01/30/2020 11:00 AM House FISHERIES

               HB 203-TRANSPORTATION OF LIVE CRAB                                                                           
                                                                                                                                
11:14:44 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES announced that the only order of business would be                                                                 
HOUSE BILL NO. 203, "An Act relating to transportation of live                                                                  
crab."                                                                                                                          
                                                                                                                                
11:15:38 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARY KNOPP,  Alaska State  Legislature, as  prime                                                               
sponsor, introduced HB  203.  He stated that HB  203 is important                                                               
to  the  communities  it  affects.    He  introduced  his  staff,                                                               
Intimayo Harbison.                                                                                                              
                                                                                                                                
11:16:18 AM                                                                                                                   
                                                                                                                                
INTIMAYO  HARBISON,  Staff,  Representative  Gary  Knopp,  Alaska                                                               
State Legislature,  presented HB 203 on  behalf of Representative                                                               
Knopp, prime  sponsor.  He  stated that  HB 203 would  change the                                                               
language  of AS  16.10.240  to remove  restrictions  on the  live                                                               
transportation  of  three crab  species:    king crab,  Dungeness                                                               
crab,  and  Tanner  crab.    He explained  that  as  the  law  is                                                               
currently written,  there is  a restriction  on the  transport of                                                               
those three crab species, except  when being shipped live via air                                                               
freight after pre-packaging.  He  stated that HB 203 would change                                                               
the statute to allow for surface  transport of live crab after it                                                               
has  been first  landed  in an  Alaska port  and  recorded on  an                                                               
Alaska  Department  of Fish  &  Game  (ADF&G)  fish ticket.    He                                                               
explained  that  the current  Alaska  statute  pertaining to  the                                                               
transport of live  crab was written in the 1960s  and was revised                                                               
in 1996,  due to  concerns regarding loss  of product  and toxins                                                               
when transporting  by surface  rather than air.   He  stated that                                                               
since  the initial  passing of  this  legislation and  subsequent                                                               
amendments,  there  have  been many  breakthroughs  in  the  safe                                                               
transport  of   live  crab  species,  which   allow  for  surface                                                               
transport while  maintaining freshness of product.   He explained                                                               
that new technology allows for  the storage and transport of live                                                               
crab  by keeping  them in  cooled and  aerated saltwater  for the                                                               
entirety of their  journey to market.  He added  that this method                                                               
of transport  allows for  crab to be  held for up  to a  month or                                                               
longer, without a loss of product or risk to consumers.                                                                         
                                                                                                                                
MR. HARBISON  stated that  currently, dead  loss on  shipments of                                                               
live  crab out  of Alaska  can be  high due  to several  factors,                                                               
including improper  packaging, delayed  shipment due  to weather,                                                               
and  a general  lack of  air  shipment service  to remote  Alaska                                                               
communities.   He said that HB  203 would allow for  high quality                                                               
Alaska crab to reach markets  despite limitations to air freight.                                                               
He explained  that Alaska  has fallen  behind in  expanding world                                                               
crab markets, due  to limitations placed on live  export from the                                                               
state.   He stated that red  king crab is currently  sold live in                                                               
global markets  by other industries from  foreign countries; this                                                               
includes  sales to  the U.S.  and Canada,  which would  be better                                                               
served  by the  Alaska crab  industry.   He  summarized that  the                                                               
ability to sell  currently restricted species in  larger and more                                                               
consistent volumes would help expand  consumption of Alaska crab,                                                               
bring economic  opportunity to  Alaska crabbing  communities, and                                                               
overall benefit the state and its industries.                                                                                   
                                                                                                                                
11:18:56 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOPP,  referencing  a   letter  from  the  United                                                               
Fishermen of  Alaska (UFA),  asked whether  the language  the UFA                                                               
preferred was  not included in HB  203 as a result  of the bill's                                                               
evolution as it was drafted.                                                                                                    
                                                                                                                                
MR.  HARBISON  replied that  he  thinks  the letter  was  written                                                               
during a  previous version  of the  bill.   He stated  that there                                                               
have  been  suggestions   for  changes  to  the   bill,  by  some                                                               
individuals  in the  crabbing industry,  that would  clarify some                                                               
issues.                                                                                                                         
                                                                                                                                
11:19:53 AM                                                                                                                   
                                                                                                                                
CHAIR  STUTES   announced  the   committee  would   hear  invited                                                               
testimony on HB 203.                                                                                                            
                                                                                                                                
