATON reviewed the history of this legislation in this
committee, and requested that by the next meeting everything is
available in order that a decision could be made.
Number 1573
REPRESENTATIVE OGG noted that the information from Alaska
Department of Fish & Game (ADF&G) and Commercial Fisheries Entry
Commission (CFEC) has been helpful. However, information
regarding how many vessel owners aren't interim-use permit (IUP)
owners is necessary. Therefore, he requested that data be
available.
CHAIR SEATON said that data has been requested and should
hopefully be available by the next hearing. He directed the
committee to look through the back page of the data where it
outlines the unique number of permit holders and the unique
number of vessels.
[SB 347 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 11:02
a.m.
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