SENATE COMMITTEE SUBSTITUTE FOR COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 363(L&C) "An Act relating to salmon product reports and to the sale of fish; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. REPRESENTATIVE ALAN AUSTERMAN told the Committee the bill was introduced on behalf of salmon harvesters initially as an update of current statutes regarding canned and thermal salmon. He stated that the legislation also adds several other products currently handled by the salmon industry. He said the canned salmon reports addressed in the bill have existed since before statehood. Representative Austerman continued that the bill adds fresh and frozen headed and gutted salmon products, fresh and frozen fillets and salmon roe to the reporting requirements. It also adds a requirement for salmon processor to report production areas. Representative Austerman shared that the bill has been revised a number of times since its introduction. He pointed out that original statute requires any processor producing more than 1000 pounds of canned or thermal product to submit this report. An amendment to the bill, he said raises that amount to one million pounds. Senator Wilken wanted to know if the reports records the wholesale number of cans produced after the business tax is incurred. He asked what purpose the reports serve. Representative Austerman surmised that the original intent was to provide wholesale price information to the state and any other interested parties. Co-Chair Torgerson asked if these reports are confidential. Representative Austerman affirmed and explained that more than three processors must be operating in a particular area before the reports on that area could be released to the public. TOM WISCHER, Kodiak area fisherman and Member, United Salmon Association, testified via teleconference from Kodiak that the bill fills a gap, eases mistrust between fishermen and processors, and would give good business information to fisherman across the state. VIRGINA ADAMS, Commercial Salmon Fisherman out of Kodiak, testified via teleconference from Kodiak. Tape: SFC - 00 #90, Side B 8:50 PM Ms. Adams continued recounting the efforts to obtain accurate accounting information on the status of the salmon industry. She approved on the one million-pound requirement saying it protects smaller processors. HERB JENSEN, representing, United Salmon Association, Cordova District Fishermen United, Copper River Salmon Producers, testified via teleconference from Cordova in favor of the bill and what it would provide to the state. STEPHANIE MADSEN, Vice-President, Pacific Seafood Processors Association, testified via teleconference from Anchorage that the association opposed the bill saying it was not just revision of the report but a significant expansion of the report. She detailed the additional pages required. She requested the frequency of the reports be reduced from three times annually to two, if the bill passes. SCOTT MCALLISTER, salmon seining fisherman, Member, United Salmon Association, United Fisherman of Alaska, Southeast Seiners Association testified in Juneau about the efforts behind this bill to improve reporting procedures. He answered Senator Wilken's question regarding the relationship between harvesters and processors, saying there is a relationship that shares the risks and results. Senator Phillips asked where was the sunset provision in the bill. CHRIS NORRIS, Icicle Seafoods in Ketchikan and Norton Sound, testified in Juneau that she believed the bill is an intrusion and serves no purpose to private business. Senator Wilken understood that this bill would increase reporting requirements by a factor of five to give better information, after the product has been sold and delivered, in order to return some of that revenue to the fishermen according to a pre-agreed upon arrangement. Ms. Norris gave her understanding of the reason for the report was to foster the idea that if fishermen have a better idea of the salmon market and prices paid, they would have a better leverage to negotiate prices. She noted that her company and fleet were not involved in the 1997 strike. She believed the reporting system originated out of frustration of fishermen. She stressed it is unfair to paint the whole processing industry negatively. BRET FREID, Economist, Department of Revenue testified about the sunset clause currently in the statute. He explained that a previous version of the bill repealed the sunset, but that the repeal has been removed in the current committee substitute. Mr. Freid stated that the department does not have a position on the collection of data because there is no direct link with taxation. He shared that the salmon is taxed at the price paid to the fisherman not the wholesale value or the profits. Mr. Freid qualified that the department could do a good job preparing the reports and meeting the requirements of the bill. He spoke to the fiscal note that shows the need for three-quarters of one position to operate the program at a total operating cost of $38,000 for the first year with an additional $20,000 in capital funds to set up a database. Co-Chair Torgerson asked that if the Department of Revenue does not oversee this program, what other agency could hold confidential information. Mr. Freid suggested the Department of Fish and Game. Co-Chair Torgerson commented that this is a good report and that if the legislation passes, the matter of which department has oversight could be revisited. Amendment #1: This amendment makes the following change to page 5, lines 23 and 24 of the committee substitute. Delete "September 30, 2000, must cover the period of May 1, 2000, through August 21, 2000" Insert "January 31, 2001, must cover the period of September 1, 2000, through December 31, 2000" The amended language reads as follows. TRANSITION. The first report required by AS 43.80.050, as amended by secs. 3 - 5 of this act, is due January 31, 2001, must cover the period of September 1, 2000, through December 31, 2000, and must be filed by a fish processor whose business sold more than 1,000,000 pounds of salmon products at first wholesale during the 12-month period ending August 31, 2000. Senator Leman moved for adoption and explained that the implementation of the program would be delayed by one reporting period so the department would have an opportunity to set up a database. He spoke with interested parties and found concurrence from all sides of the issue. Representative Austerman approved of the amendment saying the delay is better for both the processors and the department. There was no objection and the amendment was ADOPTED. Senator Wilken asked if the portion of the report protected as confidential is the final average wholesale price report recipient. Mr. Freid corrected that the identification of a specific processor, the wholesale price and the total pounds of salmon should not be identifiable. He stated that only the summary of all information is published. Senator Leman relayed a suggestion he made when the bill was heard in the Senate Labor and Commerce Committee that electronic filing would be more efficient and cost- effective. He noted that while the initial set-up cost would be higher, the long-term costs would be lower for both the department and the processors. Senator Leman offered a motion to report from Committee, SCS CS HB 363 (L&C) as amended with $38,400 fiscal note from the Department of Revenue. The bill was MOVED from Committee. ADJOURNED Senator Torgerson adjourned the meeting at 9:15 PM. SFC-00 (1) 04/14/00