11:20:39 AM                                                                                                                   
                                                                                                                                
JEREMY  WOODROW,  Executive  Director, Alaska  Seafood  Marketing                                                               
Institute   (ASMI),  Department   of  Commerce,   Community,  and                                                               
Economic Development, testified in support  of HB 203.  He stated                                                               
that ASMI  submitted written testimony, which  he would summarize                                                               
with oral  testimony.   He explained that  crab is  a low-volume,                                                               
high-value species  in Alaska; it  only makes up  approximately 1                                                               
percent  of  Alaska's ex-vessel  volume  but  represents over  12                                                               
percent  of the  ex-vessel value.    He stated  that Alaska  crab                                                               
represents approximately  $300 million in  first-wholesale value,                                                               
but  of  that  $300  million, only  approximately  1  percent  is                                                               
exported  live due  to several  restrictions, market  challenges,                                                               
and  shipping  restrictions.    He  expressed  that  HB  203  has                                                               
significant  support from  the seafood  industry; at  ASMI's most                                                               
recent  annual all-hands  meeting, the  ASMI shellfish  committee                                                               
unanimously passed support for legislation  that would allow live                                                               
shipment of all  species of Alaska crab.  He  reiterated what Mr.                                                               
Harbison  had  explained  earlier about  improved  transportation                                                               
technology, which  allows for more convenient  and cost-effective                                                               
shipping of live crab via surface transportation.                                                                               
                                                                                                                                
MR.  WOODROW  explained that  traditionally  live  crab has  been                                                               
required  to  be  air  shipped,  which is  costly  and  comes  at                                                               
significant financial risk, as crab can  only be out of water for                                                               
a  short  time period  without  a  significant loss  of  product.                                                               
Alaska crab  competes on  a global  market with  similar products                                                               
caught  in other  regions  of  the world.    He  stated that  the                                                               
ability to ship  more live crab, which receives  a premium market                                                               
price,  better positions  Alaska  seafood  processors to  compete                                                               
against foreign  products.  He  explained that  currently foreign                                                               
products  often undercut  Alaska prices  and have  more favorable                                                               
trade terms in foreign markets in  which Alaska crab is sold.  He                                                               
expressed that HB 203 adds another  tool to the toolbox of Alaska                                                               
crab processors and producers, and  positions Alaska crab species                                                               
to stay competitive in other regions of the world.                                                                              
                                                                                                                                
11:23:36 AM                                                                                                                   
                                                                                                                                
EDWARD POULSEN,  Business Owner,  GKC Holdings LLC,  testified in                                                               
support of HB  203.  He stated that over  the past several years,                                                               
he has been working with Unisea,  Inc. in Dutch Harbor to develop                                                               
a live  golden king crab  program.   He explained that  they have                                                               
been  pioneering a  new  container-based  technology that  allows                                                               
crab  to be  shipped  on a  barge or  container  ship from  Dutch                                                               
Harbor to Seattle.   He explained that crab is  placed in barrels                                                               
with  chilled  and  aerated  seawater  within  containers.    The                                                               
shipment from  Dutch Harbor to  Seattle takes  approximately five                                                               
to  six days  and crab  is then  sold to  markets from  a holding                                                               
facility in Seattle.   He explained that the  technology is still                                                               
being improved,  but healthy live  crab is already  being shipped                                                               
with low  dead loss; the  most recent  shipment had only  11 dead                                                               
crab out of 1,000,  9 of which were the result  of a faulty drain                                                               
cap on one  of the barrels.  He expressed  that crab shipped live                                                               
are  healthier than  crab that  are air-shipped,  as a  result of                                                               
being out of the water for only  a short time; crab kept in tanks                                                               
in the  holding facility in  Seattle can  be kept alive  for well                                                               
over a month.  He  expressed that considerably higher volumes can                                                               
be  shipped  consistently  via   seagoing  containers  than  when                                                               
shipped by air, especially from  remote communities such as Dutch                                                               
Harbor.                                                                                                                         
                                                                                                                                
MR.  POULSEN stated  that red  king  crab and  bairdi crab,  also                                                               
called  Tanner  crab, cannot  currently  be  shipped on  seagoing                                                               
containers due to  AS 16.10.240.  He expressed that  HB 203 would                                                               
fix this  and allow red king  crab and bairdi crab  to be shipped                                                               
live  via containerized  seagoing  vessels.   He emphasized  that                                                               
this change  is important because  red king crab and  bairdi crab                                                               
are ideal  species for  live markets.   Red  king crab  is widely                                                               
available and well known in  world markets; currently most of the                                                               
product is  from Russia  and the  markets would  be glad  to have                                                               
live Alaska  red king crab.   He expressed that bairdi  crab is a                                                               
hearty species of  crab, widely considered by Alaskans  to be the                                                               
most delicious Alaska  crab species.  He stated  that bairdi crab                                                               
would be a  unique new product in world markets,  which he thinks                                                               
would be very popular.                                                                                                          
                                                                                                                                
