Legislature(2003 - 2004)

04/30/2004 08:43 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 273(FIN)                                                                                               
                                                                                                                                
     An Act amending the size, membership, and powers of the                                                                    
     board of directors of the Alaska Seafood Marketing                                                                         
     Institute  and  making  a corresponding  change  in  the                                                                   
     quorum  requirement;  authorizing the  establishment  of                                                                   
     the  seafood  marketing  assessment  at a  rate  of  0.5                                                                   
     percent or 0.6 percent of  the value of seafood products                                                                   
     produced;   providing  for   an   election  to   retain,                                                                   
     terminate,    or   increase   the   seafood    marketing                                                                   
     assessment;  providing  for  the repeal  of  the  salmon                                                                   
     marketing  tax  and  provisions related  to  the  salmon                                                                   
    marketing tax; and providing for an effective date.                                                                         
                                                                                                                                
Co-Chair  Williams  commented  that  Work  draft  Version  G,                                                                   
Utermohle, 4/26/04,  was adopted  on 4/29/04.   Testimony was                                                                   
also  heard the  previous day,  and the  Committee would  now                                                                   
consider the amendment by Representative Croft.                                                                                 
                                                                                                                                
In   response   to   a   question   by   Co-Chair   Williams,                                                                   
Representative  Croft clarified  that  he had  talked to  the                                                                   
bill  sponsor, Icicle  Seafoods,  the UFA  and House  members                                                                   
from  fishing communities.  The sponsor  still preferred  his                                                                   
version  of a  7-member  or a  9-member  board.   The  Alaska                                                                   
Seafood   Marketing   Institute   (ASMI)  had   a   unanimous                                                                   
resolution  supporting a  15-member board,  while the  Salmon                                                                   
Task Force recommended a 9-member board.                                                                                        
                                                                                                                                
Representative  Croft  stated that  there  is agreement  that                                                                   
this should  be a  smaller board  with some  increase in  the                                                                   
representation of the processors  to encourage their adoption                                                                   
of the processor  tax. The question is whether to  tilt it in                                                                   
favor   of   processors   generally,   and   big   processors                                                                   
specifically.  He and Senator  Stevens still disagreed on the                                                                   
tilt.                                                                                                                           
                                                                                                                                
Co-Chair Williams  commented that he  had been on  the Salmon                                                                   
Task Force,  and he experienced  that boards with  15 members                                                                   
or  18 members  were  "like  a  convention." The  Task  Force                                                                   
worked for two  years with fishermen and processors  to lower                                                                   
the board membership to get a workable composition.                                                                             
                                                                                                                                
SENATOR  GARY STEVENS,  SPONSOR, explained  that through  two                                                                   
years  of work,  the  Salmon Task  Force  crafted a  delicate                                                                   
balance on the  board to ensure that the right  decisions are                                                                   
made. Processors have a legal  right to go to zero and decide                                                                   
to put no money in, but he would  encourage the processors to                                                                   
go to  0.5% or $5 million,  and allow the salmon  fishermen's                                                                   
tax   to  "spin   off  into   the  regional   organizations."                                                                   
He felt  that would  be the ideal  situation. He  pointed out                                                                   
that the  bill had gone  through several committees,  and the                                                                   
House  Fisheries  Committee  moved  it out  quickly  and,  he                                                                   
thought, without  opposition.  He  hoped that the  bill would                                                                   
remain intact.                                                                                                                  
                                                                                                                                
Representative Croft  explained that his amendment  is in the                                                                   
form of  a Committee  Substitute, Work Draft  Version M.   He                                                                   
pointed out that Version G is  the original bill version that                                                                   
has 7 or 9 board members on page 2.                                                                                             
                                                                                                                                
Representative Croft MOVED to  ADOPT Version M instead of the                                                                   
Version G. Co-Chair Williams OBJECTED.                                                                                          
                                                                                                                                
Co-Chair  Williams  asked about  the  changes  in Version  M.                                                                   
Representative  Croft explained  that the  main issue  is the                                                                   
composition  of  the  board.  Sections  2 and  3  on  page  2                                                                   
establish  either an  11-member  or a  13-member  board.   He                                                                   
reiterated  that ASMI  wanted a 15-member  board, the  Salmon                                                                   
Task  Force  wanted  a  9-member   board,  and  he  wanted  a                                                                   
compromise between  those figures.  An 11-member  board would                                                                   
be comprised  of 5 big processors,  2 small processors  and 4                                                                   
fishermen. He noted that Representative  Seaton had expressed                                                                   
concern in  the Fisheries Committee  that the  big processors                                                                   
could be  a quorum  by themselves, with  the ability  to pass                                                                   
measures  without  even one  vote  from small  processors  or                                                                   
fishermen.                                                                                                                      
                                                                                                                                
