Legislature(2001 - 2002)
03/04/2002 03:38 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 208-AQUATIC FARMS FOR SHELLFISH CO-CHAIR STEVENS announced that the next matter before the committee was HOUSE BILL NO. 208, "An Act relating to aquatic farming of shellfish; and providing for an effective date." Number 2370 REPRESENTATIVE SCALZI moved to adopt the proposed committee substitute (CS), version 22-LS0763\L, Utermohle, 2/26/02, as the working document. There being no objection, Version L was before the committee. REPRESENTATIVE SCALZI, sponsor of HB 208 informed the committee that the bill was the result of a cumulative effort and several years of hard work between the Alaska Department of Fish & Game (ADF&G) and the Department of Natural Resources (DNR). The effort had been to solve problems in the area of shellfish farm permitting. REPRESENTATIVE SCALZI said the bill would allow the Department of Natural Resources to auction and lease 90 sites. In accordance with the ADF&G criteria, 60 of these sites would be "suspended-culture" sites, 20 would be "on-bottom" sites, [and 10 would be for farming geoducks]. The sites would be available for lease annually until [all sites are leased], and they would require ten-year leases. He said the bill calls for farmers to abide by "the sustained-yield principle" when harvesting. REPRESENTATIVE SCALZI told the committee that the market demand cannot be met with the small number of shellfish farms in Alaska. He said there is a great deal of interest in expanding farms throughout the state, and that there is a large amount of support for the bill. Number 2470 DOUG MECUM, Director, Division of Commercial Fisheries, Alaska Department of Fish & Game, testified before the committee. He said the bill was moving in the right direction, and that some of the constitutionality problems had been removed. Some concerns remain with regard to the timeframe. He said the department had been in correspondence with the Alaska Shellfish Growers Association on the issue of the timeframe. He made it known that it would not be impossible to meet the current timeframe, but it would be very difficult to do so. He told the committee that the bill was moving in the right direction, and that it would be a reasonable way to jump-start the aquatic farming industry in the state. Number 2535 BOB LOEFFLER, Director, Division of Mining, Land and Water, Department of Natural Resources, testified via teleconference. He supported the comments of Mr. Mecum. He said he was pleased with ADF&G, the Alaska Shellfish Growers Association, and legislative staff. He expressed his doubt that everything could be accomplished within the one-year timetable. Number 2577 ROBERT HARTLEY, Alaska Shellfish Growers Association (ASGA), testified via teleconference. He said he was a past president of the association and had been working on the bill for a year or two. The bill would address concerns of departmental approval, and people would be able to "know what [they] are getting into." It would also provide for proper site evaluations. He said the bill also provides a continuing source of sites. Once initial surveys are done, year after year, sites will be available because there will not be a great abundance of people getting into shellfish farming. He stated that the most important aspect of the bill is that it provides a "good steady source of sites for aquatic farming." Number 2709 REPRESENTATIVE SCALZI made reference to departmental claims that the timetable was not easily satisfied. He asked if February 2004 would be more easily incorporated. MR. HARTLEY answered that it would be better to allow more time. Number 2773 RODGER PAINTER, Alaska Shellfish Growers Association (ASGA), testified before the committee. He expressed his support of the bill in the form of the proposed CS. He cited his extensive work with Representative Scalzi and Senator Torgerson through the previous year, as well as with the agency to resolve concerns about the legislation. Mr. Painter made note of the difficult financial times [for state government] and said the fiscal note is "very high," but he added that it is a good investment into one of the largest natural resources in the state. He expressed his belief that shellfish farming is an investment that would repay its cost many times over. He gave several examples of how the farms could pay for the investments made by the state. TAPE 02-6, SIDE B MR. PAINTER said the ASGA would like to see "something that works for everyone." Number 2954 REPRESENTATIVE SCALZI asked Mr. Painter if [ASGA] had a problem with changing the implementation date from July 2003, to February 2004. MR. PAINTER said February 2004 could work if the agencies respond in the timeframes that had been discussed. Number 2910 REPRESENTATIVE COGHILL pointed out that the number of sites has an effect on the fiscal note. He asked if it would be "workable in the industry" to reduce the minimum number of sites. MR. PAINTER said that in reality, there would not be 90 different locations. He explained that with the wording in the bill, the 90 sites could be made available in 30 different areas, for example. The industry might select an area such as a bay, where multiple farms could be located. This concentration of farms would make the agencies' jobs much easier. He added that the industry is working actively to identify sites for nominations. He said he had personally been working closely with state, local, and federal agencies on a concept he termed an "aquaculture development zone." He said if the bill passed, there were a number of areas near Prince of Wales Island that would be easily nominated because some sites had already been surveyed there. Number 2793 REPRESENTATIVE COGHILL said that the issues of identification, paperwork, and legal research costs were what he was concerned about. He said he was "trying to get a handle on" whether it was "a site issue" or a "timing issue." MR. PAINTER said DNR would undergo a land use planning process that requires much public transparency. The process would seek out conflicts, and if one were being found that could not be mitigated, the site would be "taken off the table." He characterized the process as "complex," and warned it would take some time. He explained that the fiscal notes are high because planners would have to be hired to work on the sites. He said ADF&G's costs would come from site surveys and the [Division of Habitat and Restoration's] reviews of impacts on fish and wildlife resources. Number 2690 PAUL FUHS, Lobbyist for Alaska Trademark Shellfish, testified before the committee. He characterized the bill as "good legislation" and a boon to the economies of the rural areas in particular. He brought forth the problem of obtaining brood stock for standing stocks, specifically in the case of geoducks. He gave the example of a group he represents and said that the sites that are the best to farm already have native stocks. MR. FUHS said the issue of limited-entry dive fisheries brings a