Legislature(2003 - 2004)
04/30/2004 08:43 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.