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Show $ 0.4453 per pound for raw, wet, unprocessed cysts. The Tax Commission also assumes that 40 percent of the biomass harvested is debris ( dead shrimp, algae, bird feathers, floating wood, etc.) ( Bath, 1998). Multiplying the assumed net weight of 3,668,217 lbs. by the unit value of $ 0.4453 yields a total value of $ 1,633,457 ( in a raw, wet, unprocessed state). The market value for the processed cysts is substantially higher than the estimated unit value of unprocessed cysts as determined by the Tax Commission. The market value of the cysts varies based on cyst quality ( the percentage hatch rate), availability and other factors. It should be noted that processed cysts are a value- added product. The Tax Commission charges the royalty rate only for the resource being used, which it deems to be the unprocessed cyst ( Bath, 1998). The current value for processed cysts is hard to determine. Prices vary according to season sold, quality, global supply and demand. These variables and others create high price volatility. Estimates from two individuals involved in the brine shrimp industry for the average value per pound of the cysts in 1998 ranged from $ 7-$ 12. According to Bob Valentine, Utah Brine Shrimp Industry Council, the current value for processed cysts ranges from $ 5 per pound for low quality to $ 35- 40 per pound for high quality with $ 7- 8 per pound being average ( Valentine, 1998). Don Leonard believes that $ 12 per pound is the average value for 1998 ( Leonard, 1998). According to representatives of the brine shrimp coalitions, at least 85 percent of the GSL cysts are processed in state ( Valentine, 1998 and Leonard, 1998). Some Utah companies import cysts from outside the state for processing in Utah. Approximately half of the companies currently harvesting in GSL also process cysts. The other half sell the product for processing or maintain an interest in the final product value. In the latter case, the buyer gives the seller an up- front payment and then the two agree to an additional payment when the cysts are sold based on a percentage of the final sales revenues ( Leonard, 1998). Royalties In 1997, the state decided that a royalty should be paid by the brine shrimp harvesters to compensate the state for the use of brine shrimp eggs. " It is the policy of the state that when its natural resources are used, a royalty should be paid to compensate the state for the use of the natural resource. The state receives royalties on minerals extracted from the GSL. A market has developed for brine shrimp eggs; therefore, the state should be compensated for the use of this natural resource" ( Section 59- 23- 2, Utah Code). The brine shrimp royalty equals 3.5 percent of the value of unprocessed brine shrimp eggs ( Section 59- 23, Utah Code). The Tax Commission annually determines the value of unprocessed brine shrimp eggs. All revenue generated by the brine shrimp royalty is deposited in the Species Protection Account. These funds can then be appropriated by the Legislature for actions to protect any plant or animal species identified as sensitive by the state or as threatened or endangered under the Endangered Species Act of 7P73, U. S. C. 16, Sec. 1531 et seq. ( Section 63- 34- 14, Utah Code). 150 |