conflict between commercial divers and shellfish farmers. He said the constitutional amendment that enabled limited entry said, "Common property shall not be abridged except for limited entry and aquaculture." He said limited entry has already been litigated, but "aquaculture" has never been defined. Mr. Fuhs said the court told his clients that: The ADF&G couldn't say, "We're not going to let you do it because it's a potential future fishery." We're not diving on the site now; no one is using it. They said that was wrong, but then they said, "You also have this common property issue out there that you have to resolve." So they said, "If there is a substantial amount...." Well, [ADF&G] has never come out and said what's a substantial amount; there is no regulation, so we're caught in a complete Catch-22 on this. The department is in a difficult situation because of having no resolution of this common property resource issue. So the thing is, can the legislature do something with this? And throughout the findings in the court case, they were crying out for more definition of what really is the policy here. So the essence of this proposed amendment is ... that if you got a place where no one has ever fished before, that could become an aquaculture site, but what the department would have to do is post a public notice to say, "This is going to become an aquaculture site; commercial divers, get your act together because you're going to be able to go in there and harvest that site." And then the requirement on the farmer is, at the end of that time, they have to restore it to the population it was before. So you have no net loss of the population there, and at the end of the lease, the divers could go back in. You haven't really removed it from the public domain, but it's a practical way to let the divers go get an economic value of the standing stock, then let the farm go forward. That's the essence of this amendment. MR. FUHS said that the amendment was before various entities and that if he and his clients could resolve the issue through compromise, "we'll drop the lawsuit." Number 2498 REPRESENTATIVE SCALZI said he was under the impression "that the venue was to have that language go through in regulation, not in statute." He asked Mr. Fuhs if that would be the case if the bill were to be amended. MR. FUHS said he did not think "this has really been considered in regulation." He said: It's interesting that for a fishery that is a common property fishery with no limited entry, what the department does now, they let the public go in - like for littleneck clams, they'll publish a period; anybody can go harvest the area; after that harvest period, the farmer gets it; and if the site is under their control, ... then nobody can go harvest it anymore. It's their property for the lease period. For limited entry, which is a restricted access fishery, they are saying that that imbues some property title to those people who have it, even in areas that they are not fishing. So, can you see the difference? I mean, to me it's kind of backwards. You'd think that the public that had access to it would have more rights than a limited group. We've got 104 divers in limited entry - 80 of them aren't even from Alaska - so 24 divers up here that you could say have claim to every single animal out there, just because it's limited entry. Well, that doesn't make any sense to me, but how do we protect our rights - that's ... the solution we're looking for here. MR. FUHS said he could understand ADF&G's quandary over being "stuck right in the middle of this thing." He said the department needs some direction from the legislature or the courts. Number 2415 REPRESENTATIVE SCALZI said limited entry fisheries are to regulate the management of the fishery. He said it is no different for the management of the geoduck fishery. For common property, people can go out and dive in any area that is open, they just cannot sell what they harvest. Representative Scalzi said, "You can't sell a sport fish." MR. FUHS said he was agreeing with Representative Scalzi. He added: They should be treated equally, but they're not right now because of this legal argument concerning property rights under limited entry fisheries. That's where we're stuck right now. It's a big Catch-22. [It must] be resolved one way or another. Number 2369 GREG FAVRETTO, Favco, testified via teleconference. He said the ASGA members grow a high-quality product with an excellent marketplace reputation. He told the committee that increasing market demand and gradually increasing market value per pound or per dozen has been the hallmark of mariculture shellfish, unlike the market for salmon. His company had forecast a 15 percent growth in sales in the present year over the previous one. He said his company is looking forward to a long, steady future in the year-round mariculture shellfish industry. Number 2248 JOHN AGOSTI, Qutekcak Shellfish Hatchery, testified via teleconference. He said he was in favor of the bill because the state invested three and a half million dollars into building the hatchery. The [Qutekcak hatchery] is working hard to grow the industry in Alaska; because the ADF&G built the hatchery so large, the present industry is not big enough to support it financially. He said the hatchery is "ramping up" its sales income every year, but presently most of its income is from grant monies. Mr. Agosti said the hatchery's break-even time is being stretched into the future, as agencies gradually become less willing to deliver funds. MR. AGOSTI told the committee that the hatchery has introduced four new species to help the industry diversify. He said [Qutekcak Shellfish Hatchery] is counting on the bill to help jump-start the industry by creating more customers for its products. Number 2089 SCOTT JANKE, Manager, City of Seward, testified via teleconference. He said the City of Seward is the leaseholder for the hatchery, and that they sublease it to Qutekcak. He stated that the city has an interest in seeing the hatchery succeed on the local economic development level as well as that of the state. He gave the example of Cedar Key, Florida where an aquaculture venture went from nothing to a $60 million industry in ten years. He expressed that he would not want to see shellfish farmers in Alaska miss an opportunity to take market share in such an attractive industry. He said the City of Seward was in support of the legislation. Number 2002 REPRESENTATIVE SCALZI said he thought it a good idea for the City of Seward to take over the hatchery. He conceded that there was some work to do on some of the language concerning the sites. He said the fiscal note would be reduced if the deadline were carried "a little further out." Number 1904 REPRESENTATIVE SCALZI moved to report CSHB 208, version 22- LS0763\L, Utermohle, 2/26/02, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 208(FSH) was moved out of the House Special Committee on Fisheries.
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