CSHB 419(RES)-REGIONAL SEAFOOD DEVELOPMENT ASS'NS./TAX CHAIR CON BUNDE announced CS HB 419(RES) to be up for consideration. REPRESENTATIVE DAN OGG, sponsor, said HB 419 came out of the Joint Legislative Salmon Task Force. Fishermen wanted a way to tax themselves so they could develop their seafood products. The idea initially came from the Copper River where fishermen advertise their Copper River Red Salmon, the first salmon fishery of the year and they are highly prized in the west coast markets. Some of the grants to help develop their program are ending and other areas of the state have got the idea of marketing regional fish. Kodiak and Cook Inlet are working on similar programs. Twelve regions were developed in the state in which to administer these programs and each area would have one program. The bill allows 21 percent of a region's permit holders to apply to the Department of Community & Economic Development (DCED) for an election to form an organization. If 51 percent of the permit holders vote in favor, they form an organization. The bill allows them to tax themselves in an election in which they pick a .5, 1, 1.5 or 2 percent taxation rate. If it passes, they have established their assessment. This bill also gives them the power to provide an infrastructure for improvements like fish chillers for members' use. TAPE 04-36, SIDE A REPRESENTATIVE OGG explained that folks could untax themselves with the same method. Twenty-five percent of the permit holders could ask for a new election to untax. MR. JERRY MCKUNE, United Fishermen of Alaska (UFA), said a lot of fishermen in the state are excited about this bill. Grants are drying up as the sponsor said and this would allow a lot of fisheries to raise $200,000 to $300,000 at the 1 percent range. This will also allow fishermen to work with processors and others in the communities to put promotional programs together and get more value off the salmon and work on quality problems, such as installing ice machines in remote areas. CHAIR BUNDE asked if he knew of any opposition to this bill. MR. MCKUNE replied that probably some fishermen would get worried with talk about taxes. If you have a use for this money, you have to convince your fleet to take this on and have an election, you're going to have to do some education of that fleet to convince them why you want to use the money.... plus every fisherman gets to sit on the committee that's in that particular fishery. So, they all get to have their say.... Some areas probably don't have need for it or won't have a need for it for a while until they have a separate fishery. When you break it down to certain fisheries, there are some gillnet fisheries I see in the state that could probably do this right away and try to get this passed once it's on the books and in other fisheries, like seine fisheries, it would be a little bit more complicated and would have to be talked through to whether that's going to be a benefit for them. SENATOR GARY STEVENS asked Representative Ogg to explain how the voting would take place and how latent permits would be dealt with. REPRESENTATIVE OGG replied that this issue received a lot of discussion and the recommendation of the task force is to go with 50 percent of the actual permits voting, which is how the aquaculture voting is set up and it works fine. CHAIR BUNDE asked if the size of a quorum was discussed. REPRESENTATIVE OGG replied: The mechanism in which the ballots go out - knowing how fishermen are and being one myself - sometimes you don't get the notice. So you are sent out two ballots, two separate mailings. So, you're most assured to get everybody and it's pretty clear what's going on and it's in your high interest to participate. If there's latent fishermen who aren't fishing, they won't pay a tax, because they don't have any product that they're selling. Once they start to fish again, they will pay a tax. MR. MCKUNE added that each region has to publish two notices in a newspaper. SENATOR SEEKINS asked if there is any requirement to make sure a ballot was ever received. REPRESENTATIVE OGG replied no; nothing more is needed than the two mailings to addressees on the limited entry permit cards. CHAIR BUNDE asked what level of participation the aquaculture associations have among eligible voters. REPRESENTATIVE OGG said he didn't know. MR. MCKUNE replied that the Prince William Sound Aquaculture Association had an 80 percent return when it first started. He thought the same would be the case with this program. CHAIR BUNDE postulated that an election wouldn't be valid unless 10 or 15 percent of the permit holders participated and wanted that discussed in the Finance Committee. The way it is written now, two out of three people could decide an issue. Although he doubted that would happen, he also sees low voter turnout in general elections. SENATOR SEEKINS asked if other forms of notification that an election is going to take place are required. MR. MCKUNE answered that the bill requires two ballots and two notices in the newspaper of the region in which the election will take place and a minimum of two public meetings must take place. SENATOR GARY STEVENS moved to pass CSHB 419(RES) from committee with attached fiscal note and individual recommendations. Senators Hollis French, Ben Stevens, Ralph Seekins and Chair Con Bunde vote yea; and CSHB 419(RES) moved from committee.