04/18/1993 01:20 PM Senate FIN

                                                                               
  SENATE BILL NO. 177                                                          
                                                                               
                                                                               
       An Act relating to salmon marketing, a salmon marketing                 
       tax,  and the Alaska  Seafood Marketing  Institute; and                 
       providing for an effective date.                                        
                                                                               
  Co-chair  Pearce directed  that  SB 177  be  brought on  for                 
  discussion and  noted that it  was introduced by  the Senate                 
  Finance Committee.   It relates  to an additional  marketing                 
  tax in  an  effort  to  make the  Alaska  Seafood  Marketing                 
  Institute  fully self-supporting.   The legislation  is also                 
  tied to the  Senate version  of the operating  budget.   Co-                 
  chair Pearce  voiced her further  understanding that general                 
  fund  moneys  for  ASMI  were  originally deleted  from  the                 
  Governor's budget.    The  Dept.  of  Commerce  subsequently                 
  requested that they be reinstated while the department works                 
  with  fishing  groups  in  an  effort  to  make  ASMI  self-                 
  supporting.  The general fund dollars  were thus returned to                 
  the budget with  the expectation that something  will happen                 
  within the year.                                                             
                                                                               
  KIM ELTON,  Executive  Director,  Alaska  Seafood  Marketing                 
  Institute,  came before committee.   He  said that  the bill                 
  would establish  a 1%  tax on  salmon processors.   The  tax                 
  would   flow   to   the   general   fund   for   legislative                 
  reappropriation back to  ASMI.   At least 90%  of the  funds                 
  would be used  for domestic marketing of salmon.   Up to 10%                 
  would  establish  a  market price  information  service  for                 
  salmon fishermen.   The legislation also increases  the ASMI                 
  board of directors from eighteen to twenty-five to establish                 
  equity  (12 fishermen  and 12  processors).   The bill  also                 
  includes provisions for a public member on the board.  Since                 
  the  effective date is July 1, 1993, most of the 1993 salmon                 
  fishing  season would  be  covered by  the  bill.   Expected                 
  revenue is estimated  at between  $3 to $5.7  million.   Mr.                 
  Elton concluded his  remarks by  observing that the  impetus                 
  for the bill  comes from the  previous legislature.  It  has                 
  substantially evolved since  that time due, largely,  to the                 
  efforts  of individuals in  the salmon harvesting community.                 
  He advised that he was  comfortable with the legislation and                 
  voiced his understanding that the United Fishermen of Alaska                 
  are  also.    He  acknowledged  that  the  industry  is  not                 
  completely united behind the tax bill.                                       
                                                                               
  Senator Kelly asked how passage or  failure to pass the bill                 
  would impact the budget.  Co-chair Pearce explained that the                 
  Senate  budget  for  the  Dept.  of  Commerce  and  Economic                 
  Development  is  predicated  upon  passage.    It   replaces                 
  approximately $900.0 in general funds with revenues from the                 
  proposed tax.  The House did not proceed in that manner.   A                 
  final  decision  on  funding  will  be made  at  conference.                 
  Similar House legislation is presently in House Rules.                       
                                                                               
  Co-chair Pearce directed  that SB 177  be HELD in  committee                 
  for additional review.                                                       
                                                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 3:50 p.m.