Tax concerns could hold up bill on seafood marketing

Posted: Wednesday, February 04, 2004

Bering Sea fishermen are concerned a bill that would subject them to a marketing tax constitutes taxation without representation.

House Bill 273 would change the tax structure that funnels revenue to the Alaska Seafood Marketing Institute by adding an 0.3 percent tax to be paid by non-salmon fishermen. Currently salmon fishermen pay a 1 percent marketing tax and processors pay a voluntary 0.3 percent assessment. The new bill would make the processor's assessment mandatory. It would also reduce the size of ASMI's board from 25 members to nine.

The bill is an attempt to alleviate ASMI's funding troubles, which stem from dropping wild salmon prices as the industry struggles against imported farmed fish.

"This problem started as a problem in the salmon industry, not as a problem in the groundfish industry," said Brett Payne, executive director of Seattle-based United Catcher Boats, which represents Bering Sea pollock, cod and crab fishermen.

Payne made his comments during a Tuesday hearing on the new bill in the Senate Labor and Commerce Committee. He said it's unclear what the 0.3 percent tax would fund. He also points out 95 percent of fishermen and crew in the Bering Sea fleet aren't from Alaska and that the group would like some representation on the ASMI board if it is subjected to a tax.

Bill sponsor Sen. Gary Stevens, a Kodiak Republican, said the new tax is estimated to generate $2.6 million per year for ASMI. Revenue from the 1 percent salmon tax is estimated at $1.67 million, and funds from the 0.3 percent processors' assessment are estimated at $3.1 million.

ASMI Executive Director Ray Riutta said the agency relies heavily on federal grants, many of which are drying up this year and next.

He said the agency needs about $10 million to $11 million annually to function and, once the current grants end, ASMI will receive about $2 million to $3 million from the federal government for overseas marketing.

"We will see little, if any, money for domestic marketing," Riutta said. "We're not asking for an increased budget. We're asking for a stable budget that doesn't fluctuate with the fishery's market."

Discussion during the hearing centered on the tax structure, rather than the board reduction.

Bruce Schactler, president of the United Salmon Association and marketing chair for the United Fishermen of Alaska, suggested the bill be split in two so that issues over the tax structure don't stymie the board reduction. Schactler said in his estimation the tax proposal seems fair.

Katrina Matheny, staff to Stevens, said the senator had balked against splitting the bill previously, but he might consider stripping the tax proposal out altogether if it seems to bog down the rest of the legislation.

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