11:27:08 AM                                                                                                                   
                                                                                                                                
MR.  POULSEN  pointed out  that  live  markets around  the  world                                                               
continue to  grow and improve;  significant portions of  the West                                                               
Coast Dungeness  fishery and  Russian red  king crab  fishery are                                                               
sold as live  products to consumers.  He  explained that high-end                                                               
chefs are very interested in  having better access to live Alaska                                                               
crab, which has a reputation  for sustainability and quality.  He                                                               
expressed that  live fresh crab  is widely known to  taste better                                                               
than  frozen crab  and generally  commands  a higher  price.   He                                                               
explained   that  this   would  benefit   crew,  vessel   owners,                                                               
processors,  and  communities as  the  live  markets continue  to                                                               
develop.   He summarized that  there is  wide support for  HB 203                                                               
among  crab harvesters,  processors,  and communities.   He  said                                                               
modifying  AS  16.10.240, as  proposed  by  HB 203,  would  allow                                                               
participants of  the red king  crab and bairdi crab  fisheries to                                                               
participate in,  and benefit  from, the  growing live  crab world                                                               
markets, particularly those living in  remote ports such as Dutch                                                               
Harbor.                                                                                                                         
                                                                                                                                
11:29:11 AM                                                                                                                   
                                                                                                                                
ERLING JACOBSEN, Executive  Director, Inter-Cooperative Exchange;                                                               
Acting  Chair,  Alaska   Seafood  Marketing  Institute  Shellfish                                                               
Committee, testified in support of HB  203.  He expressed that he                                                               
wholeheartedly supports HB 203 and  agrees with the comments made                                                               
by Mr.  Woodrow and Mr. Poulsen.   He stated that  he agrees with                                                               
everything they  both said and doesn't  feel he needs to  add any                                                               
additional comments, other than that  HB 203 would help to expand                                                               
king  crab markets  and bring  additional revenue  to Alaska  and                                                               
Alaska fishermen.                                                                                                               
                                                                                                                                
11:30:26 AM                                                                                                                   
                                                                                                                                
JAMIE  GOEN,  Executive  Director,  Alaska  Bering  Sea  Crabbers                                                               
(ABSC), testified  in support  of HB  203.   She stated  that she                                                               
will be  speaking on  the letter of  support that  ABSC submitted                                                               
for this hearing.  She explained  that ABSC is a non-profit trade                                                               
association  representing harvesters  of king,  snow, and  bairdi                                                               
crab  in the  Bering Sea  and  Aleutian Islands.   She  explained                                                               
there are approximately 70 vessels  fishing out of that area, and                                                               
ABSC  is  actively  involved   in  fisheries  management,  policy                                                               
development, scientific  research, and marketing.   She said that                                                               
allowing the  transport of  all commercial  species of  live crab                                                               
via  surface  transport  in  addition   to  air  transport  would                                                               
increase flexibility  and market opportunities for  Alaska's crab                                                               
fisheries  and  communities.     She  explained  that  given  the                                                               
variability of crab  stocks, fishermen look for  ways to increase                                                               
the  value of  their product,  especially in  times of  low catch                                                               
levels.    She gave an  example of the bairdi  crab fishery being                                                               
closed  this  year  and  hopefully   opening  again  soon.    She                                                               
expressed  that HB  203 would  increase the  value of  product by                                                               
bringing  live fresh  crab to  markets in  addition to  processed                                                               
crab.   She summarized  that ABSC supports  HB 203  and clarified                                                               
that it thinks  the bill should cover all  of Alaska's commercial                                                               
crab species:  golden king,  red king, blue king, opilio, bairdi,                                                               
and Dungeness.                                                                                                                  
                                                                                                                                
11:31:59 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE TARR  asked Ms. Goen  whether she thinks  the bill                                                               
should  still move  forward  if the  species  she listed  weren't                                                               
added to HB 203.                                                                                                                
                                                                                                                                
