Legislature(1993 - 1994)
04/08/1994 02:07 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.