SENATOR KELLY called the Senate Labor and Commerce meeting to order at 2:00 p.m. and announced SB 177 (SALMON MARKETING, TAX;ASMI BOARD & DUTIES) to be up for consideration. SENATOR PEARCE explained that the proposed committee substitute was in response to a number of concerns expressed in the previous meeting. KIM ELTON, Director of ASMI, said he anticipated a revenue stream of between $3 - $5 million with this legislation. It supplements revenues received from the processing segment of the industry. The harvester tax dollars envisioned in this bill would be used exclusively for salmon marketing in the domestic market place. The processing revenues are now used for all species. MR. ELTON noted that the data and market information provision of Section 5 should be available to the public rather than to just one portion of ADF&G. Number 171 SENATOR LINCOLN asked about the expansion of the Board. MR. ELTON explained that the Board now consists of 18 members and would expand to 24 members comprised of eight large processors, 4 small processors, and 12 fishermen. SENATOR LINCOLN asked who wanted the expansion. MR. ELTON replied that expansion was designed to accommodate 50/50 representation among the processors and fishermen. He said under the voluntary processor assessment the processing segment is contributing hundreds of thousands of dollars. If any of them were removed from the Board, it would create a significant amount of turmoil in the industry. So for equal representation of fishermen, they had to add members. The public member was dropped which he was uncomfortable with. SENATOR SHARP said he was uncomfortable taking the public member off the Board since a considerable amount of public treasury money was going into ASMI. MR. ELTON explained that the Board is appointed by the Governor and then the Board elects a chairman annually. It is very important to maintain the 50 percent balance, he reiterated. Number 303 SENATOR LINCOLN thought the appointing process left too much discretion to the Governor. There was some discussion about the makeup of the Board and Senator Rieger thought a smaller Board might be more workable. MR. ELTON said a smaller number would be difficult, because there would be a lot of bruised feelings. Also with a larger number of fishermen, many gear groups, as well as different regions of the state, could be represented. SENTOR KELLY said they would add the public member back into the bill. Number 413 CHERYL SUTTON, United Fisherman of Alaska, said as an industry they have more than paid their way. She said they like the bill except for Section 5. She said it was their intent that beneath the ASMI Board there would be a new salmon committee that would essentially oversee the domestic marketing program which would be largely funded by the assessment of fishermen/harvesters. They want a committee of seven, comprised of four fishermen and three processors. SENATOR KELLY read the proposed language and asked if they should require the members to be Alaska residents. MS. SUTTON said that would not be good, because their processor members may or may not be residents of the state, but have tremendous cash flow within the state. SENATOR KELLY asked if there would be a problem with having the fishermen being residents of Alaska. MS. SUTTON said that would be no problem for them, but it might not be legal. Number 526 SENATOR LINCOLN said the language regarding which Commissioner does the appointing was unclear. She also wondered if the Board could select the salmon marketing committee without prejudice. MS. SUTTON said she didn't see prejudice as a problem based on her previous experience. SENATOR RIEGER suggested that there needs to be clarification on which commissioner does the appointing. SENATOR LINCOLN said she really wanted to see Alaska residents on the Board. SENATOR KELLY suggested language saying "the other three should be Alaska residents selected from other fishery regions within the state and shall hold permits under AS 16.43." Number 557 Referring to page 3, line 4, MS. SUTTON said there was no reason to create an Executive Board. MR. ELTON said that language applied to the committee system and there was no problem with keeping that. TAPE 93-27, SIDE B Number 580 SENATOR LINCOLN thought there should be language stating the duties of the new salmon marketing board. Number 573 KATE TROLL, Southeast Alaska Seiners Association, said the ability of the fishermen to afford the one percent tax was a problem. Southeast Alaska is the only region that already pays a three percent enhancement tax. All the other regions pay two percent or less. Bristol Bay doesn't have a tax since they have plenty of fish with the wild runs. MS. TROLL said they would like the option of taking one percent of their enhancement tax and spending it on marketing. MS. TROLL said she had asked Commissioner Fuhs if he could allow the aquaculture associations to restructure their loans until marketing kicks in, if this amendment goes through. He said there was no problem with that. She said they would support the bill if they got the one percent credit. Number 463 DEAN PADDOCK, Bristol Bay Driftnetters Association, supported a one percent assessment for salmon marketing. He also supported changing Section 9 as Ms. Sutton suggested. Number 425 ROBIN SAMUELSON, Bristol Bay fisherman, opposed the tax, because he thought Western Alaska would be left out of the picture and it would amount to taxation without representation. He said they pay city taxes in excess of five percent. He said the domestic processors have to show a willingness to bring fish into the United States and then they would follow with marketing. This bill would also benefit the hatchery produced fisheries over natural stocks, he said. Number 406 SENATOR KELLY closed the public hearing on SB 177 and said he would have staff work on a new committee substitute.