Representative  Croft explained that  his only concern  is to                                                                   
have an Alaskan  check on the board's decisions.  He conceded                                                                   
that the  board should be  smaller and the processors'  power                                                                   
should increase because of their  marketing knowledge. But he                                                                   
did not want the  processors to have a majority  or quorum on                                                                   
the board. On an 11-member board  with 5 big processors, only                                                                   
one Alaskan  fisherman or one  Alaskan small processor  would                                                                   
be needed  to pass their  plan. He likened  it to  the checks                                                                   
and balances in government systems.  He concluded that is the                                                                   
primary difference between Version M and Version G.                                                                             
                                                                                                                                
Co-Chair  Williams  informed  the  Committee that  he  was  a                                                                   
member of  the 13-member Fish  Task Force that  covered every                                                                   
region  of state.   Participation  was better  in the  second                                                                   
year.  He felt that it isn't important  if the processors are                                                                   
from Seattle or Alaska because  they make decisions on buying                                                                   
and selling  [emphasis] Alaskan  product. The processors  had                                                                   
some farmed  fish but they  preferred to buy  Alaskan salmon.                                                                   
He  expressed  strong opposition  to  Representative  Croft's                                                                   
proposed committee substitute.                                                                                                  
                                                                                                                                
Senator Stevens commented on the  ASMI Board, explaining that                                                                   
he'd been  a legislative  ex officio  member.   He felt  that                                                                   
there  was misunderstanding  about  the board,  which is  not                                                                   
about absolute  power, but an  organization that  decides how                                                                   
to generically  market Alaskan  seafood products.   He feared                                                                   
that if the board became parochial,  it would eliminate those                                                                   
who know how to market Alaskan products.                                                                                        
                                                                                                                                
Representative Chenault pointed  to the $1.5 million that the                                                                   
current fishermen would pay if  the bill passed, and asked if                                                                   
it  would  revert  to them  to  specialty  market  their  own                                                                   
product.  Senator Stevens  explained  that  there is  another                                                                   
bill  relating  to regional  marketing.  If  the  Legislature                                                                   
passed  this  bill,  the  salmon   marketing  tax  of  1%  on                                                                   
fishermen would be eliminated on January 1, 2005.                                                                               
                                                                                                                                
Representative  Croft concluded  that it  is possible  for an                                                                   
11-member  board to  be functional.  Major  companies have  a                                                                   
worldwide  interest  that  includes Alaska,  and  often  make                                                                   
difficult marketing  decisions. Marketing  in this  new phase                                                                   
of competition  with farmed salmon  requires a  new structure                                                                   
to balance  the  legitimate interests  of major  corporations                                                                   
with Alaska's interests.                                                                                                        
                                                                                                                                
Co-Chair  Williams  commented  that  Alaskans  John  Sund,  a                                                                   
former  Representative   in  the   state  House,   and  Terry                                                                   
Gardiner, a  former Speaker of  the House, own Norquest.   He                                                                   
said that they  know Alaskan fish and the  industry. Co-Chair                                                                   
Williams stated  that the Fish  Task Force had  discussed the                                                                   
issue for hours and agreed on this number [in Version G].                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Moses, Croft, Joule                                                                                                   
OPPOSED:  Meyer,  Stoltze,  Chenault, Fate,  Foster,  Hawker,                                                                   
          Harris, Williams                                                                                                      
                                                                                                                                
The  MOTION  FAILED  (3-8).  Work Draft  Version  M  was  not                                                                   
adopted.                                                                                                                        
                                                                                                                                
Co-Chair  Harris MOVED  to  report Version  G,  HCS for  CSSB                                                                   
273(FIN)  out of  Committee with  individual  recommendations                                                                   
and the accompanying  fiscal note. There being  NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
HCS  CSSB  273(FIN)  was  REPORTED   out  of  Committee  with                                                                   
individual  recommendations  and   two  previously  published                                                                   
fiscal notes.                                                                                                                   
                                                                                                                                

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