Legislature(1993 - 1994)

04/08/1994 02:07 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 SENATOR TAYLOR introduced  SB 306  (ANTITRUST EXEMPTION FOR                   
 FISHERMEN) as the next order of business.                                     
                                                                               
 SENATOR JIM DUNCAN, prime sponsor of SB 306, said the bill confers            
 a state antitrust immunity on fishermen and, by doing that, they              
 would then be able to negotiate raw fish prices with processors in            
 order to improve the market price of Alaska seafood.  It also                 
 permits fishermen and fish processors to agree to the minimum price           
 for which processors will sell the processed fish.  He pointed out            
 the legislation was recommended in the 1993 Alaska Attorney                   
 General's report on the Bristol Bay sockeye salmon industry.  That            
 report suggests that U.S. processors have become price takers when            
 dealing with the large Japanese firms that buy Alaska salmon,                 
 leaving fishermen to bear the lost.  An antitrust exemption such as           
 in SB 306 will help level the playing field for Alaska fishermen              
 and processors when dealing with foreign trading companies which do           
 not observe antitrust laws.                                                   
                                                                               
 Senator Duncan pointed out the legislation is supported by the                
 Administration and many of the fishing organizations in the state.            
                                                                               
 Number 130                                                                    
                                                                               
 JIM FORBES, Assistant Attorney General, Department of Law,                    
 testifying from Anchorage, said SB 306 does not provide a federal             
 antitrust exemption for processors.  The federal law already                  
 provides an antitrust exemption for fishermen or fishing                      
 associations, but the processors still pay federal antitrust                  
 liability under the current status quo.  SB 306, in its current               
 form, even without the federal antitrust immunity for the                     
 processors, would clarify the fact that the fishermen associations            
 do have both state and federal antitrust immunity.                            
                                                                               
 Number 160                                                                    
                                                                               
 SENATOR JACKO asked if the federal problem could be resolved in               
 this legislation.  MR. FORBES answered it could be, but to resolve            
 that particular problem through legislation, it would be necessary            
 to create a regulatory body that could give it studies and educated           
 stamp of approval to proposed prices that industry representatives            
 come up with.  It would also require some kind of enforcement                 
 authority to make sure that those prices were followed throughout             
 the industry within Alaska.  SENATOR DUNCAN agreed that one option            
 is to create a state agency that would be involved, but he                    
 suggested that this should be done on a state level as a first step           
 before approaching the federal government to give an exemption on             
 the federal level.                                                            
                                                                               
 Number 203                                                                    
 SENATOR TAYLOR asked Mr. Forbes if he had any on thoughts on how              
 the bill could be redrafted to accomplish the state action immunity           
 provision.  MR. FORBES suggested that it could be accomplished by             
 either creating a new commission, or an existing commission could             
 be given additional powers.  SENATOR DUNCAN said he has considered            
 this as an option, but it would add more hurdles and would have a             
 fiscal impact, and it may be the option to pursue in a subsequent             
 legislative session if passage of this bill indicates that the                
 federal government will not take action to give us that exemption.            
 SENATOR TAYLOR said his concern was that the legislation may be               
 raising false hopes or expectations that it is doing something more           
 other than just sending a message.                                            
                                                                               
 Number 253                                                                    
                                                                               
 SENATOR LITTLE asked if the changes proposed in SB 306 would be               
 effective without the imposition of a new agency or commission.               
 SENATOR DUNCAN answered that if the Legislature, the fishing                  
 community of the state, and the Administration went strongly on               
 record saying that a federal exemption would be in the best                   
 interest of our fishermen, then he thinks the congressional                   
 delegation would be supportive of getting that done.                          
                                                                               
 Number 345                                                                    
                                                                               
 MS. DORN HAWXHURST, speaking from Cordova on behalf of Cordova                
 District Fishermen United, stated their strong support for SB 306.            
 They support the bill for three primary reasons: (1) it clarifies             
 ambiguities in the existing law and it expressly allows fishermen             
 to collectively sell their catch; (2) it removes inconsistencies              
 between state and federal laws; and (3) it levels the playing                 
 field by putting fishermen in a better position to obtain the best            
 price for their fish by allowing them to collectively agree on the            
 price the processors will pay the fishermen for raw fish.   She               
 urged passage of SB 306.                                                      
                                                                               
 Number 370                                                                    
                                                                               
 SENATOR TAYLOR asked the legislative drafter of the legislation,              
 George Utermohle, the possibility of restructuring the legislation            
 by the following Monday to encompass a full step by creating a                
 regulatory agency as was discussed earlier in the meeting.  GEORGE            
 UTERMOHLE, Legislative Counsel, Legislative Affairs Agency, said it           
 could be done, but it would not be an easy task because there are             
 so many details involved in establishing a new agency or giving               
 those powers to an existing agency.                                           
                                                                               
 Number 393                                                                    
                                                                               
 KATE TROLL, Executive Director, Southeast Alaska Seiners                      
 Association, said fishermen don't really have a business                      
 relationship and a forum in which to negotiate, and her                       
 organization has spent a lot of time looking at what they can do to           
 try to make changes in the industry so that they can improve the              
 price situation.  One of the things that became very clear with               
 pink salmon is that they need new product forums and new                      
 development, and, to encourage that, they need price stability.  To           
 encourage price stability, they needed to consider the idea of                
 multi-year contracts.  They had conferences in which these concepts           
 were going to be part of the conference, but the processors could             
 not participate, even at discussion level, because of the concerns            
 of antitrust.  She said her board recognizes SB 306 as a first step           
 and the fact that the federal government is the second step of this           
 change in order to be able to make that evolution to having that              
 business partnership that they really want with their processors.             
                                                                               
 Number 433                                                                    
                                                                               
 JERRY MCCUNE, President, United Fishermen of Alaska, urged that the           
 committee move ahead with the legislation in its current form as              
 one step to amending the federal law.                                         
                                                                               
 Number 452                                                                    
                                                                               
 DEAN PADDOCK, speaking on behalf of the Bristol Bay Driftnetters              
 Association, said they are very aware of the need for improved                
 marketing tools, as well as a real need for improved                          
 communications.  He urged that the committee move the original SB
 306.                                                                          
                                                                               
 Number 493                                                                    
                                                                               
 DONNA PARKER, Fisheries Development Specialist, Department of                 
 Commerce & Economic Development, voiced the strong support of the             
 department and Commissioner Fuhs for SB 306.                                  
                                                                               
 Ms. Parker said most people are aware that the problem is over                
 supply and lost market share, so the state's strategy has to be on            
 increasing market share.  She spoke of the severe impact on the raw           
 fish tax to the state.  Since 1998, the state has lost                        
 approximately $12 million in raw fish tax revenue because of the              
 decline in salmon prices.  The state has $130 million invested                
 through its revolving loan program and commercial fishing loans to            
 fishermen and aquaculture associations.                                       
                                                                               
 Ms. Parker also addressed the importance of increasing price                  
 stability and increasing product options in the marketplace.                  
 Having an antitrust exemption would allow processors and fishermen            
 an opportunity to communicate in a positive way, to discuss market            
 conditions openly to be able to come up with price agreements that            
 will give them additional clout in the marketplace.                           
                                                                               
 Number 555                                                                    
                                                                               
 There being no further testimony, SENATOR TAYLOR closed the public            
 hearing on SB 306 and stated it would be back before the committee            
 on Tuesday, April 12.                                                         

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