11:32:14 AM                                                                                                                   
                                                                                                                                
MS. GOEN answered  that ABSC supports HB 203 either  way, but for                                                               
the sake  of efficiency  and to  bring the  most value  to Alaska                                                               
crab fisheries, it should cover all commercial crab species.                                                                    
                                                                                                                                
11:32:26 AM                                                                                                                   
                                                                                                                                
CHAIR  STUTES asked  whether there  were  any further  questions.                                                               
Hearing  none,  she  asked  whether  the  bill  sponsor  has  any                                                               
additional comments.                                                                                                            
                                                                                                                                
11:32:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KNOPP  said that  he was  unaware there  were more                                                               
than three  species prohibited from  surface transport,  which is                                                               
why HB 203 is written the way it is.                                                                                            
                                                                                                                                
11:33:38 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP  asked whether  any testimony had  been heard                                                               
from   the  Department   of   Environmental  Conservation   (DEC)                                                               
regarding  the  breakthroughs  in  food  risk  safety  that  have                                                               
mitigated  the risk  of  toxins that  can  accumulate in  surface                                                               
transport.   He observed  that it was  documented in  the sponsor                                                               
statement but explained he was  looking to see something from the                                                               
officials  stating   that  the   technology  warrants   this  new                                                               
approach.                                                                                                                       
                                                                                                                                
11:34:21 AM                                                                                                                   
                                                                                                                                
MR. HARBISON  asked Representative  Kopp whether he  could repeat                                                               
the question.                                                                                                                   
                                                                                                                                
11:34:32 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP,  highlighting part  of the  second paragraph                                                               
of the  sponsor statement,  read, "Since  the initial  passing of                                                               
this legislation  ... there have  been many breakthroughs  in the                                                               
safe transport of  live crab species.   These breakthroughs allow                                                               
for  the  movement  of  live  crab  by  surface  transport  while                                                               
maintaining freshness of  product."  He stated  that Mr. Harbison                                                               
also  spoke about  the historic  risk  of toxin  build up  during                                                               
transport, which is why surface  transport was not permitted, but                                                               
now this  risk is  mitigated with new  technology.   He expressed                                                               
that  that is  why he  asked if  the DEC  had issued  a statement                                                               
verifying that there is no point in these old restrictions.                                                                     
                                                                                                                                
11:35:15 AM                                                                                                                   
                                                                                                                                
MR. HARBISON  replied that he has  been in contact with  the DEC.                                                               
He  stated that  the DEC  wanted to  determine whether  it should                                                               
have a veterinarian investigate the issue.   He said that the DEC                                                               
does not currently have anyone  looking into live crab fished out                                                               
of Alaska.  He  remarked that he has not heard  back from the DEC                                                               
with  any further  concerns it  might have,  therefore it  is his                                                               
understanding  that the  DEC  is alright  with HB  203  as it  is                                                               
written  and does  not require  an inspection  of the  crab.   He                                                               
expressed that the  toxins the DEC are concerned  about are those                                                               
that result in paralytic shellfish  poisoning, which are specific                                                               
to Dungeness crab  as it is caught in shallower  water.  He added                                                               
that Dungeness crab is currently  tested at certain times of year                                                               
to ensure consumer safety.                                                                                                      
                                                                                                                                
11:36:26 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP  stated that  he thinks  it would  be someone                                                               
from  the DEC  responsible for  scientific food  inspections, and                                                               
not  a  veterinarian, who  would  corroborate  that the  improved                                                               
technology  is reliable  for  transport.   He  added  that he  is                                                               
philosophically in  support of HB  203, but believes  a statement                                                               
from the DEC is needed for the record.                                                                                          
                                                                                                                                
11:36:54 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES encouraged  Mr. Harbison to touch base  with the DEC                                                               
and get  a statement of  their position for the  committee before                                                               
the next hearing.                                                                                                               
                                                                                                                                
11:37:04 AM                                                                                                                   
                                                                                                                                
MR. HARBISON replied that he would  reach out to the DEC and have                                                               
a letter for the committee.                                                                                                     
                                                                                                                                
11:37:12 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES  asked whether there  were any  additional comments.                                                               
Hearing  none, she  pointed out  that there  are two  zero fiscal                                                               
notes  in the  committee packet;  therefore, HB  203 has  no cost                                                               
associated with  it.   She stated that  HB 203  encourages growth                                                               
and  innovation to  the seafood  industry at  no cost  to Alaska.                                                               
She expressed  that there is  a lot  of industry support  for the                                                               
bill with no opposition.                                                                                                        
                                                                                                                                
[HB 203 was held over.]