Legislature(2003 - 2004)
03/10/2004 09:05 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 273 "An Act relating to the Alaska Seafood Marketing Institute, the seafood marketing assessment, the seafood marketing tax, and the seafood product tax; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated this bill, sponsored by Senator Gary Stevens, "reduces the size of the Alaska Seafood Marketing Institute (ASMI) Board of Directors from 25 members to nine, and changes ASMI's tax structure to raise approximately $2.8 million." Co-Chair Green moved for adoption of CS SB 273, 23-LS1366\E as a working document. Without objection the committee substitute was ADOPTED as a working document. SENATOR GARY STEVENS stated that the Joint Salmon Task Force discussed the issues in this bill. The two main issues that need to be addressed within ASMI are the size of the ASMI Board of Directors and the tax structure. This legislation brings ASMI "into the 21st century". This bill would reduce the Board of Directors to seven or nine members. A taxing structure must be established to pay for industry marketing. ASMI is the only organization that broadly markets Alaskan seafood products. A trigger mechanism exists within this bill, which would allow the fishing industry to determine the level of taxation they are willing to accept to fund ASMI. Currently, a one-percent salmon fisherman tax and a processors' tax are in place. This bill would require a vote of the processors, based on their value, to determine the tax; a majority vote would be required to implement a tax rate. The processors could decide to impose a 0.5-percent tax, maintain the current 0.3- percent tax, or they could opt out of the tax entirely. If the 0.5- percent tax were adopted the Board of Directors would have seven members, and if the 0.5-percent tax were rejected two fishermen would be added to the Board of Directors bringing the total membership to nine. [Note: in this paragraph Senator G. Stevens' references to ASMI relate specifically to the seafood marketing assessment component of ASMI.] Senator G. Stevens furthered that a determination must be made whether rational exists to continue ASMI. He expressed his support of ASMI, but emphasized that the processors should be given the opportunity to determine whether they want ASMI to continue. The processors would then be given the opportunity to decide if they want to keep the current 0.3-percent tax, terminate the tax, or increase the tax to 0.5-percent. Senator G. Stevens indicated that with the adoption of the committee substitute, the fiscal note would become zero. Co-Chair Green asked if a revised fiscal note has been prepared to the committee substitute. Senator G. Stevens answered an updated fiscal note has not been prepared, but noted a representative of the Department of Revenue is present to address the matter. Co-Chair Wilken shared that members of the Committee have requested that this legislation be held in Committee until they can fully review the committee substitute. An updated fiscal note could be presented at the next Committee hearing of this bill. Co-Chair Green also requested an updated sectional analysis of the committee substitute. Senator G. Stevens clarified that significant changes were made to this legislation in the committee substitute. Co-Chair Green cited the original sectional analysis and asked if the committee substitute would require that an appropriation from seafood marketing tax receipts not be made using unrestricted general funds. Senator G. Stevens replied that the committee substitute would involve no general fund spending. Senator B. Stevens thanked Senator G. Stevens for his efforts on this issue. Senator B. Stevens emphasized the need to inform industry participants that while the election would determine the amount of the landing tax, revenues from the tax would be utilized for marketing the entire seafood industry, and not just salmon. Concern existed that the a few processors would dictate the tax structure for the entire seafood industry. This concern is unwarranted because though there are a limited number of salmon processors, a large number of other seafood processors exist. Co-Chair Wilken addressed Senator Hoffman and Senator Olson, and asked them when they would be prepared to take action on this legislation. Senator Olson replied they would be prepared to take action by the next regularly scheduled Committee meeting in approximately two weeks. Co-Chair Wilken ordered the bill HELD in Committee.