CS FOR HOUSE BILL NO. 419(RES) "An Act relating to regional seafood development associations and to regional seafood development taxes." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken commented that this bill, Version 23-LS1418\V, would allow fishermen to form regional seafood development associations to tax themselves and thereby provide a stable funding source for marketing efforts. REPRESENTATIVE DAN OGG, the bill's sponsor, stated he is sponsoring this bill by request of the Joint Legislative Salmon Industry Task Force. He explained that by establishing 12 voluntary regional area management associations, the salmon industry, who he noted support this legislation, would be able to tax themselves in order to assist in the development and marketing efforts of salmon. He noted that the Copper River Red Salmon Association, which is one such operating association, has been quite successful in its marketing endeavors, and he noted that several other associations are in the developmental stage. He shared that this legislation is spurred by the fact that the federal and State grants that have funded these associations would be terminating in the near future. Therefore, he continued, the proposed legislation would provide a replacement funding mechanism through which associations could tax its members at rates of either point-five percent, one percent, one-point-five percent or two-percent as determined by a vote of permit holders in each association. He noted that once an association is formed in an area, other groups could join it, and he clarified that non-permit holder fisherman could be non-voting members of an association. He also noted that provisions in the bill would allow those not interested in joining an association to opt out of membership and that were an association to desire to disband, it could do so. Representative Ogg stated that rather than these associations competing with the Alaska Seafood Marketing Institute (ASMI), the goal would be to enhance the marketing of salmon in a collaborative rather than adversarial manner. He urged the Committee to support the bill. Senator Olson asked whether there is any opposition to the proposal as oftentimes controversy accompanies situations involving taxation. Representative Ogg responded that there has been no opposition to the legislation. He recalled that some members of the troll industry had some initial questions which were adequately responded to, and that, in general, there has been positive response from the industry as well as from United Fishermen of Alaska (UFA). JERRY MCCUNE, Representative, United Fishermen of Alaska (UFA) and Cordova Fishermen United, testified in support of the bill. He affirmed that there is industry concern regarding how to replace the current grant funding and that the development of area associations would benefit the industry. AT EASE: 4:25 PM/ 4:26 PM Amendment #1: This amendment makes the following changes. Following the word "fishery" in Section 3, subsection 43.76.370 (b) on page four, line three, the words ", or is amended or terminated," are inserted. In addition, the amendment would insert, following the word "section;" in Section 3, subsection (b)(1) on page four, line seven, the language "(2) at least 30 percent of the eligible interim-use permit and entry permit holders in the fishery cast a ballot in the election to levy, amend, or terminate the tax;". Other changes include the replacement of "(a) and (c)" with "(a) - (c)" in Section 3, subsection (d) on page five, line 19; the replacement of "(a), (c), and (d)" with "(a) -(d)" in Section 3, subsection (h) on page six, line ten. In addition, the phase "upon majority vote at an election held under AS 43.76.370" is deleted and replaced with "upon majority vote of eligible permit holders who vote in an election held under AS 43.76.370 in which at least 30 percent of the eligible permit holders cast a ballot." in Section 3, Section 43.76.375 of Section 3, subsection (a) on page six, lines 21 and 22. And finally, following the word "tax;" in Section 3, subsection (b)(3) on page seven, line eight, the language "(4) at least 30 percent of the permit holders who are eligible to vote in the election cast a ballot in the election." is inserted. The amendment also specifies that sections be renumbered accordingly. Co-Chair Wilken moved to adopt the amendment and objected in order to allow the bill's sponsor to explain the amendment. Representative Ogg voiced support for the amendment, as it would allow a vote conducted by an association to be validated provided a minimum 30-percent of eligible permit holders participated in the election. Co-Chair Wilken removed his objection. There being no further objection, Amendment #1 was ADOPTED. Senator Bunde moved to report the bill, as amended, from Committee with individual recommendations and accompanying fiscal notes. There being no objection, SCS CS HB 419(FIN) was REPORTED from Committee with zero fiscal note #1, dated February 19, 2004 from the Department of Community and Economic Development and indeterminate fiscal note #2, dated February 8, 2004 from the Department of Revenue.