CSHCR 28(FIN) am -STUDIES OF SALMON HARVESTING COOPERATIVES    CHAIR STEDMAN announced HCR 28 to be up for consideration. He asked the sponsor's staff to come forward. CAMERON YOURKOWSKI, staff to Representative Paul Seaton, explained that the resolution is sponsored by the joint legislative Salmon Industry Task Force and asks the University of Alaska to continue to study the effects of salmon harvesting cooperatives. They are to focus on the socio economic impacts that the cooperatives might have on coastal communities and the processing sector. Currently the one salmon cooperative that has allocative rights is operating in Chignik Alaska. The Board of Fish established it in 2002 and this season will be their third year of operation. Noting that the co-op has been somewhat controversial, he pointed out that the Salmon Industry Task Force reviewed the policy issues associated with salmon harvesting co-ops, they found that the economic data to try and weigh the pros and cons of the co-ops really wasn't available. Because of that, the resolution simply asks the university to study the issue further, hence the zero fiscal note. CHAIR STEDMAN commented that the Chignik fishermen are probably ready to renegotiate their co-op. MR. YOURKOWSKI said he didn't understand. CHAIR STEDMAN said, "A merger." MR. YOURKOWSKI said, "Oh right." SENATOR GARY STEVENS raised a question about the cost of further study and asked if the hope is that the university will absorb the cost into their other studies. MR. YOURKOWSKI said the university has indicated that they would like to continue to study the issue. SENATOR THOMAS WAGONER said he had several questions for Gunnar Knapp, an economist with UAA. Mr. Knapp was not on-line. SENATOR WAGONER stated that he has voiced his concerns at previous hearings. He was aware of one major fiberglass business in Homer that went bankrupt and knew that a number of crewmen would be put out of work so he favored a good study on co-ops before going forward. "Co-ops can do some good things and there's some good things about co-ops, but if you look overall at all the people that have been involved in fisheries such as this and you do an economic study, I think you're going to find that the spin off of that is that there's a lot of other people that are indirectly and directly penalized by the state establishing these co-ops so I think it's a catch-22." SENATOR KIM ELTON commented that there are justifiable fears associated with the establishment of co-ops. He also noted that other entities would get involved deciding on the type of economic data that is needed before additional decisions are made on co-ops. He stated support for the resolution and said he would be happy to make the motion to move it forward. SENATOR WAGONER wanted it on record that of the 100 permits, 70 some percent form the co-op. When an economic study is conducted consideration should be given to what happens when you pull so many boats from service and potentially put them on the market. "How much of a depression does that have when it comes to somebody else wanting to market a 58 foot limit seiner?" SENATOR GARY STEVENS pointed out that farmed fish represent stiff competition and that will likely increase as time goes on. "What we have to do is find a way to improve the quality of the product and find a way to reduce the cost," he said. Co-ops might not be the right answer, but they do represent an attempt to find an answer to reducing cost and improving quality. He said he'd be happy to have Senator Elton make the motion. CHAIR STEDMAN summarized that a co-op may work in select areas in the state, but the socio-economic downside could be huge for the state. "Hopefully the university, when they do these studies, will definitely broaden the scope enough to pick up the adverse impacts of [what] moving away from free competition market place brings," he said. SENATOR ELTON motioned to move CSHCR 28(FIN) am from committee with the attached two zero fiscal notes and individual recommendations. SENATOR LINCOLN said she was curious whether it would take three yeses to get the bill out of committee. CHAIR STEDMAN answered through the chuckles that, "The way this committee will run, we'll have three affirmative votes to move any bill forward." There being no objection, CSHCR 28(FIN) am moved from committee.